Sr. No. Content Page. No

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TABLE OF CONTENTS
Sr. No. Content Page. No.
- Certificate -
- College Certificate -
- Declaration (I)
- Acknowledgement (ll)
- Executive Summary (lll)
Ch - 1 Introduction 2
Ch - 2 Marketing And Sales Function 12
Ch - 3 Production Management 28
Ch - 4 Finance Management 51
Ch - 5 Human Resource Management 67
- Reference 84
NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

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CHAPTER - 1
(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 20th century, when scientific understanding and technology
extended diamond exploration and mining around the globe. For 1000 years,
starting in the 4th 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 world’s 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 Earth’s 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 concentrate is then sieved into several size
ranges, and each fraction is dumped onto a picking table, where someone
checks with eye for diamonds. In the bigger operation large earthmoving
equipment 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

Boarts. Its normal color range is from colorless to yellow, though in a limited
form, it can be found in any color, including black. The largest diamond
producers are Australia, Angola, Botswana, India, Namibia, Russia, South
Africa, Canada, South America, and Zaire.

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The cutting and polishing of Diamond and precious stone are one of the
oldest traditions 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 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.
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:
1. The Great Star of Africa:
Weight: 530.20 carats

Color: unknown
Clarity: unknown
Cut: Pear
Source: Transversal, South Africa
2. The Orloff:

Color: slightly bluish green
Clarity: "exceptionally pure"
Cut: Mogul-cut rose
Source: India
3. Centenary Diamond:

Color: Grade D Colorless
Clarity: Bright
Cut: Modified
Source: South Africa

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4. The Regent:

Color: unknown
Clarity: unknown
Cut: Cushion shaped brilliant
Source: India
5. The Kohinoor:

Color: unknown
Clarity: unknown
Cut: Round Brilliant
Source: India
6. The Taylor-Burton:

Color: F-G (colorless)
Clarity: Internally Flawless
Cut: pear-shape
Source: Premier Mine, South Africa.

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7. The sancy:
Weight: 55 carats
Color: pale yellow
Clarity: unknown
Cut: pear shape
Source: India
8. The Blue Hope:

Color: dark blue
Clarity: flawless
Cut: Oval Brilliant
Source: India
9. Hortensia:
Weight: 20 carats
Colure: peach color
Clarity: unknown
Cut: unknown
Source: Louvre in Paris.

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INTRODUCTION OF COMPANY:
About Company:
Mr. Ranchhod Lal Detroja established the Ratnakala Exports PVT LTD on the
2nd of June 2009 with the goal of achieving the top position in diamond
industry. A firm started as a trading company with small operations in trading
is now a big firm with its offices all over the world and has also speeded its
roots into the manufacturing sector recently.
RATNAKALA EXPORTS PVT LTD 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 demand 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.
Company Profile:
NAME OF THE ORG. : RATNAKALA EXPORTS PVT LTD
ADDRESS : Aanand Nagar, Shantadevi Road,

Navsari-396445.
OWNER : Mr. Ranchhod Lal Detroja
BANKER : YES Bank
REGISTERED OFFICE : MUMBAI

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HISTORY OF RATNAKALA EXPORTS PVT LTD:
HISTORY:
RATNAKALA EXPORTS was established on 2nd June 2009. RATNAKALA

EXPORTS' main export office in Mumbai; and the biggest manufacturing
factory in Surat and Navsari.
The factory has a total built up area of 20000 Sq. Ft. The total workforce of
RATNAKALA EXPORTS is 233 including skilled and semi-skilled workers.
RATNAKALA EXPORTS is importers of rough diamonds from South Africa and

other Outsourcing and Manufacturers and Exporters of Cut and polished
Diamonds having different shapes like Round, Ambron, Square Ambron, Led
Radium, Princess, Aad-Bilker, Pan (Tear), Markish, Kushan, Oval of various
size, colors, and clarity. They specialize in the manufacture of carat and
certificated diamonds (i.e., each diamond piece would weigh 1 carat or
more). They import Rough Diamonds from South Africa and other Sources,
and the cut and polished Diamonds are manufactured at their own factory at
Surat, India. The Exports of cut & polished diamonds in Dubai, Hong Kong,
and Belgium.
VISION:
RATNAKALA EXPORTS carries a vision to reserve a place amongst the world’s

most respected companies by offering total customer satisfaction and by
producing the best quality of Diamonds.
MISSION:
To achieve corporate objectives by incorporating the highest level of quality

through a highly responsive, dedicated team and creating an environment of
fairness, honesty and courtesy for employees, bankers, and clients.

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INFORMATION ABOUT MANAGERS:
NAME POSITION QUALIFICATION
Mr. Paresh Kahar Finance Manager BCom
Mr. Ramesh Hothi Production Manager SSC
Mr. Ketan Dham Production Manager HSC

Saniya
Mr. Kiran Bathe HR Manager BCom
Mr. Mahesh Detroja Marketing Manager -
Mr. Ankur Patel Admin Office -
Mr. Hasmukh Admin Office -

Mandani
FUTURE PLANS OF RATNA KALA Exports Pvt Ltd:
• Increase productivity by reducing wastage and maintenance.

• Get position in the top 10 diamond units.
• Make healthy relationships with government and customers.
MAIN PRODUCTION UNIT (HEAD OFFICE):
• Main Production Unit at Surat.

• Main Head Office at Mumbai.

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OTHER FACTORY’S LOCATION:
• Navsari Factory:
RATNAKALA EXPORTS PVT LTD
Village: Navsari
District: Gujarat India
Pin Code – 396445.
ORGANISATION STRUCTURE:
CEO
FINANCE MANAGER PRODUCTION MANAGER HR MANAGER MARKETING MANAGER
MANAGER MANAGER
MANAGER
CA
ASST.
ASST. SALES
MANAGER
MANAGER EXECUTIVES
COMPANY OPERATOR
WORKERS STAFF

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CHAPTER - 2
(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.”
RATNAKALA EXPORTS sells its finished product in both Local and foreign
market. It is a big exporter of polished diamonds. In RATNAKALA EXPORTS'
focus on marketing function is low and they prefer to call this department as
selling department rather than the 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 salesman. The 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. Mahesh Detroja )
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:
• Rough Diamonds
• Polished Diamonds
Classification of Diamonds:
There is no classification for Rough Diamonds but polished Diamonds can be

classified in to two ways:
➢ Color wise classification

➢ Cut wise classification
➢ Color wise classification:

✓ Pink Diamonds
✓ White Diamonds
✓ Champagne Diamonds
✓ Pink Champagne Diamonds
✓ Yellow Diamonds
✓ Blue Diamonds
✓ Green Diamonds

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➢ Cut wise classification:
1) Round Cut Diamond
2) Ambron Diamond
3) Red Radium Diamonds
4) Princess Cut Diamonds
5) Aad Bilker Diamond
6) Pan Cut Diamond
7) Heart Shaped Diamonds
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% of the market for 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.
RATNAKALA EXPORTS has been engaged in the business of polished diamonds

since 2009. It deals with polished diamonds up to ’18 cents’ of all colors and
purity in trading while in manufacturing it deals with diamonds from 0.05
carats to 5.00 carats majority up to “J” color and “VS-SI” purity. 90% of the

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product will be of ‘VS’ purity. 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:
• J.B. Diamonds
• R.C.Gems
FEATURES OF PRODUCTS:
The main characteristic of diamond is known as 4 Cs of diamond.
• CARAT
• CUT
• CLARITY
• COLOR
1) CARAT:
The weight of a Diamond is measured in carats, with one carat being

equivalent to 100 points and 5 carat = 1 grams. 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

carats, 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 a cut will let light
escape through a diamond's bottom, causing it to appear dull, while too deep
a cut will allow light to be lost through the sides of diamond, making it appear
dark.
Diamonds with perfect color and clarity could nevertheless have poor
brilliance if they are not well cut. The price of diamond depends upon the
shining that is reflection of diamond. It means that if light reflection is
maximum then it 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:
• Excellent
• Ideal
• Very Good
• Good
• 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 mean better clarity) and how visible they are. The greater
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.

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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.
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) to 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.
CLASSIFICATION OF 4Cs:

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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.
RATNAKALA EXPORTS sells its products in both the local and foreign market.
So, we can say that RATNAKALA EXPORTS has geographic segmentation,
which calls for dividing market units such as nation, state, countries, and
cities region etc.
Target Market:
RATNAKALA EXPORTS have geographic segmentation so we can say that the

target market is also geographic. The target market of RATNAKALA EXPORTS is
as follow:
• Indian market
• Foreign market
DISRIBUTION NETWORK:
A distribution channel performs the work of moving goods from producers to

consumers. It overcomes the time, place, possession gaps that separate
goods and services from those who need or want them.
The customers of RATNAKALA EXPORTS are each person interested in buying

diamonds, also big dealers and jeweler manufacturers are fixed customers
etc. RATNAKALA EXPORTS has its own office for sales at Surat, Mumbai,
Hongkong, Dubai, Bangkok, etc. At these offices there are some sales
executives who contact directly to the customer and the brokers. There are

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intermediaries like brokers or agents. In some case selling is done by personal

meeting with the buyer but in some cases, they must send the diamonds to
the buyers located in different cities or countries so that they require some
courier agencies. So, we can say that SAMKIT DIAMONDS has a multi-level
distribution network.
SALES PROCEDURE:
CUSTOMER REQUIREMENT BY PERSONAL MEETING/ PHONE/ MAIL/ FAX
GETTING SALES ORDER
DELIVER DIAMONDS
SALES INVOICE
RECEIVING PAYMENT
HOW CUSTOMER ORDERS ARE PROCESSED:
• First, when a customer comes to the office and asks for polished
diamond or jewelry, a 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.

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• The sales employees at the office explain the various features of all
types of Diamonds and 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 RATNAKALA EXPORTS PVT LTD not to give documents

related to sales to any outsiders, they are not ready with us to give these
documents. But they prepare following documents:
• Sales bill
• Challan

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COMPARISON OF 4Ps OF PRODUCTS OF ORGANIZATION

WITH COMPETITORS:
1. Product:
RATNAKALA EXPORTS PVT LTD manufactures various products of diamond

and jewelry with different quality, design, size and features. RATNAKALA
EXPORTS PVT LTD engaged in the business of polished diamond whose weight
is up to ’5 carats’ and purity is up to ranging from IF to SI.
2. Price:
The price of the polished diamond is decided based on the report called
“Rapaport report”. This Rapaport report is published every month and it is
accepted worldwide, so the company must sell certified diamonds according
to the prices mentioned in the Rapaport report all over the world. Diamonds
can be sold for a price less than the price mentioned in the Rapaport report

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but it’s illegal to charge a higher price than the price mentioned in the report.
All the companies sell 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 a convenient place customers cannot buy them easily. The products of
RATNAKALA EXPORTS PVT LTD are made available to its customers all the
time and at all places.
4. Promotion:
RATNAKALA EXPORTS PVT LTD doesn’t go for many promotional activities due
to its very reputed and recognized name. They give advertisement profiles
which are the sources commonly used by the customers of the company i.e.,
other companies, showroom holders etc. The Marketing Manager remains in
touch with the customers and maintains smooth relations with them.
STUDY OF GENERIC LEVEL COMPETITION:
Generic level competition means the competition of a company’s product

with the other product which has the same use, but which is unbranded and
of lower quality and which is less expensive.
Example: Competition with all local diamond firms which are not branded as
RATNAKAL EXPORTS PVT LTD.

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FORECASTING AND SALES PLAN PREPARATION:
Forecasting:
The most important use of a forecast is to have a reasonable basis for

predicting the firm's sales volume. The firm's sales forecast is 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 festivals like Diwali and Christmas there is a high demand for 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.
2. Competition:
If competition is high companies must try to increase sales.
3. Business fluctuation:
If there is a depression in the business cycle, then sales will be reduced. And
for prosperity period sales will 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.”
RATNAKALA DIAMOND PVT LTD has no fixed price for polished diamond. They
have a 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
• Competitor’s price
• Dollar Fluctuation

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PROMOTIONAL AND ADVERTISING POLICIES:
Promotion refers to creating incentives for buying. For promotion

RATNAKALA EXPORTS PVT LTD depends on the following:
• Customer relations.
• Price discount
• Personal selling
• Direct marketing
RATNAKALA EXPORTS PVT LTD 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 of sales tax. There are no rules of taxes in
Diamond industry. But when a company imports and exports Diamonds, the
Company must pay excise duty on diamonds.
CONTROL SYSTEM AND REPORTING SYSTEM DESIGNED

FOR SALES EMPLOYEES WORKING IN FIELD:
When a feasible plan is prepared its execution is important and when plan is
executed its controlling becomes very important. Controlling is very
important in each 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 must 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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CHAPTER - 3
(PRODUCTION)

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INTRODUCTION:
Production management deals with converting raw materials into finished

goods or products. It brings together the 6M’s 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. Ramesh
Hothi)
Assort Poloshing
Planning Manager Sawing 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:
As shown in the above diagram, the first marketing department forecasts the
firm’s 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 prepare the production
plan, taking into mind the present stock of the finished product and the
minimum level of stock that the company maintains.
If the marketing department is anticipating access demand in favorable

season, they communicate with production department and production head
prepares production plan 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:

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ANALYSIS OF PLANT LOCATION CONSIDERING VARIOUS

FACTORS:
There are two plants from RATNAKALA EXPORTS PVT LTD. The main plant is in
Surat and the other one is in Navsari.
Factors Affecting Selection of plant Location:
• Cheaper land:
The price of the land is cheaper as compared to in a city so RATNAKALA

EXPORTS PVT LTD can expand their business by spending less.
• Near to most of the employees:
As we know, Surat has a large amount of skilled labor and most of them stay
in Surat Area. And the main factory of RATNAKALA EXPORTS PVT LTD is in
Surat so it is easy to get skilled labor over there. And it is also near to most of
the employees.
• Labor availability:
The production plant of RATNAKALA EXPORTS PVT LTD is situated in Surat

city. And as the highest number of skilled workers comes from nearby area
labor is available easily.
• Cost of living:
The cost of living in Surat is low compared to urban areas. So, the expenses
related to workers tend to be low. And so manufacturing cost decreases.

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PRODUCTION PROCESS

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There are mainly seven steps which are as follows:
• 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.
• 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 should be cut and
marks it to indicate where the stone should be cleaved or sawed. It is also
known as ‘Signing’ or ‘Marking’.

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• Cleaving and Sawing:
Here the experts must 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 sowing. 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.
Therefore, diamond dust is used on the saw, as well as the actual diamond
dust generated by the crystal being cut.

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• Boiling:
Boiling plays a 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.
• 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.
• Bruting:
In this department, brutes give different shapes to the diamonds as earlier

planned, in such a way that the polisher can achieve maximum yield. Normal
brutes, Maxi brutes, advanced brutes as well as laser bruting machines are

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used in this process. The brutes must take their utmost care of the diamond
at this process so that it does not break. Also, in this process the brutes must
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 brutes 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.
• Polishing:
After being bruised a diamond pass 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.
Here the artisan must be very careful at all stages as even a small mistake
made 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

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process of diamonds.
MATERIAL HANDLING EQUIPMENT:
• Tray:
Plastic tray is useful to handle the Diamonds. Assorting is done only with the
use of this tray.
• Tongs:
Tongs are used to pick the diamond and place it at an appropriate location.
• 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.

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• Polythene pouch with zip:
If the diamond is in a big lot, then it is handled in such polythene pouch which
has zip by which we can pack it. This pouch is mainly used during import and
export.
• Elevator:
Big machines and other heavy items are transferred by elevator.
• Small bowl:
Small ceramic bowls are used to boil the diamonds in the acid.
• 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.

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• Courier and private logistic service:
Company uses private logistic system in transfer of money and diamond from
one branch to another branch. Courier service is useful to transfer
documents, cheques, reports, etc.
CLASSIFICATION OF MATERIAL HANDLING EQUIPMENTS:
➢ Based on source of power:
• Electric power:
- Elevator, Electric Heater and Oven
• Fuel consuming:
- Pipeline
• Manual power:
- Tongs
- Tray
- Small bowl
- Packets
- Polythene pouch with zip
➢ Based on path of movement:

• Fixed path:
- Elevator
- Pipeline
- Small bowl
• Variable path:

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- Tongs
- Packet
- Tray
- Polythene pouch with zip
- Courier
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 controlling and keep knowledge
about Received, issued and the balanced stock in the store. RATNAKALA
EXPORTS PVT LTD also control inventory and get some benefits, which are
added to the profits of the company.
The main objective for controlling inventory is to meet the customer

requirement timely and 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 or damage. Obsolescence etc.

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INVENTORY VALUATION METHODS:
Inventory valuation is necessary for any organization. The two important

objectives for inventory valuation are as follows:
• The valuation of inventory is necessary for determining the true income

earned by a business during a particular period.
• The inventory at the end of a period is to be shown as a current asset of
the business. In the event the inventory is not properly valued, the
balance sheet will not disclose the correct financial position of the
business.
RATNAKALA EXPORTS PVT LTD 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 ABC analysis “A” class item covers 70 to
75% of consumable value and 10 to 15% of material consumed. Here rough
diamond covers about 85% of consumable value and 80% of material
consumed.
VED ANALYSIS:
• Vital item:

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Vital items 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 are very
small and low-cost items but without that item assorting and signing will not
go ahead and production will automatically stop.
• Essential item:
They are those items without which production may not stop instantly but
there can be problems like a slow-down of production. Essential items are
sawing machines, computers, boiler machines, matter balance, etc. which are
necessary to run smooth and speedy production with low cost and time.
• Desirable item:
They are those items without which production may not stop instantly nor
will it 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.

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STUDY OF MATERIAL CODIFICATION SYSTEM:
RATNAKALA EXPORTS PVT LTD has a codification system in which they use a
barcode system. They give barcodes two times 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 storeroom:
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:
• Material receipt register

• Material issue register
• Stock Register
• Monthly stock report

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MATERIAL RECEIPT PROCEDURE:
Material Request
Purchase Order
Material Received
Checking
Store
Computer Entry
MATERIAL ISSUE PROCEDURE:
Material issue procedure is the process of issuing material by manager to

worker. Here we discuss the material issue procedure of rough diamond.
• Production managers give rough diamonds to assort manager and give

entry in stock registered.
• Assort manager makes entry in his register and gives it to the cleaving
department.
• After that they give it to the lotting department with entry in register.
• After lotting it comes to the issue department. From there they issue it too
various
• manufacturing departments according to “kappa” no.
• Then polished diamonds are sent to the quality control department.
• After checking the quality, they issue it to polish assortment department.

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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

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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 in heavy production and monetary loss. There is proper maintenance of
the machines done as per schedule.
Cleaving department:
In this department, a machine called ‘DynaMark-z’ is connected directly to

the computer. If any problem happens, the problem is solved by the IT
department.
Blade sawing department:
In this department, the maintenance of blade sewing machine is done every

2-3 months. The blades of those machines are changed once a year & the
machine remains idle for 30 minutes. If the problem is related to the 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 a computer. If there is any

problem with the software, the problem is solved by the IT department. The
machine called ‘Sarin’ is connected to a computer. These machines are
repaired every month by the Sarin Company.
Laser department:
In this department, there are 3 types of machines. They are automatic. In

these machines, the part called ‘laser lamp’ must be replaced every month.
The machine remains idle for 1 hour. If the laser lamp blasts, then the
machine remains idle for 2 hours for cleaning the machine and changing the
laser lamp.

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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 a worker starts the machine, he does calibration, it means he
checks the result whether it is perfect or not. If the result is not perfect, it is
repaired. Its breakdown time is 2-3 hours.
RECORDS RELATED TO PRODUCTION OPERATION AT

DIFFERENT MACHINE:
RATNAKALA EXPORTS PVT LTD has following type of machines:
Laser machine, sewing 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 records in the register which includes date and time,
department from where material is come to process, weight, lot no., process
time, remark etc.
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 goods and services. Quality is the priority that the customer
demands in his product. If there is a 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.
RATNAKALA EXPORTS PVT LTD set some standards which are strictly followed
by every employee. The managerial people always keep in touch with new

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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, the 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.
Work In progress:
• Planning should be proper so that the best shape of diamond can be

chosen.
• The level of rejection or wastage should be at minimum.
• During boiling, chemicals 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.

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REPORTS GENERATED IN PRODUCTION DEPARTMENT:
The following reports are generated in production department:
• Material consumption report

• Rejection report
• Total production report
• Maintenance report

Page 51
CHAPTER - 4
(FINANCE)

Page 52
INTRODUCTION:
“Finance is considered as the LIFE BLOOD of an organization.”
Financial Management is a study about the process of procuring financial

resources and its effective utilization with a view to maximizing the wealth of
shareholders and companies.
Efficient management of every business enterprise is largely dependent on

the efficient management of its finances.
ORGANIZATION STRUCTURE OF FINANCE DEPARTMENT:
Mr. Paresh Kahar Finance Department
Chartered Accountant
Assistant Manager
Computer and Data Entry Operator

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REVENUE BUDGETING:
The routine expenses which are incurred to run the business or daily activities
are called revenue expenses. Without revenue Expenses firm cannot
manufacture anything. The 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 receipts like commission, income from investment etc.
Revenue payments are as follows:
• Payment of material supplied.

• Payment of wages.
• Payment of overheads.
• Other payments like interest on loans, income tax etc.
COSTING METHOD:
Costing is very necessary for every organization, because only after finding all
the expenses can we identify the profit margin, and it also enables us to make
comparisons with competitors.
Costing is a practical exercise, which determines the real position of the

business. The balance sheet gives only a brief picture of the entire business,
whereas the cost gives a detailed idea of 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,

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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:
➢ Raw material cost

➢ Factory cost
➢ Production cost
Following are the classification of costs as per different categories:
➢ Raw material cost:

• Local
• Import
➢ 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

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• 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
WORKING CAPITAL MANAGEMENT:
Working capital is one of the most fundamental measures of a firm’s financial

strength. If an 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 firm’s management can oversee the
firm’s operation. The speed at which the firm can manage its short-term
assets and short-term liabilities are also crucial to its business success.
Keeping the working capital level to the minimum required for efficient
operation keeps costs down. This means controlling buying, handling, storing,
and managing stock property.
In simple terms, working capital refers to the cash an organization requires 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 concepts of working capital for the purpose of definition-Gross
concept and Net concept. Gross overall refers to a firm’s current assets. The
firm’s total current assets are termed as gross working capital. The net

Page 56
concept refers to current assets' fewer 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
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

Page 57
PREPARATION AND ANALYSIS OF FUND FLOW

STATEMENT:
STATEMENT SHOWING CHANGES IN WORKING CAPITAL
Particulars 2021 2022 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 Liabilities 287252438 280083886 - 7168552
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

Page 58
FINANCIAL PERFORMANCE:
Particular 2021 2022

Total sales 74.63 72.52
Profit of the business 0.94 0.99
The financial performance of RATNAKALA EXPORTS PVT LTD is very poor

compared to the previous year. There is a decrease in the profit.
INTERNAL AUDIT POLICIES & FINANCIAL CONTROL

SYSTEMS:
Internal Audit Policy:
• The accounts have been prepared on a 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 fixed 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. Based on other items of raw material are valued at cost
on FIFO basis.
• Polished diamonds are valued at estimated cost.

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Financial Control Policy:
• Stock and debtors: daily reporting.

• Cash and bank balance: checked daily
• Sales and profit: checked monthly.
• Other expenses are checked annually.
ACCOUNTING POLICIES:
• Basis of Preparation of Financial Statements:
The financial statements are prepared under the historical cost convention,
on the accrual's basis of accounting.
• Fixed assets:
Fixed assets are carried at cost of acquisition less accumulated depreciation.
• Depreciation:
Depreciation has been provided as WDV basis at the rates.
• Investment:
Investments are stated at the cost of acquisition.
• Revenue recognition:
Revenue is recognized on its accrual; sales are accounted when diamonds are
supplied and recorded net of trade discount and rebates but including excise
duty and value added tax.

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• Borrowing cost:
Borrowing costs are directly attributable to the acquisition of the asset. Other
borrowing costs are recognized as an expense in the period in which they are
incurred.
• 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:
RATNAKALA EXPORTS PVT LTD used the FIFO method, which is known as
FIRST IN FIRST OUT.
METHODS TO CALCULATE DEPRECIATION:
The written down value (WDV) method is used by RATNAKALA EXPORTS PVT
LTD for finding depreciation. Under this method a fixed 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.

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RATIO ANALYSIS
• Current Ratio = Current Assets / Current Liabilities
= 486588278 / 287750310
Ans = 1.69: 1
YEAR 2019-2020 2020-2021 2021-2022

Current Rations 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 assets in greater proportion than the current liability.
• Quick Ratio = Quick Assets / Quick Liabilities
= 481933735 / 280083886
Ans = 1.72: 1
YEAR 2019-2020 2020-2021 2021-2022

Quick Ratios 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.

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• Net Profit Ratio = Net Profit after Tax / Net Sales*100
= 22621839 / 861043889*100
Ans = 2.62%
YEAR 2019-2020 2020-2021 2021-2022

Net Profit Ratios 3.32% 2.91% 2.62%
• Analysis:
There is a reduction in the net profit ratio due to the increase in overheads as
well as the additional stock disclosed in the survey.
• Proprietary Ratio = Owner’s fund / Total Asset
= 33921839 / 497851652
Ans = 0.06: 1
YEAR 2019-2020 2020-2021 2021-2022

Proprietary Ratios 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.
• Fixed assets to Proprietor’s fund Ratio = Fixed Assets /

Proprietor’s fund
= 11263374 / 11300000
Ans = 0.99: 1

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YEAR 2019-2020 2020-2021 2021-2022

Fixed assets to Proprietor’s 1.07:1 1.71:1 0.99:1
fund Ratio
• ANALSIS:
This ratio shows an increasing trend and then it started decreasing from last
year. It is due to an increase in owners’ funds. Fixed assets have been
decreasing, which is not good for the company.
• Debtors Turnover Ratio = Net Credit Sales / Average

Account Receivable
= 861043889 / 290454730
Ans. = 2.96 Times
YEAR 2019-2020 2020-2021 2021-2022

Debtors Turnover Ratio 1.97 2.23 2.96
(In Times)
• Analysis:
This ratio is increasing due to a great increase in credit sales. It is a good sign
for the company to have less receivable and more credit sales.
• Debtors Velocity = 365 Days / Debtors Turnover Ratio
= 365 / 2.96
Ans = 123.31 Days

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YEAR 2019-2020 2020-2021 2021-2022

Debtors Velocity 185 164 123
(In Days)
• Analysis:
This ratio is decreasing as debtor’s turnover is increased. Having less debtor’s

velocity helps company to reduce risk element in business.
• Debt-Equity (owner’s fund) Ratio = Total Long term Debts /

Owner’s fun
= 109618217 / 33921839
Ans. = 3.23: 1
YEAR 2019-2020 2020-2021 2021-2022

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 not advisable
for business to maintain such a level. It shows the low liquidity of the
company.

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COMPARATIVE STATEMENT OF BALANCE SHEET:
Particulars 2021 2020 incr/decr

Sources Of Funds Amt. Amt. Amt.
Owner’s fund:
Owner’s fund 97382772 91764848 5617924
Reserve and surplus 11300000 6300000 5000000
Loan funds:
Secured loan 109618217 59533318 50084899
Total 218300989 157598166 60702823
Application Of Funds:
Fixed Assets: 11263374 10814397 448977
Current assets, loans and advance:

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

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TREND ANALYSIS:
TREND ANALYSIS OF BALANCE SHEET
PARTICULARS 2021 2022
SOURCES OF FUNDS:
Owner’s fund:
Owner’s 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

Page 67
CHAPTER - 5
(HUMAN RESOURCE
MANAGEMENT)

Page 68
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 today’s 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 manpower 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.

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ORGANIZATION STRUCTURE OF HUMAN RESOURCE

DEPARTMENT:
In the Human resource Department, the Company designed the pure line
organization structure. This department works as staff position only for
production department.
CHAIRMAN
(Mr. Ranchhod Lal Detroja)
H.R. Manager
(Mr. Kiran Bathe)
HUMAN RESOURCE PLANNING:
RATNAKALA EXPORTS PVT LTD 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, 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.

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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 requirements 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. The future specific
period may be of one, two, three year or more than that. The firm can use the
following factors to estimate their future personnel requirements more
effectively.
• Employment Trends.
• Need for filling the vacancies.
• Development.
• Productivity.
There are two methods for estimating total human resource requirements, as
below.
• Workload analysis method and

• Work force analysis method.

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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 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:
• Manpower 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 based on job analysis, job description is
prepared and based on job requirements. Job requirements are the
qualifications, qualities, experience and skills necessary for performing the
job satisfactorily.
5) Estimating Human Resource Supply:
After estimating the total number of employees required and after

determining the job requirement for 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.

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6) Implementation of Human Resource Planning:
After passing through the 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 for preventing repetition of errors in future.
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 matches with the job
• Give them information about organization and job.
• Encourage them to apply for jobs in the firm.
Selection Process:
It is the process of choosing the most suitable people out of all the applicants.
RATNAKALA EXPORTS PVT LTD does not have a formal selection process. They
follow the following steps for successful selection:
• Application blank
• Fixing wages
• Work appointment
Application blank:

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First, when the employee comes for the job or applies for the job, he must fill
in one blank form which includes all basic details. This form is known as
application blank. With this form RATNAKALA EXPORTS PVT LTD collects basic
information about the applicant. The H.R. Manager analyzes that form and
selects some applicants for further process.
This form includes following items:
• Name
• Address (permanent residential address)
• Address (native place address)
• Contact no.
• Educational qualification
• Work experience
• His previous firm’s name and address
• Family members
• Expected salary
• 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 the
same for employees. Fix salary is also there for many posts, it changes
according to the ability of the applicant.
• Work appointment:
If the salary or wages set by H R Manager is accepted by the applicant, then

he will get a final appointment letter. The date of joining is informed to
candidate. One agreement is prepared and signed by the applicant and H R
Manager which includes employee code no., designation, salary structure,
rules and regulations of the organization, etc.

Page 74
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
SOURCES OF RECRUITMENT:
The following internal & external sources of recruitment are used by the firm
for recruiting highly talented and competent employees.
• Employee references
1) Gate Hiring
2) Past Employees
3) Transfer
4) Promotion
Internal Sources:
In internal sources RATNAKALA EXPORTS PVT LTD uses different means for
recruitment like transfer, promotion, employee references and past
employees.
They use internal sources of recruitment to get following advantages:
• Internal sources of recruitment are motivational and speedy compared

to external sources.

Page 75
• They can get competent employees by spending less on the

recruitment process.
• These sources are generally used to recruit low skilled employees in the
organization.
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 sources of recruitment, firms get more applications as compared

to internal sources of recruitment. So, the probability of selecting the most
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 a longer period compared to
an internal source of recruitment. And it is more expensive too.
In external sources, companies use gate hiring to recruit employees.
For hiring skilled personnel, the company uses employee references.
For lower-level Personnel Company uses the external source of recruitment

i.e., gate hiring.

Page 76
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
JOB DESCRIPTION FOR ASSORTER
Title Assorted
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

Page 77
⦁ Assorting efficiency must 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.”
RATNAKALA EXPORTS PVT LTD is related to the production of diamonds. In

the diamond industry there are no educational qualifications needed for
workers. They should be able to analyses and plan the diamonds properly
giving accurate result, so physically the eyesight and judgment power should
be good.
JOB SPECIFICATION
Age Above 18 years

Education 12th (not necessary)
Job experience Minimum 2 years in the same field
Physical strength Eyesight should be good
Mental strength ⦁ Judgment power should be good

⦁ General intelligence
Habitual Should be habitual to work for 8-9 hours a day

Page 78
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 RATNAKALA EXPORTS PVT LTD 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.
Process of Performance Appraisal:
• 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
discussion between experts and the production manager. The standards are
decided by the undertaking of the average employee, not so excellent, not so
weak. For different posts, there are different parameters which we can take
as performance measurement parameters. By checking and evaluating this
parameter we can take a decision about the performance of employees.
For example:
ASSORTER: speed of assorting, number of diamonds, clarity in assort
SIGNER: speed, planning of cleaving.
POLISHING STAFF: speed, polishing, clarity
COMPUTER OPERATOR: speed of typing and data entry, level of correction.

Page 79
• Communicating standards:
The standards set by the manager are communicated with the employee and
examiner. If there is any problem with standards and needs to improve, then
send it back to the H.R. Manager and improve it. Well-communicated
standards are helpful to make the performance appraisal process perfect.
• Measuring performance:
Performance is measured according to the standards set by specialists.

Production manager notes down the data received in the form in which the
standard is already written. He puts the original data in front of the standard
and then measures the actual performance.
• Comparing with standards:
Actual performance is compared with the standards. Such a comparison will

reveal the deviations which may be positive or negative. Positive deviation
occurs when actual performance exceeds the standards and vice versa.
• Discussing the appraisal:
When the result is achieved, the result is needed to communicate with

employees along with deviations. This will enable an employee to know his
strengths and weaknesses.
• Taking corrective action:
If deviations are negative, then they need to be improved. Performance can

be improved by providing training, coaching, counseling, etc.

Page 80
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 qualified and competent people.

• To recognize and reward the efficiency of an employee.
• To fill up higher vacancies within the organization.
• To fill higher vacancies within the organization, in urgent situations.
• Promotion is merit based, mostly as per the requirement of the job.
• Seniority is also a criterion.
Demotion:
Demotion is not a part of RATNAKALA EXPORTS PVT LTD. 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 RATNAKALA EXPORTS PVT LTD the increment to the employees is given

based on:
• Years of experience of the job.

• Knowledge.
• Association with the firm.
• Work efficiency

Page 81
DIFFERENT WELFARE ACTIVITIES:
“Welfare means faring or doing well.” At RATNAKALA EXPORTS PVT LTD

there are various welfare activities that are done for the employees, such as:
• Leaves given to employees (18 days (about 2 and a half weeks) / year)
• Bonus given to employees (7% of basic salary)
• Provides sanitation, ventilation, Rest room, light and drinking water
facility to employees at factories as well as office.
EMPLOYEMENT RECORDS:
While employee joins the organization:
• Personal detail.
• Address detail.
• Physical detail.
• Previous organization where that worker worked.
• Date of appointment.
Attendance of employees:
There is a thumb punching system for employees while entering and exiting
the office. And this information automatically enters the HR manager’s
computer. It is a password protected system.
While employee leaves the organization:
The reason for leaving the organization and the name of the organization
they want to go to.

Page 82
TRAINING AND DEVELOPMENT:
RATNAKALA EXPORTS PVT LTD has a policy of giving 30 days' training to all
newly appointed employees so the new employee will be aware of his work
and can perform their task efficiently. During this period the manager of a
particular department will judge the performance of the employees. And will
check their regularity and dedication for work. If the manager gets a
satisfactory result, then the manager appoints the employee.
Apart from this training company gives induction training to the employees:
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:
RATNAKALA EXPORTS PVT LTD rates the present employees in following

points to identify the employees requiring training:
• Decision skill
• Behavioral approach
• Planning execution
• Good relationship with subordinates
• Efficiency and control over the department
• Product knowledge
• Process knowledge

Page 83
• Quality system documentation

• Follow up of the instruction
• Cost control
• Discipline
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 RATNAKALA EXPORTS PVT LTD and if any worker
has any problem, he can directly approach his supervisor.
WAGES AND SALARY ADMINISTRATION:
Wage and salary are both two different compensating ways to compensate
employees for the work they are performing. Wages are given to basic
workers. They are given on a per day basis. Salaries are given to employees in
the office such as accountants and managers. Etc.
INCENTIVES AND MOTIVATION SYSTEM:
Motivation is the complex forces starting and keeping a person at work in a

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

Page 84
• Family pension fund

• Loans without interest
• Advances
REFERENCES:
• www.google.com
• www.wikipedia.org

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- Executive Summary (lll)

Ch - 2 Marketing And Sales Function 12

Ch - 5 Human Resource Management 67

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

A BRIEF HISTORY OF DIAMOND INDUSTRY:

Today diamonds are mined in about 25 countries, on every continent but

It is a modern misconception that the world’s diamonds come primarily from

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

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

India today occupies top position in importing, processing, and exporting

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

Famous Diamonds of the World:

1. The Great Star of Africa:

Weight: 530.20 carats

Weight: 189.62 carats

Weight: 273.85 carats

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

Weight: 140.50 carats

Weight: 108.93 carats

Weight: 69.42 carats

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

8. The Blue Hope:

Weight: 45.52 carats

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

NAME OF THE ORG. : RATNAKALA EXPORTS PVT LTD

ADDRESS : Aanand Nagar, Shantadevi Road,

OWNER : Mr. Ranchhod Lal Detroja

BANKER : YES Bank

REGISTERED OFFICE : MUMBAI

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

HISTORY OF RATNAKALA EXPORTS PVT LTD:

RATNAKALA EXPORTS was established on 2nd June 2009. RATNAKALA

RATNAKALA EXPORTS is importers of rough diamonds from South Africa and

RATNAKALA EXPORTS carries a vision to reserve a place amongst the world’s

To achieve corporate objectives by incorporating the highest level of quality

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

INFORMATION ABOUT MANAGERS:

NAME POSITION QUALIFICATION

Mr. Paresh Kahar Finance Manager BCom

Mr. Ramesh Hothi Production Manager SSC

Mr. Ketan Dham Production Manager HSC

Mr. Mahesh Detroja Marketing Manager -

Mr. Ankur Patel Admin Office -

Mr. Hasmukh Admin Office -

FUTURE PLANS OF RATNA KALA Exports Pvt Ltd:

• Increase productivity by reducing wastage and maintenance.

MAIN PRODUCTION UNIT (HEAD OFFICE):

• Main Production Unit at Surat.

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

OTHER FACTORY’S LOCATION:

RATNAKALA EXPORTS PVT LTD

District: Gujarat India

Pin Code – 396445.

FINANCE MANAGER PRODUCTION MANAGER HR MANAGER MARKETING MANAGER

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

“Marketing management is the art and science of choosing target markets

NARAN LALA COLLEGE OF COMMERCE AND MANAGEMENT NAVSARI

TYPES AND CLASSIFICATION OF PRODUCT MIX & THEIR

There are mainly two types of Diamonds: