Hrm & Finance-jivraj Tea

7/31/2019 Hrm & Finance-jivraj Tea

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HUMAN RESOURCE MANAGEMENT


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Human Resource Department

INDEX

SR. NO. PARTICULARS

3.1 H.R.M. Scope

3.2 H.R. Department

3.3 Organisation structure

3.4 H.R. Planning3.5 Recruitment

3.6 Selection

3.7 Training and Development

3.8 Performance appraisal

3.9 Promotion of employees

3.10 Transfer

3.11 Wage and Salary administration

3.12 Employees welfare

3.13 H.R. audit

3.14 Scope of H.R. audit

3.15 Human resource status3.16 Social welfare


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HUMAN RESOURCE DEPARTMENT

Human resource management is planning, organizing, directing, and controlling of the procurement,

development, compensation, integration, maintenance and separation of human resource to the end thatindividual, organizational, and social objectives are accomplished.

Human Resource Management is that part of management which is concerned with people at

work & their relationship within the organization. The term Human Resource Management refers to the

management of personnel in the organization of any company to achieve the predetermined goals. The

duty of the personnel manager is to look after the personnel department and various functions of the

personnel like recruitment, selection, promotion, transfer, etc.

In Jivraj Tea Ltd. also this definition is followed where HRM means to manage the available

human resource effectively so that organizational goals can be achieved.

3.1) Human Resource Management: Scope

The scope of HRM is very wide:

1. Personnel aspect-

This is concerned with manpower planning, recruitment, selection, placement, transfer,

promotion, training and development, layoff and retrenchment, remuneration, incentives,productivity etc.

2. Welfare aspect-

It deals with working conditions and amenities such as canteens, rest and lunch rooms, housing,

transport, medical assistance, education, health and safety, etc.

3. Industrial relations aspect-This covers union-management relations, joint consultation, collective

bargaining, grievance and disciplinary procedures, settlement of disputes, etc.

At Jivraj these above aspects are taken into account. Here in Jivraj tea ltd all the activities are counted as

HRM activities which are given above in group of above three aspects.

3.2) Human Resource Department:


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All the activities of HRD are controlled by the manager himself whether it is recruitment, promotion or

resignation in jivraj tea ltd. For the higher level the manager himself take all the necessary steps to recruit

the employee. For lower level of employee also the manager himself recruit the employee. Other

activities like welfare incentives etc. are managed by the manager of thejivraj tea ltd.

Activities of Personnel / HR Department:

4. Manpower NeedWhy? Where? How? And When?

5. Recruitment & Establishment functions

6. Performance Appraisal

7. Welfare & other services

8. Loans & Claims

9. Industrial Relations

As we said in scope of HRM in jivraj tea that all the activities of HR is done and above activities of

Personnel/HR department are also done.

3.3) Organisational Structure:

An organizational structure is a mainly hierarchical concept of subordination of entities that collaborate

and contribute to serve one common aim.

I, found that, there is a separate department in jivraj tea ltd for Human Resource Management i.e.

Department which performs the function like personnel administration, wages, salary, staffing, selection,

training, recruitment, personal records etc. This specified task is done very carefully under the eye ofMr.

Viren shah at jivraj tea ltd.

The following is the organizational/departmental structure of thejivraj tea ltd. From here we can

understand easily the shape of management and staff in the company. And also the levels are shown.
http://en.wikipedia.org/wiki/Hierarchicalhttp://en.wikipedia.org/wiki/Hierarchical


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3.4) Human Resource Planning:

In simple words HRP is understood as the process of forecasting and organizations future demand for,

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

management department initiates the recruitment and selection process. HRP is the sub-system in the total

organization planning. HRP is variously called manpower planning, personnel planning or employment

planning.

Manpower planning is the strategy for the acquisition, utilization, improvement and

preservation of an organizations human resource. It is aimed at coordinating the requirements for and the

availability of different types of employees:

3.5) Recruitment:

Recruitment refers to the process of identifying and attracting job seekers so as to build a qualified job

applicant. After the required number and kind of human resource are determined the next step in the

procurement function is to locate the sources where from the requirement of human resources can be

available and to attract them towards the organization. This is known as RECRUITMENT.

Recruitment normally means process of identifying and encouraging prospective employees to

apply for jobs. Recruitment is a process to discover the sources of manpower to meet the requirements of

the staffing schedule and to employ effective measures for attractive manpower inadequate numbers to

facilitate effective selection of an efficient working force. Recruitment is said to be positive in its

approach as it seeks to attract as many applicants s possible. So from many applicants the firm in not able

to select all of them, but will try to select the best qualified out of it.

Recruitment refers to the process of attracting, screening, and selecting qualified people for a job

at an organization or firm.

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


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3.5.1) Sources of Recruitment:

Well basically two types of sources are used in every organization, they are followed.

1. Internal

2.External

At jivraj tea ltd, I have found that both of the sources of recruitment are used simultaneously. But

then too internal sources of recruitment are given preference as they belong to less time wasting, less

money expenditure, totally Economical.

1.Internal sources:

1.Present employees

2.Former employees

3. referrals

4.Previous applicants

1.Present employee: By the use of promotion and transfer policy the org. can fulfil the job requirement.

Sometimes when immediate requirement is held, then org. takes the decisions to promote the currentemployee who is working similar to that post or under that post by measuring their efficiency.

2.Past applicants: Sometimes in org. it happens that some candidate may have applied for another job in

the org. but he is efficient enough to do work for the vacant place then the org. can call all these kinds of

employees.

3.Relative of Current employees: In the org. sometimes for quick and easy fulfilment of Vacancy

Company allows employees relative to apply for the vacancy.

4.Previous Employees: In the organisation some time call the work man who works in past who call

when shortage of worker in the org. so thats a good way for continue the work in the production or

service department.


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External sources:

1.Employment exchange

2.On hand applicants

3.E-recruitment

4.Advertisement

5.Company websites

6.Gate hiring

7.Campus Placement

8.Employee Agencies

External sources: At jivraj tea ltd as a trainee I have found that not many external sources are used besides

Advertisement in Local news paper and Campus recruitment.

3.5.2) Utilization of recruitment sources at Jivraj tea ltd.

Every company has the motto of making effective utilization out of the available resources at minimum

cost. On the same theory, jivraj tea ltd. put emphasis.

Most probably the internal sources are used for fulfilling the job requirements. Make or buy strategy is

one of the part of recruitment.

3.5.3) What is Make or Buy Strategy?

1.Make strategy:- Preparing a men for the particular market environment for the particular

post/job by providing various kinds of induction and training programmes in the organisation.

Which helps the personnel to develop himself according to the needs of work environment

2.Buy Strategy:-

Hiring personnel from other competitor company for the post in which he has got experienced.

Sometimes for getting immediate result from market company uses the buy strategy.

3.6) Selection:

Selection is the process of choosing suitable candidates amongst all other candidates.


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Selection is a process of picking individuals out of the pool of job applicants with requisite qualifications

and competence to fill jobs in the organization. Or it can even be termed as a process of differentiating

between applicants in order to identify and hire those with a likelihood of success in a job.

Our recruitment is not based solely on academic achievements. We are seeking to appoint candidates whosatisfy a broad range of criteria in terms of their ability to make a positive and on-going contribution to

the organisation.

In jivraj tea ltd. selection means to select best candidates out of available candidates and give them

employment in the organization.

The process of selection according to jivraj tea ltd. is as given:

1. Preliminary Interview:-

This is like a screening out the applicants. In this step, company screens out those applicants who are

qualified, well experience and as per the requirements for that particular job. At this stage the necessary

basic information about the job and the company is given to applicants by the company. The company

Preliminary Interview

Application Blank

Employment Interview

Reference & Background Analysis

Selection Decision

Job Offer


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also collects some data from the candidates like education, skill and salary expected etc. If company

founds the applicants suitable for that particular job, the further proceed can be made to that applicant.

2. Application Blank:-

Application Blank is a device for collecting information from candidates. As company is not small firm,

it asks the applicants to fill the application blank. The application form contains following information:

1.Identifying Information:- Name, address, telephone no. etc.

2.Personal Information: - Age, sex, place of birth, marital status, dependents etc.

3.Physical Characteristics: - Height, weight, eye sight etc.

4.Family Background

5.Education: - Academic, technical and professional.

6.Experience: - Jobs held employees, duties performed, salary drawn etc.

7.References

8.Miscellaneous: - Extra circular activities, hobbies, games and sports, membership of

professional bodies etc.

3. Employment Interview:-

The next stage of selection process is employment interview. This one is done because interview can be

adapted to unskilled, skilled, managerial and professional employees. It allows a two-way exchange of

information, the interviewers learn about the applicants, and the applicant learns about the employer. The

employment interview can be following types.

In company arrange employment interview can be taken by one to one and panel method not the

sequential. In one-to-one interview, there are only two participants-the interviewer and the interviewee.

The sequential interview takes the one-to-one a step further and involves a series of interviews, usually

utilizing the strength and knowledge-base of each interviewer, so that each interviewer can ask question

in relation to his or her subject area of each candidate, as the candidate moves from room to room and

panel interview consists of two or more interviewers and the figure may go up to as many as 15 and

interview take place.

4. Reference and Background Analysis:-

In company reference is checked and placement is given to that applicant. The company also introduces

the applicant about the company and the necessary formalities are done here. The company asks the


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

policy.

5. Selection Decision:-

After all these process, all the managers and directors list down all applicants name and they start to

eliminate all applicant because of their unsuitable with the job and the most three suitable applicants will

be selected by all managers and directors.

6. Job Offer:-

The next stage followed by company in the selection process is the job offer. Job offer is made through a

letter of appointment. Such letter generally contains a date by which the appointee must report on duty.

After getting done with this lengthy process of selection they appoint the employee for training

for a specified period, for getting used to the work condition and company environment. After completing

training period successively company appoints the person for the particular post.

3.7) Training and Development:

Training is an act of increasing knowledge and skills of employees for doing a particular job.

In next page the training cycle is given which is followed at the jivraj tea ltd. Now we will first of all see

the meaning of training and development.

Training and development means it is an attempt to improve current or future employee

performance by increasing employees ability to perform through learning, by changing employees

attitude or increasing his or her knowledge and skills.

Training and development need = Standard performanceActual performance

After the employee is selected, the second step is to provide training to the employee. If employee is fresh

then he must require some training. But if the employee is coming from any other organization and he is

experienced enough, then he may not require training.


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For having development in the employees work skill, knowledge, the org. provides training.

There are 3 types of this, which are provided as according to the requirement of personnel.

1.Induction training.

2.Work training.

1. Induction Training:

Induction means as an introduction of the new employee towards the company and colleagues. It helps

the person to connect and contact with other employees of the organisation.

Two types of Induction take place in an organisation:

1.Formal Induction:

Formal induction meant by introducing the newly employed candidates to the organisation by

organizing a special function for them. So they dont have to waste their time in introducing one-

another self while they meet for work.


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2.Informal Induction:

Informal induction is also a type of introducing new employee but there is a slit change in making

introduction.

In this theory the employee is putted to the job place and asked to get introduced with the co-

workers himself.

2.Work Training :

The training related to the sales or any other work is decided and provided according to the work nature.

There may be two types of it and they are given below.

1.In house training

2.Outdoor training

In house training means the training related to the H.R. department, banking and general knowledge about

the general works of the organisation isprovided after identifying the needs of the workman.

Outdoor training is concerned with the training provided for the sales department boys for being efficient

in recognising and fulfilling the demand of the consumer.

So from here we can see that the training is given to the employees with the help of seminar and

multimedia projector and also the specialised person come and give the information about the sales.

3.8) Performance Appraisal:

Performance appraisal is the activity of setting up the parameters for employees and to evaluate the

performance of the employees and if he has not achieved the predetermine performance then the feedback

is provided to that employee.

After an employee has been selected for a job, has been trained to do it and has worked on it for a

period of time, his performance should be evaluated. Performance appraisal or merit rating is the


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mechanism to assess the contribution of all human resources working at each level of the organization

during a specific period of time.

3.8.1) Process of Performance Appraisal:-

The process of performance appraisal follows a set pattern and it consists of following steps:

At jivraj tea ltd. the process of performance appraisal is conducted to identify the works of various

employees. For that the records of their work is kept on a sheet and after the data are compared with

standards set by the company. So that, the organisation is able to take corrective decisions and imply

appropriate actions. The process of appraisal takes place after every 2months

3.9) Promotion of the employees:

Promotion refers to the advancement of an employee to a higher post carrying greater responsibilities,

higher status and better salary. It is an upward movement of an employee in an organization hierarchy.

Promotion can be defined as, The advancement of on employee to a better job, better job in

terms of greater responsibilities and status, greater skill and specially increase rate of pay or salary.

Record

Analysis

DecisionMaking

Action


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Promotion refers to advancement of an employee to higher post carrying greater responsibilities,

higher status and better salary. It is the upward movement an employee in the organization hierarchy, to

another job commanding greater authority, higher status and better working condition. When an employee

is assigning a higher level job with more pay and power, he is said to be promoted. Promotion may be

temporary or preeminent depending upon the needs of the organization. When an employee is assign to a

higher level job without increase in pay, it is called dry promotion.

At jivraj tea ltd, the promotion is provided after appraisal. If the employee has performed very

well particularly at his post and he is efficient enough to tackle greater responsibilities the promotion can

be in existence. It takes place after every appraisal of employee work (2 months).

3.10) Transfer:

A transfer is a horizontal or lateral movement of an employee from one job, section, department, shift,

plant or position to another at the same or other place where his salary, status and responsibility are the

same.

A transfer involves a change in the job accompanied by a change in the place of the job of an

employee without a change in responsibilities or remuneration. A transfer differs from a promotion in that

the latter involves a change in which a significant increase in responsibility, status & income occurs, but

all these elements are stagnant in the former. Another difference is that transfers are regular & frequent &

promotions are infrequent, if not irregular.

At jivraj tea ltd, transfer occurs frequently. The main reason of transfer is to adjust the work

force. If there is any shortage of employee in one department & is excess in another department then

Director's

office

For providing

direction

Training room

here, training is

conducted.

Meeting room

Here, the

meetings are

done onrequirement.


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transfer is made. Another reason of transfer is to make the employee more versatile. Transfer is most

frequent in lower level of employees.

3.11) Wage and Salary Administration:

Wage represent hourly rate of pay and salary refers to the monthly rate of pay, irrespective of the number

of hours out in by an employee. Wages and salary are subject to annual increments. They differ from

employee and depend upon the nature of job, seniority and merit.

Employee compensation is a vital part of human resource management. Wages, salaries & other forms of

employee compensation constitute a very large component of operating costs. One of the biggest factors

affecting industrial relation is the salary or wage-the compensation an employee receives for a fair days of

work. No organization can except to attract and retain qualified & motivated employees unless it pays

them a fair compensation. Employee compensation can be classified into two categories:

1) Primary Compensation (Basic pay)

2) Supplementary Compensation

3.11.1) Methods of Wage Payment:

There are two types of wage payments. They are:

1.Time Wage System

2.Piece Wage System

Now atjivraj tea ltd, both the Time Wage System & Piece Wage System is used for calculating

the salary of the employees. It means the salary of the employee is fixed but he/she can earn extra piece of

salary by performing well at his work through the incentive system.

3.11.2) Incentive:

Incentive is what, which is provided after the salary for your good piece of work. Incentives are provided

due to the increment in the moral of employee and to get batter work done every time to time.

Incentive administration:

The incentive administration is basically based upon the work or performance of employee at his field.

The techniques of providing incentive can be of two types.

1.Fixed incentive plan

2.Slab wise incentive plans


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1.Fixed incentive plan: In this system the incentive provided is same at all levels of product

selling. It means the incentive is same when the sales vary at various levels.

2.Slab wise incentive plans: In this system the incentive varies as total sale of the employee

vary. Basically the incentive is increased after every increment in the total sales.

3.12) Employee Welfare:

Anything which is paid over and above, the wages whether social benefits or other perquisites are called

employee welfare.

In simple words, employee welfare or labour welfare means The efforts to make life worth

living for workmen. Welfare means faring or doing well. It is a comprehensive term, and refers to the

physical, mental, moral and emotional well-being of an individual. Further, the term welfare is a relative

concept, relative in time and space. It, therefore, varies from time to time, from region to region and from

country to country.

Labour welfare is a term which must necessarily be elastic, bearing a somewhat different

interpretation in one country from another, according to the different social customs, the degree of

industrialization & educational level of workers.

There are two types of welfare:

1.Intra-mural: Service provided within the establishment

2.Extra-mural: Service provided outside the establishment

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

etc.

Extra-mural: Since company is a manufacturing industry in which the employees of lower level are on

contract basis & there is no need to provide any extra-mural welfare activities but then also some extra-

mural activities includes of transport, holiday homes, leaves, travel facilities etc.

Now, we will have a quick look at the facilities provided at jivraj tea ltd. for the welfare of the employees.


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FACILITIY DISCRIPTION

Uniform Couple of uniforms are given on half yearly basis to all employees.

Medical Insurance mediclaim worth Rs. 1lakh provided.

Incentive and

bonus

Incentive is provided on per 10kg sale and bonus is provided when the given

target is achieved.

Rewards If the performance is excellent than employee will be rewarded.

Holidays Two holidays are provided accept Sunday.

(Working days - 23)

3.13) HR Audit:

Human Resource Audit is a process or a tool which helps assess effectiveness of human resource function

of an organization.

It is an important test of managerial control. It involves examination and verification of accounts

and records. Human Resource audit implies critical examination of policies, programmes and procedures

in the area of human resource management. It is a periodic review to measure the effectiveness of human

resource management and to determine the steps required for more effective use of human resources.

Human resource audit involves a formal, systematic and in depth analysis, investigation and comparison.

The primary aim of human resource audit is to determine whether the human resource policies and

practices are consistent with organizational objectives.

HR audit is very much useful to achieve the organizational goal and also is a vital tool which

helps to assess the effectiveness of HR functions of an organization.

At jivraj tea ltd, HR audit is done on quarterly basis in which the performance of an employee is

evaluated and calculated. After those decisions are made whether the employee should be rewarded or

punished.


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3.14) Scope of Human Resource Audit:

The scope of human resource audit is very wide. It covers the management of people at all levels. It is not

limited to a review of the performance of human resource department. Human resource audit can be

conducted to evaluate the policies procedures, and programmes of human resource management.

Generally, no one can measure the attitude of human being and also their problems are not

confined to the HR department alone. So it is very much broad in nature. It covers the following HR

areas:

1.Audit of all the HR function.

2.Audit of managerial compliance of personnel policies, procedures and legal provisions.

3.Audit of corporate strategy regarding HR planning, staffing, remuneration and other HR

activities.

4.Audit of the HR climate on employee motivation, morale and job satisfaction.

.

3.15) Human Resource status:

Total employees in jivraj tea ltd. 60

Average salary of each employee 7000/-

Total salary 4,20,000/-


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3.16) SOCIAL WELFARE

Blood donation camp:

Internal R.O.plant:


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Social seminars:


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FINANCE DEPARTMENT


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INDEX

SR. NO. PARTICULARS4.1 Introduction to finance

4.2 Objectives of finance management

4.3 Function of finance manager

4.4 Sources of long term finance

4.5 Working capital management

4.6 Inventory management

4.7 Leverages

4.8 Balance sheets

4.9 Ratio analysis


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4. FINANCE DEPARTMENT

4.1) Introduction to Finance:

Finance is the lifeblood and nerve centre of business, just as circulation of blood is essential in human

body for maintaining life, finance is very essential tool for smooth running of business. It has been rightly

termed as universal lubricant, which keep the enterprise dynamic.

Finance is well-known as the lifeblood of any business. It may be defined as the base on which

the whole business structure depends on the finance. Once the business is started it needs funds for

production of goods and services as well as their distribution. Finance is the master key which provides

all the sources for activities of productions, distribution etc.

4.2 Objectives of Finance Management:

The basic objectives of finance management are as follows:

Maintenance of adequate liquid asset in a firm:-

Maintenance of adequate liquid asset in a firm is one of the basic objectives of financial management. The

objective implies that financial management sure there is adequate cash in the hands of the firm to meet

its obligations.

Profit maximization:-

Profit maximization is one of the important objectives of finance management. Those objectives imply

that financial management should ensure that the profit of the firm is maximized. The earnings of profit of

the firm can be maximized either by increasing output for a given input by reducing the cost of producing

for given output. The objective of profit maximization can be stated in the forms of sales or return on

investment of earning per share. The concept of profit maximization implies that any finance decision

would be evaluated on the basis of it overall contribution to the profit or earning of its enterprise.

Wealth maximization:-

Maximization of wealth means maximization of wealth of company i.e. the net present value of the

company, over the long run; the wealth maximized or created by the company is reflected in the market

value of equity share of the company. The gross present worth of a course of action is equal to the

company. The gross present worth of a course of action is equal to the capitalized value of the flow of the


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future expected benefits, discounted or capitalized at the rate, which reflect their certainty or uncertainty.

Wealth or present worth is the difference between the gross present worth and the amount of capital

investment required to achieve the result. Any financial action which created wealth or which has net

present worth zero is desirable and should be under taken.

4.3Function of Finance Manager:

1.As A staff Officer

2.As A line Officer

1.As A Staff Officer: -

Staff officer is an expert in his field. He has the authority to think and tender advice to higher

authority. Financial manager is an expert in the field of finance management. Certain financial decisions

fall under the domain of the Board of Directors. His role as a staff officer confers on him the privileged to

sit right into the drives chamber.

Financial manager is consulted by the board before making decisions on the following subject matters:-

1- Advisability of launching a new project.

2- What should be the capitalization of a new project?

3- Design of capital structure or use of financial leverage.

4- Incase of merger, amalgamation, integration, takeover etc.

5- While making dividend policy decision and declaration of dividend.

6- At the time of negotiation with the leaders of employees union pertaining to their demand

2.As A Line Officer: -

As a financial manager he has to perform two types of function :-

1. Managerial function

2. Administrative function

Managerial Function: -

1- Financial Planning

2- Organizing of finance department

3- Financial co-ordination

4- Financial control


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5- Management of working capital

6- Management of fixed assets

7- Management of earnings

1.Financial Planning: -

It is the fundamental and primary function of financial management. It decides in advance how

much fund will be needed, from which sources and by which mean needed funds will be raised.

For the successful implementation of long and short term operational plans long term and short

term funds are needed. Therefore, for effective acquisition and uses of funds financial planning is

needed.

2.Organizing of Finance Department: -

It is the function of the financial management to create such an organization. Generally in a large

corporate unit under the headship of finance manager two distinct posts namely treasurer and

financial controller are created. The responsibility of the treasurer and his assistants is to receive

cash, make payments, to collect fund from debtors etc. while the responsibility of controller is to

undertake financial planning, tax planning, to receive financial report, to prepare financial budget

and to evaluate and control the financial situation.

3 -Financial Co-Ordination:-

For the smooth functioning of different departments financial co-ordination between different

departments is highly essential, so that the entire department get the required fund in time.

Increase in sales will affect the financial requirements of production, materials and human

resource department too.

4-Finance Control:-

Controlling is the fourth important managerial function of financial management. With the help

of ratio analysis, fund flow analysis, cash flow analysis and break-even analysis it evaluates the

present financial situation. Financial control includes control over liquidity, cost, debtors, credit

terms, collection from debtors and project cost. Generally budgets are used as tools of cost

control.

5- Management of Working Capital: -


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Management of working capital needs here special mention and attention as managerial function

because plenty of time is spent by the financial manager in solving working capital problems. It

involves cash management receivables management and stock management. For effective working

capital management it prepares cash budget, takes policy decisions regarding credit terms, credit

worthiness of customer, collection from debtors and inventory control.

6- Management of Fixed Assets: -

For profitable investment and efficient management of fixed assets capital budgeting is an

important function of financial management. It helps in making most profitable investment decisions

and exercising control over fixed assets. It also includes maintenance of fixed assets in proper

condition.

7- Management of Earnings: -

It involves tax planning, dividend decisions and appropriation of profit. For the maximization of

wealth management of earnings is very important. By proper tax planning tax liability can be

reduced to the minimum and proper appropriation of net profit increases internal resources for future

expansion.

Administrative Function: -

1- Maintenance of accounts books

2- Accounting work

3- Control over cash receipts

4- Payment of cash

5-Prepare BRS

6- Maintenance of important document

7- Maintenance of financial information

8- Financial reporting

1- Maintenance of Accounts Books: -

It sees that accounts books as required by the Company Act are properly maintained.


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2- Accounting Work:-

The responsibility of writing the books of accounts regularly is assigned to particular personnel and care is

taken to see that accounts books are regularly written and audited.

3-Control over Cash Receipts: -

It exercises control over cash receipts from debtors and cash sales and safety measure are taken for cash,

so that misuse and misappropriation of fund is prevented.

4- Payment of Cash: - It makes payments to creditors, share holders, debenture holder etc. and maintains

proper records of payments.

5- Prepare BRS: - So that accounting entries and bank balance can be verified. Many cheques are daily

deposited in the bank for collection and many are issued for payments to the creditors. Therefore, it

becomes difficult to verify the correctness of bank balance. For that purpose, it is essential to prepare bank

reconciliation statement.

6- Maintenance Of Important Documents:- Share certificate, debenture certificate, insurance policies,

contract deeds entered into with different parties like trade union, suppliers etc. are the important

documents which require to be maintained safely.

7- Maintenance of Financial Information:- It maintains financial records containing financial

information providers in the case of need to the management for decision making. Now-a-days financial

information is stored in electronic storage device.

8- Financial Reporting: - It prepares financial reports in proper form and supplies to higher level

management for evaluating the present situation, its trend and making proper decisions.

8.4 Sources of Long Term Finance:

In a broad sense, sources of long term capital in general can be divided into two types: one is the internal

sources and second is the external sources.

1. Internal Sources: -

1- Bonus shares

2- Reserve and surplus

3- Depreciation reserve

4- Provision for taxation


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5- Sundry provisions

2. External Sources: -

1- Equity shares

2- Rights shares

3- Preference shares

4- Debenture or bonds

5- Term loans

Jivraj tea ltd. are using OWN FINANCE as the source of long term finance and also take TERM LOAN

as a source of long term finance from ICICI BANK of Rs.70,44,302 in 2005-2006 and of Rs.

58,50,419.84 in 2006-2007.

4.5) Working Capital Management:

1.Sources of Working Capital Finance: - Two types of sources can be tapped for financing

working capital requirements- one is the short term and second is long term sources.

1- Short Term Sources:- 1- Trade credit

2- Accruals exp.

3- Deferred income

4-Public deposit

5-Inter-corporate deposit

6-Short term loans from financial institution

7- Commercial paper

8- Factoring

9- Bank finance

2-Long Term Sources: - 1- Equity shares

2-Right shares


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3- Preference shares

4- Debenture or bonds

5- Term loan

The short term sources of working capital finance of jivraj tea ltd. is SHORT TERM LOAN from YES

BANK and there is no any sources of long term working capital finance in jivraj tea ltd.

4.6) Inventory Management:

Another component of working capital is inventory. The factory is a very big kitchen which requires

hundreds or thousands of items for manufacturing or selling the different products. Such items included

spare parts, finish goods and others. For reducing the cost and increase the profitability by optimum

investment in inventory, its efficient management is very important.

Need For Maintaining Inventory: -

The need for maintaining inventory arises because of following reasons:

1.For maintaining the continuity of business processes.

2.For maintaining the continuity the sales.

3.To maintain the production processes.

4.Precautionary motive.

5.Speculative motive

Objective of Inventory Management: -

The main objective of inventory management or control can be stated as under:

1. To ensure supply of materials for maintaining the continuity of production.

2. To keep sufficient quantity of materials during scarcity.

3. To maintain the continuity the sales by keeping sufficient stock of finished goods

4. To see that optimum level of investment is made in inventory.

5. To make efficient use of available capital.

6. To store the different items scientifically.

7. To reduce the cost associated with inventory like opportunity cost, insurance cost, wastage etc.

Inventory Control: -


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Inventory control means the task of determining optimum level of inventory and to see that it is

maintained at that level and to take proper safety measures and keep accounting records of acquisition

and uses of inventory. The popular proverb A leak can sink a ship applies to inventory management.

Techniques Of Inventory Control:-

1- Economic order quantity (EOQ) - a) Trial and error method

b) Graphic method

c) Formula method

2- Reordering point

3- Safety stock

4- ABC analysis as a technique of monitoring and control of inventory

5- Ratios and indexes.

4.7) Leverages:

The term leverage means the ability of a firm in employing long term funds having a fixed cost to

enhance return to owner. There are three types of leverages:-

A) Operating Leverage

B) Financial Leverage

C) Combined Leverage


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LEVERAGES OF JIVRAJ TEA LTD

(JIVRAJ TEA LTD)

Particulars 2009

Rs.

2008

Rs.

Sales 718,309,649 703,267,533

(-)less: variable cost 643,277,913 634,764,791

Contribution75,031,736 68,502,742

(-)less: fixed cost 41,971,865 30,271,146

EBIT

{Earnings before interest tax}

33,059,871 38,231,596

(-)less: interest 8,369,140 8,745,999EBT

{earnings before tax}24,690,731 29,485,597

(-)less: tax 11,654,275 9,741,318

EAT{earnings after tax} 13,036,456 19744279

DOL= Contribution

EBIT

Contribution

EBIT

= 75,031,736

33,059,871

68,502,742

38,231,596

= 3.04 2.32

DFL EBIT

EBT

EBIT

EBT

= 33,059,871

24,690,731

38,231,596

29,485,597= 1.34 1.30

DCL DOL*DFL DOL*DFL

= 3.04*1.34 2.32*1.30

= 4.07 3.02

1.Operating Leverage: -

Operating leverage defined as the firm ability to use fixed operating cost to magnify the effect of

changes in sales on its earnings before interest and tax.

OPERATING LEVERAGE = CONTRIBUTION / EBIT

a) Degree of Operating Leverage = % Change in EBIT / % Change In Sales

b) Degree of Operating Leverage = Q (P-V) / Q (P-V)-F

Where, Q= quantity produce and sold


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P= selling price

V= variable cost

F= fixed cost

Operating leverage ofjivraj tea ltd. =2009-10=3.04

2010-11=2.32

2.Financial Leverage: -

Financial leverage concern with the effect of change in EBIT on the earnings available to equity

holders. It is defined as the ability of a firm to use fixed financial charges to magnify the effect of

changes in EBIT on the earnings per share.

FINANCIAL LEVERAGE = EBIT / EBT

a) Degree of Financial Leverage = % change in EPS / % change in EBIT

b) Degree of Financial Leverage = EBIT / (EBIT-I)Dp / (1-T)

EARNING PER SHARE = (EBIT-I) (1-T)Dp / N

Where, I= interest

T= tax N = no. of equity share

Dp= dividend on preference share

Financial leverage ofjivraj tea ltd.= 2009-10=1.34

2010-11=1.30


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3.Combined Leverage: -

Combined leverage can be defined as the potential use fixed cost, both operating and financial

which magnifies the effect of sales volume changes on the EPS of the firm.

COMBINED LEVERAGE = CONTRIBUTION / EBT

DEGREE OF COMBINED LEVERAGE = % CHANGE IN EPS / % CHANGE IN SALES

Combined leverage ofjivraj tea ltd.= 2009-10=4.07

2010-11=3.02

Income Statement:

PARTICULAR AMOUNT

SALES XXXX

(-) VARIABLE COST XXXX

= CONTRIBUTION XXXX

(-) FIXED COST XXXX

= EBIT XXXX

(-) INTRESET XXXX

= EBT XXXX

(-) TAX XXXX

= EAT XXXX


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4.8) COMPARATIVE ANALYSIS OF P&L A/C AND BALANCE SHEET

JIVRAJ TEA LTD.

PROFIT & LOSS ACCOUNT FOR YEAR ENDED ON 31-03-2011

Particulars 20010-11Rs.

2009-10Rs.

Income:

Sales & other income 718,309,649 703,267,533

Total 718,309,649 703,267,533

Expenditures:

(Increase)/decrease in finished goods stock (4,027,271) 5,682,609

Consumption of raw materials 426,879,163 331,234,665

Purchase of traded materials 127,446,065 235,278,639

Manufacturing expenses 62,373,645 42,459,006

Payment and benefits to employees 22,851,332 20,554,644

Administrative expenses 10,207,459 9,349,019

Selling and distribution expenses 3,727,708 5,237,837

Financial charges 31,752,242 20,922,127

Depreciation 25,255,152 22,191,976

Depreciation withdrawn from revaluation reserve (12,164) 000000000

25,242,988 22,191,976

Loss/(Profit) on sale o assets 202,043 615,693

Total 706,655,374 693,526,215

Profit before tax adjustment 11,654,275 9,741,318

Less: current tax 1,307,000 1,003,000

Less: deferred tax 565,209 (1,521,825)Less: fringe benefit tax 200,000 201,000

Profit after tax 9,582,066 10,059,143

9,582,066 10,059,143

Short provision for taxation in earlier year (85,632) 62,133

Net profit 9,496,434 10,121,276

Balance brought forward 36,280,814 31,512,118

Total 45,777,248 41,633,393

APPROPRIATION:

Proposed dividend 4,575,050 4,575,050

Tax on dividend 777,530 777,530

Transfer to general reserve 1,300,000Balance carried to balance sheet 39,124,668 36,280,814

Total 45,777,248 41,633,393

EPS basic 13.02 11.72


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JIVRAJ TEA LTD.

BALANCE SHEET AS AT 31ST

MARCH, 2011

Particulars2010-11

Rs.

2009-10

Rs.SOURCES OF FUNDS:

Shareholders funds :

a) Share capital 36,600,400 36,600,400b) Reserves & surplus 86,449,185 54,104,186

123,049,585 90,704,586

Loan funds:a) Secured loans 191,786,177 179,959,987

b) Unsecured loans 63,144,241 42,209,241

254,930,418 222,169,228

Deferred tax 7,247,350 6,682,141

TOTAL 385,227,353 319,555,955

APPLICATION OF FUNDS:

Fixed assets:Gross block 302,047,710 257,942,515

Less: depreciation 126,653,373 101,796,797

Net block: 175,394,337 156,145,718Capital W.I.P including advances 16,737,778 9,374,785

192,132,115 165,520,503

Investments : 10,439,516 2,670,000

Current assets, loans and advances:a) Inventories 43,128,771 45,669,219

b) Sundry debtors 100,977,782 92,819,847

c) Cash and bank balances 5,002,498 2,555,511d) Loans and advances 65,204,465 54,701,114

214,313,516 195,745,691

Less: current liabilities & provisionsa) Current liabilities 8,909,203 23,354,923

b) Provisions 22,748,075 21,025,316

31,657,278 44,025,316Net working capital 182,656,238 151,365,452

TOTAL 385,227,353 319,555,955

Ratio of Jivraj Tea Ltd,2010-2011

1. Current ratio


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Current ratio= Current assets

Current liability

2.Quick ratio

Quick ratio = Quick assets

Current liability

3. Proprietary ratio

Proprietary ratio = shareholders fund

Total assets

Companies shareholders fund Total assets Ratio

Jivraj Tea Ltd. 123,049,585 416,885,147 0.30:1

Company Current assets Current liability Ratio

Jivraj Tea Ltd. 214,313,516 8,909,203 24.06:1

Companies Quick assets Current liability Ratio

Jivraj Tea Ltd. 214,313,516 8,909,203 24.06:1


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4. Fixed assets to Proprietary ratio

Fixed assets to Proprietary ratio = fixed assets

Share holders fund

Companies Fixed assets shareholders fund Ratio

Jivraj Tea Ltd. 192,132,115 123,049,585 1.56:1

5. Long term fund to fixed assets ratio

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

Fixed assets

Companies Long term debts Fixed assets Ratio

Jivraj Tea Ltd. 291,530,818 192,132,115 1.52:1


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6. Net profit ratio

Gross profit ratio = net profit after tax X100

Net sales

7. Debtors turnover ratio

Debtors turnover ratio= debtors

Net sales

Companies debtors Net sales Ratio

Jivraj Tea Ltd. 100,977,782 718,309,649 0.14 times

8. Return on shareholders fund

Return on shareholders fund = net profit after tax X 100

Shareholders fund

Companies Net profit after tax Net sales Ratio

Jivraj Tea Ltd 39,124,668 718,309,649 5.45%


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9. average collection period

Average collection period = 12 month

Debtors turn over ratio

Companies Net profit after tax shareholders fund Ratio

Jivraj Tea

Ltd.

39,124,668 123,049,585 31.80%

Companies Particulars Ratio Month

Jivraj Tea Ltd 12 month 0.14 times 86 months


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Marketing & Sales Management


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INDEX


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WHAT IS MARKETING?

Marketing deals with identification and meeting human social needs. Marketing is typically seen

as the task of creating, promoting and delivering goods and services to customers and business.

DEFINITION OF MARKETING:-

A social definition of marketing is marketing is a societal process by which individuals

and groups obtain what they need and want through creating, offering, and freely exchanging

products and services of value with others.

ORGANISATIONAL STRUCTURE:


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TYPES AND CLASIFICATION OF PRODUCTION AND THEIR

SALES VOLUME:-

PRODUCTS

The following are the products of Jivraj Tea Ltd.:

J9 Tea

Jivraj 9 Tea

Anokhi Tea

Jivraj Bhagal Cha

Lajawab Sugar

tea & Lajawab tea bags


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Hrm & Finance-jivraj Tea

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Transcript of Hrm & Finance-jivraj Tea