A

SUMMER TRAINING PROJECT REPORT

ON
“Financial Analysis”

AT
DUSS LIMITED, MORADABAD
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT FOR BBA DEGREE
Submitted To,
Submitted By.
Mr. Syed Md. Faisal Ali khan
Mudit Mittal

1
Faculty Management BBA 5th
Sem.

(2008-2011)

SARASWATI INSTITUTE OF MANAGEMENT &

TECHNOLOGY
Affiliated to Kumaun University, Nanital
12 Km on Rudrapur- Gadarpur Road, P.O. Prem Nagar via Gadarpur (U.S.
Nagar) Uttarakhand

Website: www.simtrdr.org , E-mail: simt1@rediffmail.com

COLLEGE CERTIFICATE

2
COMPANY’S LETTER

3
 STUDENT DECLARATION
This project has been undertaken as a partial fulfilment of the
requirements for the award of the Degree of Bachelor of Business
Administration from Kumaun University, Nanital.

This project was executed during the IVth semester under the
supervision of Mr. Syed Md. Faisal Ali Khan, Faculty Management
Department.

Further, I declare that this project is my original work and analysis

and findings are for academic purpose only. This project has not been
presented in any seminar or submitted elsewhere for the award of any
degree or diploma.
4
Supervisor Signature
Student Signature
MR. SYED MD. FAISAL AlI KHAN MUDIT
MITTAL
Dep’t of Management BBA
IVth sem.

HOD Signature
Mrs. PUJA JHORI

ACKNOWLEDGEMENT
It is a matter of great pride to my summer training in the prestigious Dugdh
Utpadak Sahkari Sangh Limited (DUSS Ltd.) "PARAG" Dalpatpur, Distt.
Moradabad, under its Finance Department.

I have no word to express my gratitude towards General Manager Sri

Mr. PRASADI LAL, who allowed me to carry on my summer training at

"PARAG" Dalpatpur. There is a great sense of indebtness toward Finance In
charge Mr. SARVESH KUMAR SAXENA, Who has also
supervised my report and spared his valuable time for timely suggestion and
help.

5
 My reverenced teacher, Director Dr. MOHD. ALI, S.G.I. whose
guidance is of great importance in the completion of this report.

I am thankful to Mrs. PUJA JHORI (H.O.D.), of Management

dep’t., for the help rendered by them time to time.

I also express my sincere thanks to Mr. SYED MD. FAISAL

ALI KHAN my Project Guide, who had make the concepts of Finance so
clear that the project had become very easy to understand and make.

My most sincere and greatest gratitude towards my parents who enabled

me with all their resources, love and guidance.

Last but not the least I want express my regards all the staff members of
Parag, my teachers and my friends who helped me in every possible manner to
present this treatise in this form.

Mudit Mittal

PREFACE
PREFACE
Indian economy has undergone a radical transformation in the last three
decades. The discoveries and inventions in various fields of life is perhaps
being the reasons for this transformation. The marketing strategy in India,
which has practiced in the olden days, has either changed or been refined so
as to adjust with the dynamic world. If we consider the early years of the
development of our economy. The report help us to understand the followings:

(i) To know the Earning Capacity or Profitability.

6
(ii) To know the Solvency.

(iii) To know the Financial Strength.

(iv) To make comparative study with other firms.

(v) To know the capability of payment of interest and dividend.

(vi) To know the trend of the business.

(vii) To know the efficiency of management.

(viii) To provide useful information's to the Management.

7
8
 Table of Contents
Title Page no.

College Certificate (2)

Company Letter (3)

Student Declaration (4)

Acknowledgement (5)

Preface (6)

Chapter No.

1. Introduction to topic 8
2. Introduction to company 9
3. Objective of study 26
4. Scope and Importance
5. Research Methodology 28
6. Data analysis 33
7. Findings and Analysis
8. Conclusion
9. Recommendations
10. Limitations
Bibliography …..

9
 Annexure …..

INTRODUCTION TO TOPIC
My project is based on facts and survey conducted under the guidance of the
people of Moradabad Dugdh Utpadak Sahkari Sangh Limited, who had been
very helpful at all times.

10
 INTRODUCTION TO COMPANY
Uttar Pradesh milk co-operatives are contributing immensely to the Indian dairy
industry, the highest milk producer in the world. The impact of Uttar Pradesh
milk co-operatives can be ascertained from their role in the private and co-
operative systems. With the launch of innovative technologies Uttar Pradesh is
now being able to enhance their milk production acutely. The merging of the
rural and the urban contribution to the dairy production in Uttar Pradesh forms
the Uttar Pradesh milk co-operative union. This induces rapid growth and
development in the dairy production. The Uttar Pradesh milk co-operatives are
significantly engaged in the production, procurement, processing and marketing
of milk. The Pradeshik Co-operative Dairy Federation in Lucknow facilitates the
marketing and distribution of milk in Uttar Pradesh.

Moradabad Sahkari Milk Board Ltd., Dalpatpur, was established in 1968

with the joint planning of INDIAN GOVERNMENT & UNICEF. The
“UNICEF” with assistance from freedom from hunger campaign committee for
the benefits of poor and malnourished population in India and it was a belief that
this dairy may serve as a living monument of international co-operation.
The main objective to set up the Moradabad Sahkari Milk Board is
collecting the milk from the villages. Through co-operative societies and
distribute pure, fresh milk and milk products after pasteurization in Moradabad
on fair prices. This was the planning of state govt. which is now successfully
running under the PRADESIK CO-OPERATIVE DAIRY FEDERATION.

11
 The dairy was started in 1968. The capacity of plant at that time is 50,000
liter per day. The organization was manufacturing its product under brand
“PARAG” but due to some reason in June 1993 again this organization
started working under two schemes. This aid was given by NATIONAL DAIRY
DEVELOPMENT BOARD, NEW DELHI to PRADESHIK CO- OPERATIVE
DAIRY FEDERATION LTD.
In the year 1993 the name of organization changed and new name was
assigned MORADABAD DUGDH UTPADAK SAHKARI SANGH LTD.
(DUSS Ltd.) DALPATPUR, MORADABAD and the brand name of
product is “PARAG”.
Parag the brand name of Pradeshik Co-operative Dairy Federation
is given by the general public and accepted by Pradeshik Co-operative Dairy
Federation. It is a symbol of “PARAG” which is found in the flowers on pollen
grains.

Milk procurement by the Uttar Pradesh

Milk co-operatives
In 1999-2000 Uttar Pradesh procured milk of 7.19 Lakh kg Per Day to 7.09
Lakh kg Per Day. According to an authentic source it procured 15, 943 tonne
thousand milk in the year 2003-2004 as against 2.89 lakh tonnes in 2000-2001.

Estimates of Milk Production

State 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09

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Uttar Pradesh 12934 13618 14152 13857 14648 15288 15943 16512 17356 18095 18861 19537

*Production in lakh liters.

CORPORATE PROFILE

It is the project of Indian government established in 23 state of India from the

name of “state dairy cooperative federation.” It is running is various 23 states in
India from the name of “state cooperative dairy federation” under the
supervision of central government running by state government dairy
cooperative all over country are allowing the small dairy farmers to take
initiative in moulding their own destiny. They serve more then 10 million
former in over 80,000 villages. Here is a list of dairy co-operatives in India state
wise.

STATE COOPERATIVE DAIRY FEDERATIONS

ANDAMAN & NICOBAR:

Andaman & Nicobar Island Integrated Development Corporation Ltd.

(ANIIDCO),

Port Blair - 744101.

ANDHRA PRADESH:

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Andhra Pradesh Dairy Development Cooperative Federation Ltd.

Lalapet, Hyderabad - 500017

Brand name: Vijaya.

BIHAR

Bihar State Cooperative Milk Producers’ Federation Ltd.

Dairy Development Complex, PO Bihar Veterinary College, Patna - 800014
Brand Name: Sudha.

GOA:

Goa State Cooperative Milk Producers’ Union Ltd.

Curti, Ponda - 403401, Goa
Brand Name: Goadairy.

GUJARAT:

Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF)

Amul Dairy Rd, Anand - 388001
Brand Names: Amul, Sagar.

HARYANA:

Haryana Dairy Development Cooperative Federation Ltd.

SCO No 127-128, Sector 17-C, Chandigarh - 160017
Brand Name: Vita.

HIMACHAL PRADESH:

Himachal Pradesh State Cooperative Milk Producers’ Federation Ltd.

Totu, shimla – 171011

14
JAMMU & KASHMIR:

Jammu Cooperative Milk Producers’ Federation Ltd. (JCMPF)

Jammu cantt - 180003

Brand name: Jamfed.

Kashmir Valley Milk Producers’ Cooperative Federation Ltd.

Srinagar - 19001

KARNATAKA:

Karnataka Cooperative Milk Producers’ federation Ltd.

Bangalore - 560029

Brand name: Nandini.

KERALA:

Kerala Cooperative Milk marketing federation Ltd.

Thiruvananthapuram - 695004

Brand Name: Milma.

MADHYA PRADESH:

Madhya Pradesh State Cooperative Dairy federation Ltd.

Bhopal - 462011

Brand Name: Sanchi, Shakti, Sneha.

MAHARASTRA:

Maharashtra Rajya Sahkari Dugdh Mahasangh Maryadit

15
Mumbai - 400020

Brand Name: Mahanan.

MANIPUR:

Manipur State Cooperation Milk Processing & Marketing federation Ltd.

Imphal – 795001

NAGALAND:

Kohima Dist Cooperative Milk Producers Union Ltd.

Dimapur - 797112

Brand Name: Kevi.

ORISSA:

Orissa state cooperative milk producers’ federation Ltd.

Bhubaneswar - 751007

Brand Name: Omfed.

PONDICHERRY:

Pondicherry Cooperative Milk Producers Union Ltd.

Pondicherry - 605009

Brand Name: Ponlait.

PUNJAB:

Punjab State Cooperative Milk Producers’ federation Ltd.

16
Chandigarh - 160022

Brand Name: Verka.

RAJASTHAN:

Rajasthan Cooperative Dairy federation Ltd.

Jaipur 302017

Brand Nam: Saras.

SIKKIM:

Sikkim Cooperative Milk Producers Union Ltd.

Gangtok - 737102

Brand Name: Sikkimilk.

TAMIL NADU:

Tamil Nadu Cooperative Milk Producers Federation Ltd.

Chennai - 600051

Brand Name: Aavin.

TRIPURA:

Tripura Cooperative Milk Producers Union Ltd.

Agartala - 799006

Brand Name: Gomati.

UTTAR PRADESH:

Pradeshik Cooperative Dairy Federation Ltd.

17
Lucknow - 226001

Brand Name: Parag.

WEST BENGAL:

West Bengal Cooperative Milk Producers Federation Ltd.

Calcutta - 700091

Brand Name: Benmilk.

PROFILE OF PARAG U.P.

Established in 3/Jan/1967 Pradesh Corporative Dairy Federation Ltd. (Parag) is
the largest FMCG and manufacture enterprise of its kind in India today. The
company is engaged in manufacture of wide variety of milk products and
FMCG product, transmission and utilization of milk food product.

Placed among the top 4 manufacture of milk product & milk, PARAG provides
products, services for milk products, Ghee, Butter, Milk, Power, Ice Cream etc.
In each of these sectors, PARAG offer total service to its customers on turnkey
basis.

The first plant of PARAG was set up in Lucknow, which signalled the dawn the
milk food industry in India. It has 26 major plant were set up in U.P. &
Uttarakhand.

PARAG business broadly covers conversions, transmission, utilization and

conservation of food products in core sectors of economy that fulfil vital
infrastructure needs of the country. Its products have established and enviable
reputation of high quality and reliability, which is largely due to emphasis
placed all along on contemporary companies. Parag has consistently upgraded

18
its design and manufacturing facilities to National standards acquiring and
assimilating some of the best technologies of the India from the leading
companies in all over India from its own R & D Centres.

Headquarters at Lucknow, the company now has 26 manufacture divisions,

more than 100 service centres and 4 regional centres besides project sites spread
all over India and effective service to customers in India. PARAG has more than
30,000 employees comprising trained engineers, technicians & skilled artisans
supporting technical staff and management staff. The company registered a
turnover of Rs.100000 cr during the year 2006-2007.

MANUFACTURING UNITS OF PARAG

PRADESHIK CO-OPERATION DAIRY
FEDERATION LTD.

• Agra Dugdh Utpadak Sahkari Sangh Ltd., Agra.

• Allahabad Dugdh Utpadak Sahkari Sangh Ltd, Allahabad.
Soc: 360, Mems: 20,000. Av Milk Prod.: 30,000 Lpd.
• Almora Dugdh Utpadak Sahkari Sangh Ltd. Almora.
Soc: 151, Mems: 7020. Av Milk Prod.: 4,5 61 Lpd.
• Azamgarh Dugdh Utpadak Sahkari Sangh Ltd, Azamgarh.
• Ballia Dugdh Utpadak Sahkari Sangh Ltd, Ballia.
Soc: 177, Mems: 13290. Av Milk Prod.: 4,790 Lpd.
• Banda Dugdh Utpadak Sahkari Sangh, Banda.
• Barabanki Dugdh Utpadak Sahkari Sangh Ltd, Barabanki.
Soc: 390, Mems: 25,370. Av Milk Prod.: 28271 Lpd.
• Bareilly Dugdh Utpadak Sahkari Sangh Ltd, Bareilly.

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• Bijnore Dugdh Utpadak Sahkari Sangh Ltd, Bijnore.
Soc: 212, Mems: 8,480. Av Milk Prod.: 9,935 Lpd.
• Bulandshahr Dugdh utpadak Sahkari Sangh Ltd, Bulandshahr.
Soc: 514, Mems: 31,400.Av Milk Prod.: 70,668 Lpd.
• Deharadun Dugdh Utpadak Sahkari Sangh Ltd, Deharadun.
Soc: 201, Mems: 9753. Av Milk Prod.: 7,100 Lpd.
• Etawah Dugdh Utpadak Sahkari Sangh Ltd, Etawah.
Soc: 158, Mems: 10,000.Av Milk Prod.:6,440 Lpd.
• Farrukhabad Dugdh Utpadak Sahkari Sangh Ltd, Fatehgarh.
Soc: 147, Mems: 10,000. Av Milk Prod.: 7290 Lpd.
• Fatehpur Dugdh Utpadak Sahkari Sangh Ltd, Fatehpur.
Soc: 304, Mems: 18,000.Av Milk Prod.: 24,000 Lpd.
• Firozabad Dugdh Utpadak Sahkari Sangh Ltd, Sheikhabad.
• Gangol Sahkari Dugdh Utpadak Sangh Ltd, Meerut.
Soc: 449, Mems: 27,971.Av Milk Prod.: 48,066lpd.
• Ghaziabad Dugdh Utpadak Sahkari Sangh Ltd, Hapur.
• Ghazipur Dugdh Utpadak Sahkari Sangh Ltd, Ghazipur.
• Gonda Dugdh Utpadak Sahkari Sangh Ltd, Gonda.
Soc: 146, Mems: 5,451.Av Milk Prod.: 4,100 Lpd.
• Gorakhpur Dugdh Utpadak Sahkari Sangh Ltd, Gorakhpur.
Soc: 211, Mems: 12975.Av Milk Prod.: 4,331 Lpd.
• Hamirpur Dugdh Utpadak Sahkari Sangh Ltd. Hamirpur.
• Hardoi Dugdh Utpadak Sahkari Sangh Ltd, Hardoi.
Av Milk Prod.: 17,000.Lpd.
• Jalaun Dugdh Utpadak Sahkari Sangh Ltd, Hardoi.
Av Milk Prod.: 11,381 Lpd.
• Jaunpur Dugdh Utpadak Sahkari Sangh Ltd, Jaunpur.
20
 Soc: 102, Mems: 4,700. Av Milk Prod.: 2,700 Lpd.
• Kanpur Dugdh Utpadak Sahkari Sangdh Ltd, Kanpur.
Soc: 397.Av Milk Prod.: 83,700 Lpd.
• Kotdwara Dugdh Utpadak Sahkari Sangh Ltd, Kotdwara.
• Lucknow Producers cooperative Milk Union Ltd, Lucknow.
• Manipuri Dugdh Utpadak Sahkari Sangh Ltd, Manipuri.
Soc: 160, Mems: 8,000.Av Milk Prod: 13,000 Lpd.
• Mathura Dugdh Utpadak Sahkari Sangh Ltd, Mathura.
Soc: 149, Mems: 10,080. Av Milk Prod.: 14500 Lpd.
• Mirzapur Dugdh Utpadak Sahkari Sangh Ltd, Mirzapur.
• Moradabad Dugdh Utpadak Sahkari Sangh Ltd, Moradabad.
Soc: 885, Mems: 45369.Av Milk Prod.: 85,000 Lpd.
• Muzaffarnagar Dugdh Utpadak Sahkari Sangh Ltd, Muzaffarnagar.
• Nanital Dugdh Utpadak Sahkari Sangh Ltd, Nanital.
Soc: 340, Mems: 18470.Av Milk Prod.: 22,340 Lpd.
• Pithoragarh Zila Dugdh Utpadak Sahkari Sangh Ltd, Pithoragarh.
• Rae Bareilly Dugdh Utpadak Sahkari Sangh Ltd, Rae Bareilly.
Soc: 126, Mems: 12,970.Av Milk Prod.: 5,930 Lpd.
• Saharanpur Dugdh Utpadak Sahkari Sangh Ltd, Saharanpur.
Soc: 213, Mems: 11,310.Av Milk Prod.: 12,370 Lpd.
• Shahjahanpur Dugdh Utpadak Sahkari Sangh Ltd, Shahjahanpur.
Soc: 104, Mems: 4,715. Av Milk Prod.: 3,255 Lpd.
• Sitapur Dugdh Utpadak Sahkari Sangh Ltd, Sitapur.
Soc: 130, Mems: 6,490.Av Milk Prod.: 12,456 Lpd.
• Sultanpur Dugdh Utpadak Sahkari Sangh Ltd, Sitapur.
Soc: 292, Mems: 14,720. Av Milk Prod.: 12,456 Lpd.
• Uttar Kashi Dugdh Utpadak Sahkari Sangh, Uttar Kashi.
21
 • Varanasi Dugdh Utpadak Sahkari Sangh Ltd, Varanasi.
Soc: 248, Mems: 11,495.Av Milk Prod.: 16,657 Lpd.

GROWTH AND DEVELOPMENT OF

THE ORGANISATION
MORADABAD DUDGH SAHKARI SANGH LTD. Was started in Nov. 1968
with the capacity of 150000 lit. Per day.

This aid was given by NATIONAL DAIRY DEVELOPMENT BOARD,

NEW DELHI to PRADESIK CO-OPERATIVE DAIRY DEDERATION LTD.
LUCKNOW in year 1983 organization starts selling of milk in Polly pack. At
that time it was the only organization who sale the milk in Polly pack in
Moradabad Mahanager.

The table represents the growth rate of milk from the beginning of this
organization in Polly pack.

22
 Sales Report of Liquid Milk

Year Sale/Lit. Day Decline/Increase

in%

1999-2000 16359 -------------

2000-2001 18838 15.153%

2001-2002 17038 9.55%

2002-2003 15479 9.15%

2003-2004 12109 21.77%

2004-2005 11040 8.8%

2005-2006 12700 13.70%

2006-2007 11005 13.34%

2007-2008 10959 .41%

2008-2009 11162 1.85%

Above sales report presents fluctuation in the sale of Parag polypack milk. With
the compare of 1997-98, in 2007-08 the sale of Parag has been declined
31.76%g downward due to coming of similar other companies in similar field.
Present sale is concentrated on 9-10 thousand lit. /Day.

Moradabad Dugdh Sangh has increased the capacity of its doing from 50,000 to
1,50,000 Liters. The efficiency of Akbarpur chilling center has been accelerated
from 10,000 liter to 90,000 liter per day another chilling plant has been
established at Bijnor.

During 1992-93 the organization faced a loose of Rs. 3.31 Crores while in
93-94 organization earned a profit of Rs. 6.60 lakhs with all dedication & hard

23
work of management and employees of organization and in 1994-95
organization earned a profit of Rs. 888.94 Lakhs, the company reaped a profit of
Rs. 2 crore approximately in Year2003-2004.

SOCIETY AND THEIR PROCUREMENT

REPORT
Society and their Procurement Report

Year No. of Society No. of member Procurement of

Milk(Liters/Day)

2000-01 727 49390 46737

01-02 684 43652 46552

02-03 707 40956 67049

03-04 749 41214 71617

04-05 859 44470 67385

05-06 1054 4889 102060

06-07 1008 48975 65074

07-08 871 43199 70652

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08-09 645 42675 40817

At present the company is making all possible effort for increasing the sale of
liquid milk and milk products. About 1 milk bar is operating in Moradabad
Mahanager and a large no. of agents involved in selling of milk and product.

There are more than 200 commission agents of milk and milk product in
Moradabad Mahanager. At present Moradabad Dugdh Sahkari Sangh Ltd. Deals
in so many milk products as Pasteurized Standardised Milk, Double toned milk,
Sterilized flavour milk, Simple Mattha, Salted Mattha, Milk cake, Parag kheer,
pure ghee etc.

Over all Parag is the market leader due to their quality, Brand image,
operating efficiency and approachability from last thirty years.

PRESENT STATUS OF THE

ORGANISATION
Moradabad Mahanagar Parag is the market leader in Polypack milk. Before two
year percentage sale of Parag Polypack milk is near about 90% but due to
coming of similar other companies their percentage came down by 26.6%. Now
total percentage of consumption of milk in Moradabad is near about 56% in poly
pack industry. At present Parag milk board sale is concentrates nine thousand
liters/day.

Over all Parag polypack milk is the market leader. The sale of their other
products is also very good and captures large market of Moradabad Mahanagar.
These data represent the annual sale of Parag products.

Products Name Weight (Kg.)

25
Table butter (20gram) 55000

Pure Ghee 44500

Kheer 14200

Milk Cake 3950

Flavoured Milk (liters) 94000

Mattha (Liter) 45000

White Butter 29985

26
 Till now, if we think about polypack milk than Parag poly pack milk
firstly strike at our mind. Over all image of parag milk is best in Moradabad
Mahanagar. Moradabad Dugdh Sahkari Sangh Ltd. Always tries to maintain
their good image in the minds of consumers.

PRODUCT PROFILE

27
SERIAL NO. NAME OF PRODUCTS

1. PASTEURISED STANDARDISED
MILK

2. PARAG DOUBLE TOONED MILK

3. PASTEURISED SKIMMED MILK

4. PURE MILK GHEE

5. STERILIZED FLAVOUR MILK

6. PLANE MATTHA

7. MATTHA SALTED

8. LASSE

9. PARAG KHEER

10. MILK CACK

28
29
 OBJECTIVES

PARAG’S VISION

VISION OF PARAG (DALPATPUR) MORADABAD:

Word class, innovative, competitive, cost effective & Profitable productive

enterprise committed to quality, learning, growth, stake-holders and customer
enrichment

CORPORATE VISION:

Total Business Solutions.

World class, Innovative,

Competitive &Profitable

Hygienic food products providing

COMPANY’S BUSINESS MISSION

BUSINESS MISSION:

To maintain a leading position as suppliers of quality products,

and services in the field of conversion of milk, for application in
the areas of food products. Utilize company’s capabilities and
resources to expand business into allied areas and other
priority sectors of the economy.

BUSINESS OBJECTIVES:

1. GROWTH:-

30
To ensure a steady growth by enhancing the competitive edge of PARAG in
existing business, new areas and India leading operations so as to fulfil national
expectation from PARAG.

2. PROFITABILITY:-
To provide a reasonable and adequate return on capital employed, primarily
through improvements in operational efficiency, capacity utilization and
productivity and generate adequate internal resources to finance the company
growth.

3. CUSTOMER FOCUS:-
To build a high degree of customer confidence by providing increased value for
his money through international standards of product quality, performance and
superior service.

4. PEOPLE ORIENTATION:-
To enable each employee to archive his potential, improve his capabilities,
perceive his role and responsibilities and participate and contribute positively to
the growth and success of the company. To invest in human resources
continuously and alive to their needs.

5. IMAGE:-
To fulfil the expectation which stake holders like Government as owner,
employee, customer and the country at large have from PARAG.

31
RESEARCH
METHODOLO
GY

RESEARCH METHODOLOGY
32
 After recession with my locality member. I choose the project of
working capital management. I discussed the project with my instructor and
coordinator Mr. Sarvesh Kumar, account of books & budget section at PARAG
Moradabad.

He approved the project. After that a simple course of action has been
followed for working on this project. That entire information and data were
gathered from the respective annual report of PARAG, Moradabad. All the
figures are taken from their balance sheet, profit & loss account of the respective
years and the other internal documents, which were personally shown by the
members of company in our interest.

A great help was provided by our instructor Sarvesh Kumar in

understanding the facts and figures Mr. Sarvesh Kumar it possible to us to ask
our quarry from that person who can answer it best than anybody else in the
company. Although it has been a difficult task but the availability of proper data
and timely guidance give by Mr. Sarvesh Kumar and my efforts made it a little
simpler of completed this project.

The study is based on Exploratory research and then the descriptive research.

33
 SWOT ANALYSIS
Every organization is a part of an industry. All most all the organization faces
competition either directly or indirectly. Thus the industry and competition are
vital considerations in making of strategic choice.

Business firms undertake S.W.O.T. analysis to understand the central and

internal environment. S.W.O.T. analysis stands for strength, weakness,
opportunity and threats. It is also known as WOTS- UP analysis. With the help
of S.W.O.T.

Analysis the strength and existing within an organization can be matched with
the opportunities and threats operating in the environment so that an effective
strategy is one that capitalizes on the opportunities through the use of strength
and neutralizes the threats by minimizing the impact of weaknesses.

S.W.O.T. analysis involves matching of internal capabilities with the

environmental opportunity and threats matching strengths and weakness with
opportunities and threats requires that a firm should direct its strength towards
and threats requires that a firm should direct its strength towards exploiting
opportunities and blacking threats white minimizing exposure of its weakness at
the same time. S.W.O.T. analysis of PARAG is as:

STRENGTHS (S):

1. The company has a strong image and strong brand image.

2. PARAG has excellent distribution network.

3. The company has a competent sale force.

34
 4. It has a long experience.

5. The company has a strong market reputation.

6. The visibility of Parag in Moradabad polypack market is very high as

compare to the other brand.

7. Parag Sangh is a Semi-Government Sector.

WEAKNESSES (W):

1. Inability to provide project financing.

2. The promotional budget of the PARAG is less than their competitors.
3. Rate of PARAG polypack is higher than their competitors.
4. The company is somewhat over confident.

OPPORTUNITITIES (O):

1. High expected growth in food sector.

2. The polypack market is growing at a steady phase of 5 to 7%.
3. The total market of polypack milk is near about 15000 liters per day.
4. Opportunity to promote by using various sales promotion methods.
THREATS (T):

1. The threat to the PARAG Company is by the entry of competitors.

Namely by Gopalji, Amul, Nandan, Mother dairy.

2. Their promotional budget is very low in comparison to their other budget.

3. Total percentage of loose milk is near about 80-83% in Moradabad

Mahanagar.

35
4. The market there of Parag polypack milk is declined by 25%.

NATURE AND SCOPE OF STUDY

The basic purpose of Financial Analysis of Parag milk factory and Comparison
with two year Balance Sheet in Parag milk factory and Maintain equitable
wages and salary structure. Wages and Salary Administration refers to the
establishment and implementation of sound policies and practices of employee
compensation. It includes such areas as job evaluation survey of wages and
salary analysis or relevant organization problem development and maintenance
of wage structure, establishing rules for administrating wages, wages payment,
incentives, profit changing and adjustment, supplementary payments, control on
compensation costs and other related items.

The wages and salary administration is concerned with the financial aspect
needs, motivation of needs, motivation and rewards of the organization, analysis
and interpret the needs of their employee so that rewards can be individually
designed to satisfy these needs.

36
 FINANCIAL ANALYSIS

Meaning of Financial Analysis is to classify the data in simple form given in

financial statements and to compare with each other to find out the strong points
and weakness of the business and to take decisions for future. For instance, if all
items relating to current assets are placed in one group while all items relating to
current liabilities are placed in another group, the comparison between the two
groups will provide useful information. Actually the figures given in financial
statements do not speak anything themselves. The analysis of these figures helps
the interested reader by giving tongue to these mute heaps of figures.

In the words of Finney and Miller:

“Financial analysis consists in separating facts according to some definite plan,

arranging them in groups according to certain circumstances and then
presenting them in a convenient and easily read and understandable form.”

In the words of John N. Myres:

“Financial statement analysis is largely a study of relationships among the

various financial factors in a business, as disclosed by a single set of statements
and a study of the trends of these factors as shown in a series of statements.”

OBJECTS OR PURPOSE OF FINANCIAL ANALYSIS

37
The purpose of financial analysis depends on the needs of the person who is
analyzing these statements. These varying needs may be :—

(i) To know the Earning Capacity or Profitability.

(ii) To know the Solvency.

(iii) To know the Financial Strength.

(iv) To make comparative study with other firms.

(v) To know the capability of payment of interest and dividend.

(vi) To know the trend of the business.

(vii) To know the efficiency of management.

(viii) To provide useful information's to the Management.

FINANCE FUNTIONS
COST SECTION:

38
Cost-section of the company is divided into following two sections viz,
PRODUCT COST & CENTRAL COST and these deals with the following
functions:-

• Determination of periodic profits including inventory valuation.

• Determination of pricing policy of the company.
• Work relates to capital expenditures of the company.
• Developing variance management information report for different
parts of management for purpose of cost control and reduction.
• Valuation of work in progress and finished goods.
• Interaction with management of top management link for achieving
cost control and cost reduction and thereby improving bottom line
of the company.
• Preparation of cost sheet of different product and their analysis for
future planning.

SALES SECTION:

Sales accounts section will deal mainly with the following:-

• Scrutiny and vetting of estimates / quotation for sale of products /

services, whenever financial concurrence is required.
• Scrutiny and vetting of agreements for sales of products and
services.
• Invoicing for sale / advance or progressive payment / erection
income and other.
• Maintenance of subsidiary records like sale journals / sales day
book, sundry debtor’s ledgers’ advances from customer ledger etc.
• Payments, recovery and accounting of sale tax, excise duty.

39
 • Accounting of claims on carries/ insurance companies for missing
items / damages on outward consignments.
• Scrutiny, payments and accounting of bills of carriers and insurers
and other miscellaneous claims relating to them outwards
consignments.
• Review and in coordination Reconciliation as well as follow up of
recovery of outstanding dues from the customers Calculation and
scrutiny of data for payments of royalties to the collaborators.

STORES SECTION:

For the conveniences of performance of various functions it is divided in to

further three sections which are as follows:-

a) Stores bills.
b) Store review
. They deal mainly with the following items of works:-

i) Payment of supplier’s bill including bill for advances

indigenous.
ii) Pricing of stores receipt vouchers including fixed assets
vouchers and fixed assets receipt vouchers.
iii) Maintenance of accounts of advances to suppliers, claims
recoverable, claims for short suppliers, rejections and
rectifications to materials and sundry creditors.
iv) Opening of letter of credit and arranging payment to suppliers
under credit / deferred payment agreements.
v) Payment of bills for ocean freight, port trust dues, custom
duty, local agents commission and clearing agents bills, transit

40
 insurance bills, bills of contractors for transport / handling etc.
and accounting of such payments are made at regional offices.
vi) Maintenance of account of accounts of material issued on loan
and materials issued to subcontractors.
vii) Keeping account of earnest money and security deposits
received from tender and suppliers.
viii) Adjustment of stores in transit to be made at the close of the
year.

BOOKS AND BUDGET SECTION:

i) Preparation of operating budget for the company as a whole.

ii) Co-ordination with various function of organization with
regard to generation and submission of important MIR’s to
corporate office.
iii) Preparation of annual accounts to the company.
iv) Coordination with company auditors with regard to company
accounts.
v) Maintenance and accounting of fixed assets accounts.
Preparation of long term profit plans based on broad objectives of the
company.

PAYROLL SECTION:

This section deals mainly with the following functions:-

i) Preparation of monthly wages bill.

41
ii) All account work related to personal payment and discloses profit and
loss account of the company.
iii) Dealing with income tax authority with regard to personal taxation of
employee.
iv) Dealing with other statutory authority such as P.F. Commissioner, ESI
(Employee state insurance).
v) To ensure correct payment of salary and wages and other benefits to
employees in line with policies.
vi) Payments and accounting of all miscellaneous expenditures incurred
on post and telegraph, telephone and miscellaneous payments.

CASH SECTION:

The cash section shall responsible for banking of all money or money’s
worth received by the company and the disbursement of all authorized
payments on behalf of the company and also for the safe custody of all cash
and other valuable as may be entrusted to that section. The broad functions
are:

i) Receipt of money in the form of cash, cheque, bank draft, and postal
orders etc.on behalf of the company. Payment of money to the
suppliers, contractors etc. on behalf of the company and disbursement
of salaries, wages and other personal payments of employees.
ii) Handling and custody of cash, cheque etc. till disbursement or deposit
in bank and custody of other valuables like govt. and other paper
securities, share certificates, bank guarantees etc.

42
iii) Accounting of all receipt and payments on behalf of the company in
cash / bank books, maintenance of registers and other record incidental
to and for the efficient dispatch of the responsibilities of the section.
iv) Arrangement / operation of cash credit facility with banks.
v) Preparation of cash flow statement forecasts etc.

Note: - The function of arrangements of cash credit facility specified at item

(IV) above is now discharged centrally by the cash management section of
the corporate office. However the division concerned will also keep proper
liaisons with all the local members, bank consortium to ensure the smooth
functioning of the centralized cash credit system.

WORKS SECTION:

Work section of the company is dealing with the following functions:-

i) Payments of contractors bill including bills for advance.

ii) Maintenance of accounts of contractors with regard to security
deposits, earnest money, progressive payments.
iii) 215 maintenance of accounts of materials issued on loans to
contractors.
iv) All accounting work related to capital expenditure in progress on
erection of plant & machinery and building.
v) All other miscellaneous. Work relating to hiring of various facilities.
vi) Payments and accounting of all expenditure related to revenue
particularly with regard to expenditure related to revenue particularly
with regard to expenditure incurred on repair and maintenance of plant
machinery, building and roads.
43
Status of DUSS Ltd. Moradabad showing
balance sheet

Balance sheet of 2007-08

PARTICULARS AMOUNT AMOUNT

Sources of Funds:-

Capital account 3,69,71,020.61

Loans (Liability)

secured loans 6,29,78,457.05

unsecured loans 1,37,60,018.19 7,67,38,475.24

Branch / Divisions 4,02,98,483.91

GRAND TOTAL 15,40,07,979.76

Application of Fund:-

2,57,17,108.19

Fixed Assets

Investment 17,65,774.85

44
 Working capital

Current Assets

stock-in-hand 52,13,660.11

Deposits(assets) 20,39,227.91

Loans & Advances (assets) 42,54,468.37

Sundry Debtors (-) 34,29,338.32

cash-in-hand 2,746.00

Bank Accounts 55,86,649.71

Other Current Assets 1,39,43,351.91 2,76,10,765.69

Less: current liabilities

Duties& taxes 24,885.00

Provisions 11,200.00

sundry creditors 3,41,25,155.53

(-)7,85,47,877.6
other current liabilities 7,19,97,402.82 10,61,58,643.35 6

PROFIT& LOSS A/C

Opening balance 18,38,45,971.01

add: current year 1,89,46,081.86

20,27,92,052.87

adjustments during the year 22,80,921.51 20,50,72,974.38

GRAND TOTAL 15,40,07,979.76

MORADABAD D.U.S.S. LTD Dalpatpur,

Moradabad

45
 PROFIT & LOSS A/C
PARTICULARS AMOUNT AMOUNT

Trading Account:

sales account 45,76,90,583.36

cost of goods sold

consumption:

opening stock 25,23,265.18

purchase account 37,66,55,503.45

37,91,78,768.63

Less: closing stock 52,13,660.11 37,39,65,108.52

Expenses (Direct) 6,53,25,407.77 43,92,90,516.29

Gross profit 1,84,00,067.06

Income Statement :

income (Revenue) 6,01,545.79

Sub-total 1,90,01,612.85

Less : Expenses

Expenses ( indirect) 3,79,47,694.71 3,79,47,694.71

46
 Net Profit (-)1,89,46,081.86

PERFORMANCE ANALYSIS

As at sat, 31 Mar 2008

OPERATING RESULT
For the month For the year

Sale Account 1.3.2008to31.3.2008 1.4.2007to31.3.2008

Actual 11,29,163,915.60 45,76,90,583.35

(February : Total) 2,45,33,288.04

Purchase Account

Actual 9,54,02,454.77 37,66,55,503.45

(February : Total) 4,56,69,888.86

47
Income (Revenue)

Actual 48,168.54 6,01,545.79

(February : Total) 11,605.00

Expenditure Account

Actual 4,05,99,953.68 10,32,73,102.48

(February : Total) 75,58,099.98

CASH MOVEMENT

Cash-in-hand

opening Balance 3,56,640.75 Dr 30,065.65 Dr

Receipts 63,45,781.50 8,74,33,677.57

Paymennts 66,99,676.25 8,74,60,997.22

Closing Balance 2,746.00 Dr 2,746.00 Dr

Bank Accounts ,

opening Balance 1,38,949.37 Dr 74,11,905.80 Dr.

Receipts 6,42,69,462.60 71,94,33,950.58

Paymennts 5,88,21,7662.26 72,12,59,2066.67

Closing Balance 55,86,649.71 Dr 55,86,649.71 Dr.

Nett cash flow

Inflow of cash 4,65,71,484.41 47,06,23,140.99

Outflow of cash 4,14,77,678.82 47,24,75,716.73

48
(net inflow of cash) 50,93,805.59 (-)18,52,575.74

RATIO ANALYSIS OF DUSS Ltd. Moradabad

ON THE YEAR OF 2008

for the month for the year

1.3.2008 to 1.4.2007 to
31.3.2008 31.3.2008

PROFITABILITY RATIOS

Sales Account 11,29,13,915.60 45,76,90,593.35

Gross Profit (-)1,20,64,020.96 1,84,00,067.06

Gross Profit % (-)10.68% 4.02%

Net Profit (-)3,11,38,397.36 (-)1,89,46,081.86

Net Profit % (-)27.58% (-)4.14%

Operating Cost % 127.58% 104.14%

Current Ratio

A. Current Assets 2,76,765.69

B. Current Liabilities 10,61,586,43.35

A:B 0.26:1

( at the end of February) 0.77:1

49
Quick Ratio

(without stock-in-hand)

A. Liquid Assets 2,23,97,105.58

B. Current Liabilities 10,61,58,643.35

A:B 0.21:1

(at the end of February) 0.61:1

Debt / Equity Ratio

A. Loans (Liability) 7,67,38,475.24

B. Net Capital Account (-)16,81,01,953.77

A:B (not calculable)

Working Capital Turnover

A. Sales Account 45,76,90,583.35

B. Working Capital (-)7,85,47,877.66

A/B (not calculable)

Receivables Turnover

(avg. credit on sales)

A. Sundry Debtors (-)34,29,338.32

B. Sales Account 45,76,90,583.35

(A / B) * no. of wkg days (not calculable)

Present Status of DUSS Ltd. Moradabad

showing balance sheet

Balance sheet of 2008-09

50
 PARTICULARS AMOUNT AMOUNT

Sources of Funds:-

capital account 3,69,79,745.61

Loans (Liability)

secured loans 6,31,86,202.05

unsecured loans 1,37,60,018.19 769,46,220.24

Branch / Divisions 6,85,60,178.06

GRAND TOTAL 18,24,86,143.91

Application of Fund:-

Fixed Assets 2,31,84,266.30

Investment 13,89,196.85

working capital

Current Assets

stock-in-hand 10,97,881.13

Deposits(assets) 20,39,227.91

Loans & Advances (assets) 12,79,449.55

Sundry Debtors (-) 30,40,668.25

cash-in-hand 22,886.75

Bank Accounts 3,20,13,258.85

Other Current Assets 1,27,58,957.22 4,61,70,993.1666

Less: current liabilities

Provisions 11,200.00

51
 Duties& taxes 18,343.00

sundry creditors 4,60,19,234.89

other current liabilities 7,91,09,037.02 12,51,57,823.91 (-)7,89,86,830.75

PROFIT& LOSS A/C

opening balance 20,50,72,974.38

add: current year 3,20,45,623.98

23,71,18,598.36

adjustments during the year (-)2,19,086.85 23,68,99,511.51

GRAND TOTAL 18,24,86,143.91

MORADABAD D.U.S.S. LTD Dalpatpur,

Moradabad

PROFIT & LOSS A/C

PARTICULARS AMOUNT AMOUNT

Trading Account:

sales account 31,34,97,133.21

cost of goods sold

consumption:

opening stock 52,13,660.11

purchase account 25,40,69,501.48

52
 25,92,83,161.59

Less: closing stock 10,97,881.13 25,81,85,280.46

Expenses (Direct) 5,63,10,031.57 31,44,95,312.03

Gross profit (-)9,98,178.82

Income Statement :

income (Revenue) 5,52,662.43

sub-total (-)4,45,516.39

Less : Expenses

Expenses ( indirect) 3,16,00,107.59

Other revenue accounts - 3,16,00,107.59

Net Profit (-)3,20,45,623.98

53
 PERFORMANCE ANALYSIS

As at sat, 31 Mar 2009

OPERATING RESULT
For the month For the year

Sale Account 1.3.2009 to 31.3.2009 1.4.2008 to 31.3.2009

Actual 1,98,88,622.72 31,34,97,133.21

(February : Total) 2,90,86,929.77

Purchase Account

Actual 1,05,77,829.51 25,40,69,501.48

(February : Total) 1,55,23,711.61

Income (Revenue)

Actual 2,43,541.20 5,52,662.43

(February : Total) 1,33,228.00

Expenditure Account

Actual 3,43,52,271.97 8,79,10,139.16

(February : Total) 30,97,126.11

54
 CASH MOVEMENT

Cash-in-hand

opening Balance 35,351.05 Dr 2,748.00 Dr

Receipts 63,45,781.50 9,21,78,543.97

Payments 66,99,676.25 9,21,58,403.22

Closing Balance 22,886.75 Dr 22,886.75 Dr

Bank Accounts

opening Balance 2,36,24,857.45 Dr 55,86,649.71 Dr.

Receipts 1,91,78,807.00 50,02,82,511.00

Payments 5,88,21,7662.26 47,38,55,901.86

Closing Balance 55,86,649.71 Dr 3,20,13,258.85 Dr.

Net cash flow

Inflow of cash 2,15,62,113.25 37,12,14,707.01

Outflow of cash 1,31,86,176.15 34,47,67,957.12

(net inflow of cash) 83,75,937.10 2,64,46,749.89

RATIO ANALYSIS OF DUSS Ltd. Moradabad

ON THE YEAR OF 2009

55
 for the month for the year

1.3.2008 to
31.3.2008 1.4.2007to31.3.2008

PROFITABILITY RATIOS

Sales Account 1,98,88,622.72 31,34,97,133.21

Gross Profit (-)1,58,69,732.01 (-)9,98,178.82

Gross Profit % (-)79.79% (-)0.32%

Net Profit (-)2,70,17,247.67 (-)3,20,45,623.98

Net Profit % (-)135.84% (-)10.22%

Operating Cost % 235.84% 110.22%

Current Ratio

A. Current Assets 4,61,70,993.16

B. Current Liabilities 12,51,57,823.91

A:B 0.37:1

( at the end of February) 0.47:1

Quick Ratio

(without stock-in-hand)

A. Liquid Assets 4,50,73,112.03

B. Current Liabilities 12,51,57,823.91

A:B 0.36:1

(at the end of February) 0.43:1

Debt / Equity Ratio

A. Loans (Liability) 7,69,46,220.24

B. Net Capital Account (-)19,99,19,765.90

A:B (not calculable)

56
Working Capital Turnover

A. Sales Account 31,34,97,133.21

B. Working Capital (-)7,89,86,830.75

A/B (not calculable)

Receivables Turnover

(avg. credit on sales)

A. Sundry Debtors (-)30,40,668.25

B. Sales Account 31,34,97,133.21

(A / B) * no. of wkg days (not calculable)

WAGES & SALARY ADMINISRATION

The basic purpose of wages and salary administration is to establish and

maintain an equitable wages and salary. It is not so simple to developed or
maintain the wages and salary structure in an structure in an organization. So
wages and administration should be controlled by some proper agency. This
responsibility may be entrusted to the personnel department or general company
organization, or to some job executive. Since the problem of wages salary is
very dedicated and complicated. I usually entrusted to a committee of high
ranking executives representing major line organization. The major functions of
much committee are:-

1. Approval and / or recommendation to management on the

job evaluation methods and finding.

57
 2. Review and recommendation of basic wages and salary
structure.
3. Help in the formulation of wages policies.
4. Co-ordination and review of departmental rates to ensure
conformity.
5. Review of budget estimates for wages and salary adjustments
and increase.

This committee should be supported by the advise of the technical

staff; such committee may be for job evaluation; job description meant rating
wages salary survey in an industry and for a review of present wages rate
procedure and policies.

Alternative the overall plan is first presented by the personnel

manager in consultation and discussions with senior members of other
department. It is then committed for final approval of the top executives. Once
he has given his approval for the wages and salary structure and the rules for
administration its implementation becomes a joint effort of all heads of the
departments. The actual appraisal of the performance of subordinates is carried
out by the various managers, who is turn submit their recommendations to
ensure compliance with established rules to administration in unusual cases of
serious disagreement the president makes the final decision.

(a) MEANING
A wages (or pay) is the remuneration paid, for the service of labour in
production to on employee/worker. Wages usually refers to the hourly rate paid
to such groups as production and maintenance of employees (blue caller
worker). On the other side, salary normally refers to the weekly or monthly rates
paid to clerical administrative and professional employees (white caller worker).
58
Every organization has a unique wages and salary structure if its own, while
framing the wages and salary police the top management ensure that the wages
structure is attractive and the compensation package provides a reasonable
standard of living for its employees.

According to the plan, it first prepared by the personnel manager and discussion
with senior members of other departments. After this it is submitted for final
approval of the top executive organization, a sound wages policy is to adopt a
job evaluation, depending upon the contents of the job.

(b)PRINCIPAL
The generally accepted principles governing the fixation of wages and salary
are:-

i) The plan should carefully distinguish between jobs and

employees.
ii) Equal pay for equal worker.
iii) There should be a well defined and clear cut procedure
for hearing the wages complaint and redressed of these
grievances.
iv) All the wages and trade union members should be fully
aware of the existing wages rates and grievances
redressed procedure about wages complaints.
v) The wages and salary structure should be flexible so that
changing condition can be easily met.
vi) The wages and salary payment must fulfill a wide variety
of human need for self actualization.
vii) For revision of wages

59
FACTORS:

The factor usually taken into consideration for wages and salary administration.

i) The firm’s capacity to pay

The main factor of wages and salary
administration is the capacity of firm’s to pay. Firm’s enjoying higher profits,
higher rate of return over investment gives higher wages than those firms’s
which are running into losses are enjoying lesser profit.

ii) Demand and supply of labour

If the demand of labour is more than its
supply the labour wanted higher wages and if the demand of labour is less then
its supply the labour wanted lesser wages.

iii) Prevailing market rate

To attract the sufficient and maintain the quality
and quantity of manpower, a firm gives the wages to its employee, according to
the industry or other firm’s.

iv) The cost of living

When the cost of living increasing, the worker demand
increases for real wages.

60
 v) Job requirement
Wages is also depending upon skills, responsibility and
job condition required. Those employees who have higher responsibility get
more wages then the employees which have lower skill and responsibility.

vi) Production of labour

Productivity measures the contribution of all the
resource factors men, method, material and management.

vii) Managerial attitudes

Job management’s desire to maintain or enhance
the company’s prestige has been a major factor in the wages policy of number of
firms. Desire to improve or maintain moral to attract high-caliber employees, to
reduce turnover and to provide as possible wages policy decisions.

WAGES DETERMINATION PROCESS

The element of these diagrams is explained below:

a) Job Analysis

The process is done, after the deciding that how many persons would be needed.
It is a written document. It records the detail of training, skill, qualification,
abilities, experience, responsibilities etc.

Job Description and Specification

61
 These are the structure of job analysis. Job description
mean to describe the job that, what’s responsibilities, authority given to the
people where as, job specification tells that what kind of person to recruit and
what qualities are present for doing the particular job.

c) Job Evaluation
In these processes, there is a comparison between the
different type of work and the workers which are doing this work.

d) Wages Survey
After the job evaluation the actual amount to be paid to
worker must be determined. This is done by making wages or salary survey.
Such surveys are given the answers the questions like, what are other firms
paying? What is the level of pay offered by firms for similar occupation? etc.
such wages survey provide may be kinds of useful information about differences
in wages level for particular kinds of occupation. this can have a great influence
on an organization compensation policy.

e) Wages Structure

The next step is to determine the wages structure. For this

several decisions need to taken such as:-

i) Where the organization wishes or able pay amount above,

below or equal to averages in the industry.
ii) Where wages range should be provide for merit increase or
whether their should be single rate.

62
 iii) The number and width of the payment grade and extent to
overlap.
iv) Which jobs are to be placed in each of the pay grade.
There are though no hard and fast rule for making such
decision and procedure.

f) Rules of Administration

Wages & Salary administration should be

controlled by some proper agency. This responsibility may be entrusted to
personal department or, some job executive. For controlling the wages and
salary administration a committee is formed for the formulation of wages
policies. According to the rules of administration the wages and salary is paid to
the worker / employees.

g) Wages Payment

Method of wages payment is different in different

organization. Different industry applied different method for the payment of
wages. But the three most common methods which have provide a basis for all
these systems of wages are payment by time, by piece and debt. These systems
are generally termed as:-

a) Time Wages Payment System

As the name suggested under this

system time is the basis of payment. Remuneration of is the directly calculated
on the basis of time spent by him on the work. This system is simplest historical

63
and oldest method of wages payment. Under this system if a worker is paid 5
rupees per hour and work for 8 hours.

They will get 5x8=40 rupee

* Time wages=T x R

T = Time spent at the work place.

R = Rate of wages per unit of time.]

This system enjoys the following payoffs:-

1) This method is simple to operate and easy to understand.

2) Understand the method any sickness and lazy cannot cut the payment of
worker.

3) It is accept by trade unions.

4) Eliminated wastage.

5) Illiterate worker also can not cheated by employees.

Pitfalls:-

1) Increase cost of production.

2) No distraction between good and bad workers.

3) Decline in efficiency.

64
 b) Piece Wages Payment System

This system is also very old, but it

is only recently that it has begun to be windily used. Under this system
workers are paid according to the quality of goods products not on the
basis of payment.

When the result or output is zero, then quite obviously the pay
will be zero.

Piece wages = N x R

N = Number of pieces are produced by the workers.

R = Rate per piece

This system enjoys the following payoffs:-

1) It provides greater incentive it the worker.

2) It distinguishes skilled and semiskilled work.

3) Easy estimation of labour cost.

Pitfalls:-

1) This method is harmful for worker.

2) Heavy wastage during the highly wages.

3) Under this system minimum wages are not fix.

65
c) Balance Method

The methods also know as debt method. This is a

combination of time and piece rates. The worker is guaranteed an hourly or a
daily with an alternative piece rate. If the earning of a worker calculated at the
piece rates, the worker is guaranteed an hourly or daily rate with an alternative
piece rate. If the earning of a worker calculated at the piece rate exceeds the
amount which he would have earned means, if the paid on the time basis he get
credit for the balance, i.e. , if his price rate earning are equal to his time rate
earnings the question of excess payment dose not arise. Where piece rate
earning are less than time rate earning he is paid on the basis of the time rate;
but the excess which he is paid is carried forward as a debt against him to
recovered from any future balance of piece work earning over time work
earning over time earnings. This system presupposes the fixation of time and
piece rate on a scientific basis.

All the wages payment system has discussed, but in PARAG time
wages payment system is going on, because other wages payment system is
impossible.

ALLOWANCES AND DEDUCTIONS

I) ALLOWANCES:

1. DEARENESS ALLOWANCE (D.A.)

The payment of these allowances
will be regulated in accordance with the orders issued by the company from time
to time. It will be regulated by Head Office of Government of U.P. in Lucknow.

66
Dearness allowance will be computed on the basis pay of each employee.
Dearness allowance (DA) will be admissible during leave provided leave salary
is payable. It will not be admissible during extra ordinary leave or leave without
apply.

- At present Dearness Allowance is 41.8% on Basic Pay.

2. HOUSE RENT ALLOWANCE (HRA)

The payment of these allowances
will be regulated to those employees who never uses the company quarters and
they live in there own quarters. House Rent Allowance (HRA) is also payable in
leave period. For these purpose leave means total leave of all kinds not
exceeding 120 days of the leave period of holidays are combined with leave, the
entire period of holidays and leave should be taken as one spell of leave.

- At present House Rent Allowance is 10% on Basic Pay and

Special Allowances.
3. OVERTIME ALLOWANCE (OT)
When a worker, who comes in
factories act, 1948, works beyond the prescribed hours on any day, he is entitled
to payment of Overtime Allowance. This is worked out at a single rate i.e.
(1/208 of pay, Basic Pay, Special Allowance, Dearness Allowance) for each
hour on a working day. When a worker works more than 9 hours on a day or
more than 48 hours a week. Overtime Allowance is calculated at double the rate
mentioned above.

OT = BP + SA + DA \ 208 X 1 Hr.

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 In the cause of staff not covered by factories Act, the overtime
allowance will be claimed in accordance with rules and rates fixed by the
Management.

4. CONVEYANCE ALLOWANCE
Conveyance allowance / cycle allowance
will be paid as per the rules framed by the company from time to time.

5. LATE NIGHT SNACK ALLOWANCE (LNSA)

All employees who work
in night shifts extending beyond midnight are paid LNSA. This allowance is
also paid to temporary employees who working against regular employees.

- At present LNSA is Rs. 30/- per night

6. WASHING ALLOWANCE
Payment of washing allowance is to be
regulated as per orders/circulars issued by personnel department in this regard
from time to time.

- At present Washing Allowance is Rs. 70/-per month

II) SUBSCRIPTOIN TO CONTRIBUTORY POVIDEND FUND:

On receipt of office order of joining from personal dept., the data is sent
to computer for deduction of CPF. The particulars are noted in the individual
salary/wages record and further recoveries are affected every month at the rate
prescribed from time to time.

- At present the rate of recovery of subscription towards cpf is 12%

wages/salary.

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III) RECOVERY OF CYCLE/SCOTER/MOPED/CAR ADVANCE:

When payment of cycle/motorcycle/scooter/moped/car advance is made,

the particulars of the number of installment recoverable will be noted in the
individual salary/wages record and the recovery effected every month
accordingly. Just after the last installment of the principle amount is recovered,
interest due will calculated be and also be noted for recovery.

IV) LIFE INSURANCE PREMUM:

The concerned office of the life insurance

Corporation intimates the rate of Premia and policy numbers in respect of
employees covered by Life Insurance Corporation’s Salary savings scheme.
This will be noted in the individual salary/wages record and recoveries affected
every month accordingly.

V) HOSPITAL AND DIET CHARGES:

A statement of hospital and diet

charges recoverable from various employees is received every month from the
chief medical officer in charge of the hospital either directly or through the
Revenue Accounts section. A note of the amount due for recovery will be kept
in the individual wages/salary record and recoveries will be affected
accordingly.

- At present the rate of Hospital and Diet Charge is Rs.30/-per day.

VI) CLUB SUBSCRIPTIONS:

The list employees joining the clubs as well as

those who have discontinued the subscription of the club are received from the

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secretaries of the clubs every month. With reference to these advice recoveries
will be affected by the establishment Accounts Section.

- At present the rate of Club Subscription is Rs.50/-per month.

VII) INCOME TAX:

At the beginning of the year, the total anticipated income

assessable to income tax is worked out with reference to details available in the
establishment.

Accounts section and the installments of deductions are fixed accordingly. In

the month of August or September a declaration is obtained from each employee
assessable to income tax showing the detail of annual income, Life Insurance
Premium paid, subscription to provident fund, Recurring Deposit Scheme and
other relevant particulars for the calculation of income tax in terms of financial
act of the year. A statement of deductions on account of income tax deduction at
source will also be supplied to the employees concerned by 30 April every year.

For the purpose of calculations of income tax recoverable from salaries of

company employees, the salaries earned and paid from the period from April to
March are taken into account. However, in case of deputations the basis adopted
while in government service of namely, salaries earned during the period March
to February, will be continued in the company so long as they continue on
deputation with the company.

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JOURNAL ENTRY OF EARNINGS AND DEDUCTIONS

DESCRIPTION DR CR

BASIC PAY xxx

DEARNESS ALLOWANCE xxx

HOUSE RENT ALLOWANCE xxx

OVERTIME ALLOWANCE xxx

LATE NIGHT SNACK ALLOWANCE xxx

WASHING ALLOWANCE xxx

SPECIAL ALLOWANCE xxx

OTHER ALLOWANCE xxx

RENT COMPANY QUARTERS xxx

ELECTRICITY CHARGES xxx

WATER AND GARDEN CHARGES xxx

SUBSCRIPTION TO CONTRIBUTION PROVIDENT FUNDxxx

RECOVERY OF CYCLE/MOTOR CYCLE/ CAR ADVANCExxx

LIFE INSURANCE PREMIUM xxx

HOSPITAL AND DIET CHARGES xxx

CLUB SUBSCRIPTION xxx

OTHER RECOVERIES xxx

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 FINDINGS

 To find out the financial position of Parag will decrease day by day.
 After analyzing the ratio in two year balance sheet we found that the ratio
has decreased in comparison to last year balance sheet.
 The existing pay structure should be regularly revised. This will make job
evaluation program mere acceptable to employees.
 Wages and salary structure must be such that which help to maintain
harmonious relation between employers and employees.
 Regional difference in wages should invariably be maintained.
 To find out satisfaction level of employees related to salary.
 To find out employees grade in parag milk factory.

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 Employees Grade

salary grade of
10% officers
20%

wages salary grade

8000 -16400 class 2nd
employee
2750 -3050
salary grade of
40%
30% class 3rd
employee
4000 -5000
others

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 SUGGESTION

• The company should create a system to evaluate the financial position of

the company.
• Ensure that training contributes to competitive strategy of the firm.
Different strategies need different financial skill for implementation.
• There should be making leaning one of the fundamental values of the
company. Let this philosophy percolate down to all employees in the
organization.
• There should be a comprehensible and systematic approach to training
exits, and training and re-training are done at all levels on a continuous
and ongoing basis.
• There should be a proper linkage among organizational and individual
training needs.

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 CONCLUSION

1. Pay fixation on age revision in PARAG is not point to point due

to which pay annually arises.
2. There is no efficiency bar system in PARAG.
3. Both the inefficient and efficient persons get equal wages, hence
efficient workers lose their enthusiasm for work.

BIBLIOGRAPHY

1. Understanding financial position of Parag.

2. Financial dept. of PARAG.
3. Establishment of Accounts in PARAG, Moradabad.
4. Intranet of PARAG, Moradabad.
5. www.indiandairy.com
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6. www.paragmilk.com
7. E-mail: pcdf1@satyam.net.on
8. Finance is managed by Mr. Sarvesh Kumar
9. webmaster@indiandairy.com

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