History and Marketing 40 Final

A

Project Report

On

Summer Training at

“DHANHAR MASALA PVT. LTD.”

Submitted by:

1. Mistry Mukesh M. 25

2. Patel Abhay N. 34

3. Patel Nishant M. 43

Submitted to:

1. Miss Namrata Madam

2. Miss Jueela Madam

3. Miss Manisha Madam

4. Mr. Jignesh Sir

Vivekanand College for BBA, Surat

Academic Year-2007-2008

1

Acknowledgement

I would like to thanks to Veer Narmad South Gujarat

University to include this summer training in the curricular of B.B.A.

program.

I express my deep sense of gratitude to “DHANHAR

MASALA PVT. LTD.” to allow me to do summer training and giving

me their best to accomplish the same.

I would also thank to all faculty members of college

to help me greatly in preparation and guidance during the training.

My special thanks to one and every faculty member

in the dept for their suggestions.

I would like to thank with great pleasure on

colleagues who helped me in successfully completed this project.

Date:

Place:

1. Mistry Mukesh M. 25

2. Patel Abhay N. 34

3. Patel Nishant M. 43

2

Executive Summery

The project basically deals with the recently

customer of Dhanhar Masala Pvt. Ltd. The survey about the

Customer satisfaction. The survey says that most of people give

first rank to the best Masala of Industry.

In this project, we have covered four cites for

the survey of test of Masala for the purpose of to identify about the

Industry awareness, satisfaction of service, which were provided by

the Dhanhar Masala Pvt. Ltd.

Finding said that Industry has not yet covered

the businesspersons those who are use masala as well as

employees of the various organizations, those who are use masala

for the purpose of pleasure, test and safety of health. So, it is

necessary to marketing in that sense to cover all the various

customers.

All the information is presented in simplified

manner have been included wherever required.

3

Declaration

Here by declare that this training report is prepared

with my own efforts. This report has been prepared at “DHANHAR

MASALA PVT. LTD.” during 01/05/2008 to 30/06/2008 with my

skills and management tools and technique, which we learnt in

collage.

This report has not been previously submitted by

any one to any university, for award of any other degree.

Date:

Place:

1. Mistry Mukesh M. 25

2. Patel Abhay N. 34

3. Patel Nishant M. 43

4

Preface

The knowledge lies every where whether it

is theoretical or practical. Theory of any subject is important but

without its practical knowledge it becomes useless particularly for

management student. As a student of the business administration,

we have studied many theories in the class room but after taking up

this project works, we have experienced and understood these

management theories and practices in its full sense, which play vital

role in business field today.

This report is designed with the objective to

gain practical knowledge about the beverage industry it’s working

and functioning in different department of “DHANHAR MASALA

PVT. LTD.”

5

MISSION & VALUES MISSION & VALUES

One of the greatest strengths of the Dhanhar

Masala Pvt. Ltd. industry is its ability to develop customized

products. This policy of the Dhanhar Masala Pvt. Ltd. Industry has

helped to build close ties and mutual trust with customers globally,

thus increasing worldwide acceptance of its products.

Mission

To delight the customer by continuously

developing new products tuned to evolving needs and maintaining

high standards of quality and efficiency in production and prompt

delivery.

Values

1. High priority to customer satisfaction.

2. High standards of consistent quality and reliability.

3. Promoting use of modern technology and practices.

4. Minimizing profitability for cost-effectiveness.

5. Commitment to community development and environment

protection.

6

INDEX

Profile of the Industry

Marketing Department

HR Department

Production Department

Financial Department

Bibliography

Annexure

7

1. Profile of the Industry

History of Industry:-

DHANHAR MASALA BHANDAR Pvt. Ltd.

introduces itself as a leading manufacturer and exporter of Indian

particularly Masala’s, Hing’s and others. Established on 1966, the

company has always followed the philosophy of providing quality

products and services to our ever increasing clientele. Today

DHANHAR has become a name synonymous to Indian spices, its

tastes and aroma; and has become a name of repute in spices and

hing industry.

The name “DHANAHAR” itself connotes “MASALA”

DHANHAR MASALA starting in the home place

and its first product is “hing”. On this time Dhanhar Masala

manufacturing at “Ambaji Road, Nani Chipava.” Dhanhar is not first

name of the brand. Before Dhanhar, its name is “MANSUKH

KANTI DOUBLE POPAT BRAND”, that is the first name of the

Dhanhar.

Meaning of the Dhanhar name;

DHAN means “LAXMI”

HAR means “MAHADEV”

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DHANHAR name comes of the two dynamic people,

first is DHANSUKHLAL and second is HARKISHANLAL.

DHAN comes of the DHANSUKHLAL

&

HAR comes of the HARKISHNLAL

History – An Overview

Thirty Eight year back, two dynamic

entrepreneurs, Mr. Dhansukhbhai Chhabildas Vankawala and

Mr. Jagdishchandra Harkishandas Vankawala; pioneers in

spices / hing industry and connoisseurs of Indian tastes, joined

hands together to start Dhanhar Masala; supported by Mr.

Bipinchand Chhabildas Vankawala; a mechanical engineer by

profession. The firm started as a gruh udyog, manufacturing hing,

graduated in terms of size and volume; obviously due to healthy

response from the market. In the 1972, a manufacturing plant was

established in Surat. The company started manufacturing spices in

1976 with a single product “Dal Shak Masala” and has consistently

climbed up the growth ladder since. The company at present is

manufacturing more than 30 different spices. For bulk orders, we

can customize the products according to your requirements.

In 1990, a major milestone was achieved when

the company got “AGMARK” certification for its Hing. In 1995,

same certification was accorded to Spices.

When company started, it goes in the loss, but

after some time loss converted in the big and big profit. In the 1977

the price of the “Dal Shak” masala was just 7 RS. In 5 Kilo. So, it’s

very chipper. In the 1988 Hing’s packaging stared and published

name of the “BHANDHANI HING” and also developed the brand

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name of Dhanhar Masala. All the production by manually, no

machine work of this time. On this time means, 1988; the staff was

just 10 people in Dhanhar Masala and now the staff is about 62

people in Dhanhar Masala. Manually work’s time period is 1988 to

1996, means about 8 year.

Under the able guidance of the promoters, the

company has reached to a position, par excellence. Mr. Hitesh

Vankawala (B.Com. L.L.B.) And Mr. Jignesh Vankawala (B.Com),

able sons of Mr. Dhansukhbhai joined business in 1992 and 1998

respectively. Also the able sons of Mr. Jagdishchandra, Mr. Sandip

Vankawala (B.Com.) joined the company in 1992 and 1998

respectively. Mr. Hitesh and Mr. Sandip are looking after Sales

Department whereas Mr. Jignesh and Mr. Nilesh are looking after

Production and Quality Control Departments.

The new entrants are following their fathers’ footsteps and

have the enough dynamism and acumen to lead the company to

new heights.

The company boasts of modern machinery and high

technology to attain the quality without losing the traditional aroma

of Indian spices. Our products are well known for their high purity.

The reliability, flexibility, competitive pricing and prompt

service have been the pillars of the company’s reputation and

success.

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2. MARKETING DEPARTMENT

Marketing environment (Competition)

Products of the Industry (Product Mix)

Packaging & Labeling

Price of Products (Pricing Policies)

Organization’s buying process

Product life cycle (PLS) & Marketing

Strategies

Channels of distribution

Marketing / Sales dept. at a glance

Promotional Activities

11

Structure of Marketing Department

12

1. Marketing environment

(Competition): -

Head of Marketing

Department

Hitesh bhai( Head 1)

Sandeep bhai( Head 2)

Agent

Clerk

Peon

13

There are some points which are uses in DHANHAR

MASALA is below here in the Marketing environment (Competition).

1. Concept of target

2. Concept of channel

3. Concept of competition

4. Concept of public

Concept of Target:-

There is annual turn-over is 3 ton per day

(1080 ton per year). Profit target of the company is 20% of sales.

Concept of Channel:-

There are 3 types of Marketing Channel.

1. Communication Channel:

Through this channel company deliver &

receive message from target market. The Company’s

Communication channel includes News papers, Radio, local TV

channel, postures, local transportation etc.

2. Distribution Channel:-

Through this channel company displays sell &

deliver the physical product to the buyer. Company includes CNF

(super stockiest), Distributor, Shop keepers etc.

3. Service Channel:-

14

Through this channel company carry out

transactions with potential buyer. This channel includes Agent

Godown delivery, Warehouses, Transportation companies,

Insurance Company etc.

Concept of Competition :-

It includes all the actual & potential rival offering &

substitute of their product a buyer might be consider. The company

may be of monopoly, total competitive or oligopoly.

E.g. There are many masala brands against Dhanhar Masala as

like SK Masala, Gajanand Masala, and Ramdev Masala

etc.

Concept of Public :-

Population outside the Company within the nation.

From which company can identify their potential buyer, current

users, decision makers and general public.

Macro Environment

1. Social and Cultural Environment:-

Dhanhar Masala does not affect to cultural

factors but it affects social factors because cultural factors affect

cultural, sub-cultural, social factors. Society sales beliefs, values

and harms that largely define taste & preferences of customers.

People observe almost unconsciously a world view that defines

there relationship to them to measure and the universe.

15

Regional difference in language, customs,

social system, values, habits, and religion and cast system may be

social & cultural environment.

2 .Technological Environment:-

One of the most dramatic force shopping

people live is technology. Technology includes Automatic packing

Machine, computers, printers etc. There are many technology is

being used in Dhanhar Masala. Technological Environment

increase production more and more. Because of using technical

Machineries and Equipments it takes low/minimum time for

Maximum Production.

3. Political & legal Environment:-

There are mainly two sub paints in this environment.

Increase in the business environment

Company must have a good working knowledge

of the major low protection competition, consumer and society.

Protecting the welfare of consumer

There are five types of protecting welfare of consumer in Dhanhar masala.

Safety:-

Information:-

Choice:-

Redresses:-

Representation:-

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Economic Environment:-

Marketers require purchasing power as well as

people. The available purchasing power in economy depends on

current income, price, debts, saving and credit availability.

Income distribution is also creating measure impact

for economic growth.

Physical Environment:-

Raw Material

Dhanhar Masala purchasing Raw Material from various

Countries and States.

E.g. Red chilly powder from Karnataka,

Hing from Afghanistan,

Salt from Pakistan,

Plastic package from Bombay.

Live Stock

They have no expiry date which are reaching or not

reach to consumers in Dhanhar Masala.

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2. Products of the Industry (Product

Mix):

There are many masala product of DHANHAR MASALA industry. Which

are below here;

1. Agmark Hing

2. Chilly Powder

3. Turmeric Powder

4. Coriander Powder

5. Coriander-Cumin Powder

6. Aachar Sambhar

7. Rajwadi Garam Masala

8. Tea Masala

9. Chhole Chana Masala

10. Kitchen Hing Masala

11. Chat Masala

12. Pavbhaji Masala

13. Panipuri Masala

14. Punjabi Gravy Masala

15. Garlic Masala

16. Buttermilk Masala

17. Chewada Masala

18. Milk Masala

19. Sambhar Masala

20. Biryani Pulao Masala

21. Singoda Masala

22. Rajwadi Atta

23. Sindhav Salt

24. Chicken Masala

25. Mutton Masala

26. Fish Masala

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27. Tandoori Chicken Masala.

28. Kashmiri Chilly Powder

So, there are lots of item productions in the

DHANAHAR MASALA, which are daily use in homes and hotels.

Product Mix

Meaning of product mix:-

“A product mix (also called product assortment) is

the set of all product lines and items that a particular seller offers for

sale to buyers” An organization with several product lines has a

product mix.

In other words, product mix is “the composite of

products offered for sale by a firm.” It is collection of products

manufactured or distributed by a firm.

Product Mix has three main characteristics:-

1. Width

2. Depth

3. Consistency

Width of the prduct mix is concerned with the

number of product lines marketed by Dhanhar Masala. Width and

smaller number of product lines narrower is the product mix.

. Depth of the product mix depends on the average

number of product items included in the product lines. The average

number of product items smaller is the depth of product.

19

Consistency of the product mix indicates how far

or to what extent the product lines are interconnected with each

other from the view point of final use or production requirement or

channel of distribution.

The following situation indicates lack of optimization of product mix:-

1. A situation of excess production capacity arising seasonally or

very often.

2. I proportionately very high percentage of profit from a few items of

the Dhanhar Masala.

3. Insufficient width of product mix to the extent that maximum

benefits of the Dhanhar Masala sales for contacts.

Important of the product mix in Dhanhar Masala:-

1. Profit maximization

2. Maximization of sales

3. Stability of sales and sales income

4. Maximum benefits

Profit maximization, with the help of product mix

available opportunities can be turned into maximum profit. This

would be not having been possible in its absence.

Maximization of sales, in this point to improving in

the sale maximum level. It helps to in exploiting the situation for

maximizing the sales.

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Stability of sales and sales income, any

decrease in the sales of any product item of Dhanhar Masala

disturbance in optimum product mix and income also declines. So,

the sale of any item to the Dhanhar Masala is stability of sales and

sales income can be maintained.

Maximum benefits, the salesman of the present

product come in contact with a large number of customers. By

introducing a new product maximum benefits of their contacts can

be derived with minimum cost and maximize in to the profit.

21

3. Packaging & Labeling: -

Meaning of Packaging:-

Packaging means, “The wrapping of goods

before they are transported or stored or delivered to a consumer.”

In the other hand, “packaging is the sub-

division of the packaging function of marketing.” Packaging has

been defined as, “An activities which is concerned with protection,

economy, convenience and promotional considerations.”

We can define packaging as: “all the activities

of designing and producing the container is called the package”

The packaging has three levels, they are following:-

Primary package

Secondary package

Shipping package

Packaging is also kept pace with our products

and the market, conforming to International Standards and featuring

diverse packing methods to match client requirements

Packing is not available in kg with double

polypropylene in-liner in trucks. It is also available 10000 kg

cardboard boxes on wooden pallets. Trucks are also available for

5000 kg & 10000 kg.

22

We have a special inspection team, which

ensures the quality of packing before the material is dispatched

from the works

Primary package

This is the primary packaging of the “Garam Masala” in

the Dhanhar Masala industry. So, this is the first step of the packaging of

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the masala. All types masala packaging like this type but this is the

example only “Garam Masala’s” packaging.

Secondary package

This is the secondary packaging of the “Garam

Masala” in the Dhanhar Masala industry. So, this is the second step of

the packaging of the masala. This is the important step of the packaging.

24

Shipping package

25

This is the last and final means shipping packaging of the

“Garam Masala” in the Dhanhar Masala industry. It is the very important

packaging of the masala because when it’s over then production supply

in to the market and use consumer and other.

So, the packaging of a consumer product is an

important part of the marketing. A good number of companies adopt

square packages in place of round packages which save space.

There are many factors to be considered while designing a

package.

Dhanhar Masala used kinds of the material for the packaging below

here;

1. Card Board Contriver

2. Plastic Contriver

3. Plastic Bag

4. Non-own Bag

5. Pouches

6. Paper Contriver

7. Clothes etc.

Kinds packaging of the Dhanhar Masala is below here;

1. Consumer Packaging

2. Family Packaging

3. Multiple Packaging

So, there are different packaging produce by

Dhanhar Masala for the customer.

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Packaging size of the Dhanhar Masala is 1 Kg.,

5 Kg., 15 Kg. and 40 Kg.

Labeling

Meaning of Labeling:-

“Label is a part of product, which carries verbal

information about the product or the seller. It may be a part of a

package, or it may be a tag attached directly to the product.” Label

may be small slip or a printed statement.

DHANHAR MASALA uses three types of label, which is following here;

1. A Brand Label

2. A Grade Label

3. A Descriptive Label

Label gives following information in any product in the production.

(DHANHAR MASALA)

1. Brand name

2. Picture of the Product

3. Address of the producer and industry

4. Gross and Net quantity of the content

5. Ingredients in the product

6. Direction for the use

7. Precautionary measures

8. Nature of the product

9. Date of packaging and expiry

10. Retail price

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Labeling photo’s of the Dhanhar Masala’s product:-

28

4. Price of Products (Pricing

Policies): -

Meaning of Price:-

It includes price, trade discount, cash discount, credit

terms, and collection policy. The price is determined normally after

considering production cost, distribution cost, quality, rival’s price &

government controls.

Pricing policy of industry

Price is the one element of the market mix that

produces revenue. The other elements produce costs. Price is one

of the most important factors that affect demand, growth of

company, market share, competitors, supplier etc. so we can say

that the price is decide by considering this all factors. Price may be

suitable to product and market.

How to deciding the price?

DHANHAR MASALA Pvt. Ltd. has taken a certain

steps to fix up the price of its different product.

1. Selecting the pricing objectives

2. Determination of demand for product

3. Estimating the costs of production

4. Analyzing competitors’ costs, prices and offers

29

5. Selecting a pricing method

6. Selecting the final price

Responding to the competitors price changes

The company may react the changes in competitors’ price changes in

following way:

1. Maintain price

2. Maintain price and add value

3. Reduce price

4. Increase price and improve quality

5. Launch a low-price fighter line

Starting Price of the Dhanhar Masala’s Rs. 1, 2, 5,

50, 100, 200 and 500 up.

Price list of the Dhanhar Masala for the different

Masala’s item in the market to customer. (100 K.g.)

Dhanhar Masala Pvt. Ltd.

Bagal Surat (Gujarat)

Price List

W.E.F.

01.04.08

Name of Item Price of Item (100 K.g.)

Rajwadi Garam 27 Rs.

Agmark Hing 36 Rs.

Chilly Powder 13 Rs.

Turmeric Powder 11 Rs.

Coriander Powder 14 Rs.

30

Coriander – Cumin Powder 15 Rs.

Aachar Sambhar 15 Rs.

Rajwadi Garam Masala 27 Rs.

Tea Masala 48 Rs.

Chhole Chana Masala 35 Rs.

Kitchen King Masala 33 Rs.

Chart Masala 24 Rs.

Pavbhaji Masala 40 Rs.

Panipuri Masala 24 Rs.

Punjabi Gravy Masala 35 Rs.

Buttermilk Masala 20 Rs.

Chewada Masala 15 Rs.

Milk Masala 130 Rs.

Idle Sambhar Masala 33 Rs.

Biryani Pulao Masala 33 Rs.

Singoda Atta 15 Rs.

Rajgara Atta 8.50 Rs.

Sindhav Salt 5 Rs.

Chicken Masala 38 Rs.

Mutton Masala 38 Rs.

Fish Masala 38 Rs.

Tandoori Chicken Masala 42 Rs.

Kashmiri Chilly Powder 23 Rs.

Deluxe Hing 68 Rs.

Dhanhar Masala produces many other masala items

to small basis. So, its price is not given here.

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5. Organization’s buying process: -

The Dhanhar Masala Pvt. Ltd. Industry has major

business in industry. It provides a raw-material for the other industry

or processing units like dyeing mils, printing unit and others. The

order placing for the raw material:

1. Problem reorganization

2. General need specification

3. Product specification

4. Supplier search

5. Proposal solicitation

6. Supplier selection

7. Order routine specification

8. Performance review

Where’s comes Row Material?

Red chilly powder from Karnataka

Hing from Afghanistan

Salt from Pakistan

Plastic package from Bombay

32

6. Product life cycle (PLS)

&

Marketing Strategies

Meaning of Product Life Cycle:-

As every being has life, a product has its life.

Industrial goods may have a longer life than consumer goods.

Products, like human beings, have length of life for making sales

and earning profit.

The product life cycle is generally termed as

product market life cycle, because it is related to particular market.

For instance, an old product in the market of Bombay may have a

life in a village. The product life cycle may be short for same

products and long for some other products. The period may differ

form product to product. But the product passes through the stages,

collectively known as product life cycle.

Chart of the product life cycle in Dhanhar Masala:-

Sales and Profit

Introduction Growth Maturity

Total sales

Total Profit curve

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Introduction: - Product is new, awareness in market, cost of marketing high

and profits are low.

Introduction is the first stage in the life of a

product. This is an infant stage. The product is a new one. The

new product means. “A product that opens up an entirely new

market, replaces an exiting product, or significantly broadens

the market for an exiting product.” In this stage profit may

below, because of heavy advertising and sales promotion in

order to stimulate the demand.

Marketing Strategy: -

There are four types of the marketing strategy in Introduction but Dhanhar

Masala use only two types of the strategies;

(a) Low Price and a Big Promotional Expenditures Budget: -

(b) Low Price and a Small Promotional Expenditures Budget: -

If the market is very wide, customers are unfamiliar

with the product and sensitive to the price and the market is also

competitive this strategy is adopted for a quick entry in the market.

If the customers are price sensitive and promotional

expenditures are not likely to increase the sales and the customers

are familiar with the product strategy is adopt for early and quick

entry of the production in the market.

Growth: - The product has given satisfaction to the first buyers. Sales

increase rapidly and product started generate profit.

34

Growth is the second stage in the life of a product. In

this stage, the product satisfaction the market and a product gains

acceptance from the part of consumers and businessmen. So,

sales and profit increase. The success of firms depends upon the

efficient manufacturing and distributing system of the product.

Previous buyers continue in their purchase and new buyers appear.

Marketing Strategy: -

There are five types of the marketing strategy in Growth but Dhanhar

Masala use only four types of the strategies;

(a) To increase the quality of the product or add new features

to the product.

(b) To start a campaign to search out new areas of market.

(c) To intensity the advertisement and find out distribution for

wide spread sales.

(d) In order to attract price marketing strategies the industry to

decrease the price at appropriate time.

Maturity: - The product reaching its maturity and sales are good. But battle for

market share is about to begin.

At this stage, keen competition increases. Sales

continue to increase for a while, but at decreasing rate. Competitors

go for mark - down price by increasing advertising deals. Market

expenses increase, even after mark – down price, which enable to

face competition. Thus, profit is thinned. Additional expenses are

involved in production modification and in the market. Overall

marketing effectiveness becomes the key factor in this stage.

35

Marketing Strategy: -

There are five types of the marketing strategy in Maturity but Dhanhar

Masala uses all the types of the strategies;

(a) Efforts should be made to enter into new markets.

(b) Steps should be taken to increase the utility of the product.

(c) Product should be made familiar with other classes of

customers.

(d) Product should be improved very much.

(e) Alterations should be made in the marketing mix to suit the

changing conditions.

So, in the Dhanhar Masala’s every product moves

through a life cycle, having three phases, which are above the

detail.

7. Channels of distribution: -

36

Meaning of Channels of distribution: -

According to American Marketing Association,

“A channel of distribution, or marketing channel, is the structure of

intra – company organization units and extra – company agents and

dealers, wholesale and retail through which a commodity, product

or service is marketed.”

According to Richard M. Clewelt, “A channel is

the pipe line through which product floes in its way to the consumer.

The manufacture puts his product in to the pipe line or marketing

channel and various marketing people move it along to the

consumer at the other and of the channel.”

Marketing channel may be defined as, “A

pathway composed of intermediaries, who perform such function as

needed to ensure smooth flow of goods and services from the

manufacturing ends to the consuming ends in order to achieve

marketing of the produce of a company.”

Marketing channels are distribution network.

Products flow to the market through the distribution network.

‘Marketing channel’ and ‘Channel of distribution’ is a path traced in

the direct or indirect transfer of ownership to a product, as it moves

from a producer to ultimate consumer/industrial users.

Channel of distribution in Dhanhar Masala

37

Distribution channel

The producer and the final customer are part of

every channel. We will use the number of intermediate levels to

designate the length of channel. There are many type of distribution

channel in industry. There are following:

1. Zero-level channel

2. One level channel

3. Two level channel

Manufacturer

CNF (Super Stockiest)

Agent

Wholesaler

Retailer

Consumer

38

4. Three level channel

Dhanhar Masala Pvt. Ltd. use to zero level

channels and one level channel in rare case they use a two level

channel company get an export order by e-mail and domestic

market. There is use one-level and two-channels.

8. Sales dept. at a glance: -

39

Main product of Masala essential commodities sales in open market

by Masala Agent & Super Stockiest as per daily marketable etc.

Masala factory reputed person perform as an Agent & Super

Stockiest taken a some deposits amount from Masala.

Masala deliver against only Demand draft & Cash. There is a some

control about releasing Masala quota for even month edusting by

control government department.

It means department of food supplest, government of India.

Masala factory export masala about as per instruction by control

government benefit to masala factory for exporting.

Price as per the domestic market depends upon Demand and Row

- material.

9. Promotional Activities: -

Meaning of promotion: -

40

Promotion means a set of efforts made by the

company for stimulating the demand for its product or products

without making any alteration in product mix, price and channels of

distribution.

Promotion is any communication activity whose

main object is to move forward a product, service or an idea in a

channel of distribution. It is a set of efforts by marketer to inform

and persuade buyers to accept, resell, recommended or use the

article, service or idea which is being promoted. It is a form of

communication with an additional element of persuasion. The

promotion activities always aim at stimulating demand by affecting

knowledge, preferences, attitudes and behaviors of the buyers.

Important of the promotion in the Dhanhar Masala: -

1. Increasing distance between producer and consumer

2. Need of commutation in expanded markets

3. Information to the market intermediaries

4. Stimulates Demand

5. Reviving of Demand

6. Makes other elements of marketing mix meaningful

Customer purched masala item above Rs 1000 up; So, Dhanhar

Masala gives one Shopping Beg .

Customer purched masala item above Rs 2000 up; So, Dhanhar

Masala gives one Traveling Beg .

Promotional and advertising policies

Dhanhar Masala is a private limited company. Its

customers are very satisfied with the product and services that they

are provided. And as we know that the best advertising is done by

41

the satisfied customer, most of the times the customers themselves

recommend products of Dhanhar Masala in their business circle.

No other advertising policy is followed by Dhanhar Masala as such

as they never felt the need of doing so till now.

But in case if there is any need of promotion,

they make use of consumer-direct channels to reach and deliver

goods to the customers without using any middleman. These

channels include telephones and fax devices. Generally they

receive orders in abundance, but during slack time they call on their

customers and ask them to place their orders. They try to tempt

them by saying that production of so-and-so masala is being

carried out and if they place their orders soon they will get prompt

delivery or else they will have to wait for 4 to 5 hours for delivery if

they make it late.

E.g. During our summer training we found that during the first week of

May there were quite a few orders with the company. So they

called up their customers and asked them to place their orders by

tempting them as they were very busy with work and if they would

place their orders now they will get their order delivered soon.

This kind of direct marketing helps them to build

continuous relationship each customer and also make their offers

and strategies less visible to their competitors. Also they provide

the booklet containing samples of their varieties of masala to their

customers.

3. HUMAN RESOURCE DEPARTMENT

Activities of Personnel / HR Department

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Recruitment & Selection

Human Resource Planning

Training & Development

Promotion & Transfer

Performance Appraisal

Wages & Salary Structure

Employee Welfare

Human Resource Audit

Hierarchy Structure of Organization

Absenteeism Rate

Employees Turnover

Structure of HR Department

43

Introduction

HRM is that branch of management which is responsible

on a staff basis of concentrating on those aspects of relationship of

management to employee and with the development of the individual

and the group. The objective is to attain maximum individual

development, desirable working relationship between employers and

employees; employee and employee, and effective molding of human

resources as contrasted with physical resources.

In a Dhanhar Masala Pvt. Ltd., there is more importance

given to the personnel because all works are done by human beings if

right person appoint then company get surly success in its works.

Industry believes in getting well persons for its work.

Head of HR Department

Dhansukh bhai (Head 1)

Jagdish bhai(Head 2)

Assistant

Peon

44

1. Activities of Personnel / HR

Department

Meaning of HR: -

“HRM is a management function concerned with

hiring, motivation, & maintaining people in an organization. The

function & principle are applied to acquisitioning, developing,

maintaining, & remunerating employees in organization.”

Definition of HR: -

“HRM is a series of integrated decision that form

the employment relationship; their quality contributes to the ability of

the employees to achieve their objectives.”

“HRM is a management is the planning, organizing,

directing & controlling of the procurement, development,

compensation, integration, maintains & separation of HR to the end

that individual, organization, & social objectives are accomplished.”

Activities of personnel department: -

HRM department helps managers to recruits, selection and train and develop

members for the company.

HRM is concern with the people’s dimension

in organization. HRM refers to set of programs function and

activities designed and carry out in order to maximize. Both

employees as well as organization effectiveness.

45

The main activities of HRM department are

to recruitment, selection, and training and develop members for an

organization.

The function, which are used by HRM department in the Dhanhar

Masala Pvt. Ltd. is below here,

(1) Managerial function

(2) Operative function

Managerial function

(a) Planning: -

Planning is the process of deciding the goals &

formulating policies & programmers to achieve the goals. Planning

involves forecasting & research. Planning helps to face successfully

the changes that are likely to take place in future. It preparing

human resource budget.

(b) Organizing: -

Organizing is the process of allocating tasks

among the member of the group, establishing authority –

responsibility relationships among them & integrating their activities

towards the common objectives. Organizing is the framework

through which management directs controls & co – ordinates the

efforts of people.

46

(c) Directing: -

Directing is the process of motivating, activating,

leading & supervising people. Directing includes all those activities

by which a manager influences the action of subordinates. Directing

is the heart of the mgmt process. Directing also helps in building

sound individual & human relation in the organization.

(d) Controlling: -

It implies checking, verifying & regulating to

ensure that everything occurs in conformity with the plans adopted

& the insuuctions issued. Such monitoring helps to minimize the

gap between desired result & actual performance.

(2) Operative function: -

There are five functions in the Operative function but Dhanhar Masala Pvt. Ltd.

uses only three functions in their industry, which are below here:

(a) Procurement Function: -

Procurement function is concerned with

securing & employing the right kind & proper number of people

required accomplishing the organizational objectives.

Dhanhar Masala Pvt. Ltd. consists of the only five activities in the

procurement function:

(1) Job Analysis

(2) Human Resource Planning

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(3) Recruitment

(4) Selection

(5) Placement

(b) Development Function: -

Human Resource development is the

process of improving the knowledge, skills, aptitudes & values of

employees so that they can perform the present & futures jobs

more effectively.

Dhanhar Masala Pvt. Ltd. consists of the only three activities in the

development function:

Performance Appraisal

Training

Executive Development

(c) Compensation Function: -

Compensation function is refers to providing

& fair remuneration to employees for their contribution to the

attainment of organizational objectives.

Dhanhar Masala Pvt. Ltd. consists of the only three activities in the

compensation function:

Job Evaluation

Wage & Salary Administration

Bonus

So, there are three types of function,

which are use by Dhanhar Masala Pvt. Ltd. H.R. department.

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2 Recruitment & Selection

Meaning of Recruitment: -

Recruitment is understood as the process of

searching for & obtaining applicants for jobs, from among whom the

right people can be selected. Recruitment involves attracting &

obtaining as many applications as possible from eligible job -

seekers.

Organization have to recruit people with

requisite skills, qualification & experience if they have to service &

flourish in a highly competitive event while doing so, they have to be

sensitive to economic, social, political, & legal factors within a

country.

Definition of Recruitment: -

“Recruitment is the process of finding &

attracting capable applicants for employment. The process begins

when new recruits are sought & ends when their applications are

submitted. The result is a pool of applicants from which new

employees are selected.”

Process of the Recruitment in the Dhanhar Masala Pvt. Ltd. , which are

below here in detail;

Process of the Recruitment in the Dhanhar Masala Pvt. Ltd.

49

There are four types of the Recruitment process uses in the Dhanhar

Masala Pvt. Ltd., which are below here;

(1) Planning: -

Panning is the first step of the Recruitment

process. Planning’s involves the translation of likely job vacancies &

information about the nature of the job.

Dhanhar Masala, Recruitment planning deals with,

Types of application refer to the type of people

to be informed about job openings. These details are available

through job description & job specification.

Planning

Strategy Development

Screening

Evaluation & Control

50

(2) Strategy Development: -

Once it is know how many & what type of

recruits are required serious consideration needs to given to;

“Buy” decision

Sources of recruitment

Sequencing the activities in the recruitment process

“Buy” means hired skilled workers &

professionals. It employees has the advantage in the sense that the

skilled professional & labour can be the work immediately & little

training may be needed.

(3) Screening: -

Screening is to remove from the recruitment

process, at an early stage, those applicants who are visibly

unqualified for the job. It screening, clear job specifications are

invaluable. Applicant qualification judged on the basis of their

knowledge, skills, abilities & interests required to do the job.

(4) Evaluation & Control: -

Evaluation & Control is necessary as considerable

costs are incurred in the recruitment process. Statical information

on the cost of advertisements, time taken for the process, salaries

for recruiters, time spent on preparing job description, job

specifications, Recruitment overheads & administrative expenses.

51

Selection

Meaning of selection: -

Selection is the process of picking individuals

(out of the pool of job applicants) with requisite qualification &

competence to fill jobs in the organization.

The objective of selection process is to

determine whether an applicant meets the qualifications for a

specific job & to choose the applicant who is most likely to perform

well in that job.

Definition of selection: -

“Selection is the process of differentiating

between applicants in order to identify & hire those with a greater

likelihood of success in a job.”

Selection is the most important process of the any

Company and Industry. Selection is the based of choose best

workers and employment for the Industry.

Process of the selection in the Dhanhar Masala Pvt. Ltd.

There are five types of the Recruitment process uses in the Dhanhar Masala

Pvt. Ltd., which are below here:

52

Process of the selection: -

(1) Preliminary Interview: -

Preliminary Interview is the fires step of the

selection process in the Dhanhar Masala Pvt. Ltd. Preliminary

interview, on the other hand, helps reject misfits for reasons, which

did not appear in the application forms.

(2) Selection Test: -

Generally, tests are used to determine the

applicant ability, aptitude & personality. Different types of tests in

the Dhanhar Masala Pvt. Ltd., which are below here;

Preliminary Interview

Selection Test

Employment Interview

Reference Check

Physical Examination

53

Ability Test

Personality Test (Tat Test & Cpi Test)

Medical Test

(3) Employment Interview: -

An interview test is conducted at the

beginning & at the end of the selection process. The emphasis here

is on the letter. Different types of interviews in the Dhanhar Masala

Pvt. Ltd., which are below here;

One-to-One-Interview

Sequential Interview

Personnel Interview

(4) Reference Checks: -

Reference Checks is the most important

process of the selection. Many employers request name, addresses

& telephone numbers of references for purpose of verifying

information & perhaps, gaining additional background information

on an applicant.

(5) Physical Examination: -

Last and Final process of the selection is the

Physical fitness test in the Dhanhar Masala Pvt. Ltd. The result of

the medical fitness test is recorded in a statement preserved in the

personnel records.

54

3. Human Resource Planning

Meaning of HRP: -

HRP is the process of forecasting a firm’s

future demand for supply of the right type of people in the right

number. HRP is also known as ‘manpower planning’, ‘personnel

planning’ or ‘employment planning.’

HRP is the process of getting the right

number of qualified people into the right job at the right time. It is

the system matching supply & demand of manpower.

Definition of HRP: -

“HRP includes the estimation of how many

qualified people are necessary to carry out the assigned activities,

how many people will be available, & what, if anything, must be

done to ensure that personnel demand at the appropriate point in

the future.”

HRP translates the orgn’s objectives & plans into the number of

workers needed to meet those objectives.

Time duration of HRP in the Dhanhar Masala Pvt. Ltd.

Short Term Plan : 1 year

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Process of the HRP in the Dhanhar Masala Pvt. Ltd.

Human resource planning process is important to

making effective planning for personnel. The steps taken by

Dhanhar Masala Pvt. Ltd. is describing below:

1. First they analysis the organizational plan it means see deeply

future plan of the various department or organization. Select the

Organization’s objectives & policies and done work in HRP by employment.

2. Then after they forecast demand of manpower required in future

they think which type of manpower demand is required is arise & which

Organization Objectives & Policies

HR Needs & Supply Forecasting

HR Programming

Evaluation & Control

56

department and how much personnel is required .then they find sources of

manpower. And they also find how HR needs and supply forecast.

3. Once the demand is decided then they forecast the supply of the

manpower it means best sources is available to recruit the employee. Then

they match the demand and supply of manpower.

4. Evaluation & Control is the final phase in the HRP process. The

HR plan should include budgets, targets & standards. It should also clarify

responsibilities implementation & Control which will enable achievements to

be monitored against the plan.

Surplus: Reduced hours

Shortages: Recruitment

In this planning following points they take into consideration for its HR

planning:

When HR needs arises.

Which type of manpower is required in future?

Source of required manpower available for the organization in future.

Is any diversification is done in the organization in short term OR in long

term.

57

4. Training & Development: -

Meaning of Training: -

“Training is the process of increasing the

knowledge and skills for doing a particular job. It is an organized

procedure by which people learn knowledge and skill for a definite

purpose. Training is aimed at improving the behavior and

performance of a person.”

“Training is any process by which the aptitudes,

skills and abilities of employees to perform specific jobs are

increased. Training is essentially practical consisting of knowledge

and skills required to perform specific tasks.”

Meaning of Development: -

“Development is the process of developing the

knowledge and skills in employees for doing a particular job.

Development involves preparing the individual for a future job and

growth of individual in all respects.”

Training and Development

Employee training is distinct from

management development. Training is a short term process

utilizing a systematic and organized procedure by which non

managerial personnel learn technical knowledge and skills for a

definite purpose. It refers to instruction in technical and

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mechanical operations like operation of a machine. It is design

primarily for non-managers. It is for a short duration and for

short duration and for a specific job related purpose.

On the other hand development is a long term

education process utilizing a systematic and organized

procedure by which managerial personnel learn conceptual

and theoretical knowledge for general purpose. It involves

philosophical and theoretical educational concept and it is

design for managers it involves broader education it’s purpose

is long term development.

Training and development both are different in company’s

point of view.

Training:-

Contents: technical and mechanical operation.

Participants: non managerial personnel.

Time period: short term one short affair.

Purpose: specific, job related ness.

Initiative: for management , external motivation

Nature of the process: reactive process, to meet currant need.

Development:-

Contents: Conceptual and philosophical concept.

Participant: Managerial personnel.

Time period: long term continuous process.

Purpose: Total personally.

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Initiative: From individual himself- internal motivation.

Nature of the process: Proactive process- to meet future need

Why training needs in the Dhanhar Masala Pvt. Ltd.?

There are three rezones to needs training in the

Dhanhar Masala Pvt. Ltd., which are below here;

Job Requirements

Technological Changes

Internal Mobility

Training method: -

There are two methods for training but Dhanhar Masala Pvt. Ltd.

use,

On the job training method:

Job rotation

Job coaching

Job instruction

Training through step by step

Committee assignments

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5. Promotion & Transfer: -

Meaning of Promotion: -

Promotion means an improvement in pay

prestage position & responsibilities of an employee within his/her

organization. A more shifting of an employee to a different job which

has better working hours better location & more pleasant working

conditions dose not amount to promotion for the employee only

when it carries increased responsibilities & enhanced pay.

Definition of Promotion: -

“A promotion is the transfer of an employee

to a job which pays more money or some preferred money.” When an

employee is assigned a higher level job with more pay and powers

then it’s said to promote. Promotion may be temporary or permanent.

Meaning of Promotion: -

“Transfer refers to a horizontal

movement of and employee from one job to another in the

same company. Within any requisition change in responsibility,

statues & income. Transfers are regular & frequent, as in banks &

other government work.”

In this Dhanhar Masala Pvt. Ltd. transfer

are used to place employees in position where they are likely

to get more job satisfaction. A transfer to normally a change in

61

job assignment. Transfer within the same department or across

department.

Factor affecting Promotion in the Dhanhar Masala Pvt. Ltd.:-

Merit basis: - Merit means an individual’s efficiency and capacity as

judged from past performance. Merit denotes an

individual’s employee’s (skills knowledge, ability,

efficiency and aptitude as measured from educational

training & past employment record.)

Seniority basis: - Company also promotes the employee in seniority

basis. Seniority system are based on the length of

service & job experience .

Advantages of promotion in company’s point of view are as follows:

To put the worker in a position where he will be a greater

work to the company & where he may derive incised

personnel satisfaction & income from his work.

To remove a worker from his job as an alternative to avoid

the embarrassment of firing or demoting him.

To fill up higher vacancies from within the organization.

To recognize an individual performance & rewired him for his work.

To increase an employee’s organization effectiveness.

62

To recognizes an employee’s performance and loyalty and

motivate him towards better performance.

To promote job satisfaction among the employee & give them

an opportunity for unbroken continuous service.

To attract suitable and competent workers for the company.

To develop a competitive spirit among the employee for

acquiring knowledge and skills required by higher level job.

To utilize more effectively the knowledge and skills of employee.

There are six objectives of Transfer in the Dhanhar Masala Pvt. Ltd.,

which are below here;

To meet organizational need.

To satisfy employee need.

To better utilize employee.

To make the employee more verscrilte.

To adjust the work force.

To provide relief.

There are four factors affecting of Transfer Dhanhar Masala Pvt.

Ltd., which are below here;

Poor Placement

Level of Training and Development

Nature of work

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Growth Opportunities

6. Performance Appraisal: -

Meaning of Performance Appraisal: -

“Performance Appraisal is the process

of obtaining, analyzing and recording information about the relative

worth of an employee. Performance Appraisal and Merit rating are

used synonymously.”

Definition of Performance Appraisal: -

According to flippo, “Performance

Appraisal is the systematic, periodic and an impartial rating of an

employee’s excellence in matters pertaining to his/her present job

and potential for a better job.” It is the process of obtaining,

analyzing and recording information about the relative worth of an

employee.

Advantages of Performance Appraisal of company’s point of view

are as follows.

To effect promotion based on components based on

competence and performance.

To confirm the services of probationary employee upon the

completion of the probation period satisfactory.

64

To check training and development needs of employee. To

decide upon the pay-raise where regular pay scale have not

fixed.

To decide upon the pay-raise where regular pay scale have

not fixed.

To let the employee know where they stand as far as there

performance is concerned and to help them with constrictive

criticism and guidance for the purpose of there

development.

To improve communication

Performance Appraisal can used to determine whether human

resource program such as selection, training and transfers have

been effective or not.

Essential of Performance Appraisal system in the Dhanhar Masala

Pvt. Ltd. are below here: -

Clear objectives.

Standardization training

Job relatedness

Feedback and participation

Individual differences

Review and appeal

65

In this way Performance Appraisal system is very useful to

company.

Process of the Performance Appraisal in the Dhanhar Masala Pvt.

Ltd.

There are five types of the Recruitment process

uses in the Dhanhar Masala Pvt. Ltd., which are below here;

66

Safety Stander

Company follows safety ruse restricts. The

company is constructed there plant in such a way. That in a case of

emergency the worker can be secured more then one way out are

provide assembly point is in case of fire safety virulent can be

implemented urgently as wall as general returns, company

Establishing Performance Standards

Communicating the Standards

Measuring Performance

Comparing the Actual with the Standards

Discussing the Appraisal

Taking Corrective Actions

67

provided for the worker hand glows, gumshoes, helmets ,masks, to

prevent from the masala reactive . Around the bloke more in

emergency the firebriged and disaster management center

telephone number are kept in such a way that can be contact

errantly without loosing time first-aid box are kept in each section of

the plan.

Record and System As per the rules and regulation company has

to maintain all the rerecord to person working in the factory. More

ever company has to keep the record has per government reels

and factory act. In all necessary firms as wall as regarding Safety

Company has get certain machine cheeked though government

approval agency time to time related to safety rules and maintain its

records.

Factory & Office Work of Time

The employee must have to come timely and

employee has to follow the rules made by the company and

government. Employee not go out side the plant or site without the

permission of his superior or authority. In the organization this rules

touch every person who work in the firm.

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Time keeping:

Shift timing

Dhanhar Masala Pvt. Ltd. has only one shift that is day shift and time is:

9 a.m. to 8 p.m.

Break:

12.30 to 1.30 p.m. lunch break

7. Wages & Salary Structure: -

About Wages & Salary: -

Wages represent hourly rates of pay & Salary

means monthly rate of pay, irrespective of the number of hours put

in by the employee. Wages and Salaries are subject to annual

profit. They differ form employee & depend upon the job – nature,

69

seniority & merit. Wages & Salary, both are part of Components of

Remuneration.

There are three policies of the Wages, Which are below here;

Minimum Wage

Fair Wage

Living Wage

A minimum wage should provide for workers family, for

his efficiency, for the education of his family, their medical cure.

Minimum Wage 3000 in the Dhanhar Masala Pvt. Ltd.

A fair wage should provide for productivity of labour,

place of industry in the economy of a country, prevailing rates of

wages. Fair Wage 4000 in the Dhanhar Masala Pvt. Ltd.

A living wage should provide for forms the basis for

fixing minimum wage, capacity of the industry to pay. Living Wage

6000 in the Dhanhar Masala Pvt. Ltd.

There are two methods of the Wage Payment, which are uses in

Dhanhar Masala Pvt. Ltd.

Methods Depended

Time Wage Depended on the time

Piece Wage Depended on the piece (unit)

70

Wages and Salaries structure in the Dhanhar Masala Pvt. Ltd.;

Company’s wages and salaries are paid by

incentives way and also called payment by result. Incentives

are depend open the productivity of the employee.

Productivity of workers Salaries

1000 to 2000 units 3000

2000 to 3000 units 4000

3000 to 3500 units 4500

3500 to 4000 units 5000

4000 to 5000 units 6000

This is a structure of paying salaries in the Dhanhar Masala Pvt. Ltd.

Dhanhar Masala Pvt. Ltd. also provide fringe benefit for such

top employee these benefit are as follows .

Provident fund

Gratuity

Medical care

71

Hospitalization

Accident relief

Health and group insurance

Canteen

Uniform

Recreation

8. Employee Welfare: -

Meaning of Employee Welfare: -

According to the Arthur James Todd,

“Employee Welfare means anything done for the comfort and

improvement, intellectual or social of the employees over and

above the wages paid, which is not a necessity of the industry.”

72

According to the Oxford dictionary employee

welfare or labour welfare means “the efforts to make life worth living

for workmen.”

Welfare Activities

Welfare activities means those activities which are

do always in favor of employees. It means the special extra

facilities given to employees from company. As it is Dhanhar

Masala Pvt. Ltd. provides such kind of facilities to employees

which are as follow,

Provide good condition of equipment and also provide

better environment for work

Company provides individual changing room, store room, rest room

etc.

First aid box provided to all department.

Safety devices like helmet, glows, safety shoot are provided by

Dhanhar Masala Pvt. Ltd. in production area units

Traveling allowance and dearness allowances are provided

to every employees and executive.

There are two type of welfare activates of the company

73

1. Intramural

2. Extra – mural

1. Intra mural : - This services are provided within the establishment

These include washing & bathing facilities, rest room,

uniform, medical aid , recreation facilities.

2. Extra mural: - These services are provided outside the establishment.

these include housing accommodation , transport ,

maturity benefits , sport’s field, holiday home, etc.

Dhanhar Masala use only Intramural Welfare Services.

9. Human Resource Audit: -

About Human Resource Audit: -

Audit is an important test of managerial

control of company’s point of view. It involves examination and

verification of accounts and records. Human recourse audit

implies critical examination and evaluation of polices, programs

74

and procedure in the area of HR audit of the company’s point

of view .

Advantages of HR audit in company’s point of view.

To review the system of acquiring , developing , allocating,

and utilizing human resource in the organization .

To evaluate the extent to which line managers have

implemented the polices and programs .

To identify shortcoming in the managers in the management

of human resources.

To evaluate the human recourse staff.

Company’s scopes of HR audit are as follows;

1. Auditing human recourse polices.

policy of the company

policy formulation

communication policy

consistency policy

2. Auditing Human Recourse Programs.

3. Audit of Human Recourse.

4. Company’s Audit Report.

75

10. Hierarchy Structure of

Organization:

76

11. Absenteeism Rate: -

HR Department Head

Personal manager Personal officer

Supervisor

Worker

Clerk

Peon

77

The absenteeism rate of Dhanhar Masala

Pvt. Ltd. industry has decreased since last two years as seen

form the records maintained by the Industry. The absenteeism

rate in the year 2001-2002 was around 7% which has now

decreased to 4% in the year 2005-2006. This is due to the change

in the interest and aver ness of the employees working in the

Industry and development of the wage rates which is linking.

Example: - The wages are on the basis of their work or their

attendance. If any person remains absent

continuously for more than eight days without

informing the company that person would be

removed from the job.

Why absenteeism rate is decreased?

Absenteeism Rate is decreased compared to

2001-’02 and 2005-’06 because Dhanhar Masala Pvt. Ltd. gives

extra benefits to the workers. Like bonus, gift and etc. So,

Absenteeism Rate is decreased about 3%.

4. PRODUTION DEPARTMENT

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Activities of Production Department

Process Layout / Product Layout

Technology used

Machinery Operations Stores

Plant Location, Controls of R.M. in

Process & finished goods

Quality Control

79

Structure of Production Department

Introduction: -

Meaning of Production: -

“Production is the process of converting the

raw material and for the other input the product for further

Head of Production

Department

Jignesh bhai(Head 1)

Nilesh bhai(Head 2)

Production Manager

Assistant

Workers

80

production of the finished goods or services so that utility of input is

created or enhanced and the need of customer are satisfied.”

Example: - Consumer goods, Industrial goods, Services of transport,

Medical treatment, Education, Insurance, Banking etc.

Definition of Management: -

“Management means creating and

maintaining an environment in which individual working together in

group willingly contribute there best to achieve the predetermined

goal and objective timely though the effective utilization of sources

such as money, material, technology etc.”

Production Management: -

“Production Management means creating

and maintaining environment in which individual working together in

group willingly contribute their best to produce to satisfy the goods

and services by optimum utilization of raw material and other input so

as to timely satisfy the need of customers”

]

Important of Production Management: -

1. It helps to satisfy the need of customer timely:-

By maintaining the quality delivery schedule and the require rate

of production.

By providing the flexibility of production to give different form of

product and verity of products.

By providing reasonable low price though increase in productivity.

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2. It increase the productivity: -

By utilizing the resources efficiently.

By reducing the wastage of raw material, man hour, machine

hour, fuel etc.

By minimum inventory cost, set up cost, ordering cost etc.

3. It gives the better satisfaction to the employee: -

By providing job satisfaction though training, motivation,

good working condition.

By providing them incentive like with higher productivity.

4. It satisfies the investors by increasing the return on investment (ROI) and

capital appreciation.

5. It satisfies the supplier of an input and ancillaries. By increasing their turn

over.

6. It satisfies the community.

By providing pollution free and healthy environment.

By welfare and development activity in the community.

82

1. Activities of Production

Department: -

Production Management includes all the activities right

from the procuring of row materials and other inputs to their

conversion into marketing output.

There are various activities of the production department in the

Dhanhar Masala Pvt. Ltd., which are below here in short.

1. Product Selection and Design

2. Process Selection and Planning

3. Location of Plant and Facilities

4. Material Handling

5. Capacity of Planning

6. Production Planning and Control

7. Purchasing and Inventory Control

8. Quality Control

9. Maintenance and Replacement of Machinery

10. Cost Reduction and Control

11. Incentives and Extra Benefits

So, there are different eleven types of activities of

the production department in the Dhanhar Masala Pvt. Ltd.

83

1. Process Layout / Product

Layout: -

Location of plant

Plant location is mainly selection on these areas

where the business should well establish for maximum utilize of

economy and effectiveness. It is an important decision in long term.

Location of plant is most important factor in a

private sector. There are many factors are affected e.g. if the place

was out side the city then they are free from paying octroi for their

product, various taxes, labour transmission facilities, living home to

the labour or employee like houses, cottages etc., for the raw

material storage facility to the certain extent to run production

smoothly. When plant or site is located in near or in the city they

have no expense to rent for the employee or labour houses,

available good infrastructure in compare to the far from the city

area, less transportation cost, easy distribution of goods in less time

Dhanhar Masala Pvt. Ltd. plant is located at no

far from the city and not near to the city. It is located in industrial

zone of fulpada in this area they get benefits from the government

and electricity, water, roads, communication channels.

Dhanhar Masala Pvt. Ltd. Chooses this area

because there are available enough raw material with proper quality

& quantity. Easy distribution of their product & profitable to the

industry. They not thinking for the changing the site. They want to

buy or take on the lease new site near the old plant.

84

The population is increasing day by day and

residential area will come near to the industrial area so that

Dhanhar Masala Pvt. Ltd. more concentrate on environment not

harmful to the their citizen. The company will think to establish new

plant far from to the residential area.

Production department

Process layout / Product Layout

Process layout / Product layout plant depend in 10 types

of production department and the Process layout / Product layout are as

follows.

Flow chart of manufacturing Masala

85

Plastic/billetArrival

Testing inLaboratory

Storage &Dispatch

CuttingTo length

CoolingRoom

Charged in re-useFurnace capacity

1MT/hr

Sent backTo supplier

Intermediate Work

(1) Plastics/ Billets

Plastic / Billets is a one types of row-materials. The

plastic / billets they purchases in different places for the different item and he is

delivery to the other places and cities, which are uses masala. All the industries

have too very big stock in plastic / billets.

86

INSPECTION

(2) Reheating Furnace

Reheating furnace means return to plastics and billets

furnace. The company foremen or worker supplied for the plastics and billets to

the furnace. The cranes carry to the plastics and billets and put the conveyer

belt so conveyer belt pick up the plastics and billets goes to the reheating

furnace. So plastics and billets go to the furnace after the process plastics and

billets go to the roughing mill.

87

(3) Intermediate Work

Intermediate mill always work in roughing mill work

finished. Actually intermediate mill means the joint for the plastics and billets.

Intermediate mill the workers hand a one masala packaging and he was push

the out of roughing mill stock and supplied in intermediate mill and the

intermediate mill joint the packaging and fixed cuts. So intermediate mill means

a one types of joint the packaging. The intermediate mill in a very high degree

temperature. So, worker very carefully works in intermediate mill.

88

(4) Finishing Work

Finishing mill means the finished the

Masala Packaging. The Industry always very carefully to the finished for the

packaging. The Industry always demands in the market and he was not rough

product for the customer. So, Industry always very carefully for the finishing mill

and the different product for other Masala’s Industry / companies. Finishing mill

always in the very carefully work for the masala packaging.

89

(5) Cooling Room

Cooling bed means cool the Masala Packages. Some

time the package produce in very large number so Industry cooling room also

facilities provide for the factory. Cooling room work only the cool the packages.

The cooling room very long and very big many workers work on the cooling

room. The workers pick up the masala packages and put the cooling room.

90

(6) Inspection

Inspection means a one types of checking for the packages. The

Industry checks the packages a briefly. The manager is only view to the

checking of packages. The Industries one manager appointment to the check of

packages. The manager is checks the packages after goes to the packages in

the storage & dispatch. Inspection plan is fully automatically. The foremen

provide to the machinery and check the packages and the machinery provide

91

the document about in packages how many unpolluted. These facilities also

provide the companies for his customers.

(7) Storage & Dispatch

Storage & dispatch means the store the

Masala’s packages and transporting to the packages. Storage means the

companies store the packages and the customer gives the order for the

different item of the masala. So, Dhanhar Masala Pvt. Ltd. calls to the

transporter and gives the dispatch for the packages. Any times the Industry

gives self delivery for the product. So the very big place for the storage &

dispatch and the Industry also selected worker for the storage & dispatch.

92

3. Technology used: -

Technology is play very important role of the any

Industry and Company. Dhanhar Masala Pvt. Ltd. used latest technology in

the factory to produce the different types of Masala and display in the

market of whole Gujarat and its selling & result is nice for the Dhanhar

Masala Pvt. Ltd. So, Dhanhar Masala Pvt. Ltd. used “INPACK

FABRICATIONS PVT. LTD.” technology. Dhanhar Masala used many other

machines and technology which are below here;

93

Dhanhar Masala used;

1. High Speed Servo Driven Auger Filler (With Rexroth Bosch System)

2. High Speed Volumetric Viscous Filler to pack oils

3. Servo Driven Auger Filler (With Siemens System)

4. Volumetric Cup Filling ( to pack free flowing Granules)

So, Dhanhar Masala Pvt. Ltd. uses these four types’ machines of the

“INPACK FABRICATIONS PVT. LTD.”

94

Company uses modern machines and techniques to

maximize their production and to minimize the waste. Company

uses only Indian Machines, no China Machines.

95

4. Plant Location, Controls of R.M. in

Process & finished goods: -

Location of plant

Plant location is mainly selection on these

areas where the business should well establish for maximum utilize

of economy and effectiveness. It is an important decision in long

term.

Location of plant is most important factor in a

private sector. There are many factors are affected e.g. if the place

was out side the city then they are free from paying octroi for their

product, various taxes, labour transmission facilities, living home to

the labour or employee like houses, cottages etc., for the raw

material storage facility to the certain extent to run production

smoothly. When plant or site is located in near or in the city they have

no expense to rent for the employee or labour houses, available good

infrastructure in compare to the far from the city area, less

transportation cost, easy distribution of goods in less time.

Dhanhar Masala Pvt. Ltd. plant is located at no far from the

city and not near to the city. It is located in industrial zone of Surat

at A.K. Road. In this area they get benefits from the government

and electricity, water, roads, communication channels. Dhanhar

Masala Pvt. Ltd. chooses this area because there are available

enough raw material with proper quality & quantity. Easy distribution

of their product & profitable to the Industry. They not thinking for the

changing the site. They want to buy or take on the lease new site

near the old plant.

96

The population is increasing day by day

and residential area will come near to the industrial area so that

Industry more concentrate on environment not harmful to the their

citizen. Dhanhar Masala Pvt. Ltd. will think to establish new plant far

from to the residential area.

Raw Material

Dhanhar Masala Pvt. Ltd. uses the raw material to

make a product like Plastics/billets. Every product has a different

raw material. Dhanhar Masala Pvt. Ltd. Use raw material given

below:

1. Plastics /Billets

2. Different Masala’s Row - Material comes different Places

Procuring the raw material

The needs of raw material exist when

Industry receives orders from the customers. For that Industry

makes contract or agreements with the supplier of raw material.

Contract may be duration for the one month or one year. Industry

purchases the raw material in the local market.

According to the agreement duration of

contract, price of raw material, quality of raw material, and in some

case quantity is also specifying, Party’s name, and supplier name is

mentioned in the contract.

Row -Materials are goods which have not yet

been committed to production in a manufacturing firm. They may

consist of basic raw materials or finished components, In many of

97

the cases the finished goods of one Industry becomes the raw

materials of another Industry.

E.g.: - The finished goods of a Dhanhar Masala Pvt. Ltd.

are the masala, which becomes the raw material

from different places for different masala.

1. All the plastics Row - Material comes from the Bombay

2. Rock Salt’s Row - Material comes from the Pakistan (Lahore)

3. Hing’s Row - Material comes from the Afghanistan (Iran)

So, Different types of Row -Material is uses in

the Dhanhar Masala Pvt. Ltd. and it comes to many far and different

places.

Finished Goods

After come raw materials for different type’s

masala, then work in process to the end of finished goods. Finished

Goods are completed products awaiting sale. Finished Goods are

the final output of the production process in a manufacturing firm.

The levels of the three different kinds of inventories depend upon

the nature of the business.

E.g.: - Dhanhar Masala will have high levels of all the three

kinds’ inventory, while a retailer or wholesaler will have

high level of inventories of finished goods only.

98

Inventory Management

Definition of Inventory Management: -

“Inventory control means the decision of

the firm as to the extent to which inventories can be economically

stored.”

Inventory management: -

Dhanhar Masala Pvt. Ltd. Industry they are not

able to engage large amount of money in stock. So, Industries plant

manager has to handle the inventory of raw material, semi-finished

goods etc. There is no such type of different department to manage

the inventory. According to the manger who handle the inventory, in

early stage there were no speedy transportation and

communication so they have to consider the lead time for the raw

material required that’s why the company need to maintain

inventory of raw material and finished or semi-finished goods.

Today there is a greatest change in the IT sector, transport facility

etc. So, there is less need to maintain inventory. Now the raw

material is available in the same place or near by place, in case raw

material purchased from outside the other city then it is available in

one or two days. So, there are fewer burdens to bring the stocks.

Dhanhar Masala Pvt. Ltd. Industry maintains

stock for the safety purpose so production runs in a smooth way. The

stock keeps for the using it crisis time. So, productions not stop.

99

5. Quality Control

About Quality: -

Quality refers to the sum of attributes or properties that

describe a product. These are generally expressed in terms of

specific product characteristics such as length, width, colour, etc.

These characteristics must be quantitatively expressed in terms that

can be objectively measured or observed.

About Quality Control: -

Quality Control refers to those activities used to refer

to a specific organization within the Industrial enterprise which is

assigned responsibility for many of the activities necessary to

achieve quality objectives.

Methods of Quality Control, which are uses in the Dhanhar

Masala Pvt. Ltd.

There are four method uses, which are

1. Inspection

2. Quality Circles

3. Total Quality Management (TQM)

4. Statistical Quality Control (SQC)

Most of use Inspection and Statistical Quality

Control by Dhanhar Masala Pvt. Ltd. in the Factory.

100

Quality control

Customers of any industry first take care and

try to know about the quality of the product. It happens in this

industry also.

The Industry produces a product as per the

customer requirement and the standard given by the customer. For

quality control company takes sample in each and every stage of

production and check the quality of given order. These samples

send to the customers and if they approve the sample then and only

then the order being processed. Quality check in the Industries own

laboratory which is located in their plant. Laboratory is located in the

plant so it comfortable to test and transport the sample.

If customer reject the sample then second

time process is begin with improvement and with care of consider

the quality and requirement of customer. Then it sends to the

customer again

In present time quality control has been one

of the most important factor to boost the product in the competitive

market. Every stage quality checking, reaction testing becomes an

important factor. Just starting the batch from the first reaction time

to time testing is carried out in between the process quality control

and check is containing carried until the product comes out into the

final form especially in dye stuff. Certain quality parameters are

important like solubility of materials, insoluble particles of materials,

isomers, so contained other foreign particles transparency of the

material and strength of the material.

101

Transport

The Dhanhar Masala Pvt. Ltd. provides a

transportation facility to its customer. For export purpose company

send goods to near by dock and then responsibility are shifted to

the buyer’s to carry out the goods to their place. Company sends

goods by the truck, tempo, max pick up and other transport

agencies. Dhanhar Masala Pvt. Ltd. has its own vehicles to

transport the goods.

102

5. FINANCE DEPARTMENT

Budgeting & Planning

Taking Loans (Sources of funds)

Issuing Shares (if applicable)

Providing funds to Different Departments

Balance Sheet & Annual General Report

Working Capital, Cash, Inventories,

Receivables etc.

103

Introduction: -

A firm needs to manage its resources effectively

and efficiently to achieve its objectives. The managing of resources

in an effective manner is possible only when the management

works out the future courses of action in advance and takes

decisions in a professional manner, utilizing the individual and

group efforts in a co-ordinated and rational manner. Financial

Planning should estimated the resources required to carry out

operations and determine how far these resources can be

generated internally by the firm itself and how far they will have to

be obtained externally.

Organization Structure of Finance Department

Head of finance

Department

Dhansukh bhai(Head 1

Jagdish bhai(Head 2)

Head of Marketing Department

104

Accounting Policies

Method of accounting:

The company follows mercantile systems of accounting

as mentioned in the companies act, 1956.

Fixed assets:

All fixed assets are recorded at cost of acquisition

including installation cost wherever applicable excluding motivate

amount.

Depreciation:

Chairman

Directors

General Manager

Accountant

Cashier

Clerk

105

It is being provided according to the companies act 1956

considering written down value method using single shift working in

respect of plant and machinery. In respect of other assets

depreciation is provided according to rates prescribed in schedule

IV of the company’s act 1956 in case of addition during the year.

Depreciation is provided of the prorate basis.

Inventories:

Inventories are valued at the cost or net realizable value

whichever is lower.

Income and expenses recognition:

Income and expenses are accounted for an accrual

basis.

Miscellaneous expenditure:

Miscellaneous expenses are amortized over a

period of 10 years.

Capital structure during the year (Amount in Rs.Thousands)

Public issue --- Nil

Bonus issue --- Nil

Rights issue --- Nil

Private placement --- Nil

1. Budgeting & Planning: -

106

Definition of Capital Budgeting: -

Capital Budgeting may be defined as decision making

process by which an organization evaluates the major investment

proposals keeping due consideration for the,

Amount needed for Investment

Amount available for Investment

Amount that can be acquired from different sources

The cost of raising funds

Future cash Inflows

Types of Capital Budgeting in the Dhanhar Masala Pvt. Ltd.;

1. Introduction of a New Product

2. Change in Method of Production

3. Replacement

4. Business Expansion

5. Substitution of Machinery for Labour

Definition of Financial Planning: -

Financial Planning is primarily a statement estimating the

amount of capital and determining its composition. It includes. :

1. The determination of the form and proportionate amounts of

securities.

2. Develop the best plan to obtain the required fund.

3. Analyse control points which need to be established.

4. Estimated the requirement of financial resources in time with its

operating programme.

107

5. Established control points which need to be established.

Advantages of Financial Planning in any Industry and Company;

Economical procurement and profitable use of funds

Elimination of Waste

To Maintain Effective Control

Modern business is very complex. Financial Planning

helps management to avoid waste which possible by maintaining

close co-ordination between various functions of the firm.

Financial Planning provides broad guidelines for

procurement, allocation and disbursement of funds. Control can be

exercised in an effective manner when actual are compared against

these guidelines.

In the Dhanhar Masala Pvt. Ltd. financial planning is

very strong. Finance position level is maintained for the future.

Factors affecting for the financial planning in the Dhanhar Masala

Pvt. Ltd.;

Nature of business

Attitude of the Management

Alternative sources of finance

Steps in Financial Planning, which are taken by the Dhanhar Masala

Pvt. Ltd.;

108

Review and Analysis of past performance

Establishing objectives

Financing

Consequences of Financial Plans

2. Taking Loans (Sources of funds): -

109

Dhanhar Masala Pvt. Ltd. requires and uses Short Term Capital for running

the business. Short Term Capital to finance its working capital requirements.

Dhanhar Masala Pvt. Ltd. taking no loans by any Industrial bank.

Dhanhar Masala Pvt. Ltd. use only Retained Earnings in the

business firm.

Depreciation charged and retained earnings represent

the internal sources of finance available to the Industry. If the

depreciation charges are used for replacing worn-out equipment,

retained earning growth the only internal sources for financing

expansion and growth. Industrial normally retain 30 per cen to 60

per cen of profit after tax for financing growth.

Advantages of the Retained Earnings in the Dhanhar Masala Pvt.

Ltd.

1. Retained Earnings are readily available internally. They do not

require taking to outsiders.

2. Retained Earnings effectively represent effect of additional equity in

the firm.

3. There is no transfer of control when a firm relies on retained

earnings.

4. The capital appreciation that arises as a sequel to retained earnings

is subject to a lower tax rate.

110

5. Reinvestment of profit may be convenient for many shareholders as it

relieves them to some extent of the problem of investing on their own.

3. Issuing Shares: -

Dhanhar Masala Pvt. Ltd. has no Issuing Shares and no applicable

shares.

4. Providing funds to Different

Departments: -

111

Dhanhar Masala Pvt. Ltd. industry providing funds to different departments

in their budgeting programme.

8% to 10% for marketing department

20% to 30% for capital budgeting

2.5% to 4% for employee welfare

50% to 55% for wages & salary

5. Balance Sheet & Annual

General Report: -

Annual General Report & Balance Sheet of the Dhanhar Masala

Pvt. Ltd. for the year of 2006 – 2007

112

Trading Account as on the date 31/03/2007

(Account Year: - 2006 – 2007)

Particulars (Name of Account) Credit Debit

Sales of Goods (tax) 2,54,88,902 -----

Sales of Goods (Retail) 32,92,800 -----

Closing Stock A/C (T/A) 28,45,211.21 -----

Fire & General Ins. A/C 12,49,000 -----

Opening Stock A/C ----- 12,44,697.02

Sales Tax A/C ----- 1,32,315

Noor - Jakat A/C ----- 2,21,058

Electric Bill Exp. A/C ----- 2,33,280

Purchase of Goods (tax) ----- 2,08,98,501

Purchase of Goods (Retail) ----- 43,01,891

Gross Profit ----- 68,44,209.19

Grand Total of Trading Account 3,38,75,948.21 3,38,75,948.21

Profit & Loss Account as on date 31/03/2007

(Account Year: - 2006 – 2007)

Particulars (Name of Account) Income Expense

Gross Profit 68,44,209.19 -----

Bank Com. A/c ----- 7,153.31

113

Vatav Kasar A/c ----- 40,859.29

Telephone Exp. A/c ----- 11,519

Petrol Exp. A/c ----- 1,859.02

Other Exp. A/c ----- 7,904

Petrol Exp. A/c (car) ----- 26,873.72

Dharmada Exp. A/c ----- 4,200

Machinery Reading Exp. A/c ----- 57,660

Advertising Exp. A/c ----- 5,13,074

Salary Exp. A/c ----- 3,30,400

Fire & General Ins. Exp. A/c ----- 60,790

Professional Tax ----- 1,000

Stationary Exp. A/c ----- 4,817

Mobile Phone Exp. A/c ----- 23,499

Cold Storage Rent ----- 2,389

Computer Programme Service Exp. ----- 8,000

Lava jam Exp. A/c ----- 12,900

Motor Car repairing Exp. ----- 3,534

Out Carriage Exp. ----- 1,79,749

Letter (Tar - Tapal) Exp. ----- 18,428

Packing Stock 6,01,277 -----

Hire Charges ----- 44,291.86

Gasara Exp. ----- 3,18,343.83

Legal Action Fee Exp. ----- 42,382

Website Exp. ----- 26,636

Machinery Parts Exp. ----- 96,664

Sales Promotion Exp. ----- 1,51,965

Rent Exp. ----- 1,42,800

Bonus Exp. ----- 27,500

Salary Exp. (Staff) ----- 2,49,000

Interest Exp. (Safari) ----- 3,17,653.72

Machinery Consultant fee ----- 34,800

Light man Exp. ----- 34,800

114

Purchase of Packing (tax) ----- 31,68,016

Net Profit & Loss A/C ----- 14,73,986.44

Grand Total of P & L Account 74,45,483.19 74,45,483.19

Balance Sheet as on date 31/03/2007

(Account Year: - 2006 – 2007)

Particulars (Name of Account) Liabilities Assets

Partners/Prop. Capital 55,54,326.26 -----

Secured Loans 32,11,252.35 -----

Unsecured Loans 4,15,626.18 -----

Sundry Creditors (Suppliers) 59,27,172.74 2,68,343.62

115

Other Liabilities

Sale tax A/C (Previous) 47,561 -----

Other Account 3,20,000 -----

Fixed Assets

Machinery A/C ----- 1,99,000.68

To lamp A/C ----- 7,041.66

Computer Printer A/C ----- 10,317.16

Motor Cycle (bike) A/C ----- 3,752.29

Air Condition A/C ----- 45,694.68

Fax Machinery A/C ----- 2,292.13

Television A/C ----- 4,175.83

Computer A/C ----- 64,427.50

Civil Exp. A/C ----- 31,785

Motor Car A/C ----- 11,65,948.81

Advance Given to Employees 17,500 -----

Sundry Debtors (Customers) 2,65,563.24 8,953.81

Cash Account

Cash Book ----- 11,10,186.66

Bank Account

Dena Bank ----- 3,94,109.93

Current Assets

Closing Stock A/C (B/A) ----- 28,45,211.21

Electric Item A/C ----- 51,624.61

Packing Stock A/C ----- 6,01,277

Grand Total of Balance Sheet 1,57,59,000.77 1,57,59,000.77

116

Dhanhar Masala Pvt. Ltd. goes to on the profit way

comparing the year of 2005 - 2006. Dhanhar Masala Pvt. Ltd. has more

profit in the year of 2006 – 2007. In the year of 2005 – 2006 Gross Profit

was Rs. 51, 66,835.92 and year of 2006 – 2007 Gross Profit is Rs.

68, 44,209.19. So, it means Rs. 16, 77,373.27 more profit in the year of

2006 – 2007 comparing the year of 2005 – 2006. It’s good shine for the

business because Dhanhar Masala Pvt. Ltd. goes to on the profit way.

6. Working Capital: -

Working capital to a company is like the blood to human

body. It is the most vital ingredient of a business. Working capital

management if carried out effectively, efficiently and consistently

will assure the health of an organization.

Meaning:-

117

Working capital is defined as the excess of current

assets over current liabilities.

Current assets are those assets which will be

converted into cash within current accounting period or within the

next year as a result of ordinary operation of the business. They are

cash or near cash resources. This includes:

Cash and bank balance

Receivables

Inventory

Raw materials, stores and spares

Work in progress

Finished goods

Prepaid expenses

Short term advances

Temporary investment

The value represented by these assets circulates

among several items. Cash is used to buy raw material, to pay

wages and to meet other manufacturing expenses. Finished goods

are produced. These are held as inventories. When these are sold

account receivable brings cash into the firm. The cycle starts again.

This is shown in the following diagram.

118

Circulation of current assets

Current liabilities are the debts of the firms that have to be

paid during the current accounting period or within a year. These

include:

Creditors for goods purchased

Out standing expenses

Short term borrowings

Advances received against sales

Taxes and dividend payable

Other liabilities maturing within a year

STATEMENT OF WORKING CAPITALSTATEMENT OF WORKING CAPITAL

Particulars 2007 2006

Cash

Inventories

119

Current Assets

Inventories

Sundry debtors

Cash on hand

Bank account

Loans and advance

325843.00

265562.24

1006635.00

394109.93

-----

181545.00

108563.85

501120.00

-----

45000.00

A: Total Current Assets 1992150.17 1036228.85

Current Liabilities

Creditors

Advance for goods

Provisions

Other liabilities

527172.74

297100.00

544870.00

55000.00

325574.85

-----

348115.00

-----

B: Total Current Liabilities 1424142.74 673689.85

Working capital = (A-B) 568007.43 362539

Formula to calculate Operating cycle is;

OP = R + W + F + D – C

Raw material storage period :

R = Average stock of raw material .

Average raw material consumption per day

120

= 15 days

Finished goods storage period :

F = Average finished stock inventory

Average cost of goods sold

= 1 day

Debtors collection period :

D = Average debtors .

Average credit sales per day

= 36 days

Credit payment period :

C = Average creditors .

Average credit purchase per day

= 20 days

Operating cycle = R + F + D – C

= 15 + 1 + 36 – 20

= 32 days

Internal audit policies

121

Internal audit system is very important for any

industry. By the audit, management can know where the company

stands. This is the best way to control and remove deices.

Management can also easily know whether they are earning profit

or incurring loss.

The balance sheet and profit and loss A/C of

Dhanhar Masala Pvt. Ltd. is audited every year at the end of the

march.

An audit of Dhanhar Masala Pvt. Ltd. is conducted

in accordance with auditing standards generally accepted in India.

Audit is planned and performed to obtain reasonable assurance

about whether the financial statements are free of material

misstatement. An audit includes examining on test basis evidence

supporting the amount and disclosure in the financial statement. An

audit above includes assessing the accounting principles used

significant estimates made by the management as well as

evaluating the overall financial statement presentation. Here

auditing is done half yearly.

The balance sheet and profit and loss A/C

comply with the accounting standards referred to in subsection 3-C

of section 211 of the companies act 1956.

Types of Payment to Auditor Amount (Rs.)

Audit Fees 15000

Tax Audit Fees 5000

Other Matters 5000

Services Tax 1250

Method of calculating depreciation

122

Each asset in the business has its own useful life.

The main base of such useful life depends upon the period on

which the assets can be used. Because of the usage of the asset its

working capacity decreases and so does the utility price of it. This

reduction in the value of an asset is known as depreciation.

With the reference to above explanation,

depreciation can be understood as the amount to be written off out

of the cost price of that asset during its useful life.

According to Carter, “gradual and permanent

reduction in price of an asset is called depreciation”

According to Spicer and Pegler, “Depreciation is

the measurement of the reduction in the effective life of an asset

due to certain reasons during the given period of time”.

In Dhanhar Masala Pvt. Ltd., depreciation is

being provided according to the companies act 1956 considering

written down value method using single working in respect of plant

and machineries. For other assets depreciation is provided

according to rates prescribed in schedule VI of company’s act 1956.

In case of addition during the year depreciation is provided on

prorate basis.

Cash: -

123

Meaning of Cash: -

As Sydney Robbins, “A business wants to get hold of it

in the shortage possible time, but to keep the least possible quantity

on hand.”

On the other hand, “If the organization is always

running with shortage of cash, its trading and manufacturing

operations will be disrupted and ultimately profitability of the firm will

be affected.”

Cash Management Involves the following four factors:

1. Ascertainment of the minimum cash balance and

controlling the levels of cash.

2. Controlling cash inflows

3. Controlling cash outflows

4. Optimum investment of surplus cash

There are four levels of the Cash Controlling, which is below here;

1. Preparing Cash Budget

2. Providing for contingencies

3. Consideration of cost of shortage of cash

4. Availability of other sources of funds

Cash Budget

Meaning of Cash Budget: -

124

Cash Budget is a, “statement showing the estimated cash

inflows and cash outflows for a particular period.”

On the other hand, “Cash Budget is a plan showing cash

position of business at different time intervals during the year.”

Advantages of Cash Budget in the any Industries and

Companies:

Planned use of cash

Provision for Capital Expenditure

Investment of surplus funds

Dividend Policy

Profitable use of Cash

Timely Payment of Debts

Arrangement for obtaining funds

Useful for Control

Helps Co-ordination

Easy to Obtain funds

Limitations of Cash Budget in the any Industries and Companies:

Estimates are difficult

Carelessness in implementation

Rigidity

Expensive

Methods of Preparing Cash Budget in the Dhanhar Masala Pvt. Ltd.

Receipts and Payment Method

125

Adjusted Profit and Loss Method

Receivables: -

Meaning of Receivable: -

When a firm sells goods for cash, payments are received

immediately and therefore no receivables are credited. A firm grants

credit to its customer so that its sales are not lost to competitors.

According to Hampton, “Receivables are assets

accounts representing amounts owed to the firm as a result of the

sale of goods / services in the ordinary course of business.”

RECEIVABLESRECEIVABLES

All the companies would like to sell their products for

cash, but the pressure of the competitor and the force of the

customers persuade to sell them on credit hence the companies

grant credit facilities to increase the sells. Those customers who

can’t borrow from other sources or find it very expensive or

inconvenient use the credit facilities.

The credit period provided by Dhanhar Masala Pvt.

Ltd. industry is usually up to 60 days after the sells date if the

product is sold by credit, finished goods get converted into accounts

receivable in the books of the seller. While most of the products are

sold by cash but if sold in credit the company charges higher price

on the basis of the credit period allowed.

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Cost of Maintaining Receivables: -

Capital Cost

Collection Cost

Administrative Cost

Difficult Cost

Objectives of Maintaining Receivables: -

To Achieve Growth in Sales

To Increase Profits

To Meet Competition

Some formula’s to forecasting of Receivables: -

Estimated Receivables = Estimated Sale

Accounts Receivables Turnover

= 25488902

1600

= 15930.56

Accounts Receivables Turnover = 360 days

ACP

Here, ACP = Average Collection Period

CONCLUSIONCONCLUSION

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After completing our two months of summer training in

Dhanhar Masala Pvt. Ltd. industry, which was a golden opportunity

provided to us by the university and Dhanhar Masala Pvt. Ltd.

Industry to visit each department of the company and get practical

experience and knowledge in the fields of marketing, HR,

production and finance which helped us to prepare the project.

Hence after preparing the project we got knowledge about the

management and over all handling of the company.

The preparation of the project was been made easier

due to the co-operation of Mr. Jignesh bhai and Mr. Nilesh bhai by

providing each and every detail of the company and the opportunity

to face the real business environment. We are also grateful to

Dhanhar Masala Pvt. Ltd. Industry for their co-operation in

preparing the project.

SWOT Analysis

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Strength:-

Company has a many strength points but one is

his product techniques and marketing strategies to compete with its

competitors. Company has a control over the personnel department

the base of the finally strong. Dhanhar Masala Pvt. Ltd. produce

masala to best quality and chipper price is the strong point of the

industry.

Weakness:-

Company has a one weak point and it is a

disability to produce on time. It become delay because maintain

quality.

Opportunity:-

Company increases its attention to cost and

reduce it, and enter in other state of Indian market and global

market like USA, UAE, etc.

Threats:-

Company may face big problem created by the

other masala industry because its cost is too low and it covers the

Masala market.

BIBLIOGRAPHYBIBLIOGRAPHY

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Annual report of Dhanhar Masala Pvt. Ltd. industry

Reference Book: -

Marketing Management: Philip Kotler

Finance Manager: Bhagvati & Pillai

Production Management: Ashwathapa

Personal Management: B.S.Shah

Website: -

www.dhanhar masala.com

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