Summer Training Final

1
A
PROJECT REPORT ON
SUMMER TRAINING UNDERTAKEN
AT
SAMKIT DIAMONDS
SUBMITTED BY:
HARSH SANGHAVI (230) SYBBA DIV -III
MUDIT MEHTA (139) SYBBA DIV-II
SUBMITTED IN PARTIAL FULFILLMENTS OF

B.B.A. PROGRAMME
SUBMITTED TO:
SARVAJANIK EDUCATION SOCIETY

B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
BATCH: 2012-2013
BRCM COLLEGE OF BUSINESS ADMINISTRETION

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DECLARATION
We the undersigned, HARSH SANGHAVI & MUDIT MEHTA give assurance that
this project report entitled A study on management of SAMKIT DIAMONDS is
result of the training given to us during may-June 2013 and has not been
previously submitted to any other university or institution for any other
examination and for any other purpose by any other person.
We will not use this project report in future to use as submission to any other
university, institutes or any other publication without written permission of any
guide.
We also promise not to allow/permit any other individual to copy from this report
in any form.
If we are found or caught as defaulter of above declaration, we know that our

present or future submission may become invalid, and / or we may not be
permitted to appear in the final exam.
Signature
HARSH N. SANGHAVI
MUDIT S. MEHTA

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ANCKNOWLEDGEMENT
We the student of Veer Narmad South Gujarat University, Surat, Would like to
acknowledge our sincere gratitude for allowing to-do training in SAMKIT DIAMONDS
PVT LTD, Surat.
First of all we would like to thank MR. JAYESH DESAI the director of B.R.C.M.
College of business administration and faculty member such as MR. OJAS DESAI, MR.
MEHUL MEHTA, MR. PRATIK PATEL, MR. MRUNAL JOSHI, MRS. PAYAL
SAXENA and other faculty members who have given us in depth explanation about
summer training. We will always be thankful to them for their valuable and helpful
advice.
Secondly, we would like to thanks to Mr. ANIL SANGHAVI who had given us the
opportunity to undergo the training in the SAMKIT DIAMONDS PVT LTD, for eight
weeks.
We are highly indebted to the director and other employees of SAMKIT
DIAMONDS and no words would suffice to express our thanks for their assiduous co-
operation and precious guidance in our training period. Without their prudent guidance,
solicitous interest and encouragement the project would not have been possible. In
addition to this, the employees of SAMKIT DIAMONDS have helped us in gaining in-
depth training & guidance and have also given us their time from their busy schedule and
have always helped us in solving our doubts & problems.
At last, we express our gratefulness to all people who lended us their esteemed and
highly significant time and help for the completion of our project.

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Thankyou.
INDEX
CHAPTER CONTENT PAGE

No.
1. Introduction 5
2. Marketing and Sales function 18
3. Production Management 41
4. Finance and Account 73
5. Human Resource Management 100

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INTRODUCTION

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A BRIEF HISTORY OF DIAMOND INDUSTRY:
Today diamonds are mined in about 25 countries, on every continent but Europe
and Antarctica. However, only a few diamond deposits were known until the 20 th
century, when scientific understanding and technology extended diamond exploration
and mining around the globe. For 1000 years, starting in roughly the 4 th century BCE,
India was the only source of diamonds. In 1725, important sources were discovered in
Brazil, and in the 1870s major producers now include several African countries,
Siberian Russia, and Australia,
It is a modern misconception that the worlds diamonds come primarily from
South Africa: diamonds are a worldwide resource. The common characteristic of
primary diamond deposits is the ancient terrain that hosts the kimberlite and lamproite
pipes that bring diamonds to the Earths surface.
In the most basic, individual operations, such as in Sierra Leone or Angola, the
technology involves shovel and with some hard sloshing to gravitate diamond to the
bottom of the pan; the eye in the ultimate sorting device. Mom and pop operations in
South Africa involve a small claim and utilize limited technology shovels, jury-rigged
cranes powered by small vehicles, and the like to load a small washing pan. The

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concentrate in then sieved into several size ranges, and each fraction is dumped onto
a picking table, where someone checks by eye for diamonds. In the bigger operation
large earthmoving equipments transports the alluvium, and the processing approaches
that of the primary mines coarse sieving, then rotary sieving. A picking table, and
usually a grease table. OF course, no crushing is required, as nature has already
released the diamonds from the pipe rock.
Rough diamonds can be classified in to three categories: Gem, Industrial and
Boart. Its normal color range is from colorless to yellow, though in a very limited form,
it can be found in nearly any color, including black. The largest diamond producers are
Australia, Angola, Botswana, India, Namibia, Russia, South Africa, Canada, South
America and Zaire.
The cutting and polishing of Diamond and precious stone is one of the oldest
tradition in India and the country has earned considerable goodwill, both, in the
domestic and international markets for its skills creativity. India was also the first
country to have introduced diamonds to the world. The country was the first to mine
diamonds, cut and polish them and also trade them. For around 2,700 years back, i.e.
from 9th Century BC to mid 18th Century AD, India was leading producer of Diamonds.

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Diamond Industry:
Gems and Jewellery industry is the leading foreign exchange earner for the
country. It is also one of the fastest growing Industries in the country. It is an artistic
and creative industry and in the world no other country could match India in the cutting
of gemstones and crafting of beautiful and fine Jewellery.
The importance and attraction of the industry can be judged by the fact that over 1.5
million people are employed in the industry and it is still growing at the rate of
approximately 15% every year.
The biggest advantage is that the Indian Jewellery has is produced at a low cost.
The diamond Jewellery, which is produced between $50 and $80, the overseas
importer sells for $200. In other words, the value addition is considerable. The current
consumption of gold in India is estimated between 865-960 tons in 2013 which is used
mostly in 18-22 carat craft Jewellery.
India today occupies top position in importing, processing and exporting
diamonds. Of the total world exports of 104.25 million carats of cut and polished
diamonds, more than 70% exports are from India. Statistics say that, of every 10
polished diamonds in world, 9 are polished in India.

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Famous Diamonds of the World:
The Great Star of Africa:
Weight: 530.20 carats
Color: unknown
Clarity: unknown
Cut: Pear
Source: Transversal, South Africa
The Orloff:
Color: slightly bluish green
Clarity: "exceptionally pure"
Cut: Mogul-cut rose
Source: India
Centenary Diamond:
Color: Grade D Colorless
Clarity: Bright
Cut: Modified
Source: South Africa

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The Regent:
Color: unknown
Clarity: unknown
Cut: Cushion shaped brilliant
Source: India
The Kohinoor:
Color: unknown
Clarity: unknown
Cut: Round Brilliant
Source: India
The Taylor-Burton:
Color: F-G (colorless)
Clarity: Internally Flawless
Cut: pear-shape
Source: Premier Mine, South Africa.

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The sancy:
Weight: 55 carats
Color: pale yellow
Clarity: unknown
Cut: pear shape
Source: india
The Blue Hope:
Color: dark blue
Clarity: flawless
Cut: Oval Brilliant
Source: India
Hortensia:
Weight: 20 carats
Color: peach color
Clarity: unknown
Cut: unknown
Source: Louvre in Paris.

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INTRODUCATION OF COMPANY:
About Company:
Mr. Anil Sanghavi and Mr. Ashwin Sanghavi established the the partnership firm
SAMKIT DIAMONDS in 1988 with the goal of achieving the top position in diamond
industry. In 2001 the son of Ashwnibhai, Mr. Samkii Sanghavi joined SAMKIT
DIAMONDS as a co-partner. The firm started as a trading company with small
operations in trading is now a big firm with its offices all over the world and also
spreaded its roots into manufacturing sector recently.
SAMKIT DIAMONDS built on the foundations of integrity, trust, product quality
and above all, customer service, is a highly reputed name in the global diamond
trading business. Since its creation in 1988, SAMKIT DIAMONDS has steadily evolved
its business, putting innovation in technology at its core.
SAMKIT DIAMONDS has successfully blended traditional values and ultra-
modern business practices, which means a passion for research, development and
dynamic innovation.
With a team of experts spread across the globe, they keep a constant watch on
market movements, customer demands and the latest trends and fashions. Their
entire team works with a firm belief of delivering the finest quality and exquisite
craftsmanship to their customers.
Timely delivery with impeccable quality at attractive prices is the benchmarks of
SAMKIT DIAMONDS.

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Company Profile:
NAME OF THE ORG. : SAMKIT DIAMONDS.
ADDRESS : 102, DTC,
Dalgiya Street,
Mahidharpura,
Surat 395 003.
OWNERS : Mr. Anilbhai Sanghavi
Mr. Ashwinbhai Sanghavi
Mr. Samkitbhai Sanghavi
Mr. Babulal T Sanghavi
AUDITOR : Mr. Hardik Mehta
Chartered Accountants, Mumbai
BANKERS : AXIS BANK
Katargam, Surat.
REGISTERED OFFICE : 102, Prasad Chambers,
Opera House,

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Charni Road, Mumbai.
PLANT LOCATION:
1) Katargam 2) DEESA,
Taluka: DEESA,
District: Surat District:
Banaskantha

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HISTORY OF SAMKIT DIAMONDS:
History:
SAMKIT DIAMONDS was established in 1988 as a Partnership Firm registered
under the Indian Partnership Act, 1932. SAMKIT DIAMONDS is having its Registered
Office in Mumbai at 102, Prasad Chambers, Opera house, Charni Road, Mumbai (W).
Factory having totaled built up area of 20000 Sq. Ft. The total workforce of the
SAMKIT DIAMONDS is 233 including skilled and semi-skilled workers.
SAMKIT DIAMONDS is importers of rough diamonds from DTC and other
Outsourcing and Manufacturers and Exporters of Cut and polished Diamonds having
different shapes like Round, Princess, Hearts, Baguettes, Emeralds, Marquise, Pear
and Oval of various size, colors and clarity. They specialize mainly in manufacture of
carat and certificated diamonds (i.e. each diamond piece would weight 1 carat or
more). They mainly imports Rough Diamonds from DTC and other Sources and the
cut and polished Diamonds are manufactured at their own factory at Surat, India. The
Exports of cut & polished diamonds is all over the globe from US to China.
VISION:
SAMKIT DIAMONDS carries a vision to reserve a place amongst the worlds
most respected companies by offering total customer satisfaction and by producing
best quality of the Diamonds

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MISSION:
To achieve corporate objectives by incorporating highest level of quality through
highly responsive, dedicated team and creating an environment of fairness, honesty
and courtesy for employees, bankers and clients.
INFORMATION ABOUT OWNERS:
NAME POSITION QUALIFICATION
Mr. ANIL SANGHAVI Chairman B.COM
Mr. SAMKIT SANGHAVI Co-partner MBA
Mr. ASHWIN SANGHAVI Co-partner 11TH COMMERCE
Mr. BABULAL SANGHVI Co-partner 9

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FUTURE PLANS OF SAMKIT DIAMONDS:
Increase productivity by reducing wastages and maintenance.
Get position in top 10 diamond unit.
Make healthy relationship with government and customer.
Become sight holder of DTC
MAIN PRODUCTION UNIT (HEAD OFFICE):
2nd floor, Bajrang complex,
Nandu doshi ni vaadi,
Katargam, Surat.
OTHER FACTORYS LOCATION:
1. DEESA FACTORY
SAMKIT DIAMONDS
Village: Juna Deesa, Taluka: Deesa
District: Banaskantha
Gujarat, India.

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ORGANISATION STRUCTURE:
TOP
MANAGEMENT
(ALLPARTNERS)
T
CHAIRMAN
Finance Production Selling & Human

MR. NANJIBHAI
Marketing Resource
MR. Babulal MR. Neel bhansali MR. Manishbhai
C.A Manager Manager Manager
Comp. Asst.
operators manager Sales Asst.
executives manager
Workers Staff

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MARKETING

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INTRODUCTION:
Marketing management is the art and science of choosing target markets and
getting, keeping, and growing customers through creating, delivering and
communicating superior customer value.
SAMKIT DIAMONDS sells its finished product in both Local and foreign market. It
is a big exporter of polished diamonds. In SAMKIT DIAMONDS focus on marketing
function is low and they prefer to call this department as selling department rather than
marketing department because in this industry goodwill is the base of the business
and not marketing. Buyers and sellers carry out their business activities through
brokers, so in short the brokers are the marketers or sales man. Local market does not
give importance to marketing well as in the markets overseas, marketing is given
weightage.
ORGANISATION SRUCTURE:
Head-office
Mumbai
Marketing Manager
Mr. Neel Bhansali
Sales Executive
Staff
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TYPES AND CLASSIFICATION OF PRODUCT MIX & THEIR SALES

VOLUMES:
Types of Diamonds:
There are mainly two types of Diamonds:
1) Rough Diamonds
2) Polished Diamonds
Classification of Diamonds:
There is no classification for Rough Diamonds but polished Diamonds can be
classified in to two ways:
1) Color wise classification
2) Cut wise classification
1) Color wise classification:
i) Pink Diamonds
ii) White Diamonds
iii) Champagne Diamonds
iv) Pink Champagne Diamonds
v) Yellow Diamonds
vi) Blue Diamonds
vii) Green Diamonds

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2) Cut wise classification:
1) Round Brilliant Diamonds
2) Princess Cut Diamond
3) Marquise Diamonds
4) Pear Shaped Diamonds
5) Emerald Cut Diamond
6) Cushion Cut Diamond
7) Heart Shaped Diamonds

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DETAILS OF THE COMPETITORS:
In India there is a throat cutting competition between the companies in the
diamond industry. There are many giant organizations producing diamonds.
Gujarat covers around 90% market of polished diamonds. Surat is the biggest
manufacturing hub of diamonds in the whole world. There are many national and
multinational companies having their production units in Surat.
SAMKIT DIAMONDS is engaged in the business of polished diamonds since
1990s. It deals with polished diamonds up to 18 cents of all colours and purity in
trading while in manufacturing it deals with diamonds from 0.05 carats to 5.00
carats majority upto J color and VS-SI purity . 90% of product will be of VS
purity. The companies dealing in the same size and same purity can be
considered as the competitors of the company. There are 32 site holders in India
and from them among 8 companies produce diamonds of same size. Thus only
eight-diamond manufacturing companies can be considered as the competitors of
the company. The names of the competitors are given below:
1. Sanghavi Exports Ltd.
2. Amba exports
3. S.Vinod
4. HVK
5. KP sanghavi
6. KGK diamonds Pvt ltd.
7. K.girdhar
8. SRK diamonds Pvt Ltd.

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FEATURES OF PRODUCTS:
The main characteristic of diamond is known as 4 Cs of diamond.
1. CARAT
2. CUT
3. CLARITY
4. COLOR
1) CARAT:
The weight of a Diamond is measured in carats, with one carat being
equivalent to 100 points and 5 carat = 1 gram. Larger stones are often more
highly valued, but size should not be the only consideration--high brilliance, which
varies according to clarity, cut, and color grade, is highly desirable in a diamond.
For example, if we have 10 diamonds of each 1 carat and 1 diamond of 10 carat,
the price of 10 carat diamond is more than 10 diamonds each of 1 carat. As we
had already mentioned that shining of diamond affects its price. So reflection of
light is more in 15 carat diamond and vice versa.

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2) CUT:
The cut of a diamond determines how it reflects light, which is responsible
for its sparkle or brilliance. A well-cut diamond is cut by a skilled professional to
the best proportions possible so that light will be reflected from each of its mirror
like facets and disperses through its top. Too shallow cut will let light escape
through a diamond's bottom, causing it to appear dull, while too deep cut will
allow light to be lost through the sides of diamond, making it appear dark.
Diamond with perfect color and clarity could nevertheless have poor
brilliance if it is not well cut. Price of diamond depends upon the shining that is
reflection of diamond. It means that if light reflection is maximum than its is
defined as a diamond of excellent cut and vice versa.
GIA (Gemological Institute of America) had given 5 grades to diamonds
according to its cuts:
1. Excellent
2. Ideal
3. Very Good
4. Good
5. Fair
3) CLARITY:
A diamond's most distinguishing characteristics are its inclusions, marks that
are often invisible to the naked eye. However, under a jeweler's magnifying loupe
or microscope they can look like crystals, tiny rivers, or clouds. A diamond's
clarity is determined by the presence or absence of inclusions. (Fewer inclusions

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mean better clarity) and how visible they are. The greater is the diamond's clarity,
the greater is its brilliance and value. A diamond categorized as internally
flawless will have no inclusions, but this is extremely rare.
Diamonds with very, very small inclusions are graded as VVS1 or VVS2.
Those with larger inclusions are considered lower-grade. Diamonds with
inclusions that are visible with the naked eye are graded l1 to I2. These factors
are given by GIA.

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4) COLOR:
Though diamonds come in a wide range of colors, colorless diamonds have
traditionally been considered the most valuable. Most diamonds are graded on a
scale using the letters of the alphabet, from D (colorless), the best grade, through
Z (a light yellow). It is difficult for the untrained eye to notice such variations in
color unless stones are being compared side by side. The comparatively rare
colored diamonds are known as fancy-colored and are also quite valuable.
Diamonds that are graded D, E, and F tend to be the most expensive
because of their rarity.
CUSTOMER SEGMENTATION AND TARGET MARKET:
Customer Segmentation:
Customer segmentation can be identified by demographic, psychographics,
and behavioral differences & geographic examination. The marketers then decide
which segments present the greatest opportunities that are its target market. For
each chosen target market the firm develops a market offering.
SAMKIT DIAMONDS sells its product in both local and foreign market. So
we can say that SAMKIT DIAMONDS has geographic segmentation, which call
for dividing market unit such as nation, state, countries, and cities region etc.

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Target Market:
SAMKIT DIAMONDS have geographic segmentation so we can say that
target market is also geographic. The target market of SAMKIT DIAMONDS is as
follow:
1. Indian market
2. Foreign market
DISRIBUTION NETWORK:
A distribution channel performs the work of moving goods from producers to
consumers. It overcomes the times, place, possession gaps that separate goods
and services from those who need or want them.
The customers of SAMKIT DIAMONDS are each person interested in buying
diamonds, also big dealers and jeweler manufacturers are fixed cutomers etc.
SAMKIT DIAMONDS has its own office for sales at Surat, Mumbai, Delhi,
Hongkong, Dubai, Newyork, London, Shenzen, Indonesia, Bangkok, Moscow etc
. At this offices there are some sales executives who contact directly to the
customer and also contact the brokers. There are intermediaries like brokers or
agents. In some case selling is done by personal meeting with buyer but in some
cases they have to send the diamonds to the buyers located at different cities or
countries so that they require some courier agencies. So we can say that
SAMKIT DIAMONDS have multi level distribution network.

Production Unit 33
(Finished Products)
Head Office
Sales office 1 Sales office 4

Sales office 2 Sales office 3
Brokers Customers
Customers Brokers
Customers
Customers
SALES PROCEDURE:
CUSTOMER REQUIREMENT BY PERSONAL MEETING/ PHONE/ MAIL/FAX
GETTING SALES ORDER
DELIVER DIAMONDS
SALES INVOICE
RECEIVING PAYMENT

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HOW CUSTOMER ORDERS ARE PROCESSED:
First of all when customer comes to office and asks for polished diamond or
jewelry, sample line is shown to him. In that sample line all types of diamond
with different purity and different color, which the company manufactures, are
shown.
Also the Diamonds are given to the brokers or agents which go to different
offices and customers to fulfill their requirements.
The sales employees at the office explain the various features of all types of
Diamonds and also help to select the Diamonds, which will be suitable for the
customer.
The customer will select the Diamonds according to his convenience and will
place the order.
If the order is made and the stock is not available, then production is done
and consignment is sent from the main office.
DOCUMENTS RELATED WITH SALES:
As there is a policy of SAMKIT DIAMONDS not to give documents related
with sales to any outsiders, they are not ready with us to give these documents.
But they prepare following documents:
1. Sales bill
2. Challan

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COMPARISON OF 4Ps OF PRODUCTS OF ORGANIZATION WITH

COMPETITORS:
Product
Promotion Marketing Place
Price
1. Product:
SAMKIT DIAMONDS manufactures the various products of diamond and
jewelry with different quality, design, size and features. SAMKIT DIAMONDS
engaged in the business of the polished diamond whose weight is up to 5 carats
and purity is up to ranging from IF to SI.

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2. Price:
The price of the polished diamond is decided on the basis of the report
called rapaport report. This rapaport report is published every month and it is
accepted worldwide, so the company has to sell the certified diamonds according
to the prices mentioned in the rapaport report all over the world. Diamonds can
be sold for the price less than the price mentioned in the rapaport report but its
illegal to charge higher price than the price mentioned in the report. All the
companies sell the certified polished diamonds according to the price mentioned
in the rapaport report.
3. Place:
Place is another important tool for marketing as unless we provide the
goods at convenient place customers cannot buy it easily. The products of
SAMKIT DIAMONDS are made available to its customers all the time and at all
places.
4. Promotion:
SAMKIT DIAMONDS doesnt go for much of promotional activities due to its
very reputed and recognized name. They gives advertisement profile which are
the sources commonly used by the customers of the company i.e. others
companies, showroom holders etc. Marketing Manager remains in touch with the
customers and maintains smooth relations with them.

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STUDY OF GENERIC LEVEL COMPETITION:
Generic level competition means the competition of companys product with
the other product which has same use but which are unbranded and of lower
quality and which are less expensive.
Example: Competition with all local diamond firms which are not branded as
SAMKIT DIAMONDS.
FORECASTING AND SALES PLAN PREPARATION:
Forecasting:
The most important use of a forecast is to have a reasonable basis for
predicting the firms sales volume .The firms sales forecast are affected by the
state of general business. Forecasting is the science of predicting economic
change .It is because change occurs that the need for forecasting rises.
They forecast about sales considering following the factors:
1. Seasonal verification:
During festival like Diwali and Christmas there are high demand of polished
diamond. I.e. For two months between NOVEMBER and DECEMBER.
While during the months between AUGUST and SEPTEMBER demand of
polished diamonds tend to be low.

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2. Competition:
If competition is high company has to make effort to increase sales.
3. Business fluctuation:
If there is depression in business cycle than sales will be reduced. And for
prosperity period sales will be increase.
Sales Plan Preparation:
For making sales plan selling/marketing manager communicates with
production manager to know the available resources and capacity of the firm.
The sales plan is prepared after knowing the available capacity and the
availability of resources such as labour and material. After this the sales plan
determines how many diamonds can be sold, and hence the orders are taken
accordingly.

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PRICING POLICIES:
Price, is what the customer is required to pay for the goods and services, it
should be such that it meets the customers expectation and make them
delighted.
SAMKIT DIAMONDS has no fix price of polished diamond. They have 15
20 % margin on manufacturing cost. Price will change according to the feature of
diamond jewellery.
Pricing is done considering the following factors:
Demand
Perceived value by customer
Shape of diamond
Color
Clarity
Weight
Ongoing market rate
Competitors price
Dollar Fluctuation
PROMOTIONAL AND ADVERTISING POLICIES:
Promotion refers to creating incentives for buying. For promotion SAMKIT
DIAMONDS depends on the following:
Customer relation.
Price discount

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Personal selling
Direct marketing
SAMKIT DIAMONDS does not go for any advertising activity as such; it has
a good brand image of itself in the market.
TAXES APPLICABLE ON SALES ACTIVITY:
The Diamond industry is free for sales tax. There are no rules of taxes in
Diamond industry. But when company imports and exports Diamonds, Company
has to pay excise duty on diamonds.
CONTROL SYSTEM AND REPORTING SYSTEM DESIGNED FOR

SALES EMPLOYEES WORKING IN FIELD:
When feasible plan is prepared its execution is important and when plan is
executed its controlling becomes very important. Controlling is very important in
each and every execution of plan, so that the faults or deviation can be found
earlier and corrective measures can be taken.
Controlling can be done by following way:
Keeping watch on the activity of executives
Executives have to present weekly reports
Analyzing the reports presented by executives

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DIFFERENT REPORTS GENERATED IN MARKETING

DEPARTMENT:
Demand from production report
Expenses report
Sales report
Monthly executives report
Executives wise sales report
Payment recovery report
Payment outstanding report
Attendance issue report

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PRODUCTION

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INTRODUCTION:
Production management deals with converting raw materials into finished goods or
products. It brings together the 6Ms i.e. man, money, machine, material, methods and
markets to satisfy the wants of the people. Thus it can be defined as,
Production management is management of conversion process so that desired goods
and service are systematically produced in efficient manner.
ORGANISATION STRUCTURE:
PRODUCTION MANAGER
Mr. Babulal
Assort Planning Sawing Polishing

Manager Manager Manager Manager
Assistant Assistant Assistant Assistant

Manager Manager Manager Manager
Workers Workers Workers Workers

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HOW PRODUCTION PLAN IS PREPARED FROM SALES PLAN:
sales forecast
marketing
department
Preparation of
production plan by
production
department
As shown in above diagram first of marketing department forecasts firms
future demand and accordingly they will decide future sales, the same will be
communicated with the manager of the production department. And with the use
of this information production heads prepares the production plan, taking in to
mind the present stock of finished product and also the minimum level of stock
that company is maintaining.
If the marketing department is anticipating access demand in favorable
season they communicate with production department and production head
prepares production plan in advance and adjust their capacity to produce as per
sales forecast so the production can be match with the forecasted demand.

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CONVERSION OF PRODUCTION PLAN INTO MATERIAL

REQUIERMENT PLAN AND ULTIMATELY IN PURCHASE PLAN:
Production plan
Material availability
checking (rough diamond)
YES NO
Purchase of rough
Diamonds
Material is
Available
Capacity availability
checking
YES NO
Job work or
Overtime
Capacity is
Available
Start
production
Send material
to marketing

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ANALAYSIS OF PLANT LOCATION CONSIDERING VARIOUS

FACTORS:
There are two plants of SAMKIT DIAMONDS. The main plant is in
Katargam, Surat and the other one is located in Deesa taluka of Banaskantha.
Factors Affecting Selection of plant Location:
Cheaper land:
The price of the land is cheaper as compare to in a city so, SAMKIT
DIAMONDS can expand their business by spending less.
Near to most of the employees:
As we know that Surat has a large amount of skilled labor and most of them
stay in Katargam area. And the main factory of SAMKIT DIAMONDS is located
in Katargam so it is easy to get skilled labor over there. And it is also near to most
of the employees.
Labor availability:
Production plant of SAMKIT DIAMONDS is situated in the city. And as
highest number of skilled workers comes from Katargam, Varaccha and
nearby area labor is available easily.
Cost of living:
Cost of livening in Katargam is low compare to urban area. So the expenses
related to workers tend to be low. And so that manufacturing cost decreases.

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INTERNAL PLANT LAY-OUT OF PRODUCTION DEPARTMENT:
The building has four floors. The firm has two interconnected offices on 2 nd floor .
As the offices are different but are interconnected with a bridge kind of covered
formation we can say that that are two factories in a single office.
Entrance gate
Drinking
M water facility
Managers table
Planni
ng
comput
ers

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Production Process:
Assortment
Planning
Cleaving and sawing
Boiling
Assorting
Bruting
Polish

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The entire production process starts with the rough assortment and ends with the
stone being polished. The production process of diamond is given below.
There are mainly seven steps which are as follows:
1. Rough Assortment:
This is a very important department, as a diamond begins its journey of being
transformed from a rough to a polished stone from here onwards. The work of this
department is to check the rough stone and to determine its properties such as purity,
color, & size etc. i.e. 4'C's namely color, clarity, carat, cut. Keeping all these 4Cs in mind
they give the rough stone a grade.
2. Planning:
This is also one of the most important phases of the entire manufacturing
process. It can also be known as the brain department of the entire process. Marking is
done after examining each rough diamond to decide how it should be cut to get the
greatest value. The shape of the rough diamond and the number and location of
blemishes are first considered. Since the crystalline structure of diamond causes it to
have a grain, it is critical to plan for the facets of the diamond to be made in the correct
direction. Taking these factors into account, the planner decides how the diamond

50
should be cut and marks it to indicate where the stone should be cleaved or sawed. It is
also known as Signing or Marking.
3. Cleaving and Sawing:
Here the experts have to decide whether the marked diamond should be cleaved
as per the mark and planes of each individual diamond. When the stone is very large
and valuable, cleaving it is a critical process, because a mistake by the planner or the
cleaver can shatter the diamond. The cleaver's job is to cut the diamond into two pieces
to bring out the best angles and establish what the final cut will be. Cleaving is done by
hi-tech laser machine marking and then by chisel and hammer. However, some stones
have too many stress points and might fragment if cleaved, so they must go to the
sawyer. This process is extremely meticulous and time-consuming.
If the diamond needs to be cut, blades or laser machines do it, which is the latest
technology in sawing. The saw used in diamond processing is a paper-thin disk of
phosphor bronze that rotates on a horizontal spindle at about 4,000 rpm. The diamond
is clamped so it rests against the blade and is sawed for several hours, depending on
the size of the diamond. Since diamond is the hardest substance on earth, it can only be
cut by another diamond.

51
Therefore, diamond dust is used on the saw, as well as the actual diamond dust
generated by the crystal being cut.
4. Boiling:
Boiling plays very important role in the business of diamond. After cleaving or
cutting by laser sawing machine the diamond being dark or black, so to make it clean
boiling process is useful. They use sulfuric acid to boil the diamonds.
5. Assorting:
After boiling, diamond has the need for assortment so assortment of diamond is
done twice in the manufacturing of the diamond. It is done second time because after
cleaving shape of diamond will be change so this process is compulsory.

52
6. Bruting:
In this department, bruters give different shapes to the diamonds as earlier
planned, in such a way that the polisher can achieve maximum yield. Normal bruters,
Maxi bruters, advanced bruters as well as laser bruting machines are used in this
process. The bruter has to take its utmost care of the diamond at this process so that it
does not break. Also in this process the bruter has to leave as much of natural skin on
the piece of diamond as possible. This is because one can check out that the weight
loss of the diamond in this process is not more than required. In the whole process of
bruting the main aim of the bruter is to give a shape to the rough diamond in such a way
that its optimum effect can be achieved by the polisher, without any extra weight loss
than required.
7. Polishing:
After being bruted a diamond passes to the polishing department where the final
work of faceting is done. Polishing means the process of giving the diamond its final
look. The diamond is clamped onto a revolving cast-iron lap called SARAN that has
been charged with diamond dust. The fine diamond dust acts as an abrasive to polish
away small imperfections and make the surface of the stone perfectly smooth.

53
Here the artisan has to be very careful at all stages as even a small mistake done by
him can make the diamond look poorer than what it might have looked had it been cut
properly. This is the last step in the manufacturing process of the diamond.
Material handling equipment:
1. Tray:
Plastic tray is useful to handle the Diamonds. Assorting is done only with the
use of this tray.

54
1. Tongs:
Tongs are used to pick the diamond and place it at appropriate location.
2. Packet:
Internally, the diamonds are transferred from one person to other or from
one department to another department through packet. It is made from paper. In
the upper side of the packet weight, shape, lot no., piece, etc. are written.
3. polythene pouch with zip:
If the diamond is in the big lot than it is handled in such polythene pouch
which have zip by which we can pack it. This pouch is mainly used during import
and export.

55
4. Elevator:
Big machines and other heavy items are transferred by elevator.
5. Small bowl:
Small ceramic bowls are used to boil the diamonds in the acid.
6. Electric Heater and Oven:

Electric Heater is used to boil the diamonds and Oven is used to bake
the diamond cassettes prepared for the bruiting machine.
8. Courier and private logistic service:
Company use private logistic system in transfer of money and diamond from
one branch to another branch. Courier service is useful to transfer documents,
cheque, reports, etc.

56
CLASSIFICATION OF MATERIAL HANDLING EQUIPMENTS:
On the basis of source of power:
1) Electric power:
Elevator, Electric Heater and Oven
2) Fuel consuming:
Pipeline
3) Mannual power:
Tongs
Tray
Small bowl
Packets
Polythene pouch with zip
On the basis of path of movement:
1) Fixed path:
Elevator
Pipeline
Small bowl
2) Variable path:
Tongs
Packet
Tray
Polythene pouch with zip
Courier

57
INVENTORY CONTROL SYSTEM:
It is the process of controlling timings and quantities of two inventory
transactions. The first is purchase or acquisition of inventory and the second is
usage of inventory.
Inventory control in any company is all about to control and keep knowledge
about Received, issued and the balanced stock in the store. SAMKIT
DIAMONDS also control inventory and get some benefit, which is added to the
profits of the company.
The main objective for controlling inventory is to meet the customer
requirement timely, effectively. Efficiently, smoothly and satisfactorily and other
objectives are as follows:
To gain economy of purchase or production in lots
To balance various costs of inventory such as order cost and inventory
carrying cost
To meet unforeseen future demand due to variation in forecast figures and
actual figures
To smoothen the production process
To meet the time lag for transportation of goods
To balance the stock out cost
To minimize losses due to deterioration, damage. Obsolescence etc.

58
INVENTORY VALUATION METHODS:
Inventory valuation is necessary for any organization. The two important
objectives for inventory valuation are as follows:
1) The valuation of inventory is necessary for determining the true income
earned by a business during a particular period.
2) The inventory at the end of a period is to be shown as a current asset of
the business. In case the inventory is not properly valued, the balance
sheet will not disclose the correct financial position of the business.
SAMKIT DIAMONDS used FIFO method of inventory valuation, where the
material received first is used for production first. This is a very simple method
and does not create any burden of tedious calculations and record keeping.
CLASSIFICATION OF INVENTORIES ACCORDING TO ABC AND

VED ANALYSIS:
ABC analysis:
In all the diamond manufacturing units the rough diamond is the only raw
material which covers 90% of total value of inventory. So here ABC analysis is not
applicable, because according to in ABC analysis A class item cover 70 to 75% of
consumable value and 10 to 15% of material consumed. Here rough diamond cover
about 85% consumable value and also 80% of material consumed.

59
VED ANALYSIS:
1. Vital item:
Vital item are those items without which production will instantly stop. In this
industry vital items are rough diamonds, eye glass and sign pen. Without rough
diamond production will instantly stop. Eye glass and sign pen is very small and low
cost item but without that item assorting and signing will not go ahead and
production will automatically stop.
2. Essential item:
They are those items without which production may not stop instantly but there
can be problems like slow-down of production. Essential items are like sawing
machine, computer, boiler machine, matter balance, etc. which are necessary to run
smooth and speedy production with low cost and time.
3. Desirable item:
They are those items without which production may not stop instantly nor it will
slow down but there may be some inconvenience in manufacturing. The items like
oil, grease, cleaning powder for diamond, etc. are comes under vital items.

60
STUDY OF MATERIAL CODIFICATION SYSTEM:
SAMKIT DIAMONDS has a codification system in which they use barcode
system. They give two times barcode on the packet of diamonds: first before
polishing and second after polishing. After passing each level of manufacturing, all
the details of diamonds are loaded in server. When diamond is sent to the next
department, employee gets all the details of a particular diamond with the help of
barcode system
DIFFERENT RECORDS KEPT IN STORE:
Following items are store in the store room:
computer stationary, machinery spare parts, eye glass, sign pen, tray of
assorting, lead weight, saw blade, die, crown, stationary, cleaning powder for
polished diamond, boiling chemical, etc.
Records kept in store:
1. Material receipt register
2. Material issue register
3. Stock Register
4. Monthly stock report

61
MATERIAL RECEIPT PROCEDURE:
Material Request
Purchase Order
Material Received
Checking
Store
Computer Entry
MATERIAL ISSUE PROCEDURE:
Material issue procedure is the process of issue of material by manager to
worker. Here we discuss the material issue procedure of rough diamond.
Production manager give rough diamonds to assort manager and give entry in
Stock register
Assort manager makes entry in his register and gives to the cleaving department.
After that they give it to lotting department with entry in register.
After lotting it comes to the issue department. From there they issue it to various
manufacturing departments according to kapan no.
Then polished diamonds are sent to quality control department.
After checking the quality, they issue it to polish assortment department.

62
PURCHASE PROCEDURE:
There are 2 types of purchases: import purchase and Local purchase.
The various departments as per their requirements inform the purchase in

charge about the quantity and quality of Rough diamonds required. The purchase
in charge then forwards the details to the administrative office from where the
negotiation with the suppliers is done and the order is placed for the Rough
diamonds.
Purchase request to purchase department
Sending the inquiry of product to different suppliers including with price, quality,
items and terms of payment etc
Asking quotation from different suppliers. In quotation, they mentioned price rate,
quality level, delivery time, payment term etc
Then after makes a comparison between price level and delivery date. Select the
Supplier, which is giving rough diamonds at low price rate and earliest delivery
date
Giving purchasing order
Make the payment
Material inward.
DOCUMENTS OF PURCHASING
Application form
Performa invoice of supplier
License of import

63
MAINTENANCE PLANNING:
Various capital assets require servicing and maintenance. Maintenance is
an unproductive activity. If maintenance is not done with proper planning it may
result into heavy production and monetary loss. There is proper maintenance of
the machines done as per schedule.
Cleaving department:
In this department, machine called Diamark-z is connected directly with the
computer. If any problem happened, the problem is solved by IT department.
Blade sawing department:
In this department, the maintenance of blade sawing machine is done at every
2-3 months. The blades of those machines are changed once in a year & the
machine remains idle for 30 minutes. If the problem is related with motor, the
machine remains idle for 2 days. For the maintenance of machine oiling is regularly
done.
Computer planning:
In this department, the work is done only on computer. If there is any problem in
software, the problem is solved by IT department. The machine called Sarin is
connected with computer. These machines are repaired every month by Sarin
Company.

64
Laser department:
In this department, there are 3 types of machines. They are automatic. In these
machines, the part called laser lamp has to be replaced every month. The machine
remains idle for 1 hour. If the laser lamp blast, then machine remains idle for 2 hours
for cleaning the machine and change the laser lamp.
Bruting department:
There is a bruting machine called Russian bruting machine. This machine is
used to give round shape to the diamonds. Servicing is not done regularly, but every
day when worker starts the machine, he does calibration, it means he checks the
result whether it is perfect or not. If result is not perfect, it is repaired. Its break down
time is 2-3 hours.
RECORDS RELATED TO PRODUCTION OPERATION AT

DIFFERENT MACHINE:
SAMKIT DIAMONDS has following type of machines:
Laser machine, sawing machine, different bruting machines, grinding
machine, boiling machine, weightier scale, planner machine, computer, printer,
different lath machines, round set machine, different polish machines, blocking
machine etc.
The machine operator record in the register which includes date and time,
department from where material is come to process, weight, lot no., process time,
remark etc.

65
QUALITY CONTROL SYSTEM:
Quality is one of the most widely used terms in management. The term
quality does not mean the best one, but it is related to some specific standards of
particular good and services. Quality is the first priority that the customer
demands in his product. If there is lack of quality in the product then the customer
will reject the product and find a new supplier. Quality plays a very important role
in all competitive industries.
SAMKIT DIAMONDS set some standards which is strictly followed by every
employee. The managerial people always keep in touch with new technology and
ready to establish it. One diamond moves among at least 15 people and is checked
at least 200 times with eye glass. So quality level is maintained properly. They
provide guidelines regularly to employees.
QUALITY CONTROL GUIDLINES:
The standards or guidelines for maintain quality is as follow:
Raw material Rough diamond:
Purchase high quality of rough
It should be easily assorted
Rejection should be as low as possible
Maximum weight and best purity should be achieved.

66
Work In progress:
Planning should be proper so that best shape of diamond can be chosen.
Level of rejection or wastage should be at minimum.
During boiling, chemical should be standard so that shine will increase.
During bruting and polishing, the weight loss should be minimum.
The table, bottom, and pavilion of diamond should be according to the instructed
parameters.
Finished products polished diamond:
The weight of polished diamond should be 39% to 42 % of total weight of rough
during bruting and polishing.
After preparing the diamond, it should be properly cleaned so that diamond will
shine more.
Final shape of the diamond should be ideal, not so shallow or deep.
REPORTS GENERATED IN PRODUCTION DEPARTMENT:
The following reports are generated in production department:
Material consumption report
Rejection report
Total production report
Maintenance report

67
FINANCE

68
INTRODUCTION:
Finance is considered as the LIFE BLOOD of an organization.
Financial Management is study about the process of procuring of financial
resources and its effective utilization with a view to maximizing the wealth of
shareholders and company.
Efficient management of every business enterprise is largely dependent on the
efficient management of its finances.
ORGANIZATION STRUCTURE OF FINANCE DEPARTMENT:
FINANCE MANAGER
MR. BHARATBHAI
CHARTERED ACCOUNT
MR. HARDIK MEHYA
ASSISTANT MANAGER
COMPUTER AND
BRCM COLLEGE OF BUSINESS
DATA ENTRY ADMINISTRETION
OPERATORS
69
REVENUE BUDGETING:
The routine expenses which are incurred to run business or daily activities
are called revenue expenses. Without revenue Expenses firm cannot
manufacture anything. Revenue budget is prepared to forecast the future receipts
and payments.
It consists of following receipts:
Receivable on cash sale of goods.
Amount receivable from customer or client and
Other business receipt like commission, income from investment etc.
Revenue payments are as follows:
Payment of material supplied.
Payment of wages.
Payment of overheads.
Other payment like interest on loans, income tax etc.
COSTING METHOD:
Costing is very necessary for every organization, because only after finding
all the expenses we can identify the profit margin and it also enables us to do
comparison with competitors.

70
Costing is a practical exercise, which determines the real position of the
business. The balance sheet gives only the brief picture of the entire business,
where as costing gives detail idea about all the expenses incurred. It highlights all
the strengths and weaknesses of the firm, so that advantage of strengths can be
taken and weakness can be removed.
For calculating the cost of processing per unit, they add all the expenses
that are to be incurred such as material cost, labour cost, direct expenses,
manufacturing overhead, administration overhead, selling expenses and financial
expenses.
CLASSIFICATION OF DIFFERENT COST:
The cost of final product of SAMKIT DIAMONDS can be classified in following

three categories:
1. Raw material cost
2. Factory cost
3. production cost
Following are the classification of costs as per different categories:
Raw material cost:
Purchase during the year
Local
Import

71
Factory cost:
Factory labour
Power and fuel expenses
Powder expenses
Repair and maintenance
Production cost:
Account charge
Angadia expenses
Assortment charges
Electricity expenses
Import freight expenses
Import insurance expenses
Foreign traveling expenses
Traveling remuneration
Professional fees
Excise duty
Stationery expenses
Safety maintenance charge
Salary
Telephone expenses
Insurance expenses
Security service expenses
Loan interest
Other expenses

72
WORKING CAPITAL MANAGEMENT:
Working capital is one of the most fundamental measures of firms financial
strength. If organization possesses a significant value of liquid assets, it can
easily fund its day-today-day business obligation. Working capital also provides
insight on how efficiently a firms management able to oversee the firms
operation. The speed at which the firm is able to manage its short term assets
and short term liabilities, are also crucial to its business success. Keeping
working capital level to minimum required for efficient operation keeps cost down.
This means controlling buying, handling, storing, and managing stock property.
In simple terms, working capital refers to the cash an organization requires
in order to finance its day to day business operation or In other words, working
capital refers to the amount of capital which is already available to an
organization. There are two concept of working capital for the purpose of
definition-Gross concept and Net concept. Gross concept refers to firms current
assets. The firms total current assets are termed as gross working capital. Net
concept refers to current assets less current liabilities. That means, working
capital is difference between resources in cash or readily convertible into cash
will soon be required.
CURRENT ASSETS:
Inventory = 17,97,89,169
Sundry Debtors = 29,04,54,730
Cash and bank = 1,16,89,836
Loans and advances = 46,54,543
Total = 48,65,88,278

73
CURRENT LIABILITIES:
Current liability = 28,00,83,886
Provision = 76,66,424
Total = 28,77,50,310
WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITIES

= 48,65,88,278-28,77,50,310
= 19,88,37,968
PREPARATION AND ANALYSIS OF FUND FLOW STATEMENT:
STATEMENT SHOWING
CHANGES IN WORKING CAPITAL
Particulars 2011 2012 Increase Decrease
(A) Current Assets:
Inventory 193805816 179789169 14016647
Sundry Debtors 233418029 290454730 57036701
Cash & Bank Balance 601736 11689836 567200
Total (A) 57603901 14016647
(B) Current Liabilities:
Current Liability 287252438 280083886 7168552

74
Total (B) 57603901 21185199
Increase In Working Capital 36418702
Total 57603901 57603901
FUND FLOW STATEMENT
Source of Funds Amt Application of Funds Amt
secured Loan 109618217 Increase In Working Cap. 39819628
Provision 7666424
Purchase of Fixed Assets 11263374
FUNDS FROM OPERATION 50868791
Total 109618217 Total 109618217
FINANCIAL PERFORMANCE:
(In Cr.)
Particular 2012 2011
Total sales 74.63 72.52
Profit of the business 0.94 0.99
The financial performance of the SAMKIT DIAMONDS is very poor as compare to

previous year. There is a decrease in the profit.

75
INTERNAL AUDIT POLICIES & FINANCIAL CONTROL SYSTEMS:
Internal Audit Policy:
The accounts have been prepared on historical cost basis ignoring
changes, if any in the purchasing power of money.
Fixed assets are stated at acquisition cost less accumulated depreciation.
Depreciation on fix assets has been provided on WDV basis at the rates.
Due to short period of processing and/or manufacturing, difficulty in
identifying the stages of process & identification of valuation, goods in
progress, including polished diamonds, are classified as raw material for
the purpose of classification and valuation.
Diamonds (including in process) are valued at cost on specific
identification. On the basis of other items of raw material are valued at cost
on FIFO basis.
Polished diamonds are valued at estimated cost.
Financial Control Policy:
Stock and debtors: daily reporting.
Cash and bank balance: checked daily
Sales and profit: checked on monthly basis.
Other expenses are checked annually.

76
ACCOUNTING POLICIES:
a) Basis of Preparation of Financial Statements:
The financial statements are prepared under the historical cost convention,
on the accruals basis of accounting.
b) Fixed assets:
Fixed assets are carried at cost of acquisition less accumulated
depreciation.
c) Depreciation:
Depreciation has been provided as WDV basis at the rates.
d) Investment:
Investments are stated at cost of acquisition.
e) Revenue recognition:
Revenue is recognized on its accrual, sales is accounted when diamonds
are supplied and recorded net of trade discount and rebates but including excise
duty and value added tax.
f) borrowing cost:
Borrowing costs, that is directly attributable to the acquisition of the asset.
Other borrowing costs are recognized as an expense in the period in which they
are incurred.

77
g) Foreign currency transactions:
Transactions in foreign currencies are recognized at the prevailing exchange
rates on the transaction dates. Realized gain and losses on settlement of foreign
currency assets and liabilities at the yearend are translated at the yearend
exchange rates, and the resultant exchange difference is recognized in the profit
and loss account, except those relating to acquisition of fixed assets, which are
adjusted in the cost of the fixed assets.
INVENTORY VALUATION METHOD:
SAMKIT DIAMONDS used FIFO method, which is known as FIRST IN FIRST

OUT.
METHODS TO CALCULATE DEPRECIATION:
Written down value (WDV) method is used by SAMKIT DIAMONDS for
finding depreciation. Under this method a fix rate of depreciation is calculated on
the reduced balance of the asset. A constant rate is applied to written down
value, the amount of depreciation charged every year decreases over the life of
asset.

78
RATIO ANALYSIS:
1) Current Ratio = Current Assets
Current Liabilities
= 486588278
287750310
Ans = 1.69: 1
Year 09-10 10-11 11-12

Current Ratios 1.46:1 1.47:1 1.69:1
Analysis: There is a positive increase in the current ratio which is due to the
increase in current asset in greater proportion than the current liability.
2) Quick Ratio = Quick Assets
Quick Liabilities
= 481933735
280083886
Ans = 1.72: 1
Year 09-10 10-11 11-12
Quick Ratio 1.41:1 1.49:1 1.72:1
Analysis: There is a positive increase in the quick ratio which is due to the
increase in quick asset in greater proportion than the quick liability.

79
3.) Net Profit Ratio = Net Profit after Tax * 100
Net Sales
= 22621839 * 100
861043889
Ans = 2.62%
Year 09-10 10-11 11-12

Net Profit Ratio 3.32% 2.91% 2.62%
Analysis: There is reduction in net profit ratio due to increase in overheads as well as
the additional stock disclosed in the survey
4.) Return on Capital Employed = Profit before Tax + Interest * 100
Total Capital Employed
= 33268849 +1356000 * 100

120918217
Ans = 28.63%
Year 09-10 10-11 11-12

Return on Capital
24.83% 35.12% 28.63%
Employed

80
Analysis: This ratio shows the dismal performance of the company in the current
year as this ratio has decreased which shows that the company has
underperformed than the previous year.
5) Proprietary Ratio = Owners fund
Total Assets
= 33921839
497851652
Ans = 0.06: 1
Year 09-10 10-11 11-12

Proprietary Ratio 0.05:1 0.04:1 0.06:1
Analysis: There is increase in Proprietary ratio due to increase in total assets. It shows
good performance OF COMPANY.
6) Fixed assets to Proprietors fund Ratio =
Fixed Assets
Proprietors fund
= 11263374
11300000
Ans = 0.99: 1
Year 09-10 10-11 11-12

Fixed assets to
Proprietors fund 1.07:1 1.71:1 0.99:1
Ratio

81
ANALSIS: This ratio shows increasing trend and then it started decreasing from last
year. It is due to increase in owners fund. Fixed assets have been decreasing which is not
good for company.
7) Debtors Turnover Ratio = Net Credit Sales
Average Account Receivable
= 861043889
290454730
Ans = 2.96 (3 App.) Times
Year 09-10 10-11 11-12

Debtors Turnover
Ratio 1.97 2.23 2.96
(in Times)
Analysis: This ratio is increasing due to high increase in credit sales. It is good sign for
company to have less receivable and more credit sales.
8) Debtors Velocity = 365 Days
Debtors Turnover Ratio
= 365
2.96
Ans = 123.31 (123 App.) Days

Year 09-10 10-11 11-12
Debtors Velocity
185 164 123
(In Days)

82
Analysis: This ratio is decreasing as debtors turnover is increased. Having less debtors
velocity helps company to reduce risk element in business.
9) Debt Equity (owners fund) Ratio =
Total Long term Debts
Owners fund
= 109618217
33921839
Ans = 3.23: 1
Year 09-10 10-11 11-12

Debt Equity Ratio 3.34:1 2.77:1 3.23:1
Analysis: This ratio is increasing due to large long term debts. But this is nt advisable
for business to maintain such level. It shows low liquidity of company.

83
COMPARATIVE STATEMENTS
COMPARATIVE STATEMENT OF BALANCE SHEET :
PARTICULARS 2012 2011 increase/decrease

Amt. (Rs.) Amt. (Rs.) Amt. (Rs.)
SOURCES OF FUNDS
Owners fund:
Owners fund 97382772 91764848 5617924
Reserve and surplus 11300000 6300000 5000000
Loan funds:
Secured loan 109618217 59533318 50084899
Total 218300989 157598166 60702823
APPLICATION OS
FUNDS:
Fixed Assets: 11263374 10814397 448977
Current assets, loans

and advances:
Inventories 179789169 193805816 -14016647
Debtors 290454730 233418029 57036701
Cash and bank balance 11689836 601736 11088100
Loans and advances 4654543 1575470 3079073
Total 497851652 440215448 57636204
Less: Current liabilities

& provisions:
Creditors 280083886 287252438 -7168552
Provisions 7666424 4265498 3400926
Total 287750310 291517936 -3767626
Net current assets 198837968 137883114 60954854
Total 218300989 157598166 60702823

84
COMPARATIVE STATEMENT OF TRADING, PROFIT & LOSS

ACCOUNT:
PARTICULARS 2011 2012 INCREASE/DECREASE

Income:
Net Sales 521415715 861043889 339628174
Other Income 82150 11261260 11179110
Stock Adjustments 66356074 45615111 -20740963
Total 587853939 826690038 238836099
Expenditure:
Raw Materials 149821366 154246262 4424896
Manufacturing Expenses 5672480 5271801 -400679
Selling and Admin 11312827 15692095 4379268
Expenses
Purchases of traded 388208229 600778340 212570111
goods
Financial Expenses 6631242 8255696 1624454
Total Expenses 561647144 784244193 222597049
PBDIT (Income - 26206795 42445845 16239050

Expenditure)
-Depreciation 1644355 1820995 176640
PBI 24562440 40624849 16062409
-Interest 756000 1356000 600000
-remuneration to partners 1440000 6000000 4560000
Profit Before Tax 22366440 33268849 10902409
-Tax 7208359 10647010 3438651
Net Profit 15158081 22621839 7463758

85
TREND ANALYSIS:
TREND ANALYSIS OF BALANCE SHEET
PARTICULARS 2010 2011
SOURCES OF FUNDS:
Owners fund:
Owners fund 100 106.12
Reserve and surplus 100 179.37
Loan funds:
Secured loan 100 184.13
Total 100 138.52
APPLICATION OS FUNDS:
Fixed Assets: 100 104.15
Current assets, loans and advances:

Inventories 100 92.77
Debtors 100 124.44
Cash and bank balance 100 1942.69
Loans and advances 100 295.44
Total 100 113.32
Less: Current liabilities & provisions:

Creditors 100 97.5
Provisions 100 179.73
Total 100 98.71
Net current assets 100 144.21
Total 100 138.52

86
TREND ANALYSIS OF PROFIT AND LOSS ACCOUNT

Income:
Net Sales 100 165.14
Other Income 100 13708.16
Stock Adjustments 100 (68.74)
Total 100 140.63
Expenditure:
Raw Materials 100 102.95
Manufacturing Expenses 100 92.92
Selling and Admin Expenses 100 138.71
Purchases of traded goods 100 154.76
Financial Expenses 100 124.50
Total Expenses 100 139.63
PBDIT (Income - Expenditure) 100 172.81

-Depreciation 100 110.74
PBI 100 165.39
-Interest 100 179.37
-remuneration to partners 100 416.67
Profit Before Tax 100 148.74
-Tax 100 147.7
Net Profit 100 149.24

87
COMMON SIZE STATEMENT:
COMMON SIZE STATEMENT OF BALANCE SHEET:

SOURCES OF FUNDS:
Owners fund:
Partners current account 44.61 58.23
Partners fixed capital account 5.18 4
Loan funds:
Secured loan 50.21 37.77
Total 100 100
APPLICATION OS FUNDS:
Fixed assets 5.16 6.86
Capital work in progress 3.76 5.2
Deffered Tax assets -
Current assets, loans and advances:

Inventories 82.36 122.97
Debtors 133.05 148.11
Cash and bank balance 2.13 1
Loans and advances 5.35 0.38
Total 222.9 272.47
Less: Current liabilities & provisions:

Creditors 138.30 182.27
Provisions 3.5 2.71
Total 131.81 184.97
Net current assets 91.08 87.49
Total 100 100

88
COMMON SIZE STATEMENT OF P&L ACCOUNT
Income:
Net Sales & other income 100 100
Expenditure:
Raw Materials 18.66 25.49
Manufacturing Expenses 0.64 0.97
Purchase of traded goods 72.67 66.04
Selling and Admin Expenses 1.9 1.92
Financial Expenses 1 1.13
Total Expenses 94.87 95.54
PBDIT (Income - Expenditure) 5.13 4.46

-depreciation 0.22 0.28
PBDT 4.91 4.18
-interest 0.16 0.13
-remuneration to partners 0.07 0.24
Profit Before Tax 0.4 3.8
-Tax 1.29 1.23
Net Profit 2.74 2.58

89
HUMAN RESOURCE
MANAGEMENT

90
INTRODUCTION:
Human resource management popularly known as personnel management
is the planning, organizing and controlling of the procurement, development,
compensation, integration, maintenance and separation of human resource to
the end that individual, organizational and social objectives are accomplished.
Human resource management (HRM) is the backbone of any firm. It has a
very wide scope and implications in todays organizational management. It helps
in maximizing both organizational and employee effectiveness and relations. All
activities related to the planning, recruitment, selection, training and
development, placement, transfer, promotion, compensation, job analysis, job
evaluation and description, motivation, performance appraisal, welfare activities,
safety, health and industrial relations come under the area Human Resource
Management.
In short, management of man-power i.e. when it is needed , for how much time ,
how many workers, how to make them work for developing themselves as well as
achieving the organizational goal is called Human Resource Management.

91
ORGANIZATION STRUCTURE OF HUMAN RESOURCE

DEPARTMENT:
In human resource Department Company designed the pure line
organization structure. This department works as staff position only for production
department.
CHAIRMAN
MR. ANIL BHAI
H. R. MANAGER
MR. MANISH BHAI
HUMAN RESOURCE PLANNING:
SAMKIT DIAMONDS does not have a formal human resource planning
process. They follow the following process for successful human resource
planning.
Steps for Human Resource Planning:
1) Clarification of Objectives:
Every HRP process begins with clarification of objectives. First of all a firm should
identify their objectives for HRP. The primary objective is to strike the balance
between workload and human resources employed so that situations of
overstaffing or understaffing can be avoided. Here the balance means balance
between workload and workforce quantitatively and qualitatively.

92
Other objectives can be stated as under:
To make maximum use of available human resources.
To maintain the work force consistent with technological development and
modernization.
To increase the labour productivity.
To give assurance of continuous supply of human resources as per
business requirement.
To fulfill future requirement of management personal and technical skill.
To reduce the surplus human resources.
Planning of human resources for future development, expansion and
diversification.
2) Estimating the Future Requirement of Human Resources:
The second step after clarification of objectives is to estimate the future
requirement of human resources for a specific period of time. The future specific
period may be of one, two, three year or more than that. The firm can use
following factors to estimate their future personnel requirements more effectively.
Employment Trends.
Need for filling the vacancies.
Development.
Productivity.

93
There are two methods for estimating total human resource requirements, they
are as under.
Work load analysis method and
Work force analysis method.
3) Collection of Information Regarding Present Human Resources:
The next step is the concern with collection of information related with
present manpower capacity. From this information they can know the total
number of employees currently working in the organization their qualification,
experience and performance, etc. and also can evaluate the employees and
know how many new and with what type of skills are required to be added to the
present human resource inventory.
Method of collecting the information regarding the present human
resources:
Man power inventory,
Skills inventory, and
Human resource audit.
4) Determine The Job Requirements:
Total manpower required minus present staff indicates new appointments or
surplus staff. For appointing or promoting right man on right post description of
job requirement is essential on the basis of job analysis, job description is

94
prepared and on the basis of job requirements. Job requirements are the
qualifications, qualities, experience and skills necessary for performing the job
satisfactorily.
5) Estimating Human Resource Supply:
After estimating total number of employees required and after determining
the job requirement of new jobs, it is essential to estimate the supply of human
resources required.
There are mainly two resources of manpower:
Internal sources and
External sources.
6) Implementation of Human Resource Planning:
After passing through above stages now it is time to implement the human
resource plan. Without proper implementation of human resource planning the
firm cannot get the benefit of it. After implementation, evaluation is necessary to
check to what extent human resource planning is successful and also for
preventing repetition of errors in future.

95
RECRUITMENT & SELECTION PROCESS:
The company does recruitment through internal sources only.
Recruitment Process:-
Get the requisitions for recruitment of employees from any department.
Locating the source of manpower.
Identifying the employees whose character matchs with the job
Give them information about organization and job.
Encourage them to apply for job in the firm.
Selection Process:
It is the process of choosing the most suitable persons out of all the
applicants. SAMKIT DIAMONDS does not have a formal selection process. They
follow the following steps for successful selection:
Application blank
Selection test
Fixing wages
Work appointment
1. Application blank:
First of all when the employee comes for the job or applies for the job, he
has to fill one blank form which includes all basic details. This form is known as
application blank. By this form SAMKIT DIAMONDS collects basic information

96
about the applicant. H R Manager analyzes that form and selects some applicant
for further process.
This form include following items:
Name
Address (permanent residential address)
Address (native place address)
Contact no.
Educational qualification
Work experience
His previous firms name and address
Family members
Expected salary
2. Selection test:
The next step is about selection test. There are mainly two types of tests:
1) Work test
2) Behavior test
1) Work test:
After analysis of application blank, the applicants are called for work test.
For employee of production department, the work test will be of 2-3 days. During
this test the applicant works in the company as the employee of the organization.
The work done by applicant is checked by production manager. If the quality of
work is good than employee is selected and vice versa.

97
In the work test following points are checked:
Speed of work
Quality and cut of diamond prepared by him under the given weight
restrictions
Regularity
2) Behaviour test:
The attitude and behavior of the employee is also checked along with the
work test. During the days of work test, applicants behaviour is supervised by HR
Manager. Behaviour of applicant with other employees, nature of applicant,
attitude, etc. is checked during the behavior test.
3. Fixing wages:
The applicant shows his expected salary in the application blank form. The
H R Manager fixes the wages/salary structure individually for each applicant. For
production employee salary is set by wages system. The wages are same for
employees. Fix salary is also there for many posts, it changes according to the
ability of the applicant.

98
4. Work appointment:
If the salary or wages set by H R Manager is accepted by applicant than he
will get final appointment letter. The date of joining is informed to candidate. One
agreement is prepared and signed by applicant and H R Manager which includes
employee code no., designation, salary structure, rules and regulations of the
organization, etc.
DOCUMENTS RELATED TO RECRUITMENT AND SELECTION:
Followings are the document for recruitment and selection:
Application blank
Wages structure
Appointment letter
Agreement between company and employee

99
SOURCES OF RECRUITMENT:
Following internal & external sources of recruitment are used by the firm for
recruiting highly talented and competent employees.
Recruitment Sources
Internal Sources External Sources
1) Employee references 1) Gate Hiring
2) Past Employees
3) Transfer
4) Promotion
Internal Sources:
In internal sources SAMKIT DIAMONDS uses different ways for recruitment

like transfer, promotion, employee references and past employees.
They use internal sources of recruitment to get following advantages:
Internal source of recruitment is motivational and speedy as compare to

external sources.
They can get competent employees by spending less in recruitment
process.
These sources are generally used to recruit low skilled employees in the
organization.

100
External Source:
Every time firm cannot use internal sources of recruitment because there
are some posts which requires specialized qualification, knowledge, and skill
which cannot be obtain from internal sources of recruitment. That is why firm
uses external source of recruitment to get best suitable candidate for the post or
vacancies.
In external source of recruitment, firm gets more applications as compare to
internal source of recruitment. So the probability of selecting best suitable
candidate will increase.
At the same time it should be noted that if the firm is going for external
recruitment, the process of recruitment will take longer period as compare to
internal source of recruitment. And it is more expensive too.
In external sources, company uses gate hiring to recruit employees.
For hiring skilled personnel company uses employees references.
For lower level Personnel Company uses the external source of recruitment
i.e. gate hiring.

101
Job Description:
A job description is an organized, factual statement of duties and

responsibilities of a specific job. In brief, it should tell what is to be done, how it is
done and why. It is a standard of function, in that it defines the appropriate and
authorized content of a job.
JOB DESCRIPTION FOR PLANNER
Title Planner (signer)
Department Production department
Duties Mark (Sign) on diamond according to the shape.
Responsibilities Mark to prepare the best diamond in shape and

size with minimum rejection
Conditions Minimum 50 diamonds should be finalized.

Punctuality should be maintained
Wrong markings will tend to deduction in
salary as penalty.
Facility at workplace Centrally A.C. building

Material handling is easy and fast
Good and healthy environment
Salary level 17,000 to 25,000

102
JOB DESCRIPTION FOR ASSORTER
Title Assorter
Department Production department
Duties Assort diamonds according to the size, clarity

and color as directed.
Responsibilities Assort the diamonds to make further production

process easy and more fruitful.
Conditions Assort the diamonds as given.

Punctuality should be maintained
Assorting efficiency has to be good.
Facility at workplace Centrally A.C. building

Material handling is easy and fast
Good and healthy environment
Salary level 5000 to 15000
Job Specification:
Job specification is a statement of minimum acceptable qualification
necessary to perform a job properly. It is a standard of personnel and designates
the qualities required for acceptable performance.
SAMKIT DIAMONDS is related with production of diamonds. In diamond
industry there is no educational qualification needed for workers. They should be
able to analyse and plan the diamonds properly giving accurate result, so
physically the eye sight and judgment power should be good.

103
JOB SPECIFICATION
Age Above 18 years
Education 12th (not necessary)
Job experience Minimum 2 years in the same field
Physical strength
Eye-sight should be good
Mental strength Judgment power should be good

General intelligence
Habitual Should be habitual to work for 8-9 hours a day
PERFORMANCE APPRAISAL:
Performance appraisal is a process of assessing the performance and
progress of an employee or of a group of employees on a given job and his
potential for future development.
At SAMKIT DIAMONDS the performance appraisal program is done at a
simple level. Every year in the month of March the appraisal is done for all the
employees, the most important criteria for appraisal evaluation are the
performance of the employee at work.
The performance appraisal is one way to encourage the employees to
perform even better.

104
Process of Performance Appraisal:
Setting the standards
Taking corrective action Communicating

sandards
Discussing results Measuring performance
Comparing with stndards
1) Setting the standards:
The appraisal process begins with setting up of criteria to be used for
appraising the performance of employees. The standards are set by proper
discuss between experts and production manager. The standards are decide with
undertaking of average employee not so excellent, not so week. For different
post, there are different parameters which we can take as performance
measurement parameter. By checking and evaluating this parameter we can take
decision about performance of employee.

105
For example:
ASSORTER: speed of assorting, number of diamond, clarity in assort
SIGNER: speed, planning of cleaving.
POLISHING STAFF: speed, polishing, clarity
COMPUTER OPERATOR: speed of typing and data entry, level of correction.
2) Communicating standards:
The standards set by manager are communicated with employee and
examiner. If there is any problem with standards and need to improve than send
back to H.R. Manager and improve it. Well communicated standards are helpful
to making performance appraisal process prefect.
3) Measuring performance:
Performance is measured according to the standards set by specialist.
Production manager note down the data received actually in the form in which the
standard is already written. He put the original data in front of the standard and
then measures the actual performance.
4) Comparing with standards:
Actual performance is compared with the standards. Such comparison will
reveal the deviations which may be positive or negative. Positive deviation occurs
when actual performance exceeds the standards and vice versa.

106
5) Discussing the appraisal:
When the result is achieved, the result is needed to communicate with
employee along with deviations. This will enable an employee to know his
strengths and weaknesses.
6) Taking corrective action:
If deviations are negative, than they needs to be improve. Performance can
be improved by providing training, coaching, counseling, etc.
PROMOTION, DEMOTION & INCREMENTAL POLICIES:
Promotion:
Promotion means an improvement in pay, prestige, position and
responsibilities of an employee within the organization.
The criteria for promotion are as follows:
To attract and retain the qualified and competent people.
To recognize and reward the efficiency of an employee.
To fill up higher vacancies within the organization.
To fill up higher vacancies within the organization, in urgent situations.
Promotion is merit based, mostly as per requirement of the job.
Seniority is also a criterion.

107
Demotion:
Demotion is not a part of SAMKIT DIAMONDS. The HR manager believes
that this activity should not be a part of the system in the organization. And if any
employee does any wrong act again and again then they fire that employee from
the organization.
Increment:
At SAMKIT DIAMONDS the increment to the employees is given on the basis of:
Years of experience of the job.
Knowledge.
Association with the firm.
Work efficiency
DIFFERENT WELFARE ACTIVITIES:
Welfare means faring or doing well. At SAMKIT DIAMONDS there are

various welfare activities that are done for the employees, such as:
Insurance is provided
Leaves given to employees (18 days / year)
Bonus given to employees (7% of basic salary)
provident fund (10% of basic salary)
Provides sanitation, ventilation, Rest room, light and drinking water facility
to employees at factories as well as office.

108
EMPLOYEMENT RECORDS:
1) While employee joins the organization:
Personal detail.
Address detail.
Physical detail.
Previous organization where that worker worked.
Date of appointment.
2) Attendance of employees:
There is thumb punching system for employees while entering and exiting
the office. And this information automatically enters the HR managers computer.
It is a password protected system.
3) While employee leaves the organization:
The reason for leaving the organization and the name of the organization
they want to go.
TRAINING AND DEVELOPMENT:
SAMKIT DIAMONDS has a policy of giving 30 days training to all newly
appointed employees so the new employee will be aware about his work and can
perform their task efficiently. During this period manager of particular department will
judge the performance of the employees. And will check their regularity and
dedication for work. If the manager gets satisfactory result then the manager
appoints the employee.
Apart from this training company gives induction training to the employees:

109
Induction Training:
H.R Manager gives Induction Training to newly joined employees. This
training covers following General details:
1. Organization
2. Nature of Business
3. Policy & Procedure of firm
4. Working Conditions etc.
TRAINING NEEDS IDENTIFICATION:
SAMKIT DIAMONDS rates the present employees in following points to
identify the employees requiring training:
Decision skill
Behavioral approach
Planning execution
Good relation with subordinates
Efficiency and control over the department
Product knowledge
Process knowledge
Quality system documentation
Follow up of the instruction
Cost control
Discipline

110
LABOUR RELATION AND ACTIVITIES OF TRADE UNION:
Since employees are provided with proper tool kit, proper ventilation,
drinking facility, rest rooms and good environment, workers put their maximum
efforts to achieve the organization goal. These are the reasons why there exists a
very good labour relation.
There is no labour union at SAMKIT DIAMONDS and if any worker has any
problem he can directly approach his supervisor.
WAGES AND SALARY ADMINISTRATION:
Wage and salary, both are two different compensating ways to compensate
employees for the work they are performing. Wages are given to basic workers.
They are given on per day basis. Salaries are given to employees in the office
such as accountants, managers. Etc.
Wage structure is as under:
Type of Work Wage Rate (in Rs. As Per size

of the diamond)
pavilion 17-23
Girdle 5-9
Crown 13-19

111
Salary structure is as under:
Employees Salary Level (Rs. Per Month)
Departmental Manager 30,000 35,000
Signer 17,000 25,000

Assorter 15,000 25,000
Sawing Staff 16,000 19,000
Computer Operator 10,000 16,000
Security Staff 3,000 4,000
Peons 2,500 3,000
Cleaning Staff 2700 4,000
INCENTIVES AND MOTIVATION SYSTEM:
Motivation is the complex forces starting and keeping a person at work in
company. The company motivated the employees in monetary terms and there
are no incentives systems.
Company gives motivation in monetary form by allowing:
Bonus
Provident fund
Family pension fund
Loans without interest
Advances

112
BIBLIOGRAPHY
1) INFORMATION GIVEN BY SAMKIT DIAMONDS

2) http://www.studiosoft.it/jewelryworlds10.htm
3) www.google.com
4) www.wikipedia.org
5) Soni Diamond Business Institute
BOOKS REVIEW:
1) MARKETING MANAGEMENT BY PHILIP KOTLER.
2) ORGANISATIONAL BEHAVIOUR BY K. ASHVATHAPPA.
3) MANAGEMENT ACCOUNTING BY BHAGVATHI PILLAI.

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1

HARSH SANGHAVI (230) SYBBA DIV -III

MUDIT MEHTA (139) SYBBA DIV-II

SUBMITTED IN PARTIAL FULFILLMENTS OF

SARVAJANIK EDUCATION SOCIETY

BRCM COLLEGE OF BUSINESS ADMINISTRETION

BRCM COLLEGE OF BUSINESS ADMINISTRETION

BRCM COLLEGE OF BUSINESS ADMINISTRETION

BRCM COLLEGE OF BUSINESS ADMINISTRETION

If we are found or caught as defaulter of above declaration, we know that our

BRCM COLLEGE OF BUSINESS ADMINISTRETION

We are highly indebted to the director and other employees of SAMKIT

have always helped us in solving our doubts & problems.

BRCM COLLEGE OF BUSINESS ADMINISTRETION

CHAPTER CONTENT PAGE

2. Marketing and Sales function 18

4. Finance and Account 73

5. Human Resource Management 100

BRCM COLLEGE OF BUSINESS ADMINISTRETION

BRCM COLLEGE OF BUSINESS ADMINISTRETION

A BRIEF HISTORY OF DIAMOND INDUSTRY:

century, when scientific understanding and technology extended diamond exploration

Siberian Russia, and Australia,

It is a modern misconception that the worlds diamonds come primarily from

South Africa: diamonds are a worldwide resource. The common characteristic of

pipes that bring diamonds to the Earths surface.

BRCM COLLEGE OF BUSINESS ADMINISTRETION

usually a grease table. OF course, no crushing is required, as nature has already

released the diamonds from the pipe rock.

Rough diamonds can be classified in to three categories: Gem, Industrial and

America and Zaire.

BRCM COLLEGE OF BUSINESS ADMINISTRETION

of gemstones and crafting of beautiful and fine Jewellery.

approximately 15% every year.

mostly in 18-22 carat craft Jewellery.

India today occupies top position in importing, processing and exporting

polished diamonds in world, 9 are polished in India.

BRCM COLLEGE OF BUSINESS ADMINISTRETION

Famous Diamonds of the World:

The Great Star of Africa:

Weight: 530.20 carats

Source: Transversal, South Africa

Color: slightly bluish green

Clarity: "exceptionally pure"

Cut: Mogul-cut rose

Weight: 273.85 carats

Color: Grade D Colorless

Source: South Africa

BRCM COLLEGE OF BUSINESS ADMINISTRETION

Cut: Cushion shaped brilliant

Cut: Round Brilliant

Color: F-G (colorless)

Clarity: Internally Flawless

Source: Premier Mine, South Africa.

BRCM COLLEGE OF BUSINESS ADMINISTRETION

Color: pale yellow

Cut: pear shape

The Blue Hope:

Weight: 45.52 carats