power looms summer training project

7/29/2019 power looms summer training project

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BRCM College of Business Administration

Introduction


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Industry Details

India textile industry largely depends upon the textile manufacturing and export. It also plays a

major role in the economy of the country. India earns about 27% of its total foreign exchange

through textile exports. Further, the textile industry of India also contributes nearly 14% of the

total industrial production of the country. It also contributes around 3% to the GDP of the

country. India textile industry is also the largest in the country in terms of employment

generation. It not only generates jobs in its own industry, but also opens up scopes for the other

ancillary sectors. India textile industry currently generates employment to more than 35 million

people. It is also estimated that, the industry will generate 12 million new jobs by the year 2010.

Surat, an emerging city in the state of Gujarat, is known as the textile city of Gujarat. And, the

epithet is perfectly suited to the city. The textile industry is one of the oldest and the most

widespread industries in Surat. A major part of the city population is associated with the textile

industry. The textile industry in Surat is mainly engaged in the activities of yarn production,

weaving, processing as well as embroidery. Surat is well known for its synthetic products

market. It is mainly engaged in the production and trading of synthetic textile products.

Nearly 30 million metres of raw fabric and 25 million metres of processed fabric are produced in

Surat daily. The city has several textile markets that exist since times immemorial. Zampa

Bazaar, Bombay Market, JJ Textile Market and Jash Market are among them. Katat Gam,

Magdalla and Udhana are the areas of Surat where manufacturing is mainly concentrated. In the

course of time, people from various other places like Rajasthan and Kolkata settled in Surat in

order to carry out their textile business.

Generally, the pattern which is followed in the textile industry is the text risers manufacture yarn

and sell it to the waivers, they manufactures gray cloth and sell it to the whole sellers, the whole

sellers give the job work to the mills and/or embroidery and sell it to the retailers within the city

or outside the city or export it to the foreign countries. And then the retailers sell to the final

customer.


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Current Facts on India Textile Industry

India retained its position as worlds second highest cotton producer. Acreage under cotton reduced about 1% during 2008-09. The productivity of cotton which was growing up over the years has decreased in

2008-09.

Substantial increase of Minimum Support Prices (MSPs). Cotton exports couldn't pick up owing to disparity in domestic and international cotton

prices.

Imports of cotton were limited to shortage in supply of Extra Long staple cottons.Various Categories

Indian textile industry can be divided into several segments, some of which can be listed as

below:

Cotton Textiles Silk Textiles Woollen Textiles Readymade Garments Hand-crafted Textiles Jute and Coir


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Company Details

Chanchapra Textiles is located at 96/97, Mahatma Industrial Estate, Varachha Road, Kapodra,

Surat. Is engaged in manufacturing of gray cloth with a constant production capacity of

4000 meters/day of gray cloth and actual annual average production of 3345 meters/day. The

total electricity requirement is 500000 units/year; the natural gas consumed by the Chanchapra

Textiles is of45000 per year. The total industrial process is continuous.

Company Profile

Name of Company: CHANCHAPRA TEXTILES

Location:

96/97, Mahatma Industrial Estate,

Varachha Road,

Surat-395006

Year of Establishment: 2005

Production Starts from: 6th February 2005

Vinubhai Lallubhai Bhikadiya

Jayeshbhai Tulsibhai Chanchapra

Capacity: 4000 meters/day

Promoters:


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History of Company

Chanchapra Textiles is located at 96/97, Mahatma Industrial Estate, Varachha Road, Kapodra,

Surat. Chanchapra Textiles started on 15th January 2005 by Mr. Vinubhai Lallubhai Bhikadiya.

Then he retired and give the seat to Mr. Jayeshbhai Tulsibhai Chanchapra, who is well known

person in Surat. Company is engaged in manufacturing of gray cloth with a constant production

capacity of 4000 meters/day of gray cloth and actual annual average production of 3345

meters/day. The total electricity requirement is 500000 units/year; the natural gas consumed by

the Chanchapra Textiles is of45000 per year. The total industrial process is continuous.


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Marketing

Department


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Introduction

The term marketing has changed and evolved over a period of time, today marketing is based

around providing continual benefits to the customer, these benefits will be provided and a

transactional exchange will take place. Traditionally, marketing analysis was structured into

three areas: customer analysis, company analysis, and competitor analysis (so-called "3 Cs"

analysis). More recently, it has become fashionable in some marketing circles to divide these

further into certain five "Cs": customer analysis, company analysis, collaborator analysis,

competitor analysis, and analysis of the industry context.

The Chartered Institute of Marketing define marketing as 'The management process responsible

for identifying, anticipating and satisfying customer requirements profitably'. If we look at this

definition in more detail Marketing is a management responsibility and should not be solely left

to junior members of staff. Marketing requires co-ordination, planning, implementation of

campaigns and a competent manager(s) with the appropriate skills to ensure success.

Marketing objectives, goals and targets have to be monitored and met, competitor strategies

analysed, anticipated and exceeded. Through effective use of market and marketing research an

organisation should be able to identify the needs and wants of the customer and try to delivers

benefits that will enhance or add to the customers lifestyle, while at the same time ensuring that

the satisfaction of these needs results in a healthy turnover for the organisation.

Philip Kotlerdefines marketing as Satisfying needs and wants through an exchange process.

Within this exchange transaction customers will only exchange what they value (money) if they

feel that their needs are being fully satisfied; clearly the greater the benefit provided the higher

transactional value an organisation can charge.


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P.Tailor suggests that Marketing is not about providing products or services it is essentially

about providing changing benefits to the changing needs and demands of the customer.

Marketing is the process of planning & executing the conception, pricing, promotion, and

distribution of ideas, goods, and services to create exchanges that satisfy individual and

organizational goals

Marketing management is the practical application of marketing techniques. It is the analysis,

planning, implementation, and control of programs designed to create, build, and maintain

mutually beneficial exchanges with target market. The marketing manager has the task of

influencing the level, timing, and composition of demand in way that will achieve organizational

objectives.


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Organisational Structure of Marketing Department

Chairman

General Manager

Marketing Manager

Sales Executive


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Types and Classification of Product

We can divide product into two types like; 1) Consumer Products, 2) Business Products. We can

also classify products into various other category describe as follow;

Let us, describe types and classification in brief.

Classification of

Products

CustomerProducts

ConvenienceProduct

ShippingProducts

SpecialityProducts

BusinessProducts

Raw Material

MajorEquipments

AccessoryEquipment

ComponentsPart

Process

Material

Supply

BusinessServices


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1. Consumer Products:

A product bought to satisfy personal and family needs. There are three categories of consumer

products. These groupings are based primarily on characteristics of buyers purchasing behavior.

i. Convenience Products: Is a relatively inexpensive, frequently purchased item for whichbuyers want to exert only minimal effort. The buyer spends little time in planning the

purchase of a convenience item or in comparing available brands or sellers. Example:

Bread, Gasoline, Newspaper, Chewing gum, soft drinks.

ii.

Shopping Products: Is an item for which buyers are willing to expend considerable

effort on planning and making the purchase. Buyers allocate ample time for comparing

stores and brands with respect to prices, product features, qualities, services, and

warranties. These products are expected to last for a fairly long time and thus are

purchased less frequently than convenience items Example: Appliances, Furniture,

Mens Sites, Bicycle, Cellular Phones.

iii. Speciality Products: It possesses one or more unique qualities for which a buyer iswilling to expend considerable purchasing effort. Buyers actually know what they want

and will not accept a substitute. In searching for specialty products, purchasers do not

compare alternatives. Example: Unique sports car, Rare imported wine, specific type of

antique china, Special handcrafted furniture.

2. Business Products

A product bought for resale, for making other products, or for use in a firms operation.

i. Raw Material: Raw material is a basic material that actually becomes part of a physicalproduct. It usually comes from mines, forest, oceans, or recycled solid wastes. Raw

material usually are bought and sold according to grades or specification. For Chanchapra

Textile this raw material is: Yarn, Aluminium, etc.


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ii. Major Equipment: Major Equipment includes large tools and machines used forproduction purpose. Some major equipment is custom made for a particular organisation,

but other items are standardised products that perform one or several tasks for many types

of organisations. In Chanchapra Textile there is major equipment is: Looms Machine,

Hand trucks, Dump truck.

iii. Accessory Equipment: Accessory Equipment is standardized equipment used in a firmsproduction or office activities. Compared with major equipment, accessory items are

usually much less expensive and are purchased routinely with less thought. Examples:

Hand tools, Computers, Calculators.

iv. Component Part: Component part is part of a physical product and is either a finisheditem ready for assembly or a product that needs little processing before assembly.

Examples: Looms machines part, Computers part, and other more.

v. Process Material: is used directly in the production of another product. Unlike acomponent part, a process material is not readily identified in a finished product. Like

component parts, process material is purchased according to industry standards.

Examples: Food preservatives, Industrial Glue.

vi. Supply: Facilitates production and operations, but it does not become part of the finishedproducts. Examples: Paper, Pencil, Oil, Cleaning Agents.

vii. Business Service: An intangible product that an organisation uses in its operations.Purchases must decide if they want to do their own services or to hire them from outside

the organisation. Examples: Financial, Marketing / advertising, Janitorial, Legal.


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Details of Competitors

Our organization, Chanchapra Textiles, has etched a resounding name for itself as traders,

wholesalers and suppliers of varied kinds of Yarns and Fabrics. These products are known for

their fine weave, different patterns, great finish, smooth texture and colour fastness. All the

products are procured from veritable vendors of the market, who have proved their worth time

and again.

Located in Mahatma Estate (Varachha, surat), our hi-tech warehousing unit is designed to store

fabrics in a safe and secure manner. Our procurement officials use this building as a central point

to conduct business. They scour the market and source fabrics from well-known vendors, who

utilize the best quality raw material to make the products. Later, these are quality tested by our

experts, who determine the colour fastness and long lasting nature of the products. Our products

can be used for varied purposes like making dresses, curtains, pillow cases and bed sheets. Based

on our hard work and consistency, we have managed to accumulate a vast clientele that spans

across a vast area.

Our team comprises the best officials in the industry. The team plays a major role in maintaining

the quality standards of the products by testing all the products & processes related to the

enterprise strictly. Our professionals also stay in touch with the developments in the market

based on extensive research and incorporate these into the day to day processes of the firm. The

team comprises following members:

Procurement professionals, Quality testers Sales and Marketing professionals, Administrative staff Logistics staff


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Product Profile

We are a formidable trader, wholesaler and supplier of varied kinds of Yarns and Fabrics. Our

range includes Cotton Fabrics, Twill Fabrics, Woven Fabrics, Palin Fabrics and Satin Fabrics.

Moreover, we provide Drill Fabrics and Grey Fabrics. These products are imported and procured

from the best vendors in the industry. The vendors make use of high quality raw material in the

form synthetic, natural and blended fibres, which are inclusive of lycra, cotton and polyester.

Our vendors manufacture these using hi-tech production facilities, which are equipped with

sophisticated machinery meant to facilitate bulk production of quality fabrics. Some of the

specific features of our products are as follows:

Fine finish Tear resistant Colour fast Superior spun High elasticity Skin friendly


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Segmentation & Targeting

Segmenting is the process of dividing the market into segments based on customer

characteristics and needs.

The main activity segmenting consists of four sub activities. These are:

1. Determining who the actual and potential customers are2. Identifying segments3. Analysing the intensity of competitors in the market4. Selecting the attractive customer segments.

Customer segmentation can be identified by examining demographic, psychographics, and

behavioural differences & geographic. The marketers then decide which segment presents the

greatest opportunities that are its target market. For each chosen target market the firm develops

a market offering.

Target Marketing involves breaking a market into segments and then concentrating your

marketing efforts on one or a few key segments.

Chanchapra Textile sells its product only to one segment of textile industry that is printing and

dying mills so that they have not to be worry about this strategy (segmentation and targeting).


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Distribution Network

Distribution means to distribute or spread out in the field of marketing. Channels of distribution

indicate routes or pathways through such goods and services flows, or move from producers to

consumers. The line or channel includes the manufactures and the consumer as well as

intermediates. Product distribution (or place) is one of the four elements of the marketing mix.

Distribution is the process of making a product or service available for use or consumption by a

consumer or business user, using direct means, or using indirect means with intermediaries.

The most common routes used for bringing the products in the market from producer to the

consumer are as follows.

Producer----------Consumer.

Producer----------Retailer----------Consumer.

Producer----------Wholesaler----------Retailer----------Consumer.

Producer----------Agent---------Wholesaler---------Retailer----------Consumer.

Producer----------Wholesale----------Consumer.

Producer----------Dealers-----------Consumers.


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Chanchapra Textile uses only one Distribution Channel in each time to reach the consumers. The

most common channel of the distribution in the Chanchapra Textile is given below.

Producer DistributorWarehouse Distributor Printing & Dying Mills (Customer)

Producer

Distributer

Warehouse

Distributor

Printing &Dying Mills


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How Customer Orders Are Proceed?

Sale procedure does not mean only dispatching the product. But this procedure starts from

inquiry about the products to the dispatching of the product to the customers. It contains

following activities.

Buyers make inquiry about different supplier who manufactures grey cloth and fabrics andcompany give the quotation of the products. Quotation contains some basic information like

price of the product, taxes (excises duty, sales taxes) VAT / CST, freight, payment terms, etc.

Customer analysis the quotation of supplier (C.T.). Then customer places the order as pernegotiated terms. Buyer has defined the last date of the delivery, required quality, required

quantity, ratio of the quantity in different size, they also denote the.

After getting order, marketing department send requirement of the customer to Productiondepartment as to manufacture the sample product. First the photo of the product send to the

buyer and then one piece of all sizes will send to the buyers.

If the buyer agreed with the sample then Chanchapra Textile will give the final approval andif they want any change in product or colour of the fabric then they give notes of the

alteration.

Chanchapra Textile gives two month of credit period to buyer for payment.


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4 Ps of Marketing

The marketing mix is a business tool used in marketing products. The marketing mix is often

crucial when determining a product or brand's unique selling point (the unique quality that

differentiates a product from its competitors), and is often synonymous with the four Ps: price,

product, promotion, and place. Marketing decision variables are those variables under the firm's

control that can affect the level of demand for the firm's products. They are distinguished from

environmental and competitive action variables that are not totally and directly under the firm's

control.

Let us define all these four terms like; Product, Price, Place and Promotion.

4 Ps of

Marketing

Product

Price

Place

Promotion


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1. Product:

The first thing you need, if you want to start a business, is a product. Therefore Product is also

the first variable in the marketing mix. Product decisions are the first decisions you need to take

before making any marketing plan. A product can be divided into three parts. The core product,

the augmented product and the tertiary product. Before deciding on the product component there

are some questions which you need to ask yourself.

What product are you selling? What would be the quality of your product? Which features are different from the market? what is the function of product

2. Price:

Pricing of a product depends on a lot of different variables and hence it is constantly updated.

Major consideration in pricing is the costing of the product, the advertising and marketing

expenses, any price fluctuations in the market, distribution costs etc. Many of these factors can

change separately. Thus the pricing has to be such that it can bear the brunt of changes for a

certain period of time. However, if all these variables change, then the pricing of a product has to

be increased and decreased accordingly. This decision includes:

Suggested retail price Volume discounts and wholesale pricing Cash and early payment discounts Bulk Purchase


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3. Place:

Place refers to the distribution channel of a product. If a product is a consumer product, it needs

to be available as far and wide as possible. On the other hand, if the product is a Premium

consumer product, it will be available only in select stores. Similarly, if the product is a business

product, you need a team who interacts with businesses and makes the product available to them.

Thus the place where the product is distributed depends on the product and pricing decisions, as

well as any STP decisions taken by a firm. This decision includes:

Distribution channels

Pricing strategy (Skim, Penetration) Warehousing Distribution centers Order processing Transportation

4. Promotion:

Promotions also decide the segmentation targeting and positioning of the product. The right kind

of promotions affects all the other three variables the product, price and place. If the

promotions are effective, you might have to increase distribution points, you might get to

increase the price because of the rising brand equity of the product, and the profitability might

support you in launching even more products. However, the budget required for extensive

promotions is also high. Promotions are considered as marketing expenses and the same needs to

be taken in consideration while deciding the costing of the product.


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Generic Level Competition

Generic Level Competition is the Competition among products that are different, but solve the

same problem or provide the same benefit or utility, such as audio cassettes and CDs, adhesive

tape and glue-sticks, carpets and tiles.

Business-level strategy is concerned with a company's position in an industry, relative to

competitors and to the five forces of competition described earlier. Companies are challenged to

select business-level strategies to position themselves favourably (in terms of the five

competitive forces) and to establish a competitive advantage over industry rivals.

Cost Leadership Differentiation

Cost Focus DifferentiationFocus

GENERIC BUSINESS LEVEL MODEL OF PORTER


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Companies can choose one of four strategies from the generic strategy matrix based on the

source of competitive advantage--uniqueness or cost--and breadth of competitive scope--broad

or narrow.

A company choosing to compete across a broad market determines that it should compete in a

number of customer segments. Competitive advantage is achieved either by offering unique

products--a differentiation strategy--or by establishing a low-cost position and providing

standardised products at the lowest competitive price--a cost leadership strategy.

Companies that choose to compete in narrow customer segments select a focus strategy, which

may be either a focused differentiation strategy (few segments, unique products) or a focused

cost leadership strategy (narrow segment, standardised products at the lowest competitive price).


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Pricing Policy

Pricing is a very crucial matter for the marketing manager because it affects the demand, sales

promotion, competitive strength of the business unit, ego satisfaction of the customer and

ultimately the profit. In any business unit pricing policy can play an important role without a

good pricing policies profit cannot be managed by the any business unit.

1. Determination of cost per unit: First, in a bulk quantity raw material is taken. Cost of this raw material is calculated Now, Labour hours are calculated to manufacture the product and total labour cost is

also calculate

Total time used to manufacture that product is calculated and on basis of that other totalcost are calculated, like electricity used, fuel, oil, land, tools etc. which are used to

manufacture that product.

Costs of inspection of quality, plant maintenance, transportation cost are also calculated. Now, calculation of total of above cost id done. Total number of items manufactured is counted. Total cost per unit is calculated by dividing the total cost by number of items

manufactured.

2.

Determination of price per unit:

After determining the cost, a profit percentage which the firm wants to incur will be added which

can provide a profit to firm. The price must be equal to or more than the cost per unit. The firm

must earn profit by which it can survive in the competition.


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3. Price Discrimination:Pricing policy where a seller sets different incremental margins on various units of the same or

similar product. To earn a higher incremental margin from buyers with higher benefit, and a

smaller margin from buyers with lower benefit.

4. Complete Price discrimination:The pricing policy where a seller prices each unit of output at the buyers benefited and sells a

quantity where the marginal benefit equals the marginal cost.

a.

The entire buyer surplus is extracted. Every buyer is charged the maximum she is willing

for pay for each unit.

b. Economically efficient quantity: all the opportunity for additional profit through changesin sales is exploited.

c. Extracts a higher price for units that would be sold under uniform pricing and extendssales by selling additional units that would not be sold.

Promotional and Advertising Policy

Chanchapra Textile does not use any promotional and advertisement policy for their product

because they manufactured grey cloth which is sold to a particular printing and dying mills

company so there is no need to make policy and expense on these two decisions.


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Taxes Applicable

Direct taxesDirect Taxes are those which are directly charged in the hands of the assesse. E.g. Income Tax.

The Person who earns income pays tax.

Corporate tax Personal income tax Wealth and Property Tax

Indirect taxesIndirect taxes are those which are indirectly collected from assesse. E.g. Sales Tax. The person

who sales collects tax from the buyer and hence the buyer ultimately pays the tax is called

Indirect tax.

Service tax Custom duty Excise duty Sales Tax


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Study of Control System & Reporting System Design for Sales

Employees Working In Field

The controlling system is very necessary for sales employees. In Chanchapra Textile as

Industries controlling system is very clear. No one can take the lot outside the factory before the

signature of dispatching manager and general manager. Dispatching manager issues the bill for

the goods which is send out of the factory. This bill would be collected by the security manager.

And then they allowed any one to let the goods outside the factory. This system is also

applicable for the purchased goods. No one can take the goods inside the factory, first security

manager check the goods and then allowed to enter into the factory.


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Production

Department


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Organizational Structure of Production Department

Chairman

General

Manager

Production

Manager

Supervisor

Master

Pasariya Workers Worpers TFOWorkers


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Production Plan

Production planning is the function of management, which decides about the resources that will

be required for future manufacturing operations & allocating these resources to reduce desired

output at right time, in right amount, of required quantity & at minimum cost.

A production plan is that portion of your intermediate-range business plan that your

manufacturing / operations department is responsible for developing. The plan states in general

terms the total amount of output that the manufacturing department is responsible to produce for

each period in the planning horizon.

The output is usually expressed in terms of units of measurement (e.g. tons, litters, and kgs.) or

units of the aggregate product (this refers to the weighted average of all the products in

company). The production plan is the authorization of your manufacturing department to

produce the items at a rate consistent with your company's overall corporate plan.

This production plan needs to be translated into a master production schedule so as to schedule

the items for completion promptly, according to promised delivery dates; to avoid the

overloading or under loading of the production facility; and so that production capacity is

efficiently utilized and low production costs result.

Production planning is one of the planning functions that a firm needs to perform to meet the

needs of its customers. It is a medium-range planning activity that follows long-range. Firms

need to have an aggregate planning or production planning strategy to ensure that there is

sufficient capacity to meet the demand forecast and to determine the best plan to meet this

demand.


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A carefully developed production plan will allow your company to meet the following

objectives:

Minimize costs / maximize profits Maximize customer service Minimize inventory investment Minimize changes in production rates Minimize changes in work-force levels Maximize the utilization of plant and equipment

Inputs to the production planning process

To be able to perform the aggregate planning process, the following information should be

available to this production planning team. These data include the following:

Materials / purchasing Information Operations / manufacturing Information Engineering / process Designs Sales, marketing and distribution Information Financial and accounting information Human resources information

In Chanchapra Textiles, the Production Plan is made according to the orders placed by the

customers. For each and every order, they make production planning directly or indirectly.


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Analysis of Plant Location

1. Availability of Raw MaterialsThe firm Chanchapra Textiles has its production unit in Mahatma Industrial Estate, from where

they can get raw material very easily. Availability of raw material affects the selection of plant

location.

2. Proximity to marketIt means that you have the potential market to sell your product in your area where you are

producing. The market is also near to the Firm; actually it is in one city only.

3. Transportation FacilityThere is transportation facility is very much available there, because the firm is near to the main

road of the city, so the transportation problem is less and therefore many peoples like to do

business in this area.

4. Man Power AvailabilityThe workers are also easily available in that area so that they dont have to worry more about the

labours.

5. Financial Facilities & Infrastructure FacilitiesThere are also branches of some banks like, SBI, ICICI, and IDBI, and also some facilities like

road, rail, airport, ports are also easily available.

Thus, the location of Plant Site is very much conveniently, and it helps to earn money also.


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Plant Location of Every Department


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Internal Plant Location


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List of Machines

Power Looms Machine Boiler

Yarn Twisting Machine

(Spinning Machine)Electronic Weighting

Scale


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List of Material Handling Equipment

Scissor & Spindle Baskets

Folding Equipment Material Lifting Machine

Goods Transportation Truck Vacuum Cleaner


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Inventory Valuation Method

An inventory valuation allows a company to provide a monetary value for items that make up

their inventory. Inventories are usually the largest current asset of a business, and proper

measurement of them is necessary to assure accurate financial statements. If inventory is not

properly measured, expenses and revenues cannot be properly matched and a company could

make poor business decisions.

There are three basis approaches to valuing inventory that are allowed by GAAP (Generally

Accepted Accounting Principles) -

First-in, First-out (FIFO): Under FIFO, the cost of goods sold is based upon the cost ofmaterial bought earliest in the period, while the cost of inventory is based upon the cost of

material bought later in the year. This results in inventory being valued close to current

replacement cost. During periods of inflation, the use of FIFO will result in the lowest

estimate of cost of goods sold among the three approaches, and the highest net income.

Last-in, First-out (LIFO): Under LIFO, the cost of goods sold is based upon the cost ofmaterial bought towards the end of the period, resulting in costs that closely approximate

current costs. The inventory, however, is valued on the basis of the cost of materials bought

earlier in the year. During periods of inflation, the use of LIFO will result in the highest

estimate of cost of goods sold among the three approaches, and the lowest net income.

Weighted Average: Under the weighted average approach, both inventory and the cost ofgoods sold are based upon the average cost of all units bought during the period. When

inventory turns over rapidly this approach will more closely resemble FIFO than LIFO.


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Manufacturing Process

The main operational process for production of towels and bed sheets in cluster units are:

Doubling

Yarn Dying

Winding

Warping

Weaving


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1. Doubling

In the Doubling process, thin single yarn is converted to double yarn for strengthening the yarn

by using doubling machine.

2. Yarn dyeing

Initially, the yarn is soaked in soap water for 24 hours to remove the dirt and other foreign

materials and after soaking, the yarn is taken for bleaching. Bleaching is carried out soaking the

yarn in tanks mixed with bleaching agents and after completion of the process;

The yarn is washed with normal water. The hang dyeing machine tanks are filled with required

quantity of normal water and required chemicals and dyeing agents are added. The temperature

of the water is raised by oil circulation or direct steam injection.

3. Winding

The yarn after drying is taken for winding in which the yarn is wounded to bobbins and cones.

The winded yarn is taken for further process.

4. Warping

In warping, the winded yarn is wound to beams according to designed pattern (customized

designs). Then the beams are taken for Weaving.

5. Weaving

The beams, which are wound with yarn are taken and placed in power looms where the designed

pattern is already set. In power looms, the yarn is converted to final product by weaving. The

product obtained from weaving is taken for stitching and packing.


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Finance

Department


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Finance Management

The part of an organization that manages its money is called finance department. The business

functions of a finance department typically include planning, organizing, auditing, accounting

for and controlling its company's finances. The finance department also usually produces the

company's financial statements. The management of the finances of a business / organisation in

order to achieve financial objectives is called Finance Management.

Taking a commercial business as the most common organisational structure, the key objectives

of financial management would be to:

Generate Funds Optimum utilisation of funds Efficient allocation of earnings

There are three key elements to the process of financial management:

(1) Financial Planning

Management need to ensure that enough funding is available at the right time to meet the needs

of the business. In the short term, funding may be needed to invest in equipment and stocks, pay

employees and fund sale made on credit. In the medium and long term, funding may be required

for significant additions to the productive capacity of the business or to make acquisitions.

(2) Financial Control

Financial control is a critically important activity to help the business ensure that the business is

meeting its objectives. Financial control addresses questions such as:

Are assets being used efficiently? Are the businesses assets secure?


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Do management act in the best interest of shareholders and in accordance with businessrules?

(3) Financial Decision-making

The key aspects of financial decision-making relate to investment, financing and dividends:

Investments must be financed in some way however there are always financingalternatives that can be considered. For example it is possible to raise finance from

selling new shares, borrowing from banks or taking credit from suppliers

A key financing decision is whether profits earned by the business should be retainedrather than distributed to shareholders via dividends. If dividends are too high, the

business may be starved of funding to reinvest in growing revenues and profits further.


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Organizational Structure of Finance Department

Owner

(Vinubhai Bhikadiya)

General Manager

(Jitubhai Chanchapra)

Accountant(Rajeshbhai )

Payment Collector

(Sajnu )


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Budgeting and Planning

Budgeting is essential to the sustainability and growth of a business. Management must forecast

business results, such as sales revenue, capital expenditures, expenses, investments and debt

management. These projections are based on market analysis, research, growth targets and

experience. Done properly, these budgets save time, effort and money in determining how to best

allocate business resources.

Capital Budgeting

The term capital budgeting, means planning for capital asset. The capital budgeting decision

means a decision as to whether or not money should be invested in long term projects. Such

projects may include the setting up of a factory or installing a machinery or certain creating

additional capacities to manufacturing a part which at present may be purchased from outside. It

includes a financial analysis of the various proposals regarding capital expenditure to evaluate

their impact on the financial condition of the company for the proposal to choose the best out of

the various alternatives.

In Chanchapra Textiles, capital budgeting is being done not every day but every 2 years. In last

year, in capital budget, they have decided to purchase 20 new Water Jet Looms for better and

efficient quality production.

Revenue Budgeting

A budget that projects future sales is called Revenue Budget. The amount of money allocated to

the maintenance and growth of a business. A revenue budget is essential to management and is

the result of a business's forecasts of sales revenue, expenses and capital expenditures. Revenue

budgets help business save time and effort by the proper allocation of resources.

Management team of Chanchapra Textiles do sales forecast and make revenue budget as per the

data available of past years. And according to that, they make predictions of future revenue and

sales.


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Final Accounts of Chanchapra Textiles

2009-10 2010-11 2009-10 2010-11

OPENING STOCK SALES

Opening Stock 2558881.00 3513580.00 Grey Sales 40809791.00 32446434.00

PURCHASE CLOSING STOCK

Millgin Purchase 522575.00 545820.00 Closing Stock 3513580.00 5217242.00

Yarn Purchse 24938858.00 19148252.00

Grey Purchse - 94568.00

SALARY & WAGESG.E.B. Power Bill A/c 5345691.00 4885058.00

Gujarat Gas Bill Exp - 44452.00

Worker Salary A/c 3687408.00 3454288.00

Worker Salary [Twi.] A/c 1883705.00 1573924.00

GROSS PROFIT 5386253.00 4403734.00

TOTAL 44323371.00 37663676.00 TOTAL 44323371.00 37663676.00

CHANCHAPRA TEXTILES

96/97, Mahatma Ind. Est., Kapodra, Varachha Road, Surat

TRADING ACCOUNT FOR THE YEAR 2009-10-11

Amount ()Amount ()Expenditures Income


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2009-10 2010-11 2009-10 2010-11

ADMINISTRATIVE EXP GROSS PROFIT 5386253.00 4403734.00

Account Fee Exp. 144000.00 144000.00

Audit Fee 15000.00 15000.00 ADMINISTRATIVE INCOME

Bank Charges 3268.00 1696.14 Sales of Wastages - 168950.00

Bank Interest Exp 401431.00 4472214.00 Late Payment Interest 19667.00 -

Conveyance Exp 40650.00 30600.00

Depriciation A/c 358514.00 347951.00

Electricity Exp 31743.00 26435.00

Factory Rent A/c 480000.00 480000.00Gujarat Gas Bill Exp 46353.00 -

Gray Claim A/c 11099.00 105349.00

Insurance Exp 15272.00 15010.00

Interest Exp 63130.00 92148.00

Mobile Phone Bill 20511.00 27030.00

Machinery Repairs 111270.00 22239.00

Manager Salary Exp 234000.00 144000.00

Master Salary Exp 264000.00 132000.00

Miscellenious Exp 89170.00 31600.00

Machinery Rent 1224000.00 1224000.00

Professional Tax 2000.00 3920.00

Programming Charges - 2500.00SMC Tax 60064.00 105950.00

Supervisior Salary Exp 234000.00 108000.00

Stationary & Printing 10344.00 3215.00

Security Exp 144000.00 -

Telephone Bill Exp 7521.00 5420.00

Transport Exp 122439.00 48771.00

Discount Exp 35873.00 91523.00

Admin Staff Salary Exp 420000.00 240000.00

NET PROFIT 816268.00 677112.00

TOTAL 5405920.00 4572684.00 TOTAL 5405920.00 4572684.00

PROFIT & LOSS ACCOUNT FOR THE YEAR 2009-10-11

ExpendituresAmount ()

IncomeAmount ()

CHANCHAPRA TEXTILES96/97, Mahatma Ind. Est., Kapodra, Varachha Road, Surat


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2009-10 2010-11 2009-10 2010-11

OWNER'S CAPITAL FIXED ASSETS

Jayeshbhai Chanchapra 1634081.00 29272963.43 Boiler A/C 14138.00 12017.00

UNSECURED LOAN Computer A/C 53.00 21.00

Bipinbhai D. Chanchapra 300000.00 - Gujarat Gas Co. Ltd. 29634.00 25189.00

Tejuben B. Patel 300000.00 300000.00 Machinery A/C 1896418.00 1611955.00

Dhanjibhai Chanchapra 290000.00 - Office Furniture A/C 62501.00 56251.00

Jivanbhai Patel 232000.00 - Printer A/C 2995.00 2546.00

Kishan Textiles 200000.00 - Television A/C 25875.00 23287.00

Nileshbhai Chanchapra 95000.00 - Air-Conditioner A/C 32300.00 27455.00

Rambhaben Chanchapra 925000.00 - Motor Car A/C - 527344.00

Tulsibhai Chanchpra 480000.00 - INVESTMENT

Vimlaben Chanchapra 160000.00 - Argine Jewels 527452.00 14920107.00

Vibhaben Chanchapra 300000.00 - SPB Bank FD 222442.00 244338.00

SUNDRY CREDITORS (Goods) SPB Bank Shares 100020.00 100020.00

GROUP 1 INVENTORIES

Shree RadheGovind Poly 369298.00 - Closing Stock 3513580.00 5217242.00

APL Corp. Pvt. Ltd. - 278700.00 SUNDRY DEBTORS

Fairdeal Filaments Ltd. - 1003040.00 AAA Creations 371753.00 -

Lotus Marketing - 671379.00 Shashi Prints 46202.00 -

Udai Yarn Twisters - 354092.00 I.G. Fashion 45707.00 -

GROUP 2 Khushboo Creation 142760.00 -

Madhvanand Textile - 94568.00 Khushi Creation 234424.00 -

Maker Sizing Pvt. Ltd. - 12960.00 Marudhar Silk Mills 96350.00 -

Shree Nijanand - 3850.00 Mansi Fashion 94815.00 -

Shree Gayatry Reed Mfg.. - 100484.00 Manan Fashion 194470.00 -

Siddharth Waves - 137258.00 Naman Creation 91775.00 -

Yud Enterprise - 278472.00 Nilkanth Silk 373715.00 -

Shahlon Silk Mills - 70190.00 Radheshyam Creation 389956.00 -

SUNDRY CREDITORS (Others) Shree Balaji Creation 266923.00 310918.00

Ashmita Fabrics 101358.00 105840.00 Shantinath Creation 93667.00 -

J.B. Patel 125676.00 129600.00 Shantinath Sarees 23944.00 -

Kishan Textiles 152037.00 158760.00 S.B. Creation 230338.00 -

Mihir Twisters 101358.00 105840.00 Sagar Exports 268658.00 603402.00

Nilesh Textiles 152037.00 158760.00 Witness Creation 40000.00 -Piyush Textiles 152037.00 158760.00 Alfa Silk Mills - 36970.00

Radhe Twister 185823.00 194040.00 Ashish Silk Mills - 35540.00

Rambhaben Chanchapra 167568.00 172800.00 Balaji Silk Mills 570987.00 24834.00

Shilpa Fabrics 152037.00 158760.00 Colour Range - 270013.00

Vimlaben Patel 125676.00 129600.00 Dharma Creation - 59316.00

Varsha Fabrics 152037.00 158760.00 Gopalji Textiles - 58464.00


BALANCE SHEET AS ON 31st March

LiabilitiesAmount ()

IncomeAmount ()


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2009-10 2010-11 2009-10 2010-11

PROVISIONS G.L. Sarees - 1400.00

Unpaid Mobile Bill 1535.00 2843.00 Harekrishna Textiles - 1528614.00

Unpaid Gujarat Gas Bill 3917.00 3125.00 Gaurav Enterprise - 106415.00Unpaid Audit Fees 15000.00 15000.00 Heer Creation - 170742.00

Unpaid G.E.B Bills 432874.00 398710.00 Laxmi Sarees 856278.00 423540.00

Unpaid Telephone Bill 845.00 - Malishka Industries - 126640.00

Unpaid Worker Salaries 481149.00 - Nivesh Fashion - 308138.00

Unpaid Staff Salaries 170000.00 32000.00 Narayan Prints - 657301.00

Unpaid Admin Staff Salary 30000.00 - Nitisha Textiles - 91654.00

CASH & BANK BALANCE Pinal Sarees - 55633.00

SPB Co-operative Bank 3908890.00 3979849.00 RatanRaj Creation 282291.00 241086.00

Shivam Silks - 124182.00

Sai Ganesh Textiles - 95456.00

Shree Pinal Sarees - 175106.00

Vidhatri Sports - 114449.00CASH & BANK BALANCE

Cash A/C 119239.00 266648.00

Axis Bank 5912.00 657276.43

Bank Of Baroda 16995.00 16828.00

LOAN & ADVANCES

Alpeshbhai Chanchapra 600000.00 3000000.00

Prepaid Insurance 12666.00 12666.00

Tulsibhai Chanchapra - 6300000.00

TOTAL 11897233.00 38641003.43 TOTAL 11897233.00 38641003.43

LiabilitiesAmount ()

IncomeAmount ()


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Cost Sheet of Chanchapra Textiles

Cost sheet is a statement, which shows various components of total cost of a product. It classifies

and analyses the components of cost of a product. Previous periods data is given in the cost

sheet for comparative study. It is a statement which shows per unit cost in addition to Total Cost.

Selling price is ascertained with the help of cost sheet. The details of total cost presented in the

form of a statement are termed as Cost sheet. Cost sheet is prepared on the basis of:

1. Historical Cost2. Estimated Cost1. Historical Cost

Historical Cost sheet is prepared on the basis of actual cost incurred. A statement of cost

prepared after incurring the actual cost is called Historical cost sheet.

2. Estimated CostEstimated cost sheet is prepared on the basis of estimated cost. The statement prepared before

the commencement of production is called estimated cost sheet. Such cost sheet is useful in

quoting the tender price of a job or a contract.


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Particulars Amount ()Per Unit Cost

(Sales 1220925 meters)

Direct MaterialsOpening stock 3513580.00

+Purchases 19788640.00

-Closing stock 5217242.00 18084978.00 14.81

Direct Wages 5028212.00 4.117

Direct Expenses 4929510.00 4.038

Prime Cost 28042700.00 22.965

Factory Overheads

Indirect Wages 384000.00

Factory Rents 480000.00

Machinery Rent 1224000.00

Machinery Repairs 22239.00

Depriciation of plants 52192.65

Insurane Expense 107158.00 2269589.65 1.859

Work Cost 30312289.65 24.824

Office and Admin. Overhead

Account Fee Ex. 144000.00

Audit Fee 15000.00

Bank Charges 1696.00

Bank interest ex. 447214.00Conveyance ex. 30600.00

Mobile Phone Bill ex. 32450.00

Misce. Ex. 31600.00

Programming Charges 2500.00

Stationary & Printing ex. 3215.00

Administrative staff salary 240000.00

Tax 109878.00 1058153.00 0.8667

Cost Of Production 31370442.65 25.6907

Selling & Distribution Overhead

Transport Ex. 48771.00

Vatav Kasar 91523.00 140294.00 0.115

Cost Of Sales 31510736.65 25.809

Profit 677112.86 0.5545

Sales 32187849.51 26.3634

Cost Sheet for the period of 31st march 2010-11


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Classification of Cost

Cost classification can be defined in three categories:

1. Direct Material Cost:The raw materials used in the creation of the final product. Direct material is a direct cost and

includes any raw material that ends up as a part of the final product. For example, the cost of

glass is a direct materials cost in light bulb manufacturing. The manufacture of products or goods

required material as the prime element. In general, these materials are divided into two

categories. These categories are direct materials and indirect materials. Direct materials are also

called productive materials, raw materials, raw stock, stores and only materials without any

descriptive title.

2. Direct Labour Cost:Direct labour cost is a part of wage-bill or payroll that can be specifically and consistently

assigned to or associated with the manufacture of a product, a particular work order, or provision

of a service also; we can say also it is the cost of the work done by those workers who actually

make the product on the production line.

3. Overhead Cost:In business, overhead or overhead expense refers to an on-going expense of operating a business.

The term overhead is usually used to group expenses that are necessary to the continued

functioning of the business but cannot be immediately associated with the products/services

being offered.


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Working Capital Management

Working capital is a financial metric which represents operating liquidity available to a business,

organization or other entity, including governmental entity.

Working capital can be defined as the difference between current assets and current liabilities.

Working Capital (WC) = Current Assets (CA)Current Liabilities (CL)

Decisions relating to working capital and short term financing are referred to as working capital

management. These involve managing the relationship between a firm's short-term assets and its

short-term liabilities. The goal of working capital management is to ensure that the firm is able to

continue its operations and that it has sufficient cash flow to satisfy both maturing short-term

debt and upcoming operational expenses.

Working capital management refers to the combined efforts of a small business owner or

manager to balance or improve the cash situation of the business. It normally will include

different reports and measures taken to evaluate cash flows in and out of the business, and often

entails using a third party for obtaining additional cash resources.

Working capital management is important because maintaining a desired balance of income to

debt can be difficult. Owners must be diligent to assure that there is adequate working capital

available or they may run into problems that could have catastrophic results. Even very

profitable businesses can run into trouble if they lose the ability to meet their immediate

obligations. Sometimes it takes a little assistance to maintain levels of liquidity or make major

purchases.


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Net Working Capital = Current AssetsCurrent Liabilities

A. Estimation of Current assets:1. Cost of Raw Material inventories2. Cost of Work-in-progress inventories3. Cost of Finish Goods inventories4. Amount of Debtors5. Minimum cash and bank balance

B. Estimation of Current Liabilities:1. Amount of Creditors2. Outstanding Expenses

Estimation of Working Capital = AB

Operating Cycle

Time length between payment of raw material purchase and collection of cash from the

receivable is known as operating cycle or cash cycle.

Process of Operating Cycle

1. Conversion of cash into raw materials2. Conversion of raw materials into finish goods3. Conversion of finish goods into receivables4. Conversion of receivables into cash


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O = R + F + D - C

Where, O = Operating Cycle Length

R = Raw material storage period

F = Finish Goods storage period

D = Debtors collection period

C = Creditors payment period

Cash

Raw Material

Finish Goods

Receicables


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Fund Flow Statement

Fund flow statement is a statement which shows the inflow and out flow of funds between two

dates of balance sheet. So, it is known as the statement of changes in financial position. We all

know that balance sheet shows our financial position and inflow and outflow of fund affects it.

So, in company level business, it is very necessary to prepare fund flow statement to know what

the sources are and what are the applications of fund between two dates of balance sheet?

Generally, it is prepare after getting two year balance sheet.

According to Prof. Anthony, The funds flow statement describes the sources from which

additional funds were derived and the use of which these funds were put.

The first step for making Fund Flow Statement is to make Change in Working Capital Statement.

Particular Increase Decrease

CA

Closing Stock 1703662.00 -

Sundry Debtors 904800.00 -

Cash 798606.43 -

Loan & Advances 8700000.00 -

CL

Sundry Creditors-

2699571.00Provision 683642.00 -

BOD 70959.00 -

Increase in WC 10162098.43

12861669.43 12861669.43

CHANGE IN WORKING CAPITAL STATEMENT

CHANCHAPRA TEXTILES



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From making Change in Working Capital Statement, we can know the increase or decrease in

Working Capital of the company.

And the second step is to make Fund Flow Statement from Change in working Capital Statement

and Balance Sheet.

Sources of Fund Amount Application of Funds Amount

Raise Owner's Capital 27638882.43 Increase in WC 10162098.43

Sales of Boiler 2121.00 Pay Unsecured Loans 2982000.00

Sales of Computer 32.00 Purchase of Motor Car 527344.00

Sales of Gujarat Gas 4445.00 Purchase of Argine Jewels 14392655.00

Sales of Machinery 284463.00 Purchase of SPB FD 21896.00

Sales of Furniture 6250.00

Sales of Printer 449.00

Sales of Television 2588.00

Sales of Air-Conditioner 4845.00

27944075.43 27944075.43

FUND FLOW STATEMENT

CHANCHAPRA TEXTILES



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Common size and Comparative Statement

Common size Financial Statement

A company financial statement that displays all items as percentages of a common base figure is

called Common Size Financial Statement. This type of financial statement allows for easy

analysis between companies or between time periods of a company.

Amount % Amount %

Sales 40809791.00 100 32446434.00 100

Less: Cost of sale 35423238.00 86.8 28042700.00 86.43

Gross Profit 5386253.00 13.2 4403734.00 13.57

Less: Admin. Expenses 4295802.00 10.53 3550044.14 10.94

Balance 1090451.00 2.67 853689.86 2.63

Less: Selling Expenses 168656.00 0.41 143509.00 0.44

Net Operating Profit 921795.00 2.26 710180.86 2.19

Add: Other Income 19667.00 0.048 168950.00 0.52

EBIT 941462.00 2.31 879130.86 2.71Less: Interest 63130.00 0.15 92148.00 0.28

EBT 878332.00 2.15 786982.86 2.43

Less: Tax 62064.00 0.15 109870.00 0.34

Net Profit After Tax 816268.00 2 677112.86 2.09

2009-10 2010-11Particulars

COMMON SIZE INCOME STATEMENT



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Comparative Financial Statement

A statement which compares financial data from different periods of time is called Comparative

Financial Statement. The comparative statement lines up a section of the income statement,

balance sheet or cash flow statement with its corresponding section from a previous period. It

can also be used to compare financial data from different companies over time.

Assets:

Current Assets:

Investment 849914.00 15264465.00 14414551.00 1696.00

Inventories 3513580.00 5217242.00 1703662.00 48.49

Debtors 4715013.00 5619813.00 904800.00 19.19

Advances 612666.00 9312666.00 8700000.00 1420.02

Cash And Bank Balance 142146.00 940752.43 798606.43 561.82

Total Current Assts 9833319.00 36354938.43 26521619.43 269.71

Fixed Assets 2063914.00 2286065.00 222151.00 10.76

Total Assets 11897233.00 38641003.43 26743770.43 224.79

Liabilities & Capital:Current Liabilities:

Sundry Creditors 1936942.00 4636513.00 2699571.00 139.37

Provision 1135320 451678.00 -683642.00 -60.22

Bank Overdraft 3908890.00 3979849.57 70959.57 1.82

Total Current Liabilities 6981152.00 9068040.57 2086888.57 29.89

Loans 3282000.00 300000.00 -2982000.00 -90.86

Propritors Capital 1634081.00 29272962.86 27638881.86 1691.40

Total Liabilities & Capital 11897233.00 38641003.43 26743770.43 224.79

Change in () Change in %Amount

2009-10

Amount

2010-11


COMPARATIVE BALANCE SHEET

Particulars


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Trend Analysis

Trend analysis is a form of comparative analysis that is often employed to identify current and

future movements of an investment or group of investments. The process may involve

comparing past and current financial ratios as they related to various institutions in order to

project how long the current trend will continue. This type of information is extremely helpful to

investors who wish to make the most from their investments.

In Rs. % In Rs. %

Sales 40809791.00 100 32446434.00 79.51

Purchases 25461433.00 100 19788640.00 77.72Cost of Goods Sold 35423538.00 100 28042700.00 79.16

Profit Before Tax 878332.00 100 786982.00 89.60


TREND ANALYSIS (BASE YEAR: 2009-10)

Particular

Year

2009-10 2010-11


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Ratio Analysis

Liquidity and Solvency Ratio:1. Current Ratio =

2009-10 =

= 1.41: 1

2010-11 =

= 4.01: 1

2. Quick Ratio

2009-10 =

= 1.86: 1

2010-11 =

= 4.29: 1

3. Net Working Capital Ratio =

2009-10 =

=0.24: 1

2010-11 =

= 0.74: 1

4. Proprietary Ratio =

2009-10 =

= 0.41: 1

2010-11 =

= 0.77: 1


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5. Absolute Liquidity Ratio =

2009-10 =

= 0.02: 1

2010-11 =

= 0.10: 1

6. Fixed Assets To Proprietary Fund Ratio =

2009-10 =

= 042: 1

2010-11 =

= 0.08: 1

7. Current Assets To Proprietary Fund Ratio =

2009-10 =

= 2: 1

2010-11 =

= 1.23: 1

8. Capital Gearing Ratio =

2009-10 =

= 0.01: 1

2010-11 =

= 2.01: 1


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9. Debt-Equity Ratio =

2009-10=

= 0.70: 1

2010-11=

= 3.26: 1

10.Solvency Ratio =

2009-10=

= 0.86: 1

2010-11=

= 0.24: 1


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Profitability Ratio:1. Gross Profit Ratio =

100

2009-10=

= 86.80%

2010-11=

= 86.43%

2. Operating Ratio =

100

2009-10=

= 86.80%

2010-11=

= 86.43%

3. Net Profit Ratio =

100

2009-10=

= 2%

2010-11=

= 2.01%

4. Return On Assets =

100

2009-10=

= 6.86%

2010-11=

= 1.75%


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5. Return On Capital Employed =

100

2009-10=

= 15.34%

2010-11=

= 1.92%

6. Return On Shareholders Fund =

100

2009-10=

= 49.97%

2010-11=

= 2.31%


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Activity Ratio:1. Inventory Turnover Ratio

2009-10

= 11.67 Times

2010-11

= 1.56 Times

2. Debtors Turnover Ratio =

2009-10=

= 17.31 Times

2010-11=

= 11.55 Times

3. Debtors Collection Period =

2009-10=

= 22 Days

2010-11=

= 32 Days

4. Creditors Turnover Ratio

2009-10

= 26.29 Times

2010-11

= 8.54 Times


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5. Creditors Payment Period

2009-10

= 15 Days

2010-11

= 43 Days

6. Working Capital Turnover Ratio

2009-10

= 12.42 Times

2010-11

= 1.03 Times

7. Fixed Assets Turnover Ratio =

2009-10=

= 17.16 Times

2010-11

= 12.27 Times

8. Capital Turnover Ratio =

2009-10=

= 7.21 Times

2010-11=

= 0.95 Times


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Internal Audit Policy

Internal auditing is an independent, objective assurance and consulting activity designed to add

value and improve an organization's operations. It helps an organization accomplish its

objectives by bringing a systematic, disciplined approach to evaluate and improve the

effectiveness of risk management, control, and governance processes. Internal auditing is a

catalyst for improving an organizations effectiveness and efficiency by providing insight and

recommendations based on analyses and assessments of data and business processes. With

commitment to integrity and accountability, internal auditing provides value to governing bodies

and senior management as an objective source of independent advice. Professionals called

internal auditors are employed by organizations to perform the internal auditing activity.

The scope of internal auditing within an organization is broad and may involve topics such as the

efficacy of operations, the reliability of financial reporting, deterring and investigating fraud,

safeguarding assets, and compliance with laws and regulations.


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Human

ResourceDepartment


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Introduction

Definition:

HUMAN RESOURCE MANAGEMENT is a management process of procurement,

development, compensation, integration and maintenance and reproduction of HUMAN

RESOURCES in the organization so that the goals of an organization are achieved in an

effective and efficient manner.

In simple sense, HUMAN RESOURCE MANAGEMENT refers to a set of polices, practices

and programmers, designed to maximize both employees as well as organizational goals.

The Personnel Department provides support services to other departments so that they may focus

on the services they provide to their customer. The Personnel Department is responsible for the

successful administration of various employment related systems and programs including

employee recruitment, employee development, compensation and benefits management,

employee relations and risk management.

The Personnel department's activities both enhance community safety and Personnel

management is a continuous process. It cannot stop. Personnel management is a never-ending

process. It helps in achieving objectives of company. This is done by proper perform of

personnel function like recruitment, selection, training & development, labour activity,

motivation, welfare etc. it also helps to keep a smooth relationship between employers &

employees. Promote the efficient and effective delivery of services to citizens.


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Structure of Human Resource Department

Chairman

General

Manager

Human Resource

Manager

Co-Assistant

Worker


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Activities of HR Department

Determines the requirements of those individuals who will work to hold and to further company

mission, vision, and values and works to bring such individuals to the areas where needed.

Creates and implements an orientation program that eases the adaptation of newemployees to their jobs and to the company.

Determines the requirements for in- and out-house training that will accelerate theworker's technical and personal development and actualizes these training programs.

Prepares procedures and forms related to Human Resources to ensure that employees aremade aware of company practices and processes.

Counsels company employees. Offers support to promote implementation of the suggestion award system. Conducts total personnel/employee procedures. Prepares payrolls and manages insurance procedures. Prepares various statistical information reports relative to employees. Finds and organizes the work of high school and university interns, when such need

arises.

Organizes motivational activities and events. Carries out various HR projects.


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Human Resource Planning Process

Human resource planning is understood as the process of forecasting an organizations future

demand for, and supply of the right type of people in the right number. It is only after this that

the Human resource planning department can the recruitment and selection process. Human

resource planning is a sub-system in the total organizational planning. Organizational planning

includes managerial activities that set the companys objectives for the future and determine the

appropriate means for achieving that objective. Chanchapra Textile have design the human

resource planning process in its own manner. The process is as under:

Objectives

How many

needed

Sources of

Employee

Selection

Process


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1. Objectives:

First of all, HR Manager decides the objective of the need of employee. We can say it as the

reason behind need of new employee. The objectives are as follow:

New machinery installed. Capacity increased. Current employee leaves the organization. New branch started.

2. How many needed?

There is no specific method used by Chanchapra Textile to decide number of employee. HR

Manager takes decision about number in following manner. If the new machine will install than

need raises according to capacity of machine. For example in this company one worker can

handle approx. 6 machines so according to this data they will plan for recruitment of employee.

3. Source of employee:

After deciding number of employee, next step is to find out the best source from where the

company can get good employees. The source of recruitments is as under:

Internal Source: Family references (applicable) Casual callers Transfer (applicable) Promotion (applicable) Recall Past employees (applicable)


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External Source: Advertisements Competitors

4. Selection process:

Mostly, selection will be done with regard to references i.e. when the company requires skilled

or unskilled workers, a notice is put on the notice board so that they can see it and brings the

workers to whom they know.

Advertisement will be also given in the newspapers. Government Employment Exchange will be

also one of the major sources of recruitment.


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Recruiting & Selection

According to Flippo Recruitment is the process of searching prospective employees and

stimulating and encouraging them to apply for jobs I the organisation. In other words we can

say that Recruitment is a process to discover the sources of manpower to meet the requirements

of the staffing schedule and to employ effective measures for attracting that manpower in

adequate numbers to facilitate effective selection of an efficient working force.

Chanchapra Textiles does not have any systematic recruitment procedure for recruiting shop

floor worker, master sometime and sometime do not fall in procedure of recruitment and section.

Only other manager and employees fall in the recruitment process, which is also done when

Requirements will be done by recruiting people by referring to internal sources to organisation

only.

According to Chanchapra Textiles, Recruitment is needed for every organization, it is the

process of hire employees from various sources to achieve desire goal of an organization.

1. Get the information about recruit employee from other department

2. Find the source of manpower

3. Selecting the employee whose character is match with require job

4. Give them information about organization and job

5. Encourage them to apply for job


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Recruiting Process

1. Need Identification:

Generally, Recruitment process begins when the human resource department receives

requisitions for recruitment from any department of the company. The human resource

requisitions contains details about the positions to be filled, number of person to be recruited, the

duties to be performed, qualifications required from the candidate, terms and conditions of the

employment, and the time by which the person should be available for appointment, etc.

2. Locating and Developing Source:

Locating and developing the sources of required number and type of employee.

3. Identifying the Prospective Employee:

Identifying the prospective employees with required characteristics.

4. Communicating:

Communicating the information about the organisation, the job and the terms and conditions of

service.

5. Encouraging:

Encouraging the identified candidates to apply for jobs in the organisation.

6. Evaluating:

Evaluating the effectiveness of recruitment process.


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Sources of Recruiting

Advantages of internal resource of recruitment

1. Moral and motivation of employees improve when they are assumed that they would bepreferred in filling up vacancies at higher levels.

2. Suitability of existing employees can be judged better as record of their qualifications andperformance is already available in the organisation.

3. It promotes loyalty and commitment among employee due to sense of job security andopportunity for advancement.

4. The time and expenditure of recruitment are reduced as there is little need for advertisingvacancies, or arranging rigorous tests and interviews.

1. Transfer

2. Promotion

3. Family References

4. Recall Past Employees

1. Competitor

2. Advertisement

Sources ofRecruitment

Internal Sources External Sources


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Disadvantages of internal resource of recruitment

1. It may lead to inbreeding.2. It discourages flow of new blood into the organisation.3. All vacancies cannot be filled up from within the organisation.4. The choice in selection is restricted. Chances of favouritism are higher.Advantages of external resource of recruitment

1. People having the requisite skill, education and training can be obtained.2. As recruitment is done from a wider market, best selection can be made irrespective of caste,

sex or religion.

3. Expertise and experience from other organisation can be brought.4. It helps to bring new blood and new ideas into the organisation.5. This source of recruitment never dries up.6. External source are best when suitable people from within are not available.Disadvantages of internal resource of recruitment

1. It is more expensive and time consuming to recruit people from outside. Detailed screeningis necessary as very little is known about the candidate

2. The employees being unfamiliar with the organisation, their orientation and training isnecessary.

3. If higher level jobs are filled from outside, motivation and loyalty of existing staffs areaffected.


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Selection

Selection means choosing an eligible candidate from all the applicants. Selection is the process

of differentiating between applicants in order to identify and tire those with a greater likely hood

of success in a job.

Excellence, innovation and creativity are the foundations on which we build our business, and

our staffs comprise a handpicked team of the best possible people. To build this team, we

undertake an extremely thorough and comprehensive recruitment process, and seek applicants

who satisfy a broad range of criteria in terms of their ability to make a positive, on-going

contribution to Macquarie. Generally, this process includes applications, initial interviews,

further interviews, psychological assessments and reference checking before an offer is made.

The Selection Process is concerned with determining whether an applicant meets with all the

qualification need to perform a particular job. It is very important because if a wrong person is

selected it will cost to the company. Procedure for selection is differing from organization to

organization and from job to job.

For Executives:

Written Test, Aptitude test Subject test, Group test Interview Final selection

For Non-Executives:

Written Test Final interview and selection


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Selection Process

This above diagram shows professional selection process. Chanchapra Textiles does not have

any type of selection process.

1. Scruitinising of Applicaions

2. Application Blanks

3. Selection Tests

4. Interview

5. Medical Examination

6. Reference Check

Primary Selection

7. Placement

8. Induction


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Job Description

The data collected through job analysis provides the basis for preparing job descriptions and job

specifications. Job description is a functional description of what the job entails. It is descriptive

in nature and defines the purpose and scope of a job. Job description is a written record of the

appropriate and authorized contents of a job. It is a factual and organized statement describing

the job in terms of its title, location, tasks, and duties, responsibilities, working conditions,

hazards and relationship with other jobs. Job description is an important document as it helps to

identify the job and gives a clear idea of what the job is. Job Description is a written statement

showing job title, tasks, duties and responsibilities involved in a job. It also prescribes the

working conditions, hazards, stress that it can produce and the relationship with other jobs.

Flippo has defined job description as A job description is an organized, factual statement of

duties and responsibilities of a specific job. In brief, it should tell what is to be done, how it is

done and why

In Chanchapra Textile., HR Manager is not prepared any kind of documents related to job

description. They just give as brief idea about tasks, responsibilities, working condition, and

facility. So we prepared following table showing job description of the two jobs; Master,

Supervisor, and lower level worker as example.


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Job Description for Supervisor

Title Supervisor

Department Production and finish goods Department

Tasks To keep production record and check effectiveness of production

Responsibilities

Supervisor have to come in time and have to check the written record

which sent by master for daily production or checking quality of raw

material and finished goods.

Working condition

Noisy

Come on time, late will be on the next day

Proper dress, shocks and shoos is must

Facility at workplace

A.C. Rooms

Material handling is easy and fast

Mobile phone and vehicle will be provided

Good and healthy environment

CCTV camera

Supervision

Supervision is directly from the director.

Supervision to production department and other finish goods

department.

Salary level 20,000 to 35,000

Relationship

With equivalent levels of management in other departments

Maintain social and official contacts with local officials


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Job Description for Master

Title Master ( vice supervisor )

Department Mainly in production Department

Tasks To keep production record and send it to main supervisor

Responsibilities

Come in time and have to keep written record for daily production

or taking attendance and receive raw material and check it then

send it to the supervisor.

Working conditionNoisy

Proper dress, shocks and shoos is must

Facility at workplace

A.C. Rooms

Material handling is easy and fast

Necessary tolls and equipments are provided

Mobile phone and vehicle will be provided

Good and healthy environment

CCTV camera

Supervision

Supervision is directly from the main supervisor

Supervision on lower level worker and other finish goods

department.

Salary level 15,000 to 28,000

Relationship

Finished goods department

Market


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Job Specification

Job specification is also known as man or employee specification, is a statement of minimum

acceptable qualities required in a job incumbent for the effective performance of the job. In

contrast to job description which provides various features of the job, job specificatio

power looms summer training project

Documents