1

CHAPTER - 1

INDUSTRY PROFILE

2

INDUSTRY PROFILE

1.1 INTRODUCTION:-

From time immemorial, India has been considered as the "Spice Bowl of the

World". The history of Indian spices is almost as old as the 'Human civilization

of Spices '. Conquering tribes from Assyrians and Babylonians, Arabians,

Romans, Egyptians, the Chinese to the British and the Portuguese all invaded

India with one goal - to take advantage of the rich, natural wealth and for

Indian spices. The earliest written record in India on Spices is the venerable

Vedas - such as the Rig Veda, and the others Yajurveda, SamaandAtharva.

During the Vedic period, information was primarily was handed down orally

from generation to generations through the medium of hymns. The Rig Veda

contains references to various spices such as horseradish - a close relation of

Mustard and Turnip. There are also references to Black Pepper in the

Ayurveda. These are but few of the spices in the natural expanse of the

subcontinent - in the mountain, swamps, riverine, tropical rain forests,

wetlands, marshy woodlands, rich valleys, green fields in a pollution-free, &

eco-friendly environment. The history of Indian spices lies in the abundance &

goodness that Mother Nature has blessed it with and made it so popular

worldwide.

A spice is a dried seed, fruit, root, bark or vegetative substance used in

nutritionally insignificant quantities as a food additive for the purpose of

flavoring, and sometimes as a preservative by killing or preventing the growth

of harmful bacteria. Many of these substances are also used for other purposes,

such as medicine, religious rituals, cosmetics, perfumery or eating as

vegetables.

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For example, turmeric is also used as a preservative; licorice as a medicine;

garlic as a vegetable. In some cases they are referred to by different terms.

1.2 GROWTH RATE:-

SPICES exports rise 18 per cent in 2007-08 to a record $491 million as almost

all commodities registered healthy growth during the year, the Spices Board

has said.

Volume grew 32 per cent during the fiscal to 3.35 lakh tones (lt), surpassing the

previous highest of 2.64 lt in 2006-07. In rupee terms, exports increased by 15

per cent to ₹ 2,200 crore.

Spices exports will cross US$ 1 billion in the current financial year and touch

US$ 10 billion by 2017, according to V J Kurien, chairman, Spices Board. Of

the world's total annual spice trade of 850,000 tones, India accounts for 44 per

cent in quantity and 36 per cent in value

1.3 OTHER SPICE COMPETITOR

1) S.K. Masala 2) Badshah Masala 3) Ramdev Masala 4) Ttc Masala 5) M.D.H Masala 6) Everest 7) Dhanhar Masala 8) Gajanand Masala

4

CHAPTER - 2

COMPANY PROFILE

5

COMPANY PROFILE

2.1 INTRODUCTION:-

Ramannad Food introduces itself as a leading manufacturer and exporter of

Surat spices particularly masalas, and others.

Established on 2008, the company has always followed the philosophy of

providing quality products and services to our ever-increasing clientele.

Today Ramannad has become a name synonymous to Indian spices, its taste

and aroma; and has become a name of repute in spices industry.

2.2 BOARD OF DIRECTOR:-

Name

Mr. Jayantibhai Jodhani M D

Mr. Dineshbhai Jodhani Marketing Department

Mr. Dilipbhai Dhorajiya Sales Department

Mr. Sureshbhai Patel Finance Department

Mr. Bipinbhai Dhorajiya Production Department

Mr. Manan Jodhani HR Department

2.3 INFRASTRUCTUR:-

We pride in our city of art technology coupled with an efficient team of skilled

and unskilled labor. Being an industry which is labor intensive, we have kept a

balanced mix of technology and manpower to give you the best in Indian

spices. We provide consistently high quality and attractively packed products to

our esteemed clients. The company is spreader over an area of 12000 sq. ft.

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comprising city of art machinery and professional manpower, numbering

around 30 people on the payroll. The team strength constitutes 5 people in

administrative cell, 10 people in skilled level and 15 people in unskilled level.

2.4 INTRODUCTION TO COMPANY

2.4.1 NAME OF THE COMPANY:-

“RAMANAND FOODS”

2.4.2 ADDRESS OF THE COMPANY:-

‘’RAMANAND FOODS’’

H.O.:- 318/1, Varsha Soc., L.H Road, Surat – 395006

Ph. No.:- (0261) 0544953 / 67

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2.4.3 LOCATION:-

‘’RAMANAND FOODS’’

H.O.:- 318/1, Varsha Soc., L.H Road, Surat – 395006

Ph. No.:- (0261) 0544953 / 67

Factory: Block No. 117, Plot No. 11-a, Arihant Ind. Estate, Pipodra G.I.D.C.,

Mangrol, Dist. Surat (Gujarat).

Ramannad Foods choose place where avoid from society so minimum polluted

to society. In 2006 Pipodara area is Surat. And they are choose because avoid

to society. But now this area comes in industrial area.

Ramannad Foods also decide cost about level &building construction its

production department of 12000 sq. foot, and its building construction cost is

low.

2.4.4 VISION OF THE COMPANY:-

We will become one of the leading make a masala manufacturers of the Surat

through

1) Efficient Production

2) Efficient Quality

3) Efficient Diversification

4) Efficient Expansion

2.4.5 MISSIONS OF THE COMPANY:-

1) To establish a strong market presence in the Surat market

2) To make reputation in market and create a new branch and provide to

product of customer

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3) To establish Ramannad food is excellent business organization comparable

to the best in the Achar and masala business

Goal of the Company:-

To meet the need of the customer satisfaction and to sale the cheap and best

quality of the product

2.4.6 ANNUAL OBJECTIVES:-

1) To ensure the quality of the products

2) To establish good industrial relation with customers and get a quick

responsible feedback from customers.

3) To motivate employees in the right way and provide training and

development programmed.

4) To provide harmony and safe working condition to employees.

5) To maximum use of appropriate technology and information.

6) To establish reliable contact with customers.

7) To making good quality & sell them in the market.

2.4.7 HISTORY OF THE COMPANY:-

In 2008, two dynamic entrepreneurs, Mr. Jayantibhai Jodhani and Mr. Punabhai

Patel; pioneers in spices industry and connoisseurs of Indian tastes, joined

hands together to start Ramannad foods; supported by Mr. Gordhanbhai Patel.

The firm started as a manufacturing GARAM MASALA, graduated in terms of

size and volume; obviously due to healthy response from the market. In 2008, a

manufacturing plant was established in Surat. The company started

manufacturing spices in 2008 with a single product "CHILLI POWDER" and

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

manufacturing 4 different spices. For bulk orders, we can customize the

products according to your requirements. In 2009, a major milestone was

achieved when the company got "AGMARK" certification for its CHILLI

POWDER and TURMERIC POWDER. In 2009, same certification was

accorded to Spices.

Under the able guidance of the promoters, the company has reached to a

position, par excellence. Mr. Bipinbhai Dhorajiya joined business in 2009

respectively.

Mr. Dilip Dhorajiya and Dinesh Jodhani are looking after Sales Department

whereas Mr. Bipinbhai looking after Production and Quality Control

Departments.

The new entrants are following Mr.Gordhnbhai's footsteps and have the enough

dynamism and acumen to lead the company to new heights.

The company boasts of modern machinery and high technology to attain the

quality without losing the traditional aroma of Indian spices. Our products are

well known for their high purity.

The reliability, flexibility, competitive pricing and prompt service have been

the pillars of the company's reputation and success.

2.4.8 ACHIEVEMENTS:-

Companies have the more success in the masala industry

Company has created the image of the best supplier of the masala in the

market.

The company have known for its "chip rate and best quality"

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CHAPTER - 3

HUMAN RESOURCES

DEPARTMENT

11

HUMAN RESOURCES DEPARTMENT

PERSONAL DEPARTMENT

Activities of personnel departments

HRM dep. Helps managers to recruits, selection, and train and develop

members for the company.

HRM is concern with the people’s dimensions in organization. HRM refers to

set of programs functions and activities designed by employees as well as

organization effectiveness.

3.1 ORGANIZATIONAL CHARTS:-

Managing Director

Production manager

Personal manager

Finance manager

Marketing manager

• Employee welfare • Motivation • Promotion& transfer • Training& development • Job analysis & design • Environment of HRM • Ethical issue • HR audit • Strategic environment • Employee communication

12

3.1.1 HR dept. objectives are as follows:

Societal objectives:-

In this objectives company ethically and socially responsible to the need and

challenges of society.

Organizational objectives:-

Company recognizes the role of HRM in bringing organizational effectiveness.

Functional objectives:-

It helps to maintain departments’ contribution at the level appropriate to the

organizational needs.

3.1.2 Personal Objective:-

Company assists employees in achieving their personal goal at so far as these

goals enhance the individual contribution to the organization.

3.1.3 Standing Orders:

Rules and Regulation:

1) Attendance: 1) Time

2) Signature

3) Time Card

4) 15 minute late day

5) Without Permission

6) Half Day

2) Entry Exit & Liabilities: 1) Get Entry & Exit

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2) Security Checking

3) Remove Harmful Thing & inspection

3) Leave: 1) Follows Rules & Regulation

2) Medical Certificate

3) National Leave & Festival Holidays

3.2 HRP (HUMAN RESOURCE PLANNING):-

HRP is the process of forecasting a firm’s future demand for, and supply of, the

right type of people in the right number in company.

3.2.1 Importance of HRP of company’s point of view is as

follows:

1) Future Personnel need.

2) Part of strategic Planning.

3) Creating highly talented Personnel.

4) State Strategy.

5) Foundation for Personnel Function.

6) Increase Investment in human recourse.

7) Resistance to change and move.

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3.2.2 Factors affecting HRP of the Company:

3.2.3 Company’s planning process is as follows:

HRP essentially involves forecasting personnel need, assessing personnel ,

supply and matching demand supply factor through personnel related

programming the planning process is influence by overall organizational

objectives and the environment .

3.3 RECRUITMENT & SELECTION PROCESS:

3.3.1 Recruitment:

In simple term, recruitment is a process of searching for an obtaining

applicant for job.

HRP

Org. growth,

cycle &Plannin

g Environmental

uncertainty

Out sourcing

Nature of job

being field

Type and quality of

org.

Time horizon

15

“It is the process of finding and attracting capable applicants for employment.

The process begins when new recruiters are sought and ends when ends when

their applications are submitted. The results are a pool of applicants from which

new employees are selected.”

3.3.1.1 Process of Recruitment of the company

Recruitment Planning:

In the Ramannad, first of all it will decide that how many no. of personnel are

to be contacted and what type of personnel to be contacted. Sometimes they

demand for the managers, supervisors, worker so type of personnel is also

determined in first step.

Strategy Development:

After deciding the planning for recruitment they decide the order from where

they will get their employees. They will get their professionals, regional or

local for workers and local market.

3.3.1.2 How to look:

Internal Recruitment: 1) Present employees

2) Employees referred

3) Former employees

4) Previous applicants

External Recruitment:

1) Professional association

2) Advertisement

3) Employment exchange

4) Campus recruitment

5) Walk INS, write INS, talk INS.

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6) Consultants

7) Contractors

8) Radio & television

9) Competitors

When to look:

They start finding the employees before two months ago from their required

time. Because 10 days for advertise to begin producing resumes. Four days

invitation for interviews issued, 7 days for arranging the interviews, 4 days for

org. to make up its mind, 10 days for the applicants offered jobs to make up

their minds and 21 more days for those accepting offers to report for work. This

suggests that vacancies must be advertised two months before they expected to

occur.

Screening:

In this step they screen the employees, whether they are capable to do the job or

not from this step, they remove many applicants from recruitment process.

Evaluation & Control:

Salaries for recruiters

Administrative Expense

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So control on these costs & whether we found the capable applicants or not. It

checked in this evaluation step.

This is the process of recruitment. It refers to identifying and attracting job

sackers to pull of qualified applicant.

3.3.2 Selection:

Selection is the process of picking individual applicant with requisite

qualification and competence to fill jobs in the organization.

Selection is the process of differentiating between applicants in order to

identify and hire those with a greater like hood of success in a job.

PLANNING

STRATEGY DEVELOPMENT

SEARCHING

SCREENING

EVALUATION

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3.3.2.1 Process of selection of the company;

1) External Environment

2) Internal Environment

3) Preliminary Interview

4) Selection Test

5) Employment Interview

6) Background Analysis

7) Selection Decision

8) Physical Examination

9) Job Offer

10)Employment Contact

11) Evaluation

1) Preliminary Interview:

In this interview the general question is asked and checks the capability of the

applicant. The objective of this step is to select good applicants for the test.

2) Selection Test:

Jobseekers that pass the preliminary interview are called for tests. Different

types of tests may be administered depending on the job the company.

Generally testes are used to determine the applicant’s ability. Attitude &

Personality. Personality tests are given to measure a prospective employee’s

motivation to fun. In a particular working environment.

3) Employment Interview:

Interview is a formal, in depth conversation conducted to evaluate the

applicant’s acceptability. It is considered to be an excellent selection device. It

allows a two applicant and applicant learns about the employers. In regarding

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the particular job and general knowledge questions are asked to the applicants.

The obj. of the interviews ate to obtain additional information from the

applicant. To give general information to applicant such as company policies,

job, products manufactured and the like and to build the company’s image

among the applicants.

4) Reference & Background Checks:

In Ramannad foods, after taking the interview the reference & the background

of the applicant is checked. Ramannad, normally seek letters of reference or

telephone references. References are a formatting seldom verified by the

employers.

5) Selection Decision::

After taking information through the preceding steps, selection decision is

made in the Ramannad Foods the final decision has to be made from the pool

of individuals who pass the testes, interviews and references checks. The HR

manager plays a crucial role in the final selection.

6) Job Offer:

In Ramannad Foods, job offer is given to those applicants who have crossed all

the previous hurdles. Job offer is made through a letter of appointment. Such a

letter generally contains date by which the appointee must report on duty.

7) Contracts Of Employment:

After offering the job to the applicant the contract or file of employment is

made in Ramannad. In case of worker they are dealing them as a trainee worker

for 5-6 months and then they are permanent employees for the company.

Generally Ramannad makes the contract of employment for 1 year. This 1 year

divided in two parts. Three month for training and nine month for regular work.

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3.4 INDUCTION:

In Ramannad Foods house these process is most important because his

employees comes from M.P. & Karnataka. So, they feel at home it’s very

necessary and easy to start work confidently.

Induction or orientation program, at officer level, is undertaken by the manager

of concerned department. Manager gives guidelines about the policies of

company and manager introduces employee to training to their subordinate

3.5 PROMOTION, TRANSFER, AND DEMOTION:

3.5.1 Promotion:-

“Promotion is a term which covers a change and call for grater responsibilities

and usually involves higher pay and better terms and conditions of service and

therefore a higher status or rank.

3.5.1.1 Advantages of promotion in company’s point of view are

as follows:

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

company & where he may derive incised personnel satisfaction & income

from his work.

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

embarrassment of firing or demoting him.

To fill up higher vacancies from within the organization.

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

To increase an employee’s organization effectiveness.

To recognizes an employee’s performance and loyalty and motivate him

towards better performance.

To promote job satisfaction among the employee & give them an opportunity

for unbroken continuous service.

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To attract suitable and competent Workers for the company.

To develop a competitive spirit among the employee for acquiring

knowledge and skills required by higher level job.

To utilize more effectively the knowledge and skills of employee.

3.5.1.2 Factor affecting promotion in Ramannad foods

1) Merit Basis: Merit means an individual’s efficiency and capacity as judged from past

performance. Merit denotes an individual’s employee’s (skills knowledge,

ability, efficiency and aptitude as measured from educational training &

past employment record.)

2) Seniority Basis:

Company also promotes the employee in seniority basis. Seniority system are

based on the length of service & job experience.

3.5.2 Transfer:-

Yoder and associates have defined transfer as “a lateral shift causing movement

of individuals from one position to another usually without involving any

marked changes in details responsibilities skills needed or compensation.

In the case of Ramannad there is no transfer because companies have no any

branch.

Transfer refers to a horizontal movement of and employee from one job

to another in the same company. Within any requisition change in

responsibility, statues & income.

In this RAMANAND FOOD company transfer are used to place

employees in position where they are likely to get more job satisfaction.

A transfer to normally a change in job assignment. Transfer within the same

department or across department.

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3.5.2.1 Objectives of transfer in company’s point of view

are as follows.

1) To meet organizational need.

2) To satisfy employee need.

3) To better, utilize employee.

4) To make the employee more verscrilte.

5) To adjust the work force.

6) To provide relief.

7) To punish employee.

3.5.2.2 Factor affecting Transfer of the company:

1) Changing volume of firm within the firm

2) Level of Training and Development

3) Sensitiveness of the org. Towards employees problem

4) Nature of work

5) Structure of the Organization

6) Growth Opportunities

3.6 TRAINING & DEVELOPMENT:

Training refers to the process of imparting specific skills.

Employee training is distinct from management development. Training is a

short term process utilizing a systematic and organized procedure by

which non managerial personnel learn technical knowledge and skills for a

definite purpose. It refers to instruction in technical and mechanical

operations like operation of a masala. It is design primarily for non-

23

managers. It is for a short duration and for short duration and for a specific

job related purpose.

On the other hand development is a long term education process utilizing

a systematic and organized procedure by which managerial personnel

learn conceptual and theoretical knowledge for general purpose. It

involves philosophical and theoretical educational concept and it is design

for managers it involves broader education its purpose is long term

development.

3.6.1 Types of Training:

1) Induction Training:

Induction or orientation program is head in the RAMANAND FOODS PVT.

LTD. whenever new employee has to undergo 2 to 3 days induction training. In

case of worker joining the company, supervisor undertakes 3 to 4 days

induction training. Worker is given guidelines about the company rules and

regulation and also he is given training about how to operate the machine.

Induction or orientation program, at officer level, is undertaken by the manager

of production department. Manager gives guidelines about the policies of

company and manager introduces employee to training to their subordinate.

2) On the job Training:

The immediate superior shall impart the On-Job training to the operational

personnel whenever required.

Apart from this every immediate superior has to identify training needs as per

the calendar prepared by management representative and works manager and

recommend their sub-ordinate for training.

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3.6.2 Training and development both are different in

company’s point of view.

Training:-

1. Contents: technical and mechanical operation. 2. Participants: non managerial personnel. 3. Time period: short term one short affair. 4. Purpose: specific, job related ness. 5. Initiative: for management , external motivation 6. Nature: reactive process, to meet currant Need.

Development:-

1. Contents: Conceptual and philosophical concept. 2. Participant: Managerial personnel. 3. Time period: long term continuous process. 4. Purpose: Total personally. 5. Initiative: From individual himself- internal motivation. 6. Nature of the process: Proactive process- to meet future need.

3.7 COMPENSATION MANAGEMENT:

Company’s wages and salaries are paid by incentives way and called payment

by result. Incentives are depend open the productivity of the employee.

Productivity of workers Salaries

10000 to 20000 units 3500

20000 to 30000 units 7500

30000 to 40000 units 12000

40000 to 50000 units 17000

50000 to 100000 units 25000

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This is a structure of paying salaries of an employee. Company also provide

fringe benefit for such top employee these benefit are as follows.

1) Provident fund

2) Medical care

3) Hospitalization

4) Accident relief

5) Health and group insurance

6) Canteen

7) Uniform

8) Recreation

3.8 WELFARE OF EMPLOYEE & SOCIAL RESPONSIBILITY:

3.8.1 There are two type of welfare activates of the company:

Intra mural:

This services are provided with in the establishment these include

washing & bathing , rest room, uniform, medical aid , recreation facilities.

Extra mural:

These services are provided outside the establishment. these include housing

accommodation , transport , maturity benefits , sport’s field, etc.

Welfare services may also be divided as voluntary & statutory. Many

employers provide the following facilities.

1) Housing

2) Education

3) Transportation

4) Recreation

5) Consumer cooperative store

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3.9 HR AUDIT:

Audit is an important test of managerial control of company’s point of

view. It involves examination and verification of accounts and records. Human

recourse audit implies critical examination and evaluation of polices,

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

of view.

3.9.1 Advantages of HR Audit in Company’s point of View:-

To review the system of acquiring , developing , allocating, and utilizing

human resource in the organization .

To evaluate the extent to which line managers have implemented the

policies and programs .

To identify shortcoming in the managers in the management of human

resources.

To evaluate the human recourse staff.

3.9.2 Company’s Scope of HR Audit is follow:-

1. Auditing human recourse polices:

1) Policy of the company

2) Policy formulation

3) Communication policy

4) Consistency policy

2. Auditing Human Recourse Programs:

3. Audit of Human Recourse:

4. Company is Audit Report:

27

3.10 HRIS:

The company maintains wide range of records containing detailed information

about employment, promotions, transfer, training, welfare activities, wage,

employee service etc. it also maintain personal data of every employee.

Name of the employee

Local and permanent address

Appointment of service\job

Detailed about past

Educational Qualification

Personal detail like marital status, gender etc.

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CHAPTER - 4

PRODUCTION DEPARTMENT

29

PRODUCTION DEPARTMENTS

4.1 PRODUCT:

4.1.1 Motive

"To provide best quality with Cheapest Price"

Ramannad Foods Company Have Also Number of Products with Different

Packing, Different Quantity, but with Same Quality.

Company have Started to selling Under a Ramannad brand In 2008

At that time Company had only 10 Peoples Staff.

In 2008 Packing Production was done by the manually.

In 2008 the Handling of Marketing Department was given to the Mr.

Dineshbhai

In 2008 New Automation Technology was Adopted

Now Company Have Fully Automatic Packing Masala and Fully Automatic

Production Masala

The company has the fully automatic 2 masala and 2 Powder

Company's products is packing in the different container

1) Plastic bags

2) Plastic pouches

3) Paper cotton bag

4) Wooden box

4.2 PROCESS OF THE COMPANY:

In the every industry, very important factor is the production.

How company is producing?

How much producing?

When producing?

Which costing will be for produce item?

30

This all question is related to the production.

Ramannad Foods also have nice production process with good structure

.company have product type of layout for the production process.

Company has continuous production process.

Process is containing five main steps.

RAW MATERIAL

CLEANING DEPARTMENT

GRADING

BLANDING

PACKING

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4.2.1 Raw Material: It is the step of getting the raw material from the supplier and the take to that

material in the production department.

Main places for getting raw material for the company are as follow.

1) Bangalore

2) Ahmadabad

3) Rajkot

4) Mumbai

4.2.2 Cleaning department:

In this department all the raw Material will be scene and dust and other

physical dust will removed from it.

4.2.3 Grading:

It is the step of grade the raw material.

All the raw material will get as per their quality. Good quality of raw material

will be in a class category. And other will be in B and C category as per quality

standard.

4.2.4 Blanding:

It is the main step of the process. In this step all raw material will go in masala

for making a final product. This masala is fully automatic. When this process

will over the raw material will convert in to the powder.

4.2.5 Food laboratory:

After making Powder Company is sending the sample for testing that is there

any kind of harmful elements.

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4.2.6 Packing:

It is the final step of the process. In this step powder of will be packing in to the

box or plastic bags.

Plastic bags are sealed in hi-tech well sanitized and sterilized laboratories,

taking care of all the guidelines set by the Food and Drug Administration. The

hygienic measures taken maintain the standards of cleanliness and purity. The

spice handling is untouched by human hands and the sealing of the plastic bags

is done under the supervision of experienced laboratory technicians. This whole

procedure always takes place under the personal supervision of the specialist

themselves.

The cardboard boxes in which these plastic bags are put in are well packed by

our Hi-Tech masala. These attractive looking boxes have the picture of the

spice used in meals with the directions for use. Contents are generally

mentioned on the sides and the back of these cardboard boxes. The shelf life

ranges to years if the contents are stored and preserved properly.

Packing machinery

33

4.3 PLANT LOCATION;

The company is located at Pipodara.

In Pipodara production and human resources management is done.

In the Head Office only financial handling & marketing activity is being done.

Location of the company is so large but company is managing well with the

medium location of the company.

The companies have two production department, one packing department, one

main office, one storage unit, Cleaning department, and one shop for direct

selling the spices to the consumer.

4.3.1 Plant Location:

‘’RAMANAND FOODS’’

H.O.:- 318/1, Varsha Soc., B/H Labheshwar Sco.; L.H Road, Surat – 395006

Ph. no.:- (0261) 0544953/67

FACTORY:

Block No. 117, Plot No. 11-a, Arihant Ind. Estate, Pipodra G.I.D.C., Mangrol, Dist.

Surat (Gujarat).

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4.4 PLANT LAYOUT:

Plant lay out means physical configuration of department work station

equipment’s in the production system or in the conversion process.

Ramannad Foods plant layout include the arrangement of machinery,

equipment& other industrial facilities such as receiving &shipping department

TOOSL &

FIXTURES

DEPARTMENT

BOXES GODOWN

STORAGE UNIT

PRODUCTION

UNIT-1

PRODUCTION

UNIT-2

Cleaning

Department

Packing

Department

35

,tools room ,maintained room employee amenities for the purpose of achieving

the cheap &best production at the least cost.

Ramannad plant lay out is the plan for determining arranging the desired

machinery and equipment of a plant whether established and contemplated. In

one of the best place to select the cheapest flow of material at the lowest cost

&produce the best level production and then processing the product to the

shipping in finished goods. 4.5 MATERIAL HANDLING SYSTEM;

Every product you have ever used, from televisions to tennis shoes, has been

manufactured, stored and shipped to you with the help of the material handling.

Conveyor

o The company is using conveyor for the handling the boxes of the

finished products.

Company is using delivery van and auto for the delivering the finished product

to the shop keepers.

In the production department hand craft is use for the Handling raw material.

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4.6 PLANNING:

In simple term, production planning means decide the sequence of each activity

to carry out finish product or item. Production plan is the heart of the

organization. Production planning is the plan of future production, which is

prepared by production manager with the help of the sales plan of the

organization. Production planning is the primary step of any organization. So

that it is most important for any organization. It is very useful for the control of

the organization’s activities.

In technical term, production planning is that function of management, which

decides about the resources that will be required for future manufacturing

operation, and allocating of resources to produce the desired output at right

time, in right amount, of required quantity and at minimum cost. There are

three levels of production planning which are different from each other based

on time horizon it covers.

1) Strategic planning.

2) Tactical planning.

3) Operation planning

First, this plan is use to achieve the goal of the organization and it is mostly 4-5

years. Second plan is planning of operations over medium range and it is make

for 6-8 months. Third type of planning is most important for real shop floor

planning. It is mostly for 1-3 months.

Production planning is always made base on the sales plan of the organization

or on the customer order. Based on sales plan first of all how much to

manufacturing is decided. So that manager can decide what production

operation will be done on which masala and when. He has also decided the raw

material or input required for the production. For the decide raw material

37

requirement, he first check the stock of raw material, stock of finish goods,

pending purchase order, etc. so, the sales plan of the organization is very much

important component to make production planning.

We know the business is dynamic nature. Sometime, it may happen that the

demand is very little in the market. So we can see the excess of material. On the

other hand, when the demand of the product is very high. We see the shortage

of material. So both the types of problems are solving with the help of

production planning. Effective production planning helps to the organization to

avoid such situation.

In RAMANAND FOODS, the production plan is prepared based on sales plan,

which help them to avoid situation as mention above. The process of

RAMANAND is as given below.

The staff of the sales department prepares sales monitor report for the purpose

of giving the best services in the term of delivery dates specified by the

customer. So they easily produce as per customer requirements. One copy of

this report is send to the production department. So sales planning are not done

on the basis of the production planning rather than production plan is based on

the sales plan.

The customer specification included type of the product lot size, delivery date,

and material to be used for the products, quality required, etc... On the basis of

these specifications, production plan is prepared.

It is deciding in advance the short term as well as long term conversion if raw

material and other inputs in to finish product or product to be utilized as inputs

for further production by enhancing the utility of inputs. So that, they satisfies

customers’ needs on time.

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4.6.1 Production plan is converted in MRP:

The whole process of material requirement planning or preparation of material

requirement panning is indirectly depending upon the customer orders. Because

when the customers give order than they also specifics the material to be used

.as per customer specification raw material is used.

Thus order placed by the customer or their specifications plays a dominant role

in material requirement planning. When manager purchased the raw material

that will be used full in satisfy the customers demand.

Before deciding the required quantity of the material to be needed for the

production, the inventories are deducted from the requirement. The frosh

material placed after calculating the inventories. The prime objective of

material requirement planning is to be trigger timely purchase action of various

dependent demand items. Which raw material is required urgently and

providing conveys which can be delayed required details of MRP to purchase

department. If helps maintain priority control

As far as data of schedule is concern, the customer also specifies it and

according to buy the raw material. The supplier on the basis of the delivery

schedule, if a supplier can supply the material according to the production

schedule he can be selected.

In RAMANAND the use material requirement planning as manufacturing

resource planning the planning is divided in to two parts.

1) Manufacturing resource planning-1

2) Manufacturing resource planning-2

MRP –1 includes man, machine, and material. Where as in MRP-2 apart from it

money and marketing are also included, MRP- 2 provides greater control over

inventory of system is used properly. As in MRP-1 name applies plans only the

requirement. This system takes care of whole organization in place of single

39

unit. MRP-2 is associated with single unit of an organization. MRP-2 is the

expansion of MRP-1.

4.6.2 Material requirement planning menus:

4.6.3 Highlights of MRP software in Ramannad unit:

1) It is weekly basis. Currently the starts form Sunday. It is shown by year and

followed by current week.

2) Have local area network system. In the RAMANAND .all the pcs connected

with LAN system.

3) Using 5m’s Ex: - man, material, masala, money and marketing The MRP

software is self-made by company employed and the development is always

going on.

4.6.4 Analysis of plant location considering various factors:

Plant location is same as plant layout. Plant location, which cover main

production area, offices for production employees, other offices and other

departments of the organization. In technical term, plant layout is physical

arrangement of various buildings, production department, technical utilities,

personal utilities and locations of various machines within each production

I. Design II. Dispatch III. Inquiry bills of material IV. Bills V. Inventory VI. Indent

VII. Purchase order VIII. Work order IX. Planning X. Vendor XI. Requisition XII. Customers

XIII. Sells order XIV. Inward XV. Labor XVI. Cost

XVII. Store XVIII. Quit

40

department. In RAMANAND, plant layout of it very effective. The main

factors which affect its location are as followings:

1) How much to manufacture?

As we know RAMANAND produces the masala. The manufacturing of those

masala requires large space. While they decided the plant lay out or location.

They also decide their capacity of manufacture masala. The customer’s need or

not they first study sales plan and bases on that prepared that production plant

& lay out.

2) Location:

RAMANAND is on Pipodara. Which is good area? There are also many

industries in that area. They can do easily their production activity. They also

build multi storage building. So their plant lay out is very effective.

3) No. Of employees and visitors:

In RAMANAND, they have 30 employees. In that total employees work are

Gents.

4) Provision for material handling:

Within production department they normally use a trolley for raw materials and

masala. They have also facility to store the material handling equipment’s.

5) Nature of product operation:

As RAMANAND produce very good quality of masala. They production

activity is at dynamic nature. They make some change in their operation as per

the requirement of the organization. They also make some provision for such

change in the organization.

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4.7 SCHEDULING & CONTROL:

Working time is 10:00am to 6:00pm so according to timing of the work center

schedule is prepared. The company prepare weekly schedule for manufacturing

the different product. According to market demand and other reason there will

be change in the schedule.

4.8 DISPATCHING:-

Dispatch instruction received form concerned department with

related documents.

Verification of material

Packaging of material

Arranging for transport

Prepared dispatch documents

Loading material on transport vehicle

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4.9 INVENTORY MANAGEMENT:

In the spice industry inventory, management is most important factor because

this industry is totally depends upon the seasonal variation.

In the season of various raw material company can get it from the farmer if

there is shortage of material then company have to stop production. So

company has to manage it very carefully throughout the year.

Inventory is the total amount of goods and/or materials contained in a store or

factory at any given time. Storeowners need to know the precise number of

items on their shelves and storage areas in order to place orders or control

losses. Factory managers need to know how many units of their products are

available for customer orders. Restaurants need to order more food based on

their current supplies and menu needs. All of these businesses rely on an

inventory count to provide answers.

Company is taking an inventory monthly. Because company have to order the

raw material quantity in every end of month and company cannot stock the

item more the one month because all items are related to the food.

The word 'inventory' can refer to both the total amount of goods and the act of

counting them. Many companies take an inventory of their supplies on a

regular basis in order to avoid running out of popular items

4.9.1 ABC analysis

The company is doing the ABC analysis for taking the inventory.

In the first category, a company is putting the high valuable thing that comes

from distance places such Chennai from, or from Bangalore etc.

The second category company is the items which is valuable but easily

available for the company.

Third category is of items which is not so valuable and also easily available.

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4.10 QUALITY CONTROL:

We follow strict quality conditions. We are manufacturing spices under the

strict norms and rules prescribed in PF standards. Our commitment to the client

is reflected in our commitment to the quality of the product.

We have an advanced quality control department consisting of modern

machinery, enabling us to check purity and hygiene level at every level of

production. Right from production to packaging, our products pass through

stringent quality control tests in distinct units. Natural raw materials are

carefully selected, checked for various quality parameters and processed in the

most hygienic processing conditions thus preserving the Indian aroma and

taste.

We at Ramannad foods have been always concerned about giving our

customers, high quality products specified as per government norms.

The Production Unit has always aimed at achieving utmost purity, freshness

and cleanliness of their Products, through which we have been able to gain faith

of our Customers.

We have acquired "AGMARK", the Standard for Quality Control of Grading

and Processing of Spice

Our emphasis has always been on "A" Grade quality raw materials that are

meticulously inspected from the country's best fields. The cleaning, roasting

and blending is carried out in a fully automated plant. We have our own

Quality Control laboratory for the scrutiny of quality. The quality of raw

materials, proportions, blends must meet the authentic standards set by the

company.

44

CHAPTER - 5

MARKETING DEPARTMENT

45

MARKETING DEPARTMENTS

5.1 PRODUCT:

Product is the physical thing which is manufactured for satisfaction of the

consumer.

Ex-: food ,car, mobile, TV,

Motive " To provide best quality with Cheapest Price"

Ramannad Foods Company Have Also Number of Products with Different

Packing, Different Quantity, but with Same Quality.

Company have Started to selling Under a Ramannad Food In 2008

At that time Company had only 15 Peoples Staff.

In 2008 Packing Production was done by the manually.

In 2009 the Handling of Marketing Department was given to the

Mr.Dineshbhai.

In 2008 New Automation Technology was adopted.

Now Company Have Fully Automatic Packing Machinery and Fully Automatic

Production Masala.

The companies have the fully automatic 4 masala.

Company's products are packing in the different container.

plastic bags

plastic Pouches

wooden box

paper cotton bag

5.1.1 Product Profile

1) Garam Masala 2) Chili Powder 3) Turmeric Powder 4) Achar Masala

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5.1.2 Product Sample

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PRODUCT PACKING WEIGHT

Garam Masala - - 500gm 200gm 100gm 50gm

Chilli powder Bulk 1kg 500gm 200gm 100gm 50gm

Turmeric Powder Bulk 1kg 500gm 200gm 100gm 50gm

Achar Masala Bulk - 500gm 200gm 100gm 50gm

5.1.3 Product Mix:

5.1.3.1 Meaning Product Mix

A product mix (also called product assortment) is the set of all product lines

and items that a particular seller offers for sale to buyer’s an organization with

several product lines has a product mix.

5.1.3.2 Product Mix has three main characteristics:-

1) Width

2) Depth

3) Consistency

Width of the product mix is concerned with the number of product line

marketed by Ramannad foods. Width and smaller number of product line

narrower is the product mix.

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Depth of the product mix depends on the average number of product items

include in the product line. The average number of product items smaller is the

depth of product.

Consistency of the product mix indioctes how far or to what extent the

product line are interconnected with each other from the view point of final use

or production or channel of distribution

5.1.3.3 The following situation indicates lack of optimization of

product mix:-

1) A situation of excess production capacity arising seasonally or very often.

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

Ramannad foods.

3) Insufficient width of product mix to the extent that maximum benefits of the

Ramannad foods sales for contact.

5.1.3.4 Importance of the product mix Ramannad masala:-

1) Profit maximization

2) Maximization of sales

3) Stability of sales and sales income

4) Maximum benefits

Profit maximization, with the help of product mix available opportunities

can be trued into maximum profit. This would be not having been possible in

its absence.

Maximization of sales, in this point to improving in the sale maximum

level. It helps to exploiting the situation for maximizing the sales.

Stability of sales and sales income, any decrease in the sales of any

product items of Ramannad foods disturbance in optimum product mix and

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income also declines. So, the sale of any item to the Ramannad food is stability

of sales and sales income can be maintained.

Maximum benefit, the salesman of the present product comes in contact

with a large number of customers. By introducing a new product maximum

benefit of their contacts can be derived with minimum cost and maximize in to

the profit.

5.1.4 Packaging & Labeling:

5.1.4.1 Packing:

It is the final step of the process. In this step powder of will be packing in to the

box or plastic bags.

Plastic bags are sealed in hi-tech well sanitized and sterilized laboratories,

taking care of all the guidelines set by the Food and Drug Administration. The

hygienic measures taken maintain the standards of cleanliness and purity. The

spice handling is untouched by human hands and the sealing of the plastic bags

is done under the supervision of experienced laboratory technicians. This whole

procedure always takes place under the personal supervision of the specialist

themselves.

The cardboard boxes in which these plastic bags are put in are well packed by

our Hi-Tech machinery. These attractive looking boxes have the picture of the

spice used in meals with the directions for use. Contents are generally

mentioned on the sides and the back of these cardboard boxes. The shelf life

ranges to years if the contents are stored and preserved properly.

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Packing machinery

5.1.4.2 Labeling: “Label is a part of product .which carries verbal information about the product

or the seller. It may be a part of a package. Or it may be a tag attached directly

to the product.” Label may be small slip or printed statement.

Label gives following information in any product in the production:

1) Brand name 2) Picture of the product 3) Address of the producer and industry 4) Gross and net quantity of the content 5) Ingredients in the product 6) Direction for the use 7) Precautionary measures 8) Nature of the product 9) Date of packaging and expiry 10)Retail price

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Labeling photos of the Ramannad Food’s product:-

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5.2 PRICE:

Company's price of the product is decided on the Bases of the company's

costing of manufacturing.

It includes all the exp. Of the Raw Material, Transportation, Packing, Gov.

Taxes (5%), Inspecting exp. , Production exp. , Agent commission, C.N.F

commission {super stockiest}, Profit of Company (20%).

Company also considering the price of the competitors.

In the boom period when there is high competition at that time company

decrease their price below the cost

And incurring loss because of standing in to the market.

Because of the company's stability in the price, company is getting more

response from the company.

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TURMERIC

POWDER

50g 09.00

100g 16.00

200g. 31.00

500g. 75.00

1kg. 145.00

CHILLI POWER

50g 10.00

100g 18.00

200g. 34.00

500g. 80.00

1kg. 150.00

ACHAR MASALA

50g. 18.00

100g. 35.00

200g. 70.00

500g. 170.00

GARAM MASALA

50g. 10.00

100g. 18.00

200g. 34.00

500g. 80.00

RAMANAND FOODS [P] Ltd.

Pipodara, Surat. (Gujarat)

PRICE LIST W.E.F. 23.03.11

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5.3 Place:

Companies have mainly three types of the channel.

1) Communication channel

2) Distribution channel

3) Service channel.

5.3.1 Communication Channel of Ramannad

Through this channel company deliver & receive message from target market.

The Company’s Communication channel includes Newspapers, Radio, local

TV channel, postures, local transportation, calendar etc.

Through this channel company, displays sell & deliver the physical product to

the buyer. Company includes CNF (super stockiest), Distributor, Shopkeepers

etc.

Every company has their Distribution. Some companies sale their products

directly to the consumer. Those companies have No distribution channel.

Company have long distribution channel including CNF (super stockiest),

Distributor, Shop keepers etc.

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5.3.2 Distribution Channel of Ramannad

MANUFACTURER

DISTRIBUTOR

SHOP KEEPER

CONSUMER

The company have very long distribution channel but company is managing it

very effectively and with the less staff.

5.3.3 Service Channel of Ramannad

Through this channel, company Carry out Transactions with potential buyer.

This channel includes Agent Go down delivery, Warehouses, Transportation

companies, Insurance Company etc.

Company is Providing Transportation, to the distributor up to final shipment of

good to the buyer.

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5.4 PROMOTION:

In the competitive field Promotion is the most useful tools.

Promotion is related to the 'how to increase the sales by beating the competitor

& by satisfying the customer'.

promotion have some main faces

1) PUBLICITY

2) DOOR TO DOOR SELLING

3) ADVERTISING

4) SALES PROMOTION

This tool is the most useful for promotion.

5.4.1 Sales Promotion

Ramannad also using this tool by giving the sample.

o By offering gift on purchase of bulk quantity.

o By giving free coupon.

o By giving prize to distributor on achieving sale target.

5.4.2 Advertising

It is the most useful tools for the promotion.

Advertising have also different number of tools.

1) Television

2) New paper

3) Banner

4) Hand bill

5) Local Channel

6) Holding

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Product life cycle:

Every companies are passing through different phases

Mainly there are four phases

1) Introduction

2) Growth

3) Maturity

4) Decline

In the first stage of introduction, company is just entered in to the Market so

that a sale is law, exp. Is high.

In the second stage company is enter in to growth stage so that high sales, low

exp.

The third stage in which company is currently going so company is facing with

High competition.

Fourth stage is the last stage in which company will lose the consumer slowly

Because of high expenses, low promotional exp.

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5.4.3 Competitions

It includes all the actual & potential rival offering & substitute of their product

a buyer might be considering. The company may be of monopoly, total

competitive or oligopoly.

In the Surat market, there are few companies which have no competitor.

In Surat every company have to face heavy competition.

Ramannad have also facing the large number of the competitor in the Surat

market. such as,

1) S.K Masala

2) Badshah Masala

3) Ramdev Masala

4) Ttc Masala

5) M.D.H Masala

6) Everest

7) Dhanhar Masala

8) Gajanand Masala

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CHAPTER - 6

FINANCE DEPARTMENT

60

FINANCE DEPARTMENT

MEANING OF FINANCE:-

The importance of finance in the business is same as the importance of the

spring in the clock. Finance is required from the starting of the business until it

terminates, as a means of the business transaction. Finance is the blood of the

business without which an enterprise cannot survive.

Finance is that administrative area or set of administration function in an

organization which relates the arrangement of cash and credit so that

organization may have the means to carry out its objective as satisfactory as

possible”.

Finance is regard as life blood of business organization and management of

finance study about procurement of funds from most advantage source and its

effective disbursement with a view to maximizing shareholder’s wealth.

Account activity is also an important part of finance management.

MEANING OF FINANCIAL MANAGEMENT:-

Financial management is the concern with the managerial decision that results

in the acquisition and financing of long term and short term credit of the firm.

Financial management is a managerial activity, which is concerned with

planning and controlling of the firm financial resources.

Financial management means the use of such managerial function as planning

and control to undertake finance function.

Finance management is that managerial activity which is concerned with the

planning and controlling of the firm financial resources. Still today it has no

unique body of knowledge of its own and draws heavily or economic for its

theoretical concept.

61

Finance is regard as life blood of business organization and management of

finance study about procurement of funds from most advantage source and its

effective disbursement with a view to maximizing shareholder’s wealth.

Account activity is also an important part of finance management.

Ramannad has also effective department which perform all the works related

with transportation and money. Ramannad has good financial petition and play

important role to maximize its share value.

So, finance department is one of the important department finance organization

department finance organization.

6.1 FINANCE FUNCTIONS:

Sources Finance management is that managerial activity which is concerned

with the planning and controlling of the firm financial resources. Still today it

has no unique body of knowledge of its own and draws heavily or economic for

its theoretical concept.

Finance is regard as life blood of business organization and Account activity is

also an important part of finance management.

So, finance department is one of the important department finance organization

department finance organization.

6.1.1 Importance of Finance Department in Company:

The financial department of the any company has perform of follows maintain

three function. They are under.

1) Investment Decision :

The function related in the secretion of assets in which financial will be

invested by a firm either in long term or short term assets.

62

2) Financial Decision :

It involves decision regarding financial mix to determine capital structure. It is

broadly related with assets from of the firm.

3) Dividend Policy Decision :

The dividend policy decision should be analyses in relation to the financing

decision are a firm Investment opportunities available within the firm.

6.1.2 The main objectives of finance department in Ramannad

Foods are as under:

1) To monitor & measure debtors

2) To prepare profit & loss account

3) To maintain working capital at minimum level compared to last year

4) To prepare a balance sheet of each year

5) To monitor & measure internal customer satisfaction

6) To increase short- term investment

6.1.3 Finance Function:

Control of expenditure and economy measures.

Audit and Accounts.

Financing of Five year Plans and expenditure sanctions relating to Plan and

Non Plan Schemes of all departments.

Exercise of financial powers delegated by the Governor in case where such

powers. Have not been specifically delegated to other departments and

authorities.

Scales of pay and allowances, revision, etc.

Codification of Financial rules and regulations.

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6.2 SOURCES OF LONG TERM FINANCE:

6.2.1 Meaning:

A business requires funds to purchase fixed assets like land and building, plant

and machinery, furniture etc. These assets may be regarded as the foundation of

a business. The capital required for these assets is called fixed capital. A part

of the working capital is also of a permanent nature. Funds required for this

part of the working capital and for fixed capital are called long term finance.

6.2.2 Sources of long term finance:

The main sources of long term finance are as follows:

1) Retained earnings

2) Term loans from banks

3) Loan from financial institutions

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6.3 SOURCES OF SHORT TERM FINANCE:

6.3.1 Meaning:

After establishment of a business, funds are required to meet its day to day

expenses. For example raw materials must be purchased at regular intervals,

workers must be paid wages regularly, water and power charges have to be paid

regularly. Thus there is a continuous necessity of liquid cash to be available for

meeting these expenses. For financing such requirements short-term funds are

needed. The availability of short-term funds is essential. Inadequacy of short-

term funds may even lead to closure of business.

6.3.2 Sources of Short term finance:

1) Bank Credit

a. Loans

b. Cash Credit

c. Overdraft

d. Discounting Of Bill

2) Customers’ Advances

3) Installment Credit

4) Loans From Co-Operative Bank

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6.4 CAPITAL BUDGETING PROCESS:

The process of making the decision of investments of current fund in the assets,

in the anticipation of returns, during a series of future years is known as capital

expenditure budge

6.4.1 Process of Capital Budgeting:

Project Generation

Project Evaluation• Estimation of Capital Expenditure• Forecasting of net cash flow• Determining the present value of net

cash flow

Selection of Project

Project Evaluation

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6.5 WORKING CAPITAL MANAGEMENT:

Generally, term Working Capital refers to that part of capital which is not field

up in the fixed assets but is used to meet the day to day requirements. It is

invested current assets like cash, stock, bills receivable, debtors, etc. this type

of capital is used to make payments for purchases raw materials, wages and to

meet other expenses till goods are sold and money collected against it.

There are two type of working capital- gross and net. Gross working capital

refers to the company investment in current assets. Current asset are the asset

which can be converted into cash within an accounting year and include cash,

short term securities, debtors, bill receivable and stock.

Net working capital refers to the difference between current liabilities. Current

liabilities are those claims of outsides, which are expected to mature for

payment within in accounting year and include creditors, bill payable and

outstanding expenses.

Net working capital = total current assets- total current liabilities

6.5.1 Nature of Working Capital:

The nature of working capital is described with the help of nature operation

cycle of the firm. The process of cash or operation cycle starts when a firm uses

cash to purchase raw material and pay for other manufacturing costs to produce

goods. These goods are carried as inventory for some time till they are sold.

These processes are described as circulating nature of current assets. The speed

of circulation of working capital of turnover of current assets is an indicator of

the degree of efficiency of the management.

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6.5.2 Need for Working Capital:

In RAMANAND FOODS, they are doing successful sales program.

They are convert cash in to inventory.

Convert inventory in to receivables.

In addition, receivables are converting in cash.

6.5.3 Kinds of Working Capital in Ramannad Foods:

Permanent or fixed working capital

Temporary and variable working capital

Cash working capital

6.5.4 Source of Working Capital:

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6.5.5 Financing of Long Term Working Capital:

Long term working capital should be provided in such a manner that the

enterprise may have its uninterrupted use for a long time. It can be conveniently

financed by the following sources:

1) Issue of shares:

Issue of share is the most important source for raising the permanent working

capital shares are of two types-Equity shares and preference shares. Maximum

amount of permanent capital be raised by the issue of shares.

2) Floating of Debenture:

A debenture is an instrument issued by the company acknowledging its debt to

its holder. It is also an important source of long term working capital. The firm

issuing debentures also enjoy a number of benefits, such as trading on equity,

retention of control, tax benefits etc.

3) Ploughing back of Profit:

It means the reinvestment by a concern of its surplus earning in its business.

That is, a part of the earned profits may be ploughed back by the firm, in

meeting their working capital needs. It is an internal of source of finance and is

most suitable.

4) Long-term Loan:

Financial institutions such as commercial bank, life insurance Corporation of

India, industrial finance corporation of India, stat finance corporation etc.

provide all types of loans-long-term, medium-term, short-term loans. This type

of finance is ordinarily repayable in installments.

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5) Accepting Public Deposit:

Public deposits are the fixed deposits accepted by a business enterprise directly

from public.

6.5.6 Financing of Short-Term Working Capital:

The category of fund covers the need of working capital of financing day-to-

day business requirements. They are of two types-internal source and external

source.

1) Internal Sources:

a. Depreciation Funds:

Depreciation reserve provides a good source of funds for working capital.

b. Provision for Taxation:

The provision for taxation can also be used by the concern as a source of

working capital during intermittent periods.

c. Accrued Expenses:

The firm can postpone the payment of expenses for short periods.

2) External Sources:

a. Trade Credit:

One of the most important forms of short-term finance is the trade credit

extended by one business enterprise on another on the purchase and sale of

goods.

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b. Credit Paper:

In the category of credit paper, bills of exchange and promissory notes of

shorter duration, varying between a month and six month. These papers can be

discounted with bank.

c. Bank Credit:

Commercial Banks are also principal sources of working capital. They provide

working capital in the form of overdrafts, cash credit, short-term loans etc.

d. Customer Credit:

Advances may also be obtained on contracts entered into by the enterprise.

Customers are often asked to make advance payment in cash in lieu of a

contract to purchase.

e. Loans from Directors:

An enterprise can also obtain loans form its officers, directors etc.

These loans are often obtained at low rate of interest.

f. Security of employees:

If employees are required to make deposits with their employer companies,

such deposits are available or short-term working capital.

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6.6 INVENTORY MANAGEMENT:

For many business firms, inventory is one of the visible and tangible of doing

business. Raw materials, work in process and finished goods all represent

various form of inventory. In simple words, inventory refers to stocks of good

necessary to do business.

In fact, for a business firm, inventory is both an assets and a liability. Too much

inventory consumes physical space, causes of financial burden, and increasing

the possibility of damage, spoilage and loss. On the other hand, too little

inventory disrupts manufacturing operations, engenders chaos on the shop

floor, poor customer service.

6.6.1 Need to hold Inventory:

Business firm keep inventory for different purpose. Every firm, big of small,

trading of manufacturing has to maintain some minimum level of inventories.

1) Transaction motive:

Every firm has to maintain some level of inventories to meet the day to day

requirement of sales, production process, customer demand etc. the inventory

level will provide a smoothness to the operation of the firm.

2) Precautionary motive:

A firm should keep some inventory for unforeseen circumstances also. For

example, supply of raw material may not reach due to strike by the transporters.

3) Speculative motive:

The firm may be tempted to keep some inventory in order to capitalize an

opportunity to make profit.

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6.6.2 Types of Inventory:

1) Raw Material Inventory:

These are goods which have not yet been committed to production in a

manufacturing firm. They may consist of basic raw material.

2) Work-In-Process:

This includes those materials which have been committed to production process

but have not yet been completed.

3) Finished goods:

These are completed products awaiting sale. They are the final output of the

production process in manufacturing firms.

4) Supplies:

A fourth kind of inventory, Supplies or what is called consumable -stores are

also maintained by the firms. These materials are of low value & they do not

enter the production process.

5) Scrap:

The waste of materials arising during manufacturing process is also a part of

the inventory. Even defective pieces to be disposed of are a part of in inventory.

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6.7 RATIOS :-

1) Current Ratio: CURRENT ASSET

= -------------------------------

CURRENT LIABILITIES

5, 03,001

= -------------- 5, 41,358

2) Liquid Ratio / Acid Test Ratio:

CURRENT ASSETS - STOCK

= -------------------------------------

CURRENT LIABILITIES – B.O.D

5, 03,001 – 3, 52 769

= ----------------------------

5, 41 358 – 000

3) Proprietors Ratio: PROPRIETORS FUND – FICTITIOUS ASSETS

= -------------------------------

TOTAL ASSETS – FICTITIOUS ASSETS

7, 54,428 -33,516

= -------------- 7, 60,310 - 33,516

0.93: 1

0.28: 1

0.99: 1

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4) Debtor’s Ratio: DEBTOR + BILLS RECEIVABLE = ------------------------------- × 365

TOTAL CREDIT SALES

1, 26,500

= -------------- × 365 79, 67,835

5) Debt Equity Ratio:- LONG TERM LIABILITIES

= -------------------------------

OWNER’S FUND

3, 52,086

= -------------- 7, 54,428

6) Debtors Turnover Ratio:

SUNDRY DEBTORS + BILLS RECEIVEABLE = ------------------------------- × 365

NET CREDIT SALES

1, 26,500

= -------------- × 365 79, 67,835

6 Days

4.67: 1

6 Days

75

7) Creditors Turnover Ratio:

CREDITOR’S + BILLS PAYABLE = -------------------------------

AVERAGE CREDIT PURCHASE

5, 24,775

= -------------- 3, 52,186

8) Stock Turn Over Ratio:-

COST OF GOOD SOLD [C.O.G.S] = -------------------------------

AVERAGE INVENTORY

3, 52,189

= -------------- 3, 52,784

9) Total Assets Turn Over Ratio:

TOTAL ASSETS = -------------------------------

TOTAL ASSETS – FICTITIOUS ASSETS

7, 96,783

= -------------- 7, 60,310 – 33,516

54 Days

10 Days

1.05

76

10) Gross Profit Ratio:

GROSS PROFIT = ------------------------------- × 100

SALES

1, 96,579

= -------------- × 100 7, 96,783

24.67

77

CHAPTER - 7

FINDING & CONCLUSION

78

FINDING & CONCLUSION

FINDINGS

After the study of the subject aspects which are mentioned in earlier chapter,

many things come in to the minds of researcher. A brief description of them

can be drawn as findings;

1) Fixed assets of company are increase in 2010-11 as compared to

previous year 2009-10. Because of that reason the Net Profit of year

(2010-11) is Decrease.

2) In Current Ratio, as per compare to Ideal Ratio is low so the company’s

current ratio is satisfactory

3) Marketing is very low to other competitor.

4) Sundry debtors are also increase in 2010-11 as compared to previous

year. It is little bit harmful for company.

5) Investment falls in 2010-11 as compare to 2009-10.

6) Company has increase in Reserves and Surplus in year 2010-11 as

compared to year ‘09-‘10.

7) Financial expenses are increased in 2010-11 as compared to year 2009-

10.

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CONCLUSION

We are getting the information from the entire department. In Ramannad Foods

house first they got the information about production department and marketing

department and then get the information about finance and H.R. department.

Bipinbhai give the information about production process plant lay out plant

location etc. and Dinishbhai give the information about marketing environment

4 p’s etc.

Mananbhai give the information about H.R. audit training selection

requirement transfer etc. and Sureshbhai give the information about working

capital ratio analysis etc. all the department manager give to information which

we want to make reports.

During my industrial training at Ramannad Foods. I found that there is co-

operative managerial staff & workers & also good & efficient management in

each & every department & workers are fully satisfied with their management

because the main purpose of Ramannad Foods is to achieve their goals

involving each & every employee.

A Customer Is Very satisfied To Ramannad Foods Quality and Also with

Quantity.

80

CHAPTER - 8

SUGGESTIONS

81

SUGGESTIONS

After completing of training I suggest following points:

o Company should give effective advertisement in newspaper & women

magazine.

o In spices market many more competitors so keep to the customer for over

product is not easy so given the good quality at fewer prices

o Current Assets, Loans and Advances are increase in current year, so it is

good for company and it helps the company to meet its cash requirements.

o Fixed Assets of company is increase in current year.

o In marketing base Ramannad Foods are not good in advertisement and other

marketing point of view. So some money is invest in marketing line and

given to competition to her competitors.

o The price of masala & Atta is very high then other company so company

should try to minimize the price of masala & Atta for increases selling of

masala & Atta and to capture the market share.

o Company tried to minimize the cost of goods sold and financial expenses.

o The company should find another vendor to purchase raw materials at lower

rate because to reduce costing of masala.

82

BIBLIOGRAPHY

Marketing management book by Philip kotler.

Brochure and Booklet

Financial Management book by B.S. Shah

Human Resource Management book by C.B. Gupta.

Production Management by Aswathappa.

83

ANNEXURE

BALANCE SHEET