CHAPTER-I

INTRODUCTION

INTRODUCTION
HUMAN RESOURCE MANAGEMENT
HRM is the management of employees, skills, knowledge, abilities,
talents, aptitudes, creative abilities etc. Employee in HRM is treated not only as
economic man but also as social and psychological man. Thus, the complete man is
viewed under this approach. Employee is treated as a resource. Employees are treated as
a profit centre and therefore, invert capital for HRD and future utility.

NATURE AND SCOPE OF HRS

People in any organization manifest themselves, not only through
individual sections but also through group interactions. When individual come to work
place, they come with not only technical skills, knowledge etc, but also with their
personal feelings, perception, desires, motives, attributes, values etc, therefore, employee
management in an organization does mean management of not only technical skills but
also other factors of the human resources.

MEANING OF HRS MANAGEMENT

Different terms are used to denote hrs management. They are labour
management, labour addition, and labor management relations, employee, employer
relations, industrial relations, personal administration, personal management, human
capital management, human asset management, and the like. Though these terms can be
differentiated widely, the basic nature of distinction lies in the scope or coverage and
evolutionary stage. In simple sense, human resources management means employing
people their resources, utilizing, maintaining and compensating their service in tune with
the job and organizational requirements.
HRM is a process consisting of four functions, acquisition, development,
motivations and maintenance of HRs
Robin & Duecento

HRM has been defined as a strategic and coherent approach to the

management of an organization most valued assets the people working these, who
individual and collectively contributes to the achievement of its goals.
Armstrong (1999)

OBJECTIVES OF HRM
The basic aims & objectives of HRM are to help the realization of the organizational
goals.

To ensure effective utilization of human resources. All other organizational

resources will be efficiently utilized by the human resources.

To ensure respect of human beings by providing various services and welfare

facilities to the personnel.

To ensure reconciliation of individual group goals with those of the organization

in such a manner that the personnel feel a sense of commitment and loyalty towards it.

To identify and satisfy the needs of individuals by offering various monetary and

non-monetary rewards.

SIGNIFICANCE OF HUMAN RESOURCES MANAGEMENT

Human resources play a crucial role in the development process of
modern economics. Arthur Lewis observed there are great differences in development
between countries which seem to have roughly equal resources, so it is necessary to
enquire into the difference in human behavior. It is often felt that, though the
exploitation of natural resources, availability of physical and financial resources and
international aid play prominent roles in the growth of modern economies, none of these
factors is more significant and committed manpower. It is fact, said that all development
comes from the human mind.

FUNCTIONS OF HRM
The function of HRM can be broadly classified in to two categories.
(I)

Managerial functions and

(II)

Operative functions.

I. Managerial functions:
Managerial functions of personnel management involve planning,
organizing, directing and controlling. All these functions influence the operative
functions.
(i) Planning: It is a pre-determined course of action. Planning is determination of
personal is determination of personnel programmers and changes in advance that will
contribute to the organizational goals.
(ii) Organizing: An organization is a means to an end. It is essential to carry out the
determined course of action.
(iii)

Directing: The next logical function after completing planning and organizing is

the execution of the plan. The basic function of personnel management at any level is
motivating, commanding, leading and activating people. The willing and effective cooperation of employees for the attainment of organizational goals is possible through
proper direction.
(iv)Controlling: After planning, organizing and directing the various activities of the
personnel management, the performance is to be verified in order to know that personnel
functions are performed in conformity with the plans and directions. Controlling also
involves checking, verifying and comparing of the actual with the plans, identification of
deviation if any and correcting of identified deviations. Thus, action and operation and
adjusted to pre-determined plans and standard through control.
II. Operative Functions:
The operative functions of personnel management are related to specific
activities of personnel management viz., employment, development, compensation and
relations. All these functions are interacted by managerial functions. Further these
functional are to be performed in conjunction with management functions.
(i) Employment: It is first operative function of Human Resources Management.
Employment is concerned with securing and employing the people possessing required
kind and level of human resource necessary to achieve the organizational objectives. It
covers the functions such as job analysis, human resource planning, recruitment,
selection, placement, induction and internal mobility.
a. Job analysis: It is the process of study and collection of information relating to the
operations and responsibilities of a specific job.

b. Human Resource planning: It is a process for determination and assuring that the
organization will have an adequate number of qualified persons, available at proper
times, performing jobs which would provide satisfaction for the individual involved.
c. Recruitment: It is the process of searching for prospective employees and
stimulating them to apply for jobs in an organization.
d. Selection: It is the process of ascertaining the qualifications, experience, skill,
knowledge etc. of an applicant with a view to a appraising his/her suitability to a job
appraising.
e. Placement: It is the process of assigning the selected candidate with the most
suitable job in terms of job requirements. It is matching of employee specification with
job requirements.
f. Induction and Orientation: Induction and orientation are the techniques by which a
new employee is rehabilitated in the changed surrounding and introduced to the
practices, policies, purpose and people etc., of organization.
(ii) Development: It is the process of improving. Molding and changing the skills,
knowledge, creative ability, aptitude, attitude, values, commitment etc., based on present
and future job and organizational requirements. This function includes:
a.

Performance Appraisal.

b.

Training.

c.

Management Development.

d.

Career Planning and Development.

e.

Internal Mobility.

f.

Transfer.

g.

Promotion.

(iii) Compensation: It is the process of providing adequate, equitable and fair

remuneration to the employees. It includes
1.

Job evaluation.

2.

Wage and salary.

3.

Administration.

4.

Incentives,

5.

Bonus,

6.

Fringe benefits,

7.

Social security measures etc.

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(v)

Human Relations: Practicing various human resources polices and programmers

like employment, development and compensation and interaction among employees
create a sense of relationship between the individual workers and management,
among workers and trade unions and management.

RESPONSIBILITIES OF HRM
The responsibilities are not distinct or compartmentalized. They are inter-related.
ATTRACTION

ADJUSTMENT

SELECTION

ASSESSMENT

RETENTION

DEVELOPMENT &
MOTIVATION

NEED FOR THE STUDY

Hr payroll management includes the following features

It is inter related between hr policy and financial management.

To know the satisfaction of employee expected remuneration for doing their job

Assurance of no loss of jobs as a result of the programs

Training of employees in team problem solving

The use of hr payroll management where employees discuss problems affecting

the performance of the plan and the work environment.

Encouragement of performance elopement

Satisfaction to maintain of good hr payroll management.

Increasing the satisfaction of employee performance

OBJECTIVES OF THE STUDY

To study the components and determinants hr payroll management and its role in

influencing the employee satisfaction of performance -cultural and loyalty upon

company.

To study the impact of working conditions indirectly.

To examine the impact of loyalty upon company hr policys in AP foods.

To develop an integrated approach towards hr payroll management.

To draw conclusion which would improve the aspects in relation to hr payroll

management?

SCOPE OF THE STUDY

The term hr payroll management in its broader sense covers various
aspects of employment and their expect performance upon company policies and
conditions of work .The present study will aim at studying various factors which
influence hr payroll management.
Although the important components of hr payroll management were
comprehensively discussed, the scope is confined to all the categories / levels that are
working at AP FOODS like, services dept, Administrators, Supporting Staff.

RESEARCH & METHODOLOGY

The following methodology has been used to carry out the research on the
topic.hr payroll management. Both primary and secondary data has been used to carry
out the present topic.

PRIMARY DATA:
The primary data has been collected through Questionnaire. The
Questionnaire has been properly prepared in order to cover all the information required
for the study. This Primary data was also collected through personal interview and
interaction with the officials and staff in the organization.

SECONDARY DATA:
Secondary data has been collected through the annual reports of the
organization & from the manuals. Some data was collected from the website of the
organization (www.apfoods.nic.in and www.who.com).
The data was also collected from various publications in the magazines
like HRM Review, HRD, sap, peoplesoft, oracle hr payroll process and policys and
journal like Indian Journal of Industrial Relations and the various articles published in
them.

SAMPLE DESIGN:
The method of sampling used was random sampling. The main aim of the
study was to cover employees at all hierarchical levels. Therefore, a sample of
respondents was chosen at each level of hierarchy in all the departments and services.
The sample size was taken as 50. The respondents were from 4 categories as Scientific
Staff, Technical Staff, Administrators, and Supporting Staff.
Respondents
Employee Details
Total

No.

Employees

of.

Supporting

Technical

Staff

Staff

700

100

Administrators Supporting
Staff
105

10

100

Sample

No.

of.
20

Employees

10

10

10

Sample selection is random from all the 4 categories.

During the course of study, following constraints which were noticed are as follows:
1) TIME
2) RESPONSES

TIME:
The project had to be completed with in certain period of time, as time plays a major
constraint in the project.

RESPONSES:
(i)

Busy schedules of the employees made to take such a sample size as 50.

(ii)

Majority of the employees of AP FOODS, to whom we have approached,

explored themselves towards the questionnaire very well. It was really enchanting of the
organization.

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LIMITATIONS OF THE STUDY

Though adequate care has been taken while doing the project. This project
still suffers from certain limitations. They are

The hr payroll management involves a wider range.

So, the present study

examines it from identified and selected dimensions only. However it is possible that
there may be other factors which might not have been covered in this study

This interpretation being based on percentage method is not definite. The study is

not conclusive.

The management allowed the researcher to collect the data from limited

respondents only.

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CHAPTER-II
REVIEW OF LITERATURE

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REVIEW OF LITERATURE
PAYROLL MANAGEMENT:
Payroll Management is a fundamental business requirement demanding
compliant and accurate financial controls in a timely manner. A rules-based payroll
management system will assist in controlling the workforce costs; ensure the entire
workforce is being paid on time and according to compensation rules. Fully integrated
with financial and hr factor, Payroll is based on a global HRMS engine with countryspecific localization extensions to better manage your global HR operations.

INTEGRATE AND STREAMLINE YOUR HR PROCESSES:

Payroll is part of Human Resources Management family of
applications and integrates seamlessly with other Human Resources applications,
including Human Resources (core), Benefits, Self, Incentive Compensation,

HR PAYROLL OVERVIEW:
In a broad sense, payroll accounting is the calculation of remuneration for
work performed by an employee. More specifically, payroll accounting consists of a
variety of processes that are becoming increasingly important due to the employers
increased obligation to supply benefits and medical welfare.

HR PAYROLL:
HR Payroll is very specific depending on the country. General
configuration rules should be used in all country implementation, but each is very
individual when it is about details. All this is because different labor laws and social
security demands.
Payroll seen from HR side. Payroll is used to calculate remuneration for
work performed by individual employees. All elements of an employees periodic
remuneration which are entered by the relevant department are used as basics for payroll
program to perform gross-to-net calculation (including calculating benefits, taxes,
amounts for social security and other types of statutory and voluntary deductions) wage
types stored in info types Basic Pay, Recurring Payments/Deductions , Additional

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Payments , Additional Off-Cycle Payments, other payroll related (country and client
specific) info types, time wage types (bonuses for overtimes, night shifts, etc).
Payroll program produces payroll results (entered in payroll specific
tables), remuneration statements and bank transfers. Also posts payroll results to
Accounting.

HR PAYROLL MANAGEMENT:
Purpose
This component enables the running of the payroll for all employees in
line with n legal and business requirements.
Implementation Considerations
The HR Payroll management component must be implemented in
cooperation with project teams implementing other areas of Human Resources (HR), in
particular HR Personnel Administration.
Integration
The HR Payroll component integrates with other HR components such as
Personnel Administration and Personnel Time Management. There are interfaces
to Financial Accounting and Controlling. You can run payroll using a combination of and
third-party products.
Features
The component uses data from other areas of HR for calculating all
statutory and non-statutory additions and deductions for your employees. HR Payroll
offers a number of standard reports used in payroll, superannuation, leave, advance
payments and taxation.
In addition to the standard payroll functions, the payroll processing for
also comprises the following country-specific functions:
Basic Increments
Dearness Allowance
Housing rental allowance (HRA)
Car and Conveyance
Long Term Reimbursements
Claims

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Bonus
Income Tax
Third Party Deductions
Income from Other Sources
Exemptions
Leave Travel Allowance
Medical Reimbursements
Medical Insurance
Child Education Allowance
Child Hostel Allowance
Other Allowances and Reimbursements
Leave Encashment
Voluntary Retirement Scheme
Previous Employment Tax Details
Professional Tax
Provident Fund
Employee State Insurance
Labor Welfare Fund
Nominations
Minimum Net Pay
Loans Enhancement
One Day Salary Deduction
Mid Year Go Live
Termination Work Bench
Gratuity
Superannuation

HR Payroll supports retroactive accounting. This function automatically

recalculates payroll in the event of changes to master data and time data in periods for
which payroll has already been completed.

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Basic General Increments:

This function is used to perform a batch update of increments in the Basic Salary wage
type in the Basic Pay.
Dearness Allowance:
This component enables the computation of Dearness Allowance.
Dearness Allowance is a non-statutory allowance that you pay to an employee on a
monthly basis. The payment of this allowance relates to the changes in the cost of living
in a particular location. The Dearness Allowance is related to the Consumer Price Index
(CPI) for a given location, and the state authorities generally revise the CPI on a
quarterly basis.
A change in employee status, such as a transfer or a promotion may affect
Dearness Allowance. The allowance consists of a fixed and a variable portion.
For a non-management category, you generally call this component the
Dearness Allowance. For a supervisory category, you may call it the Cost Of Living
Allowance (COLA).
Integration
DA forms a part of the salary basis for the other components of Payroll.
For example, the Dearness Allowance along with the basic salary typically forms the
salary basis for computation of Income Tax, Gratuity, and Professional Tax.
Features
The standard system provides the following methods for the computation
of Dearness Allowance:
Non-Slab based calculation
Basic slab based calculation
Basic slab based Incremental calculation
CPI slab based calculation
Incremental CPI slab based calculation
Basic slab based calculation, subject to minimum value.

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Housing rental allowance (HRA):

This component helps you create and maintain information on the
employee accommodation. You can also compute the exemptions and perquisites
applicable on a housing benefit.
Income Tax:
During the computation of the annual exemptions and perquisites, the Income Tax
functionality also includes the exemptions and perquisite wage types of the housing
functionality.
Basic Pay:
When you create or modify a housing record using the Housing (HRA / CLA /COA) with
the new or changed wage type for Housing.

Car and Conveyance petrol conveyance:

This component enables you to process the:
Exemption on Conveyance Allowance Perquisite on Car Schemes and driver(s)
provided by the company. The system reads the details for an employee maintained in
the Car & Conveyance

Long Term Reimbursements:

Long term reimbursements are benefits provided to the employees over a
fixed period of years. The duration of the benefit generally varies between three to five
years. In the. System, you can categorize Long Term Reimbursements into the following:
Hard Furnishing Scheme
This is a benefit provided to employees for the purpose of acquiring movable capital
items like furniture, fridge, washing machine, television, and computer.
Soft Furnishing Schemer Other Reimbursements
This is a benefit provided to employees for the purpose of acquiring consumer capital
items like carpets and curtains.
Car Maintenance Scheme
This is a benefit provided to employees for the purpose of maintenance of their car over
a period of time.

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Features
You can maintain the Long Term Reimbursement claimed by the
employees in this info type and under one of the following subtypes:
Claims:
This component enables the processing of claims submitted by an
employee. Employees are eligible for certain monetary and non-monetary benefits, as a
part of their compensation package. Employees submit a claim based on their eligibility,
to avail these benefits.
Reimbursement allowances can be of the following types:
Amount (monetary) Monetary claims are reimbursements against a particular
eligibility amount. For example, a medical reimbursement, subject to a maximum
amount of Rs.15, 000/-, in a given assessment year.
Unit or a number (non-monetary) Non-monetary claims are those claims that an
employee typically makes for the purpose of company work. Claims of non-monetary
nature are made in whole units. For example, protective clothing, briefcases, calculators,
and number of liters of petrol. Claims of non-monetary nature are made in whole units.
Amount, subject to a number limit on the number of times that you can claim the
allowance For example, a stitching allowance eligibility of Rs.1000/- per financial
year, for which the employee can submit a claim only twice in that financial year.
Slab based claims- Some types of reimbursements have a validity period that is greater
than a year, and are called Long Term Reimbursement.
Eligibility - The system determines whether an employee is eligible for a particular
reimbursement or not, using Pay Scale Grouping for Allowances. A reimbursement can
be either monetary or non-monetary in nature. If the reimbursement is:
Validity Period - You can configure the validity period of a reimbursement through Pay
Scale Grouping for Allowances and Reimbursement
Bonus:
This component enables the processing of employee bonus. You can compute
both regular and off-cycle bonus.

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Integration
Additional Payments
The hr payroll system updates this after a regular bonus computation.
Additional Off-Cycle Payments for off-cycle bonus
The system updates this info type after an off-cycle bonus computation.
Feature
This report computes the employee bonus. You have the option of computing bonus:
As per the Payment of Bonus Act
On a monthly salary basis or an annual salary basis
For ex-employees
As a regular bonus or an off-cycle bonus or both
Off-Cycle Taxation
When the bonus is as an off-cycle payment, the System will compute the applicable Tax
Deduction at Source (TDS). The Income Tax Deduction at Source for off Cycle Bonus
Payment payroll function (INBTD) determines the rate of Tax Deduction at
Source (TDS) for an off-cycle bonus. This function has the following parameters:

Income Tax:
This component computes tax on the income received by an employee for
a financial year.
Income of an employee may consist of all or any of the following components:
Regular Income - This is that part of the salary, which an employee receives every month
and is projected for the entire financial year. For example, Basic Pay, House Rent
Allowance, Conveyance Allowance.
Monthly regular income

Annual regular income

Income Tax computations payroll function (INTAX) computes the tax on the income
received by an employee for a financial year.

Tax payable

The tax payable value is added to the value of Monthly Tax Payable wage type

20

Education cuss

The education cess value is added to the value of Monthly Education Cess wage type

Surcharge

The surcharge value is added to the value of Monthly Surcharge wage type (/4MS).
Third Party Deductions:
This component provides for the calculation of Section 80 deduction and Section 88
rebate when payments to external parties are made directly from the payroll of the
employee. For example, LIC Premium, Mediclaim. These deductions are in addition to
the declarations that an employee makes for the Section 80 and Section(88) contributions
through Section (80) Deductionsinfotype (0585) and Investment Details (Sec88) infotype
(0586), respectively. You do not require to maintain the details in these two infotypes for
the the Section 80 and Section 88 deductions processed through the payroll.If the Third
Party Deductions are made through Membership Fees infotype (0057), along with the
past and the present payments, the projected payments will also be considered while
calculating tax. The amount the employee proposes to contribute in the future months of
the financial year is also taken into consideration, by the system, while calculating the
total Section 80 and Section 88 contributions.

Income from Other Sources

Exemptions:
This component comprises of:
Exemption on Medical Reimbursements and Medical Insurance Premiums
Exemption on Leave Travel Allowance
Exemption on Child Education Allowance and Child Hostel Allowance
Exemption on Other Allowances and Reimbursements
Exemptions on Leave Encashment
Exemption on Voluntary Retirement Scheme
Exemptions on Housing
Exemptions on Conveyance

21

Leave Travel Allowance (LTA):

This component calculates the tax exemptions applicable to Leave Travel
Allowance (LTA).
Your organization can give LTA to the employees in the following ways:
1.By specifying an annual (normally, but not necessarily) amount for LTA and making
payments against claims submitted by the employee.
By giving the employee a certain amount as LTA on a monthly or a periodic basis.
Example
An employee is eligible for an LTA of Rs.24, 000 annually for the financial year 2002 2003. In the current block 2002 - 2005, he/she has carried forward one trip from the
previous block. The employee submits the travel tickets of Rs.26, 000 for the journey
undertaken between the January 2, 2002 - January 19, 2002. The employee gets an
exemption of Rs.24, 000, which is the minimum of the eligible LTA and the travel tickets
submitted as proof. This exemption is against the carry forward trip from the previous
block.
An employee is eligible for an LTA of Rs.36, 000 annually for the financial year 2002 2003. In the current block 2002 - 2005, he/she has carried forward one trip from the
previous block. The employee submits the travel tickets of Rs.20, 000 for the journey
undertaken between the January 2, 2002 - January 19, 2002. He/she also submits another
set of travel tickets of Rs.15,000 for the journey undertaken between April 10,
2002 - April 28, 2002. The employee gets an exemption of Rs.35, 000, which is the
minimum of the eligible LTA and the total amount (Rs.20, 000+Rs.15, 000) of the travel
tickets submitted as proof. This exemption is against the carry forward trip from the
previous block and one trip of the current block.
Exemption on Leave Travel Allowance (LTA):
This component calculates the tax exemptions applicable to Leave Travel
Allowance (LTA).
Your organization can give LTA to the employees in the following ways:
By specifying an annual (normally, but not necessarily) amount for LTA and making
payments against claims submitted by the employee.
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By giving the employee a certain amount as LTA on a monthly or a periodic basis.

Exemption on Medical Reimbursement:

This component calculates the tax exemptions against Medical
Reimbursements.
You can give Medical Reimbursements to your employees in the following ways:
By specifying an annual (normally, but not necessarily) amount for Medical
Reimbursement and making payments against claims submitted by the employee.
By giving the employee a certain amount as medical allowance on a monthly or a
periodic basis.

Integration
Whenever an employee submits the bills for medical exemption as proof,
you must create an Exemptions info type (0582), MDAsubtype record for the employee.
You can create a record for each bill submitted by the employee or you can create a
record by cumulating all the bills, submitted as proof for medical exemption.
You can make the payments for Medical Reimbursement through the Basic Pay.

Exemption on Medical Insurance Premium:

This component calculates the tax exemptions against Medical Insurance
premiums.
You can provide Medical Insurance to your employees in the following ways:

Exemption on Child Education Allowance/Child Hostel Allowance :

This component calculates the tax exemption on Child Education
Allowance (CEA) and Child Hostel Allowance (CHA).
Integration
The Children Education Allowance exemption payroll function (INCEA) can generate
the following wage types depending on the parameter setting:
Monthly exemption on education of children
Monthly exemption on hostel accommodation of children
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Annual exemption on education of children

Annual exemption on hostel accommodation of children
Other Allowances and Reimbursements:
This component is used to calculate tax exemption on any allowance or
reimbursement that your company may want to give to the employees.
You must use this component only:
For those tax exemptions that have not been provided as a standard by the system. For
example, Exemptions on Leave Travel Allowance, Medical Reimbursement, Medical
Insurance, Child Education Allowance, Child Hostel Allowance.
When the tax exemption is not a fixed amount and varies from one employee to the other
depending on the proof of expenditure provided by the employee. The system reads the
exemption amount from the subtype of Exemptions
Leave Encashment:
This component computes exemptions on the Leave Encashment received
by an employee at the time of separation from employment.
The system computes exemption on Leave Encashment as the minimum of:
1. Leave Encashment Amount
2. Exemption limit
3. Product of the Average Monthly Salary and the Multiplication factor
4. Product of Average Monthly Salary and Number of months of leave encased
Exemption on Voluntary Retirement Scheme:
This process describes the computation of the exemptions, on the amount
received by an employee under a Voluntary Retirement Scheme (VRS).
Process Flow: Voluntary Retirement Service Taxation payroll function (INVRS)
computes exemptions on the VRS at the time of termination. It computes the exemption
on VRS as a minimum of the following factors
1. VRS payments received
2. Tax limit

24

3. Number of months of salary payable for every completed year of service

4.Product of the Number of months of Salary from VRS date to Normal Retirement
Date and the Current nominal basis
Previous Employment Tax Details:
This component provides for the computation of:
Tax in the current financial year, by capturing the salary, exemption, contribution,
deduction details of the employee pertaining to the previous employments in the current
financial year.
Tax exemption when the employee separates from the current employment, by capturing
certain lifetime exemptions from all previous employers.
Integration
You must create a Previous Employment Tax Details record
For an employee, whenever a new employee joins your organization
For all employees who have joined your organization in the past from some
Professional Tax:
This component provides functions and processes that compute the
professional tax deductions of an employee. Professional tax is a statutory tax that state
governments levy on professions, trades, callings, and employment. Professional Tax
functionality in the. System only covers the Professional Tax applicable on employee
salaries.
Individual State Governments decide the rules applicable for computing the professional
tax in their state. The Central Government, under the Constitution of, fixes the limit on
professional tax that the State Governments can charge.
Integration
Income Tax The system estimates the annual professional tax of an employee and
deducts it from salary as per Section 16(ii) of the Income Tax Act.
Features
The system determines the professional tax payable by an employee, based on the
following factors:

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Professional tax basis Comprises those salary components on which a professional tax
is applicable. The salary components to be included for calculating the professional tax
basis depend on the state. The different components are:
Basic pay
Dearness allowance
Medical reimbursement perquisite
Housing
Profits in lieu of salary
Other remuneration that an employee receives regularly
Bonus
Medical Reimbursement The system includes the medical reimbursement amount
which exceeds the amount exempt from Income Tax (as fixed under the Income Tax
Act), as a part of the professional tax basis.
Housing Allowance In case of a company leased or a company owned accommodation,
the system checks the difference in housing allowance and the rent. If you pay an
employee the positive difference between housing allowance and rent, then, the system
includes this amount for calculating the professional tax basis.
Bonus - If the employment is in a state that specifies bonus as a component of the
professional tax basis, then the system includes the same for professional tax basis
calculations.
Monthly Where the professional tax basis computation occurs every month.
Half yearly Where the professional tax basis computation occurs twice in a year, and
each computation spans six payroll periods.
Annual Where the professional tax basis computation occurs only once in a year and
the computation spans the twelve payroll periods.
Deduction frequency This is the frequency with which the system deducts the
professional tax of an employee. The computation frequency may span across one or
more payroll periods, and is state specific. For example, the deduction frequency may be:
Monthly Professional tax is deducted every month.
Quarterly Professional tax is deducted once in a quarter and spans three payroll
periods.

26

Half-yearly Professional tax is deducted twice a year, and the computation spans six
payroll periods.
Annual Professional tax is deducted once in a year, and the computation spans the
twelve payroll periods.
Exemptions Some states exempt certain categories of employees from paying
professional tax. For example, in Karnataka, the following categories of employees are
exempt from professional tax:
Blind, deaf or dumb employees
Employees who are 65 years of age
Provident Fund (PF)
This component helps you create and maintain information on employee
Provident Fund. Provident Fund is a statutory contribution, and consists of two parts:
Provident Fund (PF) - Both, the employee and the employer, contribute a fixed
percentage of the PF basis towards a Provident Fund. The minimum percentage
contributed is as specified by the authorities.
Pension Fund - The employer contributes a fixed percentage of the PF basis towards the
Pension Fund of an employee. The minimum percentage contributed is as specified by
the authorities.
In addition to contributing towards PF and Pension Funds of the employee, an employer
also contributes to the Employees Deposit Linked Insurance (EDLI). An employee may
choose to contribute a certain percentage towards a Voluntary Provident Fund (VPF)
Using the Provident Fund component you can create, maintain, and process the
following for your employees
PF
Pension Fund
EDLI
VPF
Employee State Insurance (ESI)
This component calculates the Employee State Insurance (ESI)
contribution:
To be deducted from the salary of the employee.
To be made by the employer.

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Eligibility
An employee is eligible for ESI only if:
Other Statutory Deductions record exists for the employee.
ESI Basis of the employee is less than or equal to the amount stored in the ESI Eligibility
Limit constant (ESILT) of the table view Payroll. This amount is set by the government.
ESI Basis is the sum of basic salary, dearness allowance, all allowances and overtime.
Overtime is excluded from ESI Basis for the calculation of ESI eligibility but is included
for the computation of ESI contribution.
If the employee is eligible for ESI in any one month of the ESI contribution period, then
the employee is eligible for all the subsequent months in that contribution period.
Features
The ESI contribution periods with their respective benefit periods
Contribution Period

Benefit Period

April 1 - September 30

January 1 - June 30

October 1 - March 31

July 1 - December 31

Employee makes a contribution of 1.75% of the ESI Basis.

Employer makes a contribution of 4.75% of the ESI Basis.
Labor Welfare Fund:
This component computes the contribution towards Labor Welfare
Fund (LWF).
LWF is a statutory contribution. The state authorities determine the rate of contribution
and frequency of contribution towards LWF.
Features
The states specify their individual rates for LWF computation, the frequency of LWF
contribution and Validity Date for LWF contributions.
For example, the LWF contribution frequency in Tamil Nadu is annual and it takes place
in the ninth period. The validity date for Tamil Nadu is 31st December. In Kerala, the
deduction frequency is bi-annual, and it takes place in the third period and the ninth
period. The third period has the validity date as 30th June.
Termination

28

The method of computing LWF in case of a termination differs from one state to another.
The individual states also specify the method of computing LWF contributions, in case of
a termination.
For example, if an employee in Kerala leaves the organization before 30 th June, the
system will not compute the LWF contribution for the employee. In the case of Tamil
Nadu however, the system will compute the LWF contribution even if the employee
leaves before the 31st December.
Definition
This info type stores the nomination details of employees for the following benefits:
Employee State Insurance
Gratuity
Maternity Act
Provident Fund
Pension
Use
According to the company rules and legal laws, an employee has to nominate some
person(s) for the transfer of benefits, in the eventuality of the death of the employee.
These nomination details are maintained in this
The nomination details have to be maintained:
When the employee joins the organization.
As and when the employee is covered fewer than one of the above benefits.
When the employee wants to change the nomination details.
Structure
You are provided with the following subtypes to store the nomination details for the
different benefits:
ESI Benefit (BNES)
Gratuity Benefit (BNGR)
Maternity Act Benefit (BNMB)
PF Benefit (BNPF)

29

Pension Benefit (BNPN)

For a subtype,
You must enter the name of the nominee and the percentage of the benefit that goes to
the nominee.
The sum of the percentage share must be equal to 100.
Minimum Net Pay:
This component sets a minimum wage for the employees, while
processing payroll.
Minimum net processing supports only non-statutory deductions...
Features
The minimum wage for an employee can be configured in two ways:
As a percentage of a particular wage component - You can maintain the percentage in
the Minimum Net Pay - Percentage constant (MNPPR) of table view Payroll Constants
As a fixed amount - You can maintain this fixed amount in the Minimum net pay - Fixed
Amount constant
You have been provided with a Business Add-In you can use this Add-In to calculate the
minimum wage of an employee according to your own requirements that differ from the
standards. For example, you want to configure the minimum wage as a percentage of an
employee configured.
Loans Enhancement:
This component explains the additional Company Loans features for
Payroll.
Features
The following options have been added as conditions of the Loans info type (0045) for :
Tranche
Penal Interest Simulation
For a loan type, you can configure Loan Conditions such as:
The Debit and Reference Interest Rates
Whether the system should calculate the Interest Rate Advantage

30

One Day Salary Deduction:

This component allows voluntary salary deduction for an employee for
one or more days.
This component also computes the employer contribution for the same amount as that
contributed by the employee.
One day salary deduction is required in situations such as, contribution to Prime
Minister's Relief Fund, Charitable Cause.
Mid Year Go Live
This component helps in transferring legacy payroll results data to the system and in
creating payroll results from the transferred legacy data. Mid Year Go-Live functionality
is useful if you are implementing. Payroll in the middle of a financial year.
In, the income tax assessment year is from the 1 st April to the 31st March and you
calculate all applicable taxes on employee salary for this period. When you
implement. Payroll in the middle of a financial year, you also need to transfer payroll
results for those periods of the financial year that lie before the period, in which you are
implementing the.
Termination Workbench:
This component helps in terminating an employee from the payroll.
The Termination Workbench computes the various types of payments due to, or payable
by the employee at the time of termination. For example, Gratuity, Superannuation,
Leave Encashment or any pending Reimbursable allowances.
The termination of employment may be due to the:
Resignation of an employee
Retirement of an employee
Voluntary retirement or premature retirement by an employee
For information on setting up the Termination Workbench functionality in the .system,

31

Features
The Termination Workbench comprises of the following processes:
Payroll when you execute the payroll for the period in which the employee was
terminated, the payroll processes the amounts payable at the time of termination. For
example, Notice Pay, Gratuity, Superannuation and Leave Encashment. The payroll also
calculates the applicable exemptions.

STEPWISE HR PAYROLL MANAGEMENT

Step 1:
Pre-requisite before taking up the payroll process work from client.
The purpose behind the re-engineering process of the entire payroll
management would be, by visit of our personnel to not only to suggest bottle necks and
improvements but also to clearly share the expectations and completely understand the
scope of the payroll processing assignment.
There will be trial run for a month to ensure that we are in line with the
Expectations of the client.
Step 2:
Adherence to the corporate policy
Ensure that procedures are in place to maintain the records of Corporate
Circulars and policies related to pay roll at the regular time intervals.
Understand the salary components in terms of fixed and variable.
Understand the benefits available to employees on monthly and yearly basis.
Understand local laws and compliance of the same related to payroll process.
Ensure that proper effect to the pay roll is given in accordance with the
Policy guidelines defined by the Company.
Receiving job details along with job code allocation. The job code
Allocation is to be given according to the type of the job description.

Step 3:
Collecting time sheets with attendance sheets

32

If the on line system is maintained, then it will ensure automatic checking with the
attendance register and time sheets. Otherwise the attendance sheets and the time sheets
are to be compared manually.
Step 4:
Receiving salary details

Receiving attendance details from personnel department

Terms of appointment

Receiving details of salary structure

Receiving details of Promotion, Increment and Confirmation.

Promotion
Changes of Grade, Salary Structure, and Department etc. will be initiated in case of
promotion on the basis of the information received from personnel department.
Increment
The increment letter of an employee is to be forwarded to us and necessary changes are
to be incorporated in the system.
Confirmation
Confirmation letters are to be forwarded to us and necessary changes are to be
incorporated in the system.

Details of disciplinary action taken

Every disciplinary action is based on certain terms and conditions.

That terms and conditions, if it has any effect on salary, the same to be incorporated in
the system.

Receiving details of Resignation and Retirement

Resignation
At the time of resignation an exit interview is to be conducted. The final settlement is to
be disbursed, based on the notice period.
Retirement
Retirement can be normal or voluntary. Accordingly the final settlement is to be made.
Receiving the details of Employee Advance

33

Step 5:
U PD ATI N G S A LA RY D ETAI LS

The terms of appointment

Salary Structure

Annual benefits

Attendance details

Overtime details

The details of reimbursement

The promotion, increment and confirmation details

The details of departmental transfers

The details of resignation, retirement and retrenchment

The employee advance position

Step 6:
GE N ER ATI ON OF R EPORTS FOR C HEC KI N G

Salary register

Variance Report

Step 7:
R E C TI FI C ATI ON OF C OR R EC TI ON S / MOD I FI C ATI ON S
Step 8:
GE N ER ATI ON OF R EPORTS

Salary register (Monthly)

Pay slips

Advance register

Bank Statement

Other deductions and allowance statement

MI S R EPORTS

As per clients requirements.

Reports to comply with local authorities, if any.

34

CHAPTER-III
INDUSTRY PROFILE
&
COMPANY PROFILE

35

INDUSTRY PROFILE
India is the worlds second largest producer of food next to china, and has
the potential of being the biggest with the food and agricultural sector. The total food
production in India is likely to double in the next ten years and there is an opportunity for
large investments in food and food processing technologies, skills and equipment,
especially in areas of canning, dairy and food processing, specialty processing,
packaging, frozen food/refrigeration and thermo processing. Fruits & vegetables,
fisheries, milk &milk products, meat & poultry, packaged, convenience foods, alcoholic
beverages & soft drinks and grains are important sub- sectors of food processing
industry. Health food and health food supplements is another rapidly raising segment of
this which is gaining vast popularity amongst the health conscious.
India is one of the worlds major food producers but accounts for less than 1.5
percent of international food trade. This indicates vast scope for both investors and
exporters. Food exports in 1998 stood at us$5.8 billion where as the world total was us $
483billion .The Indian food industry sales turn over is rest 140,000 core (1crore+10
million) annually as at the start of year 2000.
The most promising sub- sectors includes soft drink bottling,
confectionery manufacture, fishing, aquaculture, grain milling and graing based products
meat and poultry processing, alcoholic beverages , milk processing tomato paste, fast
food, ready -to eat break fast cereals, food additives, flavors etc.
FOOD GUIDANCE: The agency regularly issues guidance to food industry representatives and
other stakeholders on range of topics, often as a result of new regulations coming into
force.

We have listed some of the most popular reports here, which you can easily download

36

BREAD AND FLOUR REGULATIONS 1998: GUIDANCE NOTES

The bread and flour regulation 1998 lay down labeling and compositional
standards for the breads and flours to which they apply. They also continue with a long
standing national requirement to restore certain vitamins and minerals to flour
manufactured and sold in India

CONTAMINANTS IN FOOD REGULATIONS GUIDANCE NOTE.

This guidance note has been produced by the food standards agency with
the aim of providing informal guidance and a general and general introduction to the
contaminants in food regulations 2007.
DISTANCE SELLING GUIDANCE FOR FOOD BUSINESSES
The agency has produces guidance for food businesses selling to
customers who order products over the internet by phone, fax or mail order.
EU OFFICIAL FEED AND FOOD CONTROLS REGULATION: GUIDANCE
FOR ENFORCEMENT AUTHORITIES
Q&A notes for enforcements authorities on the new EU regulation on
official feed and food controls (882/2004)
FEEDING STUFFS REGULATIONS GUIDANCE NOTE:
Legislation concerning animal feeding stuffs, which includes pet food and
feed for horses, farmed fish and in limited cases wild animals, is harmonized throughout
the EU and based on measures negotiated in Brussels by the member states
FOOD ADDITIVES LEGISLATION GUIDANCE NOTES: The sweetener in food regulation 1995(as amended), the color in food
regulation 1995 (as amended), and the miscellaneous food additives regulations 1995 (as
amended).

37

FOOD CONTACT MATERIAL AND ARTICLE LEGISLATION GUIDANCE

NOTES:
This is general introduction to legislation to food count materials and
articles in Great Britain. It does not in any way supplement the law in this area, nor
constitutes legal guidance.
FOOD STANDARDS AGENCY GUIDANCE NOTES ON ARTICLES 14, 16, 18
AND 19 OF THE GENERAL FOOD LAW REGULATION (178/2002):
Regulation (no.178/2002 lays down general principles and requirements
food law and food safety procedures and established the European food safety authority.
FOOD SUPPLEMENTS REGULATION 2003: GUIDANCE NOTES:
The food supplements directive 2002/46/EC came into force in July 2002
and was implemented in England by the food supplement (England) regulations 2003.
GM FOOD AND FEED, AND TRACEABILITY AND LABELING OF GMOS:
GUIDANCE NOTES ON THE REGULATIONS
New rules concerning genetically modified organisms (GMOs) became
legally binding across all member states on 18 April 2004 one covering traceability and
labeling of GMOs (EC no.1830/2003) and the other, the gm food and feed regulation
(EC no. 1829/2003), dealing with authorization procedures and labeling issues.
GUIDANCE NOTES ON MATERIALS AND ARTICLES IN CONTACT WITH
FOOD:
These have been prepared to provide information relating to European
regulation (EC) No.2023/2006 on good manufacturing practice for materials and articles
intended to come into contact with food.
GUIDANCE ON EXPENSES ARISING FROM ADDITIONAL OFFICIAL
CONTROLS:
The food standards agency has issued guidance notes to provide advice
inn relation to regulation 41 of the Official feed and food controls (England) regulations
2007,wich

came into force on 14 December 2007, parallel regulations apply in

Scotland ,Wales and north Ireland.

38

GUIDANCE ON NUTRITION AND HEALTH CLAIMS MADE ON FOODS:

This guidance aims to help food business operators who wish to make
claims identify what they must do to comply with European regulation (EC) No
1924/2006 on nutrition and health claims made on foods. It also explains how new
claims will be authorized.
GUIDANCE ON THE ADDITION OF VITAMINS AND MINERALS AND OF
CERTAIN OTHER SUBSTANCE TO FOOD:
The guidance aims to help food business operators who wish to fortify,
or otherwise add vitamins and minerals and other substances to food, identify what they
must do to comply with European regulation (EC) NO: 1925/2006 on the addition of
vitamins and minerals and of certain other substances to food
IMPORT OF FOOD FROM THIRD COUNTRIES: GUIDANCE FOR FOOD
AUTHORITIES:
The food standers agency has issued guidance for the import of food from
third countries: (non European Union countries) for enforcement officers at ports and
inland local authorities.
IMPORTS OF PRODUCTS OF NON ANIMAL ORIGIN: GUIDANCE FOR
BUSINESSES:
Guidance notes for feed and food businesses on the imports provision for
products of non animal origin are available.
MATERIALS AND ARTICLES IN CONTACT WITH FOOD (ENGLAND)
REGULATIONS 2005:
This guidance has been prepared to provide information about the
regulation the regulations. It should not be taken as an interpretation of the law. It is not a
substitute for the regulations nor should it be read in isolation from them.
MYCOTOXIN IN FOODSTUFFS SAMPLING ADVICE:
This sampling advice is intended to provide information to enforcement
authorities and food business operators on the legislations regarding mycotoxins in food
stuffs and the official methods of sampling certain foods for mycotoxins.

39

NATURAL MINERAL WATER, SPRING WATER AND BOTTLED WATER

REGULATIONS 2007 GUIDANCE NOTE:
Guidance on recognition, exploitation, bottling and labeling rules for
natural mineral, water, spring water and bottled drinking water in UK.
NON- PERMITTED COLORS IN SPICES: GUIDANCE NOTE:
Guidance notes intended to help food companies that use spices to
minimize the risk of products adulterated with non- permitted colors entering the food
chain.
PLASTIC MATERIALS AND ARTICLES IN CONTACTS WITH FOOD
(AMENDMENT)(ENGLAND) REGULATION 2005 GUIDANCE NOTES:
The agency has issued new guidance aimed primarily at businesses in
England that manufacture, sell or use plastic materials and articles intended for use in
contact with food.
PLASTIC MATERIALS AND ARTICLES IN CONTACT WITH FOOD
(ENGLAND) REGULATIONS 2006 GUIDANCE NOTES:
This guidance provides a short summery of change proposed by the new
regulation so far as they relate to England only. It is signed primarily at companies that
manufacture, use or sell materials and articles made from food contact plastics, and
those plastics, adhesive and coatings containing BADGE (2,2,-bis(4-hydroxyphenyl)
propane bis (2,3-epoxypropyl) ether and its derivatives.
PLASTIC MATERIALS AND ARTICLES IN CONTACT WITH FOOD (LID
GASKET) REGULATIONS 2007: GUIDANCE NOTE:
The proposed 2007 regulation will provide for the enforcement, in
England of regulation (EC) NO 372/2007by the food authorities as defined by the food
safety act 1990.
PRINCIPLES FOR PREVENTING AND RESPONDING TO FOOD INCIDENTS:
This guide has been developed by the task force on incidents, to aid food
businesses and others and to prevent or deal efficiently with food incidents if they occur.

40

SAMPLING FOOD AND FEED FOR GENETICALLY MODIFIED (GM)

MATERIAL GUIDANCE:
The food standards agency (FSA)supplementary guidance on the
sampling of GM food and feed for enforcement officers , following a European
commission (EC) food and veterinary office(FVO) mission to the UK in June 2006.
SAMPLING GUIDANCE:
These guidance documents on food standard and feeding stuffs sampling
have been developed through the sampling co ordination working group (SCWG) and
has been endorsed by the enforcement liaison group (ELG).
STATUS AND LABELING OF 1% FAT MILK AS A FOOD INGREDIENT:
This advice has been issued in consultation with the department for
environment food and rural affairs (defray) and in Wales the assembly government.
SUDAN DYES IN CHILLI IMPORTED FROM INDIA: GUIDANCE: NOTES
The food standards agency investigations have identified that certain food
products sold in UK have been found to contain chili powder, chili products or cirri
powder imported from India illegally contaminated with the Sudan dyes which are
chemicals that could cause cancer.
SWEETENERS IN FOOD (AMENDMENT) (ENGLAND) REGULATIONS 2003
GUIDANCE NOTES:
These guidance notes relate to the provisions of the sweeteners in food
(amendments)(England) regulations 2003 ( 2003 NO .1182).they came into force on 23
may 2003 and permit the marketing and use of the sweetners, salt of as
partameacesulfame, for two years.
UNDESIRABLE SUBSTANCES IN ANIMAL FEED:
Undesirable substance (contaminants) are defined in legislation as any
substance or product, with the exception of pathogenic agents , which is present in and
/or on the product intended for animal feed and which presents a potential danger to
animal or human health or to the environment or could adversely affect livestock
production.

41

VACUUM PACKED CHILLED FOODS GUIDANCE:

The agency has produced guidance and fact sheet to help minimize the
risk of clostridium botulinum in vacuum and modified atmosphere packed chilled foods.
The guidance is designed to assist small businesses and local authority environment
health officers assess the risks.
WASTE COOKING OIL FROM CATERING PREMISES:
Guidance issued jointly by the food standards agency, cabinet office,
environment agency, defrays, HM revenue and customs and LACORS.
HYGIENE GUDANCE:
Guidance notes for business on hygiene legislation include the 2006 food
hygiene legislation.
CHEESE RECOVERY: GUIDANCE FOR UK DAIRY INDUSTRY AND LOCAL
AUTHORITIES:
The food standards agency has issued new guidance aimed to ensure
cheese recovery is carried out in accordance with food hygiene legislation.
FEED HYGIENE REGULATION (183/2005): GUIDANCE FOR FARMERS:
Feed hygiene regulation (183/2005) comes into effect in January 2006. It
applies to businesses that make, use or market animal feeds. This includes most live
stock farm, arable farms that grow, use or sell crops for feed use and also fish farms.
FISHERY PRODUCTS CHARGES REGULATIONS 2007: GUIDANCE FOR
ENFORCEMENT AUTHORITIES:
The food standards agency has issued Q&A notes for enforcement
authorities on the fishery products (official control charges) regulations 2007.
GUIDANCE ON TEMPERATURE CONTROL LEGISLATION.
The majority of the text in the document has not changed from the
guidance previously issued by the department of heath on the 1995 regulations. The main
addition to the guidance is advice on the legislation in Scotland.

42

GUIDANCE ON THE 2006 FOOD HYGIENE LEGISLATION

New EU food hygiene regulations have applied since 1 January 2006.
GUIDANCE ON WILD SALMON AND ANISAKIS PARASITE:
Parasite is fish, particularly anisakis, can, if eaten alive, serious health
problem.
Therefore, the agency has issued new guidance for anglers and nest men,
who may want to eat their own catch, or supply small quantities to individuals or local
food businesses.
HOW TO APPLY FOR APPROVED OR REGISTRATION UNDER EC FEED
HYGIENE REGULATION (183/2005):
EC regulation 183/2005 required feed business operators to notify the
relevant enforcement authority of any establishment that is under their control and active
in any stage of production, processing, storage, transport or distribution of feed
notification should be given in the form required by the enforcement authority , with a
view to apply for approval and or registration
MANAGEMENT OF OUT BREAK OF FOOD BORNE ILLNESS:
The purpose of this document is to provide a frame work for health
professionals to assist them in the management of outbreaks of infectious intestinal
disease caused by ingestion of microbiology contaminated food.
OFFICIALLY TUBERCULOSIS-FREE

STATUS AND

DAIRY HYGIENE

LEGISLATION GUIDANCE NOTES:

The food standards agency has issued update guidance to food authority
in England on officially tuberculosis-free status (OTF) and hygiene legislation.
CHANGING FACE OF THE INDIAN FOOD PROCESSING INDUSTRY
The past decade has witnessed a radical development in India's food
processing sector. The growth of this industry is expected to change the way people
perceive food and their eating habits. Yashodhan Jadhav maps the evolution of the
processed food sector, proposed development plans and upcoming trends in India.
The food processing sector in India is poised to be one of the largest in terms of

43

production, consumption, export and growth prospects. The government too has
prioritized its focus on this sector and bestowed it with a number of fiscal reliefs and
incentives to commercialize and add value to the agricultural produce. The focus is also
directed towards minimizing pre and post harvest wastage, employment generation and
export growth. While India's food processing industry features an array of products like
fruit and vegetables, meat and poultry, milk and milk products; other consumer product
groups like confectionary, chocolates and cocoa products, soya-based products, mineral
water and high protein food also falls under its purview. As per the figures given by the
National Committee on Food Processing & Regulatory Affairs, the food processing
sector received investments worth USD 144 million between 2007 and 2008, as against
USD 5.7 million in the previous year. During April 2008 - January 2009, the sector
received

USD

760

million

worth

of

investments.

THE FOOD PROCESSING INDUSTRY:

In retrospect with an aim to streamline the meat and poultry processing
industry in India, the government has launched the National Meat and Poultry Processing
Board (NMPPB) in New Delhi on February 2009. The new board will have 19 members
and will address issues related to the production of clean and hygienic meat and meat
products. The board will also go a long way in helping the rural economy through
employment generation. Further, NMPPB will work towards raising domestic standards
in meat and poultry processing to international levels, developing uniform and effective
meat quality testing systems and addressing environmental pollution issues arising out of
the conditions, which is now prevalent in the meat industry. The cabinet had given the
approval for the board's set up, with an outlay of Rs 14.64 core (Rs 146.4 million).
SETTING UP MEGA FOOD PARKS
Similarly a sum of Rs 3,700 core has been assured in order to set up 10
mega food parks in the first phase of the 11th five-year Plan. This includes Rs 2,500
core-investment from individual units, Rs 700 core from special purpose vehicles (SPVs)
and the Centre contributing Rs 500 crore. A total of 30 mega food parks are expected to
be set up during the 11th Plan. Each food park is expected to have 30 units, which are
collectively expected to attract Rs 250 crore. The SPV, which will require an investment
of Rs 120 crore, will include the government's contribution of Rs 50 crore. Hence, each
park will attract an investment of Rs 370 crore. Apart from private entities, government
44

agencies are also allowed to be part of the SPV. Consequently, the West Bengal
Horticulture Development Corporation and Assam Industrial Development Corporation
are stakeholders in their respective state mega food parks.
The parks will be set up in Chittoor (AP), Chikmagalur
(Karnataka), Dharmapuri (Tamil Nadu), Pune (Maharashtra), Jalandhar (Punjab),
Jangipur (West Bengal), Rai Bareilly (Uttar Pradesh), Haridwar (Uttarakhand), Nalbari
(Assam) and Ranchi (Jharkhand). Private partners, who have taken part in the SPV,
include Patanjali Ayurved of Ramdev fame in Uttarakhand, Shrei Infrastructure in West
Bengal, Unity Infra in Punjab and Chordia Food Products in Maharashtra. For the SPV
to be approved, it should have a minimum of five members, out of which one should be
from the food processing industry. Each mega food park will have a minimum catchment
area of five districts. Each will incorporate a chain developing from the farm gate to the
retail shelves, with collection and distribution centers and central processing centers in
between; functions like sorting, grading and packaging along with irradiation and food
incubation-cum-development will take place, as well. The food processing ministry
hopes that the initiative will be a commercial success.
SOME STAGGERING FACTS
India has 184 million hectares of cultivable land and the country produces
90 million tones of milk (highest in the world), 150 million tones of fruit and vegetables
(second largest), 485 million livestock (largest in the world), 204 million tones food
grain (third largest), 6.3 tones fish (third largest), 489 million poultry and 45,200 million
eggs. In spite of having a vast production base, the processing level is low - two per cent
in fruits and vegetables, 26 per cent for marine products, six per cent for poultry and 20
per cent for buffalo meat. With only 1.5 per cent share of India's export of processed
food in global trade; there lies immense potential for investment and development in this
sector.
INDIAN GRAPE PROCESSING BOARD
In early 2009, the government launched the Indian Grape Processing
Board (IGPB) in Pune, Maharashtra. This board will provide a platform for the advocacy
of the Indian wine sector. The board's major objectives are to formulate a vision and
action plan for the Indian wine sector's growth including research and development for
quality up gradation in new technologies/processes; to collaborate and advise wine-grape
45

growers, the wine processing industry, central and state governments on commercial,
regulatory and technical issues related to the Indian wine sector, including best practices
in viticulture; to increase farmers' income and employment generation, with a particular
focus on rural areas; to encourage cluster farming, contract farming and farm
diversification; to bring the benefits of value addition to the farming community and
farmers fetching remunerative prices for their produce; co-coordinating with premier
Research and Development (R&D) institutes in order to identify and develop appropriate
root-stock and wine varieties of grapes suited for different geo-climatic regions of India.
Annual grape production in the country is estimated to be 1.6 million
metric tons and area under cultivation is about 60 thousand hectares. Approximately 80
per cent of total production, irrespective of variety, is consumed fresh. Of the total grapes
produced in the country, about one per cent is processed into wine. The Indian wine
market is growing rapidly at 25-30 per cent per annum for the last five years.
The food processing sector is likely to be the driving seat for the Indian
economy. At present, the sector is growing at the rate of 15 per cent per annum; however,
the sector's future growth depends on adherence to safety and quality standards,
infrastructure facility, capacity building, skilled manpower, and rationalization of tax
structure, opined Subodh Kant Sahai, Union Minister for Food Processing Industries.
The food processing sector needs strong venture capital arrangements, either from the
government or via Private-Public Partnership (PPP) mode, as banks do not give priority
to sectors, which fall under perishable segment.
RESEARCH AND DEVELOPMENT
In August 2009, Sahai said that the government was planning to formulate
a separate policy for India's food processing industry and develop R&D activities in the
sector. The minister addressed this topic at a workshop on 'New Perspectives in Research
and Development in the Food Processing Sector,' jointly organized by the ministry and
the Federation of Indian Chambers of Commerce and Industry (FICCI). The proposed
new policy would lay special emphasis on PPP for giving a commercial orientation to
R&D activities in this sector. The ministry intends to chart out a roadmap for scaling up
R&D activities in the sector. It will also focus on technical capacity building for research
with the ultimate aim of increasing the processing of perishables from the 2007 - 08 level
of 10 per cent to 20 per cent by 2015 and raise value addition (of agricultural produce)
from 25 per cent to 35 per cent.
46

R&D in food processing is vital for several areas like development of new
cost-effective technologies for preservation and packaging of food products,
development of innovative products using new technologies and use of energy-efficient
processing. The minister also said that special emphasis would be given to train farmers
and other stakeholders. The ministry plans to train and empower five lakh women
entrepreneurs, at least 1,000 women from each of the 5,000 parliamentary constituencies
of India, thereby the intent is to create 5, 00,000 women entrepreneurs in the food
processing sector.
"The customer awareness in India is high. Today's discerning clientele
seeks authentic food. However, they still prefer simple plate presentation. One important
development is that the hotels are getting severe competition from the standalone
restaurants. Thus, the hotels will need to rework on their price points to be offered.
Hotels cannot operate on the five-star deluxe margins and will be compelled to
rationalize their pricing. Besides, foreign travelers want to try local cuisine. Thus F&B
outlets within the hotels need to offer authentic and innovative recipes," said Anural
Bhavnagar, General Manager, Le Royal Meridien, Mumbai. Contrary to serving
authentic gourmet fare (both Indian and international cuisines) within hotels, the
government is keen to make traditional Indian food available in overseas markets
through preservation and packaging. Likewise, research will be encouraged in
perishables such as fruits, vegetables, dairy products, meat, poultry products, fish and
marine products.
ACCEPTANCE AND FUTURE
Food service industry professionals opine that the product expectations
have increased from institutional clients, suppliers and retailers, especially with regards
to the new technology that augments itself within the food processing sector. Food
service players find it relatively easier to gain ground, now, within the market, thanks to
the spurt of trade shows and exhibitions, which showcase the latest offerings within the
F&B sector. "I believe there is a paradigm shift in the way end consumers and the
industry perceives the food processing industry. For example, we have observed that
people are willing to accept processed frozen foods now. A few institutional players have
also changed/modified their style of operations, food preparation and service to match
the prerequisites of processed food. One cannot rely on the seasonal availability of
certain exotic fruits and vegetables, hence, frozen foods serve as the most ideal option

47

for such requirements," explained, Hrishikesh Bhatjiwale, Vice President - Sales and
Marketing, Taste Choice.
Initially, processed food products were considered an exorbitant
commodity; however, 'convenience' has become an important factor in today's context.
Bhatjiwale suggests that food service players slowly seek 'convenience over cost'
involved in preparing the food, thereby saving time and labor but often cumbersome to
manage overheads. The processed food market gears up to offer innovative products,
which are quick to prepare and available throughout the year yet affordably priced.
The ministry of food processing has set a target of 150 per cent growth in
processed food exports in the next five years on rising global demand of Indian food.
This will be 5 per cent of the total share in global processed food market.
GOVT. EYES 150% GROWTH IN PROCESSED FOOD EXPORTS IN FIVE YRS
Agriculture & Processed Food Products Export Development Authority (Apeda)
monitored processed food products including fresh and processed fruits and vegetables,
livestock products, cereals etc. have grown exponentially by 24 per cent in rupees term
(Rs 39,461 crore) and 10 per cent in dollar term ($8.67 billion) in 2008-09.
The way value addition and food processing is picking up, Indias exports would
increase by at least another Rs 60,000 crore by 2014-2015.
But, to maintain the same growth pace, an investment of Rs 100,000 crore is
required during the period which has received lukewarm response from investors
especially in the projects such as Mega Food Park, said Ashok Sinha, secretary, Ministry
of Food Processing Industries, in the sideline of Agricorp 09 in Mumbai.
Sinha emphasized the need of corporate entry into contract farming and fast
adoption of mechanized farm practices which can help enhance food grain production
and reduce reliance on imports. Since land holding by average farmers has declined
significantly in the last four decades due to population explosion, there are rooms for
better fertilizer, pesticides and seeds management through contract farming by corporate
which is not easy but possible, Sinhala said.
During this period, average land holding by farmers has declined to a third from
an acre each in 1970. Equally difficult is the adoption of mechanized farm practices as
only 10 per cent of Indian farmers own tractors for tilling the field while around 30 per
cent are using this. According to a recent study by the Ministry of Agriculture, in a
country where 60 per cent population depend upon agriculture, over 80 per cent farmers

48

own less than five acres of land while over 63 per cent of farmers control less than 2.5
acres of land bank.
While contract farming has not been allowed by the government officially,
private companies have been entering into contracts with farmers to grow the agricultural
commodities of the formers choice. In some cases, quality seeds, fertilizers, pesticides
and irrigation equipment are availed by the company on a condition to supply the output
to the company. Farmers enjoy premium over market price of the produce from the
company.
However, the law is silent on the issue whether to allow corporate into contract
farming or not, said Begin Sinha, project director of UBM India, an organizer of events
on food processing sector.
Bharat Doshi, president of the Bombay Chamber of Commerce and Industry,
said, Barring 2006-07 when agri sector growth surpassed the target of 4 per cent, the
government has never achieved even half of that. Hence, there is an urgent need to raise
domestic production of agricultural products to meet the rising demand.
At a time when land bank is shrinking, better utilization of farm
techniques including multiple cropping, mechanization of tilling, sowing, harvesting and
post-harvest management for reducing agri output loss, can enhance availability of farm
produce to feed growing population. According to an estimate, India loses agri
commodities worth Rs 33,000 crore due to poor post-harvest management practices.

49

COMPANY PROFILE
ORGANISATION STRUCTURE OF A.P. FOODS:

SOCIETY
President: PM
Vice president: M (S&T)
Members
GOVERNING
BODY

ADVISORY
BOARD

GENERAL (Addl.
Charge)

PERFORMANCE
APPRAISAL
BOARD

HQ.

MANAGEMENT
COUNCIL

LABORATORIES (37)
Head: Director

RESEARCH
COUNCIL

INTRODUCTION:
A.P. Foods is a Govt. of A.P. Enterprise functioning under the auspices of A.P. Nutrition
Council a Society which was setup in the year 1976 with the assistance of CARE &
UNICEF and GOI for producing and supply of Nutrition Foods to Malnourished School
going, per school children, pregnant women and lactation mothers.

EVOLUTION:
Surveys conducted in different parts of the country including the state of AP on
comprehensive diet and nutrition by the National Institute of Nutrition and National
Institute of Monitoring Bureau found that there is a protein and calorie mal-nutrition
widely among the pre-school children, lactating mothers and pregnant women belonging

50

to the socioeconomic status of the population and this was also linked with poverty. Malnutrition may be due to the deficiency of proteins, calories, certain micro-Nutrients like
essential vitamins and minerals. Thus for combating the problem of mal-nutrition in the
year of 1971 the Government of A.P decided to establish a central kitchen factory to
manufacturer Ready To Eat (RET) food approximately 1, 55,000 primary school going
children in districts of Telangana in cooperation with CARE at Hyderabad. The total
estimated cost of factory was Rs.91, 16993 of which, the shares of CARE and State
Government were Rs.7136, 294 and Rs.15, 80,669 respectively. The Govt.of.A.P
considered that a society with the title of ANDHRA PRADESH CHILD
NUTRITIONAL CONCIL be got registered under A.P Telangana Area Public Societies
Act (Act, 1350 Fasali), so that the administrative affairs of the Factory might be run by
the Society wide G.O Ms. No.526 Education Department Dt.07-06-1973.
A Governing council was also constituted to look after the affairs of the
factory/organization. During 1976 with the object to provide and extend facilities for
supply of nutritious food to the Beneficiaries to create raw-materials pre-processing and
food procession capacity with the assistance From Govt. constituted other International
agencies. The Govt. constituted another council namely

A.P.NUTRITION

COUNCIL and a governing board with representation of the government of A.P and
India.
The council was registered in the year 1976, under A.P (Telangana area) public societies
Act (Act-I. 1350 Fasali), as a registered society.
By the resolution Dt.0e-04-1981 ANDHRA PRADESH CHILD NUTRITION
COUNCIL Was merged with the A.P.NUTRITION COUNCIL.
By the factory is unique and is one of the biggest food procession units is Asia for the
Production of nutritious food supplements and is also unique in having large scale
continuous defeated Frying unit for the production of noodles systematically, untouched
by hand from raw-materials stage. To the finished product which is filled, packed and
stacked.
During the resolution 1984 A.P.NUTRITION COUNCIL the name of the factory
was Changed to REPRON FACTORY. Even though, there is no change in aims and
objectives of the Company (Original).

51

In the year of 1986 the factory was declared as Public Enterprise vides G.O.RT. No.1786
GA (PE.1) Dept. Dt.12-05-1986. This decision of the Gove. Helped the factory due to
periodic reviews, Professional guidance through Public Enterprises Management Board.
GOVERNING BODY
Andhra Pradesh Nutrition Council is managed by an Executive Committee which is
constituted by the following members:
1.

Principal Secretary! Secretary to the Government of Andhra Pradesh, (ex.-

Officio) who is in charge of Nutrition, who shall also be the President of the Executive
Committee.
2.

Principal Secretary, Finance and planning Department.

3.

Principal Secretary, Municipal and Urban Development Authority Department.

4.

Secretary, Social Welfare Department.

5.

Joint Secretary or his nominee (ex-officio), Department of Women and Child

Development, Ministry of Human Resource Development in the Government of India.

6.

Technical Advisor or his nominee (ex-officio), Department of Women and Child

Development, food and Nutrition Board in the Government of India.

7.

Director (ex-officio), Womens Welfare and Child Welfare Department,

Hyderabad.
8.

Managing Director, Andhra Pradesh Foods, who shall be the Member-Secretary

of the Committee.
We can observe from the above that the Factory is managed by highly competent IAS
Officers and the day to day running of the Factory is bestowed with the Managing
Director, who himself/herself is an IAS Officer.
OBJECTIVES
Andhra Pradesh Nutrition Council is an association formed under the Andhra Pradesh
(Telangana Area) Public Societies Registration Act, 13 5OFasli (Act 1 of 135 OF).
The objects for which the Association is formed are:

52

1.

To provide, expand and facilitate supply of nutritious foods to school and pre-

school children, pregnant women and lactating mothers.

2.

To create raw material processing and food processing capacity with assistance

from the government of India. State Government and international Agencies like CARE
and UNICEF and also national agencies and use the same for production of RTE snacks
and other products for the nutrition Programmers of the state in particular and for
nutrition Programmers in general.
3.

To process raw materials of high nutritive value, indigenous as well as imported,

for the production of ready-toeat snacks, formulated flours and other types of
processed goods.
4.

To promote and assist institutions for the study of food and nutrition problems

and requirements.
5.

The propagation of knowledge and experimental measures the assistance to

prosecution, development and co-ordination of research generally or specifically in

connection with study of the causes, mode of spread and prevention of diseases due to
mal-nutrition.
6.

To exchange information knowledge and personal with other institutions,

associations and societies either in India or elsewhere interested in the same objects.
7.

To prepare and publish any papers or periodicals in furtherance of the objects of

the council and contribute to any such periodicals.

8.

To put to use any available excess preprocessing and processing capacity in the

plants f the factory for assisting other government units central and state and also for
introducing the products of the factory in to adjacent states for their Programmers of
nutrition, for marketing of the products.
9.

To affiliate, coordinate regulate and develop the working of food and nutrition

projects in Andhra Pradesh.

10.

To coordinate with the government of Andhra Pradesh, government of India,

international agencies such as UNICER, CARE

and voluntary agencies to ensure

regular supply of nutritious foods.

VISION:
To strive, excel and emerge as the best food manufacturing unit in the public
sector in the country producing quality and nutritious food by incorporating the best
practices against the competitive market in the industry.
53

MISSION:

To serve poor undernourished underprivileged group of women and children.

Facilitating the implementation of ICDS projects and other Govt schemes.

Continue to pursue food production wherever commercially viable market is

available and leading the position as a best food manufacturing unit in the public
sector in the country.

Simultaneously to go all out to expand progressively the diversification

programmes of food manufacturing and project the company to convert and
sustain as a viable corporate body.

PRODUCTION ,SUPPLIES & SURPLUS FOR LAST 6 YEARS

54

Distribution
A.P.Foods supply Ready-to-Eat Nutritious foods to beneficiary departments of
Government and the activity of dispatching / distributing these foods manufactured at
our factory is the job of Distribution Section.
Presently, we are supplying foods to two departments of the State Government viz.,
(1) Commissioner ate / Directorate of Women Development and Child Welfare and (2)
Commissioner ate/Directorate of Municipal Administration.
1) Commissioner ate of WD & CW Department:Under this beneficiary department we have to supply required quantities of foods up to
ICDS projects level, making transportation arrangements by floating annual tenders.
The annual supply advice is given by the Department prior to beginning of each
financial year along with number of schemes under which foods are to be supplied, list
of ICDS projects, number of AWCs, ration size for each category of beneficiaries,
composition of each AWC and also any other norms.
After we receive this supply advice, we arrive at the monthly and annual requirement
and types of food required to be supplied to various projects and will inform to
Production, Raw material purchase and Finance & Accounts departments for doing
needful from their side.

55

Once the feeding year starts, we would prepare indents for vehicles on respective
transporters on daily basis on project-wise. The finished product stocks available every
day morning will be informed by Production Wing and accordingly the loading and
dispatch of vehicles to respective projects are planned.
a) Factory way bill (Delivery Chillan) in quadruplicate Onaway bill for SNP food
consignment in different series of numbers per each lorry per each station will be issued.
b) Commercial Tax way bill which is supplied by the CT Department will be issued
along with Weigh Bill for every station.
c) Gate-pass for internal security check in duplicate.
Transporter-wise foods dispatches made are also entered in the registers meant for the
purpose to monitor the arrival of the food receipt acknowledgements from the projects
for two purposes.
We receive requests for early supplies and postponements of supplies from several
projects over phone, telegrams and letters, which are noted down in the project-wise
ledgers for regulating the food supplies to respective projects from time to time.
At the end of every day, daily food dispatch reports are prepared project-wise,
programmed-wise, transporter-wise and also upon completion of every month,
dispatches and consolidated monthly reports will be prepared for onward submission to
Director, Women Development Child Welfare and Director, Municipal Administration.
Upon receipt of the Way Bill acknowledgement along with Freight Bills, the payment
proposals for freight charges will be scrutinized in all respects, then those bills forwarded
to Finance & Accounts for further verification and onward submission to MD for
approval. If any defective Way Bills are received from the transporters that will be sent
back and get proper Way Bill.
The original Way Bills are being sorted out separately by taking Xerox copies of
the same. The original Way Bills are handed over to Finance & Accounts for billing
towards reimbursement of food cost from beneficiary department.
Functions
1) Maintaining Personal Files & Service Registers of all employees.
2) Look after Security arrangements of the Organization through Special Protection
Force and Private Security Services for Visage site.
3) Running Subsidized Canteen for employees in the premises of A.P. Foods.
56

4) Coverage of Insurance for Plant & Machinery, Buildings, Vehicles, Raw material,
Furniture & Fixtures and GPAP for employees.
5) Sponsoring employees to the seminar/workshops/training programmers etc.
6) Maintaining Attendance of all employees, leave records & controlling Time Office.
7) Maintaining ESI records of all employees and checking of ESI remittances made by
Labor Contractors engaged for day to day business of the Organization.
8) Recruitment of employees, apprenticeship trainees, promotions, disciplinary actions,
transfers etc. And appointment of deputationists.
9) Procurement of Office equipment maintenance, stationery, uniform for employees etc.
10) Sanction of Medical claims, LTC, Children Education Advance and concession,
Festival Advance, Telephone bills, News papers, Magazine, TA-DA claims
and Annual Grade Increment to the employees etc.
Welfare measures undertaken for Employees
Production Linked Incentive: Rs. 250/- per MT over & above production of 5,250
MTs are being paid @70% for production staff and 30% for non-production staff every
month.
Canteen facility with 80% subsidy: Providing one time Tiffin, one time full meal /
bread (for night shift employees) and two times tea at the cost of Rs.4/- per person per
day. Egg provided twice in a week for each employee.
Uniform: 2 pairs of dress, 3 pairs of socks, 1 pair of shoe and a cap per year are
provided to male employees. 3 Saris, 1 pair of chapel and a cap per year are provided to
female employees. Stitching Charges Rs.400/- per pair for male employees & Rs.100/for female employees.
Washing Allowance: Rs.200/- and one carbolic soap per month is given to each
employee.
Conveyance Allowance: Cost of Petrol @ 50 Lars for 4 wheelers and @ 25 Lars for
2 wheelers per month is reimbursed subject to 20 days attendance. For the employees
attending to office by bus, Rs.445 per month is paid. 16 Lets of petrol cost was
considered to the employees whose basic pay of Rs.4825 below. 14 Lts of petrol cost
also extended to Casual Laborer (MMW-C) and Rs.445/- (Bus Pass) is extended to
Hamalies.
Medical Reimbursement: Employees drawing Rs.10, 000/- or below are covered
under ESI. Employees not covered by ESI are reimbursed Rs.2.00 laky as per
G.O.Ms.No.105; dt.09-04-2007 is reimbursed in case of major ailments such as Kidney
57

transplantation, Bypass Surgery, Neuron surgery, Cancer, Etc. Rs.3000/- was sanctioned
towards reimbursement of medical expenses @250/- per month along with salary.
Shift Allowance:
B Shift: Asst. Sup. & above cadre - Rs.45.00, for others Rs.25
C Shift: Asst. Sup. & above cadre - Rs.50.00, for others Rs.37
Roaster Allowance: Rs.50/- per shift.
Steering Allowance: Rs.15/- per day.
Allowance for preparation of Vitamin Premix: Rs.30/- per shift.
Lunch Allowance: Rs.40/- per day.
Machine Allowance: Rs.100/- per month to every employee.
Computer Allowance: Rs.200/- per month for the Assistants in office side as per
G.O.
Chakki Operator Allowance :Rs.15/- per shift.
Educational Advance: Rs.5000/- for eligible employees every year.
Marriage Advance: Rs.30, 000/- for male employees (Self/son marriage) and
Rs.50, 000/- for female employees (self/daughter marriage). Rs.1, 000/- also sanctioned
as a gift to marriage of employee.
Group Insurance: Under this policy Rs.1 lakh compensation in case of accidental
death and in the event of injury compensation is fixed by Insurance Company.
Gratuity, Leave Encashment, EPF and ESI: As per relevant Acts.
Diaries: Every year the Diaries are being provided to all employees.
Funeral Expenses: One month gross salary for permanent employee & Rs. 10,000/for Casual Labor.
Children Education concession:

Rs.100/- for LKG & UKG and Rs.500/- for 1st

class to 10th class.

Finance
1.

A.P. Foods is a Society Registered under Section 12A(a) of Income Tax Act

1961.
2.

A.P. Foods is following accrual method of Accounting. Being service oriented

organization A.P. Foods is preparing Income & Expenditure account and Balance
Sheet.

58

3.

The Income over Expenditure i.e. Surplus is being accumulated towards capital

Expenditure

replacement

of

machinery

expansion,

modernization

and

diversification etc.,
CAPITAL FUND:
The

Capital Fund

means

the value of Assets donated by CARE, UNICEF

Capital grant received from Govt. of A.P. and the Plant & Machinery, Buildings
erected with accumulated surplus amount.
(a)

A.P.

Industrial Infrastructure Corporation

donated

15.46

acres of

land at Nacharam IDA to A.P. Foods during the year 1973. Subsequently, during the
year 1985 A.P. foods purchased 3.29 acres of land valuing Rs. 9.331 lacks at
Gazuwaka Industrial Estate, Vizag and during the year 1987, admeasuring 4.407
acres of land which is adjacent to A.P. Foods

was also purchased at cost a of

Rs.5.977 laths.
(b) During period 1974-1978 CARE an International Organization has
donated Plant & Machinery, Buildings, Lab equipments and Vehicles valuing Rs. 74.948
laths.
(c) During 1980-81UNICEF and International
Organization has donated Buildings, Plant & Machinery and Spares. Subsequently, some
more

spare

are

received

from

UNICEF

during

the

period

1982-84.The

total value of Assets donated by UNICEF works out to Rs. 135.900 lacks.
(d) Govt. of A.P. has provided a capital grant of Rs25.145lacks during the period 19771981.
(e) Subsequently,
A.P. Foods have erected Automatic Energy Food Plant, Soya Plant, Computerized Extru
sion Plant, and Effluent Treatment Plant andHotFood Plantwith its own funds i.e.
From the accumulated surplus.
5)

NO EQUITY:

6)

Depreciation is provided on Fixed Assets on return down value method at the rates

provided in the Income Tax Act 1961.

7)

Inventories are valued at cost by following FIFO Method.

8) A.P. Foods does not receive Budget from State/ Central Goats directly A.P.
Foods manufacture and supply Ready-To-Eat Nutritious food under Govt. feeding
59

programmers to Govt. departments such as Director of Women & Child Welfare

& Director of Municipal Administration. The costs of supplies are reimbursed by
those departments from their budgetary allocation.
9)

A.P. Foods prepares budget estimates every year for the activities to

under taken. Accordingly, Budgetary Control System is followed.

STATUS OF AUDIT
Statutory Audit for the year 2008-09 is completed.

60

be

CHAPTER-IV&V
DATA ANALYSIS AND
INTERPRETATIONS

61

DATA ANALYSIS AND INTERPRETATIONS

1.

Do you get market based pay?

option

No. of respondents

% of respondents

100%
yes

50

no

0%
0

INERPRATATION;
All the respondents (i.e 100 %) are agree that they are paid according to market price.

62

2.

Does your organization provide the medical& health insurance services?

Option

No. of respondents

% of respondents

48

96%

4%

yes
No

INERPRATATION;
From the analysis 96% get medical health insurance services.4%employee no to have
conclusion is 96%employee have medical health insurance services.

3.

Is there any pay related grievances in your organization?

63

Option

No. of respondents

% of respondents

80%
yes

40

no

20%
10

INERPRATATION;
From the above pie chart 80 % of the respondents face pay related grieviences

4.

How is your customer satisfaction incentive?

64

option

No. of respondents

% of respondents

Very satisfied

10%

satisfied

15

30%

Average

20

40%

poor

10

20%

INERPRATATION:
From the analysis 10% are very satisfied, 30%satisfied, 40%avarage and 20%poor.it
conclude that 40% employees are average with the Customer satisfaction incentives.

5.

Which type of pay system you would like to prefer?

65

option

No. of respondents

% of respondents

0%
Variable pay system

Fixed pay system

50

100%

INERPRATATION;
From the above analysis 100 % of the employees are interested in fixed pay system.

6.

How satisfied are you with the annual pay roll components i.e., with meal

vouchers, leave travel allowances, special allowances annual bonuses, incentives,

medical & other reimbursements etc
66

option

No. of respondents

% of respondents

Outstanding

14%

Above average
Average
Below average
poor

35
10
5
1

70%
20%
10%
2%

INERPRATATION;
From the analysis 1%poor, 14%outstanding, 5%below average, 10%average, 70%above
average. It conclude that 70% are satisfied their payroll components.

7.

Do you get vacation pay?

option

No. of respondents

67

% of respondents

48

96%

yes
no

4%
2

INERPRATATION;
From the above pie chart 96 % of the respondents agree that they get vacation pay.

8.

Do you get compensation premiums on overtime pay?

option

No. of respondents

68

% of respondents

100%
yes

50

no
0

0%

INERPRATATION;
From the analysis 100% are get premium compensation, it conclude means it every one
eligible person get compensation on over time

9.

If yes how satisfied about OT pay?

69

option

No. of respondents

% of respondents

Very satisfied

10

20%

satisfied

30

60%

Average

10%

poor

5
10%

INERPRATATION;
From the analysis 20% are very satisfied, 60%satisfied, 10%avarage, and 10%poor.it
conclude that 60% employees are average with the satisfaction on overtime pays
incentives.

70

10.

How do you find your pay roll report?

option

No. of respondents

% of respondents

Out standing

10%

Above average

15

30%

Average

15

30%

Below average
poor

10
5

20%
10%

INERPRATATION;
From the analysis 10% are outstanding, 10%above average, 30%average20%below
average, and 10%poor. It conclude that 30% employees are average with the reading of
payroll reports.

71

11. How satisfied are you with the merit performance pay system.
option

No. of respondents

% of respondents

Very satisfied

15

30%

satisfied

20

40%

Average

10

20%

poor

10%

INERPRATATION;
From the analysis 30% are very satisfied, 40%satisfied, 20%avarage, and 10%poor.it
conclude that 40% employees are satisfied with the merit performance pay system.

12.

Are you aware of current employment statistics (CES?)

72

option

No. of respondents

% of respondents

5%
yes

no
45

95%

INERPRATATION;
From

the

analysis

95%employees

are

not

aware

of

current

employee

statics,5%employees know the CES conclude that 95%employees are not known of
CES.

13.

What type of incentives you get?

73

option

No. of respondents

Long -term
Short -term

% of respondents

30%
15
35

70%

INERPRATATION;
From the analysis 70% of employees are getting short term incentives .30%are long term
incentives. It conclude 70% get long term incentives.

14.

Are the pay decision, open & transparent to all the employees.
option

No. of respondents

74

% of respondents

90%
yes

45

no

10%
5

INERPRATATION;
From the above pie chart majority of the respondents ( ie 95 %) agree that the pay
decision is open and transparent to all the employees.

15.

Does your organization enjoy the benefits of outsourcing the payroll?

option

No. of respondents

75

% of respondents

100%

50

0%

yes
no

INERPRATATION;
From the analysis 100%employees dont have outsourcing payroll system.

16.

Do you feel pride to work with this organization?

option

No. of respondents

76

% of respondents

90%
yes

45

no

5%
5

INERPRATATION;
From the analysis.90%employes feel pride to work in these organization rest of only
10% nither/nor it.

77

CHAPTER-VI
FINDINGS
SUGGESTIONS
&
CONCLUSION

78

FINDINGS
1. The employees in A. P. foods are paid according to market price, incentives are
provided with other fringe benefits like medical and health insurance.
2. From the study it is found that most of the employees are interested in fixed pay
system and enjoy the payroll components provided by the organization.
3. From the study it is found that most of the employees are satisfied with the
compensation provided for their over time.
4. Most of the employees agree that payroll reports are easy to understand.
5. Most of the employees feel that incentives should be based on short term
performance and they enjoy various incentives like merit performance.
6. The employees feel proud to work In A.P.foods and like their pay decision as they
are open and transparent.

79

SUGGESTIONS
According to the old records and the study conducted by me, the A.P
FOODS has a good hr payroll management and very good outputs

If we see the old records of external production flow it has been gradually

increased from the year 2004 to 2008

The number of production items has been gradually increasing.

But, from my study I came to know that, some of the supporting staff and administrative
staff are not aware of training programs. If some training program is provided to the
employees they can manage the work very efficiently.
As of my research need to put more activities in inventory to food items I
suggest to:
Increase the research and development department. Most of the
supporting staff and administrators are not satisfied with scope of creativity. If the job is
creative then only the employees get more interest on their job. They can innovate new
things in their job. Their creativity will be improved in saplings and production.
Performance appraisal system maintained by A.P FOODS should be
rational because it is a PRODUCTION oriented company where performance is very
much important.
A.P foods maintain the huge level of man power for production. They
hardly maintain hr activity at all level but in the scene most of employees are happy with
hr activity, specially in hr payroll system A.P FOODS hr management maintains good hr
payroll policies but most employees need to interact to hr management many of the
employees not use the company providing benefits.

80

CONCLUSION
By doing project work in Andhra Pradesh Foods in the area of HR
PAYROLL MANAGEMENT measures. I got an opportunity to study how these
activities are taken up especially in public sector.
As far the pay roll are concerned, follows the most of the rules &
regulations framed by the Government under various acts and regulations.
From the study I found that most of the employees are satisfied with the
payroll components. From the above study I also found that some of the employees feel
incentives should be based on short term performance and merit performance. Finally I
conclude that employees feel proud to work in A.P.FOODS and like their pay decisions
as they are open and transparent.

81

ANNEXURE

HR PAYROLL MANAGEMENT OF AP FOODS

QUESTIONNAIRE
PAYROLL MANAGEMENT

Employees name:

Employees positions:

Supervisors name:

Review of period:

1. Do you get market based pay?

Yes

No

2. Does your organization provide the medical& health insurance services?

Yes

No

3. Is there any pay related grievances in your organization?

Yes

No

4. Do you get customer satisfaction incentives?

a. outstanding
c. average

b. above average
d. below average

e. poor

5. Which type of pay system you would like to prefer?

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a) Variable pay system

b) Fixed pay system

6.How satisfied are you with the annual pay roll components i.e,with meal vouchers,
leave

travel

allowances,

special

allowances

bonuses,incentives,medical&other reimbursements etc

a. outstanding

b. above average

d. below average

e. poor

c. average

7. Do you get vacation pay?

Yes

No

8. Do you get compensation premiums on over time pay?

Yes

No

9. How satisfied about over time pay?

a. Very satisfied

b. satisfied

c. Dissatisfied

d. poor

10. How satisfied are you with the ease of reading your payroll reports?
a. outstanding

b. above average

d. below average

e. poor

c. average

11. How satisfied are you with the merit performance pay system.
a. Very satisfied

b. Dissatisfied

12. Are you aware of current employment statistics (CES?)

Yes

No

13. What type of incentives you get?

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annual

A) Long-term

b) short term

14. Are the pay decision, open transparent to all the employees.
Yes

No

15. Does your organization enjoy the benefits of outsourcing the payroll?
Yes

No

16. Do you feel pride to work with this organization?

Yes

No

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BIBLIOGRAPHY
Ashwathappa: Human Resources and Personal Management.
Mamoria.C.B: Personal Management (Management of HR), Himalaya Publishers.
Prasad.L.M: Human Resources Management.
Subba Rao. P: Essentials of Human Resources Management and Industrial Relations.
Himalaya Publishers.
JD edwodrd: hr payroll policies by tata wcwords
SAP.INDIA, ORCALE hr policies and application

Internet sites:

www.peoplesoft.com

www.sap.india.in

www.oracle.com

www.apfoods.nic.in

www.businss.gov.in

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