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LIMITATIONS
Busy schedule of officers and employees is adversely affected the researcher. The information provided by the company assumed to be authentic. Certain areas are restricted, so a detailed study is not possible. The success of the study depends upon the response made by the employee.
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HISTORY OF THE INDUSTRY
The terms TEXTILE is a Latin word originating from the TEXERE
which means to weave Textiles refers to a flexible material comprising of a network
of artificial fibers, known as yarn.
The development of the world textile industry was started in Britain as
the sinning and weaving machines were invested in that country. High production of
wool, cotton and silk over the world has boosted the next year. Through the industry
was started in UK, in 19thcentury the textile production passed to Europe and northern
America after mechanisation process in those areas. From time to time Japan, China,
and India took part in industry their economic and concentrated more in that sector.
India has been well known for her textile goods since very ancient
times. The traditional textile industry of India was virtually decayed during the
colonial regime. However, the modern textile industry took birth in the early 19th
century, when the first textile mill in the country was established at foster glisters near
Calcutta in 1818. The cotton textile industry however made its real beginning in
Bombay in 1850s. The First cotton textile mill of Bombay was established in 1854 by
a Parsi cotton merchant then engaged in overseas and internal trade. Indeed the vast
majority of the early mills were the handy work of Parsi merchants engaged in yarn
and cloth trade at home and Chinese and African markets. The first cotton mill in
Ahmadabad, which was eventually to emerge as a rival centre to Bombay, wasestablished in 1861. The spread of the textile industry to Ahmadabad was largely due
to the Gujarati trading class.
The cotton textile industry made rapid progress in the second half of the
19th century and by the end of the century there were 178 cotton textiles mills; but
during the year 1900 the cotton textile industry was in bad state due to the great
famine and a number of mills of closed down for long periods.
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2. India has 34 million cotton textile spindles for manufacturing cotton yarn. Cottonyarns account for 70% of Indias textiles exports. (China has 40 million cotton
spindles)
3. For the past tow years there has been a significant, mainly due to the increasingprice of cotton
4. Of the Indian textile yarn exports, almost 80% come from coarser yarnsconsequently, there is a need to upgrade the technology.
FUTURE SCOPE OF THE INDUSTRY
Garment manufacturing and exporters in India were expecting a bright future in
the days to come as more international buyers were turning their attention to Indian
markets following hike in price of textile and garments in China, which had the largest
share in the export market.
Buyers from various countries, including US and European countries,
were now started placing fresh orders with the textile garments exporters here. Erode
textile garment exporters association secretory S Sivandhan told it was reported that
production and export of garments from China have started declining, due to various
reasons including price hike of raw materials and increase in production cost.
Considering the continual capital investments in the textile industry, the
government of India may extend the technology up gradation fund scheme (TUFS) by
the end of the 11th five year plan (till 2011 -2012) in order to support the industry.
The Indian textile industry is massively investing to meet the targeted output of $85
billion by the end of 2010, aiming export of $ 50 billion. There is substantial potential
in Indian export of technical textiles and home texts as most European company want
to setup facilities near by the emerging markets, such as India and China.
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Union Ministry of Textiles certified Apparel Export Promotion Council
(AEPC) has taken the responsibility to motivate the foreign investors to invest in
Indian Textile Industry by exhibiting it massive unexplored domestic market. The
objective is to trigger the foreign investment towards instituting textile units in India
by offering numerous allowances to global investor like low priced work force and
intellectual right fortification.
The government India has also taken few initiatives to promote the
textile industry by permitting 100% Foreign Direct Investment (FDI) in the market.
the Indian Textile Industry symbolized a strong existence in the complete value
chain from raw commodities to finished products. The Synthetic and Rayon Textile
Export Promotion Council (SRTEPC) has taken all the required steps to meet the
target of doubling the synthetic textile export in India to US $ 6.2 billion by seizing
4% of market share by financial year 2011 -2012.
COTTON TEXTILE INDUSTRY
The cotton textile industry occupies a permanent place in the Indian
economy, contributing to about 23.5% of the countrys industrial production. The
textile sector is closely linked with agriculture, handlooms, power looms, garment
manufacturing and a number of industries and trade, thus touching everyday life of
the common man. Cotton textile industry is one of the oldest and largest industries in
India which has made rapid change in the economy. The countrys first textile mill
Express mill in Nagpur which was started by Tata was the first to down shutters.
The premier group has sold of its textiles mills another has been taken over by
National Textile Corporation (STC) Which has also taken over mills like Kohinoor.
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COTTON TEXTILE INDUSTRY IN INDIA
The cotton textiles industry occupies an important place in the Indian
economy as its contribution to industrial production, employment generation and
export earning are significant. Currently the industry possess 26 million spindles 2
lakh looms in the mill sector above one million power loom sector about 4 million
looms in the handloom sector and a large number of process houses with total capacity
of dyeing, printing and finishing of 10 million metres of per Annam. The industry
place an important role in the Indian economy and as its accounts for nearly 60% of
industrial production and large scale employment. It is also a foreign exchange earns
as it contribute over 30% of the countrys total exports.
The first Indian cotton textile mills was established at Fort Glisters near
Calcutta as early as in 1838. The first cotton textile mill was in Bombay was the
Bombay spinning and weaving company started in the year 1851. The cotton textile
industry is admittedly the single largest organized industry in India and occupiessecond place among the countries of the world in cotton textile mills are located in
those status like Maharashtra, Gujarat, Tamilnadu,West Bengal and Kerala.
COTTON TEXTILE INDUSTRY IN KERALA
The state has number of Textile mills. Kerala cotton textile mills generate direct and
indirect employment opportunities. There are more than 30 textile mills working in the
state. The major raw materials used by the industry are cotton polyesters, synthetic
fibres etc. These raw materials are not widely manufactured in Kerala. It is either
obtained from other states especially from Maharashtra and Tamilnadu or they are
imported from abroad. Since the climate conditions of Kerala frequently changes,
Suitable arrangements should be made to maintain the desired conditions for the
production of Yarn.
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PROFILE OF THE ORGANIZATION
Sitaram textile is a public limited company incorporated under
the Indian companies Act 1956. It is a composite textile mill, fully owned by
government of Kerala situated in Punkunnam, Thrissur. The registered office and
production unit of the company is also situated in Punkunnam-[XXXXI /306
Punkunnam, Thrissur 680002, Kerala state.]. The cotton yarn and fabrics were the
products of the company till 2000. Now the company produce only the cotton yarn and
polyester yarn. The main objective of the company is to provide employment
opportunities.
HISTORY OF THE COMPANY
Sitaram textile Ltd a composite textile mill, fully owned by government of
Kerala situated at Thrissur in central Kerala was incorporated on 11 thFebruary 1975
under the Indian companies Act 1956. The Sitaram spinning and weaving mills
originally managed as a family concern was started as a power loom unit in the year
1903. It was started by Late Shri T.R.Ramachandra lyer.Slowly and steadily, with the
passage of time the unit was expanded, diversified and become a public Ltd company.
The Sitaram textile Ltd is a government of Kerala undertaking. Its
registered office is situated in Punkunnam, Thrissur. As Sitaram textile Ltd is a public
sector undertaking a brief expansion of the nature and outline of the public Ltd,
companies relevant here. A public limited company is a company formed and
registered under any of the previous companies act. It is an association of persons
called members. But has existence apart from the members.
Sitaram textile Ltd, Thrissur is a composite mill engaged in fabrics. The
activities involved are spinning, weaving preparation, weaving and processing. The
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finished products (yarn) are directly marketed to the depots in Bombay. Different
varieties of cotton purchased from outside state such as Tamilnadu, Andrapradesh,
Karnataka and Maharashtra. The products of the company were cotton yarn and
fabrics till 2000. Now the company produces only cotton yarn and polyester yarn.
OBJECTIVES OF THE COMPANY
The main objectives of Sitaram textile are as follows;
To carry on manufacture of yarn at low cost. To produce high quality products To provide more employment opportunities To believe in healthy industrial relations and human treatment to its
employees
To maintain higher ethical standards with its suppliers and customers. To continuously upgrade the quality of human resource of the company and to
promote development.
To enter in to foreign collaboration. To establish technical institution to provide the training to the employees.
VISION
Sitaram believes in continuous up gradation of its product quality by
investment in the latest technology and its successful implementation. It also focuses
on providing employment opportune
MISSION
To be the most significant supplier of cotton yarns and polyester
yarns to the world market.
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BOARD OF DIRECTORS
Board of Directors has ultimate authority of the company. The share
holders of the company are Government of Kerala. Board Of Directors of Sitaram
Textiles Limited are :-
Chairman : N.R.Balan
Managing Director : C.K.Gopalakrishnan Nair
Directors
B.Prakash (Govt. of Kerala{joint secretary})
K.Ramachandran Pillai (CMD, NTC)
K.S.Lakshmirani (Finance joint secretary)
K.A.Chandrasekheran (Director: Handloom and Textiles)
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CAPITAL OF THE COMPANY
Capital refers to the money or moneys worth introduced or invested
by the owner into business. The authorised capital of the company is 600000 equity
shares of Rs.100 each. The starting capital investment of Sitaram Textiles was 2.5
crores. The present capital investment is 594 crores. This is raised by issuing
594000 shares of Rs.100 each. All these shares are owned by the Government of
Kerala..
The chart show the organisation has in net loss from the year
2006 to 2009. And in year 2010 the company has in profit at rs 3547606.
YEAR SALES PROFIT/LOSS
2006 63670571 (-)17100000
2007 67253459 (-)9267268
2008 79532217 (-)23519720
2009 74528657 (-)15523681
2010 98402628 3547606
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PRODUCTION UNIT
The Sitaram Textiles has only one production unit which is
situated in Punkunnam (Thrissur) in an area of 10 acres of land, engaged in the
production of cotton yarn and polyester yarn.
The raw material used in this conversion is cotton and polyester.
They have eight different steps involved in this conversion process that are mixing,
blow room, carding, drawing, simplex, spinning, cone winding, and packing. And
this process are helps to maintain the quality and smooth production of yarn.
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FUNCTIONAL ORGANIZATION STRUCTURE
The organization structure of the Sitaram Textiles is functional
organization structure. Functional organization structure is one in which the
employees are grouped on the basis of their functions. These functions are put under
the charge of specialists. A functional head can give directions throughout the
organization related with his functions.
Advantages
1. It is the most logical and easier form of an organization structure.2. It provides specialisation thus making possible efficiency in operations.3. It facilitates delegation of authority.4. If facilitates better co-ordination of activities within each department.5. Better supervision is facilitated since an individual manager is familiar with related
tasks and activities.
6. It helps in training of specialist managers rather than generalist managers.
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PRODUCT LINE
The products of the company were cotton yarn and cotton
fabrics till 2000. Now the company produces only cotton yarn and polyester yarn.
For producing cotton yarn, the period of time is one week.
Cotton yarn - 60 counts
Polyester yarn -70 counts
The term count implies the qualities of yarn. Higher the count
higher the quality. The waste of cotton are categorised into three that is saleablewaste, reusable waste and invisible waste.
The saleable wastes are gutter fly waste, lick ring fly cleaner,
cowing ends, comber no in opener, hard waste and sweeping waste flat strap waste.
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BUSINESS OPERATION
The company is situated in 10 acres of land engaged in the
manufacturing of yarn. Two types of yarns are manufacturing there. Cotton yarn
and polyester yarn. Around 200 employees are working in the organization. Now
the company is in its growth stage. The company is incurring profits after a decline.
The main objectives of the company is providing employment opportunities and
carrying on manufacture of quality yarn with minimum cost.
Nature of business
The products of the company were cotton yarn and cotton fabrics till
2000. Now the company produces only cotton yarn and the polyester yarn. . The
finished product (yarn) is directly marketed to the depots in Bombay. The company
gets advance order for producing yarns. So they undertake Just-In Timemanufacturing system.
Size of business
The company is undertaking its production on a large scale.
The company consist of more than 200 employees. The company has well qualifiedand skilled labours.
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Business Operation cycle
The business operation of Sitaram Textiles is start from cash
converted into raw materials then the raw materials are processed and converted to
finished goods. That is cotton yarn and polyester yarn. The finished product is
directly marketed to the depots in Bombay and then the finished goods to debtors
and debtors to bills receivables. The business operation goes on this flow and bills
receivable to cash is next.
Cash
Rawmaterial
FinisedGoods
Debtors
Billsreceivables
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TRADE UNION PRESENCE
Trade union as a continuous association of wages earners for the
purpose of maintaining or improving the condition of their working lives. It is the
association of employees designed primarily to maintain or improve the condition
of employment of its members. Unions are primarily concerned with the terms and
conditions of employment. The main objective of trade unions is to present their
needs before the management. The trade unions in this company are:-
INTUC [Indian national Trade Union Congress]
AITUC [All India Trade Union Congress]
CITU [Central Indian Trade Union]
[BMS + CMP] co-ordination.
Functions
The main function of trade union in this organisation is to protect the
interest of employees. Trade Union help to improve the working conditions in the
company by negotiating for better pay packages, working conditions, and other
allowances and present all the needs of employees before the management.
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MARKET SHARE
Sitaram Textiles,2%
NTC, 60%
Thrikkot Mill, 3%
GTN, 2%
Others, 33%
COMPANIES MARKET
SHARES
Sitaram Textiles2%
NTC60%
GTN2%
Thrikkot Mill3%
OTHERS33%
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COMPANY LIFE CYCLE
Sitaram Textiles Limited
profit
1975 1985 1995 2005 2010 2011 2015
year
Present status of the company
The company is in its growth stage. In this stage the demand and
sales of the product increased rapidly. In this the profit is increasing. Till 2008 the
company incurred continuous loss, but during the year 2010 and 2011 the company
earns profits because of higher demand of the products. And the company expect
the future growth.
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COMPETITORS OF SITARAM
At the time when Sitaram Textiles Limited started it was the one and
only concern in the field. Later new companies emerged in the field which increases
the competition. Now Sitaram is facing cut throught competition.
NTC under taking mills are:-
1. Alagappa Textiles, Amballur2. Vijaya Mohini mills,Trivandrum3. Kerala Lakshmi Mills, Pullazhy.4. Parvathy Mills, Kollam.5. Spinning and weaving mill, Kannur.
Private firms are:-
1. Palakkad Thrikkott Mills.2. GTN Industries Limited, Aluva
It faces competition from the private firms in Bombay working under
this industry. They have to spend only less cost of transportation. All the above
mentioned competitors are producing the same counts of yarn.
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FUTURE PROSPECTS AND GROWTH PLAN
Textile and garment manufacturers and exporters in India were
expecting a bright future in the days to come as more International buyers were
turning their attention to Indian markets following hike in price of textile and garments
in China, which had the largest share in the export market. Buyers from various
countries, including US and European countries, were now started placing fresh orders
with the textile garment exporters here.
Considering this opportunity, the company is looking to
increase the production with minimum investment. For these the company is planning
to modernise the entire existing machinery with automatic machines with an outlay of
INR 396 lakhs. Now the company is working with 30 year old machinery. After the
implementation, the unit becomes a viable one.
The future plans are.
Promote the high Sales Quality Should Precede Production Maintenance Should properly done, and that will be increase quality Effective communication, co-ordination and co-operation
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DEPARTMENTS
In every organisation there will be departments. The main
advantage of the department is the work can be done very easily and in a smooth
way. Otherwise it will be very difficult to carry out work in an organisation.
Human Recourse Department Purchase Department Marketing Department Production Department Finance Department Quality control department
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HUMAN RESOURCE DEPARTMENT
Personnel
Manager
Head Time
KeeperESI and PF clerk Security Officer
Wage clerk Security GuardsSenior Time
Keeper
Shift TimeKeeper
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The Human Resource Management (HRM) function covers a wide
range of activities. Human resources are the lively elements of an organization. An
organization utilises human resources along with technological, financial, physical
and other resources.
In HRM, is related with the management of man power. The
important task of HRM is to help every employee to grow himself to the maximum.
It is mainly concerned with methods of recruitment, selection, training and
placement of personnel and performance appraisal. Personnel manager is a staff
officer in the organization. He gives advice to top-level management in relation
with personnel policies and programmes. Human Resource Management checks
whether the workers are given fair working conditions, allowances etc. There are
more than 200 people working in Sitaram Textiles.
Functions
The functions and responsibilities of human resource management
are as follows
1. To establish good relation with employees.2. To develop human capital.3. To forecast and balance the demand for and supply suitable personnel.4. To have efficient performance of the managerial functions.5. To effectively utilise the technology and other resources.6.
To maximise productivity.
7. To develop higher employee morale.8. To motivate human resources for better performance.9. To ensure optimum utilisation of human resources.
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Strength of the company
Wages & other benefits
Basic wages
Increase in basic wages in certain categories on account of special increase given by
the management. Increase in basic wages as per the terms of IRC (Industrial
Relation Committee of Textile) settlement dated 29 June 1999.
Workers 161
Officers 8
supervisors 5
Office
assistant
15
Drivers 5
Security 5
Peons 3
TOTAL 202
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Revised occupational wages
Occupational wages means the basic wages fixed for the category or occupationunder the IRC settlement and doesnt include the annual increments.
Dearness Allowance.
Dearness allowance will be on the basis of Trivandrum cost of living index with
1970=100
Employees State Insurance (ESI)
The employment State Insurance Act provides benefits to employees in case ofsickness, maternity or any injury. An employee drawing salary less than Rs 10000
per month will come under this act. It is applicable to both accidents and Sickness.
The employee will get free treatment and compensation. The employee can take 90
days leave for sickness and accidents. For accidents leave, he or she will get 75% of
their basic wages and dearness allowance. In case of sickness leave, the employee
can draw 50%of their wages and dearness allowance.
Employee Provident Fund Scheme.
The employee contribution towards provident fund is 10%of monthly contribution
by the company. It is the amount received by the employee at the time of retirement
in lump sum. From the companies contribution Rs541 will be paid to every
employees pension fund each month.
Maternity Benefit
The maternity benefit is also provided as per the provisions of ESI act 1948. 84
days leave will be granted as Maternity benefit. If delivery is done at hospitals
referred from ESI hospital then the full amount of treatment will be reimbursed.
Gratuity
If the employees complete a five years of continuous service, they are eligible to get
gratuity. In case of death or disablement the qualifying period of 5 years is not
necessary. Sitaram textile Ltd, provide gratuity to the act, 1972.
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Canteen
Sitaram textile Ltd, Punkunnam provide a well established canteen. Both the
management and workers can use the canteen facility. Canteen extends its service
for round the clock.
Shelters and rest room
There is sufficient number of shelters and rest rooms are arranged separately for themen and women workers. They can utilize the rest room at the leisure time or for
taking meals.
Leave with pay
For every employee, one day granted as leave for every 20 working days. The
employee has to work minimum days in the previous years.
Travelling allowances
The employees of Sitaram textiles get a travelling allowance of Rs 26 per month for
26 working days.
Pension
Workers1000 to 1500
Staff - 7000 to 8000
Supervisors- 7000
Junior manager8000
Assistant manager- 9000 above
Deputy manager- 10000
Manager- 12000
General Manager14000
Managing director- 20000
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Selection of employees
The staffs of the organisation are appointed through the
PSC (Public Service Commission) and the lower workers are recruited through
agreement between trade unions & workers.
Shift of workers
There are three shifts in the company. They are
FROM TO
7.00 AM 3.30
PM
3.30 PM 12.00
AM
12.00AM 7.00
AM
Man power requirements
Mixing attendant Schutcher attendant Cording Tender Combers Drawing Tender Simplex Tender Simplex Doffing Boys
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Spinning Slider Doffing Boy Cone winners Packing Filter Assistant Filter Filter Helper Cleaning gang Shift Electrician Jobbers and others
Employees turnover of Sitaram
Labour turnover is the rate of change in the labour force of
an organisation during a given period. Therefore it signifies the shifting of work
force from one organisation to another and also the loss of manpower due to
discharge, retirement, death etc.
Employees turnover of Sitaram is 3 to 5 employees per
annum. It is mainly because of retirement.
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PRODUCTION DEPARTMENT
Sitaram textile Ltd manufactures different count of yarns. In order
to have a clear understanding, the manufacturing process can be sequenced asfollows.
Production Manager
Supervisors
Production Staffs
Workers
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The products of the company were cotton yarn and cotton fabrics till
2000. Now the company produces only cotton yarn and polyester yarn. For
producing cotton yarn, the period of time is one week. The total consumption per
day is 2000kg.
Cotton yarn - 60 counts
Polyester yarn -70 counts
The term count implies the qualities of yarn. Higher the count
higher the quality. At the time of production wastes are created. The waste of cotton
are categorised into three that is saleable waste, reusable waste and invisible waste.
Reusable waste can be used for production of yarn. The saleable
wastes are gutter fly waste, lick ring fly cleaner, cowing ends, comber no in opener,
hard waste and sweeping waste flat strap waste. Invisible waste cannot be count but
it is estimated as 2% out of total input.
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PRODUCTION CHART
MIXING BALE
AUTO MIXER
SCUTCHER
CARDING
COMBER
DRAWING
SIMPLEX
CONE WINDING
RING FRAME (SPINNING)
PACKING
BLOW
ROOM
A. SILVER LAPB. RIBBON LAP
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Production process
The raw material used in this conversion is cotton and
polyester. The different steps involved in this conversion are as follows.
a. Mixing
There are mainly two type of mixing. That is polyester
mixing and cotton mixing. Mixing is done at both manually and mechanically.
b. Blow room
In this section, mainly opening and cleaning of bale take
place. Firstly the bale passes through the bale breaker for the opening of the
compressed bales. Secondly it passes through a machine called step cleaner which
is used for cleaning the bale by step by step process. Thirdly, it passes through a
machine called Hopper feeder, which is also known as temporary storage area of
raw materials. Lastly the raw material passes through another machine and the lap
from of raw material is obtained with impurities removed to a certain extent.
c. Carding
The lap form of raw materials are processed and cleaned to
remove all the impurities and they are converted to slivers. These slivers are
collected in drums. This is of non uniform thickness. The machine used for carding
is called card machine and product is known as card sliver.
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d. Drawing
Here, the card sliver is processed to get sliver of uniform
thickness. This process is done twice. So the thickness is reduced and made
uniform. The product obtained by it is drawing sliver.
e. Simplex
The thin uniform sliver is passed in to the spindle machine
for the purpose of raring it. A number of spindles are used for it. The raw is further
thinned and the sliver is converted in to actual yarn and it is wound in the bobbins.
If there is break in one spindle, the machine automatically switched off. The
bobbins can carry 2 kg of yarn. The rowing bobbins are then passed to the next
department known as spinning department.
f. Spinning
The cop winding is started in this department. There are
number of machines used for it. Five machines are controlled by one worker. In this
section, works of workers are more. But it is not very risky work.
g. Cone winding
The cop form of yarn is wound on the paper cone by using
power 100m. The cone can carry 1.25 kg of yarn. This is used for selling
distribution. In cone winding, yarn from a single cop is wound one by one to make
1.25 kg of cone. Like cone winding there is also double winding. In these type of
winding instead of winding yarn from a single cone at a time, two cops is wound at
the same time, by this the yarn become stronger.
h. Packing
The cone of 1.25 kg is packed first in plastic. So that it
does not get wet and damaged while in transit. The product is sold in bulk quantities
is a bag of 50 kg. 40 cones are packed together and slip specifying the type of yarn
is also kept with the pack.
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STORES DEPARTMENT
This department works under the store keeper. The entire
department needs certain items for the smooth working. These items were always
kept optimum in the store. The items will be issued by producing a material issue
voucher to the concerned departments.
There are two types of purchases. One is centralized purchasing
and the other is local purchases. The local purchases are made for the stores
purchases. Bill of material is received for the purchase. And these are recorded in
Inwards Receipt book. The inward receipts books include the following details.
1. Name of the supplier2. Time and date of purchase3. Quantity of material purchased4. Place5. Name of person who purchased6. Name and designation of person who received and inspected the material.
Store Keeper
Staffs
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7. Registered number of vehicle in which the goods had been brought in.8. Transportation cost.
Each item in the store has been given a unique code number
and they are stored according to the code number and according to the cost centres .
Bin card is used to recording the receipts and issues of various materials. Proper and
scientific way of analyzing is not maintained in the company.
Even though the traditional technique, are being used in stores
management and the system is not suitable for the modern era of industry, the
personnel in stores manages to ensure each items in time when it is needed.
Methods of valuation of inventories
1. Stores , spares and coals at average cost2. Raw materials at moving weighted average cost or net realizable valuewhichever is lower
3. Finished goods -packed yarn at cost or net realizable value whichever is lower
4. Stock with retail shop at landed cost/ latest landed cost or realizable value aftermaking previous for obsolescence whichever is lower
5. Waste at realizable value
6. Material in processing. Spinning and weaving in progress. Loose yarn at lowercost or net realizable value
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FINANCE DEPARTMENT
The main function of finance department is to record day to
day transactions of business. The chief of finance department is finance manager.
Finance department plays a role of providing relevant financial information to all
departments
Functions of finance department
Two main functions of finance department are as follows
1. Accounting function2. Finance function
1. Accounting function
Accounting function involves of keeping or recording day to
day accounts. The transactions namely receipts, disbursement of money transactions
Accounts Officer
Accounts Staffs
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E. Purchase registerF. Store inventory registerG. Store issue registerH. Semi finished goods registerI. Finished goods register2. Finance function
It includes procurement of funds and effective utilization of
the same of the business. The finance function will help us to control all expenses
with comparing budgeted expenses and actual expenses.
Objectives of finance function
Selection of an optimum mix of different source of capital Profit maximization and more importantly wealth maximization To ensure control over expenses by constantly watching expenditure and income.
To provide dividends to share holders of the company
To utilize funds in such a manner that is rupee is made to work at its optimum levelwithout endangering the financial solvency of the company through decision such
as capital budgeting, profit planning, tax management and working capital
management.
Capital structure of the company
The share capital of the company is divided in to equity shares with
an authorized capital of 6 crores (6, 00,000 equity shares of Rs.100 /each) and
issued and paid up capital of Rs.5.94 crores (5, 94,000 equity shares of Rs 100/
each). All these shares are owned by the Government of Kerala.
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PURCHASE DEPARTMENT
Purchasing is the procuring of goods as per the needs either for
further sale, use or storage- against payment of an optimum price.
The main item produced in the mill at present is yarn. The cotton
yarn and polyester yarn is manufactured by the company. The main raw material of
the product is raw cotton. The raw material in the mill is compressed from cotton
bales which weight 185 kg. Different varieties of cotton purchased from outside
state that is mainly from Tamilnadu, Andra Pradesh, Karnataka and Maharashtra.
Purchase Manager
Workers
Supervisor
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QUALITY CONTROL DEPARTMENT
The main product of the company is cotton yarn and polyester yarn.
The yarn quality is termed as count. Higher the count higher the quality. The
count is calculated by using this formula:-
Count = length in hanks / weight of pounds .
1 hank = 840 yarn length
1 khandi = 355kg.
The quality control department works under production manager.
Actually there are two sides for the production process. One is production and the
other is the quality control. The quality is checked from each stage of production
and from raw material to finished goods.
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MARKETING DEPARTMENT
Marketing is one of the most important operative functions of
management. It is the process by which goods produced are made available to the
consumers. Thus goods produced are to be stored and transferred from the place of
production to the place consumption thereby creating time and place utilities.
The products of Sitaram Textiles are cotton yarn and polyester yarn.
Certain present of the waste of products can also be sold. The products of the
company are highly qualified. So the demand of the product is high. The company
follows direct distribution channel (zero level marketing).
Direct marketing
Direct marketing becomes common in this world. The company do not create dealer
network. The products are directly marketed to the depots in Maharashtra. Direct
marketing is very beneficial for customers as well as seller and producers. It
eliminates the gap between producer and consumer. The products can be effectively
displayed and demonstrated right in front of the customers. These goods and
services are available at fair price.
Marketing manager
Ass. Marketing Manager
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The company did not give importance to promotional activities
because the company has high demand in its products. They produce finished goods
after receiving orders. The price of the product is fixed by the government of
Kerala.
Management and workers have a strong confidence to success in the
market. If the government of Kerala provides the working capital (at least 2 crores)
but the company has to deliver the goods in time with consistency in quality.
Therefore the company can able to increase the order. So that the company can
definitely capture the entire market.
Now the company is facing cut throught competition from the firms
which carries same business operations. Severe price competition from the
unorganized power loom sector has restricted its operation to producing yarn.
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SWOT ANALYSIS
Swot analysis is under taken to understand the firms external and
internal environments. A conscious identification of the relevant environment
enables an organization to focus its attention on these factors which are intimately
related to its mission, objectives and strategies.
STRENGTH
The company has a well defined internal control system. The company provides high quality products. The company is blessed with highly qualified and skilled personnel. The company has cordial relationship with employees .The employees are more co-
operative.
The company ensure workers participation in management for improvement. The company is situated in10 acres of land. So expansion is possible. The company has taken various steps to improve productivity. Industrial relations are maintained harmonious. The company has productive work force.
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WEAKNESSES.
The trade union of the company are powerful. The company has not repaid interest towards principal amount of loan. High transportation cost offset the profits of the company. Technological obsolesce is the major problem, now the company is used 30 year old
machinery.
Shortage of capital prevents the companys effective performance. High labour turnover of employees. Employees turnover is mainly because of
retirement.
The loss of control is an important weakness of the company. The company follows direct marketing so the company cant capture the whole
market.
The company has not followed any promotional activities so the company cannotattract the customers.
Frequent change of BOD adversely affects the performance of management. TheBOD is selected by government of Kerala.
No facility for research and development.
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OPPORTUNITY
The company need to focus on product development. Proper up gradation of the technology helps the company to make quality good with
minimum cost of production.
The company can capture the foreign markets. Proper recruitments and selection of personnel for vacant posts Control of the department functions will helps the company for improvement. By changing the distribution channel the company can widen the market
opportunity.
A research and development wing helps the company to improve the productsquality and aiso helps to invent new products to the customers.
By introducing new production plants the company can improve their capacity.
THREATS
The cut throat competition from the similar field. Frequent changes in political policies and system are a threat of the company. Increasing trend in the price of raw material. The pollution created by the invisible waste of the cotton may cause health
problems.
Frequent changes in government policies obstruct the effective performance of thecompany.
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The Swot analysis give the clear picture about the organization both
in terms of internal and external environment. The organization have high quality
strength and opportunity to minimises weaknesses and threats. And the strength can
be use to utilises the maximum opportunity and the maximum utilisation of the
creative and productive opportunity that helps to avoid the weaknesses and
minimises the threats and producing quality product with new technology. The good
relation with the employees that helps to increase the production and minimises the
chance of making problems of the trade unions in the organization. And these better
strategies are formulated that can helps to increase the market share of the
organization.
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CONCLUSION
The research entitled An Organizational Study of Sitaram Textiles
Limited Was under taken with a view to study, understand, learn, analyses about
the operation of the organization. It also helps the researcher to gain more
knowledge and to get practical experience about the functions of each department.
In this era, companies should ensure that they offer job satisfaction and labour
remuneration to the perspective knowledge in the organization. There is a greater
co-operation between and the management and employees. The firm must also
communicate regarding their product and services.
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