HUMAN RESOURCE MANAGEMENT

Human Resource Department

INDEX

SR. NO. 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16

PARTICULARS H.R.M. Scope H.R. Department Organisation structure H.R. Planning Recruitment Selection Training and Development Performance appraisal Promotion of employees Transfer Wage and Salary administration Employees welfare H.R. audit Scope of H.R. audit Human resource status Social welfare

HUMAN RESOURCE DEPARTMENT Human resource management is planning, organizing, directing, and controlling of the procurement, development, compensation, integration, maintenance and separation of human resource to the end that individual, organizational, and social objectives are accomplished. Human Resource Management is that part of management which is concerned with people at work & their relationship within the organization. The term Human Resource Management refers to the management of personnel in the organization of any company to achieve the predetermined goals. The duty of the personnel manager is to look after the personnel department and various functions of the personnel like recruitment, selection, promotion, transfer, etc. In Jivraj Tea Ltd. also this definition is followed where HRM means to manage the available human resource effectively so that organizational goals can be achieved. 3.1) Human Resource Management: Scope The scope of HRM is very wide: 1. Personnel aspectThis is concerned with manpower planning, recruitment, selection, placement, transfer, promotion, training and development, layoff and retrenchment, remuneration, incentives, productivity etc. 2. Welfare aspectIt deals with working conditions and amenities such as canteens, rest and lunch rooms, housing, transport, medical assistance, education, health and safety, etc. 3. Industrial relations aspect-This covers union-management relations, joint consultation, collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc. At Jivraj these above aspects are taken into account. Here in Jivraj tea ltd all the activities are counted as HRM activities which are given above in group of above three aspects.

3.2) Human Resource Department:

All the activities of HRD are controlled by the manager himself whether it is recruitment, promotion or resignation in jivraj tea ltd. For the higher level the manager himself take all the necessary steps to recruit the employee. For lower level of employee also the manager himself recruit the employee. Other activities like welfare incentives etc. are managed by the manager of the jivraj tea ltd. Activities of Personnel / HR Department: 4. 5. 6. 7. 8. 9. Manpower Need Why? Where? How? And When? Recruitment & Establishment functions Performance Appraisal Welfare & other services Loans & Claims Industrial Relations

As we said in scope of HRM in jivraj tea that all the activities of HR is done and above activities of Personnel/HR department are also done.

3.3) Organisational Structure: An organizational structure is a mainly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim. I, found that, there is a separate department in jivraj tea ltd for Human Resource Management i.e. Department which performs the function like personnel administration, wages, salary, staffing, selection, training, recruitment, personal records etc. This specified task is done very carefully under the eye of Mr. Viren shah at jivraj tea ltd. The following is the organizational/departmental structure of the jivraj tea ltd. From here we can understand easily the shape of management and staff in the company. And also the levels are shown.

3.4) Human Resource Planning: In simple words HRP is understood as the process of forecasting and 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 management department initiates the recruitment and selection process. HRP is the sub-system in the total organization planning. HRP is variously called manpower planning, personnel planning or employment planning. Manpower planning is the strategy for the acquisition, utilization, improvement and preservation of an organizations human resource. It is aimed at coordinating the requirements for and the availability of different types of employees: 3.5) Recruitment: Recruitment refers to the process of identifying and attracting job seekers so as to build a qualified job applicant. After the required number and kind of human resource are determined the next step in the procurement function is to locate the sources where from the requirement of human resources can be available and to attract them towards the organization. This is known as RECRUITMENT. Recruitment normally means process of identifying and encouraging prospective employees to apply for jobs. Recruitment is a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective measures for attractive manpower inadequate numbers to facilitate effective selection of an efficient working force. Recruitment is said to be positive in its approach as it seeks to attract as many applicants s possible. So from many applicants the firm in not able to select all of them, but will try to select the best qualified out of it. Recruitment refers to the process of attracting, screening, and selecting qualified people for a job at an organization or firm.

The process of recruitment according to the jivraj tea ltd is as given to the next page.

3.5.1) Sources of Recruitment: Well basically two types of sources are used in every organization, they are followed. 1. Internal 2.External At jivraj tea ltd, I have found that both of the sources of recruitment are used simultaneously. But then too internal sources of recruitment are given preference as they belong to less time wasting, less money expenditure, totally Economical. 1.Internal sources: 1.Present employees 2.Former employees 3. referrals 4.Previous applicants

1.Present employee: By the use of promotion and transfer policy the org. can fulfil the job requirement. Sometimes when immediate requirement is held, then org. takes the decisions to promote the current employee who is working similar to that post or under that post by measuring their efficiency.

2.Past applicants: Sometimes in org. it happens that some candidate may have applied for another job in the org. but he is efficient enough to do work for the vacant place then the org. can call all these kinds of employees.

3.Relative of Current employees: In the org. sometimes for quick and easy fulfilment of Vacancy Company allows employees relative to apply for the vacancy. 4.Previous Employees: In the organisation some time call the work man who works in past who call when shortage of worker in the org. so thats a good way for continue the work in the production or service department.

External sources: 1.Employment exchange 2.On hand applicants 3.E-recruitment 4.Advertisement 5.Company websites 6.Gate hiring 7.Campus Placement 8.Employee Agencies External sources: At jivraj tea ltd as a trainee I have found that not many external sources are used besides Advertisement in Local news paper and Campus recruitment. 3.5.2) Utilization of recruitment sources at Jivraj tea ltd. Every company has the motto of making effective utilization out of the available resources at minimum cost. On the same theory, jivraj tea ltd. put emphasis. Most probably the internal sources are used for fulfilling the job requirements. Make or buy strategy is one of the part of recruitment.

3.5.3) What is Make or Buy Strategy? 1.Make strategy:- Preparing a men for the particular market environment for the particular post/job by providing various kinds of induction and training programmes in the organisation. Which helps the personnel to develop himself according to the needs of work environment

2.Buy Strategy:Hiring personnel from other competitor company for the post in which he has got experienced. Sometimes for getting immediate result from market company uses the buy strategy. 3.6) Selection: Selection is the process of choosing suitable candidates amongst all other candidates.

Selection is a process of picking individuals out of the pool of job applicants with requisite qualifications and competence to fill jobs in the organization. Or it can even be termed as a process of differentiating between applicants in order to identify and hire those with a likelihood of success in a job. Our recruitment is not based solely on academic achievements. We are seeking to appoint candidates who satisfy a broad range of criteria in terms of their ability to make a positive and on-going contribution to the organisation. In jivraj tea ltd. selection means to select best candidates out of available candidates and give them employment in the organization. The process of selection according to jivraj tea ltd. is as given:

Preliminary Interview

Application Blank

Employment Interview

Reference & Background Analysis

Selection Decision

Job Offer

1. Preliminary Interview:This is like a screening out the applicants. In this step, company screens out those applicants who are qualified, well experience and as per the requirements for that particular job. At this stage the necessary basic information about the job and the company is given to applicants by the company. The company

also collects some data from the candidates like education, skill and salary expected etc. If company founds the applicants suitable for that particular job, the further proceed can be made to that applicant.

2. Application Blank:Application Blank is a device for collecting information from candidates. As company is not small firm, it asks the applicants to fill the application blank. The application form contains following information: 1.Identifying Information:- Name, address, telephone no. etc. 2.Personal Information: - Age, sex, place of birth, marital status, dependents etc. 3.Physical Characteristics: - Height, weight, eye sight etc. 4.Family Background 5.Education: - Academic, technical and professional. 6.Experience: - Jobs held employees, duties performed, salary drawn etc. 7.References 8.Miscellaneous: - Extra circular activities, hobbies, games and sports, membership of professional bodies etc.

3. Employment Interview:The next stage of selection process is employment interview. This one is done because interview can be adapted to unskilled, skilled, managerial and professional employees. It allows a two-way exchange of information, the interviewers learn about the applicants, and the applicant learns about the employer. The employment interview can be following types. In company arrange employment interview can be taken by one to one and panel method not the sequential. In one-to-one interview, there are only two participants-the interviewer and the interviewee. The sequential interview takes the one-to-one a step further and involves a series of interviews, usually utilizing the strength and knowledge-base of each interviewer, so that each interviewer can ask question in relation to his or her subject area of each candidate, as the candidate moves from room to room and panel interview consists of two or more interviewers and the figure may go up to as many as 15 and interview take place. 4. Reference and Background Analysis:In company reference is checked and placement is given to that applicant. The company also introduces the applicant about the company and the necessary formalities are done here. The company asks the

applicant to keep the some of the details, designs and information confidential as per the companys policy.

5. Selection Decision:After all these process, all the managers and directors list down all applicants name and they start to eliminate all applicant because of their unsuitable with the job and the most three suitable applicants will be selected by all managers and directors.

6. Job Offer:The next stage followed by company in the selection process is the job offer. Job offer is made through a letter of appointment. Such letter generally contains a date by which the appointee must report on duty. After getting done with this lengthy process of selection they appoint the employee for training for a specified period, for getting used to the work condition and company environment. After completing training period successively company appoints the person for the particular post.

3.7) Training and Development: Training is an act of increasing knowledge and skills of employees for doing a particular job. In next page the training cycle is given which is followed at the jivraj tea ltd. Now we will first of all see the meaning of training and development. Training and development means it is an attempt to improve current or future employee performance by increasing employees ability to perform through learning, by changing employees attitude or increasing his or her knowledge and skills. Training and development need = Standard performance Actual performance After the employee is selected, the second step is to provide training to the employee. If employee is fresh then he must require some training. But if the employee is coming from any other organization and he is experienced enough, then he may not require training.

For having development in the employees work skill, knowledge, the org. provides training. There are 3 types of this, which are provided as according to the requirement of personnel. 1.Induction training. 2.Work training.

1. Induction Training: Induction means as an introduction of the new employee towards the company and colleagues. It helps the person to connect and contact with other employees of the organisation. Two types of Induction take place in an organisation: 1.Formal Induction: Formal induction meant by introducing the newly employed candidates to the organisation by organizing a special function for them. So they dont have to waste their time in introducing oneanother self while they meet for work.

2.Informal Induction: Informal induction is also a type of introducing new employee but there is a slit change in making introduction. In this theory the employee is putted to the job place and asked to get introduced with the coworkers himself. 2.Work Training : The training related to the sales or any other work is decided and provided according to the work nature. There may be two types of it and they are given below. 1.In house training 2.Outdoor training

In house training means the training related to the H.R. department, banking and general knowledge about the general works of the organisation is provided after identifying the needs of the workman.

Outdoor training is concerned with the training provided for the sales department boys for being efficient in recognising and fulfilling the demand of the consumer. So from here we can see that the training is given to the employees with the help of seminar and multimedia projector and also the specialised person come and give the information about the sales. 3.8) Performance Appraisal: Performance appraisal is the activity of setting up the parameters for employees and to evaluate the performance of the employees and if he has not achieved the predetermine performance then the feedback is provided to that employee. After an employee has been selected for a job, has been trained to do it and has worked on it for a period of time, his performance should be evaluated. Performance appraisal or merit rating is the

mechanism to assess the contribution of all human resources working at each level of the organization during a specific period of time. 3.8.1) Process of Performance Appraisal:The process of performance appraisal follows a set pattern and it consists of following steps:

Analysis Decision Making

Action

Record

At jivraj tea ltd. the process of performance appraisal is conducted to identify the works of various employees. For that the records of their work is kept on a sheet and after the data are compared with standards set by the company. So that, the organisation is able to take corrective decisions and imply appropriate actions. The process of appraisal takes place after every 2months

3.9) Promotion of the employees: Promotion refers to the advancement of an employee to a higher post carrying greater responsibilities, higher status and better salary. It is an upward movement of an employee in an organization hierarchy. Promotion can be defined as, The advancement of on employee to a better job, better job in terms of greater responsibilities and status, greater skill and specially increase rate of pay or salary.

Promotion refers to advancement of an employee to higher post carrying greater responsibilities, higher status and better salary. It is the upward movement an employee in the organization hierarchy, to another job commanding greater authority, higher status and better working condition. When an employee is assigning a higher level job with more pay and power, he is said to be promoted. Promotion may be temporary or preeminent depending upon the needs of the organization. When an employee is assign to a higher level job without increase in pay, it is called dry promotion. At jivraj tea ltd, the promotion is provided after appraisal. If the employee has performed very well particularly at his post and he is efficient enough to tackle greater responsibilities the promotion can be in existence. It takes place after every appraisal of employee work (2 months).

Director's office
For providing direction

Training room
here, training is conducted.

Meeting room
Here, the meetings are done on requirement.

3.10) Transfer: A transfer is a horizontal or lateral movement of an employee from one job, section, department, shift, plant or position to another at the same or other place where his salary, status and responsibility are the same. A transfer involves a change in the job accompanied by a change in the place of the job of an employee without a change in responsibilities or remuneration. A transfer differs from a promotion in that the latter involves a change in which a significant increase in responsibility, status & income occurs, but all these elements are stagnant in the former. Another difference is that transfers are regular & frequent & promotions are infrequent, if not irregular. At jivraj tea ltd, transfer occurs frequently. The main reason of transfer is to adjust the work force. If there is any shortage of employee in one department & is excess in another department then

transfer is made. Another reason of transfer is to make the employee more versatile. Transfer is most frequent in lower level of employees. 3.11) Wage and Salary Administration: Wage represent hourly rate of pay and salary refers to the monthly rate of pay, irrespective of the number of hours out in by an employee. Wages and salary are subject to annual increments. They differ from employee and depend upon the nature of job, seniority and merit. Employee compensation is a vital part of human resource management. Wages, salaries & other forms of employee compensation constitute a very large component of operating costs. One of the biggest factors affecting industrial relation is the salary or wage-the compensation an employee receives for a fair days of work. No organization can except to attract and retain qualified & motivated employees unless it pays them a fair compensation. Employee compensation can be classified into two categories: 1) Primary Compensation (Basic pay) 2) Supplementary Compensation

3.11.1) Methods of Wage Payment: There are two types of wage payments. They are: 1.Time Wage System 2.Piece Wage System Now at jivraj tea ltd, both the Time Wage System & Piece Wage System is used for calculating the salary of the employees. It means the salary of the employee is fixed but he/she can earn extra piece of salary by performing well at his work through the incentive system. 3.11.2) Incentive: Incentive is what, which is provided after the salary for your good piece of work. Incentives are provided due to the increment in the moral of employee and to get batter work done every time to time. Incentive administration: The incentive administration is basically based upon the work or performance of employee at his field. The techniques of providing incentive can be of two types. 1.Fixed incentive plan 2.Slab wise incentive plans

1.Fixed incentive plan: In this system the incentive provided is same at all levels of product selling. It means the incentive is same when the sales vary at various levels. 2.Slab wise incentive plans: In this system the incentive varies as total sale of the employee vary. Basically the incentive is increased after every increment in the total sales.

3.12) Employee Welfare: Anything which is paid over and above, the wages whether social benefits or other perquisites are called employee welfare. In simple words, employee welfare or labour welfare means The efforts to make life worth living for workmen. Welfare means faring or doing well. It is a comprehensive term, and refers to the physical, mental, moral and emotional well-being of an individual. Further, the term welfare is a relative concept, relative in time and space. It, therefore, varies from time to time, from region to region and from country to country. Labour welfare is a term which must necessarily be elastic, bearing a somewhat different interpretation in one country from another, according to the different social customs, the degree of industrialization & educational level of workers. There are two types of welfare: 1.Intra-mural: Service provided within the establishment 2.Extra-mural: Service provided outside the establishment

Intra-mural: These activities include latrines & urinals, washing facilities, canteen, immediate medical aid etc.

Extra-mural: Since company is a manufacturing industry in which the employees of lower level are on contract basis & there is no need to provide any extra-mural welfare activities but then also some extramural activities includes of transport, holiday homes, leaves, travel facilities etc. Now, we will have a quick look at the facilities provided at jivraj tea ltd. for the welfare of the employees.

FACILITIY Uniform Medical

DISCRIPTION Couple of uniforms are given on half yearly basis to all employees. Insurance mediclaim worth Rs. 1lakh provided.

Incentive and Incentive is provided on per 10kg sale and bonus is provided when the given bonus Rewards Holidays target is achieved. If the performance is excellent than employee will be rewarded. Two holidays are provided accept Sunday. (Working days - 23)

3.13) HR Audit: Human Resource Audit is a process or a tool which helps assess effectiveness of human resource function of an organization. It is an important test of managerial control. It involves examination and verification of accounts and records. Human Resource audit implies critical examination of policies, programmes and procedures in the area of human resource management. It is a periodic review to measure the effectiveness of human resource management and to determine the steps required for more effective use of human resources. Human resource audit involves a formal, systematic and in depth analysis, investigation and comparison. The primary aim of human resource audit is to determine whether the human resource policies and practices are consistent with organizational objectives. HR audit is very much useful to achieve the organizational goal and also is a vital tool which helps to assess the effectiveness of HR functions of an organization. At jivraj tea ltd, HR audit is done on quarterly basis in which the performance of an employee is evaluated and calculated. After those decisions are made whether the employee should be rewarded or punished.

3.14) Scope of Human Resource Audit: The scope of human resource audit is very wide. It covers the management of people at all levels. It is not limited to a review of the performance of human resource department. Human resource audit can be conducted to evaluate the policies procedures, and programmes of human resource management. Generally, no one can measure the attitude of human being and also their problems are not confined to the HR department alone. So it is very much broad in nature. It covers the following HR areas: 1.Audit of all the HR function. 2.Audit of managerial compliance of personnel policies, procedures and legal provisions. 3.Audit of corporate strategy regarding HR planning, staffing, remuneration and other HR activities. 4.Audit of the HR climate on employee motivation, morale and job satisfaction.

3.15) Human Resource status:

Total employees in jivraj tea ltd. Average salary of each employee Total salary

60 7000/4,20,000/-

3.16) SOCIAL WELFARE Blood donation camp:

Internal R.O.plant:

 Social seminars:

FINANCE DEPARTMENT

INDEX

SR. NO. 4.1 Introduction to finance 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9

PARTICULARS

Objectives of finance management Function of finance manager Sources of long term finance Working capital management Inventory management Leverages Balance sheets Ratio analysis

4. FINANCE DEPARTMENT

4.1) Introduction to Finance: Finance is the lifeblood and nerve centre of business, just as circulation of blood is essential in human body for maintaining life, finance is very essential tool for smooth running of business. It has been rightly termed as universal lubricant, which keep the enterprise dynamic. Finance is well-known as the lifeblood of any business. It may be defined as the base on which the whole business structure depends on the finance. Once the business is started it needs funds for production of goods and services as well as their distribution. Finance is the master key which provides all the sources for activities of productions, distribution etc. 4.2 Objectives of Finance Management: The basic objectives of finance management are as follows: Maintenance of adequate liquid asset in a firm:Maintenance of adequate liquid asset in a firm is one of the basic objectives of financial management. The objective implies that financial management sure there is adequate cash in the hands of the firm to meet its obligations. Profit maximization:Profit maximization is one of the important objectives of finance management. Those objectives imply that financial management should ensure that the profit of the firm is maximized. The earnings of profit of the firm can be maximized either by increasing output for a given input by reducing the cost of producing for given output. The objective of profit maximization can be stated in the forms of sales or return on investment of earning per share. The concept of profit maximization implies that any finance decision would be evaluated on the basis of it overall contribution to the profit or earning of its enterprise. Wealth maximization:Maximization of wealth means maximization of wealth of company i.e. the net present value of the company, over the long run; the wealth maximized or created by the company is reflected in the market value of equity share of the company. The gross present worth of a course of action is equal to the company. The gross present worth of a course of action is equal to the capitalized value of the flow of the

future expected benefits, discounted or capitalized at the rate, which reflect their certainty or uncertainty. Wealth or present worth is the difference between the gross present worth and the amount of capital investment required to achieve the result. Any financial action which created wealth or which has net present worth zero is desirable and should be under taken. 4.3 Function of Finance Manager: 1.As A staff Officer 2.As A line Officer

1.As A Staff Officer: Staff officer is an expert in his field. He has the authority to think and tender advice to higher authority. Financial manager is an expert in the field of finance management. Certain financial decisions fall under the domain of the Board of Directors. His role as a staff officer confers on him the privileged to sit right into the drives chamber. Financial manager is consulted by the board before making decisions on the following subject matters:1- Advisability of launching a new project. 2- What should be the capitalization of a new project? 3- Design of capital structure or use of financial leverage. 4- Incase of merger, amalgamation, integration, takeover etc. 5- While making dividend policy decision and declaration of dividend. 6- At the time of negotiation with the leaders of employees union pertaining to their demand

2.As A Line Officer: As a financial manager he has to perform two types of function :1. Managerial function 2. Administrative function

Managerial Function: 1- Financial Planning 2- Organizing of finance department 3- Financial co-ordination 4- Financial control

5- Management of working capital 6- Management of fixed assets 7- Management of earnings

1.Financial Planning: It is the fundamental and primary function of financial management. It decides in advance how much fund will be needed, from which sources and by which mean needed funds will be raised. For the successful implementation of long and short term operational plans long term and short term funds are needed. Therefore, for effective acquisition and uses of funds financial planning is needed.

2.Organizing of Finance Department: It is the function of the financial management to create such an organization. Generally in a large corporate unit under the headship of finance manager two distinct posts namely treasurer and financial controller are created. The responsibility of the treasurer and his assistants is to receive cash, make payments, to collect fund from debtors etc. while the responsibility of controller is to undertake financial planning, tax planning, to receive financial report, to prepare financial budget and to evaluate and control the financial situation. 3 -Financial Co-Ordination:For the smooth functioning of different departments financial co-ordination between different departments is highly essential, so that the entire department get the required fund in time. Increase in sales will affect the financial requirements of production, materials and human resource department too. 4-Finance Control:Controlling is the fourth important managerial function of financial management. With the help of ratio analysis, fund flow analysis, cash flow analysis and break-even analysis it evaluates the present financial situation. Financial control includes control over liquidity, cost, debtors, credit terms, collection from debtors and project cost. Generally budgets are used as tools of cost control. 5- Management of Working Capital: -

Management of working capital needs here special mention and attention as managerial function because plenty of time is spent by the financial manager in solving working capital problems. It involves cash management receivables management and stock management. For effective working capital management it prepares cash budget, takes policy decisions regarding credit terms, credit worthiness of customer, collection from debtors and inventory control. 6- Management of Fixed Assets: For profitable investment and efficient management of fixed assets capital budgeting is an important function of financial management. It helps in making most profitable investment decisions and exercising control over fixed assets. It also includes maintenance of fixed assets in proper condition. 7- Management of Earnings: It involves tax planning, dividend decisions and appropriation of profit. For the maximization of wealth management of earnings is very important. By proper tax planning tax liability can be reduced to the minimum and proper appropriation of net profit increases internal resources for future expansion. Administrative Function: 1- Maintenance of accounts books 2- Accounting work 3- Control over cash receipts 4- Payment of cash 5-Prepare BRS 6- Maintenance of important document 7- Maintenance of financial information 8- Financial reporting

1- Maintenance of Accounts Books: It sees that accounts books as required by the Company Act are properly maintained.

2- Accounting Work:The responsibility of writing the books of accounts regularly is assigned to particular personnel and care is taken to see that accounts books are regularly written and audited. 3- Control over Cash Receipts: It exercises control over cash receipts from debtors and cash sales and safety measure are taken for cash, so that misuse and misappropriation of fund is prevented. 4- Payment of Cash: - It makes payments to creditors, share holders, debenture holder etc. and maintains proper records of payments. 5- Prepare BRS: - So that accounting entries and bank balance can be verified. Many cheques are daily deposited in the bank for collection and many are issued for payments to the creditors. Therefore, it becomes difficult to verify the correctness of bank balance. For that purpose, it is essential to prepare bank reconciliation statement. 6- Maintenance Of Important Documents:- Share certificate, debenture certificate, insurance policies, contract deeds entered into with different parties like trade union, suppliers etc. are the important documents which require to be maintained safely. 7- Maintenance of Financial Information:- It maintains financial records containing financial information providers in the case of need to the management for decision making. Now-a-days financial information is stored in electronic storage device. 8- Financial Reporting: - It prepares financial reports in proper form and supplies to higher level management for evaluating the present situation, its trend and making proper decisions. 8.4 Sources of Long Term Finance: In a broad sense, sources of long term capital in general can be divided into two types: one is the internal sources and second is the external sources. 1. Internal Sources: 1- Bonus shares 2- Reserve and surplus 3- Depreciation reserve 4- Provision for taxation

5- Sundry provisions 2. External Sources: 1- Equity shares 2- Rights shares 3- Preference shares 4- Debenture or bonds 5- Term loans

Jivraj tea ltd. are using OWN FINANCE as the source of long term finance and also take TERM LOAN as a source of long term finance from ICICI BANK of Rs.70,44,302 in 2005-2006 and of Rs. 58,50,419.84 in 2006-2007. 4.5) Working Capital Management: 1.Sources of Working Capital Finance: - Two types of sources can be tapped for financing working capital requirements- one is the short term and second is long term sources.

1- Short Term Sources:-

1- Trade credit 2- Accruals exp. 3- Deferred income 4-Public deposit 5-Inter-corporate deposit 6-Short term loans from financial institution 7- Commercial paper 8- Factoring 9- Bank finance

2- Long Term Sources: -

1- Equity shares 2-Right shares

3- Preference shares 4- Debenture or bonds 5- Term loan The short term sources of working capital finance of jivraj tea ltd. is SHORT TERM LOAN from YES BANK and there is no any sources of long term working capital finance in jivraj tea ltd. 4.6) Inventory Management: Another component of working capital is inventory. The factory is a very big kitchen which requires hundreds or thousands of items for manufacturing or selling the different products. Such items included spare parts, finish goods and others. For reducing the cost and increase the profitability by optimum investment in inventory, its efficient management is very important. Need For Maintaining Inventory: The need for maintaining inventory arises because of following reasons: 1.For maintaining the continuity of business processes. 2.For maintaining the continuity the sales. 3.To maintain the production processes. 4.Precautionary motive. 5.Speculative motive

Objective of Inventory Management: The main objective of inventory management or control can be stated as under: 1. 2. 3. 4. 5. 6. 7. To ensure supply of materials for maintaining the continuity of production. To keep sufficient quantity of materials during scarcity. To maintain the continuity the sales by keeping sufficient stock of finished goods To see that optimum level of investment is made in inventory. To make efficient use of available capital. To store the different items scientifically. To reduce the cost associated with inventory like opportunity cost, insurance cost, wastage etc.

Inventory Control: -

Inventory control means the task of determining optimum level of inventory and to see that it is maintained at that level and to take proper safety measures and keep accounting records of acquisition and uses of inventory. The popular proverb A leak can sink a ship applies to inventory management.

Techniques Of Inventory Control:1- Economic order quantity (EOQ) - a) Trial and error method b) Graphic method c) Formula method 2- Reordering point 3- Safety stock 4- ABC analysis as a technique of monitoring and control of inventory 5- Ratios and indexes.

4.7) Leverages: The term leverage means the ability of a firm in employing long term funds having a fixed cost to enhance return to owner. There are three types of leverages:A) Operating Leverage B) Financial Leverage C) Combined Leverage

LEVERAGES OF JIVRAJ TEA LTD (JIVRAJ TEA LTD) Particulars Sales (-)less: variable cost Contribution (-)less: fixed cost EBIT {Earnings before interest tax} (-)less: interest EBT {earnings before tax} (-)less: tax EAT {earnings after tax} DOL= = = DFL = = DCL = = 2009 Rs. 718,309,649 643,277,913 75,031,736 41,971,865 33,059,871 8,369,140 24,690,731 11,654,275 13,036,456 2008 Rs. 703,267,533 634,764,791 68,502,742 30,271,146 38,231,596 8,745,999 29,485,597 9,741,318 19744279

Contribution EBIT 75,031,736 33,059,871 3.04 EBIT EBT 33,059,871 24,690,731 1.34 DOL*DFL 3.04*1.34 4.07

Contribution EBIT 68,502,742 38,231,596 2.32 EBIT EBT 38,231,596 29,485,597 1.30 DOL*DFL 2.32*1.30 3.02

1.Operating Leverage: Operating leverage defined as the firm ability to use fixed operating cost to magnify the effect of changes in sales on its earnings before interest and tax. OPERATING LEVERAGE = CONTRIBUTION / EBIT a) Degree of Operating Leverage = % Change in EBIT / % Change In Sales b) Degree of Operating Leverage = Q (P-V) / Q (P-V)-F Where, Q= quantity produce and sold

P= selling price V= variable cost F= fixed cost Operating leverage of jivraj tea ltd. =2009-10=3.04 2010-11=2.32 2.Financial Leverage: Financial leverage concern with the effect of change in EBIT on the earnings available to equity holders. It is defined as the ability of a firm to use fixed financial charges to magnify the effect of changes in EBIT on the earnings per share. FINANCIAL LEVERAGE = EBIT / EBT a) Degree of Financial Leverage = % change in EPS / % change in EBIT b) Degree of Financial Leverage = EBIT / (EBIT-I) Dp / (1-T) EARNING PER SHARE = (EBIT-I) (1-T) Dp / N Where, I= interest T= tax N = no. of equity share

Dp= dividend on preference share Financial leverage of jivraj tea ltd.= 2009-10=1.34 2010-11=1.30

3.Combined Leverage: Combined leverage can be defined as the potential use fixed cost, both operating and financial which magnifies the effect of sales volume changes on the EPS of the firm. COMBINED LEVERAGE = CONTRIBUTION / EBT DEGREE OF COMBINED LEVERAGE = % CHANGE IN EPS / % CHANGE IN SALES Combined leverage of jivraj tea ltd.= 2009-10=4.07 2010-11=3.02

Income Statement: PARTICULAR SALES (-) VARIABLE COST = CONTRIBUTION (-) FIXED COST = EBIT (-) INTRESET = EBT (-) TAX = EAT AMOUNT XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX

4.8) COMPARATIVE ANALYSIS OF P&L A/C AND BALANCE SHEET JIVRAJ TEA LTD. PROFIT & LOSS ACCOUNT FOR YEAR ENDED ON 31-03-2011 Particulars Income: Sales & other income Total Expenditures: (Increase)/decrease in finished goods stock Consumption of raw materials Purchase of traded materials Manufacturing expenses Payment and benefits to employees Administrative expenses Selling and distribution expenses Financial charges Depreciation Depreciation withdrawn from revaluation reserve Loss/(Profit) on sale o assets Total Profit before tax adjustment Less: current tax Less: deferred tax Less: fringe benefit tax Profit after tax Short provision for taxation in earlier year Net profit Balance brought forward Total APPROPRIATION: Proposed dividend Tax on dividend Transfer to general reserve Balance carried to balance sheet Total EPS basic 20010-11 Rs. 718,309,649 718,309,649 2009-10 Rs. 703,267,533 703,267,533

(4,027,271) 426,879,163 127,446,065 62,373,645 22,851,332 10,207,459 3,727,708 31,752,242 25,255,152 (12,164) 25,242,988 202,043 706,655,374 11,654,275 1,307,000 565,209 200,000 9,582,066 9,582,066 (85,632) 9,496,434 36,280,814 45,777,248 4,575,050 777,530 1,300,000 39,124,668 45,777,248 13.02

5,682,609 331,234,665 235,278,639 42,459,006 20,554,644 9,349,019 5,237,837 20,922,127 22,191,976 000000000 22,191,976 615,693 693,526,215 9,741,318 1,003,000 (1,521,825) 201,000 10,059,143 10,059,143 62,133 10,121,276 31,512,118 41,633,393 4,575,050 777,530 36,280,814 41,633,393 11.72

JIVRAJ TEA LTD. BALANCE SHEET AS AT 31ST MARCH, 2011

Particulars SOURCES OF FUNDS: Shareholders funds : a) Share capital b) Reserves & surplus Loan funds: a) Secured loans b) Unsecured loans Deferred tax TOTAL APPLICATION OF FUNDS: Fixed assets: Gross block Less: depreciation Net block: Capital W.I.P including advances Investments : Current assets, loans and advances: a) Inventories b) Sundry debtors c) Cash and bank balances d) Loans and advances Less: current liabilities & provisions a) Current liabilities b) Provisions Net working capital TOTAL

2010-11 Rs.

2009-10 Rs.

36,600,400 86,449,185 123,049,585 191,786,177 63,144,241 254,930,418 7,247,350 385,227,353

36,600,400 54,104,186 90,704,586 179,959,987 42,209,241 222,169,228 6,682,141 319,555,955

302,047,710 126,653,373 175,394,337 16,737,778 192,132,115 10,439,516 43,128,771 100,977,782 5,002,498 65,204,465 214,313,516 8,909,203 22,748,075 31,657,278 182,656,238 385,227,353

257,942,515 101,796,797 156,145,718 9,374,785 165,520,503 2,670,000 45,669,219 92,819,847 2,555,511 54,701,114 195,745,691 23,354,923 21,025,316 44,025,316 151,365,452 319,555,955

Ratio of Jivraj Tea Ltd,2010-2011 1. Current ratio

Current ratio= Current assets Current liability

2.Quick ratio

Company Jivraj Tea Ltd.

Current assets 214,313,516

Current liability 8,909,203

Ratio 24.06:1

Quick ratio =

Quick assets Current liability

Companies Jivraj Tea Ltd.

Quick assets 214,313,516

Current liability 8,909,203

Ratio 24.06:1

3. Proprietary ratio

Proprietary ratio =

shareholders fund Total assets

Companies Jivraj Tea Ltd.

shareholders fund 123,049,585

Total assets 416,885,147

Ratio 0.30:1

4. Fixed assets to Proprietary ratio

Fixed assets to Proprietary ratio =

fixed assets Share holders fund

Companies Jivraj Tea Ltd.

Fixed assets 192,132,115

shareholders fund 123,049,585

Ratio 1.56:1

5. Long term fund to fixed assets ratio

Long term fund to Fixed assets ratio = total long term fund Fixed assets

Companies Jivraj Tea Ltd.

Long term debts 291,530,818

Fixed assets 192,132,115

Ratio 1.52:1

6. Net profit ratio

Gross profit ratio = net profit after tax X 100 Net sales

Companies Jivraj Tea Ltd

Net profit after tax 39,124,668

Net sales 718,309,649

Ratio 5.45%

7. Debtors turnover ratio

Debtors turnover ratio= debtors Net sales Companies debtors Net sales Ratio

Jivraj Tea Ltd.

100,977,782

718,309,649

0.14 times

8. Return on shareholders fund

Return on shareholders fund = net profit after tax Shareholders fund

X 100

Companies Jivraj Tea Ltd.

Net profit after tax 39,124,668

shareholders fund 123,049,585

Ratio 31.80%

9. average collection period

Average collection period =

12 month Debtors turn over ratio

Companies Jivraj Tea Ltd

Particulars 12 month

Ratio 0.14 times

Month 86 months

Marketing & Sales Management

INDEX

WHAT IS MARKETING?
Marketing deals with identification and meeting human social needs. Marketing is typically seen as the task of creating, promoting and delivering goods and services to customers and business.

DEFINITION OF MARKETING:A social definition of marketing is marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.

ORGANISATIONAL STRUCTURE:

TYPES AND CLASIFICATION OF PRODUCTION AND THEIR SALES VOLUME:PRODUCTS

The following are the products of Jivraj Tea Ltd.:

J9 Tea Jivraj 9 Tea Anokhi Tea Jivraj Bhagal Cha Lajawab Sugar tea & Lajawab tea bags