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A
PROJECT REPORT
ON
SUMMER TRAINING
AT
“GARDEN SILK MILLS PVT. LTD”
Submitted By:- ROLL NO.:
KAPADIA PRATIK S. --
PATEL JIGAR D. 45
PATEL YOGESH D. 61
Guided By:
Ms. VARSHA PATEL
Ms. DILSHAD BHATHENA
Ms. VAISHALI CHAUDHARI
Mr. RAKESH LARA
Submitted To:
VIVEKANAND COLLEGE FOR BBA
VEER NARMAD SOUTH GUJARAT UNIVERSITY
SURAT
128
Academic Year – 2010-2011
INDEX OF REPORT
Sr. No. Subject Page No.
1 Industry Profile 1
2 Company Profile 5
3 Finance Department 14
4 HR – Department 40
5 Production Department 71
6 Marketing Department 94
* Bibliography 119
* Annexure 122
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ACKNOWLEDEGEMENT
We take the opportunity to express the feeling of gratitude towards South Gujarat
University for keeping Industrial training as a part of Bachelor of Business Administration
Course
It is an occasion of great pleasure and a matter a deep felt personal satisfaction to
present this complied statement of the project work undergone at company of a great esteem
Garden Silk Mills Limited. First, we believe that full credit of having completed the
prescribed training should go to the coordinator of VIVEKANAND COLLEGE FOR B.B.A.
for making available all facilities in fulfilment the requirement for my project report.
The project would have been possible through out the experience, guidance and
supervision of Ms. Varsha Patel has potentially and critically gone through the subject matter.
We wish to place on record the operation give me by Mr. Bipin Modi(Director of the
Garden Silk Mills Ltd.) for making capable of teaching new things, which are helpful in our
practical life.
We are also thankful to the staff of the Garden Silk Mills Ltd. For giving a practical
knowledge and help me for satisfactory completing my project report. We take this
opportunity to thank all those who directly or indirectly were instrumental in the completion
of our project work.
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DECLARATION
We, Kapadia Pratik, Patel Jigar and Patel Yogesh here by declare that this project is
submitted to “GARDEN SILK MILLS LTD.” As per Veer Narmad South Gujarat University
requirement of Bachelor of Business Administration curriculum is our original work based on
the finding during the project.
We will not submit this report to obtain any other degree in future and no other person
will be allowed to copy from this project in any form.
If we are found to be guilty of not fulfilling the above promises, our submission can
be declares invalid and college has the right to reject this.
Date:
Place:
- Kapadia Patik S.
- Patel Jigar D.
- Patel Yogesh D.
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EXECUTIVE SUMMERY
After completing our project in one of the leading yarn manufacturing company like
GARDEN SILK MILLS LTD. They produce yarn of best quality according to the needs of
the buyer. During the project report, we observed that all the employees working in this
company are more co-operative, disciplined & helped us in completing our project.
From the study conducted & analysed so far, it can be conclude that, organization
provides various facilities to their employees. They treat their employees as a family
members that result in success of the company. The company believes that employees are the
main property for them, so they have to take care of them by various programs.
During the training period we found that the Garden Silk Mills Ltd. Only does not
manufacture the different types of yarn but it also manufacture all type of materials for sari as
well as dress.
By the study of various department we observed that all the department are managed,
arranged, scheduled properly, so that the employees cannot feel difficulties in working.
During this vocational training we had good experience that increases our knowledge.
It was a great honour to get training under this company and we also found that the
Garden Silk Mills Ltd. has a good reputation in the market about their quality of product.
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World fiber consumption grew by 3.8% in 2006. of this cotton grew by 2.5% and
polyester by 4.4%. Polyester filament yarn, the fastest growing major fiber category, and the
industry in which your company operates, grew by 6.5% worldwide.
China and India are the world’s largest PFY producers. Moreover, PFY growth is
completely dominated by these 2 countries. This domination is expected to continue. The
world PFY growth, excluding China and India, is strongly negative. India’s PFY industry is
still a little over a tenth of the size of China but our growth is expected to be faster.
India’s economy has been growing at an unprecedented rate of 8.6% per annum over
the last 4 years. Manufacturing has been a great contributor; growing at 9.5% p.a. the
accelerated growth of the company has substantially impacted the PFY industry growth as
well, which has outperformed the real GDP growth. After a lull for a few years the industry
grew dramatically last year eliminating the oversupply that industry observers had predicted
would last for a few years more. While capacity grew by 38% to over 2 million TPA,
production grew even faster. The growth was due to both export demand as well as domestic
consumption.
The Indian cotton crop is owing to the rapid increase in yields made possible by
increased use of BT cotton and improved water management. However, this is not expected
to impact the Indian polyester industry since the global shortage of cotton should imply high
cotton prices.
In the last budget, import duties on PFY and its raw materials PTA and MFG were
reduced form 10% to 7.5%. During the year under review, excise duty on MFG was reduced
from 16% to 12% which continues to be much higher than the 8% on PFY and remain an
unfortunate anomaly.
The Company operates across the entire polyester chain from polyester chips to
finished fabrics. The party insulates it form temporary oversupply in any one component of
the chain. It also gives the Company valuable information about final consumer and raw
material trends. It also enables it to sense and respond to market movements quickly. Mostly,
however, it allows for great synergies in product development that give the company an edge
in product innovation and quality. The Company’s leadership in product differentiation,
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product quality and thus price realization gives it the opportunity and justification to grow
rapidly in the fast growing PFY industry.
The PFY market is the largest synthetic yarn market in India and accounts for over
50% of the total demand for synthetic yarn. Surat and its outskirts provide the largest market
for PFY being the heart of the polyester filament weaving and processing industry. The
company’s manufacturing units have a locational advantage being situated in the heart of the
polyester textile industry. Its location gives it proximity to both raw material suppliers as well
as end users. The Surat area is also the most innovative textile center which gives the
company a natural outlet for its specialty fabrics and yarns.
Since the company’s primary market is Surat, the ongoing and proposed expansion
plans involve considerable production of final down stream/drawn yarn in particular fully
drawn yarn and texturised yarn.
The company enjoys a strong brand for its fabrics and yarns that has been built over
the years. Its fabric distribution network is strong and spread across the country. Its fabric
engineering and design capability is second to none in the country.
TEXTILE INDUSTRY IN SURAT
In India the main manufacturing of the textiles is done in the SURAT city. The
SURAT textile industry has the largest concentration of looms in the world leaving man-
made fabrics. It has a total coverage of approximately 1.75 lakhs which is even larger than
that of Ahmedabad and Mumbai.
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HISTORY OF DEVELOPMENT IN SURAT
It is unbelievable that Surat is the largest center in the world for the production of
synthetic fabrics like nylon and polyester. Daily production is about 42lakhs meters valued at
Rs 4 crores per day. There are about 160 process houses, which processes nearly 25 lakhs
meters per day. The industries in SURAT employees more than 1 lakh workers
The beginning of the industry in SURAT is hardly 35 years old. Today, the number of
authorized looms in SURAT is approximately 4 lakhs, though the total number of looms are
anywhere between 1.5 and 1.8 lakhs. It is known from the reports that daily new machines
are imported from china and Korea. There is new trend came which is known is sequence
embroidery. These machines costs about 7 to 8 lakhs per machine but it designs many sarees
at a time with the help of the computer. These machines are imported from China and Korea
generally.
In the 1950’s, there were only about 7000 power looms in SURAT. The 10 families
who have played a leading role for the growth of the industries are Bachkaniwalas,
Hathiwala, Vakharia, Dhamanwala, Mahatma, Dr. Amichand Shah, Chevli and Lekhadia.
Now days the Textiles business is very big in the SURAT, So, now the SURAT is
known as the “Textile City”.
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Garden SilkMillsLtd. Is one of the India’s largest vertically integrated textile
companies with particular strengths in Polyester filaments based Textiles & yarns.
Garden Vareli group of companies, one of the leading industrial groups in India, plays
a leading role in the field of fashion fabrics. With annual sales exceeding U.S. $ 90 million,
they sell their products under a single banner of quality ‘Garden’.
GARDEN SILK MILLS LTD. is public limited company incorporate on July 23,
1979. It was authorized share capital of Rs. 60 crores, Equity shares of Rs. 10 each, out of
which around Rs. 3, 82, 90,560 have been issued, subscribed and fully paid up. The
shareholders here have seen much appreciation and received regular dividends which impose
that the company is getting on prosperous year and is profit making venture. This is
attribution to the three generation of the directors who have strived hard for the growth and
progress of the company. The company has also seen much of highs and lows of the market
and has successfully come out of all those, providing it to be a leader of textiles business of
all times.
The company has three production plants : One Vareli complex, at Village Vareli,
Near Kadodara Junction,taluka palsana, National Highway .No.8, The Second at Village
Jolwa, Near Bardoli, dist. surat and the Registered office at Garden Mill’s Complex, Sahara
Gate, Surat. Today the company has total 293 its own retail and authorized outlets all over
india.
The company is having a very setup, with plants to manufacture dress material and
sarees, right from the initial stage, viz, chemicals to finished fabrics. This has been possible
because of the company’s large capital base, attributable mainly to the large amount of share
capital raised; reserve of various kinds being cautiously preserved and the loans form bank
and financial institutions. The company had also raised capital through debenture in the past,
majority of that have been repaid now.
Since our inception we have been delivering excellent financial result year after year.
This statement year the financial statement was placed before the board of directors and taken
on record at their meeting.
Garden Silk Mills Ltd. is one of the leading & oldest manufactures of synthetic in
India. Garden Silk Mills Ltd. has been exporting their products to European markets
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since late 1970s. The company has made vertical & horizontal integration from its
establishment.
The company has achieved a very good brand name in Indian & International market
of sarees & dress materials.The company has achieved sales during financial year 2005-2006
of Rs.95,485.95 lacs & for the year 2006-2007 Rs.45,750.23 lacs.
The company has grown in all term during fast few year, in the economics prosperity and in
the form of larger asset creation, making Garden Vareli to be leader of all times among textiles
companies of the nation. It achieved ISO 9002 on February, 2000, which was its greatest
achievement, and Garden Silk Mills become the first company ever achieve such creation in Surat.
This has brought fame to the city and to the nation all through the international sales
and export income has been considerable. The company is expending even now and planned
to increase its capacity in a phased manner until 2002.
The company is largest manufactured of POY and PFY in India. The company is the
competitors of RELIANCE. The company’s strategy is not to be top in the POY, but they are
interested in to make the quality product which satisfy the customer needs at the most.
ACHIEVEMENTS OF COMPANY
The company was first to setup a polyester filaments yarn project in south Gujarat.
The project is capable of producing multi-filament & micro-filament yarn having a capacity
of 5,000 tones per annum in collaboration with non-val leasina ag of switzerland. This project
has a special significance for the company, as polyester filament yarn is the basic raw
material for the product manufactured by the company. The company was also first in
producing of two-for-one twister in india.
The company's production facilities boast of one of india's most sophisticated textile
plants at vareli, surat (Western India). Its weaving plant comprising nissan and tsudakoma
waterjet looms - the highest number of waterjet looms under one roof in india - and rapier
looms, automatic shuttle change looms etc, high-tech yarn preparatory machines viz, ziro-
twist-sizing, draw-warping, texturising and twisting machines, have a capacity of over 42 lac
meters/month of greige fabric. The plant has an iso 9002 certification by bvqi. The company
also markets high quality dyed and printed fabrics which it gets manufactured from
associated firms.
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HISTORY OF ORGANIZATION
The origins of the business go back to 1920 when Mr.Amichand shah installed the
first hattersley looms in surat. The company belongs to Garden Vareli Group, which is one of
the preceding manufactures of synthetic textiles in the country. Since 1920 the company
expanded not only by increasing the production capacity and workforce of the business but
also by pioneering new material and processes. To the early beginning of the art silk industry
in Surat. “Garden Silk Weaving Factory”, as it was then named, manufacturing viscose
becomes leader in jacquard fabric for years to come.
The managing director of Garden Silk Mills Limited, Mr. Praful Shah is the youngest
son of the founder, Dr Amichand Shah. He gained the degree in engineering from the
university of Stanford in the USA in 1965 after which he joined the business prior in that
date. He even extended the activities of the company to include processing cloth and even
processing cloth. As a result of this the company was able to supply finished textiles for the
first time.
This move in the early 1970’s conceded with the opening of the first retail shop in
Surat. The extension of the policy of vertical immigration into the retailing sector had
advantages of uniform pricing, close market monitoring, communications between
manufacturer and consumer and above all the exerting downward pressure on the final selling
price. The dedicated retail network now extends to some 293 authorized outlets.
In 1975, the company recruited Fine Arts Graduates from leading institutions and an
Art studio was set up. The company started introducing its own designs and supplied these
designs in the market. Prior to this, the designs produced had been a function of customer
demand and from this point onwards, the emphasis changed the design impetus coming from
manufacturers.
In the late 1970s, the company started exporting its products to European Market,
Given the size of the domestics market, the proportion of the product that are exported remain
low at approximately 2% The Company is in the process of further developing market in
Africa, Central and Eastern Asia.
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In the 1980’s, the company developed a new site-Vareli, some 12kms away from
Surat. This has become the manufacturing plant and investment of more than 2 billion has
been made. Most of this expenditure has been targeted at the expansion and modernization of
plant and equipment, particularly in the weaving and yarn preparatory sections. As a result,
the company today has one of the most modern and sophisticated textile plants in India.
The company has further its policy of vertical Integration by setting up a new plant,
also near Surat, from which it will manufacture polyester filament yarn, one of its principle
raw materials from polyester chips.
Today, the company is one of the largest manufacturers in India of high fashioned,
premium quality, dyed and printed textiles fabrics, both polyester and viscose comprising a
range of chiffon and georgettes, crepes and faithful ladies, fashion as well as Indian sarees,
The company also manufacturers an exclusive range of pure silk and cotton fabrics. The
fabrics are marketed under the famous names “Garden” and “Vareli”.
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LOCATION OF OFFICES, BRANCHES & FACTORIES
REGISTERED OFFICE
Sahara Gate, Surat 395 010.
Tel: (0261)2311197-98, 2311615
Fax :( 0261)2311029/502
Email: [email protected]
FACTORY/PLANT
Vareli complex, Village Vareli,
Taluka. – Palsana, Dist. Surat 394
327
Tel: (02622) 271241 – 47
FACTORY/PLANT
Village Jolva, Taluka. Palsana,
Dist. Surat 394 305
Tel: (02622) 271287-89
CORPORATE OFFICE
Manek Mahal,
90, Veer Nariman Road,
Church gate, Mumbai-400 020
Tel: (022) 2287 3117-19 Fax: (022) 2204 8112
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Details of Promoters and Owners
NAME DESIGANATION
Praful A Shah Chairman and Managing director
Shilpa P Shah Executive Director
Suhail P Shah Executive Director
Arunchandra N Jariwala Director
Yatish Parekh Director
Smita J Shah Director
Anjan Mukherjee Nominee Director
Alok P Shah Joint Managing Director
Sanjay S Shah Executive Director
Rajen P Shah Director
J P Shah Director
Sunil S Sheth Director
Madanial U Lankapati Director
Future plans of organization
GSM commenced commercial production of its new Continuous Polymerization
(CP) project increasing the production capacity from216,000 TPA to 416,000 TPA from
January 2009 on schedule and within budget. In March- June 09 the Company commissioned
the latest technology POY and FDY equipments adding further spinning capacity of about
55,000 TPA.GSM has further undertaken an expansion project involving enhancement of
Polyester textile grade Chips Capacity by 130,000 TPA which is expected to be
commissioned by February of 2010. This will further enhance our capability to serve our
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clients demand of non-commodity chips, of which Garden is a leading supplier. Attache to
this plant, as well as the older CP plants, machinery to directly spin a diverse range of yarns
is in the preliminary project stage. This will downstream about 138,000 TPA of polymer into
directly spun POY & FDY yarns.
In addition, 11,000 TPA of semi-dull chips will feed specialized extruder-spun yarns
in the same premises. The estimated completion date of these downstream projects is Q3 of
2010-11. In the year under review the original CP plant has been modified to optionally
manufacture high-value polymeric chips for film-grade applications and textile applications
requiring optical brightener additives. In order to maintain uninterrupted power supply to
support these projects, your Company is setting up an 18MW power plant. The total cost for
the upcoming projects is estimated to be around Rs400 cores.
CORPORATE GOALS AND OBJECTIVES
Company’s has its own culture and identity in business world. It is the effort of the
company to maintain this identity and be leading in global market. Company has fixed its
goal and laid down some certain missions to achieve them.
CORPORATE GOALS
Maximum return to share holders.
To improve company’s position in business.
To keep a slim and trim but fully satisfied management team to operate faster and to
achieve higher levels of business and growth effectively.
To ensure quality at all stages.
Comp operators
.
Top management(All partner)
Managing director
Chairman
General Manager
Production Marketing Finance Human resource
Manager
Asst. manager
Workers
Manager
Staff
Manager
C.A.
Asst. manager
Manager
Asst. managerSales executives
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Oganisation Structure Of The Company
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ORGANIZATION STRUCTURE OF FINANCE DEPARTMENT
INTRODUCTION TO FINANCE
Undoubtedly, money occupies a key position in the capitalistic economies at the
modern ate. One at the most important function at the top management is to raise finance at a
right time and in a right quantity and also to use it most effectively. In fact, this function
constitutes the core at financial management; this is evident from the fact that while all other
function at management can be and frequently are delegated to the other persons, the power to
take, and financial decisions is always reserved for tap-management only.
“Finance is that administrative area or set of administrative function in an organization
which relates the arrangement of cash and credit so that organization may have the means to
carry out its objects as satisfactory as possible.” Howard and Upton “Business finance income
statement that business activity to the acquisition and conversion of capital funds in meeting
the financial needs of overall object of enterprise.”
Director
General Manager
Excutive Manger
Company Secratary
Jr. Executi
ve
Staff
Legal Matters
Tax Consulta
nt
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The above definition reveals that finance income statement that life hold of business
organization finance income statement the key to all activities in business. The role of money
has hardly altered a firm success or failure income statement depend upon how efficiency it
income statement able to generate funds. It would not proper pass the entire credit to the
business enterprise. It depends upon production money is the organization.
"Financial management is an area of financial decision making, harmonizing
individual motives and enterprise goals".
Finance defined as issuance of, distribution of and purchase of liability, and equity
claim issued for the purpose of generating revenue for producing assets. Finance is the
management affaire of the company.
Money is life-blood at modern business. Money is required to purchase expensive
machinery, and day-to-day expenses on raw materials, labor, and operational and
administrative needs at business, execution at expansion plans and modernization programs
are not possible without adequate finance. Thus, money can be described as the lifeblood at
industries. In engineering jargon, finance is the oil that lubricants the huge machinery of the
industrial sector.
DEFINITION OF FINANCE
Finance is the science of funds management. The general areas of finance are business
finance, personal finance, and public finance. Finance includes saving money and often
includes lending money. The field of finance deals with the concepts of time, money, and risk
and how they are interrelated. It also deals with how money is spent and budgeted.
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IMPORTANCE OF FINANCE
Finance is said to be the life blood of an organization. Finance helps in the smooth running of
an organization for example a business needs Finance to commence operation. Below are
some reasons why finance is of great importance:
As said before finance is important to start operation.
Business needs to acquire machines and equipment thus there is a great need for
finance.
Since the market is becoming more and more competitive huge budget should be
allocated for effective marketing
All businesses have to pay for electricity bills, bank charges, petrol, water supply etc
these are called day to day expenses thus finance is important for the smooth running
of the organization. In general, the term “Finance” is understood as provision of funds
as and when needed. Finance is the essential requirement of every organization.
REQUIRED EVERYWHERE: All activities, be it production, marketing, human
resources development, purchases and even research and development, depend on the
adequate and timely availability of finance both for commencement and their smooth
continuation to completion. Finance is regarded as the life-blood of every business
enterprise.
EFFICIENT UTILIZATION MORE IMPORTANT: Finance function is the most
important function of all business activities. The efficient management of business
enterprise is closely linked with the efficient management of its finances. The need of
finance starts with the setting up of business. Its growth and expansion require more
funds. The funds have to be raised from various sources. The sources have to be
selected keeping in relation to the implications, in particular, risk attached. Raising
money alone is not important. Terms and conditions while raising money are more
important. Cost of funds is an important element. Its utilization is rather more
important. If funds are utilized properly, repayment would be possible and easier too.
Care has to be exercised to match the inflow and outflow of funds. Needless to say,
profitability of any firm is dependent on its cost as well as its efficient utilization.
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FUNCTIONS OF FINANCE
Finance function is the most important function of a business. Finance is, closely,
connected with production, marketing and other activities. In the absence of finance, all these
activities come to a halt. In fact, only with finance, a business activity can be commenced,
continued and expanded. Finance exists everywhere, be it production, marketing, human
resource development or undertaking research activity. Understanding the universality and
importance of finance, finance manager is associated in modern business, in all activities as
no activity can exist without funds. Financial Decisions or Finance Functions are closely
inter-connected.
All decisions mostly involve finance. When a decision involves finance, it is a
financial decision in a business firm. In all the following financial areas of decision-making,
the role of finance manager is vital. We can classify the finance functions or financial
decisions into four major groups:
(A) Investment Decision or Long-term Asset mix decision
(B) Finance Decision or Capital mix decision
(C) Liquidity Decision or Short-term asset mix decision
(D) Dividend Decision or Profit allocation decision
(A) INVESTMENT DECISION
Investment decisions relate to selection of assets in which funds are to be invested by
the firm. Investment alternatives are numerous. Resources are scarce and limited. They have
to be rationed and discretely used. Investment decisions allocate and ration the resources
among the competing investment alternatives or opportunities. The effort is to find out the
projects, which are acceptable. Investment decisions relate to the total amount of assets to
be held and their composition in the form of fixed and current assets. Both the factors
influence the risk the organization is exposed to. The more important aspect is how the
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investors perceive the risk. The investment decisions result in purchase of assets. Assets can
be classified, under two broad categories:
(i) Long-term investment decisions – Long-term assets
(ii) Short-term investment decisions – Short-term assets
LONG-TERM INVESTMENT DECISIONS: The long-term capital decisions are referred
to as capital budgeting decisions, which relate to fixed assets. The fixed assets are long term,
in nature. Basically, fixed assets create earnings to the firm. They give benefit in future. It is
difficult to measure the benefits as future is uncertain. The investment decision is important
not only for setting up new units but also for expansion of existing units. Decisions related to
them are, generally, irreversible. Often, reversal of decisions results in substantial loss. When
a brand new car is sold, even after a day of its purchase, still, buyer treats the vehicle as a
secondhand car. The transaction, invariably, results in heavy loss for a short period of
owning. So, the finance manager has to evaluate profitability of every investment proposal,
carefully, before funds are committed to them.
SHORT-TERM INVESTMENT DECISIONS: The short-term investment decisions are,
generally, referred as working capital management. The finance manger has to allocate
among cash and cash equivalents, receivables and inventories. Though these current assets do
not, directly, contribute to the earnings, their existence is necessary for proper, efficient and
optimum utilization of fixed assets.
(B) FINANCE DECISION
Once investment decision is made, the next step is how to raise finance for the
concerned investment. Finance decision is concerned with the mix or composition of the
sources of raising the funds required by the firm. In other words, it is related to the pattern of
financing. In finance decision, the finance manager is required to determine the proportion of
equity and debt, which is known as capital structure. There are two main sources of funds,
shareholders’ funds (variable in the form of dividend) and borrowed funds (fixed interest
bearing).These sources have their own peculiar characteristics. The key distinction lies in the
fixed commitment. Borrowed funds are to be paid interest, irrespective of the profitability of
the firm. Interest has to be paid, even if the firm incurs loss and this permanent obligation is
not there with the funds raised from the shareholders. The borrowed funds are relatively
cheaper compared to shareholders’ funds, however they carry risk. This risk is known as
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financial risk i.e. Risk of insolvency due to non-payment of interest or non-repayment of
borrowed capital. On the other hand, the shareholders’ funds are permanent source to the
firm. The shareholders’ funds could be from equity shareholders or preference shareholders.
Equity share capital is not repayable and does not have fixed commitment in the form of
dividend. However, preference share capital has a fixed commitment, in the form of dividend
and is redeemable, if they are redeemable preference shares. Bearing a few exceptions, every
firm tries to employ both borrowed funds and shareholders’ funds to finance its activities.
The employment of these funds, in combination, is known as financial leverage. Financial
Leverage provides profitability, but carries risk. Without risk, there is no return. This
is the case in every walk of life! When the return on capital employed (equity and borrowed
funds) is greater than the rate of interest paid on the debt, shareholders’ return get magnified
or increased. In period of inflation, this would be advantageous while it is a disadvantage or
curse in times of recession. Return on equity (ignoring tax) is 20%, which is at the expense of
debt as they get 7% interest only. In the normal course, equity would get a return of 15%. But
they are enjoying 20% due to financing by a combination of debt and equity. The finance
manager follows that combination of raising funds which is optimal mix of debt and equity.
The optimal mix minimizes the risk and maximizes the wealth of shareholders.
(C) LIQUIDITY DECISION
Liquidity decision is concerned with the management of current assets. Basically, this
is Working Capital Management. Working Capital Management is concerned with the
management of current assets. It is concerned with short-term survival. Short term-survival is
a prerequisite for long-term survival. When more funds are tied up in current assets, the firm
would enjoy greater liquidity. In consequence, the firm would not experience any difficulty in
making payment of debts, as and when they fall due. With excess liquidity, there would be no
default in payments. So, here would be no threat of insolvency for failure of payments.
However, funds have economic cost. Idle current assets do not earn anything. Higher
liquidity is at the cost of profitability. Profitability would suffer with more idle funds.
Investment in current assets affects the profitability, liquidity and risk. A proper balance must
be maintained between liquidity and profitability of the firm. This is the key area where
finance manager has to play significant role. The strategy is in ensuring a trade-off between
liquidity and profitability. This is, indeed, a balancing act and continuous process. It is a
continuous process as the conditions and requirements of business change, time to time. In
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accordance with the requirements of the firm, the liquidity has to vary and in consequence,
the profitability changes. This is the major dimension of liquidity decision working capital
management. Working capital management is day to day problem to the finance manager.
His skills of financial management are put to test, daily.
(D) DIVIDEND DECISION
Dividend decision is concerned with the amount of profits to be distributed and
retained in the firm.
DIVIDEND: The term ‘dividend’ relates to the portion of profit, which is distributed to
shareholders of the company. It is a reward or compensation to them for their investment
made in the firm. The dividend can be declared from the current profits or accumulated
profits. Which course should be followed – dividend or retention? Normally, companies
distribute certain amount in the form of dividend, in a stable manner, to meet the expectations
of shareholders and balance is retained within the organization for expansion. If dividend is
not distributed, there would be great dissatisfaction to the shareholders. Non-declaration of
dividend affects the market price of equity shares, severely. One significant element in the
dividend decision is, therefore, the dividend payout ratio i.e. what proportion of dividend is to
be paid to the shareholders. The dividend decision depends on the preference of the equity
shareholders and investment opportunities, available within the firm. A higher rate of
dividend, beyond the market expectations, increases the market price of shares. However, it
leaves a small amount in the form of retained earnings for expansion. The business that
reinvests less will tend to grow slower. The other alternative is to raise funds in the market
for expansion. It is not a desirable decision to retain all the profits for expansion, without
distributing any amount in the form of dividend. There is no ready-made answer, how much
is to be distributed and what portion is to be retained.
CASH
TRADE CREDITOR
RAW MATERIAL &COMPONENTS
TRADE DEBTORS
SALES FINISHING PRODUCTS
WORK- IN- PROGRESS
CURRENT ASSETS CYCLE
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CIRCULATING CAPITAL STRUCTURE OF GARDEN SILK MILLS
CASH FLOW OF GARDEN SILK MILLS
Cash Flow2006 2007 2008 2009 2010
Rs. In CroreNet Profit Before Tax 31.88 50.09 68.74 69.99 93.09
Net Cash From Operating Activities 71.25 79.64100.8
5167.16 162.36
Net Cash (used in)/fromInvesting Activities
-69.54
-81.10
-92.40-
209.66-
240.39Net Cash (used in)/from Financing Activities -4.62 -7.56 48.30 39.21 39.95Net (decrease)/increase In Cash and Cash Equivalents
-2.92 -9.02 56.75 -3.29 -38.07
Opening Cash & Cash Equivalents 31.36 28.44 19.42 76.17 72.88Closing Cash & Cash Equivalents 28.44 19.42 76.17 72.88 34.81
Sources of Working Capital
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SOURCES OF WORKING CAPITAL
WORKING CAPITAL MANAGEMENT
INTRODUCTION:
Working capital is one of the most fundamental measures of company’s financial
strength. If company possesses a significant value of liquid assets, it can easily fund its day-
to-day business obligation. Working capital also provides insight on how efficiently a
company’s management able to oversee the company operation. The speed at which the
company is able to manage its short term assets and short term liabilities is also crucial to its
Long term Short term
1. Issue of Share
2. Floating of Debenture
3. Ploughing back of profit
4. Loan
5. Public Deposit
InternalExternal
1. Depreciation
2. Taxation Provision
3. Accrued Expenses
1. Trade Credit
2. Credit Paper
3. Bank Credit
4. Customer Credit
5. Govt. Assistance
6. Loans from Directors
7. Security of Employees
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business success. Keeping working capital level to the minimum required for efficient
operation keeps cost down. This means controlling buying, handling, storing, and managing
stock property.
In simple terms, working capital refers to the cash a company. Requires in order to
finance its day-to-day business operation or in other words, working capital refers to the
amount of capital which is readily available to an organization. The term working capital is
more an accounting term a management concept. There are two concept of working capital
for the purpose of definition – Gross Concept and Net Concept. Gross Concept refers to
firm’s current assets. The firm’s total current assets are termed as gross working capital. Net
Concept refers to current assets less current liabilities. That means, working capital is
difference between resources in cash or readily convertible into cash (current assets) and
organizational commitment for which cash will soon be required (current liabilities).
Working Capital = Current Assets – Current Liabilities
Net Working Capital of Garden silk mills
Particulars 2006 2007 2008 2009 2010Rs. Crore
Current AssetsInventories 97.08 130.03 185.76 217.55 365.36Debtors 48.45 64.74 107.90 67.47 126.87Cash & Bank Balance 10.27 5.41 21.75 12.50 10.04Other Current Assets 155.80 200.18 315.41 297.52 502.27Loan & Advances 137.71 145.19 157.82 204.37 223.02Fixed Deposits 18.17 14.01 54.41 60.38 24.77Total 311.68 359.38 527.64 562.27 750.06Current LiabilitiesCurrent Liabilities 140.81 139.35 169.54 225.04 395.11Provisions 13.99 22.54 30.69 38.76 56.03Total 154.80 161.89 200.23 263.80 451.14Net Working Capital (C.A.-C.L.) 156.88 197.49 327.41 298.47 298.92
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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.
INVENTORY CONTROL SYSTEM
This is very important system, because it helps to control the misuse of R.M.
The purchase manager daily takes the report of raw-material. He daily checks the opening
balance and closing balance of various R.M At the end of the every day the report is send to
the purchase manager by the store manager.
The format of this kind of report is as follow:-
DATE.OPENING
BALANCE.
INCOME.
(PURCHASE)
OUT FLOW
OF R.M.
(USAGE)
CLOSING
BALANCE.
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RATIO ANALYSIS
Gross Profit Ratio = Gross Profit * 100
Sales
Year Gross Profit Sales Ratio % change2005-2006 120.35 953.26 12.62% ----2006-2007 159.16 1393.80 11.42% -9.51%2007-2008 183.17 1675.20 10.93% -4.29%2008-2009 162.25 1332.27 12.18% 11.44%2009-2010 238.40 2507.30 9.51% -21.92
2007 2008 2009 2010
Gross Profit Ratio -0.0951 -0.0429 0.1144 -0.2192
-22.50%
-17.50%
-12.50%
-7.50%
-2.50%
2.50%
7.50%
12.50%
Gross Profit Ratio
Axis Title
Interpretation:
As from the above table you can see that the difference between 2008-2009 is more and in 2009 the company was at good position and in 2010 the gross profit ratio again goes down
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Operating Ration = C.O.G.S + Operating Exp. * 100
Net Sales
Year C.O.G.S + Operating exp.
Net Sales Ratio % Change
2005-2006 915.99 953.26 96.09% ---2006-2007 1327.91 1393.80 95.27% -0.85%2007-2008 1600.62 1675.20 95.55% 0.29%2008-2009 1242.71 1332.27 93.28% -2.382009-2010 2362.92 2507.30 94.24% 1.03%
2007 2008 2009 2010
Operating Ratio -0.0085 0.0029 -0.0238 0.0103
-2.75%
-2.25%
-1.75%
-1.25%
-0.75%
-0.25%
0.25%
0.75%
1.25%
Operating Ratio
Axis Title
Interpretation:
According to above table the year 2009 was a more profitable year compared to other 3 years. Because in this the company expenditure was less than compare to other 3 years.
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Expense Ratio = Expense * 100
Sales
Year Expense Sales Ratio % Change2005-2006 848.20 953.26 88.98% ---2006-2007 1272.61 1393.80 91.30% 2.61%2007-2008 1542.70 1675.20 92.09% 0.86%2008-2009 1184 1332.27 88.87% -3.50%2009-2010 2339.71 2507.30 93.31% 5%
2007 2008 2009 2010
Expense Ratio 0.0261 0.00860000000000001
-0.035 0.05
-3.50%
-2.50%
-1.50%
-0.50%
0.50%
1.50%
2.50%
3.50%
4.50%
5.50%
Expense Ratio
Axis Title
Interpretation:
From the above table you can see that in the year 2009 the company got less expenses rather than other years.
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Net Profit Ratio = Net Profit * 100
Sales
Year Net Profit Sales Ratio % Change2005-2006 22.10 953.26 2.31% ---2006-2007 23.26 1393.80 1.66% -28.19%2007-2008 40 1675.20 2.38% 43.37%2008-2009 49.58 1332.27 3.72% 56.30%2009-2010 63.20 2507.30 2.53% -31.99%
2007 2008 2009 2010
Net Profit Ratio -0.2819 0.4337 0.563 -0.31990000000
0001-30.00%
-10.00%
10.00%
30.00%
50.00%
70.00%
Net Profit Ratio
Axis Title
Interpretation:
From the above table you can see that in year 2009 the company got good profit and suddenly in 2010 it went down.
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Return on Capital Employed = NPBT * 100
Networth + Long Term Loan
Year NPBT Networth + Long Term Loan
Ratio % Change
2005-2006 127.44 342.43 37.22% ---2006-2007 165.18 358.97 46.01% 23.62%2007-2008 190.38 392.26 48.53% 5.48%2008-2009 170.55 435.20 39.20% -19.22%2009-2010 252.98 490.29 51.60% 31.63%
2007 2008 2009 2010
Return on Capital Em-ployed
0.2362 0.0548000000000001
-0.1922 0.316300000000001
-25.00%
-15.00%
-5.00%
5.00%
15.00%
25.00%
35.00%
Return on Capital Employed
Axis Title
Interpretation:
From the above table you can see that in the year 2010 the company got more return on their capital employed.
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Return on Shareholder’s Fund = Net Profit * 100
Share Cap. + Reserves
Year Net Profit Share Cap. + Res.
Ratio % Change
2005-2006 22.10 342.43 6.45% ---2006-2007 23.26 358.97 6.47% 0.31%2007-2008 40 392.26 10.19% 57.50%2008-2009 49.58 435.12 11.39% 11.78%2009-2010 63.20 490.29 12.89% 13.17%
2007 2008 2009 2010
Return on Shareholder's Fund
0.0031 0.575000000000001
0.1178 0.1317
5.00%
15.00%
25.00%
35.00%
45.00%
55.00%
65.00%
Return on Shareholder's Fund
Axis Title
Interpretation:
From the above table you can see that in the year 2008 the company got more return on the shareholder’s fund in compare to other 3 years.
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Return on Equity Share Cap. = Net Profit – Pref. Div * 100
Equity Share Cap.
Year Net Profit – Pref. Div.
Equity Share Cap.
Ratio % Change
2005-2006 22.10 38.29 57.72% ---2006-2007 23.26 38.29 60.74% 5.23%2007-2008 40 38.29 104.46% 71.98%2008-2009 49.58 38.29 129.48% 23.95%2009-2010 63.20 38.29 165.05% 28.47%
2007 2008 2009 2010
Return on Equity Share Cap.
0.0523 0.719800000000001
0.2395 0.2847
5.00%
15.00%
25.00%
35.00%
45.00%
55.00%
65.00%
75.00%
Return on Equity Share Cap.
Axis Title
Interpretation:
From the above table you can see that the company got more return on their equity share capital in the year 2008.
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Earning Per Share = Net Profit – Pref. Div.
No. Of Equity Share
Year Net Profit – Pref. Div.
No. Of Equity Share
Ratio (Rs.) % Change
2005-2006 221000000 38290000 5.34 ---2006-2007 232600000 38290000 6.07 13.11%2007-2008 400000000 38290000 10.45 72.16%2008-2009 495800000 38290000 13.25 26.79%2009-2010 632000000 38290000 16.43 24%
2007 2008 2009 2010
EPS 0.1311 0.721600000000001
0.2679 0.24
5.00%
15.00%
25.00%
35.00%
45.00%
55.00%
65.00%
75.00%
EPS
Axis Title
Interpretation:
From the above table you can see that in the year 2008, it got a nice profit on their shares rather than other 3 years.
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Current Ratio = Current Assets
Current Liabilities
Year Current Assets Current Liabilities
Ratio % Change
2005-2006 311.68 154.80 2.01:1 ---2006-2007 359.38 161.89 2.22:1 10.45%2007-2008 527.64 200.23 2.63:1 18.47%2008-2009 562.27 263.80 2.13:1 -19.01%2009-2010 750.06 451.14 1.66:1 -22.06%
2007 2008 2009 2010
Current Ratio 0.1045 0.1847 -0.1901 -0.2206
-22.50%
-17.50%
-12.50%
-7.50%
-2.50%
2.50%
7.50%
12.50%
17.50%
22.50%
Current Ratio
Axis Title
Interpretation:
From the above table you can see that the current ration of first 2 year is up and the current ration for last 2 years are down.
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Liquid Ratio = Liquid Assets
Liquid Liabilities
Year Liquid Assets Liquid Liabilities
Ratio % Change
2005-2006 214.6 154.80 1.38:1 ---2006-2007 229.35 161.89 1.41:1 2.17%2007-2008 341.88 200.23 1.70:1 20.57%2008-2009 344.72 263.80 1.30:1 -23.53%2009-2010 384.7 451.14 0.85:1 -34.61%
2007 2008 2009 2010
Liquid Ratio 0.0217 0.2057 -0.2353 -0.3461
-35.00%
-25.00%
-15.00%
-5.00%
5.00%
15.00%
25.00%
Liquid Ratio
Axis Title
Interpretation:
From the above table you can see that the liquid ratio for the first 2 year is up and the liquid ratio for the last 2 years are down.
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Proprietary Ratio = Proprietor’s Funds * 100
Total Assets
Year Proprietor’s Funds
Total Assets Ratio % Change
2005-2006 342.43 981.5 34.89% ---2006-2007 358.97 1049.99 34.19% -2.01%2007-2008 392.26 1194.39 32.84% -3.95%2008-2009 435.12 1339.09 32.49% -1.06%2009-2010 490.29 1518.22 32,29% -0.61%
2007 2008 2009 2010
Proprietary Ratio -0.0201 -0.0395 -0.0106 -0.0061
-4.25%
-3.75%
-3.25%
-2.75%
-2.25%
-1.75%
-1.25%
-0.75%
-0.25%
Proprietary Ratio
Axis Title
Interpretation:
From the above table you can see that the difference between 2007, 2008, 2009 are more than the year 2010.
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Total Assets Turnover = Sales
Total Assets
Year Sales Total Assets Ratio % Change2005-2006 953.26 981.5 0.97:1 ---2006-2007 1393.8 1049.99 1.33:1 37.11%2007-2008 1675.2 1194.39 1.4:1 5.26%2008-2009 1332.27 1339.09 0.99:1 -29.28%2009-2010 2507.3 1518.22 1.65:1 66.67%
2007 2008 2009 2010
Total Assets Turnover 0.3711 0.0526 -0.2928 0.666700000000001
-30.00%
-10.00%
10.00%
30.00%
50.00%
70.00%
Total Assets Turnover
Axis Title
Interpretation:
From the above table you can see that the total assets turnover is more in the year 2010 and there is a big difference between 2009-2010.
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SHARE PRICE DETAIL
2001 2002 2003 2004 2005 2006 2007 2008 2009 20100
20
40
60
80
100
120
9.77
21.15
49.25
68 64.7760.15
87.7777.15
56.75
100.47
GARDEN SILK MILLS LTD.
GARDEN SILK MILLS LTD.
Share Price for the Year 2001-to-2010Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Open(Rs.) 7.75 11.8 30.5 68 65.8 63.75 56.55 119 35.3 78.2Close(Rs.
)11.8 30.5 68 65.8 63.75 56.55 119 35.3 78.2 122.75
Avg.(Rs.) 9.77 21.15 49.25 67 64.77 60.15 87.77 77.15 56.75 100.47
BSE & NSE DetailBSE 500155NSE GARDENSILKISIN INE526A01016Company Textiles – Weaving
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SHARE HOLDING PATTERN
Category Share HoldingNo. Of Share %
Promoters 21423976 55.95Mutual Funds & UTI 13800 0.04Banks, Financial Institutions & Insurance Companies 731455 1.90FIIs 2625 0.01Foreign Financial Institutions 6190 0.02Private Bodies Corporate 4030637 10.53NRIs 3492586 9.12Indian Public 8324487 21.74Shares underlying GDRs 249325 0.65Others:Clearing Members 14959 0.04Trust 520 0Total 38290560 100
128
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ORGANIZATION STRUCTURE OF HR DEPARTMENT
Vision & Mission of the Garden Silk Mills
Vision of the Garden Silk Mills:
Vision is to manufacture product as par international standards and compete
international textile industries.
Mission of the Garden Silk Mills:
Customer satisfaction is there ultimate mission.
Director
M.D.
G.M
Assist. Manager
Staff
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ACTIVITY OF HUMAN RESOURCE DEPARTMENT
Organization planning
Human Resource Planning
Job Analysis
Job Description
Job Specification
Acquisition of human resource
Managing performance
motivational activities
training and Development
Compensation and Benefits
Health and safety provision
organization Development
encouraging participation in management
Grievance procedure etc.
HUMAN RESOURCE PLANNING
“HRP is the process of forecasting an organizations future demand for, and
supply of, the right type of people in the right number.”
HRP facilitates the realization of the company’s objectives by providing the
right number of personnel’s.
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HRP – Process
HRP - Process
Internal
Oraganizational Decisions
Workforce Factors
Forcasting Techniques
External
Political,Legal,Social Changes
Competition
128
Forecasting refers to the estimates of the future demand of the employee. This can be
done by some analysis. And to do analysis it considers some factors. There are mainly two
factors which are as follows:-
1. External factors.
2. Internal factors.
1. EXTERNAL FACTORS.
A). POLITICAL, LEGAL, SOCIAL AND THE TECHNICAL CHANGES.
The demand for certain categories of employees and skills is also influenced
by changes in political, legal and social structure of an economy. In the Garden Company, it
has appointed the technicians and engineers during the last couple of years by taking into
consideration the latest technology in construction, software etc. the company considers
technology as a doubled-edged weapon. So, as a when the technology changes, the company
will also recruit new technicians & engineers to cope with the technology.
B). COMPETITION.
Garden company is operating in a field where a large number of players are
bent while cutting each others throat. In order to stay in a competitive market, the company
has to ‘LEAN’ by reducing their workforce. The company is planning better workforce as
competition has so much increased in the market. On the other hand, the company is doing
well and also progressing smoothly so it will always look for people with critical skills.
2. INTERNAL FACTORS.
A). ORGANIZATIONAL DECISIONS.
In planning H.R., the company undertakes the strategic plan; it takes into
consideration the sales and the production forecasts. The company is expecting higher
demand of textured yarn and for this, the company has planned long-term plan. Moreover, the
company is in search of people possessing requisite skills in next couple of years.
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B). WORKFORCE FACTORS.
The demand for new job occurs because of retrenchments transactions,
resignations, deaths and leaves or absence. The Garden behaves that due to past experience
the rate of occurrence of all these actions by employees are partly predictable.
C). FORECASTING TECHNIQUES.
The manpower forecasting techniques employed by the Garden Company are
described below
a. Expert’s forecasting: In the Garden Company, managers estimate future human
resource requirements. Sometimes, the company also appoints the experts to forecast
human resources along with the manager’s experience and judgments which gives the
good effect.
b. Trend Analysis :
The Garden company is deciding or forecasting its H.R. needs through
projecting past trends. Past rates of change can be projected into the future or employment
growth can be estimated by its relationship with a particular index.
RECRUITMENT AND SELECTION PROCESS
RECRUITMENT: -
DEFINITION OF RECRUITMENT: -
“It is process of finding and attracting capable applicants for employment. The
process begins when new recruits are sought and end when their applicants are admitted. The
result is pool of applications from which new employee are selected”
Recruitment is an important part of an organization’s human resource planning
and their competitive strength. Competent human resources at the right positions in the
organization are a vital resource and can be a core competency or a strategic advantage for it.
The objective of the recruitment process is to obtain the number and quality of
employees that can be selected in order to help the organization to achieve its goals and
objectives. With the same objective, recruitment helps to create a pool of prospective
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employees for the organization so that the management can select the right candidate for the
right job from this pool. Recruitment acts as a link between the employers and the job seekers
and ensures the placement of right candidate at the right place at the right time. Using and
following the right recruitment processes can facilitate the selection of the best candidates for
the organization.
In this is competitive global world and increasing flexibility in the Labour
market, recruitment is becoming more and more important in every business. Therefore,
recruitment serves as the first step in fulfilling the needs of organizations for a competitive,
motivated and flexible human resource that can help achieve its objectives
After deciding number and type of people required for organization need
through HRP and job analysis and job design specified the task and duty of jobs and
qualification expected from prospective job holders.
After that as per recruitment can be done but before that following factor can
be under taken.
1. INTERNAL FACTORS: -
Requirement policy
HRP strategic
Size of the organization and number of employees
Cost involve in recruiting employee
Growth and expansion plan of the organization
2. EXTERNAL FACTOR: -
Supply and demand of specific skills in the Labour market.
Political and legal consideration such as reservation of jobs for SC’s, and so on.
HRP and job analysis determine requirement and selection needs.
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Recruitment Process
Recruitment Planning-- Contact-- Type of Caontact
Strategy Devlopment-- Internal-- External
Searching-- Source Activation
-- Selling
Screening
Evaluation & Control
128
RECRUITMENT PROCESS
RECRUITMENT PLANNING : -
a. number of contact
b. type of contact
STRATEGY DEVOLVEMENT : -
Make or buy
Make (hire less skilled worker)
Buy (hire skilled labors and professional)
Technological sophistication or method used to reduce in recruitment.
o Where to look or reduce costs.
o How to look or source of recruitment
Internal
External
INTERNAL RECRUITMENT : -
Present employee’s promotion
Employee referrals or employee families and friends
Former employees or some retired employees
Previous applicants
EXTERNAL RECRUITMENT : -
Professional or tread association
Advertisement in news paper
Employment expanse
Campus recruitment
Consultancy
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SEARCHING : -
Source activation
Selling
SCREENINGS : -
Application received in response from advertisement is screened and only
eligible applicants are called for an interview.
The reason is reduce that application that is visibly unqualified for the job and
to save time and money.
EVALUATION AND CONTROL : -
Evaluation and control is necessary as considerable costs are incurred in the recruitment
process.
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SELECTION PROCESS
Selection decision
Reference and Background analysis
Job Offer
Evaluation
Physical Examination
REJECTED
APPLICANTS
Preliminary Interview
Selection Test
Employment Interview
Employment Contract
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In short first of all recruitment can be done through internal and external sources
and after out of them selection on the basis of some criteria can be done then finally to offer
job to selected employee.
First of all temporary job can be offer then after training given to employees
during these induction program can be done through this new employee introduce with
company and other detail of company given to new employee then training given and then
after probation basis job offer i.e. part of temporary job with some condition can be offered.
EDUCATIONAL CRITERIA FOR SELECTION
FOR MANAGER & SUPERVISOR : -
Managers possessing textile or production degree are employed to respective jobs in
beginning the salary is Rs.4500/-
FOR TEMPORARY STAFF : -
In the temporary Staff level science gradates or diploma in engineering filed are
selected their salary is Rs.3500/- at the beginning.
FOR LABOR : -
There is no need to any educational criteria for the Labour job in this job has
experience and skill for the work their wages is given to them according to their daily wage
system.
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DOCUMENT RELATED WITH RECRUITMENT AND SELECTION
In GARDEN Company there are not so much document are kept of the recruitment and
selection. In GARDEN they don’t do this process on big scale. So, there are not so many
documents are kept.
But some document names are as follows:
List of applicant according to different types of job.
Ranking of applicants on the basis of their qualifications.
List of the applicant who will be called for interview.
List of the rejected applicant for the future use.
List of the applicants who are selected for job.
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Sources of Recruitment
Sources of Recruitment
Internal Methods-- Promorions & Trnsfers
128
SOURCES OF RECRUITMENT
Recruitment is positive in nature because it attracts as many as possible
applicants. The Garden Company is recruiting people by using three methods. They are as
follows:-
A. INTERNAL METHODS
B. DIRECT METHODS
C. INDIRECT METHODS
A. INTERNAL METHODS
Internal methods means to recruit the employee from with in the company,
some internal methods are as follows:
1. PROMOTIONS AND TRANSFERS.
2. JOB POSTING.
1. PROMOTIONS AND TRANSFERS. : -
This method is used to fill the vacancies from within the organizations through
promotions and transfers. Sometimes, when vacancies arise the company recruits people from
within the organization. It is done in 2 ways: Either by giving promotion or by giving
transfer.
The company is following the promotion system rather than transfer. The
company gives promotion to the employees from lower level to higher level. As per the
industrial act, if a person remains on such rolls for 240 days or more, he will get a status of
permanent employee, and he is also entitled to all relevant benefits, including provident fund,
retrenchment and compensation.
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2. JOB POSTING : -
This is the way used by Garden Company to hire people from within the
organization. Under this, the company publishes job openings on bulletins, boards, electronic
media and other similar outlets. The main aim of the company is to use this method because it
offers a change to highly qualified applicants working within the company to look for growth
opportunities within the company without looking for green pastures outside.
B. DIRECT METHODS.
1. CAMPUS RECRUITMENT.
The company is not much using this method of recruitment. Under this
method, the managers of the company visit the college campus and their placement centers.
This method is not used by the company because there are more disadvantages rather than the
advantages. The main disadvantage is that campus recruitment can be costly for the company.
The reason behind this is that the expenses of welfare boarding and lodging expense of
recruits.
C. INDIRECT METHODS.
The indirect method consists of the advertisements in the newspapers,
information written on the notice board of the required employee etc…
Garden Silk Mills follows these two methods for recruitment:
1. Internal Methods.
2. Indirect Methods.
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TRAINING AND DEVELOPMENT
Every individual who is selected for the job needs the training. Without getting
training it is not easy for the individual to perform the job accurately and the precisely. He
should be given at least the basic knowledge with the help of which he can carry out his
work. Therefore, training is a must for each and every employee working in the organization.
It helps the employees to get the basic facts of their jobs and the working environment under
which they are supposed to perform their duties. Briefly , we can say that,
“Training is the process of increasing the knowledge and Organized procedure by which people get
the knowledge and develop certain skills for a definite purpose.”
The purpose of training is basically to bridge the
gap between job requirements and present
competence of an employee. Training is aimed at
improving the behavior and performance of a person.
It is a never ending process. Training is closely
related to education and development but needs to be
differentiated from these terms.
The Garden Company gives training to the employees who needs after their
work have been examined. And also the training is given to those who are new in the
organization. So the company gives training not to all but the few of its employees. The
company gives the training for about 1 year. The employees are observed by the senior
officers.
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As per the rule of the government a person has to undergo training at the
Indian Institute of Training. Here he is supposed to do training for 2 years and then with the
company apprentice for 1 year.
INDUCTION TRAINING
Induction means “ to receive and welcome the new employee when he first join the
company and also give some basic information of the company to the employee, so he starts his work
soon and he also aware about the company’s environment as soon as possible”
GARDEN too provides Induction. Some reasons for that are as follows:-
1. Workers become aware of company’s environment.
2. The fear can be removed.
3. Workers become aware about the company’s rules and regulations.
4. He came to know about the location of various plant and machinery.
To receive induction it is very valuable for workers
NEED OF TRAINING
To improve knowledge & skill.
To develop attitude & behavior.
Reduced cost, accident and mistake.
Increase efficiency
To increase productivity
Imparting information on new technology and methodology.
To maintain industrial relation.
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INFRASTRUCTURE FOR TRAINING DEPARTMENT
The following tools & materials are imparted for, facility required for imparting training.
Training room/Seminar room.
Board, Chair, OHP (Over Head Project)
Television, VCR, CD Player
Automatic slide projector
Computer with multimedia facility
Video projector demonstration for technical guidance.
PROMOTION, DEMOTION AND INCREMENT POLICIES
“Promotion means an improvement in pay, prestige, position & responsibility
of an employee within his or her organization.”
In promotion the salary of the workers is raised according to his efficiency. In
Garden Silk, the promotion is given on seniority basis. Some of the factors which influence
the promotion are his past records, person’s behavior, his interview report, job knowledge
etc. Garden follows the seniority basis for promotion because the seniors are usually more
experienced and young people may gain more knowledge, expertise, skills etc under senior’s
guidance.
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The purposes for promotion are mentioned below:
To motivate employees to higher productivity
To attract and retain the services of qualified and competent people
To identify and reward the efficiency of the employees
To fill up higher vacancies from within the organization
To build loyalty, morale and a sense of belongingness in the employee
TYPES OF PROMOTION : -
HORIZONTAL PROMOTION
It increases the responsibilities and pay with a change in designation but the person
does not transgress job classification. For eg; head-clerk from clerk
VERTICAL PROMOTION
It results in greater responsibility, prestige, along with the increase in pay and a
change in the nature of the job.
DRY PROMOTION
Dry promotion means sometimes increase in remuneration or better designation but
the responsibilities is not changed. The promoted sometimes may be given increments
annually or semi- annually.
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DEMOTION
A demotion is a reduction in rank, often accompanied with a lower pay status.
There are many situations in which a demotion might occur; any kind of ranked system like a
police department or military, for example, uses demotions as a disciplinary tool, while some
employees are at risk of demotion due to reorganization or substandard work. Most people
view a demotion as a punishment, since it implies that the individual was incapable of
performing at a higher rank, and the opposite of a demotion is a promotion, an elevation in
rank or status.
Most commonly, a demotion occurs when someone fails to perform as
expected. This failure may not be severe enough to be punished with employment
termination, but it does require a rethinking of the employee's job responsibilities and
functions. When someone is demoted, he or she may be demoted within a department or
outside it, depending on company needs. Being demoted in a department can be awkward, as
the employee's coworkers will be well aware of his or her fall from grace
INCREMENTS
In Garden increment is given on the basis of Performance Appraisal. Staff is given 4 Grades:
A, B, C, D and on the basis of grades increments are given.
For eg; For Grade A maximum increment is given, B is given lesser than A, C is given lesser than A-
B and D is given the least increment.
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PERFORMANCE APPRAISAL
Performance appraisal can be defined as the process of systematic, periodic and
impartial estimating the value excellence, qualities and thereby evaluating the performance of
a person in terms of requirement of the job for which he is employed.
The management uses the performance appraisal results for promotion and
transfer, identifying training and development needs. Management has established some
performance standards upon which the appraisal is done.
In the Garden Company the appraisal is done after every 6 months by the head
of the department and the results are conveyed to the respective workers.
PERFORMANCE APPRAISAL PROCESS FOLLOWED BY GARDEN
SILK MILLS
Establishing Performance Standards
Communicating Standards & Expectation
Measuring the Actual Performance
Comparing with Standards
Discussing Results
Decision Making -- Taking Corrective
Action
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ESTABLISHING PERFORMANCE STANDARD :-
The first step in the process of performance appraisal is the setting up of the
standards which will be used to as the base to compare the actual performance of the
employees. This step requires setting the criteria to judge the performance of the employees
as successful or unsuccessful and the degrees of their contribution to the organizational goals
& objectives. The standards set should be clear, easily understandable and in measurable
terms.
COMMUNICATING THE STANDARD:-
Once set, it is the responsibility of the management to communicate the
standards to all the employees of the organization. The employees should be informed and
the standards should be clearly explained to the. This will help them to understand their roles
and to know what exactly is expected from them. The standards should also be
communicated to the appraisers or the evaluators and if required, the standards can also be
modified at this stage itself according to the relevant feedback from the employees.
MEASURING THE ACTUAL PERFORMANCE: -
The most difficult part of the Performance appraisal process is measuring the
actual performance of the employees that is the work done by the employees during the
specified period of time. It is a continuous process which involves monitoring the
performance throughout the year. This stage requires the careful selection of the appropriate
techniques of measurement, taking care that personal bias does not affect the outcome of the
process and providing assistance rather than interfering in an employees work.
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COMPARING THE ACTUAL WITH THE DESIRE PERFORMANCE: -
The actual performance is compared with the desired or the standard
performance. The comparison tells the deviations in the performance of the employees from
the standards set. The result can show the actual performance being more than the desired
performance or, the actual performance being less than the desired performance depicting a
negative deviation in the organizational performance. It includes recalling, evaluating and
analysis of data related to the employees’ performance.
DISCUSSING RESULTS: -
The result of the appraisal is communicated and discussed with the employees
on one-to-one basis. The focus of this discussion is on communication and listening. The
results, the problems and the possible solutions are discussed with the aim of problem solving
and reaching consensus. The feedback should be given with a positive attitude as this can
have an effect on the employees’ future performance. The purpose of the meeting should be
to solve the problems faced and motivate the employees to perform better.
DECISION MAKING: -
The last step of the process is to take decisions which can be taken either to
improve the performance of the employees, take the required corrective actions, or the related
HR decisions like rewards, promotions, demotions, transfers etc.
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WAGE ANDS SALARY ADMINISTRATION
Wages represent the hourly rates of pay and salary refers to the monthly rate of
pay, irrespective of the number of hours put in by an employee. Wages and salaries are
subject to annual increment. The wages differ from employee to employee and it also
depends on the nature of the job, seniority and merits. On the other hand we can define salary
as the amount of money paid to an employee monthly or yearly. Currently 4500 employees
are working at Garden Silk Mills Ltd.
The salary structure is as follows:-
Temporary Employee Rs2500 & other incentives
Probation Employee Rs3500 & other incentives
Permanent Employee Rs5000 & other incentives
The government decides the minimum wage payment and as per the law all
the companies has to pay the above mentioned minimum wage to its employees.
THE PATTERN OF PAY SLIP:
Name and code of the employee Provident Fund
Slip no. Employye State Insurance
Attendance Personal Tax
Leave LIC
Absent Income Tax
Pay days Cash Advances
Rate – basic & HRA Mobile Charges
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Two copies of the pay slip are maintained. One is given to the employee and the other is kept
by the company for its records. The attendance of the employees is taken everyday. The
company gives attendance card to each of its employees and makes a register in order to
keep records of the employees. When the employee enters into the company he signs in the
register and when he leaves again do the same procedure and so in this way, the records are
maintained.
INCENTIVES & MOTIVATION SYSTEM
Incentives are payment plans which provide encouragement by extra payment
over and above regular time rated remuneration for the extra performance. To get desired or
targeted result, organization can provide extra remuneration for better performance of
employees. In other words, an incentive scheme is a plan or programmers to motive
individuals or group performance.
Garden Silk Mills Pvt. Ltd. and other company also use certain incentives to
motivate its employees. Motivation means to force a person and involve him to complete the
work in right time and place with help by providing a basic need or special need to worker.
Especially Maslow’s need hierarchy used to motivate employees such as basic need, special
need, safety need, recognize, identify, self realization.
Extra salary is one such type of incentive which is given to those employees
who show sincerity and regularity throughout the year in their work. Salary is vital factor to
motivate employees. Safety need is also used to complete the work. Other motivational
factors are: Good Organizational Culture, Grievance Handling System, No Rigidness,
Certificates, Promotion Letters etc. based on some fixed criteria.
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PERSONALITY:-
There are certain qualities of good personality such as out look,
communication, nature, presentation, good behavior, positive attitude.
LOOK:-
The person in a formal dress.
In proper hair style, clean shoes.
In case of mail, plain & light shirt and dark pent.
Other factors that adds flavors to look.
COMMUNICATION:-
Communication is a mature process; we find communication not only between
human being but also between in animal. Communication means express words and ideas of
the one person to other in a way that the person can understood clearly and easily. This can
be done in three ways.
VERBAL:-
Here selection of correct word is most essential factor because verbal
communication means express ideas in word by speaking.
WRITTEN:-
Written communication means one can present his view form of written point
and points clearly understood by other person. One can add sketch/pictures with text to
support own view & create a clear picture of the idea.
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GESTURE:-
Gesture communication means one can express idea through body language.
Body language should be perfect and well balanced.
To make communication be perfect – by whom, what, why, when, where &
how added while receiving and giving any instruction. It should be maintained to make
communication perfect and confusion less and misunderstanding less.
NATURE:-
Nature of a person should a person should be balanced not too rigid or to
flexible so as to tackle situation smoothly.
GOOD BEHAVIOR:-
Behavior of one person doesn’t put others in trouble or should hurt others by
means of word or action.
POSITIVE ATTITUDE & THINKING:-
Positive attitude and thinking of a person will add up to personality.
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LABOUR WELFARE ACTIVITIES
CANTEEN FACILITY
It is providing employees the facility of break fast, lunch and dinner at the
reasonable prices.
REST ROOM
The rest room facility is given to the workers to take rest during the lunch time
and even during the free time.
UNIFORMS
The workers are given the uniform which they are supposed to wear during the
office hours.
SHOES AND RAINCOATS
All the employees and the workers of the company are given the shoes and
raincoats during the monsoon.
FIRST AID FACILITY
It is given for quick remedy of employees, when any accident occurs during the
working hours of the organization.
SCHOLARSHIP
Company provides the scholarship to the workers and the employees to those
who study for the company as a trainee.
TRANSPORTATION (BUS) FACILITY
The company also provides the bus facility for the workers from Vareli to bela
mills and even from Jolwa to silk mills for to and fro of the workers.
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OTHER FACILITIES
Transport facilities are available for SURAT addressee to all staff and workers
and some contractor’s Labour
Gratuity is given for 15 days for each year worked if completed 05 years
Med claim is provided to the staff with family approx between 25k to 85k and
single staff is provided med claim up to 15k.
Probation is provided for 6 months to experience employees and 1 year to the
others.
Confirmation letter is issued upon the assessment on completion of probation
period.
The retirement age of the employees is 58 years.
There are total 4 shifts and timing of which are as follows:-
Shift A – 07:00 am to 03:00 pm
Shift B – 03:00 pm to 11:00 pm
Shift C – 11:00 pm to 07:00 am
General Shift – 09:30 am to 06:30 pm
The timing for Saturday is 09:30 am to 03:00 pm.
The car policy is provided to the managers and other senior officers of the
company on selective basis, the company provided 52% of the total policy and
48% is of self.
The increment is provided to the staff in April and to the workers in January.
Housing to seniors (Top Management).
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LABOUR RELATION ACTIVITIES
Labour relations are concerned with the relationship between management and
workers. In Garden Silk Mills Ltd., the Labour relations have been maintained very nicely. It
is important for the company to maintain good relations with the Labour otherwise the
company cannot come on the position where it is now.
Mr. Naised Desai is the leader of the Labour union of GARDEN SILK MILLS LTD.
TRADE UNION
Textile industries have two trade unions
1. SURAT silk mills Labour unions
2. Bombay industrial relations act
Generally the employee of the company is not interested in any of the above
mentioned trade unions but if any disputes arises and the matter goes to the court than the
employee takes the help of the SURAT silk mills Labour unions.
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ORGANIZATION STRUCTURE OF PRODUCTION DEPARTMENT
(HOD)SPG
Sr. manager/dy. manager
production
Asst. manager/engineer
shift enginer
sr. technician/
technical
worker
packing
sr. officer
sr. clerk
worker
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ACTIVITIES IN PRODUCTION DEPARTMENT
To take some knowledge about the production activities done in the GARDEN SILK
MILLS, We have visited the production plan at the JOLWA Village. At that we ask them that which
kind of activities they carry out. So, they give us the all the detail of their activity.
In JOLWA plant they produce POY (Partially Oriented Yarn). As we know that for the
production of the goods the Production Department has to depend on the Marketing Department. They
produce only those quantities which are demanded by the Marketing people.
So, some activities done in the Production Department are as follows:--
1. Production manager gathered the information about what to produce and in what quantity.
This information must be collected from the Marketing Department. Marketing Department
collects information by analysis the market and gives data to Production Department.
2. After receiving information about in what quantity produce, the production manager now
does the arrangement of the raw-material. In Garden the R.M is the POY chips which is made
from the D.M.T. and E.G.
3. After doing the arrangement of the R.M. the manager starts the production of POY.
4. When the production getting finished the manager check the quality of the all the POY.
5. After checking the goods they packed it in safe boxes. Then the boxes are kept in warehouses.
Then as per the dispatch order given by the Marketing Department the Dispatch Manager dispatch
the order and send it by trucks.
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ACTIVITIES IN PRODUCTION DEPARTMENT
Marketing Department give forecasted demand to Production Department
Production Manager Decides Production
Production Manager do R.M. Planning
Production Starts
Check Quality of Goods
Packing
Store in Warehouse
Dispatch Goods
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RAW MATERIAL PURCHASE POLICY
Purchase procedure is a very important part in the big company. For production
they need R.M. and to purchase the R.M and other item there is a special purchase procedure
that all the company follows.
In GARDEN there is also a separate purchase department who always take care
about the purchase decision in the company. In this company some purchase activity done by
purchase department are as follows.
Purchase of R.M
Purchase of chemicals like spin-finished oil, Lubricants etc…
Purchase of new imported material.
Purchase of capital goods.
Purchase of new machinery.
The purchase procedure starts when the need of purchase arises.
STEPS IN PURCHASE PROCESS:-
1. The production manager informs to the purchase manager about the need of the Raw
Material, some machinery and equipment etc.
2. The purchase manager receives the data and checks whether the demand is right or
wrong.
3. After checking the quality and quantity required by production manager, the purchase
manager will do inquiry about the potential suppliers.
4. After finding the supplier the purchase manager will send him an inquiry letter and ask
for quotation.
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5. In response to the letter the supplier will also give letter related to the price of the goods
and other condition.
6. After receiving the letter the manager will compare the quotation of the entire supplier.
They will compare the quotation in respect to the unit price of goods, credit policy, and
other terms & condition of the supplier.
7. After comparison they finalize the best supplier and then the manager personally checks
product quality and if he is satisfies then he places order.
8. After giving order, supplier has to supply it within the given time-period.
So, above are some steps which are generally followed by the purchase manager of the
company to purchase Raw Materials, other equipments etc.
DOCUMENTS KEPT IN PURCHASE PROCEDURE
1. INQUIRY LETTER.
This is the letter which is send by the purchase manager to suppliers. If the
means of communication is written then the purchase manager can have the proof. But if the
means of communication is telephonic then their can be no proof. And if the communication
is done by e-mail then their will be definite proof.
2. RESPONSE LETTER.
This letter is given by the supplier to purchase manager. This is the letter in
response to the inquiry letter. This letter is in the form of quotation. Which contain the price
of the goods that manager have asked and also other information.
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3. COMPARISON STATEMENT.
This is the statement which is prepared by the purchase manager. After
receiving the quotation from the supplier the manager will prepare this kind of comparison
statement. This statement contains the comparison between all suppliers. And on the basis of
this they will decide whether to select the particular supplier or not.
MATERIAL HANDLING EQUIPMENTS
“It may be defined as the equipment which controls internal movement of material, from
receipt, through storage and production and up to the shipment of finished product.”
Material handling equipments are very useful in the big company. This
equipment is widely used in company.
In GARDEN they use those types of equipments, which are helpful to them in
the safe movement of their material.
Material Handling Equipments of Garden Silk Mills:--
Pipelines.
Trolleys.
Fork Lifts.
Pallets.
Hydraulic Machines.
Plastic Bags.
Boxes.
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PIPELINES
Pipelines are the very important part in the manufacturing company. It is very
useful for the flow of the water, gas, air, chemical, and raw-material.
In GARDEN they also use the pipelines for such kind of use. They mainly use pipelines for
the flow of R.M. in the production process. They also use pipelines for the flow of air and
liquid material.
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TROLLEYS
Trolleys are mainly use for the transfer of goods from one place to another
place. We also use trolley at our home. In this way it is also used at the company.
In GARDEN they also use such kind of trolley. This trolley is use for the
transfer of POY bobbin from one place to another.
The trolley capacity is 24-36 rolls. In GARDEN they have approximately 900
to 1000 trolleys.
As shown in the image the POY bobbins are kept in the stand which is fitted on
the trolley.
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FORK LIFTS
Fork Lifts is very useful and very capable equipment. This is use to carry the
very big or the jumbo boxes. These boxes are very big and heavy, so that it can’t be handling
manually. So that’s why the fork lifts are being used.
This lifts can carry the boxes up to the height of 2 mts. This is use to load the
boxes in to the truck. This lifts use diesel as fuel.
We can see in the both image that, in the 1 st image its shows the lifts and in the
2nd image it shows how this fork lifts work.
PALLETS
Pallets are also very useful equipments. This is
useful to carry the jumbo box on it. As we know that jumbo box
can’t be handling manually, so these pallets are use. Pallets are
made of plastic & wood. We can see the diagram of pallets. In
the 1st image we can see different size of pallets and in the 2nd
image we can see how the boxes are kept on pallets. These
pallets are handled with the help of the Fork lifts.
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The supplies of box are done on pallets. Once the buyer
gets his order he gives back these pallets to the company. In
GARDEN they use the pallets made of wood.
HYDRAULIC MACHINES
This machines capacity is about 2000-3000 kgs. This equipment is used to carry
the jumbo boxes. The jumbo boxes can’t be carried manually, so because of that this kind of
equipment is being used. It helps to make the dispatch of finished goods faster.
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There are also some other things that can be used for material handling. These
we cant say the equipment but it helps a lot to save the goods. These are as follows.—
Plastic Bags.
Boxes. ( Small and Jumbo)
PROCESS OF MANUFACTURING
Different techniques, such as weaving, printing, dying, shrouding, packing etc.
are used in the production process. Yarn is chief raw material of the company. It is not
manufactured at the plant of Vareli but is manufactured for looms at Jolva.
Process of production can be described as below:
OBTAINING THE RAW MATERIAL
STORING RAW MATERIAL
TWISTING THE YARN
TEXTURISING OR CRIMPING THE YARN
DRAW WARPING
SIZING
WEAVING
DYING AND PRINTING
OBTAINING THE RAW MATERIAL :-
The raw material consumed by the company is Partially Oriented Yarn (POY).
The yarn is procured from both internal and external sources.
INTERNAL SOURCES:-
Internal sources of the company comprise the manufacturing plant of Jolva
and material purchase from “Surat Textile Mills” (STM), Which is under the Garden Group
of Company. Vareli plant also acquires raw material from Surat Textile Mills.
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EXTERNAL SOURCES:-
In the peak season, if the internal sources are unable to meet the demand, the
company also procures material from external sources like Modern, Indo-Rama, and Reliance
etc.
STORING THE RAW MATERIAL :-
All the raw material needed by the various departments is purchased together and maintained
in the storage area called “Dump Store” from where any department can access the required
amount of raw material.
TWISTING THE YARN:
Parcel oriented yarn is either twisted, according to the requirements of material consumed in
production.
Process of twisting:
a) Winding on bobbins: firstly POY is wound on bobbins, which are twisted on the twisting
machine. The winding of yarn is done on the winding machine.
b) Twisting machine: the POY wound on the bobbins is then tittled on the twisting machine.
On which the yarn is twisted. In this process, first the yarn is passed through spindles on
which the yarn is twisted in both the opposite directions
One for one twisting machine: in this machine, the yarn is twisted once for revolution.
Two for one twisting machine: in this machine, there are two twisters per one
revolution. Now days, TFOs are more widely used as they are quicker and offer a
better quality.
Fancy Twister: the yarn before twisting is not very strong and breaks easily. It is
twisted in order to increase its strength. Due to twisting, quality improves and hence
production also increases.
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TEXTURISING OR CRIMPING THE YARN: the POY is accessed from the dump
store to the crimping or texturizing section to texturizing it. Denier is unit for
measurement of POY. Those 9000 units of yarn are hanker and weighted in Gms, are
called one denier. It is decreased after crimping.
Process of Crimping:
Firstly, POY is put on machine in a specific amount. The place is called CRILL where
it is put. After the first delivery, the yarn is heated. Then it is passed through cooling plate.
After that, the yarn is passed through spindle assembly. Thereafter, it is passed through
boiler and at all it is taken up. This is what the crimping to Texturizing process is. There are
two ways for punching the yarn.
I. Raito-punched or bound
II. Crime-not punched
Types of crimping machine:
Friction type
Magnetic type
DRAW WARPING:-
The POY is put directly on the Machine from the dump stove to draw warped
process.
It’s the fully automatic system from the warping system. The process of
drawing heat setting and intermingling is carried out. It is given tension and then wound on
beam.
SIZING:-
Sizing is a process of saving of yarn. The raw material for sizing is accessed
either from dump store, warp raw section or from texturising department. A beam is made at
the beginning in the process on this department. Warp yarn i.e. Vertical threads are made
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A. WARPING.
B. CHEMICAL PROCESSES: - Yarn is passed through a chemical called polyvinyl
alcohol to find and arcyrize shining.
C. WAXING: - Where the yarn is waxed.
D. SIZING: - Sizing is made in this process which involves many chemicals as well as
heading of cobbling processes.
E. BEAMING: - Yarn is wound on a bean after sizing.
Sizing which mean saving of yarn is necessary because of regular wear and tear.
WEAVING:-
After making the process of twisting camping, sizing or drawing warp, the
yarn is rent to the weaving department. In grey cloth is manufactured through the process of
weaving in this process one thread is horizontal and other is vertical. Horizontal thread is
called Weft and the vertical thread is called Warp.
There are various types of looms on which the cloth is woven:-
1. SEMI – AUTOMATIC LOOMS.
2. WATER JET LOOMS
3. FULLY AUTOMATIC LOOMS.
It is notable that the production of grey cloth is 70000 mts/day and it increases
every year.
DYEING AND PRINTING:-
This is the lent step of the process of production department in the company.
PROCESS:-
The jet dyeing process is widely used for dying the grey cloth. It is dyed
printed according to the requirement of design and colors.
A. First of all the grey cloth is washed and dyed, whichever color is necessitated. The
Company dyes 9000mts of cloth daily.
B. The second step involves putting the dyed cloth in the drum washer to give crepe and
georgette crease effect along with washing the stains.
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C. The super wash machine is used for finishing and washing white color material.
D. Salvage or border outing machine is used for border cutting of the cloth.
PRODUCTION PROCESS OF COTTON YARN
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QUALITY POLICY OF GARDEN’S JOLWA PLANT
The Company follows the following slogan to show their quality preference
“QUALITY IS TRUE BASIS OF VIABILITY”
Company has adopted following points as a part of their quality policy:-
Satisfying customers need and expectation.
Striving for continuous improvements through implementation of
ISO 9001:2000.
Establishing, Communicating and Reviewing measurable quality objections.
Developing and improving employee skills through effective training.
Maintaining safe working practices.
QUALITY CONTROL SYSTEM
In GARDEN (JOLWA) there is a separate quality control department this
department is besides of the production department. They check the quality of the R.M and
Finished goods both. Their quality policy is to satisfy the customer at maximum level. The
company has appointed many engineers who always take care about quality.
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QUALITY CONTROL FOR RAW MATERIAL & FINISHED GOODS
To make the POY the major R.M is POY chips and spin-finished oil. In
GARDEN they always check the quality of this both. If they found any bad quality then they
will keep it aside. They also safely load the material in to the machine.
Once the POY made they also check the quality of it. They check the quality of
the entire POY bobbin. They take the sample from the each and every bobbin and then they
make the sample cloth from it. Then they dyed and print that cloth. And if there is any
mistake then they tell to production manager to solve it. If the quality is good then they put
the symbol of OK tested and then they pack that material. They also check the denier and also
the filament of the POY. The checking of denier is done with the help of the machine called
“Rap Reel Machine“. And the checking of filament is done by computerized system.
QUALITY CONTROL FOR WORK-IN-PROGRESS GUIDELINE
In GARDEN they have also the system of checking the quality of goods when
it is in progress. The experts keep their eye on the every activity of the machine. They check
the every activity of machine. They have the computerized system in which they can easily
know in which machine the problem is occurs. And then they solve it.
MAINTENANCE PLANNING SYSTEM
Maintenance is very important and necessary. In some company they use
corrective maintenance or in some company they do regular maintenance.
In GARDEN (JOLWA) they use the regular maintenance system. They do
maintenance at every week. The maintenance officer checks all the parts of the machinery at
every week. And in between if any problem occurs they suddenly try to solve it.
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DESIGN DEPARTMENT
There are 60 workers in design department under the direct control of the
Chairman and M.D. and it is based at Surat with the assistance of CAD/CAN equipment, the
department aims to produce up to 200 designs each month. Each design is available with
number of different colors. These new designs are marketed for testing through selected
dealers and depots, which is a contributory factor to a superficially high product return at 12
%. If the design fails to attract the customers, they are sold in spot sales of the company.
PROCESS LAYOUT OF PRODUCTION PLANT
For POY the process is the fully automatic. Once we have to input RM in to plant, then the output is
the POY Bobbins. So, for this we have given process layout as follows:
INPUT
RAW MATERIAL OUTPUT OF
POY
POY CHIPS +
Spin-finished
Oil.
Fully
Automatic
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PRODUCTION CAPACITY: -
Product Production
capacity(mt per
annum)
Additional capacity
expansion in 2010
Total capacity after
expansion(mt per
annum)
Polyester chips 2,80,000 2,52,000 5,32,000
Poy spinnimg 1,20,000 29,000 1,49,000
Fdy spinning 3,500 25,000 28,500
Draw warping 14,400 - 14,400
Draw twisting 21,000 - 21,000
Draw winding 6,000 - 6,000
Draw texturising 43,000 36,000 79,000
Fabric(million mtrs
per annum)
60 - 60
REPORTS GENERATED IN THE PRODUCTION DEPARTMENT
1. MACHINE PRODUCTION REPORT.
2. WASTE REPORT.
3. MACHINE EFFICIENCY REPORT.
DISPATCH
“It may be defined as the process of setting production activities in motion through the
release of work orders and instructions in accordance with previously planned schedules.”
In every company they have the dispatch department. The function of this
department is to dispatch the goods. The function of dispatching is more important in the intermittent
production system and has less importance in continuous production system.
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In GARDEN JOLWA the production system is the continuous. So, in this system the
dispatch manager has to perform only few tasks.
So, some functions of dispatch manager are as follows
1. To receive the pack goods from the production department and store in warehouse.
2. To receive the delivery order from the marketing department.
3. Arrange the goods as per the order.
4. Make the list of the boxes that will be dispatched.
5. To make challan.
6. To make invoice.
7. To give order to load the goods in the truck.
PROCEDURE OF DISPATCHING THE GOODS
The procedure of dispatching starts by receiving the order from the marketing
department. So, steps in this process are as follows:
1. Marketing department give the order to the dispatch manager about what to delivered. This
report contains the name of the customer, quality he required, quantity required, etc…
This report looks like as follows:-
Number Name Code Grade DENIER Size of
box
Total
box
Rate
1 Bhilosa
Tex
AAA SD 112/36 JUMBO 12 81.09RS/KG
2. After receive the order from the marketing department now the dispatch manager will
check whether the demanded goods are available or not. If available then they make list of that goods.
And then they make challan from it. They make the three copies of the challan, from which one for
them, another for buyer, and third take back from the buyer when he received the goods.
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3. After making the challan they make the invoice. Invoice is the statement which shows the
total amount of bill. They also make three copies of invoice.
Invoice contains the following information:
A. Buyers name.
B. Consigners name.
C. Delivery order no. & Date.
D. Broker name & code.
E. Mode of transportations.
F. Vehicle no.
G. Description of goods.
H. Denier.
I. Merge no.
J. Grade.
K. No of boxes.
L. Total weight of goods in kg.
M. Rate per kg.
N. Total.
O. Then taxes like VAT & EXCISE DUTY.
P. Grand total or amount receivable.
Q. Signature of the dispatch manager. Etc…
4. They make the three copy of invoice, from which they give one copy to dealers. It is
useful for dealers when he go for payment collection.
5. After dispatching the goods the work of dispatch manager is being over.
Now he has to file all the records safely for future use.
STORAGE DEPARTMENT
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It is an extremely important cost that ever appears in accounting record. Components of this
cost may be observed in several ways e.g. , in a profit making concern, sales lost as a result of
stock out, or, there may be additional costs resulting from back ordering. Another component
may be loss of goodwill due to delay in supply of finished goods. Sometimes, in production
system, a part shortage may cause idle labour on a production line of subsequent incremental
labour cost to perform operation out of sequence, usually at a higher than normal cost. Such
type of costs may also be considered as a shortage cost.
Industrial or institutional storage of material is also systematic & well documented. Because
of this reason following expenses are incurred in storage of material.
WASTAGE CONTROL
In textile firm, avoidable waste is while we are wrapping the string on the scope we
have to take care otherwise it wraps on here and there on the scope. It is the wastage
of string. This cost is avoidable should be minimize or avoided.
In the textile field who is manufacturing the cloths while production process the role
is wrapping on the bim through the wrapping machine. All the role are not empty after
the string are wraps on bim some role contain a string are not used further because it
is very less so production manager should not control this type of waste.
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ORGANIZATION STRUCTURE OF MARKETING DEPARTMENT
General Manager
Deputy General Manager
Senior General Manager
Assistant Manager
Programmer Manager
Dispatch Manager
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INTRODUCTION OF MARKETING
According to American marketing association “marketing is the performance of
business activities that direct the flow of goods and services from producer to consumer or
user.”
According to Philip kotler defines “marketing is a social management process by
which individuals and group obtain what they need through creating and exchanging products
and value with other”
IMPORTANCE OF MARKETING
Financial success often depends on marketing ability. Finance, operations,
accounting, and other business functions will not really matter if there isn’t sufficient demand
for products and service so the company can make a profit. There must be atop line for there
to be a bottom line. Many companies have now created a chief marketing officer, or CMO,
position to put marketing on a more equal footing with other C-level executives, such as the
CEO and CFO. Press release from organizations of all kind-from consumer goods makers to
health care insurance and from non-profit organizations to industrial product manufacturers-
trumpet their latest marketing achievements on their web sites. In the business press,
countless articles are devoted to marketing strategies and tactics.
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THE MARKETING CONCEPT: -
FOCUS MEANS OBJECTIVES
LOCATIONS FOR MARKETING: -
Garden Silk Mills Pvt. Ltd. is having its marketing offices at different places like
in Surat, Mumbai, Delhi, and Ahmedabad.
FUNCTIONS OF MARKETING :-
1. CONTRACTUAL: -
The searching of buyers & sellers.
2. MERCHANDISING: -
Matching the products to customers needs & desires (the market requirement).
3. PRICING: -
Determining the optimum price.
4. PROMOTION: -
Persuading the buyers to favors the firm & its products.
5. PHYSICAL DISTRIBUTION: -
The transport, warehousing & inventory control.
Products to fill in customer needs
somethingIntegrated
marketing mix
Profits through customer
satisfaction
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RESPONSIBILITY: -
They are responsible to satisfy the customer requirement by adopting better quality of
product.
They are directly responsible to the general manager and the proprietor in-charge.
They are responsible to increase the volume of sales.
They are responsible from inquiry of goods & it’s delivery to their customer.
They are responsible for the proportion of discount policy.
They are responsible for checking the account of customer.
They are responsible for attracting new customer for their product.
They are responsible to give the best advertisement in different media through which
attracting number of customers.
CUSTOMER SEGMENTATION
Customer segmentation can be identified by examining demographic, psychographics, and
behavioral differences & geographic. The marketers then decide which segment presents the
greatest opportunities that are its target market. For each chosen target market the firm
develops a market offering.
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Garden silk mills sell its product in both local and foreign market. So we can say that Garden
silk mill has geographic segmentation, which call for dividing market unit such as nation,
state, countries, and cities region etc. Garden silk mill has good opportunity in foreign
market.
TARGET MARKET
A target market or target audience is a group of customers that the business has decided to
aim its marketing efforts and ultimately its merchandise. A well-defined target market is the
first element to a marketing strategy. The target market and the marketing mix variables of
product, place (distribution), promotion and price are the two elements of a marketing mix
strategy that determine the success of a product in the marketplace.
To sell their product at maximum efficiency they have to consider the different segment of
the market. And this segment of the market is known as the TARGET MARKET.
In other sense if we say that every company have their target market in which
they sell their product at maximum level and low at other place.
The target market for the GARDEN JOLWA is the SURAT at maximum. They
sell their product in SURAT more. Then they sell at other city of GUJARAT. But here sell is
not so more as in SURAT. The next they sell their goods in some city of MAHARASTRA
also. And also they sell some product in other state of INDIA. They also export their goods
but at a very little scale.
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In following diagram we can see the Target Market network.
70%15%
10%5% SURAT
GUJRAT MAHARASTRA
As we see in the diagram that the GARDEN Company
have the major target market is in SURAT, which is
70%. This shows they have more customers in SURAT. As we know SURAT is famous for
textile business. Here the 70% of the INDIA’S looms machine are working. In SURAT there
is approx 100000 looms machine. So, their will be need of POY will be around 80000 Tones/
month. And the GARDEN Company sells approx 40000 to 50000 Tones / month in the
SURAT market.
Here the price is also same for the entire different customer. They sell the entire
product at the same price to all customers. Here the price differentiation is not possible. The
GARDEN Company is more famous because of the reason that they are “Quality Making
Company”
CBB/OBB
CBB may be defined as the acts of individuals in obtaining and using a product or
services including the decision processes that precede and determine these acts.
PROCESS OF CBB
Problem recognition
Information search
o Personal sources
o Commercial sources
o Public sources
o Experimental sources
Evaluation of alternatives
Purchase decision
SURAT 70%
GUJRAT 15%
MAHARASTRA 10%
EXPORTS 5%
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Post purchase behavior
o Post purchase satisfaction
o Post purchase actions
o Post purchase use and disposal
IBB
IBB is the buying decision making process by which the formal organisation
identifies its needs for product, raw material and services and identifies, evaluates and
chooses among alternative brand and suppliers with an objective of sharpening its
competitive edge.
PROCESS OF IBB
Problem or need recognition
General need description
Product specifications
Search suppliers
Inviting proposals from qualified suppliers
Selection of suppliers
Determination of order size and placement of an order
Performance review and feedback
TYPES AND CLASSIFICATION OF PRODUCT
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Product classification means differentiation between the products. The
GARDEN JOLWA have also many kind of product related to POY. But the main product is
the POY. This company produces all the type of different goods according to the demand of
those goods. This company has the great market after the RELIANCE.
The list of some product offered by the company and its annual sales volume is as follows:-
1. POY( PARTIALLY ORIENTED YARN)
2. TEXTURED YARN
3. DRAW TEX YARN
4. FULLY DRAW YARN
5. DRAW WINDER
PRODUCT MIX
PRODUCT
CHIPS SARI MARBLE CHEEKS DRESS MATERIALS
POLYESTE
R
NARA CHIFFON JAQUARD DECNINE
AMERICAN
CHIFFON
CDECLING BASSO
SETA CHIFFON CHAIN YARN
SAREE
HEARY OUT
MARION
MARBLE
CHIFFON
ULTRA SALEAN
PEACH SATVARLO
SILK CREPS LAPUR
LENENS BLACK PERL
SETA
CREORATTE
ALFINE & CHERA
YOURY
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Product Mix
“Product mix is also called as product assortment which is the set of all product lines
and items that a particular seller offers for sale to buyers.”
A company’s product mix has certain width, length, depth and consistency. These
concepts are illustrated for industrial products of Garden Silk Mills Pvt. Ltd.
1. Width: -The width of a product refers to how many different product lines the
company carries. The above table shows a product width of 4 lines.
2. Length: -The length of the product refers to the total number of items in the mix. In
the above table it is 20.
3. Depth: -The depth of a product refers to how many variants are offered of each
product in the line
4. Consistency: -The consistency of a product refers to how closely relate the various
product lines.
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PRODUCT LIFE CYCLE
As we know that the Garden Silk Mills is a well known company in producing
different types of yarn and that yarn is used as raw material by companies who manufacture
products related to fabric. Garden Silk Mills also manufactures dress and sari material but
there main production is yarn and by producing yarn the company is getting more profit year-
by-year and so in the above table it shown that the GARDEN SILK MILLS is at “Maturity
Stage”
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PACKAGING
` PACKING means wrapping of goods before they are transported or stored or
delivered to a consumer. On the hand, packaging is the sub-division of the packing function
of marketing. “packaging” has been defined as “an activity which is concerned with
protection, economy, convenience and promotional consideration.” Many marketers have
called packaging a fifth p, along with four Ps i.e., price, place, product, promotion. Thus
packaging is one among the activities of designing and producing the container or wrapper
for a product. The wrapper or the container is called package.
LABELLING
“Label is a part of product, which carries verbal information about the product
or the seller. It may be a part of package, or it may be a tag attached directly to the
product.” Label may be a small slip or it may be a attached to the product. It conveys verbal
information about the product and seller. The producer gives necessary information to the
consumer through the label. The act of attaching or tagging the label is know as labelling.
Label is of three types:
BRAND LABEL
It is simply popularizing the brand name of the product. It gives only the
brand names.
GRADE LABEL
It identifies or emphasizes the quality standards or grades, as A,B,C OR
1,2,3 etc. In another word it, identifies the quality.
DESCRIPTIVE LABEL
It gives written or illustrative objective information about the use, care,
performance and other features of the product.
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A COMPLETE LABEL GIVES THE GARDEN SILLK MILL
Brand name
Address of the product
Gross & net quantity of the content
Ingredients in the product
Direction for the use
Precautionary measures
Nature of the product
Date of packing
Retail price
BRAND
The word “BRAND” has its origin in the Norwegian work “BRAND”, which means
to burn. In ancient, framers used to put burn marks as identification on livestock to
distinguish their positions.
A brand is a “name, term, symbol or design to identify the goods or services and
to differentiate them from those of the competitors”.
A trade market is a brand that has been given legal protection, ensuring its use
exclusively by one seller. Trademark is a legal term, while brand is a marketing term. In
marketing, the brand name is a major selling tool and one of the most important components
of the ‘total product personality’. We are, in fact, living in an age of brand. the intensive
brand promotions undertaken by marketers of various products have made consumers
extremely brand-conscious.
The battle in the market takes place not between companies, but between brands.
Consumers buy brands; and generate income for the firm. It means that developing strong
brands is a major responsibility of the firm.
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PRICE
Price shows the value of the company’s product. The Co. itself decides its product
price considering various factors. Garden’s product is less priced than that of Reliance &
which is the 2nd highest price in the market. These 2 competitors play a major role in the
market according to their product’s price.
OBJECTIVES OF PRICING
Earning of reasonable rate of return on investment
Market penetration
Price stability
To maintain or improve market share
To cope up with competition
Market skimming
Profit maximization objective
PRICING POLICIES
Pricing policy of the company usually stable, it does not keep on fluctuating with time and
the price is decided after taking into consideration the prices of its competitors.
According to the company the price of the finished product is decided on the basis of
the price of its raw material. Say for example if the demand of petroleum is increased or
decreased then it consequently effects the price of the raw materials and also the prices at
times depends on the demand of the product also. The price of the company changes, when
the yarn market is in boom period the price tend to be high and vice-versa.
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Garden silk mill has no fix price of different yarn and chips. They have 15 – 20 %
margin on manufacturing cost. Price will change according feature of products. The factor
affecting pricing policy is denier and 25% less then reliance industries
PLACE
Physical distribution is the delivery of products at the right time and at the
right place. Garden has selected various places to sell its product but its main market is
SURAT because there is a high demand of yarn in SURAT, the “Textile City”. It also sells
its product to other cities like Bombay, Bangalore etc. & to the foreign countries also.
DISTRIBUTION NETWORK
There is usually a large channel of distribution which includes from producing a product to sell it to
wholesalers and the wholesalers give it to the retailers and finally retailers sell it to consumers. This
distribution network is for the consumer products. The main product of the company is POY which is
the industrial product and the distribution network of the company is very simple and it is not so
complex. In this network there is only one person who is known as DEALER in between the
producer and the customer.
The company mainly deals with the dealer. The dealer sells the product to the industrial customer and
he mainly acts as a guarantee on behalf of the customer for the payment to the company. The sales
manager personally does not know any of his customers but he just knows the name of their firms
who consumes his product. Thus, we can say that the dealer has a very important role to play here.
PRODUCER DEALER CUSTOMER
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The company sells their product by dealers only. The dealers get the commission by the company and
also from the customer. The GARDEN Company has their dealers in all the state. They have approx
100 dealers. The dealers’ network is in Gujarat, Maharastra, Rajasthan etc…
Some names of dealers are as follows:
1. Gheewala brothers.
2. Ekta Textiles.
3. Amidhara Textiles.
PROMOTION
“promotion means a set of efforts made by the company for stimulating the demand
for its product without making any alteration in product mix, price and channels of
distribution.”
PROMOTION MIX
“promotion mix means a set of elements or tool like advertising, public relation and
publicity, sales promotion, personal selling and direct marketing used by the marketer for
promoting sales by stimulating demand through persuasive communication.”
ADVERTISEMENT AND PROMOTION POLICIES
Advertising can be used to build up a long term image for product. The sales of a
product can be increased to a great extent with the help of advertisement. But, usually
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advertisement is done for the consumer products. But GARDEN is mainly dealing with yarn,
a raw material for fabric. They usually deal with dealers so there is no need for any kind of
ads, as it is an industrial product.
Advertising offers a reason to buy and sales promotion offers an incentive to
buy. Promotion is nowadays more accepted by top management as an effective sales tool.
The companies are under great pressure to increase their sales as numbers of competitors are
also increasing. The industrial products manufacturing also do more or less promotional
activities.
The company always tries to promote the product in the way by which the
price of the product is tried to maintain or reduce and the quality is improved so that they can
offer better product to their customers. They also do trade promotions like giving free yarn
samples and prices off.
BUDGET FOR ADVERTISEMENT:
Every organization decides their amount or budget for advertising in advance.
But it isn’t possible in every situation. Sometimes company may not be in a position to
decide, budget for advertising in advance due to certain reasons.
Previously Garden Silk had fixed budget for advertisement. In the year 1993-
94, the company provided Rs. 8, 69,000 as expenditure of advertisement, while in the year of
1994-95, the company has provided Rs.14, 52,000 as expenditure of advertising. But at
present it is not fixed.
MEDIA FOR ADVERTISEMENT:
Media is a means through which advertisement passes to consumers & by
which consumer knows about product & its features. Garden uses different media for
advertisement like dairies, textile-magazines, seminars, demonstration, Internet & other
business magazines. Thus, Garden, does not more emphasizes on advertising because it
produces industrial goods & it’s a long term buying decision & there is no regular customer
for industrial goods.
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PROMOTIN POLICY:
Sales promotion is termed as, “The Promotional Activities other than personal-
salesmanship, advertising, publicity, which stimulate consumer purchasing & dealer
effectiveness such as displays, exhibitions, demonstrations, contest & various other non-
recurrent selling effort not in the ordinary routine.” The difference between sales promotion
and advertisement is that advertising offers the reason to buy while sales promotion offers an
impulse to buy. In Garden, there is long term planning for the sale of its product. Garden has
slogans “You fascinate me” and “Garden creates new woman” which are impressive &
attracts women consumers.
THERE ARE THREE TYPES OF SALES PROMOTIONAL TOOLS: -
CONSUMER PROMOTIONAL TOOLS
TRADE PROMOTIONAL TOOLS
BUSINESS AND SALES FORCE PROMOTIONAL TOOLS
CONSUMER PROMOTION TOOLS:
SAMPLES: -
Samples are offered to its retailers, i.e. in terms of returning the sarees
with its particular design not liked by the retailer or wholesaler. This is in the case of
marketing of sarees only.
FREE GOODS: -
To pace with volatile taste and preference of the consumer the
company has to know the current consumer market. Hence, a questionnaire is
prepared including the customers’ choices and market demand with options for
answers. If the questionnaire is completely filled up and submitted by the customer,
she will get one scarf free. On the basis of response and analysis of the data, the
management decides to change its product.
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PREMIUM (GIFT): -
The customer who buys direct from the company’s shop is given impulses by offering
them free premiums or gifts.
On buying products up to Rs. 1500/-, buyer gets 2.5 mts. fabrics in the form of top-
bottom clothes.
On buying products up to Rs. 3000/-, buyer gets 5 mts. fabrics in the form of top and
bottom clothes.
On buying products up to Rs. 4000/-, buyer gets complete Duptta set, which consist of
a complete dress for her. Thus the scheme is very effective.
DISCOUNT: -
Usually, quantitative discount is given to its retailers to infatuate and vigor to buy the
product of the company.
TRADE PROMOTION TOOLS:
BUYBACK GUARANTEE: -
The company also gives full buyback guarantee to its retailers or wholesalers, i.e.
defected goods are purchased back by the company.
PRICE OFF: -
The company often has to offer price off to its retailers or wholesalers to carry a
particular brand. The company offers price off in terms of discount on the basis of amount of
sales of retailer’s sale in more than current month then management give more discount to
retailer or wholesaler.
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BUSINESS AND SALES FORCE PROMOTION TOOLS:
These tools are used to overhaul the business, sway customers and motivate sales force
to greater efforts.
Trade show: -
The company takes part in the annual trade show organized by the Textile Industry
Association in Delhi every year. Apart from it, the company also organizes a show named as,
“Text Style” which is a sort of fashion only for the products of the company.
EXPORT MARKETING
From Mumbai office the material is sent to foreign office
Customer gives order at the foreign office
Material is supplied to customer
SALES PROCEDURE
Sales procedure of each company differs from one another. Garden follows
short length sales procedure as it constitutes only 1 middleman.
All the sales of the products of the company are done only by the dealers only
as they know the requirements of the customers. He negotiates with the customers and he gets
all the information regarding the price which the customers are ready to pay and the total they
want. In short, the dealer gives the complete information to the sales manager of the company
about the customers. Following details are given by the dealers to the sales officer:-
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1. Customer name
2. Quantity required
3. Quality required
4. Aggregate price
The sales manager studies the details given by the dealer and if he is satisfied
with the requirements of the customer and the price offered by him, then the procedure will
start. The officer gives the reply to the dealers and the dealers ultimately give to the
customers.
If the company wants any change in its sales policy and price policy then the
meeting is called of managers of all the departments and the opinion of each of them is taken
into consideration and then the necessary changes in the side of the majority is taken. And
whatsoever has been the decision, the sales manager will convey it to all the dealers. The
procedure comes to and with the payment of the delivered goods and the customer has to give
full payment and there is no policy of paying partly. The company follows its rule of payment
and it does not change for any of its customers.
DOCUMENT RELATED WITH SALES
Each and every company has its own documents as per their business
activities. Document is an organ which acts as a proof for both seller and buyer. It is a signed
paper or an instrument which shows that the goods are dispatched from godown of the
company that is the seller has sold his products and the buyer has received his order as per his
requirement. Various documents indicate that the transaction has already done. The main
documents of the company are Challan and Invoice. These two documents contain various
details like the customer name, price of the product, quality of the product etc. Other
documents are packing lists, sales book, order book, etc. and all these have their own uses.
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FORECASTING AND SALES PLAN PREPARATION
One major reason for undertaking marketing research is to identify market
opportunities. Once the research is complete, the company must measure and forecast the size,
growth, and profit potential of each market opportunity.
Sales forecast are used by finance to raise the needed cash for investment and
operations; by manufacturing department to establish capacity and output levels; by purchasing to
acquire the right amount of supplies; and by human resources to hire the needed number of workers.
In short, marketing is responsible for preparing the sales forecast
Forecasting helps to come to near actual figures but it does not necessarily show the
real position of the company. So for this purpose the experts are appointed.
There are many different products whose forecasting is done by the company. Here the sales
forecasting is done on the basis of previous month or previous year sales. The market for synthetic
yarn is a seasonal and ultimately it depends on the price of the raw materials which again depends on
the price of the petroleum products. The price is controlled by the international pricing policy. The
company also uses various statistical records which are studied by the managers and the experts of the
company. Forecasting is even affected by the seasons, festivals & their respective months when
compared to previous figures.
DETAILS OF COMPETITORS
Competitors mean the person who is making the product which is similar to
ours. Means that product can be a substitute for the customer. For the success of all the
company they must have the knowledge about all the competitors. They always keep on eye
on every movement of the competitors. For e.g.If we say that Pepsi company always
watch the movement of the Coca-cola company. They must have to watch their competitors
to survive in the market.
In that way the GARDEN JOLWA have also its competitors. So, they have to
be very careful about their competitors. There are so many competitors in the market. One of
the biggest competitors is the RELIANCE. Reliance is the very big and also first number
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company in the POY market. There are also other competitors, but they are small. And the
GARDEN JOLWA has not to worry so much about those small competitors.
SOME NAMES OF THE COMPETITORS ARE AS FOLLOWS:-
1. RELIANCE SYNTHETICS.
2. GUPTA SYNTHETICS.
3. INDO-RAMA SYNTHETICS.
4. JBF INDUSTRIES.
5. MODERN PETROFILS.
6. NOVA PETROCHEMICALS.
7. CENTURY INKA.
INTERNATIONAL COMPETITORS: -
Garden Silk Mills Ltd operates in the Apparel and accessories sector. This
analysis compares Garden Silk Mills Limited with three other miscellaneous apparel
manufacturers in developing countries: Bata Chile SA of Chile (2000 sales of 68.25 billion
Chilean Pesos [US$109.20 million]), Rex True form Clothing Company Limited of South
Africa (289.10 million South African Brands [US$36.04 million]), and Buettner SA
Industries Commercial which is based in Brazil (106.97 million Brazilian Reals [US$46.41
million]).
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COMPARISON OF 4P’S WITH COMPETITOR’S 4P’S
Product, Price, Place & Promotion are the 4 P’s of any orgn. Whole marketing company
greatly depends upon these 4 P’s. The main product of the Garden Silk is yarn (synthetic &
polyester) which is raw material for producing fabrics. The main competitor of Garden is
Reliance. Comparison of 4 P’s is as follows…..
1. PRODUCT
Product itself is the first element. The product must satisfy consumer’s needs.
Garden Silk produces the synthetic and polyester yarn which is an industrial product. The Co.
makes the product as per customer needs. Reliance is the main competitor of this company
which produces the same products. The quality-features of products of both the company
differ from each other both the company’s products are available in the same markets.
2. PRICE
Price shows the value of the company’s product. The Co. itself decides its
product price considering various factors. Garden’s product is less priced than that of
Reliance & which is the 2nd highest price in the market. These 2 competitors play a major role
in the market according to their product’s price.
3. PLACE
Physical distribution is the delivery of products at the right time and at the right
place. Garden has selected various places to sell its product but its main market is SURAT
because there is a high demand of yarn in SURAT, the “Textile City”. It also sells its
product to other cities like Bombay, Bangalore etc. & to the foreign countries also.
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4. PROMOTION: -
Promotion is the persuasive communication about the products by the
manufacturers to the buyers. The firms must undertake promotion work like advertising,
publicity, personal selling etc. But Garden makes yarn which is an industrial product so there
is no need for much promotional acts. The same policy is applied by the Reliance. The sales
officer takes all the decision about the promotion acts. But they don’t do any promotional
activity. They sell their product through dealers. So, we can say that dealers are 1 kind of
promotional tools.
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Books
For Marketing & Sales Functions: -
Marketing Management Gami N.D , Published by – New Popular
Prakashan, Edition – 2009-2010, Page no. 38,46,53,59,92,132
For Human Resource Management : -
Human Resource management Notes given by DILSHAD BHATHENA
Website:
http://www.gardenvareli.com
http://www.moneycontrol.com/financials/gardensilkmills/balance-sheet/GSM
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P&L A/C Jun '06 Jun '07 Jun '08 Mar '09 Mar '10
Rs. In Crore
Income
Sales Turnover 1,079.24 1,513.42 1,823.39 1,384.75 2,662.34
Excise Duty 125.98 119.62 148.19 52.48 155.04
Net Sales 953.26 1,393.80 1,675.20 1,332.27 2,507.30
Other Income 10.18 11.58 19.52 15.46 17.89
Stock Adjustments 12.20 32.41 38.36 7.62 67.50
Total Income 975.64 1,437.79 1,733.08 1,355.35 2,592.69
Expenditure
Raw Materials 670.68 1,068.64 1,301.17 981.95 2,035.60
Power & Fuel Cost 60.23 70.62 87.15 85.91 152.74
Employee Cost 34.21 40.08 45.79 44.25 57.35
Other Manufacturing Expenses
15.95 17.72 20.40 6.54 15.95
Selling and Admin Expenses 46.47 51.53 60.43 50.13 53.51
Miscellaneous Expenses 20.66 24.02 27.76 16.02 24.56
Preoperative Exp Capitalised
0.00 0.00 0.00 0.00 0.00
Total Expenses 848.20 1,272.61 1,542.70 1,184.80 2,339.71
Operating Profit 117.26 153.60 170.86 155.09 235.09
PBDIT 127.44 165.18 190.38 170.55 252.98
Interest 46.33 56.87 63.78 55.48 87.19
PBDT 81.11 108.31 126.60 115.07 165.79
Depreciation 48.66 57.57 57.40 44.84 72.56
Other Written Off 0.69 0.65 0.48 0.26 0.14
Profit Before Tax 31.76 50.09 68.72 69.97 93.09
Extra-ordinary items 0.13 0.00 0.03 0.00 0.00
PBT (Post Extra-ord Items) 31.89 50.09 68.75 69.97 93.09
Tax 9.77 26.83 28.74 20.41 29.88
Reported Net Profit 22.10 23.26 40.00 49.58 63.20
Total Value Addition 177.52 203.97 241.53 202.84 304.10
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 5.74 5.74 5.74 5.74 6.89
Corporate Dividend Tax 0.81 0.98 0.98 0.98 1.14
128
BALANCE SHEET Jun '06 Jun '07 Jun '08 Mar '09 Mar '10
Rs. In Crore
Sources Of Funds
Total Share Capital 38.29 38.29 38.29 38.29 38.29
Equity Share Capital 38.29 38.29 38.29 38.29 38.29
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 304.14 320.68 353.97 396.83 452.00
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Networth 342.43 358.97 392.26 435.12 490.29
Secured Loans 493.22 634.92 679.87 838.09 948.57
Unsecured Loans 145.86 56.12 122.28 65.88 79.35
Total Debt 639.08 691.04 802.15 903.97 1,027.92
Total Liabilities 981.51 1,050.01 1,194.41 1,339.09 1,518.21
Application Of Funds
Gross Block 1,061.58 1,096.10 1,128.88 1,338.64 1,503.64
Less: Accum. Depreciation 336.48 389.87 444.07 488.18 556.07
Net Block 725.10 706.23 684.81 850.46 947.57
Capital Work in Progress 24.96 15.97 103.53 138.38 195.05
Investments 72.86 129.36 78.18 51.58 76.61
Inventories 97.08 130.03 185.76 217.55 365.36
Sundry Debtors 48.45 64.74 107.90 67.47 126.87
Cash and Bank Balance 10.27 5.41 21.75 12.50 10.04
Total Current Assets 155.80 200.18 315.41 297.52 502.27
Loans and Advances 137.71 145.19 157.82 204.37 223.02
Fixed Deposits 18.17 14.01 54.41 60.38 24.77
Total CA, Loans & Advances 311.68 359.38 527.64 562.27 750.06
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 140.81 139.35 169.54 225.04 395.11
Provisions 13.99 22.54 30.69 38.76 56.03
Total CL & Provisions 154.80 161.89 200.23 263.80 451.14
Net Current Assets 156.88 197.49 327.41 298.47 298.92
Miscellaneous Expenses 1.70 0.94 0.46 0.20 0.07
Total Assets 981.50 1,049.99 1,194.39 1,339.09 1,518.22
128
A CERTIFICATE OF QUALITY CONTROL IS AS FOLLOWS
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