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InTRODUCTION
1
1.1) INDUSTRIAL DETAIL
The Electronics Industry in India took off around 1965 with an
orientation towards space and defense technologies. This was rigidly controlled and
initiated by the government. This was followed by developments in consumer
electronics mainly with transistor radios, Black & White TV, Calculators and other audio
products. Colour Televisions soon followed. In 1982-a significant year in the history of
television in India – the government allowed thousands of colour TV sets to be
imported into the country to coincide with the broadcast of Asian Games in New Delhi.
1985 saw the advent of Computers and Telephone exchanges, which were succeeded by
Digital Exchanges in 1988. The period between 1984 and 1990 was the golden period for
electronics during which the industry witnessed continuous and rapid growth.
From 1991 onwards, there was first an economic crises triggered by the Gulf War which
was followed by political and economic uncertainties within the country. Pressure on the
electronics industry remained though growth and developments have continued with
digitalization in all sectors, and more recently the trend towards convergence of
technologies.
After the software boom in mid 1990s India's focus shifted to software.
While the hardware sector was treated with indifference by successive governments.
Moreover the steep fall in custom tariffs made the hardware sector suddenly vulnerable to
international competition. In 1997 the ITA agreement was signed at the WTO where India
committed itself to total elimination of all customs duties on IT hardware by 2005. In the
subsequent years, a number of companies turned sick and had to be closed down. At the
same time companies like Moser Baer, Samtel Colour, Celetronix etc. have made a mark
globally.
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1.2) COMPANY DETAIL
Name of the company: SANGAM ELOCTRONICS
Registration No.; U17119GJ1991PTC015213
Date: 14/3/1991
Registered Office: 8, parekh wadi,katargam G.I.D.C (old)
Name of the owner 1.) Arvindbhai sakariya
2.) Harikrushan Ankoliya
Company Secretary Rashik prajapati
Bankers: 1. Bank of Baroda
2. Allahabad Bank
3. State Bank of Saurastra
4. Bank of India
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1.3) HISTORY OF COMPANY
Sangam E lec t ron i c s Company i s a un ique and p ionee r ing
o rgan i za t i on i n va r i ous Power p roduc t s s i nce 1994 .
Sangam e l ec t ron i c s co . i n t roduced l a t e s t t e chno logy o f
power p roduc t s t o fu l f i l l t he f r equen t power f a i l u r e d i s t u rb ing
no rma l l i f e . P r e sen t l y , mos t o f t he homes , o f f i c e s and i ndus t r i e s a r e
equ ipped w i th soph i s t i c a t ed e l e c t r i c a l equ ipmen t s l i ke t e l ev i s i on .
Compu te r , P r i n t e r , f ax , s e rve r , DLC, t ex t i l e & d i amond e l ec t ron i c s
mach ine ry wh ich a r e h igh ly s ens i t i ve t o power f l uc tua t i on .
Managemen t o f s angam e l ec t ron i c s co . c ame up w i th a
v i s i on t o de l i ve r be s t o f i t s k ind t e chno logy by de s ign ing i nnova t i ve
p roduc t s . Keep ing i n v i ew to ge t a s t ab l e & c l ean supp ly , s angam
e l ec t ron i c s co . have deve loped a r ange o f power cond i t i on ing
equ ipmen t s
Vision:
Ou r company ph i l o sophy ha s a lways focused on s a t i s f ac t i on
w i th uncompromis ing i n t eg r i t y . Sangam e l ec t ron i c s co . c a r r i e s
p roduc t s and s e rv i ce s w i th t he f i ne s t va lue s and qua l i t y i n t he
ma rke t . To mee t ou r cus tomer ’ expec t a t i ons , we ensu re t ha t ou r s a l e s
peop l e and cus tomer s e rv i ce r ep re sen t a t i ve s gene ra t e en thus i a sm and
r e spond w i th ex t r a e f fo r t s i n add re s s ing ou r cus tomer s ’ needs Our
peop l e a r e t r a i ned t o be open and hones t w i th you . We a r e a lways
l ook ing fo r new and be t t e r ways t o improve ou r bus ine s s
r e l a t i onsh ip . Wi th ou r con t i nued succe s s and ha rd work , ou r v i s i on
ha s becomes r ea l i t y !
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Mission:
We a r e an e l e c t ron i c equ ipmen t manufac tu r i ng , s a l e s and
s e rv i ce company commi t t ed t o c r ea t i ng wea l t h fo r a l l ou r cus tomer s .
We wi l l s t r i ve fo r l e ade r sh ip i n ou r chosen p roduc t and
s e rv i ce s t o ou r cus tomer . We wi l l s e ek p ro f i t ab l e g rowth by
i nnova t i ve app l i c a t i on o f s c i ence and t e chno logy .
We wi l l pu r sue exce l l ence i n a l l t ha t we unde r t ake and
t ake s t eps t o con t i nuous ly improve . we w i l l t ake r e spons ib l e c a r e o f
t he env i ronmen t a round u s and improve t he qua l i t y o f l i f e i n t he
commun i t i e s we ope ra t e i n .
Team work:
Toge the r eve ryone ach i eves more . Teamwork and succe s s go hand -
in -hand
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Excel lence:
W e o f f e r n o t h i n g b u t t h r o u g h a f o c u s o n d e l i v e r i n g h i g h q u a l i t y s e r v i c e
a n d c o n t i n u o u s l y i m p r o v i n g o u r s e l v e s a n d o u r w o r k .
Integri ty:
In t eg r i t y i s nece s s i t y - hones ty ; open commun ica t i on and
p ro fe s s iona l i sm d r ive Each and eve ry i n t e r ac t i on .
Dedicat ion:
E v e r y i n d i v i d u a l i s c o m m i t t e d t o t h e s u c c e s s o f e a c h i n t e r a c t i o n t o
t h e b e s t o f H i s a b i l i t y .
1.4 ) BRANCHES AND LOCATION
8, parekh wadi, opp.kasa nagar,
Nr.bada ganesh temple,
Sangam co. road.katargam G.I.D.C (old)
Surat -395 004. (GUJ)
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1.5 ) ORGANISATIONAL STRUCTURE
B.R.C.M COLLEGE OF BUSINESS ADMINISTRATION
C.E.O
Managing Director
7
1.6 ) FUTURE PLANS
SANGAM ELE CO. Wan t t o expand t he i r bus ine s s . t ey wan t
t o s a l e t he i r p roduc t i n bang l adesh ,nepa l . They a l so wan t t o
i nc r ea se p l an t c apac i t y and t hey have a l r e ady s t a r t ed cuns t ruc t i on
be s ide t he i r p l an t .
B.R.C.M COLLEGE OF BUSINESS ADMINISTRATION
ProductionManager
MarketingManager
H.RManager
FinanceManager
Manager ManagerManagerManager
workerworkerworkerworker
Marketing department
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2.1) INTRODUCTION
Market: -
The common usage of market means a place where goods are bought or sold. In
its strict meaning market need not necessarily mean a place of exchange.
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Marketing: -
Marketing is concerned with selling but now a days the concept has enlarged its
meaning. We know that a product is provided with the aim of sale. The aim producer
totally depends on marketing. Without marketing no unit can run. It covers marketing
research, new product development and so many other important functions.
“Marketing is the process of discovering and translating consumer needs and wants
into product and service specifications, creating demand for these products and services
and then in turn expanding this demand.”
In SANGAM marketing management has the task of regulation of level, liming and
character of demand in a way that will help the organization to achieve its objectives. The
aims of producer totally depend on marketing, without marketing not a single unit can
run.
“SANGAM” marketing philosophy aims not to sell electronics but to help customer by
education them the modern technology and the use of electronics for optimum crop out.
In SANGAM marketing is done by head office at Surat. SANGAM has nationwide
marketing network and has covered all major stated in the countries.
2.2) MARKETING DEPARTMENT STRUCTURE
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2.3) TYPES & CLASSIFICATION OF PRODUCT
The products may be classified into the following categories:
1. Industrial Goods: -Industrial goods are those, which are used for further production of
goods or services, and include capital goods, raw materials, component parts
etc. These are used as input in producing other products.
2. Consumer Goods:-Consumer goods are meant for final consumption by consumers and
not for sale. SANGAM Pvt. Ltd. is producing industrial goods, which
indirectly affects the consumers.
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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
SANGAM Engineering Pvt. Ltd.
L E N G T H
WIDTH
UPS Stabilizer CVT Lights Battery
On line
Off line
Voltage Stabilizer
Servo stabilizer
Constant
Voltage
Transformers
Rechargeable Tourch emergencyTourch
Dry Battery
Water Battery
Sangam co. Electronic product production and sales
Year Production (Lack ) Sales (Lack )2006-07 22.45 20.152007-08 27.47 26.452008-09 33.85 34.902009-10 39.35 38.802010-11 44.50 42.75
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2.4) Details of competitors
SANGAM generally does not face any stiff competition as the Generally competition
exists in free trade. Some of the competitors of SANGAM are:
Sr. no Name
1 HOME AUTOMATION (INDIA) PVT.LTD
2 EVEREST ENTERPRISES
3 KELKON
4 ULTRON
5 NEW POWER PLUS
2.5) PRODUCT OF THE COMPANY
(1) UPS
Off line ups Features:
DC start function
Short circuit protection
Both audible and
indication lamp alarm
Function
Over temperature
protection
Over load protection
Intelligent battery
management
Compatible with small
generator
Auto restart
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Hot swappable battery
On line ups Features:
•Wide input voltage window
• Intelligent CPU control
• Protection for short circuit
and overload
• Both audible and indication
lamp alarm
Functions
• Intelligent battery
management
• Dry contact with monitoring
software
• Auto restart
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(2)Servo Stabilizer &
CVT
• Optional Futures:
• By pass facilities
• Generator compatible
circuit
• Isolation transformer / Ultra
isolation transformer
at o/p
• Ammeter : To see load
current
• Digital voltmeter & Digital
Ammetercification
Servotabilizer
(3) CVT
• Adjustment: Output voltage
adjustment of ± 5V per
phase
• Short circuit & overload
protection by meens of
MCB/MCCB/SFU
• Overvoltage &
Undervoltage trip O/P power
on with specified time delay.
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2.6) CUSTOMER SEGMENTATION & TARGET MARKET
Market segmentation is an effort to increase a company’s precision marketing.
The starting point of any segmentation discussion is mass marketing.
“Market segmentation consists of taking the total heterogeneous market for a
product & dividing it in to several sub-markets or segments, each of which tends to be
homogeneous in full significant aspects.”
Business market can be segmented with some variables employed in consumer
market segmentation, such as geography, benefits, sought & usage rate. Yet business
marketer can also use several other variables.
Buyer’s behavior is never the same & the market could be segmented on the basis
of buyer’s characteristics. The producer must understand the behavior of his customers &
adopt different strategies according to the needs & characteristics of his customers, so that
physical & human resources of the enterprise may be fully exploited & marketing
objectives may be fully meet. There are three types of marketing strategies viz.
There are certain criteria for market segmentation. If industrial market is divided
by industry, the company size & location the criteria is called demographic. If the
industrial market is divided according to technology, user or non-user status & customer
capacities, the criteria are called as operating variables. The other criteria are purchasing
approaches, situational factors & personal characteristics etc.
Sangam produces electronics machinery etc. this product is purchased by any
company of firm which use high voltage machinery therefore there is no certain basic
criteria dividing the market.
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2.7) DISTRIBUTION NETWORK
SANGAM handles its distribution of electronics by making division situated at surat.
The department of electronics guides the management of SANGAM for the distribution of
electronics product. Products, which are produced at SURAT, are dispatched directly to the
customers. It involves distribution channel also, SANGAM has develop for distribution of
electronics products.
Channel of Distribution
PRODUCER DEALER CUSTOMER
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Mode of Distribution: -
Proper planning and close monitoring enabled the society to dispatch it is allocation from plant
site to various destinations by optimal use of rail and road mix.
1. Railway: - major part of all types of products almost 79% is transported through railway
line to the states like Maharashtra, Madhya Pradesh, Punjab, Haryana and Uttar Pradesh.
2. Roadways: - the dispatch of all types of products through roadway is limited to the state
like Gujarat, Rajasthan, Madhya Pradesh, and many other states
Is round around 21%.
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2.8) SALESE PROCEDURE
Step:1
First Sangam do advertisement in news paper, internet, and many more sources. Then customer send inquire by mail or come directly at company to know about
machine feature, price, etc. Then If customer get satisfaction about product then place order. In order they
mention quantity of machine, price or machine, discount and Terms and condition about delivery of goods.
This all are fixed in Rate contract so, no require every time deal with them at the time of sales.
Step:2 After getting order from customer then they check product in stock, if stock is
available then they follow delivery procedure otherwise they put order in pending list.
This all information are knows from the MRP system
Step:3 If stock is available then they prepare challan for that and also make bill for
customer. There are two type of billing I) Excisable Goods II) Non-Excisable
1. Retail invoice2. Tax invoice
If customer is out of Gujarat then they make Retail invoice or customer have not Sales Tax Registration Number .When customer in Gujarat then they make Tax invoice
Step:4After completing invoice procedure then now time to dispatch goods. So if
Customer near to Factory location then they send local or special Tempo, but if Customer very far from the Location (out of State) then send through Transport Company by Train, by Truck. So for that they first book space in Transport company after they get LR(Lori Receipt)
Step:5 After complete 4th step then send goods and dispatch material and customer return
acknowledgment copy about goods receipt.
Step:6 Now goods are reached to customer now need engineer to fit all part of machine
it know as erection process
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Step:7 After completing all sales procedure then turn come of Payment, this is depend on Payment terms of company.
2.9) ORDER PROCESS
Firstly, buyer generates the inquiry from concern Dept. about the product, terms &
conditions of business through either by inquiry letter, by telephone, or any other sources.
After discussion about the product & its price over reports have been prepared by
marketing Dept. and it is been given to customer. A contract is made when the customer
wishes to purchase the product as per the terms and conditions. Some of the charges are
fixed like transportation, sales tax, etc.
Both seller and buyer have to sign and stamp on the contract paper and even
sometime advance system may be adopted. After contract is made information are
provided to production Dept.
Sales Dept. has duty to visit the customer sight as inspection is necessary. Few
days before the completion of machine customer have been informed. So he can do
arrangement of fund well in advance.
2.10) FORECASTING & SALES PLAN PREPARITION
Beginning and end of marketing management research is the systematic and
intelligent investigation or study of the who, what, when, why and how of actual and
potential buyers.
Marketing research can be defined as “the application of scientific method to the
solution problems”. Marketing research is the systematic and objective search for and
analysis of information and solution of any problem in the field of marketing.
Marketing research is the systematic, design, collection, analysis & reporting of data
& findings relevant to a specific marketing situation facing the company.
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In the current competitive situation, it is necessary for every organization to research
or examine their market situation at regular interval of time. Therefore company
researches their prevailing market situation.
Sangam has separate research and development for marketing research. It observed
the needs, wants and preference of the consumers, it proper the report on the consumers
need what they want, what their complaint against product etc. the report prepares of
distribution, dealer and market segmentation.
A) Retail Report:-
B) Daily Consumption
C) Looking at the scope of increasing the total consumption of a day.
D) Receiving the ideas and suggestions from distributions dealers and consumers of
the product.
2.11) PRICING POLICY
Profit of company mainly depends upon cost of production and price of the
products manufactured. SANGAM as a manufacturer of electronics item has very
limited role to play in declaring the prices of products is decided by the marketing
department.
When pricing of the products is regulated by marketing department following
points are taken into consideration: -
1. Cost of production
2. Transportation cost
3. Profit margin
4. Taxation rate
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2.12 PROMOTIANAL & ADVERTISING POLICY
An obvious fact that advertising is a form of mass communication. It is paid for by
a sponsor (seller) who wants to communicate about his product or service to his
customers. The advertiser or sponsor wants to persuade and induce the readers, viewers or
listeners to take some action viz. to buy the advertised product so that the advertiser can
have profitable sales.
“Advertising is a any paid form of non-personal presentation & promotion of idea, goods
or services by an identified sponsors.”
Consumer is the king in the modern market. Without consumer the task of
business is incomplete. So consumer must know about the product of company. Now a
day, advertisement is the best way to introduce the product to consumer.
SANGAM’s advertising mainly depends upon its customer & their customers
they are mostly illiterate. So, media gives advertisement in regional language, but in
present time customer are also develop so advertising strategy also taken into
consideration. Company gives its advertisement in local newspapers also like Gujarat
samachar, loksata, and jansatta, sandesh etc T.V; Radio magazines are also taken as a
media for these purpose.
Different language like Hindi, Punjabi, Marathi and Gujarati over various
stations of all over India radio. For the popularity of SANGAM large no. Of holdings &
roadside boards are installed on highway, bus pan ness, wall paintings and glow sing at
airports have also been installed for above purposes. Advertisements have been realized
from time to time in the dealing newspapers, and other periodical, special supplements
were brought in English, Hindi and regional languages.
They also convert old machine in new machine if customer not want invest
more capital in new machine. This is crucial aspect of customer satisfaction.
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2.13) TAXES APPLICABLE ON SALE ACTIVITY
There are mainly two type tax applicable Direct taxes, Indirect Tax.
Direct Tax is the tax paid to the government directly by the assessee like the
Income Tax or the Capital Gains Tax. There has been a steady rise in the net Direct Tax
collections in India over the years.
All the collections of the direct taxes in India like the Corporate Tax, Personal Income
Tax, Securities Transaction Tax, Banking Cash Transaction Tax, and the Fringe Benefit
Tax have been going through a healthy ascent. For instance, in the current year the
personal income taxes collection have increased with the rate of TDS being higher than
the previous years
Indirect Tax or the tax that is levied on goods or services rather than on persons
or organizations are of different types in India like Excise Duty, Customs Duty, Service
Tax, and Securities Transaction Tax. In India, there are a series of Tax laws and
regulations in order to control the indirect taxation, which can be either law, made by the
central government or even can be state specific laws. As a result these taxes are an
important part of the total cost. It is thus essential to make appropriate planning for such
costs.
When goods are manufacture then Excise duty are levy on that and goods are sold
in manufacturing state then VAT(Value Added Tax ) applicable and When Goods are
sold out of State then CST(Central Sales Tax) applicable, then “C” for m also submit to
refund the tax.
When goods are Export to other country then export duty like Custom duty are
applicable and when goods are Import then Import duty applicable.
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PRODUCTION department
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3.1 PRODUCTION DEPARTMENT STRUCTURE
P
B.R.C.M COLLEGE OF BUSINESS ADMINISTRATION
Production manager
Light & BatteryManager
CVTMANAGER
UPSMANAGER
Supervisor Supervisor
Worker
Supervisor
Worker Worker
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3.2) HOW PRODUCTION PLAN IS PREPARED FROM SALES
PLAN?
In simple term, production planning mean decide the sequence of each activity to
carry out finish product or item. Production plan is the heart of the organization.
Production planning is the plan of future production, which is prepared by production
manager with the help of the sales plan of the organization. Production planning is the
primary step of any organization. So that it is most important for any organization. It is
very useful for the control of the organization’s activities.
In technical term, production planning is that function of management, which
decides about the resources that will be required for future manufacturing operation, and
allocating of resources to produce the desired output at right time, in right amount, of
required quantity and at minimum cost. There are three levels of production planning
which are different from each other based on time horizon it covers.
1. Strategic planning.
2. Tactical planning.
3. Operation planning.
First, this plan is use to achieve the goal of the organization and it is mostly 4-5
years. Second plan is planning of operations over medium range and it is make for 6-8
months. Third type of planning is most important for real shop floor planning. It is mostly
for 1-3 months.
We know the business is dynamic nature. Sometime, it may happen that the
demand is very little in the market. So we can see the excess of material. On the other
hand, when the demand of the product is very high. We see the shortage of material. So
both the types of problems are solve with the help of production planning. Effective
production planning helps to the organization to avoid such situation.
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In SANGAM, the production plan is prepared based on sales plan, which help
them to avoid situation as mention above. The process of SANGAM is as given below.
The company requires specification about the production from the customer. This
step is performing when the order placed by the customer and afterwards production
schedule is to be prepare.
The staff of the sales department prepares sales monitor report for the purpose of
giving the best services in the term of delivery dates specified by the customer. So they
easily produce as per customer requirements. One copy of this report is send to the
production department. So sales planning is not done on the basis of the production
planning rather then production plan is based on the sales plan.
The customer specification included type of the product lot size, delivery date,
material to be used for the products, quality required, etc.. On the basis of these
specifications, production plan is prepared.
It is deciding in advance the short term as well as long term conversion if raw
material and other inputs in to finish product or product to be utilized as inputs for further
production by enhancing the utility of inputs. So that, they satisfies customers needs on
time.
Production Plan Is Converted In MRP
The whole process of material requirement planning or preparation of material
requirement panning is indirectly depending upon the customer orders. Because when the
customer give order than they also specifics the material to be used .as per customer
specification raw material is used.
Thus order placed by the customer or their specifications plays a dominant role in
material requirement planning. When manager purchased the raw material that will be
used full in satisfy the customers demand.
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Before deciding the required quantity of the material to be needed for the
production, the inventories are deducted from the requirement. The fresh material placed
after calculating the inventories. The prime objective of material requirement planning is
to be trigger timely purchase action of various dependent demand items. Which raw
material is required urgently and providing conveys which can be delayed required details
of MRP to purchase department . if helps maintain priority control.
As far as data of schedule is concern , the customer also specifies it and according
to buy the raw material . the supplier on the basis of the delivery schedule , if a supplier
can supply the material according to the production schedule he can be selected.
In SANGAM the use material requirement planning as manufacturing resource
planning . the planning is divided in to two parts.
1). Manufacturing resource planning-1
2). Manufacturing resource planning-2
MRP –1 includes man, machine, and material where as in MRP-2 a part from it
money and marketing are also included MRP- 2 provides greater control over inventory
of system is used properly as in MRP-1 name applies plans only the requirement. This
system takes care of whole organization in place of single unit . MRP-2 is associated with
single unit of an organization. MRP-2 is the expansion of MRP-1.
Material requirement planning menus: Design Development Dispatch Inquiry bills of material Bills Inventory Indent Purchase order Work order Planning Vendor Requisition
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Customers
3.3) ANALYSIS OF PLANT LOCATION
Plant location is same as plant layout. Plant location, which cover main production
area, offices for production employees, other offices and other departments of the
organization. In technical term, plant layout is physical arrangement of various
buildings, production department, technical utilities, personal utilities and locations of
various machines within each production department.
In, plant layout of it very effective. The main factors which affect its location are as
followings:
1). How much to manufacture?
As we know SANGAM produces the electronic machines. The manufacturing of
those machines requires large space. While they decided the plant lay out or location.
They also decide their capacity of manufacture machines. The customer’s need or not .
They first study sales plan and bases on that prepared that production plant & lay out.
2). Location:
SANGAM is on Parekh vadi. Which is good area? There are also many industries
in that area. They can do easily their production activity. They also build multi storage
building. So their plant lay out is very effective.
3). No . of employees and visitors.
In SANGAM, they have 125 employees in that total employees work, 30%. Of
workers are ladies. They also provide good canteen facility, insurance facility,
educational facility, etc. to their employees, every year many no. of student came in
SANGAM for the training. They provide good response to that trainer.
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3.4) PLANT LAY -OUT
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MATERIALSTORAGE
ROOM
FINISH PRODUCTSTORAGE
ROOM
RECEPTIONOFFICE
BATTERYDEPARTMENT
TOILETCALL SERVICE CENTER
UPSDAPARTMENT
CVTDAPARTMENT
REPAIRINGDAPARTMENT
TOILET
GENERETERROOM
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3.5 MATERIAL HANDLING EQUIPEMENT
With in production department. they normally use an elevator to pickles up or
to put down the raw materials and machines. They also use other material handling
equipment like lift , bins, trolley etc. they have also facility to store the material handling
equipments.
Material Handling Equipment
Shelf-Trolley
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Hand Carts
Goods Lift
Shelf-Trolley
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3.6) INVENTORY CONTROL SYSTEM
Online Inventory Management MRP-II system, interfaced with design&
Development Control System.
Planning, Purchase & Stores
1. Online inventory management MRP-II System is being used for material
planning and inventory control.
2. In addition to production facilities, the company has also developed about
250 subordinate units, owned by qualified engineers. This has made the
Company able to absorb latest technology and accept to suit local
requirements.
3. Vendor development cell is started to develop new sources.
4. Stores are controlled by MRP System.
FIFO system is followed.
Shelf Life Items are identified and stores separately same is periodically
verified
They are using Linux Server
1. 10g Oracle using as Database (server) backend.
2. VB-6 using as fronted
3. Using backup media as Tape Drive, External Hard Disc, DVD
4. Anti-Virus Server on Window-2003
5. 24 hrs Internet Connection on EDP
6. On software we have own package which are developed by our EDP Staff
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1 MRP-Manufacturing Resource Planning Control all inventory as per flow chart
2 FAS-Financial Accounting Systems
3 Payroll Systems
4 Tools Calibration
5 Drawing Control
ABC ANALYSIS
ABC stands for always better control. ABC is the value basis analysis. in this analysis
, the part , this has more value in term of rupees to the machine’s total cost .Its inventory
is given more attention and stock of required quantity is maintained .In SANGAM
Engineering Pvt. Ltd. ABC is not using..
3.7) MATERIAL CODIFICATION SYSTEM
The different code for the different material are as following:
A – Aluminium J - Motor
B – Bearing K – B.O.M.
C – Circuit L – Packing
D – Display M – Machine
E – Electrical N – Assembly
F - Finish P – Stationery
G - Gauges R – Raw material
H – Hardware S – Semi finished good
HZ – zinc coated h/w T – Jigs & fixture
I –Electronic U – Tools
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3.8) Different Record kept in store:
The store manager has to perform only one important function ex. To watch the good
receive as per its requiring quantity and quantity. The store manager performers the
following steps.
1) He checks the quantity and quantity of raw material received on the basis of
preset standard goods.
2) Good shall be stored in location and location number shall be given by the store
clerks.
3) This location number must be recorded in documents and also in computer.
4) All the events of receipt and issued record shall be filled and balanced.
5) If goods are available as per the requirement than it is issued.
6) Details of issue and receipts of material shall be recorded.
7) FIFO system is applicable and goods are checked before issue.
3.9) MATERIAL RECEIPT PROCEDURE
Goods shall be received along with challan of bill in factory premises together
with gate entry. The incoming material shall be checked by the entry of
contraband and dangerous items.
Details of incoming goods shall be record inward register, format No. F:IW:04.
Quantity shall be verified against mentioned or the vendors challan or bill.
Material identification tag, format No.F:IW:02 shall be attached with the material.
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Goods receipt not as per format F:IW:01 shall be prepared.
Goods shall be forwarded to incoming inspection department along with the goods
receipt note format No.FIW:03 shall be sent to the respective work center.
Customer supplied products shall be identified by stomped as “customer supplied
products”.
In case of cash purchase, computerized inward note cum material issue slip,
format NoF:IW:05 shall be prepared & goods will be given to respective work
center.
Goods shall be received, recorded & issued as mentioned in the table No.1.
Quantity shall be verified against the above-mentioned formats.
Goods shall be stored in location & the store clerk shall given location.
The location number shall be recorded in the recording documents mentioned in
table.
Store location shall be displayed in the store layout.
Bin lag i.e. format No.f: st:01 shall be filled & balanced for all the items except
tools, stationery, oil, paints, and other consumable items.
A control number shall be allocated to each document for receipt.
At the event of receipt &issue, the document for record shall be filled & balanced.
The availability of required goods shall be verified by referring the store ledger
book i.e. format No. ST:03.
If the required goods are available then they shall be issued.
Details of issue & receipt of material shall be recorded in comprised
manufacturing resources planning system by the store
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3.9) MATERIAL ISSUE PROCEDURE
Flowchart of the dispatch:
A) Dispatch of material having sales order and job work.
Finish components which have the sale order to be dispatched , shall be received
along with challan – invoices as per format No. F:DC:/02 the work center.
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Dispatch instruction received
form concerned department with
related documents.
Verification of material
Packaging of material
Arranging for transport
Prepared dispatch documents
Loading material on transport vehicle
38
The dispatch clerk shall verify the quantity against the challan cum invoice ,
format No. F:DC:02.
Gate pass shall be prepared as per format No. F:DC:04 and approved by the
stores, inward and dispatch in charge.
Components shall be dispatched as per delivery schedule mentioned in sales order.
Based on the sales order monitoring list , the excess components manufactured
shall be sent to the general stores along with the inspection report, format
No.F:Q:01 .
For dispatched components two copies of challan cum invoice format No.
F:DC:02 , shall be sent to customer and one to main gate and dispatch department
shall retain one copy.
B) Dispatch of general items (without sales order):
General items to be dispatched shall be received along with dispatch advice i.e. format No. F:DC:01.
Verification of quantity of returnable or non-return etc. shall be done against the dispatch advice, format No. F:DC:01.
Challan and gate pass shall be prepared by the dispatch clerk which shall be approved by the stores in charge.
For dispatch components two copy of challan per format No.F:DC:03shall be sent to the consignee , one copy to main gate and dispatch department shall retain one copy.
The dispatch clerk shall verify the appropriate packing of material to be dispatch.
Dispatch of job work item shall be done after receiving the challan format No.F:DC:05.
Rejection coming form incoming inspection department shall be received along with GRN rejection dispatch advice format No.F:DC:06 by the dispatch clerk.
The non-conforming components shall be dispatch with challan No.F:DC:05 and F:DC:06.
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3.10) PURCHACE PROCEDURE
Purchase indent shall be received from the computerized resources planning
system as per format No, F:PL:11 duly approved by assistant work manager.
To send inquiry delivery conformation letter to the approved vendor, which
are entered in M.R.P. system
Generate the purchase order by related purchase office.
Purchase coordinator shall verify the purchase order for commercial aspect.
The purchase manager shall approve purchase order.
Final approve of the director shall be taken incase of purchase.
Purchase order shall be sent to vendor through convenient media.
Follow up activity shall be done with supplier.
Material re4ceived from vendor according to purchase order is verified at
inward department.
Inward department shall prepare good receipt note f:1w:01&send material to
quality control department for inspection of the purchase product.
Inspection shall be done as per procedure of incoming inspection.
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3.11) MAINTENANCE PLANNING
Preventive maintenance
Critical machines: machines that are decided by work manager and maintenance in
charge are considered as critical machines.
The maintenance in charge shall prepare preventive maintenance schedule for the
critical machines.
A copy of the preventive maintenance schedule shall be circulated to each concerned
work center.
Control of maintenance spare:
Received spare shall be verified by the maintenance in charge.
Received spare shall be identified by a tag and kept in location along with spares
location along with spares location card, format no F: TS :01.
Spears shall be preserved in rust preventive or oil to prevent it from rusting.
Break down maintenance
On the event of the breakdown of a machine, the supervisor shall fill up the maintenance requisition slip as per format no F: MT:01, which shall be given to the maintenance in charge.
The workmen shall carry out breakdown maintenance as per work instruction W: MT:02.
On completing repair work, the supervisor shall check the machine for normal functioning and he shall certify the same on the first copy of maintenance requisitioship format no F: MT: 01.
Machine history and format no F: MT:02 shall be filled. Corrective and preventive action to prevent reoccurrence of the problem shall be taken
and records of the same shall be maintained in format no F: MR:04 wherever required. The maintenance in charge shall ensure the calibration of test equipments as per
calibration plan. Tread analysis of machine break down shall be done and recorded on format no F:
MT:06.
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3.12) QUALITY CONTROL SYATEM
The Quality policy of SANGAM ELECTONICS. Shall be
Continual improvement of their products and services.
Their focus is customer satisfaction at all times, and striving to exceed his
expectations.
We will always comply with our quality management system and improve its
effectiveness, by establishing performance objectives for our product and
people.”
The Product policy of SANGAM ELECTONICS. shall be
Control customer complaints within two complaints per month on an average-
DEC.2007
Achieve production of at least three machines components per month
Clearance of 85% order within target
Supply of machine components without shortage
Maintain rework/rejection percentage 5% to reduced by 3% with respect to total
production
90% customer satisfaction by December 2007
Quality control procedure of purchased goods:
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Quality control personnel determine the category of the component as per work
instruction. Work instruction for sampling or lot inspection to be done is
determine.
The quality control personnel inspection the purchased product as per
specification / requirements.
The acceptance criteria of the product are decoded as per product as per quality
plan and /or specifications.
Non-conforming products are kept in demarked zone.
The quality control personnel fills the details of quantity checked in goods
receipt note, which is approved by the quality control manager and data is
entered in the computerized manufacturing resource planning system.
MRP system shall generate inspected goods receipt and rejection dispatch
advice.
The non-conforming product is sending to dispatch department along with
rejection dispatch advice.
Copy of goods receipt note is send to billing section and supplier for further
action.
Quality control personnel whenever required shall do verification of purchased
products at supplier’s premises
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Flowchart of the work in process and final product:
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Material loading on machine with route card, drawing job
Required operation done as per drawing & route card
Inspection
Rework Reject
Regarded or scrap
Surface treatment if required
Inspection
Rework
Reject
Store
Dispatch
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List of Records
Sr.No Description Format No. Revisio
n No.
Retention Period
1. Inspection report F:QC:01 2 1 Month
2. Tool issue slip F:TC:01 1 1 Month
3. Purchase request ion F:PL:01 1 2 Month
4. Work order F:PL:02 2 2 Month
5. Route Card F:DD:01 0 During production
6. Job card F:PN:02 1 Up to Dispatch/store
7. Daily production report F:PN:03 1 1 month
8. Daily in-process rejection
report
F:PN:05 0 1 month
9. Shortage material
requisition slip
F:PN:19 0 1 month
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Regarded or scrap
FINANCE department
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4.1) INTRODUCTION
Finance is the blood of the business. “Finance Management is that managerial
activity which is concerned with the planning and controlling of the firm’s financial
resources.” Finance management is the most important activity of the firm and it means
that the firm secures capital, if needs and employees it
Finance management is mainly concerned with raising fund in the suitable manner
using the funds as profitably as possible, planning future operations and controlling
current performances and future developments through financial accounting, cost
accounting, budgeting and other functions.
The Finance and Accounts Department of SANGAM CO. plant is located in the
Administration Building, which is situated outside the Plant factory gate. The Finance &
Accounts (F & A) Department is a service department and its name function is to co-
ordinate the financial activities at Plant Site. The F & A department maintain the records
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as required under various statute and get the same audited by Statutory Auditors under the
functional supervision and guidance of SANGAM CO.OFFICE at SURAT
4.2) FINANCE DEPARTMENT STRUCTURE
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4.3 REVENUE BUDGET
A letter duly signed by Chief Manager (F&A) is sent to all departments asking
them to submit the likely requirements of the year, before specific date (mostly last day of
November). They will also have to send the justification with adequate proof for the sum
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M.D
SENIOR ACCOUNTANT
SENIOR ACCOUNTANT
SENIOR ACCOUNTANT
CHIEF ACCOUNTANT
DATA ENTRY OPERATOR
DATA ENTRY OPERATOR
DATA ENTRY OPERATOR
PEON
48
they demand. Concerned department while submitting their proposals will also submit the
report containing details of expenditure done under the same head last year.
From all the information thus available, a preliminary budget formation takes
place. Subsequently discussions are held at various levels to check the validity of the
budget so formed and finally after passing through all checks it is presented before the
Board of Directors for final approval.
The above written procedure is not as simple as it seems and takes 4-5 months.
The concerned department also has to ensure that it neither asks for too much or too less
amount for in first case it would be questionable for excess amount lying unutilized,
whereas in later case they would not be given any additional amount to purchase in
excess of budget.
REVENUE BUDGET PROCESS
4.4) COSTING METHOD
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BUDGET SUBMITTED TO DEPERTMENT
GENERAL MANAGER F&A
MANAGING DIRECTOR
BOARD OF DIRECTORS
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ACTIVITY-BASED COSTING.
Activity-based costing (ABC) is a secondary and somewhat
complementary (or better, supplementary) method to the two traditional costing
techniques. Whereas traditional methods might classify costs in generic
categories like direct materials, labor, and other overhead, ABC clusters all the
costs associated with a single manufacturing task, regardless of whether they fall
under the headings of labor or materials or something else. So in the bottling
example activity-based costs might include operating the dispensing machines,
performing quality checks, moving pallets of bottles, and so forth. Each of these
activities may involve human labor, equipment costs, energy and expendable
resources, and materials, but for analytic purposes the costs are all lumped
together under a single activity concept. The advantage of this approach is that
management can then observe which tasks cost the most versus which add the
most value; this analysis may indicate that a disproportionate amount of money is
being spent on low-value activities, signaling a need for process changes or for
outsourcing to a vendor that can perform the tasks less expensively. Use of this
method is sometimes referred to as activity-based cost management (ABCM) or
simply activity-based management (ABM).
4.5) COST SHEET
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COST STUCTURE OF THE SANGAM ELE. CO
NOTES….. ON…... COSTING.BASE
SANGAM TEXTILE ENGINEERING PVT. LTD.
A UNIT COST……..
1 RAW MATERIAL COST
U LABOUR COST
1 RAW MATERIAL COST
A….RAWMATERIAL COST
LESS: DISCOUNT IF ANY…..ASPER….PER..APPROVED. P.O.
B….EXCISE DUTY….CENTRAL GOVT……..
C….TAXES….VAT IN GUJ….C.S.T.O/S.GUJ
D…..FREIGHT….TRANSPORTATION…./REJECTION
2 LABOUR COST
A….O'S…LABOURCOST…….LBR.WORK.DONE.ATO/S…..ASPER…P.O
B….INHOUSELABOURCOST……
INCLUDES 1). POWER..HP/MIC*0.74*LOADFACTOR*HRS/MTH*RATE.RS.UNIT
2).DIR.LABR…OPERATORM/C*WAGES.EARNING RATE.RS./MONTH
3)..IND.LABR……WAGE/SALARY….RELATED….INVOLVEMENT.IN PRODUCTION.
4).CONSUMABLESTR.ETC….I.E.INSERT/OIL/SPARES.EIC.COSUME.IN.M/C
5)OVERHEAD…1.SERVICEDEPTT.SALARY/FACT.EXPS./REP.MAINT/ADM.O.H.ETC 6)..M/C.DEPR…FOR1SHIFT…4.75/YEAR….2SHIFT…7.42/YEAR
7)..REJECTION…ETC....
…………..ABOVECOST,IS,WORKEDOUT..RS./M/CHR
B CALCULATION…..THROUGH….COMPUTERPROGRAME
1 R.M.COST/ITEMWISE…..INWARD.ITEMWISE./ VENDERWISE.RECD.DURING.PERIOD
……………………………..SHOWING…BASICRATE/EXCISE/TAXES…ASPER.P.O.
……………………………..IFMORETHAN.ONEVENDER….MAXIMUMOTY.RECORD/.VENDER.CONS
IDERED
2 ASSLY.COST…………….ITEM.REQD.IN.ASSLY.AS PER PLANNIG*COST/ITEM
3 LBR.COST………………..O/S.LBR.COSTASPER..ITEMWISE…/VENDER
4
INHOUSE
LBRCOST……RATE.RS/M/CHR…*OPERATION.TIME/ITEMWISE.M/CWISE..ASPER.PLANNIGDEPT
4.6) WORKING CAPATIL MANAGEMENT
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Working capital is the difference between current assets and current liabilities.
Clearly, the safest position to be in is to have more assets than liabilities, and the
bigger the difference the better.
Current assets and current liabilities include three accounts which are of special
importance. These accounts represent the areas of the business where
managers have the most direct impact:
accounts receivable (current asset)
inventory (current assets), and
accounts payable (current liability)
The current portion of debt (payable within 12 months) is critical, because it
represents a short-term claim to current assets and is often secured by long term
assets. Common types of short-term debt are bank loans and lines of credit.
An increase in working capital indicates that the business has either increased
current assets (that is received cash, or other current assets) or has decreased
current liabilities, for example has paid off some short-term creditors.
Factors determining working capital requirements
Size of business
Stage of development
Time of production
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Working Capital Requirement of the year of 2008
Current Assets 2010 2009Raw Material 800 750Inventory 50 45Debtors 100 125Cash 100 105Other Current Assets 75 50
TOTAL 1125 1075
Current Liabilities Creditors 50 55Provision for Taxation 25 20
TOTAL 75 75
Total Working Capital Requirement 2100 1000
4.7) ANALYSIS OF FUND FLOW STATEMENT
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particulars Previous
year
Current year increase Decrease
A. Current assets
Inventory 45 50 5 -
Debtors 100 100 - -
Cash and bank 100 100 - -
other 75 75 - -
TOTAL 320 325 5 -
LESS:
B. Current
liabilities
Creditors 50 55 - 5
Provisions 30 25 5 -
TOTAL 80 80 10 5
Workin capital
(A-B)
240 245
Changes iv
working capital
5 (C-P)
4.8) ACCOUNTING POLICIES
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1. Basis of accounting:
The financial statement have been prepared on the historical cost convention
and in accordance with normally accepted accounting principles by following
mercantile system of accounting.
.
2. Fixed Assets:
The company has been incorporated on 20-12-2006 under part ix of the
companies act ,1956, accordingly the fixed asset are carried at the cost of acquisition less
depreciation as per income tax act, 1961 claimed by the erstwhile partnership firm.
Cost of acquisition comprises of purchase price, other attributable cost and
net cenvat availed.
3. Investment
Investments are stated at cost.
4. Inventories
Inventories are valued at cost or net realizable value whichever is less.
The valuation of inventories has been as taken, prepared and valued by the management.
5. Inter Division Sales & Purchase:
Inter division sales and purchases are shown as sales and purchase of
respective division.
6. Machinery Spares:
Machinery spares including computers, which can be used as or in
connection with an item of fixed asset are capitalized with the cost of fixed assets or as
fixed asset.
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7. Taxation :
Provision for income tax inability comprises of current tax and differed tax.
The differed tax for timing difference between the accounting income and the gross total
income is accounted using tax rates and tax laws existing at the balance date.
8. Impairment of Asset:
The carrying values of assets / cash generating units at each balance sheet date
are reviewed for the impairment of assets. If any indication of such impairment exists ,the
recoverable amount of those assets is estimated and impairment is recognized , if the
carrying amount of those assets exceeds their recoverable amount . The recoverable
amount is the greater of the net selling price and their value in use .Value in use is arrived
at by discounting future cash flows to their present value based on appropriate discount
factor. When there is indication that an impairment loss for an asset in prior accounting
period no longer exists or may have decreased such reversal of impairment loss is
recognized.
9. Contingent Liabilities:
Contingent liabilities not provided for in the accounts, are disclosed by way
of note in Notes to Account.
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4.9) 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.
Need to hold Inventory:
Business firm keep inventory for different purpose. Every firm, big of small, trading of
manufacturing has to maintain some minimum level of inventories.
Transaction motive:-
Every firm has to maintain some level of inventories to meet the day to day requirement
of sales, production process, customer demand etc. the inventory level will provide a smoothness
to the operation of the firm.
Precautionary motive:-
A firm should keep some inventory for unforeseen circumstances also. For example,
supply of raw material may not reach due to strike by the transporters.
Speculative motive:-
The firm may be tempted to keep some inventory in order to capitalize an opportunity to
make profit
Types of Inventory:-
1) Raw Material Inventory:
These are goods which have not yet been committed to production in a manufacturing
firm. They may consist of basic raw material.
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2) Work-In-Process:-
This includes those materials which have been committed to production process but have
not yet been completed.
3) Finished goods:-
These are completed products awaiting sale. They are the final output of the production
process in manufacturing firms.
4) Supplies:-
A fourth kind of inventory, Supplies or what is called consumable -stores are also
maintained by the firms. These materials are of low value & they do not enter the production
process, for example oil, fuel, bulbs, soaps etc.
5) Scrap:-
The waste of materials arising during manufacturing process is also a part of the
inventory. Even defective pieces to be disposed off are a part of in inventory.
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4.10) P&L ACCOUNT & BALANCE SHEET
Profit & Loss A/C of SANGAM ELE CO. As on 31st March 2010
Description Value(in lacks)
Income
Net Sales 1350
Other Income 150
Total Income 1500
Expenditure
Staff Cost 75
Other Expenditure 225
Depreciation 50
Cost of Row Material Consumed/Purchases 800
Cost of Bullion 37.5
Increase/Decrease in Stock in Trade 50
Interest 105
Exceptional Item 7.5
Profit (+)/ Loss (-) from ordinary Activities before Tax 150
Tax 59.5
Net Profit(+)/ Loss(-) from ordinary Activities after Tax 90.5
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Balance Sheet and General report
Particular2009 – 10(in lacks)
2008- 09(in lacks)
(I) Source of Funds
(1) Capital 1000 750
(2) Reserve & Surplus 325 300
(3) Loans
(a) Secured - Debenture 500 5000
(b) Unsecured - Loan from Director's Relative 250
1825 1800
(II) Application of Funds
(1) Fixed Assets (Net) 1250 1100
(2) Investment
(a) Government Security 250 350
(3) Current Assets, Loan & Advance
(a) Inventory 50 45
(b) Debtors 100 125
(c) Cash & Bank 100 105
(d) Other Currant Assets 75 50
(e) Loan & Advance 25 30
Less :-
(a) Liabilities ( Creditors ) 50 55
(b) Provision 25 20
275 280
(4) Miscellaneous Expenditure the Extant not Write-offs 50 70
1825 1800
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RATIO ANALYSIS
Current Ratio
The current ratio is a measure of the firm’s short-term solvency. It indicates the
availability of current assets in rupees for every one rupee of current liability. A ratio
of greater than one means that the firm has more current assets than current liability to
meet short-term requirements. The current ratio of 2:1 is considered satisfactory.
Current Assets
Current Ratio = ---------------------------
Current Liabilities
Years Current Assets Current Liabilities Ratio(Intimes)
2009-10 3,50,00,000 75,00,000 4.66: 1
2008-09 3,25,00,000 75,00,000 4.33: 1
Interpretation
Company’s current ratio is 4.66:1 in year 2009-10 and in the year 2008-09, We
are know that ideal current ratio is 4.33:1. Company’s current ratio as compare to ideal
ratio is low. So company’s current ratio is satisfactory.
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Proprietary ratio
Proprietary ratio relates the shareholder’s funds to total assets. It is a variant of
the debt equity ratio. This ratio shows the long term or future solvency of the business. The
acceptable norm of the ratio is 1:3.
Proprietary Ratio = Shareholders’ fund
Total assets
Years Shareholders’ fund* Total Assets Ratio
(In
times)
2009-10 13,25,00,000 18,25,00,000 0.72:1
2008-09 10,50,00,000 18,00,00,000 0.58:1
* shareholders’ fund= share capital+ share application money + Reserve & Surplus
Interpretation:-
The acceptable norm of the ratio is 1:3.the ratio indicates a secure position to
creditors an low ratio indicates greater risk to creditors. The proprietary ratio of the company in
2009-010 is 0.25 which indicates greater risk to the creditors.
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Fixed asset to proprietary ratio
This shows the relationship between fixed assets to
proprietor’s funds. The purpose of this ratio is calculating the percentage of the owners
funds invested in fixed assets.
Fixed asset to proprietary ratio = fixed assets
Proprietary fund
Years Fixed assets Proprietor’s
fund
Ratio
(In
times)
2009-10 12,50,00,000 13,25,00,000 0.94:1
2008-09 11,00,00,000 10,50,00,000 1.04:1
Interpretation:
Here, the ratio is less than one; it means the creditors obligation has
not been used to acquire a part of fixed assets.
Debt-Equity Ratio
The financing of total asset is done by owner’s equity (internal) as well
as outside equity (external). The relationship between this two is so popular measure
of the long term financial solvency of a firm and this is shown by the Debt Equity
ratio.
Debt-Equity Ratio = Total Long Term Debt
Shareholder’s fund
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Years Long Term Debt Proprietor’s fund Ratio
(In
times)
2009-10 5,00,00,000 13,25,00,000 0.37:1
2008-09 7,50,00,000 10,50,00,000 0.71:1
Interpretation;
The acceptable norm for this ratio is 2:1. It means ratio is high, so that the higher
ratio allowed in the case capital intensive industries.
Cost of goods sold, in the case of manufacturing concern, is the sum of cost
of raw material used, wages and all manufacturing exp., net sales means total sales
minus sales return
Gross Profit Ratio
This ratio is useful as a test of profitability and management efficiency.
Gross Profit Ratio = Gross Profit x 100
Net sales
Sales-Cogs x 100
Net sales
Years Sales Gross Profit Ratio (%)
2009-10 13,50,00,000 1,50,00,000 11.11%
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Interpretation;
A Ratio of 25 to 30% may be considered good. But here, ratio is 11.11%
so it is indicated that the company has to improve the situation.
Net Profit Ratio
This ratio also called Net profit to sales ratio (= profit margin). This
ratio is used to measure the overall profitability and hence it is very useful proprietors.
Net Profit Ratio = Net profit x 100
Net sales
Years Sales Net Profit Ratio (%)
2009-10 13,50,00,000 90,50,000 6.70%
INVENTORY (STOCK) TURNOVER RATIO:
This ratio is also known as stock velocity. This ratio is calculated to considers the
adequacy of the quantum of capital and its justification for investing in inventory.
INVENTORY TURNOVER RATIO = COGS
AVE. INVENTORY
Years COGS
AVE INVENTORY
Ratio
(Time)
2009-10 12,00,00,000 50,00,000 24
Interpretation;
It is seen from the above calculation that there is a continuous increase in
inventory ratio. There is a good progress in respect of sales policy.
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Trend analysis
particulars Current year
value
Previous
year value
Increase/
decrease
Percentage
change
Sales 1350 1230 120 9.76 %
raw material
cosumed
800 720 80 11.11 %
Cash and
bank
105 100 5 5 %
Inventory 50 45 5 11.11 %
Debtorts 125 100 25 25 %
Creditors 55 50 5 10 %
capital 750 1000 (-)250 (-) 25 %
Net profit
after tax
90 78 12 15.38 %
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Common size statement of profit and loss a\c for the year ended on 31 st march 2010
particulars 2010-09 (values in % ) 2008-09
Net sales 90 91.11
other 10 8.89
total 100 100
Expenses
Staf cost 5 5.56
Other 15 14.44
Depericiation 3.33 3.33
Cost of raw material
consumed
53.33 53.33
Cost of bullion 2.5 2.59
Increas/decreas in stock
trade
3.34 3.52
Interest 7 7.04
Other expenses 0.5 0.56
total 90 90.37
Profit before tax 10 9.63
Less : tax @40% 4 3.85
Net profit after tax 6 5.78
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Common size statement of balance sheet for the year 31 st march 2010
Sources of funds 2009-10 (values in % ) 2008-09
Capital 52.62 46.16
Reserve and surplus 17.11 18.46
total 69.74 64.6
Secured 26.32 15.38
unsecured 15.38
total 26.32 30.76
Current liabilities
Creditors 2.63 3.38
Provision 1.32 1.24
total 3.95 4.62
TOTAL 100 100
Applications for funds
Fixed assets 65.79 67.69
Investment in govt.
securities
13.16 6.15
total 78.95 73.84
Current assets and loans
Inventory 2.63 2.77
Debtors 5.26 7.69
Cash and bank 5.26 6.46
Other 3.95 3.08
Loan 1.32 1.85
Misc. 2.63 4.31
total 21.05 26.16
TOTAL 100 100
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Human Resourcedepartment
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5.1) INTRODUCTION
As one author has rightly said 1 + 1 makes an organization, i.e. where there are
two or more persons there is in effect an organization.
According to French “Personnel management is the recruitment selection,
development, utilization of and accommodation to human resources by organization. The
human resources of an organization activities.”
This definitions states that personnel management is planning, coordinating and
controlling system pertaining to the human resources. The sub processes comprise the
mast vital aspects of personnel management, leadership justice determination, appraisal,
training and development.
The institute of personnel management, London U.K. state that it is that part of
management concern with people at work and with their relationship within an
organisation. Its aim is to bring together and develop in to an effective.
Organisation the men & women who make up an enterprise and having regard for
the well being of the individual of working group of contribution to its success.
Personnel management is concern with managing people at work. It not only
concern with rank & file of employees or unionized labor. But it concern with each &
every employee of firm. If focused on blue –collared employees as well as white collared
employees.
It focus on individual as well as a group by giving them best aim to will get best
of the best work from people who are at work including workmen & women.
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5.2) H.R DEPARTMENT STRUCTURE
5.3) HUMAN RESOURCEN PLANING PROCESS
B.R.C.M COLLEGE OF BUSINESS ADMINISTRATION
DIRECTOR
Manager Personnel &
Administration
Manager Perfomance
Apprisal
SubordinateSubordinate
70
PROCESS OF HRP
How to have the right number of people which are with right skill at right time? The
process of HRP helps in this regard.
1.1 Organization Objective
The process of Human Resource Planning being with analyzing the overall plan
and objective of the organization. HR Plans needs to be based on organization’ objective.
Specifically requirement in term of number of characteristics of employees should be
derived from organization’ objectives. Organization’ objectives are defined by the top
management and the role of HRP is to sub-serve. Sub-serves the overall objectives by
ensuring the availability and utilization of human resources.
1.2 Demand Forecast
Demand forecasting is the process of estimating the future quantity and quality of
people required. The basic the forecast must be annual budget and long term corporate
plan Translated into activity level for each function and department.
1.2.1 Managerial Judgments
1.2.2 Work study Method
1.2.3 Ratio-trend Analysis
1.2.4 Delfy Method/Technique
1.2.5 Flow model
1.2.6 Mathematical model
1.3 Estimating supply of HR
Forecast of HR supply gives quantity and quality of people available from
internal and external sources of manpower supply. After making you allowances for
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absenteeism, transfer, promotion, change in work hours and other condition of works.
Forecasting of Human Resources begin with current human Resources Inventory also
called Human Resource Audit. Human Resource inventory contains information about
present human resources in the organization. It reveals what is available in the stock of
manpower and what can be expected in future.
1.4 HR Programming Policy
Once an organization personnel demand and supply are forecast this two must be
reconsolelised and balanced in order that vacancies can be filled by right employees at
right time so HR programming held grates importance.
1.5 Implementation
Implementation requires converting HR plan into Action. A series of action
programme are entitled as the part of HR plan implementation. Some such programmers
are recruitment, selection, placement, training and development, retaining and
redeployment, succession plans etc.
1.6 Evaluation and Control
The final step involve in HR planning is evaluation and control. Once the action
plans are implemented. This need to be revived, regulated and monitored against set
standards. Monitoring of action plan and programmers help to reveal the deficiency.
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5.4) RECRUITMENT & SELECTION
Recruitment
“It is the process of finding and attracting capable applicants for employment. The
process begins when new recruiters are sought and ends when ends when their applications are
submitted. The results is a pool of applicants from which new employees are selected.”
Selection
“It is process of differentiating between applicants in order to identifying those
with greater likelihood of success in a job.”
PROCESS OF RECRUITMENT
Recruitment Planning:
In the SANGAM ELE , first of all it will decide that how many no. of
personnel are to be contacted and what type of personnel to be contacted. Some times
they demand for the engineers, managers, supervisors, helpers. So type of personnel is
also determined in first step.
Strategy Development:
After deciding the planning for recruitment they decide the order from
where they will get their employees. They will get their professionals, regional or local
for technical workers and local market for blue collar employees.
How to look:-
Internal Recruitment
Present employees
Employees referred
Former employees
Previous applicants
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External Recruitment:
Professional association
Advertisement
Employment exchange
Campus recruitment
Walk ins, write ins, talk ins.
Consultants
Contractors
Radio & television
Acquisition & mergers
Competitors
When to look:-
They start finding the employees before two months ago from their
required time. Because 10 days for advertise to beging producing resumes. Four days
invitation for interviews issued, 7 days for arranging the interviews, 4 days for org. to
make up its mind, 10 days for the applicants offered jobs to make up their minds and 21
more days for those accepting offers to report for work. This suggests that vacancies must
be advertised two months before they expected to occur.
Screening :-
In this step they screen the employees, whether they are capable to do the
job or not from this step, they remove many applicants from recruitment process.
Evaluation & Control:-
Salaries for recruiters.
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Mgt. & professional time spent
Administrative Exp.
So control on these costs & whether we found the capable applicants or nor. It checked in
this evaluation step
PROCESS OF SELECTION
Preliminary interview:-
In this interview the general question is asked and checks the capability of
the applicant. The objective of this step is to select good applicants for the test.
Selection test:-
Jobseekers who pass the preliminary interview are called for tests. Different
types of tests may be administered depending on the job the company. Generally testes
are used to determine the applicant’s ability. Attitude & personality. Personality tests are
given to measure a prospective employee’s motivation to fun. In a particular working
environment.
Employment interview:-
Interview is a formal, in depth conversation conducted to evaluate the
applicant’s acceptability. It is considered to be an excellent selection device. It allows a
two applicant and applicant learns about the employers. In regarding the particular job
and general knowledge questions are asked to the applicants. The obj. of the interviews
ate to obtain additional information from the applicant. To give general information to
applicant such as company policies, job, products manufactured and the like and to build
the company’s image among the applicants.
Reference & Background checks:-
In SANGAM, after taking the interview the reference & the background of the
applicant is checked. SANGAM, normally seek letters of reference or telephone
references. References are a formatting seldom verified by the employers.
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Selection decision::-
After taking information through the preceding steps, selection decision is made in
the SANGAM ELE CO the final decision has to be made from the pool of individuals
who pass the testes, interviews and references checks. The HR manager plays a crucial
role in the final selection.
Job offer:-
In SANGAM, job offer is given to those applicants who have crossed all the
previous hurdles. Job offer is made through a letter of appointment. Such a letter
generally contains date by which the appointee must report on duty.
Contracts of employment:-
After offering the job to the applicant the contract or file of employment is made
in SANGAM. In case of engineers they are dealing them as a trainee engineers for 5-6
months and then they are permanent employees for the company. Generally SANGAM
makes the contract of employment for 3 years. These 3 years divided in two parts. One
and half years for training and one and half years for regular work.
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5.5) JOB DESCRIPTION & JOB SATISFACTION
JOB ANALYSIS
In simple terms, job analysis may be understood as a process of collecting
information about a job. The process of job analysis results in two sets of data.
Job analysis is the process of studying and collecting information relating
to the operations & responsibilities of a specific job.
In the case of Himson the process is very clear. All employees are become
very familiar with their jobs.
A job specification Himson is very clear they want hi-skill education &
expense. The immediate products of analysis are job description & job specification.
Job Description
(It containing items which is given
below)
Job specification
(It containing items which is given
below)
Job title
Location
Job summary
Duties
Machines tools
Materials
Supervision
Education
Experience
Training
Judgment
Initiative
Physical efforts
Physical skill
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Working conditions
Hazards
Responsibilities
Commutation skill
Emotional char.
5.6) PERFORMANCE APPRISAL
“Performance Appraisal is systematic, periodic and impartial rating of an employee’s
excellence in mater of the training his present job and potential for better job”
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B.R.C.M COLLEGE OF BUSINESS ADMINISTRATION
1. Setting Performance
standards
5. Discussing Corrective Action
6. Taking Corrective Actions
4. Comparing with Standards
3. Measuring Performance
2. Communicating Standards
79
Grade system in SANGAM CO plant site SURAT
A Managing Director
B Director [Operations/ Marketing/ finance]
B1 Executive Director
C senior general manager/ General Manager
D Joint general manager / Chief Manager
E senior manager/ CMO
F Manager
F1 Deputy Manager/ senior M.O.
G Sr. Assistant manager/ Sr. area manager/ Sr. engineer/ foreman
G1 Assistant manager/ Engineer/ Assistant foreman
G2 Assistant Engineer/ Assistant manager
H Joint manager/ P.S.
5.7) PROMOTION & TRANSFER
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(A). TRANSFER:-
Yoder and associates have defined transfer as “a lateral shift causing
movement of individuals from one position to another usually without involving any
marked changes in details responsibilities skills needed or compensation.
In the case of SANGAM there is no more transfer because all other branch
of SANGAM is running smooth and done nice job. Many rare transfers done in the
history of SANGAM.
(B). PROMOTIONS:-
“Promotion is a term which covers a change and call for grater
responsibilities and usually involves higher pay and better terms and conditions of service
and there fore a higher status or rank.
Purpose of promotions in SANGAM:-
I. To put the worker in a position where he will be of greater value to the company
and where he may derive increased personal satisfaction & income from has work.
II. To increase an employee’s organizational effectiveness.
III. To recognize and individual’s performance and reward him for his work so that he
may have an incentive to forge ahead.
IV. To conserve proved skill training & ability.
V. To attract suitable and competent workers.
In the SANGAM if workers are done good work then they will get
promotions and incrementing along. They get promotions in within two or three years.
5.8) DIIFFERRENT WELFER ACTIVITY
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SANGAM Electronics provides some facilities for its employee’s comfort
and satisfaction. These facilities and activities are know as welfare activities. These
facilities are considered very important because it keeps the employees satisfied.
Following are the welfare activities provides by SANGAM to its employees:
1) A proper canteen facility is provided to its employees and executives. It provides
morning break fast, tea at noon, etc. the outsiders can also use this facility by
paying a very normal cost.
2) Traveling allowance and dearness allowances are provided to every employee and
executive.
3) 1 causal leave and 2 permissible leave in four months is given to each employees
and executives.
4) Safety devices are provided to each and every employees (who are in production
area) so that they can work safely.
5) First aid box is provided to all departments for the treatment of minor injuries.
5.9) EMPLOYEE RECORD KEPT
Employee Record Kept:-
Personal Factors
Name………….. Sex…………… Address ……….
Age…………… Marital Status……. Telephone…
Education and Training
High School … Post-Graduation …… Training ………
Graduation ………………. Professional Qualifications ….
Experience and Skills
Job Areas…………….. Years of Experience ………… Employers……
Job Titles……………………….. Pay Drawn ………………
Additional Information
Grade………… Attendance Record ……. Performance
Rating ………
Salary ….. Disciplinary Record … Career Plans ..
Designation …………………… Department …………………..
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5.10) Training & Development
Organizations become dynamic and grow through zeal, caliber and vision of
their Human Recourses. “SANGAM CO” has always considered development of Human
Resources as its most important responsibility because this alone ensures the well being
and growth of the origination. Training and development activities of society from a part
of continuous process in integrating the organizational needs and the needs of individuals,
“willingness to change” for betterment is the pre-requisite for moving towards excellence.
Training forms the most important function in the development of the human resources
training is giving at there different phases:
1) Individual Phase
2) Management Development Phase
3) Organization Development Phase
The adjectives of training program at “SANGAM CO.” have a very wide
scope, which is as follows:
To minimize the time gap in learning new development.
To equip the participants with requisition ability so that they can work with
minimum supervision.
To enable employees to update their knowledge and increase the level of
performance on their present job assignment as well as canalize their inherent
potential, in order to make him Holistic Person.
To foster initiative, self confidence and to overcome manpower obsolescence
occurring due to age, temperament, lack of motivation or inability of person to
adapt to changes.
To impart training to new entrants to enable them to take up their assignment
effectively.
To create an environment of “We feeling” and enhance accountability of people.
Identification of Training Needs:-
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A committee has been constituted at Head Office for identification and
assessment of training needs of each employee posted at HO/ CMO/ SMOs. On the basis
of specific recommendation of Head of departments, employees the committee would
nominate employees for various seminar / Training Programs / Conferences etc, either in
India or abroad to meet the development needs.
Training Program:-
HRD Department at “SANGAM CO” is conducting various programs for
two categories of persons.
1) Non-Employees
2) Employees of SANGAM CO.
1. Non-Employees:-
HRD Department of SANGAM is dealing with training apprentices under
Apprentice Act, 1926 for the categories such as ITI and Diploma, Graduate Engineers
and Science Graduate in the following Trades:
i. Electronic Engineers
ii. Computer Applications
iii. Machinist
iv. Wireman
v. Electrician
vi. Tool and Dye
vii. mechanic
viii. Electronics
Vocational Training Programs :-
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This is also another training program conducted by HRD Department. This
is normally organized for students coming for practical training in industrial
organization that is a part of their academic curriculum.
Training is provided to student of different course like MLW,
MHRD, BBA, MBA, DCA,IT, M.SC, ITI, and Engineering Graduate during their
vacation. During this training they are exposed to the activities of various departments
and the practical work. They also called apprentices for 1 year from . They pay
stipend of Rs. 3600/- to every apprentices per month
Employee:-
To sustain the healthy work culture and maximize the utilization of human
potential in achieving organizational objectives, SANGAM CO. management has
been giving continuous thrust on the following HRD sub-system.
In-house training:-
After the identification of the training needs of employee and keeping in
view the requirement of the society, the in-house training programs are organized. In
such training programs, faculties are drawn from within the organization and from
outside also.
The infrastructure facilities for in-house training at surat plant include:
I. An qualification with a capacity for 50 persons.
II. Two air-condition lecture hales to accommodate 15 persons each.
III. Full fledged library.
Induction training:-
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New appointees are imparted Induction training covering SANGAM
CO. s aim objective and achievement, work culture, office. Normally internal faculty
is drawn for such training. New appointees are put on the job only after necessary
induction training.
Similarly, special programs are being designed and the employees who
have been provided to officer category from the workmen category in the recent past.
5.11) WAGES & SALARY ADMINISTRATION
Wage & Salary Administration refers to the establishment and
implementation of sound policies and practices of employee compensation. Generally, the
remuneration paid to the workers known as wage while the payment made to office staff
known as salary.
Wage is the remuneration paid for service of labour in production, skilled
and unskilled person or employer, worker technicians. Salary refers to the monthly paid
to clerical administrative and professional employees.
A sound wage & salary administration tries to achieve these objectives:
a) For employees:
Employees are paid according to requirement of their job. This eliminates
inequalities.
The changes of favoritism are greatly minimized.
Employee’s morale & motivation are increased because wage program can
be explained & based upon facts.
b) To Employer:
A wage & salary Administration reduces the likelihood of friction &
grievance over wage inequities.
It enhances an employee’s morale & motivation because adequate and
fairly administered wage are basic to his wants and needs.
It attracts qualified employees ensuring an adequate payment for all the
jobs.
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The information about employees, presentation and absence provided by
the tine keeping system is directly linked with computer section. Then after pay slip is
preferred with the Master-Date. Finally after all additions and deductions, pay is paid to
the employees. The productivity linked bonus and incentive schemes also introduced by
the SANGAM CO. The employees of SANGAM CO. have been paid bonus linked with
productivity.
In SANGAM CO. calculation of wage and salary is done by establishment
section in Finance & Account Department. In this section, wage and salary is calculated
on computers. It is the responsibility of personnel department which has to handle wages
and salary distribution together with account department.
Salary are payable on the last but on working day of every month. In this
organization for the wage and salary administration, first prepared the Master-Date under
the personnel department. In this Master-Date there are various column like grade,
employee number, pay scale, code, P.P. Account, number, name, basic-pay, living-pay,
house rent, over-time pay, medical allowance and other facilities rate etc.
Provident fund:
Company gives 12% provident fund on Employee Basic Salary.(8.% family
pension + 4% F.P.F.)
Bonus:
Company gives 11% bonus on Basic and Special
If company get lose then company enable to pay bonus then it carry forward next
year.
If any accident made in the unit. Then the employee has to give one copy
of certificate to the hospital and other is given to the unit. Then some medical
facilities are given to the employee under this scheme.
In this accident case it may happen that worker may loss his efficiency of
performing a present job. In such cases company makes number of the employee
and if he is not able to work at all, unit pay reward to him.
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B.R.C.M COLLEGE OF BUSINESS ADMINISTRATION
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