corporate performance measurement

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A Project Report

ON

CORPORATE PERFORMANCE MEASUREMENT

AS PARTIAL FULFILLMENT OF PGDM PROGRAM, IInd

year


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Company certificate


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Certificate from college


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ACKNOWLEDGEMENT

This project has been an honest and dedicated attempt to make the analysis on marketing

material as authentic as it could. And I earnestly hope that it provides useful and

workable information and knowledge to any person reading it.

During this period, I had the pleasure of working closely with accomplished organization

people who shared with me their experience and helped me in completion of my research.

I express my sincere thanks to my project guides and my institute faculty for guiding me.

Lastly I am grateful to my parents who been my mentors and motivators. I am

also thankful to all my batch mates who have been directly or indirectly involved in

successful completion of this project.


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TABLE OF CONTENTS

Sr.No.

Topics Page no.s

1.Objectives And Scope Of The Project. 8

2.Background Introduction / Synopsis Of The Project.

a) Company profile,b) Basic introduction of the project,c) Organizational hierarchy,d) Department.

3.Research Methodology.

a) Methods & Tools adopted for analysis,b) Data collection,c)

Techniques for analysis,d) Pictorial / Graphic / pie charts, presentation ofdata.

4.

Observations / Findings.

5.Limitations.

6.

Suggestions / Recommendations.

7.

Conclusion.

8.Bibliography.


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OBJECTIVES AND SCOPE OF THE PROJECT


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Objective of the project

To know the organizational structure of Indian Telephone Industry Limited,

RAEBARELI: My first objective is to know the organizational structure of Indian

Telephone Industry Limited, Raebareli. The various departments in ITI Ltd, and the

working & operations of Indian Telephone Industry, Raebareli .

To know the Financial Statement of the Company and to know its investment in

different sectors: My second objective is to know about the financial statement of the

company and to analyze financial position of the company. An analysis of financialstatement is very needful for the planning for investment i.e. the different areas where the

company should invest.

To know the techniques in which were prevailing and used in the company for

maintaining its profit as it was in loss: My third objective is to know about the

techniques which are use in recording the financial data. This is very necessary for

maintaining its profit as it was in condition of suffers.

To know the capital structure of the Indian Telephone Industry: My fourth objective is to

know about the capital structure of the Indian Telephone Industry. How much the equity

capital issued & how many the debentures are barrowed, what is the position of surplus

and reserve in the company.


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Scope of the project

Business description - A detailed description of the companys operations and business

divisions.

Company history - Progression of key events associated with the company.

Major products and services - A list of major products and services of the company.

Key competitors - A list of key competitors to the company.

Key employees - A list of the key executives of the company.

Key operational heads - A list of personnel heading key departments/functions.

Important locations and subsidiaries - A list of key locations and units of the company,

including contact details.

Detailed financial ratios- The latest financial ratios derived from the annual financial

statements published by the company.

SCOPE & IMPORTANCE OF FINANCIAL ANALYSIS

Financial management, at present is not confined to raising and allocating funds. The

study of financial institutions like stock exchange, capital, market, etc. is also emphasized

because they influenced under writing of securities & corporate promotion. Company

finance was considered to be the major domain of financial management. The scope of

this subject has widened to cover capital structure, dividend policies, profit planning and

control, depreciation policies. Some of the functional areas covered in financial

management are discussed as such-

1. Determining financial needs: - A finance manager is supposed to meet financial

needs of the enterprise. For this purpose, he should determine financial needs of the

concern. Funds are needed to meet promotional expenses, fixed and working capital

needs. The requirement of fixed assets is related to types of industry. A manufacturing

concern will require more investments in fixed assets than a trading concern. The


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working capital needs depend upon scale of operations. Larger the scale of operations,

the higher will be the needs for working capital.

2. Choosing the sources of funds: - A number of sources may be available for raising

funds. A concern may be resort to issue of share capital and debentures. Financialinstitutions may be requested to provide long-term funds. The working capital needs may

be met by getting cash credit or overdraft facilities from commercial bands. A finance

manager has to be very careful & cautions in approaching different sources.

3. Financial analysis and interpretation: - The analysis & interpretation of financial

statements is an important task of a finance manager. He is expected to know about the

profitability, liquidity position, short term and long-term financial position of the

concern. For this purpose, a number of ratios have to be calculated. The interpretation of

various ratios is also essential to reach certain conclusions Financial analysis and

interpretation has become an important area of financial management.

4. Cost-volume profit analysis: -This is popularly known as CVP relationship. For

this purpose, fixed costs, variable costs and semi variable costs have to be analyzed.

Fixed costs are more or less constant for varying sales volumes. Variable costs vary

according to the sales volume. Semi-variable costs are either fixed or variable in the

short-term. The financial manager has to ensure that the income of the firm will cover its

variable costs, for there is no point in being in business, if this is not accomplished.

Moreover, a firm will have to generate an adequate income to cover its fixed costs as

well.

5. Working capital management:-Working capital refers to that part of firms capital

which is required for financing short-term or current assets such as cash, receivables and

inventories. It is essential to maintain proper level of these assets. Finance manager is

required to determine the quantum of such assets.

6. Dividend policy: - Dividend is the reward of the shareholders for investments made by

them in the shares of the company. The investors are interested in earning the maximum

return on their investments whereas management wants to retain profits for future

financing. These contradictory aims will have to be reconciled in the interests of

shareholders and the company. Dividend policy is an important area of financial


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management because the interest of the shareholders and the needs of the company are

directly related to it.

Basic introduction of the project

The objective of this project was to assess the Corporate Performance of Indian

Telephone Industries Ltd. and to facilitate the development and guideline for Indian

Telephone Industries Ltd. that would employ non-financial performance measures.

Specific best practice conclusions and recommendations, as garnered from literature

research and discussions with the Indian Telephone Industries Ltd, are highlighted in this

report. The project emphasized the principles behind establishing a comprehensive and

measurable performance measurement foundation corporate strategies, goals,objectives, measures, targets and actions for Indian Telephone Industries Ltd.

This project anticipates that Indian Telephone Industries Ltd. equipped with an efficient

and customized performance measurement system can encounter greater congruency in

the achievement of its actual versus planned corporate goals. The project provides

supplementary information that can assist Indian Telephone Industries Ltd. in the

development of a system into a value-added management tool. Moreover, it supports the

Councils ongoing monitoring duties by facilitating the development of a moretransparent accountability system behind the activities of the system. Indian Telephone

Industries Ltd. Performance measurement is the practice of gauging progress towards

declared targets or objectives. Its most effective form, performance measurement is a

management and communication tool. Recent trends indicate the increasing importance

of shifting focus from the amount of resources allocated (inputs) and the amount of work

completed (outputs) to the actual results achieved from the corporate processes

(outcomes), as compared to the intended results.

An effective measurement approach may help your organization pinpoint strategic areas

to monitor progress and manage through chaos. Therefore, business strategy is clearly

and succinctly translated to its results and level of accomplishment. The simple logic

states that without measuring and tracking outcomes, the effectiveness of a firms


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strategy cannot be determined. Performance measurement allows the establishment of

targets for accomplishing strategic objectives and public policy goals and then track

progress relative to these targets.

BACKGROUND

INTRODUCTION/SYNOPSIS OF THE

PROJECT


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COMPANY PROFILE

Indias first Public Sector Unit (PSU) - ITI Ltd was established in 1948. Ever since, as a

pioneering venture in the field of telecommunications, it has contributed to 50% of the

present national telecom network. It has presence across six locations and a countrywide

network of marketing/service outlets, the company offers a complete range of telecom

products and total solutions covering the whole spectrum of Switching, Transmission,

Access and Subscriber Premises equipment.

ITI joined the league of world class vendors of Global System for Mobile

(GSM) technology with the inauguration of mobile equipment manufacturing facilities at

its Mankapur and Rae Bareli Plants in 2005-06. This ushered in a new era of indigenousmobile equipment production in the country. These two facilities supply more than nine

million lines per annum to both domestic as well as export markets.

The company is consolidating its diversification into Information and Communication

Technology (ICT) to hone its competitive edge in the convergence market by deploying

its rich telecom expertise and vast infrastructure. Network Management Systems,

Encryption and Networking Solutions for Internet Connectivity are some of the major

initiatives taken by the company.

Secure communications is the company's forte with a proven record of

engineering strategic communication networks for India's Defence forces. Extensive in-

house R&D work is devoted towards specialized areas of Encryption, NMS, IT andAccess products to provide complete customized solutions to various customers.

ITI Limited is an India-based company. The Company offers a range of

telecom products and solutions covering the spectrum of switching, transmission, and

access and subscriber premises equipment. The Company manufactures mobile

infrastructure equipment based on global system for mobile (GSM) technology and code

division multiple access (CDMA) technologies. During the fiscal year ended March 31,

2010 (fiscal 2010), it established the manufacturing facility for Gigabit Passive Optical

Network (GPoN) at its Rae Bareli Plant and supplied equipment to BSNL. During fiscal

2010, the Company also implemented the National Population Register Project of the

Ministry of Home Affairs at its Palakkad Plant. The ITI- Huawei combine has enabled

BSNL to launch third generation (3G) services in the South Zone.


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ORGANIZATION'S VISION

The following are the organizations vision of Indian telephone industries limited

To perceive by their customer as the leading business partner for providing totalnetwork.

To offer innovation solution using leading technologies in competitive manner tohelp customer achieve their business objective.

To pursue new opportunities arising from the convergence of informationcommunication and entertainment business.

In manufacturing business organization will continuously drive down costs. Organization will leverage its telecom domain knowledge to build telecom

software business in India catering to global requirement.

To transfer I.T.I in to a creative livewire entrepreneurial enterprise with a questfor growth and shared values.

MISSION

The following are the mission of Indian telephone industries ltd.

Leader in domestic market: Important global player Providing different solution to customer. To build on core competencies to enter new business area.


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COPORATE OFFICE

Bangalore Plant

This is the first Plant of ITI set up in 1948. With its vertically integrated, state-of-the-

art infrastructure a vast range of telecom products are manufactured. They include digital

switches (large, medium, small), Digital Microwave equipment, optic fibre equipments,

satellite communication equipment, access products, terminal equipments.

The main R&D Centre and the Micro Electronics Division are housed in this Plant.

ITI Bhawan

Doorvaninagar,

Bangalore

MANKAPUR PLANTS

It was established in 1983 for manufacturing of large digital switches (E10B). This Plant

has modern vertically integrated infrastructure for manufacturing. The OCB 283 / CSN

exchange in technical collaboration with Alcatel is manufactured in this Plant.


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Facilities include

Research and Development Centre Thick Film Hybrid manufacturing Surface Mount Technology Environment Test Lab PCB Plant PCB Assembly and Testing Metal parts manufacturing Finishing Shop Molding & Tool Room Connectors and MDF's manufacturing

SRINAGAR PLANT

It was established in 1971 for component manufactures. This plant has upgraded facilities

for assembly and testing Established in 1971 for component manufactures. This plant has

upgraded facilities of assembly and testing of telephone of various types.

NAINI PLANT

This Plant was set up in 1971 for the manufacturing of transmission equipment. The major

products are optic fiber systems of both PDH and SDH and telephone instruments of

various types. It has an R&D Centre and modern facilities for assembly and testing with

Surface Mount Technology.

Environmental lab, metal parts manufacturing facilities and PCB plants are

part of the modern infrastructure.


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Facilities include:

Research and Development center Environment test lab Chemical and metallurgical PCB plants PCB Assembly and Testing Metal parts manufacturing Surface Mount Technology

PALAKKAD PLANT

Established in 1976, the plant manufactures large digital switches and digital trunk

exchanges in collaboration with M/s Alcatel. A lean and highly productive plant by virtue

of its structure it has modern facility for PCB manufacture (including multi-layer bards)

assembly and automated testing facilities with SMT line and environmental test lab.

Facilities include

Surface Mount Technology Environment test lab PCB plant


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NETWORK SYSTEMS UNIT:

BangaloreREGIONAL OFFICES:

i. Delhiii. Bangalore

iii. Kolkataiv. Lucknowv. Mumbai

vi. Chennaivii. Hyderabad

viii. Bhubaneswarix. Bhopalx. Ahmadabad

xi. KochiMANUFACTURING UNITS:

i. Bangalore(Karnataka)ii. Naini(U.P)

iii. Mankapur(U.P)iv. Raebareli(U.P)v. Palakkad(Kerla)

vi. Srinagar(J&K


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ISO CERTIFICATION

The International organization for Standardization (ISO) is the specialized international

agency for standardization, at present comprising the national standards bodies of 91

countries including india.ISO is made up of approximately 180 committees. Each

technical committee is responsible for one of the many area of specialization.

The object of the ISO is to promote the development of standardization & related

world activities with a view to facilitating International Exchange of goods & services &

to develop the co-operation in the sphere of intellectual, scientific technological &

economic activity.

The result of ISO works are published as International Standards. The standards

discussed here is result of this process.

COMPETITORS OF ITI LTD

Arvind Micro System, Hyderabad. HECL, Calcutta Dynahytac System, system Sabmife, Hyderabad Afcoset, Mumbai Wolpower Telecom System , Mumbai UTL ,Bangalore


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HTL , Chennai Aleatelmodi, France NEC , Japan

Comparisons with some main competitors of ITI Ltd.

Company Last Price Market Cap.

(Rs. cr.)

Sales

TurnoverNet Profit Total Assets

Siemens 892.70 30,378.13 9,400.07 827.21 3,478.00

Honeywell Autom. 2,562.50 2,265.64 1,355.79 105.05 438.78

HFCL 16.95 1,682.11 86.42 40.22 1,265.23

GTL Infra 16.15 1,546.12 490.42 -139.29 6,242.13

GTL 95.35 927.45 2,396.30 139.75 3,515.75

ITI 32.15 925.92 2,102.22 -381.87 2,293.18

Gemini Comm. 23.80 309.74 314.92 10.43 331.25

Astra Microwave 30.60 250.39 161.14 18.61 174.76

AGC Networks 169.00 240.54 305.57 12.82 261.60


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GLOBAL CUSTOMERS

Botswana Comoros Gambia Ireland Madagascar Malaysia Nepal Rwanda Sri Lanka Sudan Switzerland Uganda Vietnam Yemen Zimbabwe

Kavveri Telecom 158.00 222.29 255.57 34.12 177.99


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INDIANCUSTOMERS


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Department of Telecommunications(DoT), Government of India

BSNL Mahanagar Telephone Nigam Defence Services Paramilitary, Police &

Internal Security organisations

Power, Steel and Oil sectors Railways Post Offices, Factories, Offices, Bank Corporate Hotels

ITI MARKE CUSTOMER PROFILE


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ITI unique selling proposition for the global customer is a one-stop-shop for all his

present & emerging needs. This is solidly supported by its R&D state of the art

manufacturing, integrated logistic support (ILS) & strategic alliances.

ITI CAN OFFER ITS CUSTOMERS

Solution for telecom networks. Telecom solution for defence railways electricity board etc. Specialized networks for tropical countries. Network management Customized country adaption of the product. Migration from legacy system.

RAEBARELI UNIT

Raebareli Manufacturing unit was setup in 1973 and boasts a world-class infrastructure.Presently, this unit manufactures GSM network equipments and CDMA handsets. ITI

Raebareli has taken a leap to enter broadband equipment G-PON and WiMAX. This unit

is India's first telecom equipment manufacturer to conduct field trial of G-PON

technology in India, and is all set to rollout India's first lot of G-PON equipment.

Multi-location state-of-the-art electronic assembly & component manufacturing facilities

accredited with ISO 9001:2000

The pioneer public sector undertaking, ITI Ltd. was set up by the efforts of Mrs. (Late)

India Gandhi, Ex-Prime Minister of the republic of India, under the patronage of ministry

of communications.


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ITI Ltd. Raebareli has Switching System (ESS), Digital Multi Excess Rural Ratio

(MARR) System, Electronic digital system with C-DOT technology & 3-channel open

wire transmission.

The I.T.I Ltd Deals with drivers technologies continuously phasing out old technologies

& phasing in new technologies. A part from these technologies, centre of development of

telemetric (C-DOT) has also provided indigenous technologies for manufacturing rural

automatic exchange (RAX) & main automatic exchange (MAX). The companys product

range includes all that is required to equip national & international telecommunications

network, satellite communication & optical communication system.

Prominent foreign technologies under manufacturing include:-

Digital Switching System OCB283 (in collaboration with CITALCATE, France). Digital Microwave System (in collaboration with NEC, Japan). Optical Communication System (in collaboration with NRT, Denmark). Digital Co-axial system (in collaboration with AT & T PHILIPS, Holland). Switch Mode Power Supply (in collaboration with ASCOM, Switzerland).

LOCATION ADVANTAGE

I.T.I Raebareli is well connected to all the major metros of the country by the rail & road

at just 574 Kilometers. From New Delhi, the capital city of India, the unit is easily

accessible in the true sense of the world. I.T.I is just a ninety minutes drive from

Lucknow Airport.

AREA OF BUSINESS:

Telecom Equipment Manufacture GSM network equipments and CDMA handsets Broadband equipment G-PON and WiMAX.


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PRODUCTS:

GSM - Infra(BTS) ,Shelter, Tower, RTT, SMPS, Control Panels ,Franchise Wimax & Wimax CPEs and GPON SWITCHING:

A- Large switchingB- B- Medium switchC- C- Small switching

TRANSMISSION:A- MicrowaveB-

B -Fiber optic

C- C- Satellite ACCESS:

A- Wireless in local loop (WLL)B- B- Digital loop carrier (DLS)C- C- Pair gains.

TERMINAL EQUIPMENT:-A- TelephonesB- B- ISDN productC- C- Video conferencing

MICRO ELECTRONICS:A- Application integrated circuitsB- B- Application S/W

OTHER PRODUCT:A- Switch mode power supplyB-

B- Supervisory control & dataAcquisition (SCADA)

C- Solar power system


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GSM / CDMA Products

Base Trans-Receiver Station (BTS) BTS A-9100, is radio frequency mobile

communication product based on GSM technology. It is a set of equipments that

facilitates wireless communication between user equipment (UE) and a network. A BTSin general consists of Trans-receiver module, Antenna Network Combiner, Controller

(SUMA) & Alarm Extension System (XIBM). It is a self contained unit for transmitting /

receiving signal for mobile communication.


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BTS SHELTER

Shelter is a portable sealed cabin made up of sandwiched insulated panels withpolyurethane as filler material between galvanized pre-coated steel sheet.

Floor is made up of 19mm thick marine plywood and is covered with PVCantistatic flooring.

MS tube is reinforced inside floor panel for higher floor load capacity. Secondary slanting roof is provided to protect primary roof from direct sunlight

and rainwater.

Door is fixed with heavy-duty hinges. It is equipped with hydraulic closer & threeway locking arrangement.

Shelter is installed on suitable base frame of galvanized I-beam supported onconcrete pedestal.

ITI LIMITED RaeBareli is manufacturing Prefabricated Shelter for housing of BTS

& its accessories used in Telecom Mobile Service.


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ROOF TOP TOWER

RTT is made up of structural steel as per IS2062 Grade A & hot dip Zincgalvanized as per IS 4759.

It can carry 6 Nos. GSM/WLL Antenna & 3 Nos. 0.6M dia Microwave Antenna.Basic design of RTT is for wind speed 200 Km/h. It can survive wind velocity up

to of 210 km/h for short duration.

SMPS(Switch Mode Power Supply)


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CDMA (Code Division Multiple Access)

CDMA (Code Division Multiple Access) is a digital wireless technology to provide

mobile communication. CDMA works by converting speech into digital information,

which is then transmitted as a radio signal over a wireless network. CDMA uses a unique

code to distinguish each different call. The receiving device is instructed to decipher

only the data corresponding to a particular code to reconstruct the signal. This enables

many subscribers to share the same frequency band and, at the same time, without any

cross talk or interference.

CDMA-WLL technology provides option of limited as well as full mobility to the

customers. This helps to provide faster last mile connectivity, where laying of cables is

difficult.


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INFRASTRUCTURE:

In-house Research & Development Network System Unit capable of undertaking turnkey jobs Self contained component evaluation centre Fully automated assembly lines In circuit tester (ICT) Modern Chemical, Metallurgical Labs Mechanical fabrication/Machine e shops with modern CNC machines

Moulding & Die casting Full fledged state of the art tool rooms SMT (Surface mount technology) Environmental testing Component approval centre approved by BSNL

Total Area - 250 Acres A/C Area - 1500 Sq. Mts. 4400 K.V.A. Captive Power for uninterrupted power supply communicated all

over world.

MANPOWER

Officers 1272

Non- officers 2600

Total 3872

DISTRIBUTION OF MANPOWER

Male Female

Officers 1225 47

Non-officers 2521 79


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FACILITIES:

SMT line

PCB Assembly In-circuit testing Cabinet and Rack Manufacturing Pressed and formed Sheet Metal Component Plastic moulded components Electroplating and Powder Coating Facility

Surface Mount Technology (SMT)An exclusive facility dedicated to Surface Mount Technology (SMT) offers a total

solution for a wide range of SMT production. Company has two most modern zero defect

SMT lines which are capable of handling complex and fine pitch components with great

accuracy. The SMT lines are supported by latest and advanced BGA rework station. The

manufacturing facility is also equipped with latest accurate connector fixing machines

which provide total solution for SMT art of work.

IN-CIRCUIT TESTER:

The state of art In-Circuit Tester TS 128 from Teradyne, USA, is capable of highly

reliable and accurate quality test for complex PCB assemblies. It can test upto 3840 test

points on any size of PCB with facility of DSM programming and Boundary scan. It

provides excellent diagnostic accuracy because closed-loop, low- impedance drivers

remains accurate even under fault conditions. It has the highest capacity in-circuit test

solution available in the market.


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PRODUCTION OF PRODUCT IN ITI LTD RAEBARELI

At Present Products producing by ITI Raebarli

GSM (Main)Parts of GAM

a) Shelterb) Base Tower- RTT (Roof Top Tower)c) BTS-Base Terminal systemd) SMPS- Switch Mode Power Supply

SALES

EPD MPD

EPD - Electronic Product Division

MPD - Manufacturing product Division

Special note

ITI Ltd has begged a contact from ALCATEL to supply 300 BTS (Base station

equipments) for the companys GSM execution abroad.


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Organizational hierarchy


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Board of Directors

SummaryName Since Current Position

K. Dhingra 2010 Executive Chairman of the Board,

Managing Director

Ravi Khandelwal 2011 Director - Finance, Director

Rachana Choudhary 2010 Company Secretary

R. Agarwal 2010 Whole Time Director, Director -

Marketing

K. Khurana 2008 Director - Human Resources, Whole-time Director

A. Jain 2009 Independent Whole Time Director

M. Das Chief Vigilance Officer

K. Gupta 2010 General Manager - HR & GSM - SZ,Director - Production, Director

S. Tikoo General Manager - Finance

A. Srivastava 2009 Director - Govt. Nominee

P. Mohapatra 2008 Non-Executive Director - Govt.Nominee

V. Ron 2009 Independent Director

Keshav Saran 2009 Independent Director

M. Balakrishnan 2010 Non-Official Part-Time Director

A. Bansal 2008 Independent Non-Executive Director -

GOI Nominee

S. Chaudhuri 2010 Non-Official Part-Time Director

T. Narayanasami 2010 Non-Official Part-Time Director


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Biographies

Name Description

K. Dhingra Shri. K. L. Dhingra is the Executive Chairman of the Board, Managing

Director of ITI Ltd. Shri. Dhingra is a Master in Commerce (M.Com)

and Master in Business Administration (MBA Finance) from Faculty of

Management < Studies (FMS), Delhi University. He has also done LLB

(Academic). He has acquired additional Banking qualifications from

India (CAIIB) and UK (ACIB, London). He secured the first rank in

three of the courses on banking conducted by the Institute of Banking

and Finance,

R. Agarwal Shri. R.K. Agarwal is the Whole Time Director, Director - Marketing of

ITI Ltd. Prior to taking over the charge of Director Mktg., he was

General Manager (Corporate Marketing). An industrial Engineering

Graduate, Shri. Agarwal joined ITI Ltd. in 1976 as an Assistant

Executive Engineer in the Company's Bangalore Plant. Shri Agarwal is

having 33 years experience in areas such as manufacturing, quality

control and marketing.

K. Khurana Shri. K. K. Khurana is Director - Human Resources, Whole-time

Director of ITI Ltd. He holds B.Sc. Engineering Degree from Punjab

Engineering College, Chandigarh and Post Graduate Diploma in

Electrical Engineering from RECKurukshetra.

K. Gupta Shri. K. K. Gupta is the General Manager - HR & GSM - South Zone,Director - Production, Director of ITI Ltd. Prior to taking over the

charge of Director -Production, he was General Manager, Corporate HR

and GSM (South Zone)..

M.

Balakrishnan

Prof. M. Balakrishnan is the Non-Official Part-Time Director of ITI Ltd.

He was appointed as non-official part-time Director on the Board with

effect from 9th March 2010. He is a Professor in the Department of

Computer Science & Engineering at I.IT. Delhi. He has done B.E.

(Hons) in Electronics & Electrical Engg. from BITS Pilani with 1st rank

in 1977 and Ph.D. from EE Dept. IIT, Delhi in 1985. He worked as a

Scientist in CARE, NT Delhi from 1977 to 1985 where he was involved

in designing and implementing real-time DSP systems

A. Bansal A. S. Bansal is Independent Non-Executive Director - GOI Nominee of

ITI Ltd. He has done Bachelors degree in Electrical Engineering from

esteemed Roorkee University (now lIT) in 1965 and M.B.A. from Delhi

University. He was former CMD, Telecommunications Consultants


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India Ltd. (TCIL), New Delhi. For over 37 years, he has been associated

with the Indian Telecom Industry and expert in Strategic Management

and is advising many Telecom Industrial Houses in India and Abroad.

S. Chaudhuri Dr. S. K. Chaudhuri is the Non-Official Part-Time Director of ITI Ltd.

Dr. Chaudhuri who has done Ph.D. in finance, MA (Economics),

M.Phil. Finance and B.Sc. Physics (Hons) has over two-and-a-half

decades of experience in teaching, research & consultancy. He was a

visiting scholar at J L Kellogg Graduate School of Management, USA

and Manchester Business School, UK. He has served North Bengal

University (West Bengal), Burdwan University (West Bengal)

Management Development Institute (Gurgaon, Haryana) and

International Management Institute (New Delhi).

T.

Narayanasami

Shri. T. S. Narayanasami is the Non-Official Part-Time Director of ITI

Ltd. He has done B.Sc. (Physics) and presently he is Managing Director

& CEO of United Stock Exchange of India Ltd. He is also the Directorof MTNL & Axis Asset Management Company Ltd. He is having

experience in banking industry. He held the position of Chairman &

Managing Director of Bank of India,


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DEPARTMENTS


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ROLE OF FINANCE DEPARTMENT IN ITI LTD. RAEBARELI

There are the following roles of finance department in Indian telephone industries

limited.

Preparation of cash flow statement. Assisting in purchase of equipment, raw material, and laying down suitable

procedure for purchase.

Advising the Chief Executive on the policies of prices of products, interdepartmental issues etc.

Advise the management on all service matters having financial implications. Organizing an Internal Audit Department and processing the reports submitted by

the internal Auditor, and placing them before the Board.

Ensuring that the annual accounts are prepared in time according to statutory auditand the audit by the Comptroller and Auditor General.

Acting as custodian of cash of the company. Furnishing management with prospective costs of the products to enable them to

determine the optimum product etc.

Preparation of quarterly report on resources employed cash flow, capitalexpenditure, profit & loss accounts and ratio analysis.

Ensuring sound finance, non-finance interface.


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FUNCTIONS OF DEPARTMENTS

DEPARTMENTS (FINANCE & ACCOUNTS)

Sales Billing

Personal Claim Bills Payable Cash & Bank Material and Cost Accounting Payroll Central Finance

SALES BILLING DEPARTMENT

Sales billing department, the motto behind establishing this department is to realizemoney from the customers of ITI limited Raebareli. Working of sales billing department

starts from A.P.O. (advance purchase order). For example directorate ofBHARAT

SANCHAR NIGAM LIMITED, the leading customer of ITI limited Raebareli issues

A.P.O.

Advance purchase contains:

A.P.O is likely to be converted into detailed purchase order under the following terms

and conditions: Quantity of item & general (commercial) terms &conditions Prices Delivery period Cancellation of purchase order

Technical /commercial compliances

Placement of detailed purchase order Withdrawal of the advance purchase order


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Bills payable (works)

Departmental procedure

1. Purpose: To pass and account for the payment to contractors.

2. Scope: The scope of bills payable works is to release the payment of the contractors

and its accounting.

3. Reference documents

I. Company quality manual no.cor/q/cm/001.

Ii. Quality system procedure no.cor/q/qsp/01.

Iii. Unit supplement to company quality manual.

Iv. Accounts manual.

V. Work order/mb etc.

Vi. Financial instructions issued time to time.

4. Authority and responsibility

The head of bills payable (works) has the authority to implement and control the

procedure to ensure achieving the stated purpose. To manage, perform & verify the

function of bills payable works a suitable organization shall be established and authority

assigned. The head of bills payable works shall prepare and maintain the following.

I. Organization chart.

II. Responsibility and interfacing departmental matrix.


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5. Procedure

5.1 Bills works section passed bills of all the contract works relating to

constructions/repair of building, electrical new work and maintenance works etc. The

works are defined as under.

I. Secured advance.

Ii. Passing of running bills as well as final bills.

Iii. Passing of security deposit bills.

Iv. Release of bank guarantee.

5.2 These bills are passed by works section based on the verifications made by

concerned department i.e. Civil, central services, plant etc. The system of passing and

recording are as under.

5.3 Work is carried out as follows

Bills received from concerned section duly checked and recommended forpayment.

Bills recorded in bill register. Bills given to concerned officials. Officials pass the bills with reference to work order etc. If bills are not in accordance with the work order or there is objection it is

returned to concerned department.

If bills are in order, it is put up to concerned officer for approval. If bills are running, then after approval by concerned officer voucher is prepared

and sent to cash for payment.

if bills are final, it is sent to internal audit for audit.After audit, voucher is prepared and signed by the concerned officer and sent to cash

office for payment


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PAYROLLThis department has payment works. Its calculated the salary of the employees under

given rules & regulation. The working of this department start from the attendance of the

employees is calculated after 13th of every month. It is assumed that employee will be

there, for the rest of the month. But in cash employee is absent after 13th

it will adjust in

the coming month.

The rule & regulation for computing salary is formulated under the industrial

instrumental act & central govt. The salary of employees is calculated as per the personal

manual. This manual classifies the employees into various grades (for officers) &

categories (for non-officers).

According to the payroll department, the basic salary of officer & non-officer are as

follows: - it to be revised:-

FOR OFFICERS

GRADE BASIC SALARY

1 6,500 - 200 - 11,350

2 8,600 - 250 - 14,600

3 10,750 - 300 - 16,750

4 13,000 - 350 - 18,250

5 14,500 - 350 - 18,7006 16,000 - 400 - 20,800

7 17,500 - 400 - 22,300

8 18,500 - 450 - 23,900

9 20,500 - 500 - 26,500(G.M)

10 23,750 - 600 - 28,550


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FOR NON-OFFICERS

A0 3000-35-4,750

A 3650-60-5130

B 3730-65-4510-70-5420

C 3875-75-4775-85-5880

D 4040-90-5120-95-6355

E 4240-105-5500-115-6995

F 4460-120-5900-125-7525

G 4700-130-6200-140-8080

H 5100-155-6960-160-9040

In additional of basic salary, an employee of I.T.I Ltd also receives different allowances

among them, main are:-

DEARNESS ALLOWANCE: - It is given on the basis of price index, which changes

from time to time; current rate of price index is 45.3%.

IN CASE OF OFFICER: - D.P is 45.3% of basic salary.

IN CASE OF NON-OFFICER:- D.A is 45.3% of basic salary & service weightage or

benefits.

HOUSE RENT ALLOWANCE: - According to rules & regulation it is computed @10%

of salary. For officer it is 10% of basic salary & for non-officer it is 10% of basic salary +

service weightage.

CCA: - Raebareli is unclassified city thats why there is no provision regarding to citycompensatory attendance to the office.


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For non-officer this allowance is payable with another name that is special allowance is

as follows:-

BELOW PAY RANGE SPECIAL PAY

Below Rs.4000 25

Rs 4001-5250 35

Rs 5251-6499 65

Rs 6560 & above 120

An employee is also entitled to get inanities which are based on productivity. Any

employee who is directly attached with production is entitled to get direct incentive.

Any employee who is not directly attached with production is also entitled to get indirect

incentives. Indirect incentives are given to those employees who are non-operating

worker & officer.

After checking the balance sheet I come to know only I.T.I Ltd. Raebareli unit pays Rs

84 crores salary per annum. The bank but 70 people who withdraw his salary in cash pays

the total salary.

After analyzing the Master of payroll Junes come to know that I.T.I Ltd Raebareli units

paid Rs 4, 68, 67, 840 salary of the month of may 2011.

The bank pays total salaries the 1st

day of the next month except 70 people. Those 21

people take his salary in cash at 5th

day of the next month I.T.I Ltd Rbl wants close the

cash payment of salary. Those employees who accept salaries through bank live for way

from the factory or township bank thats why the company for their convenience pays

salaries through other bank which will be nearer to them.


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There are 12 bank through which these payment are made, these are follows (payment

made for the month of May 2011 through these bank)

S.B.I TOWNSHIP ( CHECK) 22657870

S.B.I Main branch 435760

S.B.I Beliganj 385820

Union Bank Of India 700190

B.O.B (Malikmau) 1277010

B.O.B (City bank) 1124290

S.B.I (F.G College) 185920

P.N.B 1994860

DENA Bank 662630

Allahabad Bank 534410

Vijaya Bank 616010

B.O.B 63900

CONVEYANCE ALLOWANCE:-Conveyance allowance is also paid by I.T.I for officer

Rs.250/- per month & nonofficer Rs.125/-per month.

Salaries of employee depend upon major section:-

1) Central time office2) Establishment/confidential cell3) Personal claim department4) Incentives departmentTotal salary made on unifax system & accounting of those entry upon Baan system.

Above section support to making salary, they sent his report.

Attendance report comes from establish section/confidential cell. Medical claim,

T.A Bills other bills report comes from incentives department.

Employee drawn his salary in 2 various head.

1) Earning2) Deduction.


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CENTRAL FINANCE

Central Finance section Deals with the analysis & compilation of all reports generated by

the entire Department of Finance and Account:

CENTRAL FINANCE

Compilation of Fixed Asset Inventory Capital Budget Routine MIS.Report

Account Accounting -Capital Sanction - Inventory

Report

1) Sales - Debtors

Report

2) Bills - Cash Flow

etc.

3) Personal Claim

4) Services

Audit

1) Statuary Audit

2) Government Audit

3) Tax Audits

ROLE OF MIS IN ITI LTD. RAEBARELI

EDP Department was established for this purpose in 1982 to analyze, design,

development & implementation of various system with the help of computers in all

Department/Division. The input data from the entire Department is stored in the

SERVERS, Which is processed in accordance to the requirement and reports are

generated accordingly and sent back to respective department.


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BAAN FINANCE SYSTEM (ERP)

BAAN Finance System in an integrated information system, which consist of

mainly.

Following package

a) Distribution Packageb) Manufacturing Packagec) Finance Packaged) Transport Packagee) Service Packagef) Process Package

At ITI LTD RAEBARELI only FINANCE PACKAGE has been implemented.

This package contains the following module.

1) General Ledger2) Accounts payable3) Accounts Receivable4) Cash Management5) Fixed Assets6) Cost Collection7) Financial Statement8) Finance Budgeting


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Personal Claims Department

1. Purpose:To settle the personal claim bills relating to TA/LTE/Medical Claim/Officers

conveyance and Accounting thereof.

2. Scope:To settle and pass personal claims of ESL-1 and ESL 2 & Central Services

Employees

Reference Documents:

Company Quality Manual No. COR/Q/CM/001

Quality System Procedure No. COR/Q/QSP/01

Unit supplement to company quality manual TA as per administrative circular

No.745 dated 27/12/1992.

LTC as per administrative circular No. 845 dated 24/04/1994

Medical as per administrative circular No. 330 dated 31/08/1982 and amended

time to time.

Lunch /Conveyance as per administration circulation No. 824 dated 20/01/1994

Material handling as per financial circular No. 240 dated 27/01/1994

Authority and responsibility

The head of personal claims has the authority to implement and control the procedure and

insure achieving the stalled purpose. To manage performance and verifying the functions

of personal claims a suitable organization shall be established and responsibility shall be

assigned.

The head of Personal Claim shall prepare and maintain the following:

Organizational Chart Responsibility and Interfacing Department Matrix


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Procedure

Personal claim section is dealing with three type of payments:

1. Advance towards travelling allowance, leave travel concession and medicalreimbursement.

2. Final settlement of claims regarding travelling allowance, leave travel concessionand medical reimbursement.

3. Payment of lunch and conveyance allowance to non officers and vehiclereimbursement allowance to the officers.

Medical Bills Claim

All medical bills as per government rules and regulation or payment of bills are

accordingly AIMS rules.

Some organizations medical bills are 100% reimbursed like SGPGI etc.

Medical advance:

Sanction memo comes from establishment section in case of non officers and inthe case of officers from confidential cell.

After proper checking section memo payment voucher is prepared and entered inmedical advance journal and ledger.

Payment voucher sent to cash section for cash /cheque/ DD payment throughvoucher dispatch register.

Final payment:

Payment of medical claims is three types:

1. If employees treatment is done in ITI dispensary2. If employees treatment is done outside ITI dispensary3. If employees treatment is done by Homeopathic/Ayurvedic dispensary


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1. Treatment by ITI dispensary:Medical claim supported by cash memo duly verified by treating doctor/CMO comes

from establishment /confidential cell. All claims are recorded in receipts register on

day to day basis.

The claims are settled as per the guidelines of medical attendant and personnel and

administration department circulars issued time to time.

Passed claims are recorded in a medical ledger staff otherwise and a fixed date advice

is sent to payroll section for payment through salary. In exceptional cases payment

voucher is prepared for cash payment. All advances are settled in final payment

voucher for payment.

2. Treatment by outside dispensary:Claims are supported by proper movement order of ITI hospital and verified and

signed by CMO come through establishment/confidential cell. All other system for

payment of claim stated above.

Travelling Allowance

Advance: Advance application supported by movement order duly approved

/sanctioned by establishment section/confidential cell comes to personal claims section.

After proper checking of rate and fair /dearness allowance /hotel rent, paymentvoucher is prepared and entered in travelling allowance advance journal & ledger.

After proper recording payment voucher is sent for sanctioning payment throughdispatch register.

Final payment:

Employee submit TA final bill to concerned establishment/confidential cell within 15

days after completion of journey. TA final claim should be supported by original order

period of lodging and local conveyance charges counter signed by competent authority.


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Establishment/confidential cell forwarded the same to concerned personal claim section

process the claim/pass as per company TA rule. The passed bill is recorded in TA journal

ledger. If any excess amount due the same is paid & if recovery very falls the same is

advised to payroll section for recovery from salary.

Leave travel concession

Advance : Advance application duly approved/sanctioned by establishment/confidential

cell comes to personal claim then after proper checking of charges admissible payment

voucher is prepared & entered in LTC advance journal & ledger and send to cash section

for payment through dispatch register.

Final settlement of leave travel concession claim:

After completion of journey bill have to be submitted in establishment/confidential cell

suffered by proof of journey performed. Establishment/confidential cell send the claim to

personal claim section. Personal claim sections enter the claim in receipt register and

process the bill as in the case of TA allowance as stated above.

Leave Travel Concession Encashment:

LTC encashment is limited to 75% of the admissible then fare for 1500 Km. each way.

The facility is a only once for a block of 4 years. LTC encashment application form

comes through establishment /confidential cells to personal claim section. After receipt

the same is recorded in personal claim register after the bill is processed for payment duly

entered in journal / ledger. The other system for payment is same as above.

Reimbursement of material handling charges:

When an employee goes on official tour brings heavy materials he may claim loadingunloading charges coolie charges etc. and other incidental charges from company as per

tariff approved by management. Divisional head approved the claims.

Employee submit the claims with all receipt of relevant expenditure supported by

proper movement order to personal claim section and personal claim section pass the


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claim as per tariff approved and entered the passed claim in payment register maintain for

the purpose.

Officers Conveyance:Monthly reimbursement of expenditure on use of own vehicle

claim is submitted to personal claim section after completion of the month. Personal

claim section checks the salary with section given by establishment/confidential cell and

passing the same payment is made through salary. The passed claim is recorded in

register.

Lunch & Conveyance: Lunch & Conveyance reimbursement is given to non officer

duly approved by competent authority when an employee is sent for official purposes

outside the factory. A bill passing the payment is entered in registered maintained the

purpose.

Work Sequence:

a) Bills received from confidential cell/ establishment section.b) Bills recorded in control register.c) Bills given to concerned officials.d) Officials pass the bills with reference to rules /circulars issue time to time. If any

bill is not as per rules, it is returned to confidential cell/ establishment section.

Passed bills are journalized and passed in ledger.

Work is carried out as follows:

We receive the bills from establishment/ confidential cell duly verified as per delegation

of power. After receiving the bills it is recorded in control register then dealing assistant /

accountant passed the bill according to the rules. If the bills are as per rules, it is passed in

the relevant journal/ledger and put up to concerned officer. Officer sign the bills as perthe delegation of powers.

After the vouchers are recorded in a movement register salary & rent to cash

section for payment or a list of a passed bills that are not paid through each voucher is


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sent to payroll section to make payment through salary. Those bills that are claim

accordance with the rules are sent back to confidential cell/ establishment section.

Records:

TA advance register LTC advance register

TA journal LTC journal

TA ledger LTC ledger

Medical ledger Medical advance register

Medical journal Lunch conveyance register

Insurance and co-ordination cell

Department procedure:

Purpose: To ensure risk coverage of ITI properties in coming & outgoing consignment

etc.

Scope: The scope of insurance and coordination cell is to send for monthly declaration

to insurance company and dispatch the cheque / DD in bank timely.

Reference document:

1. Company quality manual No. CDR/Q/CM/0012. Quality system procedure No. CDR/Q/QSP/013. Unit supplement to company quality control


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4. Insurance as per manual and requirement of factory act & guidelines issued by theMAT form time to time.

5. Co-ordination as per procedure order No.40 dated 02/02/1987 & FZ/48 dated30.10.1993.

6. Safe custody as per financial instruction No. 128 dated 30.08.1985Authority & responsibility

The head of insurance & co-ordination cell has the authority to implement and control the

procedure to ensure achieving the stated purpose. To manage, perform and verify of

insurance & co-ordination cell a suitable organization cell shall be established and

responsibility assigned. The head of insurance & co-ordination cell shall prepare and

maintain the following:

Organization chart Responsibility and interfacing depart matrix Procedure Insurance

Insurance policies are taken from insurance company year relating to fire assets and

stocks, marine inward/outward, import policy, cash in transit and fidelity guarantee &

JPA policy on quotation / negotiation basis, insurance company submits the bills for the

value as declared based on budgeted figures for next year. Payment is being as per

quoted/ negotiated rates after recording in premium payment register. We are receiving

the policies from insurance payment register. We are receiving the policies from

insurance company. The copy of the same is forwarded to concerned department. This

cell is also sending the declaration to insurance company based on purchase journal and

MIS report. At the end of year, consolidated declaration is sent to insurance company for

adjustment/ refund of policy ITI Limited RBL has 9 type of insurance.

These are given below:

1. Marine inland transit insurance (for inward and outward carriage) 1 year2. Marine import / export policy. 1 year3. Personal escort policy ( only for outward kit) year4. Janta personal accident policy (group insurance) 1 year


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5. Personnel accident policy (only for the disturb area)6. Arguably policy (for fraud )7. Cash insurance (cash in safer locker/ cash in transits)8. Fidelity floating policy for 1 year9. Fire policy (1 year)

Co-ordination

1. In the co-ordination cell all the cheques related to suppliers is being received fromcash office. This all recorded in cheque dispatch register and prepared envelops

are sent it to central department. In same case it is already directed by bills section

to send the cheque to respective department. In some cases payment is released by

DD. The same is also received in this cell through concerned bill section. The DD

is also send as per direction of bill section. This cell also sends 1 copy of the

cheque or DDforwarding letter to concerned purchase department.

2. This cell also received the cheque /DD received from DDI & other arty throughcash office the cheque /DD recorded in receipt register and after the filling up the

bank slip some are being deposited in bank. In case of discounting of cheque bank

charges their commission.

3.

This cell also received FDR/TDR/NSC etc/ bank guarantee from bills worksection to keep in a safe custody. After receipt of the same these documents are

recorded in related register and kept in safe custody. In case of bank guarantee

letter is sent to concerned bank for confirmation of bank guarantee. The same is

also recorded in relevant register

Work sequence:

a) Receiving the cheque/ DD from concerned section.b) Making entry in a control register.c) Received cheques /DDs are dispatched after registered post send to central

dispatch section or delivered to concerned section for getting proper signature.

d) Receipt signatures are tallied with the signature mentioned in the register.


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e) Cheque / DDs that are to be deposited in bank are deposited in the same timeas per instructions.

Work is carried out as follows:

Cheques and DD,s are received by the dealing persons and entry are made in control

register. After that DD and cheques are either sent to central dispatch section making

a required post on envelope or delivered to concerned section getting receiving

signature of the officers. The signatures of these officers are received through ION

and are tallied when the cheques and DD are handed over.

Records:

1) Insurance: Premium payment register Declaration register Insurance file for each policy

2) Co-ordination: Cheque dispatch register DD dispatch register Forwarding letter dispatch register Cheque /DD deposit register

3) Safe custody: Bank guarantee register Bank guarantee safe file FDR/TDR/NSC registers. FDR/TDR/NSC safe files.


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CASH & BANK DEPARTMENT

Cash & bank is life blood of any organization. Cash & bank department deals with the

procurement of the cash from the:-

Customer Various units Corporate office

ITI Limited Raebareli is fully based on its customers for cash. The customer fulfill at

least 90% requirement of cash at I.T.I Ltd Raebareli.

Secondly various units also fulfill the requirement of cash directly & indirectly.

The corporate office Bangalore fulfills the additional requirements of cash of units.

ITI Ltd Raebareli has cash credit facility in three banks:-

1. S.B.I - 7 crores

2. B.O.B - 2.5 crores

3. P.N.B - 1 crores

Presently I.T.I Ltd Raebareli has done all transactions through state bank of India I.T.I

Township branch. Company has pay 13% of interest on his credit of S.B.I.

Cash limit of cash & bank department daily transits insurance trust is 1 crore.

Company has paid only 20000rs.In cash of on our employees, If payment is more than 20

thousand than company pay through cheque.

The cash & bank department makes daily entry of the entire vouchers in a register. All

payments made by the cash & bank section whether in cash or through cheque or draft

are entered into a register. For all earning & payment made through banks, the cash

section prepares a monthly statement, which is reconcile with the bank at the end of the

month, if there is any difference is shorted out.

The Payroll department calculates the salaries of employees & a statement pertaining it


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that it is sent to the cash & bank department all of the payment salaries made through

bank only 70s employees salaries made in cash. The cash department issues a note to the

concerned bank for debiting the companys account with the amount equal to the salaries

to be paid by the bank.

The cash & bank department also makes the payment to the contractor & suppliers. The

criteria for the payment to the contractor & supplies remain to be the amount of the

payment, the age of payment etc. The cash & bank sections issues cheque or draft to the

contractors & suppliers.

The cash section allocates funds to the different department for their requirements. The

cash allocation of cash individual department is depending upon the requirement &

capacities of the department each individual depend make purchase on their own & then

sends the accumulated voucher to the cash & bank depart for reimbursement of the

amount.

The payment mode of cash & bank section is so easy. After collecting all vouchers

section updated the voucher in his special accounting system (Baan system) & processed

them. After processing section take printout of cheque & issues to individuals

department to generate or suppliers.

There are two authorized signatory should be signed upon cheque otherwise cheque not

valid.

Payment vouchers prepare for payment by different section i.e. bills payable, payroll,

personal claim provident fund section purchase etc.


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Costing and material department

Costing: cost stands for a mature amount of value purposefully released or to be released

in the acquisition or creation of economic resources (material, labour etc.) either tangible

or intangible.

Cost is forgoing measured in monetary terms incurred or potentially to be incurred to

achieve a specific objective.

The amount measured in money of cash expended or other property transferred capital

stock (share) issued service performed on a liability include in consideration of goods or

service, received or to be received. (Is cost)

Purpose: to calculate actual cost of material, labour hour rate and overhead.

Scope: costing is a core of any organization. Costing shows overall expenditure upon

manufacturing. It helps to gain profit. It is so necessary for organization.

Working of costing department: when any requirement raise or any order comes for ITI

Ltd. Raebareli of manufacturing planning department send usable raw material list known

as bills of material. According to bills of material (BOM) costing department know whichtype of material use of making require product. Costing department had price list of all

type of material in the Master. Planning department also send a process sheet.

Processsheet is all unable material & working hour of making require product, labour

quantity. etc. according processsheet costing department calculate the cost of material

or finished goods. Costing department calculate the cost material from the MASTER

which are use in manufacturing. Usable material is shown by process sheet. This

department also calculates labour hour rate and overhead.

According costing department Rs.68/- & Rs. 73 per labour per hour rate and 537% &

748% overhead of the labour rate.


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Calculation of wages / hour / month / operator for 2009 -2010.

No. of days in the year

Less:

Declared holidays

Sunday off/weekly

Casual leave

Sick leave

Let that

No. of hour per day per operator

Less: Lunch Time

Net Working Hour

No. Hour per month

(260 7.5 12)

Calculation of direct wages:No. of direct operator (as on

31/03/09)

Average hour/operator/year

(162.5 12)

Total available Hour (1950

643)

Labour hour rate

Total direct wages(1253850 78)

Rs.

12

52

20

5

=

365 Days

104 Days

261 Days

260 Days

8

Hour

0.5

Hour

7.5 Hour

= 162.5

Hour

643 employee

= 1950

Hours

12, 53,850

Hours

= 78 Rs.

=9,

78,00,300


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Calculation of direct labour hour rate of ESL- II

Total no. of operator 452

Basic pay 2887055

Fitment benefit 58874 (IA)

Service weightage Nil

VDA 1196221 (IB)

Monthly incentive 72083 (I C)

FDA 39278

CCA 40740

PF & PP @ 12% on Total of 505708

HRA @ 10% on basic pay 288705Gratuity on (B) 199142

Bonus Nil

Cleaning charges 1.9% on (C) 100468.31

53,88,274.31

Total labour cost per operator 5388274 =11920.96

452

Labour cost per operator per hour 11920.96 = 73.16

162.5

Say that - 73 Rs.


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Calculation of direct labour hour rate of ELS I

Total no. of direct operator 643

Basic pay 3,48,737.00

VDA 18,05,853.00Service weightage (fitment benefit) 1,01,724.00

FDA 64,360.00

Total of (A) 62,56,314.00

Monthly

incentive

86,167.00

Total (B) 63,42,481.00

PF as actual 7,51,350.00

HRA 3,46,608.00

Gratuity 15/261263,20,674.00 3,00,784.00

Ex. Gratuity 2500/12643 1,33,744.00

CCA 74,465,00

Total of (C) 79,49,432.00

Special pay 4,602.00

Total of (D) 79,54,034.00

Cleaning charge @ 1.9 % of the total (D) 1,51,127,.00

Grand

total

81,05,161.00

Total labour cost per operator 8105161 = 12,605.22

643

Total labour cost per operator/ Hour = 12605.22 = 77.57

162.5

Say that = 78/- Rs.

Overhead:

537% of labour rate of ESL I

748% of labour rate of ES II


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Material department

Purpose: Maintain the records for the receipt and issue of inventory and obtain the

closing stock of inventory and obtain the closing stock of inventory. Evaluate the cost of

all products/ services dealt by the ESL I and ESL II.

Scope: It covers identification, maintenance, protection, assessment of value of inventory

lying in stories/ analysis of inventory, material in process, identification of dormant items

and cost data.

Objectives and targets:

Objective: the following objectives are identified:

a) Material accountingb) Costing and Rate buildingc) Valuation of inventory

Reference and definition:

Reference:

a) Company quality manualb) Quality system procedurec) Unit supplement to company quality manuald) Accounts manuale) Financial circulars issued time to timef) Corporate guidelines

Definition:

ISO 9000-2000(E)

Responsibility and authority:

The head of cost and material authorize the process owner i.e. sectional in-charges

to implement and follow the companys accounting policies and procedures to ensure to


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achieve the stated purpose. To manage the function of the cost and material, a suitable

organization is established and responsibility is assigned. He is authorized to monitor and

control all function and activities in the section and for the continuous improvement of

the process as per organization.

Process:

Material accounting: To maintain the receipt and issue of inventories and accounting.

Costing and rate building: Periodical rate building, costing of main products/components

and assemblies.

Process Map: It is detailed in Annexure- III. The process description is as given below:

Receive IGA, SR, DT, SRN, and SSU from stores.

Carry our check of documents.

Send documents to EDP for processing.

Carry out checks of punched documents.

Obtain final document from EDP.

Obtain BOM, process sheets and timing from Engineering, Method/IED for rate

building.

The work is initially done by assistant; it is checked by accountant and finally received

by the officer. Aid is required from EDP for processing of data.

Analysis and improvement: Data analysis is carried out monthly. If the achieved value is

not meeting the required target, improvement action shall be taken.

Record of documents:

Price store ledger (PSL) Consumption statement report ABC analysis Stock status Dormant inventory status Cost sheet of products/components. Quantity weighted average rate.


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RESEARCH METODOLOGY


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RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying now research is done systematically. In that various

steps, those are generally adopted by a researcher in studying his problem along with the

logic behind them.

It is important for research to know not only the research method but also know

methodology. The procedures by which researcher go about their work of describing,

explaining and predicting phenomenon are called methodology.

Methods comprise the procedures used for generating, collecting and evaluating data. All

this means that it is necessary for the researcher to design his methodology for hisproblem as the same may differ from problem to problem.

Data collection is important step in any project and success of any project will be largely

depend upon now much accurate you will be able to collect and how much time, money

and effort will be required to collect that necessary data, this is also important step.

Data collection plays an important role in research work. Without proper data available

for analysis you cannot do the research work accurately.

Methods & tools adopted for analysis

Sources of Data (Primary & Secondary)

In this project work primary and secondary data sources of data has been used.

Primary data: Primary data is collected through observation, or through direct

communication or doing experiments.

For this report primary data was collected by personal interview with employees and

officers in various department of ITI Ltd. The data was collected over a period of 7 week

from 16th MAY to 2nd July 2011.

The information is collected through the primary sources like:


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Talking with the employees of the department. Getting information by observations e.g. in manufacturing processes. Discussion with the head of the department.

Secondary data:

Secondary data refers to existing primary data that was collected by someone else or for

purpose other than the current one. It means already available through books, journals,

magazines, newspaper, and websites.

Data has been collected through various websites the list of which has been given in the

end of report

Research Method or type of study:

The Research method used is Descriptive Research.

Descriptive research, also known as statistical research, describes data and characteristics

about the population or phenomenon being studied. Descriptive research answers the

questions who, what, where, when and how.

In the present Research I have collected data through interview and questionnaire of

various department of ITI Ltd.

Contact Method:

Personal interview is used as a method of contacting in various departments.

It is a market research technique for gathering information through face-to-face contact

with individuals. Personal interviews take place in a variety of settings-in homes, at

shopping malls, in a business office. This type of research is relatively costly, because it

requires a staff of interviewers, but it provides the best opportunity to obtain information

through probing for clearer explanations. It is the best technique to use early on in the
http://www.businessdictionary.com/definition/primary-data.htmlhttp://www.businessdictionary.com/definition/current.htmlhttp://en.wikipedia.org/wiki/Statisticshttp://en.wikipedia.org/wiki/Statistical_populationhttp://en.wikipedia.org/wiki/Statistical_populationhttp://en.wikipedia.org/wiki/Statisticshttp://www.businessdictionary.com/definition/current.htmlhttp://www.businessdictionary.com/definition/primary-data.html


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research process when the researcher is not yet sure which questions need to be asked,

because new and better questions can come out of the dialogue.

Data collection method:

Research Instrument used in this research was Questionnaire.

A questionnaire is a formalized set of questions for eliciting information. It is one of the

most common instruments used for primary data collection.

The questionnaire can be administered in various ways. It can be administered by means

of a personal interviewer as well as by the telephone, Mail. Here, the questionnaire was

administered by a personal interview

Tools of analysis:

For the proper analysis of data, Quantitative Technique such as percentage method was

used.

Annual results in brief: (in crore)

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Sales 2,102.22 4,661.24 1,700.80 1,233.67 1,841.53

Operating

profit

-478.29 -482.00 -503.28 -287.18 -285.12

Interest 83.87 109.76 292.02 268.37 210.11

Gross profit -358.03 -240.60 -618.99 -155.52 -336.05

EPS (Rs) -13.26 -10.22 -23.20 -12.02 -13.08


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Annual results in detail: (in crore)


Other income 204.13 351.16 176.31 400.03 159.18

Stock adjustment 89.64 112.32 -21.01 2.54 33.20

Raw material 424.33 830.15 628.95 927.09 1,493.77Power and fuel - - - - -

Employee

expenses

390.49 441.35 400.91 377.23 362.15

Excise - - - 67.88 64.76

Admin and selling

expenses

- - - - -

Research and

development

expenses

- - - - -

Expenses

capitalized

- - - - -

Other expenses 1,676.05 3,759.42 1,195.23 146.11 172.77

Provisions made - - - - -

Depreciation 23.84 26.74 26.72 34.07 39.96

Taxation - - 0.36 0.76 0.56

Net profit / loss -381.87 -294.43 -668.18 -346.11 -376.57

Extra ordinary

item

- -27.09 -22.11 -155.76 -

Prior year

adjustments

- - - - -35.80

Equity capital 288.00 288.00 288.00 288.00 288.00

Equity dividendrate

- - - - -

Agg.of non-prom.

shares (Lacs)

202.19 202.19 202.19 202.19 202.19

Agg.of non

promotoHolding(%)

7.02 7.02 7.02 7.02 7.02

OPM (%) -22.75 -10.34 -29.59 -23.28 -15.48

GPM (%) -15.52 -4.80 -32.98 -9.52 -16.80

NPM (%) -16.56 -5.87 -35.60 -21.19 -18.82


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Balance sheet


Sources of

funds

Owner's fund

Equity share

capital

288.00 288.00 288.00 288.00 288.00

Shareapplication

money

- - - - -

Preference

share capital

300.00 300.00 300.00 300.00 300.00

Reserves &

surplus

-1,021.09 -3,064.78 -2,400.50 -2,036.93 -1,595.35

Loan funds

Secured loans 258.52 1,349.94 1,335.35 1,051.98 1,180.72

Unsecuredloans 19.69 793.98 895.42 690.00 800.00

Total -154.88 -332.86 418.27 293.05 973.37

Uses of funds

Fixed assets

Gross block 3,681.16 3,678.61 3,657.09 3,644.06 3,631.54

Less :

revaluation

reserve

2,448.06 2,472.72 2,498.72 2,526.83 2,653.94

Less :

accumulated

depreciation

1,089.35 1,039.60 987.32 933.12 768.25

Net block 143.75 166.29 171.05 184.11 209.35Capital work-

in-progress

1.33 1.78 1.29 2.16 4.98

Investments 0.41 0.41 0.41 0.41 0.41

Net current

assets

Current

assets, loans

& advances

5,835.86 3,021.88 2,550.49 2,531.29 2,641.58

Less : current

liabilities &

provisions

6,136.23 3,523.22 2,304.97 2,424.92 1,891.37

Total netcurrent assets

-300.37 -501.34 245.52 106.37 750.21

Miscellaneous

expenses not

written

- - - - 8.42

Total -154.88 -332.86 418.27 293.05 973.37


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Notes:

Book value of

unquotedinvestments

0.41 0.41 0.41 0.41 -

Market valueof quoted

investments

- - - - -

Contingent

liabilities

326.39 177.55 243.62 184.03 322.86

No. of equity

shares

outstanding(Lacs)

2880.00 2880.00 2880.00 2880.00 2

CASH FLOW STATEMENT

Cash flow statement or statement of changes in financial position on working capital

basis is similar to statement of changes in financial position on working capital basis or

fund flow statement. CFS may be defined as the statement showing inflow and outflow of

cash during the specific period.

Cash Flow statement is statement setting out the flow of the cash under

different head of sources and their utilization to determine the requirement of the

cash during the given period and to prepare for its adequate provisions.

- I.C.W.A.I.Advantage of cash flow statement:

Cash is procured by a company from its owner and lender at cost. Therefore finance

manager of a company has to ensure proper management of cash. He has to ensure that

there is sufficient cash to meet the obligation at their maturity and at the same time there

is no surplus of cash remaining idle. The most usual tool of the cash management is to

prepare cash flow statement. CFS has different advantages:


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1. CFS is an important tool in the hands of management to evaluate its financialpolicies and current cash position. CFS is especially useful in preparing cash

budget.

2. CFS enable management to plan and co-ordinate the financial operations.3. CFS may be used as a control device for the management. IT enables

management to check the tendency to over spend.

4. CFS enables the management to formulate a suitable dividend policy. If thecompany is not able to obtain sufficient inflow of cash, company may restrict its

cash dividend.

5. CFS highlights cash inflows from operations and therefore it is very useful tointernal financial management in deciding the form of borrowing, retiring, long

term loans, planning replacement of plan etc.

CASH FLOW

Cash flow Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06

Profit beforetax

-458.76 -667.82 -357.23 -404.70 -427.55

Net cashflow-

operating

activity

-568.46 271.26 -569.83 261.41 -55.93

Net cash

used ininvesting

activity

11.62 -12.58 -13.06 -6.45 -28.32

Net cash

used in fin.

activity

835.05 -253.87 560.11 -436.98 125.86

Net inc/dec.

in cash andequivalent

278.21 4.81 -22.78 -182.02 41.61

Cash and

equivalent

begin ofyear

19.03 14.22 37.00 219.02 177.41

Cash and

equivalentend of year

297.24 19.03 14.22 37.00 219.02


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FFIINNAANNCCIIAALLSSTTAATTEEMMEENNTTAANNAALLYYSSIISS

Financial statements are used by the management as the basis for planning,

operations, including procurement of adequate financing, and as a means of exercisecontrol over financial position of the business and efficient & Profitable use of assets.

The basic purpose of preparing financial statement is to convey to owners,

creditors and the general public about financial position of the enterprise.

Financial analysis is the process of determining financial strengths and

weaknesses of the company by establishing strategies relationship between the

components of balance sheet and profit and loss statement and other operative data.

Financial analysis is two types to interpret the position of an enterprise:-

1. Vertical analysis: -

Analysis of relationship as between different individual components and as

between these component and their total for given period of time. It is also devoted by

static analysis.

2. Horizontal Analysis:

Analysis of changes in different components of the financial statement over different

period with the help of series of the statement . It is also known as dynamic analysis.

Financial analysis is the process of selection, relation and evaluation.

The objective of financial analysis is a detailed cause and effect study of the

profitability and financial position..

N.L.Hingorani


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RATIO-ANALYSIS

Ratios are simply a means of highlighting in arithmetical terms the relationship between

figures drawn from accounting statements.

Ratio analysis refer to the process of taking relevant item or groups of terms from

financial statement establishing quantitative relationship between there with the purpose

of making a comparative and interpretative study and then drawing meaningful

conclusion which may be useful for performance appraisal of business. Ratio analysis is

a widely used tool of financial statement analysis.

TYPE OF FINANCIAL RATIO

Ratio as tool of measuring liquidity, profitability, efficiency and financial position of

a firm can be classified into five basic types: -

1. Liquidity Ratio.2. Solvency Ratio.

3. Activity Ratio.

4. Profitability Ratio

LLIIQQUUIIDDIITTYYRRAATTIIOO

Liquidity ratios provide test to measure the ability of the firm to cover its short-term

obligations out of its short-terms resources. Interpretation of liquidity ratio provides

considerable insight into the present cash solvency of the firm and its ability to remain

solvent in times of adversities. There commonly used liquidity ratio: - current, quick or

acid test & absolute liquid ratio & cash ratio.

A. CURRENTRATIO: - Current Ratio expresses relationship between current

assets and current liquidity. Current ration of 2:1 is long considered as minimum in a

sound business. The higher the current ratio, the larger is the amount of rupees available


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per rupee of current liability, the more is the firms ability to meet current obligations and

the greater is the safety of funds of short-terms creditors. The current ratio is a measure

of margin of safety to the creditors.

Current Ratio = Current Assets

Current Liabilities

For 2005-2006 Current ratio = 2,097.38 / 1,902.26 = 1.1026 times


For 2007-2008 Current ratio = 2,202.51/ 2,414.72 = 0.9121 times

For 2008-2009 Current ratio = 2,677.13/ 3,467.95 = 0.7720 times


Conclusion: The current ratio has been reduced and even it is less than the standard

ratio which means that short term financial position is not sound.

B. ACID-TEST/QUICK RATIO: - It is a measure of judging the immediateability of the firm to pay off its current obligations. It is obtain by dividing quick current

assets by current liability. A ratio of 1:1 is usually considered adequate.

Quick Ratio = Liquid Assets

Current Liability

Liquid Assets= Current Assets(Stock & Prepaid Expenses)


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Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

Quick

assets

1,881.48 1,744.63 1,839.46 2,287.20 5,218.51

Current

Liabilities

1,665.09 2,189.76 2,171.10 3,290.40 5,774.75

Quick

Ratio

1.12996 0.79672 0.84725 0.69511 0.90368

Conclusion: The quick ratio has been reduced and is less than ideal ratio which shows

unsound short term financial position .

SSOOLLVVEENNCCYY((LLOONNGGTTEERRMM))RRAATTIIOO

The second category of financial ratio is solvency ratio. The long-term creditor would

judge the soundness of a firm on the basis of the long-term financial strength measured in

terms of its ability to pay the interest regularly as well as repay the installment of the

principal in due date or in one lump sum at the time of maturity. The commonly used in

solvency ratio:- Debt- equity ratio, proprietary ratio or equity a