Summer Training Report at NJ INDIA INVES

Creating wealth, Transforming life…..
`A
Summer Training Report
At
“NJ INDIA INVEST”
Submitted by,
“Nishita Dalal” (40)

“Nupur Gajera” (60)
“Ekta Shah” (218)
“Shahin Vadhvania” (256)
“Forum Vakilna” (261)
Under the Guidance of

“Mehrunisha maam”
In the Partial Fulfillment of the Requirement

For the Admission in Semester V in
BBA Programme
Submitted to,
NAVNIRMAN INSTITUTE OF MANAGEMENT
(NIM-BBA), Bharthana, Surat
Affiliated to VNSGU, Surat
Academic Year 2011-12
“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 1

PREFACE
In India the saving contributes more than 26% of G.D.P. This figure
shows that the people of our country are very keen to save their money. Here the
proportion of saving is more than any other countries in the world. Here the rate of return
on the saving is healthy apart from other countries so people tend to save their money
rather than spending it.
In market various instrument (alternatives) are available to save one’s
money. These can be names as Banks, Insurance, Mutual funds, Government Securities,
Post Office Saving, and Public Provident Fund (P.P.F.) and so on. Here people use to
save their money mostly in the government securities because of the safety reasons and
they neglect certain other alternatives in the market. i.e. mutual funds.
In India people seems to be not aware about the various alternatives
available for the investment. They only go for the traditional instruments such as banks
and sometimes they do invest their money in order to save tax in the instruments like
insurance and govt. bonds. Still they are not having the awareness of such instruments.
Even the awareness regarding these alternatives is limited to the certain section of the
society.
Now day’s mutual funds are becoming more popular as an investment
options as they give healthy returns equivalent to the stock markets. Still most of the
people do not have the basic knowledge about the mutual fund. Even the insurance is
becoming now days very popular because of its unit linked products in the market. Still
the awareness is very less among the people.
The above facts inclined us to go for the study of the industry and expand
ours as well as investors’ knowledge by doing our summer project in one of the most
reputed company in the industry named NJ India Invest at Surat. These eight weeks were
full of learning and real world experience

ACKNOWLEDGMENT
Writing acknowledgement is probably the most difficult task for us as this report
is an outcome of the direct and indirect support of many, but only some of who end up
receiving a mention due to several constraints. Yet we would be failing in our duty if we
did not mention the names of at least a few of the many institutions and individuals who
spontaneously supported us in completing the project, and without whose support this
study would have remained incomplete.
We are really very thankful to the owner of our firm, Mr. Neeraj Choksi for
allowing us to conduct the study in NJ India Invest.
We would like to express our sincere gratitude towards Mr. Avinash Sir, branch
manager, Surat for his keen interest and generously helping and guiding us in preparing
this report.
We would also like to thank NJ India Invest Family, Surat who has helped us
directly or indirectly in completing this project.
We would also like to thank some key personnel like Hiren Sir, Dipesh Sir and
Jay Sir who have contributed significantly in preparing this report.
Last but not least we would like to express our sincere gratitude to Mehrunisha
maam and all the faculty members and whole Navnirman Institute family for their
constant support and guidance because without their help this project wouldn’t be
possible.
II
Executive Summary
Marketing Department:
•Handling channel sales, Distributor-Dealer Network development.
•Helping distributors to achieve their target.
•Collect all the information and feedback from market and same forward to the concern
department.
•Appointing new dealers to increase the product penetration.
•Day to day Marketing Job, visit to market, coordination with network.
Human Rescourse Department:
• Generate potential lead for the company.
• Create awareness amongst customer about various products and investment alternatives.
• Utilize Sales Promotion tools canopy at commercial places with partner.
• Sell the Mutual Fund through partner.
• Give presentation on Mutual Fund and Advisory Business to clients.
• Manage database for the company.
• Add Channel partner for the company.
• Give presentation to potential channel partner regarding Mutual fund advisory business
• Knowledge regarding the products of the company
• Studied Consumer Behaviour
• Learnt the process of identifying new clients and opportunities, prospecting and lead
management.
Finance Department:
• Financial objectives of NJ INDIA INVEST are to create the wealth of its investors
and partners.
•Creating the stable position in financial market.
•Ultimate objectives are to increase maximum wealth of partners and company.
Production Department:
•The activities of the operations department in NJ INDIA INVEST are basically spread
over MUTUAL FUNDS.
III

INDEX
SR.NO. CONTENTS PAGE NO.
Preface I
Acknowledgment II
Executive summary III
Chapter-1 Introduction
 Overview of the industry
 Overview of the company
 Overview of the competitors
Chapter-2 Marketing and Sales Department

 2.1 Introduction
 2.2 Structure of Marketing Department
 2.3 Functions of Marketing Department
 2.4 Marketing Strategies of the Co.
 2.5 Activities of Marketing
Department
 2.6 Product Life Cycle
 2.7 Segmentation, Targeting and
Positioning
 2.8 Pricing Policy of the Company
 2.9 Promotion Mix
 2.10 Distribution Channels
 2.11 CRM and Customer Support
Activities
 2.12 P’s of a Service Industry

Chapter-3 Production Department

 3.2 Type of Plant Layout
 3.3 Operation Strategies for Services
 3.4 Quality Control
Chapter-4 Human Resource Department

 4.2 Human Resource Planning
 4.3 Recruitment and Selection
 4.4 Training and Development
 4.5 Performance Appraisal System
 4.6 Promotion and Transfer Policies
 4.7 Wages and Salary Administration
 4.8 Employee Welfare Activities
Chapter-5 Finance Department

 5.2 Working Capital Management
 5.3 Common Size Statements
 5.4 Accounting Ratios
Chapter-6 Recommendations and Suggestions
Bibliography
Annexure

OVERVIEW OF THE INDUSTRY
The mutual fund industry is still at an embryo stage in India. With savings rate of
about 25% and a booming economy, mutual fund industry has a great scope to expand,
provided they evolve out of the existing challenges. The major issue for the industry is its
lack of penetration.
In 2004, the rate of penetration was standing at 13.7 per cent in urban households
against 3.8 per cent in rural households. Another threat for the industry is “over
conservatism” of the fund managers. Considering the investment pattern of the mutual
funds in comparison with investments made by FIIs during financial year 2004-05, they
completely hang around the opposite poles.
Mutual funds have invested 97% of the total investments in the debt market
whereas FII investments are 96% in equities. Such high investments in an under
developed debt market operating in a rising interest rate environment is no way
appreciable. Thus, maintaining such high debt investments is just another kick to the
returns of the investors, especially during the Bull Run.
Regulation is another key area of concern in the industry. SEBI, which also
extends its supervision over capital markets, somehow finds time to regulate the operation
and management of mutual funds as well. The series of controversies that took place
involving Alliance Capital Mutual Fund (ACMF) and Samir Arora, its erstwhile star fund
manager regarding internal control practices clearly sends signals for the requirement of
careful watchdogs for the industry.
As such, Indian investors are extremely apprehensive when it comes to stock
market investments, as they have been often battered by a series of scams and scandals. It
is imperative for the industry to develop and derive a communication strategy, which not
only removes existing apprehensions of Indian investors, but also creates an environment
of transparency and trust. After all it is not so very difficult to create wealth mutually.

Till now AMCs were investing in capital market, debt market and money market
but now they are permitted to invest in real estate as well as commodities like gold, silver,
grains etc.
OVERVIEW OF THE COMPANY: NJ INDIA

INVEST
Introduction
Built On Trust
An evolving, emerging & enterprising group with its roots in the financial services sector
and today expanding into newer horizons with great passion. The vision of the group is to
be leaders in businesses driven by customer satisfaction, commitment to excellence and
passion for continued value creation for all stakeholders.
This vision has helped us grow and build the trust of our customers and associates which
is at the cornerstone of everything we do. Trust is also at the heart of our success and the
driver for passion for our success.
NJ Group is a leading player in the Indian financial services industry known for its' strong
distribution capabilities. The journey of NJ began in 1994 with the establishment of NJ
India Invest Pvt. Ltd., the flagship company, to cater to investor needs in the financial
services industry. Today, the Wealth Advisory Network, also known as the NJ Fundz
Network, started in 2003 is among the largest networks of wealth advisors in India.

Over the years, NJ Group has diversified into other businesses and today has the presence
in businesses ranging from wealth advisory network, asset management, real estate,
insurance broking, training & development and technology. Our rich experience in
financial services, combined with executional capabilities and strong process & system
orientation, has enabled us to shape a rising growth trajectory in our businesses.
NJ Group is based out of Surat in Gujarat (India) and has presence in over 100* locations
in India and has over 1,000* employees.
Group Philosophy
Work Philosophy:
Doing the 'right' thing is a virtue most desirable. The difference between success and
failure is often, not dictated by knowledge or expertise, but by its actual application and
perseverance. When it comes to value creation for customers, it is something that we
strongly strive for in all our endeavors. We are committed to provide our customers with
continuous, long-term improvements and value-additions to meet their expectations.
Driven by passion, we continue to evolve and make the right product accessions and
service innovations in our offerings. Over the years, our passion has seen us grow from
strength to strength and expand rapidly, setting new benchmarks in the process. But to us,
what really matters the most is winning the trust of our customers.
Promoters
Mr. Neeraj Choksi & Mr. Jignesh Desai are two first generation entrepreneurs
who began the journey of 'NJ' in 1994. The promoters of the NJ Group were friends since
their college years and the bond between Mr. Neeraj & Mr. Jignesh has been instrumental
in the success of NJ. Discussing upon important things before taking any decision, is a
habit that they have followed ever since they shared their hostel room in Vidhyanagar,
where Mr. Neeraj was studying his management courses and Mr. Jignesh was into
engineering. They both have a complementary style of functioning that augurs perfectly
well for the business.

The key members of the management are

Mr. Neeraj Choksi Jt. Managing Director
Mr. Jignesh Desai Jt. Managing Director
Corporate Governance
NJ realizes the importance of corporate governance and seeks to implement the best
practices for the same. We strongly believe that we have an obligation or duty as
corporate entities to all our stakeholders; from employees, customers and vendors to
business partners, authorities, and society at large. We aim to strike the right balance
between minimising business risks while attempting to maximise business growth.
Corporate Governance at NJ is based on the following main principles:
 Timely and strict compliance to all established rules, regulations and guidelines
 Building sound system of risk management and internal control.
 Timely and balanced disclosure and communication of all material information to
all stakeholders.
 Transparency and accountability in all practices
 Fair and equitable treatment of all its stakeholders including employees,
associates, customers & community.

Our Businesses:
1) Wealth Advisors Network
2) Asset Management
3) Real Estates
4) Insurance Broking
5) Global Wealth Advisory
6) Information Technology
7) Training & Development
Wealth Advisors Network
The NJ Wealth Advisors Network is among India's largest and most successful
network of advisors in the financial services industry. The NJ Wealth Advisory Platform
is a comprehensive, 360° platform offering end-to-end solutions, required for a successful
wealth advisory practice.
Started in 2003, the network seeks to reach out to the common man and extend the
opportunity to create wealth through sound investment principles and strategies. The NJ
Wealth Advisors Network today has over 15,000* Advisors, called as NJ Partners, spread
across India catering to over 12* lakh investors and having an AUA close to Rs.10,000*
Crores. The platform offers Partners with a basket of wealth products in addition to
comprehensive solutions in all important areas of business, backed by cutting edge IT
services. The Wealth Advisory Platform has managed to successfully transform the lives

of many wealth advisors by providing them with one answer to all advisory practice
related concerns.
NJ Wealth Advisors Network has it's presence in over 100* locations.
Product basket
Investment Products: Domestic mutual funds (all AMCs), Fixed Deposits of
companies, PMS products (Third party & NJ), Government/ RBI/ Infrastructure bonds
Partner Services
 Dedicated Relationship Manager
 Marketing & Sales support
 Research support
 Training & Education support
 Dedicated Customer Care / Query management support
 Technological support, including online business / 'Partners Desk' with CRM,
Financial Planning & Employee Management modules
Customer Services:
Online family "Wealth / Client Desk" enabling single portfolio view of 'entire' wealth
portfolio
Trading-Demat Account with online transacting & call-&-trade service in mutual funds.
Asset Management (NJ PMS)
NJ has ventured in asset management business with NJ Advisory Services Pvt.

Ltd., a group company, launching its discretionary PMS products.
At the heart of NJ Advisory Services is the idea to provide customers with solutions
that give them the freedom from active management of investments while having an
assurance that we would be doing so in the best possible manner. Our conviction,
matched by our passion and expertise, is all about ensuring the peace of mind of the

investor. The PMS products currently offered are aimed at meeting investor's need for
successful long-term wealth creation by following strategies that control risk and
optimize returns in a mutual fund portfolio.
NJ Advisory Services leverages upon with its rich experience in portfolio
management with in-depth knowledge & expertise in mutual funds. The decisions on the
mutual fund portfolio also combine results of time tested proprietary research models,
extensive due-diligence of fund houses, interactions with fund managers & internal risk
controls. The defined processes and smart use of technology further ensures that the
investors are offered with quality portfolio management and administrative services,
ensuring a complete peace of mind.
Products:
 Freedom Portfolio:
Objective: To stay invested in equity mutual fund schemes at all times, deliver
superior portfolio returns by selecting better performing schemes and encashing
on opportunities offered by markets.
 Dynamic Asset Allocation Portfolio
Objective: To give better risk adjusted returns by deciding right proportion of
Equity and Debt asset classes from time to time, and selecting consistently better
performing mutual fund schemes.
Key customer services:

 Online Client PMS Desk with daily update reports
 Reporting on monthly, quarterly & annual basis through email and hard copies.

Real Estate (NJ Realty)
The NJ Realty venture offers an integrated service model offering end-to-end

services to various stake-holders in realty program management & execution. The idea is

to associate with stakeholders and engage actively in various stages of program

management of varying sizes, either residential or commercial in nature.
Managing realty programs is a lengthy process replete with many challenges right
from program identification to marketing. As a developer, investor or land owner, one
may be keen to execute realty projects, but may not be equipped with the right skill-sets,
contacts, experience and/or know-how for the undertaking. This is where NJ Realty can
associate and help in shaping up the realty programs. NJ Realty has acquired considerable
experience in program management and is also currently engaged in multiple programs
playing diverse roles.
At the heart of NJ Realty is the philosophy of sustainability and preservation of
environment. Going beyond words, NJ Realty seeks to keep environment as one of the
focal points in its real estate business.

Insurance Broking
NJ Insurance Brokers Pvt. Ltd., a licensed insurance broker by IRDA, seeks to

provide customers with comprehensive solutions catering to their insurance needs.
At the heart of NJ Insurance is the strong vision for continued financial well-being
for customers - individuals and families, regardless of any circumstances. The key is to
offer 'right' advice which is unbiased and customer centric and encompasses the right risk
to insure, the right coverage, the right product and at the right time. The idea to offer
clients with comprehensive solutions extends further to cover quality claim settlement
and other services.
NJ Insurance leverages from the rich experience of NJ group in financial planning
and investment management for customers. NJ Insurance Brokers has appointed Certified
Insurance Advisors (CIA’s) who work with customers in identifying, fulfilling &
managing their insurance needs. NJ offers a comprehensive basket of products both in life
& non-life insurance space and makes exhaustive use of technology to deliver great value
to customers.
Product basket:
 Life insurance products from leading life insurers

 General insurance products, especially Health, Motor & Personal Accident,

from leading general insurers

Global Wealth Advisory
NJ Global Invest (Ltd.) is a new venture wherein NJ seeks to offer a Global Wealth
Advisory platform to advisors for offshore funds across the globe.
The vision at Global Wealth Advisory platform is to offer a single window for
investment opportunities across the globe to customers. The idea is to bring to customers
a wide range of offshore fund schemes (domiciled in Mauritius, Luxembourg, Dublin and
other jurisdictions), through advisors on the Global Wealth Advisory platform. NJ Global
Invest seeks to provide a offshore fund distribution platform & offshore Portfolio
Advisory services under a B2B distribution model. NJ Global Invest also desires to offer
comprehensive order routing and trade settlement facility with support services of client
reporting & fees settlement.
NJ Global Invest is a venture that leverages from rich experience & success of
financial products advisory & distribution business in India. Incorporated in Mauritius,
NJ Global Invest is set up an offshore fund distribution company and is a licensed
'Investment Dealer (Full Service Dealer, excluding underwriting)" by FSC, Mauritius.
Information Technology (Fin logic Technologies)

NJ Technologies is a latest venture by NJ wherein we aim to provide quality

technology solutions to businesses in a wide range of domains.
NJ started its journey in technology with the start of Fin logic Technologies (India)
Pvt. Ltd., a group company, in year 2000. The idea then was to develop software
applications to support the growing (financial services) distribution business and manage
the IT infrastructure. Over the years, the captive IT team, gained strong domain expertise
and skills in diverse areas and technology domains. Today, Fin logic team boasts of
nearly 200* employees with skills & rich experience in product development, software
testing, infrastructure management, R&D, project management & information security.
The entire NJ Group's internal systems and infrastructure is managed by Fin logic which
also has developed many state-of-the arts, proprietary applications that power NJ's
businesses.
NJ Technologies now seeks to leverage these in-house skills & expertise to help
other businesses find solutions for their business challenges. At NJ Technologies, we are
keen to adopt the latest and the best practices from the industry in delivering solutions
that really work for businesses.
Solutions for businesses:
 Infrastructure set-up and management
 Database management
 Customized Application Development
 Software Quality Assurance
 Information Security

Training & Development (NJ Gurukul)

The NJ Gurukul is a venture aimed at providing valuable training & education

support to the young, emerging talent pool in India. Started in year 2007, NJ Gurukul
today offers a very wide range of training programs across India in all major cities.
NJ Gurukul is about a vision that aspires to nurture the young talent in India and to
transform them into individuals with knowledge & skills for employment and enterprise.
With special focus on the financial advisors community, NJ Gurukul today, is a leading
provider of training programs in the financial services industry. NJ Gurukul offers a wide
range of training programs by way of part / full time classroom sessions being conducted
at multiple locations across India. NJ Gurukul has an institutionalized, process driven
approach to training with focus on delivering uniformity in quality & content.
The NJ Gurukul has a Board of Trainers with over 90* well qualified, professional
trainers empanelled across India for delivering training programs. Within a short time, NJ
Gurukul has trained over 30,000* participants in over 50 locations across India. NJ
Gurukul is an authorized Education Provider (EP) with FPSB India to deliver training for
the prestigious Certified Financial Planner - CFPCM Certification. NJ Gurukul is also
amongst the largest trainers of AMFI – MF Advisors certifications in India.
Key Training Programs:
 AMFI MF (Advisors) Certification for prospective NJ Wealth Advisors

 Training for CFPCM Certification
MUTUAL FUNDS:
THE MAIN PRODUCT OF NJ INDIA INVESTS COMPANY:
The modern mutual fund was first introduced in Belgium in 1822. This form of
investment soon spread to Great Britain and France. Mutual funds became popular in the
United States in the 1920s and continue to be popular since the 1930s, especially open-

ended mutual funds. Mutual funds experienced a period of tremendous growth after
World War II, especially in the 1980s and 1990s.
The mutual fund industry in India started in 1963 with the formation of Unit Trust
of India, at the initiative of the Government of India and Reserve Bank of India. The
history of mutual funds in India can be broadly divided into four distinct phases:
First phase – 1964-87

Second Phase – 1987-1993 (Entry of Public Sector Funds)
Third Phase – 1993-2003 (Entry of Private Sector Funds)
Fourth Phase – since February 2003
Mutual Funds in India is gaining ground and getting popular as an investment

option in last five years or so. Mutual Fund is a common pool of savings created by a
number of investors. Mutual Fund is an ideal investment product for an individual
investor. Different investors with common investment objective contribute to create a
common pool of money. This money is then invested by fund manager according to the
objective of the scheme.

Structure of Mutual Funds:
In India mutual funds function as trust created under the Indian Trust Act, 1882.
There are three layers of mutual fund in India. (i) Sponsors (ii) Trustee and (iii) Asset
Management Company. Sponsors work as Promoters of the company. They take
responsibility of starting mutual fund business. Sponsors contribute initial capital (40% of
net worth of AMC) and appoint Trustees and Board of Trustees. Board of Trustees act as
guardians of investors and ensure that money invested by investors is used according to
the objective of the scheme. Asset Management Company is the public face of fund
management business. Sponsors and Trustees together form AMC and appoint Fund
Manager. Fund manager with help of fund management team makes all investment
decisions.

Advantages and Disadvantages of Mutual Fund:

ADVANTAGES:

Professional Management:
Mutual Funds provide the services of experienced and skilled professionals, backed by a
dedicated investment research team that analyses the performance of companies.
Diversification:
Mutual Funds invest in a number of companies across broad industries. This
diversification reduces the risk because seldom do all stocks decline at the same time and
in the same proportion.
Affordability:
Investors individually may lack sufficient funds to invest in high-grade stocks. A
mutual fund because of its large corpus allows even a small investor to take the benefit of
its investment strategy.
Choice of Schemes (Variety):

Mutual Funds offer a family of schemes to suit your varying needs over a lifetime.
Well Regulated:
All Mutual Funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interests of investors.

DISADVANTAGES:
Entry and Exit load:
Mutual funds are a victim of their own success. When a large body like a fund
invests in shares, the concentrated buying or selling in adverse price movements lay at the
time of buying, the fund ends up paying a higher price and while selling it realize a lower
price.
No control over costs:
The costs of the fund management process are deducted from the fund. This
includes marketing and initial costs deducted at the time of entry itself, called, ‘Load’.
Then there is the annual asset management fee and expenses, together called the expense
ratio.
No Guarantee of return:
No investment is risk free. If the entire stock market declines in value, the value of
mutual fund shares will go down as well. Investors encounter fewer risks when they
invest in mutual funds than when they buy and sell stocks on their own. However, anyone
who invests through a mutual fund runs the risk of losing money.
Management risk:
When you invest in a mutual fund, you depend on the fund's manager to make the
right decisions regarding the fund's portfolio. If the manager does not perform as well as
you had hoped, you might not make as much money on your investment as you expected.

Major competitors of NJ India Invest are:
 Angel Broking:
Angel Broking, Ltd. provides retail personal financial services in India.
The company offers e-broking, portfolio management, mutual fund, private client
group, commodities broking, investment advisory, wealth management, IPO, and
depository services. The company was founded in 1987 and is in Mumbai, India.
Investing in a Mutual fund is an excellent way of diversifying risk as well
as portfolio. Angel presents its Mutual fund services that strive to meet all your
mutual fund investment needs. They have a wide scheme of investment schemes
from all the top mutual fund houses.
Angel also provides recommendations based on in-depth research, mutual
fund performance and mutual fund ratings to help meet your investment goals.
 Prudent:
Incorporated in year 2000 with a clear vision of providing professional
services in the area of personal and corporate investments, Prudent has created a
niche segment over a period to time with an excellent quality client base. Over the
past few years Prudent Corporate Advisory Services has created in-house
capabilities of analyzing funds on various parameters before suggesting them to
clients.
The team approach worked wonders and in the short-span of just one
decade, the Prudent Group expanded its horizon by offering specialized services
in the areas of Personal and Corporate Investment Planning through Mutual
Funds, Equities, Derivatives, Third Party Products, Fixed Income Products,
Life/General Insurance and Real Estate through various companies listed below.

 Bajaj Capital:
The Bajaj Capital Group is one of India’s premier Investment Advisory and
Financial Planning companies. They are also SEBI-approved Category I Merchant
Bankers.
As one of India’s largest distributors of financial products, they offer a
wide range of investment products such as mutual funds, life and general
insurance, bonds, post office schemes, etc. offered by reputed public and private
and government organizations.
 Karvy:
Since its inception in 1982, Karvy has demonstrated a dedication coupled
with dynamism that has inspired trust from various segments, corporate,
government bodies and individuals. Karvy has since been performing a pivotal
role as the intermediary the interface between these players.
With Mutual Funds emerging as a distinct asset class, Karvy has made a
strategic choice to leverage the power of latest technology to provide a cutting
edge to its services. They, today, service nearly 60% of the asset management
companies (AMCs) across an extensive network of service centers with assets
under service in excess of Rs.2, 20,341.59 crores. Mutual fund services have been
undergoing a sea change in the Indian market place and asset management
companies are finding their niche in delivering unique products and service
offerings.

CHAPTER-2
MARKETING AND SALES DEPARTMENT:
2.1 Introduction
2.2 Structure of Marketing Department
2.3 Functions of Marketing Department
2.4 Marketing Strategies of the Co.
2.5 Activities of Marketing Department
2.6 Product Life Cycle
2.7 Segmentation, Targeting and Positioning
2.8 Pricing Policy of the Company
2.9 Promotion Mix
2.10 Distribution Channels
2.11 CRM and Customer Support Activities
2.12 P’s of a Service Industry

2.1 Introduction
Really speaking, NJ INDIA does not sell anything, tangible or intangible. This does
seem confusing. Banks sell their products based on certain assured returns; insurance
companies sell contracts. Not so mutual funds. They mobilize funds from the investing
public to manage those funds efficiently, i.e. they create an expectation of good returns in
the minds of investors and generate a desire in them to put their money with a particular
fund. Thus, there is a clear distinction between company shares and mutual fund units.
When a company issues capital, investors expect that company will be able to return the
worth of their investments through manufacturing or servicing activities, but in case of
mutual funds, managerial efficiency and investment skill would determine returns.
Successful mutual fund marketing, therefore, must create confidence among potential
investors and strengthen their desire to put their money with a particular fund.
The market segments are quite distinct because of investment objectives.

Accordingly, a marketing strategy specific to each type of funds needs to be devised.

2.2 Structure of Marketing Department

2.3) Major functions of Marketing Department:-
1. Focus on the Customers.
2. Monitor the Competition.
3. Create New Ideas.
4. Simple Communication.
5. Manage the Budget.
6. Set the Strategy, Plan the Attack, and Execute.
Some guidelines regarding the functions are given below:
1. Befriend your customers.

2. Become your market. (Don’t just monitor the competition. Rewrite the rules. Set the
pace. Lead. Outdistance your competition. Make them copy you. Force them to up their
game.)
3. Foster Innovation.
4. Simplify your communications with clients.
5. Strategize as if your budget had been slashed in half. Deliver as if your budget had
been twice what it actually is.
6. Observe, adapt, strategize, anticipate, plan, execute and be ready to improvise at a
moment’s notice.
The basic marketing department functions also include:
Customer Relationship Management

Sales Forecasting
Market Research
Sales Analysis
Sales Reporting

2.4 MARKETING STRATEGIES ADOPTED BY NJ INDIA

INVEST:
The present marketing strategies of mutual fund products adopted by NJ India

invest can be divided into following heads:
 Direct Marketing
 Selling through Intermediaries
 Other Channels
(A) DIRECT MARKETING:
This constitutes 20 % of the total sales of mutual funds. Some of the important
tools used in this type of selling are:
1) Personal selling:
In this case, the Customer Support Officer at particular branch takes appointment
from the potential prospect. Once the appointment is fixed, he informs the management
executives in marketing department to meet and give him all details about the schemes
being offered by the fund.
2) Telemarketing:
In this type of marketing, the database of the people is to be picked from the
telephone directory or other commercial sources randomly. Sometimes people belonging
to particular profession are also contacted through phone and informed about funds.

3) Advertisements:
The Asset Management Companies advertises the particular schemes in

newspaper, magazines, televisions and radios at regular interval of time. Now a day,
mutual fund NFOs (IPO’s) are coming at every two months, which are heavily advertised
through these mediums. The purpose is to keep investors aware about the schemes offered
by funds and their performance in recent past.
4) Hoardings and Banners:
In this type of marketing, the various funds advertise their schemes through
hoardings and banners, which are kept at important locations of the city where the
movement of the people is very high.
(B) SELLING THROUGH INTERMEDIARIES:
Intermediaries include Distributors or Agents or Brokers who contribute in great

manner to increase the sales of mutual funds schemes. These people or distributors are in
direct touch with the investors. Most of them are also involved in selling shares and other
investment instruments. They are completely associated with financial markets and hence
perform a good job to convince the investors to invest in mutual funds. On the other hand,
customers prefer to put trust on those distributors who give them right information about
the fund and keep them update with market conditions.
Regular meeting with distributors also plays vital role in collecting the sales of
mutual funds. The Sales executives regularly meet these distributors and solve their
requirements and complain from either service side or from customer side. The objective
is to make a good business relation and work with co-operation because these distributors
or brokers contribute 70-80% of total sales of mutual funds.
Sometimes special training sessions are also to be organized for the new agents or
distributors. Training involves giving details about the schemes, their investment
objective, its performance in the market and the competitors’ schemes also.

Sometimes big distributors have their own sub agents or sub brokers to increase
their sales activities.
(C) OTHER CHANNELS:

Apart from direct marketing and intermediaries, there are other distribution
channels also developed by mutual funds. It includes banks and other financial
institutions that are promoting these mutual funds schemes as per the regulations
prescribed by SEBI and RBI. In private as well as nationalized banks, there is a separate
section for mutual funds. They have their own executives with efficient sales force to
promote the mutual fund schemes among their customers.
2.5 ACTIVITIES OF MARKETING DEPARTMENT:
Some of the activities NJ India Invest practices in marketing department are as

follows:
 Joint calls
 Client meet
 Stall activity
 Van activity
 SMS
 Courier
 Khichdi meet

 Large meeting
 E-Mails
Joint calls:
Joint calls includes the calling the partners and informing them about
various new schemes and keeping them aware about the market conditions. It also
includes going to the partner and explaining him about the new stocks in the
market and where actually he can invest his money i.e. in what type of mutual
fund he wants to invest and what is the amount. Sometimes the head also
accompanies the mutual fund advisory to do joint calls.
Client meets:
Client meets are arranged whenever it is required. There are different
meets like meet for issuing of new mutual funds, a project visit incase of NJ
reality, meeting telling the partners about the conditions and new schemes which
are recently added. These meetings and gatherings are known as client meets.
Stall Activity:
NJ uses a very common technique as its marketing techniques, i.e. keeping
stalls and booths at various fairs. At these stalls the try to get convince the people
to invest in mutual funds and become an advisor. This is a widely used technique
by major by NJ India Invest.
Van Activity:
Another technique used by NJ is using a car for advertising. Majorly
Maruti car is used for doing this work.
SMS:

In this modern time, marketing through SMS is a very trendy and

extensively used method. It is the fastest way of communication. NJ too uses this
method for its marketing. Leads are collected from various different places and
these people are messaged about the attractive schemes which would convince
them be become an advisor. Even the current partners are informed about various
meeting or any information which is to be conveyed to them is done through
SMS.
Courier:
This is technique is also used for marketing of NJ India Invest. Different
brochures, templates, booklets are sent on Monthly or weekly bases to the partners
places. This keeps the partners update with what is going on in the firm and
market conditions.
Khichdi Meet:
Khichdi meet is one of the unique marketing techniques used by NJ India
Invest. In this meet 10 to 15 partners are invited. This is a technique which makes
the partners feel their importance in the company and motivates them to work
more and more.
Large Meets:
Large meetings are held when different brokers or partners get together and
arrange a meeting for their clients. These meets can be for a new scheme or some
changes etc. These meets makes the clients fell that NJ is concerned for them and
motivates them.
E-Mails:

Emails are also frequently used technique by NJ India Invest. Different schemes showing
the return % are sent to clients as an email. This is a quick and efficient way of marketing
and making the clients aware about various things going around them.
2.6 PRODUCT LIFE CYCLE:
Every company has a life. Some live short and some live long. Ultimately whether
company is short lived or long, its sales declines. During its whole life the company
passes through various stages which is knows as its life cycle. If we study the life history
of any branded multinational company we come to know that the life time sales of many
branded product reveal a typical pattern of development which is known as product life
cycle. It may also be defined as a history of life time sales of a product from its stage of
introduction to the stage of decline.
The life cycle of a product consist of four major stages:

 Introduction
 Growth
 Maturity
 Decline

1) Introduction:
With marketing of a new product the first stage of life cycle which is known as
introduction begins. During this stage the product is new in the market and a large
number of customers are not familiar with it. Therefore, the volume of sales in the
beginning is very less. During this stage, in order to increase sales, the company has to
incur advertising expenditure on a large scale, sales representative also to be appointed,
incentives are to be given to them for a successful entry in the competitive market. This
stage continues as long as incremental rate of sales growth does not go up and company
begins to make profit. The time span of this stage will be short if the product is quite
consistent with the customer’s demand otherwise it’s likely to be long.
2) Growth:
This stage begins with the increase in the growth rate of sales and earning profit.
If the product is consistent with customers preference, within a short time, growth rate of
the sales start to increase. Customers satisfied with purchasing continue to purchase and
canvass the product amongst other customers. As a result, sales increase with the increase

in production and average cost of production declines and profit increases. During this
stage, the product begins to make rapid sales gains because of the cumulative efforts of
introductory promotion, distribution and word of mouth influence.
3) Maturity:
In this stage, sales growth continues but at a declining rate because of the
diminishing number of potential customers who remains unaware of the product. When
sales growth rate reaching to the highest level begins to decline, maturity stage begins.
This stage lasts longer than earlier stages.
Maturity stage consists of three stages:
1. In the beginning, sales increases but at declining rate

2. In second stage, sales remains stable
3. In third stage, sales begins to decline.
During the maturity stage, market becomes highly competitive. Competitors resort
to cut price. The company has also to decrease the price to survive competition. As a
result profit and sales growth rate either cease to increase or increase at decreasing rate.
4) Decline:
In this stage, sales begin to diminish absolutely as the product gradually replaced
by better products or substitutes. No doubt, the producer continues to make efforts to
increase the sales but the efforts do not bear the fruits. Sales get stagnant for some time
and therefore begin to decline. Profit also starts declining and number of customers also
decline. Generally because of changing preferences of customers or losing utility by the
product, sales reach this stage of decline.
NJ INDIA INVEST today is in the growth stage. It is the market leader since
last 5 years. In this stage new product are to be searched on. So due to the excellent

outcome of mutual funds NJ has now started with new financial products like SIP,
Portfolio management, Realty, and insurance. New campaign to search out new areas of
market is one of the marketing strategies a company has to consider. This is exactly what
is done by NJ, to find out new customers leads are collected from various sources by
given brochures, arranging meeting and giving information to the newly recruited
members. Other marketing strategy which is followed by NJ is they find different source
of advertisement and find out new channels of distribution for wide spread sales. It is very
necessary to build trust in our customers and to enhance that trust. NJ follows various
different techniques such as calling the client, keeping them updated with new schemes
etc.
PACKAGING AND LABELLING:
 Packaging:
Packaging is all the activities of designing and producing the container for the
product. Packages might include up to three levels of material:
 Primary package: Cool water cologne comes in a bottle.

 Secondary package: In a cardboard box.
 Shipping package: In a corrugated box containing six dozen boxes.
NJ INDIA INVEST deals with the products such as mutual funds, fixed deposits,
insurance, reality etc. thus packaging does not take place.
 Labeling:

The label may be a simple tag attached to the product or an elaborately designed
graphic that is the part of the package. It might carry only the brand name, or a great deal
of information. Labeling performs various functions:
 Label identifies the product or the brand
 Label also grades the product such as on the fruits of reliance fresh written
best quality or export quality.
 It describes the product such as:
 Who made it, where it was made
 When it was made
 What it contains
 How it is to be used
 How to use it safely
As NJ INDIA INVEST is a service firm, there is no labeling done here.

Unique Selling Proposals is also a service provided by the staff in NJ INDIA
INVEST in terms of execution, knowledge, customer relations, etc.
2.7) SEGMENTATION, TARGETING AND POSITIONING
Segmentation:-

Segmenting is the process of dividing the market into segments based on customer
characteristics and needs.
The main activity of segmenting consists of four sub activities. These are:
1. Determining who the actual and potential customers are
2. Identifying segments
3. Analyzing the intensity of competitors in the market
4. Selecting the attractive customer segments.
When different segments are identified, it is not necessary that these segments are
attractive to target. A company is almost never alone in a market -- competitors have a
great influence. When there is a high intensity of competitors, it is hard to obtain a
profitable market share and a company may decide not to enter a certain market.
In NJ INDIA INVEST, there exist heterogeneous segments. The major segment consists
of ADVISORS. Advisors are segmented into Insurance Advisors, Tax Consultants,
Chartered Accountant, Stock Brokers and Postal Agents.
Targeting:-
Segments identified may be homogeneous within and heterogeneous between each other.
When these segments are known, it is important to decide on which market to target. Not
every market is an attractive market to enter. This process is called targeting.
Four sub activities form the basis for deciding on which segments will actually be
targeted:-
The four sub activities within targeting are:
1. Defining the abilities of the company and resources needed to enter a market
2. Analyzing competitors on their resources and skills
3. Considering the company’s abilities compared to the competitors' abilities

4. Deciding on the actual target markets.
Analysis of the above activities leads to a list of segments which are most attractive to
target and have a good chance of leading to a profitable market share.
Obviously, targeting can only be done when segments have been defined, as these
segments allow firms to analyze the competitors in this market. When the process of
targeting is ended, the markets to target are selected.
NJ INDIA INVEST targets various segments like all financial professionals i.e.
teacher, advocate, MBA student, etc. But the main targets are the Insurances, Taxes,
Direct Equity and PPF. Different products are provided to suit different targeted
groups.
Positioning:-
When the list of target markets is made, a company starts on deciding how to create an
identity or image of the product in the mind of the customer. Every segment is different
from the others, so different customers with different ideas of what they expect from the
product. In the process of positioning the company:
1. Identifies the differential advantages in each segment.
2. Decides on a different positioning concept for each of these segments.
NJ INDIA INVEST focuses on “Be a Wealth Advisor” position.
2.8) PRICING POLICY:
The policy by which a company determines the wholesale and retail

prices for its products and services.
Objectives of Pricing Policy:

1) Profit Maximization in the short term.
2) Profit Optimization in the long run.
3) Price Stabilization.

4) Facing Competitive Situations.
5) Maintenance of Market Share
6) Capturing the Market.
7) Entry into New Markets.
8) Deep Penetration of the Markets.
9) Achieving a Target Return.
10) Ability to Pay.
NJ India Invest comprises of products like mutual funds, reality,

insurance fixed deposits, portfolio management service, etc. there is no specific pricing
policies. It has to go with the prevailing market rates.
But different opening charges for different products, various

service charges, charges for Demat account, etc are priced by the company.
Also, the company conducts an entrance exam for the investors for which the company
charges some fees.
2.9) PROMOTION MIX:

Once a product is developed, creating demand for the product becomes a challenge. It
requires promotional activities. The activities are techniques which bring the special
characteristics of the product and of the producer to the knowledge of prospective
customers. Promotion is a process of communication involving information, persuasion,
and influence. These techniques include advertising, salesmanship or personal selling
and other methods of stimulation demand.
Advertising and sales promotion techniques are indirect and non-personal whereas
personal selling or salesmanship is a direct and personal technique. All these techniques
should be integrated with the marketing objective of the enterprise. The salesmen can
report about the different advertising and other promotional appeals as they are in close
touch with the consumer public and market conditions.
Promotion is essentially the sales efforts of a business enterprise and includes the function
of informing, persuading and influencing the purchase decision of the existing the
prospective consumers with the object of increasing sales volume and profits. Promotion
is the efforts of the seller to sell the product effectively. Promotion is the communication
with the customers to pursue them to buy the product. It is the duty of the marketing
manager to choose the communication media and blend them into an effective promotion
programme. These are more than one type of tools used to promote sales. The
combination of these tools with a view to maintain and create sales is known as
promotion mix. Promotion mix is the name given to the combination of methods used in
communicating with customers. There are four tools of promotion mix viz. advertisement,
personal selling, publicity and sales promotion. These are called elements of promotion
mix.
Elements of Promotion Mix:-

There are four elements of promotion mix:
Advertising
Advertising is a non-personal presentation of goods, services or idea. In advertising,
existing and prospective customers are communicated the message through impersonal
media like radio, T.V., newspapers and magazine. It involves transmission of standard
message simultaneously to a large number of people. The message transmitted is known
as advertising.
Personal Selling
Personal selling is the process of assisting and persuading the existing and prospective
buyer to buy the goods or services in person. It involves direct and personal contact of the
seller or his representative with the buyer.
Publicity

Publicity is a non-personal and non-paid stimulation of demand of the product or services

or business unit by planning commercially significant news about the services or business
unit, by planning commercially significant news about in the print media or by obtaining
a favourable presentation of it upon radio, television or stage.
Sales promotion
Sales promotion consists of all activities other than advertising, personal selling and
publicity, which help in promoting sales of the product. Such activities are non-repetitive
and one time offers. According to American Marketing Association, sales promotion
include, "those marketing activities other than personal selling, advertising and publicity
that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and
exhibitions, demonstrations and various non-recurring selling efforts not in the ordinary
routine."
The main aim of sales promotion is to increase sales and profits of the firm but it is quite
different from personal selling and advertising. In personal selling, customer is persuaded
by a sales person face to face. Advertising is a non-personal mass communication media.
Sales promotion, on the other hand, is a non-recurring and non-routine method. It is a
supporting and facilitating element of promotional strategy. Sales promotion bridges the
gap of advertising and personal selling.
In NJ INDIA INVEST, promotional activities are carried on in the form of stalls,

seminars, leaflets distribution, van activities, BOP (Business Opportunity Programmes)
and many more.
2.10) DISTRIBUTION CHANNEL:
A new mutual fund product may have all the desired qualities but that does not
ensure its spontaneous acceptance by customers. Success greatly depends on appropriate
distribution and promotion. The identification of appropriate market segments for the
product, selection of appropriate distribution channels and promotional aids are essential.
The Indian mutual fund industry is going through a phase of

transformation since liberalization. Liberalization has opened the way for foreign
investors in the mutual fund. This has increased the pace of evolution in the industry.
Institutional investors dominate the industry. They hold majority of the Indian mutual

fund assets, whereas retail investors account for small portion of total asset under
management. The low penetration among the retail investors can be attributed to their
lack of awareness and risk-aversion attitude.
Levels of Channel of Distribution:
1) Individual Agents:
Indian mutual fund market greatly depends on retail investors. For such purpose,
mutual fund companies appoint the distributors whose main target segment would be
retail investors. However, they are also having High Net worth Individuals (HNI). All the
distributors have to clear their AMFI examination conducted by Association of Mutual
Funds in India (AMFI) to become a Certified AMFI distributor.
Public Sector mutual funds like LIC MF and UTI have an edge over others due to
their well-established agency network. Distributors/Agents have their own investors’
universe and they always try to make the new investors. The Distributors frequently
arrange the meetings or get together for investors to aware about the schemes offered by
the mutual fund and aware about the benefits that one can derived from it. The main
purpose for arranging these types of meetings is to maintain the good relationship with
investors in today’s competitive financial market. To unload their work, the companies
bear huge market expenses in the form of higher commission to lure the investors.
The distribution can also be made by using lead managers and brokers along with
sub-brokers for selling units.
2) BANKS AND NBFC:

Till the early 1990s, the stockbrokers, sub-brokers and agents were the mainstay
of fund sales. Lack of professionalism in this method of sales led to the adoption of new

channels of distribution such as banks and Non-banking Financial Corporation. UTI is

distributing its offerings through selected branches of the Indian bank, Corporation bank,
Bank of India and Allahabad Bank.
Today, private sector banks are also promoting mutual funds through their
distribution channel. These banks have their own mutual fund section in bank itself and
two or three executives are delegated to meet the investors, educate them and sell their
products.
3) Large Distribution House:
Apart from banks and other retail distributors, the large distribution companies
like NJ India Invest are also in the ground to promote the mutual fund schemes. An agent
is essential channel between investors and mutual fund products. However, it is difficult
for AMCs to manage and monitor a large agent force. So, they take shelter in third party
distribution companies. These houses appoint their agents to sell the Mutual fund
schemes. These houses focus on financial products like insurance, dematerialization, PPF,
Post office savings like NSC/KVP, FD, and Govt. Securities etc. Moreover, they have a
large prospectus for investors and they provide the excellent facilities to investors in
terms of awareness of new schemes, market tips for investing etc. This results into large
mobilization of funds in the market ultimately which helps to mutual fund companies.
4) Institutional Agents/Brokers:
The Corporate segment is one of the more lucrative for mutual fund companies.
Earlier, we have discussed about institutional investor that they dominate the industry and
hold about 65% of the Indian mutual fund assets. To get the tax benefits and capital
appreciation, the corporate clients are more interested to choose their regular investment
vehicle as Mutual fund.

Activities of Channel of Distribution
The distribution channel of NJ India Invest follows a general process as:
 Data Collection:
Data is collected from various different sources like internet, trainee surveys,
present employee reference, walk- in and different surveys conducted by the company
itself. This data is preserved in a systematic way and is used as and when required. Data
collections plays a very important role in the distribution channel because once a client is
made ready to join NJ, the process starts.
 Meeting:
After the data has been collected, the people who are interested in becoming
advisors are called for a meeting. Here they are given information about what is mutual
fund? How to invest in it and various questions related to financial products. Any queries
by the people interested are cleared here in this meeting.
 Value Pack:
After the meeting is over the clients actually interested are given the value pack. It
contains the enrollment process and certain rules and requirements. At NJ the enrollment
is around Rs. 4000. Here information regarding the AMFI exam is also given.
 Opportunity forecasting:

The advisor at NJ then forecasts the opportunities from the market and explains
opportunity in the meeting to the interested people.
 Training:
Training at NJ is given by NJ Gurukul; they train the clients for the AMFI test
which is necessary to clear to become a mutual fund advisor. The clients are trained and
given all the information about the test and various methods to clear it easily.
 AMFI Exam:
All the people who want to be a mutual fund advisor have to clear this test. It is a
computerized test which contains basic questions about mutual funds and its market. One
goes to the next stage only after clearing this stage. Or else he again has to go back to the
training stage.
 NJ Partners:
After clearing the test all the clients are given NJ enrollment form. They are now
made NJ partners.
 Client Acquisition:
Client acquisition is divided into two major parts:

 Small Meets
 Joint Calls
 Small Meets:

Small meets includes meeting with the employees, discussing with them
the market situation and the major stocks to be invested.
 Joint Class:
When the in charge and the advisors go and meet the partner in order to
convince him/her to join and invest with NJ, these small meeting are called joint
calls.
 Training of advisors:
The advisors are given product training and they communicate new information in
this training. They also discuss about regular business development. The advisors are
encouraged to get new clients and help them to be well versed with the new and
changing situation.
2.11) CRM AND CUSTOMER SUPPORT ACTIVITIES
Customer Relation Management (CRM) is a widely

implemented model for managing a company’s interactions with customers, clients, and
sales prospects. It involves using technology to organize, automate, and synchronize
business processes—principally sales activities, but also those for marketing, customer
service, and technical support. The overall goals are to find, attract, and win new clients;

nurture and retain those the company already has; entice former clients back into the fold;
and reduce the costs of marketing and client service.
Acquiring new customers is much more expensive than selling to existing ones. With
CRM and customer support, companies have the confidence that customer cases will be
handled quickly and effectively. CRM and customer support centralizes customer service
requests across channels to allow companies to manage inbound e-mails, diagnose bugs,
share knowledge, and resolve customer issues.
Benefits of CRM and customer support activities:
 Quality and efficiency

 Decrease in overall costs
 Decision support
 Enterprise ability
 Customer Attentions
 Increase profitability
 Improved planning
 Improved product development.
Impact:
 Centrally manage and share all customer service issues

 Understand frequency of incidents to improve product quality
 Share information across individuals and teams
 Measure the responsiveness of customer support
In NJ INDIA INVEST, more emphasis is placed on creating healthy customer

relationships. For this purpose, meetings with the customers are arranged where
customers are given a very detailed knowledge regarding the mutual funds, its
benefits/advantages, why to invest in mutual funds and so on. The customers can also
consult the unit managers of our company in case of any queries.
2.12) P’s of a service industry

The service marketing mix is also known as an extended marketing mix

and is an integral part of a service blueprint design. The service marketing mix consists of
7 P’s as compared to the 4 P’s of a product marketing mix. Simply said, the service
marketing mix assumes the service as a product itself. However it adds 3 more P’s which
are required for optimum service delivery.
The product marketing mix consists of the 4 P’s which are Product, Pricing, Promotion
and Placement. The extended service marketing mix places 3 further P’s which include
People, Process and Physical evidence. All of these factors are necessary for optimum
service delivery.
The 7 Ps (used in service industry)
 Product=Service
 Place
 Price
 Promotion
 Process
 Physical evidence
 People/personnel
Product elements - The product in service marketing mix is intangible in nature. Like
physical products such as soap or a detergent, service products cannot be measured.
Tourism industry or the education industry can be an excellent example. At the same time

service products are heterogeneous, perishable and cannot be owned. The service product
thus has to be designed with care.
Place and Time - Place in case of services determine where is the service product going
to be located. The best place to open up a petrol pump is on the highway or in the city. A
place where there is minimum traffic is a wrong location to start a petrol pump.
Delivering product elements to customers can be done physically and/or electronically,
depending upon the service. Speed and convenience are essential to the customer.
Price - Pricing in case of services is rather more difficult than in case of products. If you
were a restaurant owner, you can price people only for the food you are serving. But then
who will pay for the nice ambience you have built up for your customers.
Promotion -The marketer must make sure communications; not only provide
information. You will find a lot of banks and telecom companies promoting themselves
rigorously. Why is that? It is because competition in this service sector is generally high
and promotions are necessary to survive. Thus banks, IT companies, and dotcoms place
themselves above the rest by advertising or promotions.
Process- Service process is the way in which a service is delivered to the end customer.
Let’s take the example of two very good companies – McDonalds and FedEx. Both the
companies thrive on their quick service and the reason they can do that is their confidence
on their processes. On top of it, the demand of these services is such that they have to
deliver optimally without a loss in quality. Thus the process of a service company in
delivering its product is of utmost importance.

Physical Environment - The appearance of the place where the services are delivered
may have a significant impact upon whether the service was satisfactory. Take an
example of a restaurant which has only chairs and tables and good food, or a restaurant
which has ambient lighting, nice music along with good seating arrangement and this also
serves good food. Which one will you prefer? The one with the nice ambience.
People - People define a service. If you have an IT company, your software engineers
define you. If you have a restaurant, your chef and service staff defines you. If you are
into banking, employees in your branch and their behavior towards customers define you.
In case of service marketing, people can make or break an organization. Thus many
companies nowadays are involved into specially getting their staff trained in interpersonal
skills and customer service with a focus towards customer satisfaction. In fact many
companies have to undergo accreditation to show that their staff is better than the rest.

CHAPTER-3
OPERATIONS DEPARTMENT
3.1 Introduction
3.2 Type of Plant Layout
3.3 Operation Strategies for Services
3.4 Quality Control

3.1) INTRODUCTION:
Operations management is an area of business concerned with the production of
goods and services, and involves the responsibility of ensuring that business operations
are efficient in terms of using as little resource as needed, and effective in terms of
meeting customer requirements. It is concerned with managing the process that converts
inputs (in the forms of materials, labor and energy) into outputs (in the form of goods and
services).
Operations traditionally refer to the production of goods and services separately,

although the distinction between these two main types of operations is increasingly
difficult to make as manufacturers tend to merge product and service offerings. More
generally, Operations Management aims to increase the content of value-added activities
in any given process. Fundamentally, these value-adding creative activities should be
aligned with market opportunity for optimal enterprise performance.
The activities of the operations department in NJ INDIA INVEST are basically spread
over MUTUAL FUNDS.
MUTUAL FUNDS:
The purchasing process of mutual funds consists of the following steps:-
TRANSACTION:
Over here, the person has to fill the form which consists of all the details of the
type of mutual fund, the amount which he is willing to invest, the name of the mutual
fund and other things like bank A/C details, address proof and the like.
Care should be taken that all the details are filled properly without mistake.
PURCHASE:
After transactions take place, those forms are sent to AMC’s where again the form
details are scanned and are sent to the head quarter. At the head quarter, the details sent
by the AMC are checked with the details of the employees of operations department. If
any deviations are found, they are checked and corrected.
SYSTEMATIC INVESTMENT PLAN (SIP):

After the procedure of purchasing gets complete, the most crucial thing is to
decide in which company’s mutual fund you want to invest and in how much proportion?
The proportion is decided by the investor himself.
SWITCH:
Switch means transfer of the money from one type of mutual fund to another type
of mutual fund. This can be done by the N.J. or by the investor. The main purpose of
doing such thing is to maximize “money” invested. Switch mainly occurs when the other
type of mutual fund is yielding more profits.
REDEMPTION:
Redemption means that the investor withdraws all his money from the N.J. India
Invest. Redemption occurs when the period of the money invested in any mutual fund has
come to an end. The maturity date of that mutual fund has come. This may also be done if
he no more wants to invest his money in mutual funds for some time or may be he is
satisfied with the profit he has earned.
SYSTEMATIC TRANSFER PLAN (STP):

This means that the money invested in one type of mutual fund can be transferred
to another type of mutual funds also. For example it can be transferred to textile industry
from an IT industry.
SYSTEMATIC WITHDRAWAL PLAN (SWP):

A systematic withdrawal plan is a financial plan that allows a shareholder to

withdraw money from an existing mutual fund portfolio at predetermined intervals. The
money withdrawn through a systematic withdrawal plan can be reinvested in another
portfolio or used to pay for something else. Often, a systematic withdrawal plan is used to
fund expenses during retirement. However, this type of plan may be used for other
purposes as well.
OPERATIONAL STRUCTURE:

3.2) TYPES OF PLANT LAYOUT:
Definition:
Plant layout refers to the arrangement of physical facilities such as machines,

equipment, tools, furniture etc. in such a manner so as to have quickest flow of material at
the lowest cost and with the least amount of handling in processing the product from the
receipt of raw material to the delivery of the final product.
Objectives of good Plant Layout:
 Proper and efficient utilization of available floor space

 Reduce material handling costs
 Utilize labor efficiently
 Reduce accidents
 Provide for volume and product flexibility
 Provide ease of supervision and control
 Provide for employee safety and health
 Allow easy maintenance of machines and plant.
 Improve productivity

TYPES OF LAYOUT:
There are mainly five types of plant layout:
(a) Product or line layout
(b) Process or functional layout
(c) Cellular manufacturing layout
(d) Fixed position or location layout
(e) Combined or group layout

(A) PRODUCT LAYOUT:
In this type of layout, the machines and equipments are arranged in one line
depending upon the sequence of operations required for the product. It is also called
as line layout. The material moves to another machine sequentially without any
backtracking. I.e. the output of one machine becomes input of the next machine. It
requires a very little material handling.
It is used for mass production of standardized products.

Workstation- Workstation- Workstation- Workstation-

1 2 3 4
Advantages of Product layout:

 Low cost of material handling, due to straight and short route.
 Smooth and continuous operations
 Continuous flow of work
 Optimum use of floor space
 Simple and effective inspection of work.

Disadvantages of Product layout:

 Capital investment in high special purpose machine (SPM).
 Breakdown of one machine will disturb the production process.
(B) PROCESS LAYOUT:

In this type of layout, the machines of a similar type are arranged together at one
place. This type of layout is used for batch production. It is preferred when the
product is not standardized and the quantity produced is very small.
Advantages of Process layout:

 Lower capital investment is required.
 There is high degree of machine utilization, as a machine is not blocked for a
single product.
 Breakdown of one machine does not disturb the production process.
 Supervision can be more effective and specialized.
Disadvantages of Process layout:

 Material handling costs are high due to backtracking.
 More skilled labor is required resulting in higher cost of wages.
 More frequent inspection is needed which results in costly supervision.
(C) CELLULAR MANUFACTURING LAYOUT:-
Cellular manufacturing also known as Group Technology is an approach whereby

production can be done in small batches. Components that may appear to be dissimilar
but which require similar manufacturing processes and/or similar setups of the machine
are grouped together and go through a particular group of such machines which may be
dissimilar. Thus, instead of functional work centers, we have these groups of machines or
short lines. For instance, we may have a turning machine, a drilling machine and
polishing equipment put together in a group, using which a group of components can be
manufactured. However, not all components of a components’ group need to go through

all the machines in the corresponding group or short line of machines. This concept is
called Group Technology. Each of these short lines or groups of machines is also called
as a ‘cell’. A cell thus consists of a group of machines and a ‘family’ of related
components being produced on these machines. Since the manufacturing plant would now
consist of several cells, manufacturing using such Group Technology is also called
Cellular Manufacturing.
Advantages of Cellular Manufacturing:
1. There are very few halts. Hence, flow times are reduced considerably.
2. Unnecessary fresh setups or modifications are eliminated. This saves time.
3. However all the required variety can be produced. Group technology does not
compromise on the variety of items.
4. Even a sudden rush order can be produced without causing much problem.
5. Employees feel empowered and derive job satisfaction.
6. An employee of a cell is free to do any operation within the cell, provided he has
developed that skill. Multi-skilling is commonly observed in cellular manufacturing. So,
there is job enlargement for the employee.
7. Since the employee is familiar with a known range of components of the cell, the
employee tends to make less errors; this can improve the quality of the items.
8. Quality can also improve because of reduced material handling of the items.
(D) FIXED POSITION LAYOUT:-
Fixed position layout involves the movement of manpower and machines to the product
which remains stationary. The movement of men and machines is advisable as the cost of
moving them would be lesser. This type of layout is preferred where the size of the job is
bulky and heavy. Example of such type of layout is locomotives, ships, boilers,
generators, wagon building, aircraft manufacturing, etc.
Raw
material
Finished
Machines AIR CRAFT ASSEMBLY Product
&
Equipments (Aircraft)
Labor

Advantages of Fixed position layout:

 The investment on layout is very small.
 The layout is flexible as changes in the operation sequence can be easily
incorporated.
 Adjustments can be made to meet shortage of materials or absence of workers
by changing the sequence of operations.
Disadvantages of Fixed position layout:

 As the production period being very long, the capital investment is very high.
 Very large space is required for storage of material and equipment near the
product.
 As several operations are often carried out simultaneously, there is a
possibility of confusion and conflicts among different workgroups.
(E) COMBINED LAYOUT:

A combination of process & product layout is known as combined layout.
Manufacturing concerns where several products are produced in repeated numbers with
no likelihood of continuous production, combined layout is followed.
For e.g. for industries involving fabrication of the parts and assembly, fabrication tends to
employ the process layout where as assembly areas often employ the product layout.
No particular layout is being followed in NJ INDIA INVEST. Work Stations are very
comfortable and convenient. There are cell phones at every work stations through which
contacts can be easily made. NJ INDIA INVEST is located at MAJURA GATE which is
considered a hub/prime location for business people and easily reachable with a good
means of transportation.

3.3) OPERATION STRATEGIES FOR SERVICES:
(A) Service Design:-
Service design is the activity of planning and organizing people, infrastructure,

communication and material components of a service in order to improve its quality and
the interaction between service provider and customers.
The purpose of service design methodologies is to design according to the needs of

customers or participants, so that the service is user-friendly, competitive and relevant to
the customers.
The backbone of this process is to understand the behavior of the customers, their needs
and motivations. Service designers gather customer insights through interviews and by
shadowing service users.
Service design is all about making the service you deliver useful, usable, efficient,
effective and desirable.
It’s not intangible or about the feeling you give customers or users. It's about actual
things, which service designers might call touch points. If you commission a service
designer they might:
 Help you identify problem areas and generate ideas for improvement.
 Redesign your products to improve the way they allow your customers to interact
while they use a service.
 Design spaces so that they deliver a service more efficiently.
 Creates printed material, websites, uniforms, adverts and the branded things that
allow you to communicate what your service is all about.
So a service design is a strategic project which uses design techniques like thorough client
research, collaborative ideas generation and testing to deliver services that are built
around the real needs of clients, that simplify complex problems and deliver solutions that
are future focused and cost conscious.
Process of Service Design:-

 Observe the situation.
 Involve users. Games or brainstorming will help.
 Create a blueprint of your service so you can see where everyone who delivers it,
how they work and your customers fit into what you deliver.

 Analyze the quality of your service. User feedback will be important here.
 Develop and map out ideas in a way that is easy to understand. This will help you
evaluate the ideas.
 Prototype a new service. By acting out a service or getting staff members to try
out by the new service delivery methods like an interactive map or questionnaire
and test them early when failure won't cost a lot.
 Create a toolkit at the end of the ideas stage to help you service providers
procure what you need to make the service improvements on the services that
have been created and tested.
The process of service designs followed by N.J. India invests is as follows:-
Firstly, there are number of companies in AMC (Asset Management Company) like
reliance, S.B.I., I.C.I.C.I.; etc. We here at N.J. are having the mutual funds of all the
company’s with different AMC’S registered with us. The clients are given various
options and schemes to invest their money. The client then selects the company and
invests his money in the mutual funds of that particular company.
There are so many public and private sector companies in the market. These
public and private sector companies run on a huge scale with a huge amount of capital
investment. Therefore, due to their big scale business, they often need money to finance
their business. Every time, they can’t go to the banks or issue shares for the company to
get the required capital.

3.4 QUALITY CONTROL:
Quality controls are activities designed to measure the status of competent

activities of a project, transmit data to a control centre where it is compared with the
performance standard and initiate corrective action when required.
(A) TECHNIQUES USED FOR QUALITY CONTROL:-
TOTAL QUALITY MANAGEMENT:-

TQM is a set of management practices throughout the organization, geared to
ensure the organization’s consistent meets or exceeds customer requirements. TQM
places strong focus on process measurement and controls as means of continuous
improvement.
Total Quality is a description of the culture, attitude and organization of a

company that aims to provide, and continue to provide, its customers with products and
services that satisfy their needs. The culture requires quality in all aspects of the
company's operations, with things being done right first time, and defects and waste
eradicatedfromoperations.
Some useful messages from results of TQM implementations:
 If you want to be a first-rate company, don't focus on the second-rate

companies who can't handle TQM, look at the world-class companies that
have adopted it
 The most effective way to spend TQM introduction funds is by training top
management, people involved in new product development, and people
involved with customers

IMPORTANT ASPECTS OF TQM INCLUDE:-
 CUSTOMER-DRIVEN QUALITY:
TQM has a customer-first orientation. The customer, not internal activities and
constraints, comes first. Customer satisfaction is seen as the company's highest priority.
The company believes it will only be successful if customers are satisfied. The TQM
Company is sensitive to customer requirements and responds rapidly to them. In the TQM
context, `being sensitive to customer requirements' goes beyond defect and error
reduction, and merely meeting specifications or reducing customer complaints. The
concept of requirements is expanded to take in not only product and service attributes that
meet basic requirements, but also those that enhance and differentiate them for
competitive advantage.
Each part of the company is involved in Total Quality, operating as a customer to some
functions and as a supplier to others. The Engineering Department is a supplier to
downstream functions such as Manufacturing and Field Service, and has to treat these
internal customers with the same sensitivity and responsiveness as it would external
customers.
 TQM LEADERSHIP FROM TOP MANAGEMENT :
TQM is a way of life for a company. It has to be introduced and led by top
management. This is a key point. Attempts to implement TQM often fail because top
management doesn't lead and get committed - instead it delegates and pays lip service.
Commitment and personal involvement is required from top management in creating and
deploying clear quality values and goals consistent with the objectives of the company,
and in creating and deploying well defined systems, methods and performance measures
for achieving those goals. These systems and methods guide all quality activities and
encourage participation by all employees. The development and use of performance
indicators is linked, directly or indirectly, to customer requirements and satisfaction, and
to management and employee remuneration.

 CONTINUOUS IMPROVEMENT:
Continuous improvement of all operations and activities is at the heart of TQM.

Once it is recognized that customer satisfaction can only be obtained by providing a high-
quality product, continuous improvement of the quality of the product is seen as the only
way to maintain a high level of customer satisfaction. As well as recognizing the link
between product quality and customer satisfaction, TQM also recognizes that product
quality is the result of process quality. As a result, there is a focus on continuous
improvement of the company's processes. This will lead to an improvement in process
quality. In turn this will lead to an improvement in product quality, and to an increase in
customer satisfaction. Improvement cycles are encouraged for all the company's activities
such as product development, use of EDM/PDM, and the way customer relationships are
managed. This implies that all activities include measurement and monitoring of cycle
time and responsiveness as a basis for seeking opportunities for improvement.
Elimination of waste is a major component of the continuous improvement

approach. There is also a strong emphasis on prevention rather than detection, and an
emphasis on quality at the design stage. The customer-driven approach helps to prevent
errors and achieve defect-free production. When problems do occur within the product
development process, they are generally discovered and resolved before they can get to
the next internal customer.
 FAST RESPONSE:
To achieve customer satisfaction, the company has to respond rapidly to customer

needs. This implies short product and service introduction cycles. These can be achieved
with customer-driven and process-oriented product development because the resulting
simplicity and efficiency greatly reduce the time involved. Simplicity is gained through
concurrent product and process development. Efficiencies are realized from the
elimination of non-value-adding effort such as re-design. The result is a dramatic
improvement in the elapsed time from product concept to first shipment.

 ACTIONS BASED ON FACTS:
The statistical analysis of engineering and manufacturing facts is an important part

of TQM. Facts and analysis provide the basis for planning, review and performance
tracking, improvement of operations, and comparison of performance with competitors.
The TQM approach is based on the use of objective data, and provides a rational rather
than an emotional basis for decision making. The statistical approach to process
management in both engineering and manufacturing recognizes that most problems are
system-related, and are not caused by particular employees. In practice, data is collected
and put in the hands of the people who are in the best position to analyze it and then take
the appropriate action to reduce costs and prevent non-conformance. Usually these people
are not managers but workers in the process. If the right information is not available, then
the analysis, whether it be of shop floor data, or engineering test results, can't take place,
errors can't be identified, and so errors can't be corrected.
 EMPLOYEE PARTICIPATION:
A successful TQM environment requires a committed and well-trained work force

that participates fully in quality improvement activities. Such participation is reinforced
by reward and recognition systems which emphasize the achievement of quality
objectives. On-going education and training of all employees supports the drive for
quality. Employees are encouraged to take more responsibility, communicate more
effectively, act creatively, and innovate. As people behave the way they are measured and
remunerated, TQM links remuneration to customer satisfaction metrics.

 A TQM CULTURE:
It's not easy to introduce TQM. An open, cooperative culture has to be created by
management. Employees have to be made to feel that they are responsible for customer
satisfaction. They are not going to feel this if they are excluded from the development of
visions, strategies, and plans. It's important they participate in these activities. They are
unlikely to behave in a responsible way if they see management behaving irresponsibly -
saying one thing and doing the opposite.
 PRODUCT DEVELOPMENT IN A TQM ENVIRONMENT:
Product development in a TQM environment is very different to product development in

a non-TQM environment. Without a TQM approach, product development is usually
carried on in a confliction atmosphere where each department acts independently. Short-
term results drive behavior so scrap, changes, work-around, waste, and rework are normal
practice. Management focuses on supervising individuals, and fire-fighting is necessary
and rewarded.
Product development in a TQM environment is customer-driven and focused on quality.
Teams are process-oriented, and interact with their internal customers to deliver the
required results. Management's focus is on controlling the overall process, and rewarding
teamwork.
At NJ, quality management is done by the way they treat their customers.
Customers are only the backbone of the company. It is said that NJ makes relation with
its customers for long years only. This is only because of the work quality of the
company. Minimum errors, customer satisfaction, timely update of data, etc. are some of
the quality measures taken by NJ INDIA INVEST.

CHECKING PROCESS FOLLOWED BY THE

PRODUCTION DEPARTMENT:-
 Scanning
 Data entry
 Registration
 SCANNING:
Scanning means the forms and data filled by the customers are checked and
validated that whether they are filled properly or not. The person scans that all the
details needed for the transaction are filled properly or not.
 DATA ENTRY:
The forms received from the customers are first scanned and then all the data are
entered in the employee desk.
It contains:-
 PANCARD
 ID and ADDRESS PROOF
 Partner or broker enrollment
 KYC (know your client)

 SELF DECLARATION:
Self declaration is nothing but a form to be filled by the partners. It means that the
partners of the N.J. India have to fill up one form called self declaration then only they
get their brokerage. These self declaration forms are sent to the AMC (Asset Management
Company).
 ARM:
(AMFI registration number)
AMFI registration number is the number which the partner gets after clearing the
AMFI test. This number is valid for the 5 years. After the completion on 5 years the
partner has to get renewed from the respective authority.
 WEALTH A/C:
Pan card
Address proof
Blank cheque
1.5% or RS.
24*7 HELP DESK is also provided for any queries or complaints.

CHAPTER-4
HUMAN RESOURCE MANAGEMENT
4.1 Introduction
4.2 Human Resource Planning
4.3 Recruitment and Selection
4.4 Training and Development
4.5 Performance Appraisal System
4.6 Promotion and Transfer Policies
4.7 Wages and Salary Administration
4.8 Employee Welfare Activities

4.1) Introduction
“Human Resource Management may be defined as a set of policies, practices

and programs designed to maximize both personal and organizational goals.”
________________________________________________________________________
It is the process of binding people and organizations together so that the objectives
of each are achieved.
A) Organizational Objectives and Goals

B) No of Employees and Branches:-

100+ BRANCHES IN 19 STATES
1000+EMPLOYEES
15000 + ADVISORS
In the branch of NJ INDIA INVEST at Majura Gate, 30 employees work

there currently.
C) Organizational Structure

D) Activities of Human Resource Manager:-

In NJ INDIA INVEST, the HR Manager has the responsibilities for all of the functions
that deal with the needs and activities of the organization’s people including the following
areas of responsibilities:
 Recruiting
 Hiring
 Training
 Organization Development
 Communication
 Performance Management
 Coaching
 Salary and Benefits
 Employee Relations
 Leadership
(E) Activities of Human Resource Department:-

Human Resource activity is the heart of the company, any company cannot
work without HR department because they provide the manpower to company and
without them the firm can’t operate.
The activities conducted by HR Department are:-

 They conduct the recruitment and selection process on basis of certain criteria.
 Human Resource Planning is done by them for recruiting candidates for company,
 The also provide training, transfer and employee welfare.

 They also supervise the work done by candidates or workers in the company.

4.2) HUMAN RESOURCE PLANNING
“Human Resource Planning has been defined as the process by which

management determines how an organization should move from current manpower
position to its desired manpower position.”
“HRP includes the estimation of how many qualified people are necessary to
carry out the assigned activities, how many people will be available & what if
anything must be done to ensure that personnel supply equals personnel demand at the
appropriate point in the future.”
“HRP is the system matching supply & demand of manpower.”
Candidates required = Current manpower – Attrition + Shortfall
A) Human Resource Planning Process:-
1. Review of Organization’s Objectives:
The HR manager first studies the objectives of the organization. Then he prepares a list of
all the activities (jobs) that are required to achieve the objectives. He also does Job's
analysis.

2. Estimation of Manpower Requirements (Demand):
The HR manager then estimates the manpower requirement of the organization. That is,
he finds out how many people (managers and employers) will be required to do all the
jobs in the organization. Estimation of manpower requirements must be made in terms of
quantity and quality.
3. Estimation of Manpower Supply:
The HR manager then estimates the manpower supply. That is, he finds out how many
managers, and employers are already available in the organization.
4. Comparison of Manpower:
The HR manager then compares the manpower requirements and manpower supply.
5. In case of no difference:
If there is no difference between the manpower requirements and the manpower supply,
then the HR manager does not take any action. This is because manpower requirements
are equal to the manpower supply.
6. In case of difference:
If there is a difference between the manpower requirements and the manpower supply the
HR manager takes the following actions:-
(A) Manpower Surplus: - If the manpower requirements are less then the
manpower supply, then there is a surplus.
During manpower surplus, the HR manager takes the following actions:-
1. Termination i.e. removal of staff.
2. Lay-off.
3. Voluntary retirement.
(B) Manpower Shortage: - If the manpower requirements are greater than the
manpower supply, then there is manpower shortage.
During manpower shortage, the HRD manager takes the following actions:-
1. Promotions

2. Overtime
3. Training to improve quality.
4. Hire staff from outside, etc.
7. Motivation of Manpower:
HR also motivates the employers and managers by providing financial and non-financial
incentives.
8. Monitoring Manpower Requirements:
The HR manager must continuously monitor the manpower requirements. This is because
many employees and managers leave the organization by resignation, retirement, etc. and
new work force must take their place fill the manpower gap. This helps in uninterruptible
functioning of the organization.
The above same procedure is followed at NJ INDIA INVEST for Human Resource
Planning.
B) Job Descriptions and Job Specifications:-
Job Description:
A job description is a list that a person might use for general tasks, or
functions, and responsibilities of a position. It may often include to whom the position
reports, specifications such as the qualifications or skills needed by the person in the job,
or a salary range.
Why is a job description important?

A job description has four main uses:
Organization - It defines where the job is positioned in the organization structure. Who
reports to whom?
Recruitment - It provides essential information to potential recruits (and the recruiting

team) so that they can determine the right kind of person to do the job.
Legal - The job description forms an important part of the legally-binding contract of
employment.
Appraisal of performance - Individual objectives can be set based on the job

description.
Contents of a Job Description:-
The main contents of a job description are:
Job Title: This indicates the role/function that the job plays within an organization, and
the level of job within that function (e.g. Finance Director would be a more senior
position than Financial Accountant - although both jobs are in the "finance department")
Reporting responsibilities: Who is the immediate boss of the job holder?
Subordinates: Who reports directly to the job holder?
Main purpose - Who is involved in the job overall?

Main tasks and accountabilities: Description of the main activities to be undertaken and
what the job holder is expected to achieve (e.g. in the case of the Management
Accountant, this might include "Complete monthly management accounts by 10th
working day of each month and prepare report on all key performance variances").
Job Specification:
A job specification describes the knowledge, skills, education,

experience, and abilities you believe are essential to performing a particular job. The job
specification is developed from the job analysis. Ideally, also developed from a detailed
job description, the job specification describes the person you want to hire for a particular
job.
The job specification provides detailed characteristics, knowledge, education, skills, and
experience needed to perform the job, with an overview of the specific job requirements.
Components of a Job Specification:-
Experience: Number of years of experience in the job you are seeking to fill. Number of
years of work experience required for the selected candidate. Note whether the position
requires progressively more complex and responsible experience, and supervisory or
managerial experience.
Education: State what degrees, training, or certifications are required for the position.
Required Skills, Knowledge and Characteristics: State the skills, knowledge, and
personal characteristics of individuals who have successfully performed this job. Or, use
the job analysis data to determine the attributes you need from your “ideal” candidate.

4.3) RECRUITMENT AND SELECTION
RECRUITMENT:
“Recruitment is the process of searching for prospective employees and

stimulating and encouraging them to apply for jobs in an organization.”
SELECTION:
“Selection is the process of choosing the most suitable persons out of all
the applicants.”
“Selection is the process of matching the qualifications of applicants with

the job requirements.”
A) Sources of Recruitment:-
The different sources of recruitment are classified into two categories, viz.
1. Internal: Sources of recruitment from within the organization.

2. External: Sources of recruitment from outside the organization.

Internal Sources of Recruitment:-
The internal sources of recruitment are:-
Promotions: Promotion means to give a higher position, status, salary and responsibility
to the employee. So, the vacancy can be filled by promoting a suitable candidate from the
same organization.
Transfers: Transfer means a change in the place of employment without any change in
the position, status, salary and responsibility of the employee. So, the vacancy can be
filled by transferring a suitable candidate from the same organization.
Internal Advertisements: Here, the vacancy is advertised within the organization. The
existing employees are asked to apply for the vacancy. So, recruitment is done from
within the organization.
Retired Managers: Sometimes, retired managers may be recalled for a short period. This
is done when the organization cannot find a suitable candidate.
Recall from Long Leave: The organization may recall a manager who has gone on a
long leave. This is done when the organization faces a problem which can only be solved
by that particular manager. After he solves the problem, his leave is extended.
External Sources of Recruitment:-

The external sources of recruitment are:-
Management Consultants: Management consultants are used for selecting higher-level

staff. They act as a representative of the employer. They make all the necessary
arrangements for recruitment and selection. In return for their services, they take a service
charge or commission.
Public Advertisements: The Personnel department of a company advertises the vacancy

in newspapers, the internet, etc. This advertisement gives information about the company,
the job and the required qualities of the candidate. It invites applications from suitable
candidates. This source is the most popular source of recruitment. This is because it gives
a very wide choice. However, it is very costly and time consuming.
Campus Recruitment: The organization conducts interviews in the campuses of

Management institutes and Engineering Colleges. Final year students, who're soon to get
graduate, are interviewed. Suitable candidates are selected by the organization based on
their academic record, communication skills, intelligence, etc. This source is used for
recruiting qualified, trained but inexperienced candidates.
Recommendations: The organization may also recruit candidates based on the

recommendations received from existing managers or from sister companies.
B) Recruitment and Selection process:-
RECRUITMENT PROCESS:
The process which NJ’s follows for its recruitment and selection is as follows:

Human Resource Department of NJ INDIA clearly defines the job profile (job
description, responsibilities, designation ,proposed grade ,reporting level, location of
posting)and personal profile (age, qualification, experience, etc.). NJ INDIA INVEST
carries three types of process:-
1) General Recruitment:
The process to be followed in the case of general recruitment is systematically

represented below.
 Based on the information available in recruitment form and after discussions with
department/division head of MARKETING, FINANCE, IT, etc., the HR manger will
create a notice for company’s notice board, bulletin board and recruitment portals
and will be handed over to selected placement agencies.
 After the display of recruitment profile by the different sources, many application
received from different sources would be screened by the HR Manger’s assistance
that will select and short list candidates whose profile matches with the desired

profile. A preliminary interview of the short listed candidates will be carried out by
the Manger to ensure the validity of the details given in the CV. Apart from the
necessary qualification and experience, the HR Manager shall look for stability of
candidate in previous job, involvement in industry forum-curricular activities, etc.
 The CVs of the candidates short-listed by the HR Manager’s team shall be sent to
the department/divisional head for vetting. The final list of candidates who are to be
called for the interview shall be decided after the department manager has vetted the
applications. HR Manager shall call the short listed candidates for the interview on a
convenient date.
2) Internal Application:
Depending upon the grade, the internal applications will have to be sent to the
regional HR dept or The Corporate HR dept. The internal candidates shall go through
the same interview process as given above. Applicants of the employees of NJ
FUNDZ whose past professional record was good in company can be selected. Those
employees’ CV can be taken for the internal application process of HR department.
3) Campus Recruitment:
NJ FUNDZ follows the campus recruitment for completion of vacancies. The

process to follow in these cases of campus recruitment is systematically represented
below. Fresh graduates will be recruited from Campus as Manager Trainees (MT),
Graduate Engineer Trainees (GET) or Diploma Engineer Trainees (DET).
 For the campus recruitment, HR manager will attend some colleges in the city.
After completion of criteria, the colleges which are to be selected for the campus
recruitment are decided by a team consisting of 3 or 4 members. Team members may
be departmental head, Assistance of HR manager, etc.
 The Campus Recruitment season begins in the month of October for Management
Schools and polytechnic institutes. Recruitment of Graduate engineer trainees from
engineering colleges normally continues throughout the academic year. The campus
recruitment shall be coordinated by the corporate HR.
 Based on the recruitment specified by the Corporate HR ,some selected
Management schools, Engineering colleges, Polytechnic institutes, ICAI(from the
attached list) for pre-placement talks(PPT) are to be contacted. A Standard Corporate
Presentation has been designed which should be used for the pre-placement talks to
be held at the campus.
 During the PPT, the Corporate HR Manager will indicate the details of the
vacancies available, responsibilities associated with it, remuneration, career path of
the candidate, etc. Corporate HR shall co-ordinate with the placement section of the
Management Schools for CVs of the interested students.
 Corporate HR shall also contact the Placement section of the EngineeringCollege
and Polytechnics requesting for profile of interested students.
SELECTION PROCESS:
NJ FUNDZ follows some specific steps for the final selection process as
follows:-
 The HR manager of branch will communicate the name of the short listed
candidates to the college authorities so that they can call for the final selection
process.
 The applicants will firstly be put through the group discussion. The idea of the
group discussion is to ascertain the general knowledge, oral communication skills,

thinking ability, assertiveness, etc of the candidate. Each member of the interview
panel shall independently rate the candidates during the Group Discussion.
 For MBA, MCA, CA, Engineering, etc. short listed candidates will be put through
an interview and a professional test. All candidates also have to give a general
aptitude test and a written communication test. They’ll also have to undergo a
psychometric test for understanding the personality profile of the candidates.
Now, further a list of short listed candidates shall be prepared based on the results
of the professional test, aptitude test and psychometric test.
 The interview panel will also check the background of the candidates who are
selected for the final interview. If the students are selected for the final interview,
interview panel will contact the college for the students background checking. If
there are candidates who have already done a job in some other company, then the
interview panel will check his or her background through the reference mentioned
by the candidate in his/her profile.
 After completion of interview process, interview panel will provide that data of
the candidates to the HR manger. Evaluating all the candidates on the basis of
their qualifications and performance in interview and work experience, HR
manger will take the decision to hire the candidates. He will send an appointment
letter to candidate who many accept all the terms and conditions of company and
also the salary packages.
 The candidate has to join the company on the date specified in the appointment
letter. Company will issue confirmation letter to the new employee after 6 months
of the joining date on the basis of his/her performance on job, behavior in
organization and their criteria’s.
4.4) TRAINING AND DEVELOPMENT
Every individual who is selected for the job needs the training. Without training,
it is not easy for the individual to perform the job accurately and precisely. He should be
given at least the basic knowledge with the help of which he can carry out his work.

Therefore, training is must for each and every employee working in the organization. It
helps the employees to get the basic facts of their jobs and the working environment
under which they are supposed to perform their duties.
TRAINING:
________________________________________________________________________
“Training is the process of increasing knowledge and skills for doing a particular job.”
“Training is the process by which the aptitudes, skills and abilities of employees to
perform specific jobs are increased.”
________________________________________________________________________
DEVELOPMENT:
________________________________________________________________________
“Development is a long term process utilizing a systematic and organized
procedure by which managerial personnel learn conceptual and theoretical knowledge for
general purpose.”
(A) TYPES OF TRAINING:-
There are basically TWO types of Training:-
On-the-job training:
With on the job training, employees receive training whilst remaining in the
workplace.
The main methods of one-the-job training include:
 Demonstration / instruction - Showing the trainee how to do the job.

 Coaching – A more intensive method of training that involves a close working
relationship between an experienced employee and the trainee.

 Job rotation - Where the trainee is given several jobs in succession, to gain
experience of a wide range of activities (e.g. a graduate management trainee might
spend periods in several different departments).
 Projects - Employees join a project team - which gives them exposure to other
parts of the business and allow them to take part in new activities.
The advantages and disadvantages of this form of training can be summarized as follows:
Advantages Disadvantages
Generally most cost-effective Quality depends on ability of trainer and time

Employees are actually productive available
Opportunity to learn whilst doing Bad habits might be passed on
Training alongside real colleagues Learning environment may not be conducive
Potential disruption to production
Off-the-job training:
This occurs when employees are taken away from their place of work to be
trained. Common methods of off-the-job training include:
 Day release (employee takes time off work to attend a local college or training
centre).
 Distance learning / evening classes.
 Block release courses - This may involve several weeks at a local college.
 Sandwich courses - Where the employee spends a longer period of time at
college (e.g. six months) before returning to work.
 Sponsored courses in higher education.
 Self-study, computer-based training.
The advantages and disadvantages of this form of training can be summarized as follows:
Advantages
Disadvantages
A wider range of skills or qualifications can More expensive – e.g. transport and
be obtained accommodation
Can learn from outside specialists or experts Lost working time and potential output from
Employees can be more confident when employee
starting job New employees may still need some
induction training
Employees now have new skills/qualifications
and may leave for better jobs

Training and Development in NJ INDIA INVEST:-

 NJ analyze employees requirement for training time to time.
 They also share views of employees, takes feedback from them.
 They take actions against weakness, limitations and shortcoming of the

employees.
 NJ FUNDZ Is different because it has its own training and development institute.
The name of that institute is “NJ FUNDZ GURUKUL.” Education is a source of
knowledge and knowledge is the source of power and success in today’s world.
Indeed, the right education and training is critical for success in every one's life.
 So NJ FUNDZ Gurukul emerged as an idea to bridge the gap that existed in

meeting the needs of financial advisors for continued training and education. The
objective of NJ FUNDZ Gurukul was to create a huge force of quality financial
advisors who have the right training and education needed for providing the right
advisory services to clients and thus help them. NJ FUNDZ Gurukul train the
employees and financial advisors of NJ FUNDZ.
Training and development of NJ depends upon following factors:-

4.5) PERFORMANCE APPRAISAL SYSTEM:

____________________________________________________
“Performance Appraisal is the process of assessing the performance and progress
of an employee or of a group of employees on a given job and his potential for future
development.”
________________________________________________________________________
Performance appraisal is also useful in providing proper guidance to the

employees who are potential of success and require a bit of guidance. Human resource is
the most valuable asset for any organization; every firm does a huge investment in it and
believes that the value, which human asset can increase in them, is much more than any
other asset.
(A) Process of Performance Appraisal
 Job Analysis, Job Description and Job Specification
 Establishing Standards of Performance
 Communicating Performance Standards to Employees
 Measuring Actual Performance
 Comparing Actual Performance with Standards and Discussing the Appraisal with
Employees
 Initiating Corrective Action, if any.

Performance appraisal is carried on in the following ways for different

levels of employees:-
 In NJ, performance appraisal grades are given to workers according to the

work done by them. This process is done at the end of financial year.
 Online appraisal is also done in NJ.
 According to the performance appraisal of employees department wise, NJ

FUNDZ follows a very simple method for it. In every department, the
departmental head will record the data of employee’s performance of 1 to 2
years of time of employee in company. Performance appraisal will by
conducted by every department.
 Departmental head will discuss with the HR manger of Branch/ regional/zonal

about the performance of the employee. They will compare the past
performance of employees on the criteria of his/her improvement in working
skills, behavior, qualifications and other things, etc.
 After completion of evolution of the employee’s performance, departmental

head will provide this information to the HR manger. Departmental head will
also discuss with the employee about their strengths and weaknesses in his/her
field performance and try to find out the reasons for poor performance of the
employees.
 Performance appraisal process at NJ FUNDZ is always showing positive

results in terms of employees working skills, qualities, behavior, etc..
Performance appraisal process also helps HR department in the promotion
work. Data which is available after the performance appraisal process helps in
evaluating the efficiency of the employees for promotion.

There are 4 kinds of appraisal done in N.J.India invest:
 Self appraisal
 Immediate/Review officer
 Superior
 Management
 This means that 1st employee has to rate himself.
 Secondly, a review officer approves or disapproves it within 3 days.
 Thirdly, decision is carried on to the superiors and they also take decision
within 3 days whether to approve or disapprove his appraisal within 3 days
and
 Finally the decision of appraisal is taken by the management in 3 days.
Totally approximately 9 to 10 days are undertaken for this process.
The employee’s appraisal is finally done in the following grades:-
A---Excellent
B---Very Good
C---Good
D---Poor

4.6) PROMOTION AND TRANSFER POLICIES:
(A) Promotion:-
_________________________________________________________
“Promotion refers to advancement of an employee to a higher post carrying
greater responsibilities, higher stats and better salary. It is the upward movement of an
employee in the organization’s hierarchy, to another job commanding greater authority,
higher status and better working conditions.”
________________________________________________________________________
Promotion means an improvement in pay, prestige, position and responsibility of

an employee within his or her organization.
In promotion the salary of the workers is raised according to his efficiency.
Promotion in NJ INDIA INVESTS:-

In NJ, the promotion is given on the basis of performance as well as
experience criteria. Some of the factors which influence the promotion are his past
records, person’s behavior, his interview report, job knowledge etc.
The company follows the seniority basis for promotion because the seniors are
usually more experienced and the young people may get the chance for gaining more
knowledge, skills etc.
Promotion is also based on the performance of employees.
Performance of employees is divided into grades:-
A, B, C, D.
For example;
A means Employee working for 5 years continuously.
(B) Transfer:-
_________________________________________________________
“A transfer refers to horizontal movement of an employee from one job to another
in the same organization without any significant change in status and pay.”
_______________________________________________________________________
There are very less cases of transfer in the NJ office, it is more at the factory.
CONDITIONS FOR TRANSFER:-

When an employee joins a specific department, during that time there may be no
vacancy in that department. With the passage of time, if it is observed that he works better
than the person currently working in that department, he will be transferred to that
respective department of higher productivity.
Some other reasons include:-

 Transfer is also done after a desired target is achieved by the employee and then
he may be transferred to achieve some other desired targets.
 Sometimes, transfer is done to punish the employees.
 If an employee is not efficient in a particular department, then he is transferred to

the department where he can work efficiently.
 Necessity of manpower at the work place.
 Employee’s personal need, due to some personal problems and preferences.

(C) DEMOTION:-
A demotion is a compulsory reduction in an employee's rank or job title within

the organizational hierarchy of a company, public service department, or other body. A
demotion may also lead to the loss of other privileges associated with a more senior rank
and/or a reduction in salary or benefits. An employee may be demoted for violating the
rules of the organization by a behavior such as excessive lateness, misconduct, or
negligence.
CONDITIONS FOR DEMOTION:
A demotion occurs when a classified employee is reassigned to a position

with a salary range that is lower than the salary range of the former position. A demotion
may occur when:
· The employee is unable to perform satisfactorily in the higher-level position.

· As a result of a reorganization, if the reorganization results in a reduction-in-force.
PROCESS OF DEMOTION:
1. All demotions are discussed with Human Resource Services (HRS) prior to
communicating any information to employees.
2. When considering a demotion, the department ensures that there is a valid budget
line and/or position that the employee will be occupying.
3. All demotions are then approved by respective Director/Vice President and HRS.

4.7) EMPLOYEES TURNOVER:-
_____________________________________________________
“Employee turnover ratio means in the year how many new employees recruited
and how many left the job.”
________________________________________________________________________
Employee turnover is a ratio comparison of the number of employees a company

must replace in a given time period to the average number of total employees. A huge
concern to most companies, employee turnover is a costly expense especially in lower
paying job roles, for which the employee turnover rate is highest. Many factors play a
role in the employee turnover rate of any company, and these can stem from both the
employer and the employees. Wages, company benefits, employee attendance, and job
performance are all factors that play a significant role in employee turnover.
Companies take a deep interest in their employee turnover rate because it is a

costly part of doing business. When a company must replace a worker, the company
incurs direct and indirect expenses. These expenses include the cost of advertising,
headhunting fees, human resource costs, loss of productivity, new hire training, and
customer retention -- all of which can add up to anywhere from 30 to 200 percent of a
single employee's annual wages or salary, depending on the industry and the job role
being filled.
In over all financial industry, employment turnover is 10-15%.
Employees turnover in NJ INDIA INVEST is quite low than any other in this
industry. It’s less than 1%. And total manpower in NJ is around 5000.

4.8) WAGES AND SALARY ADMINISTRATION:-
Wages:-
___________________________________________________
“Wage is derived from words which suggest "making a promise," which is

often used in monetary form. Specifically from the Old French word “wagier” or
“gagier” meaning to pledge or promise, from which the money placed in a bet (wager)
also derives.”
________________________________________________________________________
Salary:-
________________________________________________________________________
“A salary is a form of periodic payment from an employer to an employee, which

may be specified in an employment contract. It is contrasted with piece wages, where
each job, hour or other unit is paid separately, rather than on a periodic basis.”
________________________________________________________________________
From the point of a view of running a business, salary can also be viewed as the
cost of acquiring human resources for running operations, and is then termed personnel
expense or salary expense. In accounting, salaries are recorded in payroll accounts.
WAGES represent the hourly rates of pay and SALARY refers to the monthly rate
of pay, irrespective of the number of hours put in by an employee. Wages and salaries are
subject to annual increment. The wages differ from employee to employee and it also
depends on the nature of the job, seniority and merits. On the other hand, we can define
salary as the amount of money paid to an employee monthly or yearly.
Two copies of the pay slip are maintained. One is given to the employee and the other is
kept by the company for its own records.
NJ has divided cities and has given grades to different cities.
Grades are allotted in this way.
A+ Delhi and Mumbai

A Ahmadabad, Pune, Bangalore and Chennai
B Surat, Valsad and Vapi
C Others
(A) Hierarchy structure of wage and salary of NJ INDIA INVEST is as

follows:-

(B) Incentive plans:-
Piece Rate
Piece rate incentive is given to the employees based on the number of units produced.
This plan is practiced in the sectors dealing with manufacturing of products such as
engineering – automobile, telecommunication, FMCG, etc.
Commissions
Commission is a variable component of compensation package. It is given on the basis of
business generated by the employee. Commission is a pre fixed component say 5% of the
total sales done by the employee. It is practiced in the retail, FMCG and other sectors in
the marketing and sales segment.
Bonuses
Bonuses are given to employees on a pre established goal or criteria. The organizations

set policies regarding the bonuses. Usually bonuses are provided during the festive
season.
Merit Raises
Merit raises are given on the basis of predetermined policies. The employees are given
raise on the basis of their performance. The performance standards are set by the
organizations much in advance.
Standard Hour Pay
Standard hour plan provides incentives to employees based on the time saved by them
during the job course. Employees’ productivity and quality is evaluated with respect to
the set standards.
Maturity Curves
Maturity curve incentive plan considers the experience and performance of an employee
for giving out the incentives. It is practiced in all the industries. Experience is always
given a weight-age as experienced people can produce better quality results.
Gain Sharing
Gain sharing incentive plans undertake those employees who give outstanding
performances and provide for cost saving measures. Organizations believe in sharing the
profits with the employees who are responsible for producing those results.
Profit Sharing
Profit sharing incentive plans are practiced in retail and FMCG sectors. Other sectors too
implement the plan based on organizational policies. It refers to giving out the share of
profits the organization earned to all the employees. Indirectly all the organizations
follow the plan by giving out the dividends.
In NJ INDIA INVEST, many of the above incentive plans are provided to the
employees such as COMMISSIONS, BONUSES, MERIT RAISES, GAIN SHARING,
PROFIT SHARING and MATURITY CURVES.

4.9) EMPLOYEE WELFARE ACTIVITIES:-
____________________________________________________
“The efforts to make life worth living for workmen are known as
employee welfare.”
________________________________________________________________________
“Anything done for the comfort and improvement, intellectual or social, of

the employees over ad above the wages paid which is not a necessity of the
industry.
_________________________________________________________
(A) Types of Employee Welfare Activities:-
Intramural:
These services are provided within the establishment. These include latrine
and urinals, washing and bathing facilities, crèches, rest shelters, canteens,
uniform, medical aid, library, recreation facilities, free or subsidies food, etc.
Extramural:
These services are provided outside the establishment. These consist of

housing accommodation, transport, maternity benefits, children’s education,
sports fields, family planning and welfare, holiday homes, leave travel facility,
workers cooperative stores, fair price shops, credit societies, vocational guidance,
interest free loan, etc.

Nothing can be done without employees. Even though a firm has a lot of
investment ready or full tech new machines they are of no use if the employees
are not well or not willing to work all this technology will be of no use. It is very
necessary to keep your employees happy and motivated in order to get the
maximum skills out of them. So employee welfare is very necessary in any firm.
(B) Some of the employee welfare facilities given by NJ India Invest

are:
 Mediclaim:
Mediclaim policy is a financial agreement wherein the insurer promise to

pay the amount which is spent by the insured for his health purpose during
hospitalization. NJ provides its employees the mediclaim policies.
 Blood Donation Camps:
NJ arranges blood donation camps for its employees.
 Plantation:
NJ Also believes in helping the society and upliftment of it. It brings out
the campaign of tree planting every year. This builds up the moral of the
employees as they have the feeling that NJ is helping of clean up the society.
 Magazine:
A monthly magazine is issued to all the employees of the firm. This

magazine tells about the different market conditions and the things prevailing

in the market. It also tells about the different social work done by the
employees. So this makes the employee feel at home and motivates them to
keep the flag of their firm ever rising.
 NJ Connect Blog:
Blog is a very new and mainly use by the Modern world today. NJ also
provides each employee with an employee user ID and password. Here the
employee gets an opportunity to connect with other employees; this gives them
the feeling of unity. Here the employee with extra ordinary work is also
recognized.
 Gym:
It is very necessary that the employee has to be physically fit in order to

work enthusiastically. For this NJ provides their employees with a Gym in their
office so that an employee can work out while he is having a break.
 Canteen:
For motivation of employees, NJ provides its staff with an excellent and

hygienic canteen. Here the employees can interact with other employees during lunch
breaks and create a friendly atmosphere. Here, employee’s birthday and any special
occasions are also celebrated here.
 Library:
NJ has a library consisting of different range of books which are related to

their work, and other books like novels, encyclopedia etc are available. Its library
also consists of past NJ records, projects from trainees, NJ books available for
marketing, annual reports etc.

 Annual function:
Every year NJ organizes Annual Function for their employees. It is a motivating tool
for the employees. Employees with outstanding performance are given awards and
are recognized.
 Auditorium:
Well integrated auditorium for the meetings to be held and presentations and also
for the variety of functions exist in NJ INDIA INVEST.
NJ FUNDZ is genuinely concerned about the welfare of its employees and partners. NJ
FUNDZ provides the above facilities for the employees. NJ FUNDZ performs its duty for
the welfare of its employees. NJ FUNDZ believes that the Welfare activities done for the
employees of the company will create a very good image of company in the market.

CHAPTER-5
FINANCE DEPARTMENT
5.1 Introduction
5.2 Working Capital Management
5.3 Common Size Statements
5.4 Accounting Ratios

5.1) INTRODUCTION:
_______________________________________________________________________
“Financial Management is the operation activity of a business that is
responsible for obtaining and effectively utilizing the funds necessary for efficient
operations.”
________________________________________________________________________
It deals with the situation that requires selection of specific assets or combination
of specific assets, selection of specific or combinations of liability as well as the problems
of size and growth of an enterprise.
The analysis of these decisions is based on the expected inflows and outflows of
funds and their effects upon managerial objectives.
Financial objectives of NJ INDIA INVEST are to create the wealth of its

investors and partners. Creating the stable position in financial market. Ultimate
objectives are to increase maximum wealth of partners and company.

5.2) WORKING CAPITAL MANAGEMENT:
WORKING CAPITAL:-
The working capital is the minimum amount of resources that a
company requires to effectively cover the usual costs and expenses necessary to operate
the business.
WORKING CAPITAL MANAGEMENT:-

It involves the relationship between a firm's short-term assets
and its short-term liabilities. The goal of working capital management is to ensure that a
firm is able to continue its operations and that it has sufficient ability to satisfy both
maturing short-term debt and upcoming operational expenses. The management of
working capital involves managing inventories, accounts receivable and payable, and
cash.
WORKING CAPITAL CYCLE:-
Cash flows in a cycle into, around and out of a business. It is the

business's life blood and every manager's primary task is to help keep it flowing and to
use the cash flow to generate profits. If a business is operating profitably, then it should,
generate cash surpluses. If it doesn't generate surpluses, the business will eventually run
out of cash and expire.
The faster a business expands the more cash it will need for working capital and
investment. The cheapest and best sources of cash exist as working capital right within
business. Good management of working capital will generate cash and will help improve
profits and reduce risks.
There are two elements in the business cycle that absorb cash - Inventory (stocks and
work-in-progress) and Receivables (debtors owing you money). The main sources of
cash are Payables (your creditors) and Equity and Loans.

Each component of working capital (namely inventory, receivables and payables) has two
dimensions ........TIME ......... and MONEY. When it comes to managing working capital
- TIME IS MONEY. If you can get money to move faster around the cycle (e.g. collect
monies due from debtors more quickly) or reduce the amount of money tied up (e.g.
reduce inventory levels relative to sales), the business will generate more cash or it will
need to borrow less money to fund working capital. As a consequence, you could reduce
the cost of bank interest or you'll have additional free money available to support
additional sales growth or investment. Similarly, if you can negotiate improved terms
with suppliers e.g. get longer credit or an increased credit limit; you effectively create free
finance to help fund future sales.
If you ....... Then ......

 Collect receivables (debtors)
faster You release cash
from the cycle
 Collect receivables (debtors)
slower Your receivables
soak up cash
 Get better credit (in terms of
duration or amount) from You increase your
suppliers cash resources
 Shift inventory (stocks) faster
You free up cash
 Move inventory (stocks) slower
You consume more
cash

Since the capital needs of each company will be a little different, there is no ideal
working capital requirement that is universally applicable to all businesses, or even to
companies engaged in the same industry. However, new companies can develop an idea
of what type of working capital requirement they will need to operate at given levels by
researching the cost and expenses associated with other corporations engaged in similar
operations.
The basic formula for determining working capital involves only two factors: -
First, it is necessary to define the current liquid assets in the possession of the company.
This may be somewhat different from general assets, since the focus is on those resources
that can be converted into cash quickly and easily. Liquid assets may be such resources as
the outstanding current Accounts receivables balance, property that is not directly used in
the operation of the business, and balances in various operating accounts.
Working Capital Requirement = Current Assets –
Current Liability
Along with defining the liquid assets of the company, determining the working
capital requirement will also allow for the current liabilities of the corporation. This will
include both short-term liabilities, such as the usual and general monthly operating
expenses as well as any long term debt. By deducting the liabilities from the liquid assets,
it is possible to determine the current working capital requirement.
The general idea is to ensure there is enough revenue generated to cover the
essential operations of the corporation and allow for additional revenue to be generated in
the future. Companies may currently operate with a negative working capital requirement,
based on some long-term debt, but this is not necessarily a sign that the company is in
financial trouble. However, calculating the current working capital requirement at least
once a quarter will allow the company to spot trends that may indicate problems. For
example, if the working capital requirement reveals a higher negative ratio from previous
periods even though long-term debt was reduced, this may indicate an issue with
decreased sales and earnings or other factors that are causing a lessening of needed
capital.

NJ Fundz finance department use a very simple concept for managing working
capital. Company’s main capital is brokerage. Company receives brokerage through
AMC’s. NJ Fundz work for particular AMC’s. AMCs have decided some margin for the
company. Company earns its brokerage through its transactions of mutual funds.
Distribution of brokerage is done into different phases. Firstly, brokerage is given to
mutual funds advisors (partners). Then, investors of NJ Fundz will get the brokerage.
After distribution of brokerage to all partners and investors, remaining amount will be
considered the real brokerage of the company. All expenses and taxes are paid through
net brokerage. After all these expenses, remaining amount becomes the net brokerage of
NJ Fundz.
Statement of Working Capital Requirement
Particular 2011-12 2010-11 2009-10

Current Assets
Bank 1526629 1,036,462 785,316
CASH ON HAND 511530 412804 398,021
CLOSING STOCK 30636519 53,015,630 61,498,130.80
MUTUAL FUND 6240628 13,559,605 15,407,540

BROKERAGE
RECEIVABLE
FD BROKERAGE 1129614 906176 807,786

RECEIVABLE A/C
P.I.BROKERAGE 25614 20644 18,160

RECEIVABLE
PMS INCOME 112619 90613 82,099

RECEIVABLE
OTHER 30640 27235 23,191

BROKERAGE
RECEIVABLE

SUNDRY 1460609 11175059 1,059,233
DEBTORS
Total Current 41674402 80244228 80079477

Assets
Particular 2011-12 2010-11 2009-10

Less: Current
liability
MUTUAL FUND 4,451,647.77 34,225,864.00 25,727,374.00

PAYABLE
FD 651,410.73 533,961.00 498,459.00

SUBBROKERAGE
PAYABLE A/C.
SUNDRY 889,364.82 666,297.00 58,914,268.00
CREDITORS
SUNDRY 534,508.26 492,135.00 356,487.00

CREDITORS
(ASSETS)
SUNDRY 1,130,504.00 937,866.00 861,670.00

CREDITORS
(REIMBURSEMENT)
SUNDRY 1,260,129.00 1,016,042.00 977,734.00

CREDITORS (RENT)
Total Current
8917564.57 37,872,165.00 87,335,992.00
Liability
Working Capital
32,756,837.43 42,372,063.00 (7,256,515.20)
Requirement

(A) Cash Management:-
Cash is king when it comes to the financial management of a growing

company. The lag between the time you have to pay your suppliers and employees and
the time you collect from your customers is the problem, and the solution is cash flow
management. At its simplest, cash flow management means delaying outlays of cash as
long as possible while encouraging anyone who owes you money to pay it as rapidly as
possible.
Cash management is a broad term that covers a number of functions that

help individuals and businesses process receipts and payments in an organized and
efficient manner. Administering cash assets today often makes use of a number of
automated support services offered by banks and other financial institutions. The range
of cash management services range from simple checkbook balancing to investing cash in
bonds and other types of securities to automated software that allows easy cash collection.
When it comes to cash collections, there are a few popular options today

that can make the process of receiving payments from customers much easier. Automated
clearing houses make it possible to transact a business to business cash transfer that
deducts the payment from the customer account and deposits the funds in the vendor
account. Generally, this service is available for a fee at local banks.
1) Lockbox :-
Lock box services are often used by businesses to speed up the Receivable

process. Cash management by lockbox requires the establishment of a post office box for
the client. The vendor uses this post office address as the remittance address on
all invoices. As payments are received, the financial institution collects the payments,
posts them to the operating account for the customer. The customer can usually access
daily reports that can be downloaded and used for posting payments into the company
Receivables.

2) Account Reconcilement:-
Because of the increased incidence of check fraud, the concept of account reconcilement
services has become a must for many companies. Essentially, an ARC will keep the
checkbook for an operating account balanced at all times. As an additional level of
protection, the ARC allows the client to upload a daily listing of checks that have been
issued on the account. In the event a check is presented that is not included on the
authorized lists, the bank will reject the check.
When it comes to investing cash, many banks offer the ability to transfer a

fixed amount of funds into mutual funds or other investments as part of the
overall cash management strategy. The automated debit allows the client to incrementally
increase the value of the corporate investment portfolio without having to spend a great
deal of time working through complicated investment strategies.
There are a number of cash management options offered by local banks. In

some instances, the cost for the services can be costly. However, many businesses find
that the savings in time coupled with the high degree of accuracy more than make up for
the charges associated with cash management support services.
Improving Receivables:-
If you got paid for sales the instant you made them, you would
never have a cash flow problem. Unfortunately, that doesn't happen, but you can still
improve your cash flow by managing your receivables. The basic idea is to improve the
speed with which you turn materials and supplies into products, inventory into
receivables, and receivables into cash. Here are specific techniques for doing this:
 Offer discounts to customers who pay their bills rapidly.
 Ask customers to make deposit payments at the time orders are taken.
 Require credit checks on all new noncash customers.
 Get rid of old, outdated inventory for whatever you can get.
 Issue invoices promptly and follows up immediately if payments are slow in
coming.
 Track accounts receivable to identify and avoid slow-paying customers. Instituting
a policy of cash on delivery (c.o.d.) is an alternative to refusing to do business
with slow-paying customers.

Managing Payables:-
Top-line sales growth can conceal a lot of problems-sometimes too well. When you are
managing a growing company, you have to watch expenses carefully. Don't be lulled into
complacency by simply expanding sales. Any time and any place you see expenses
growing faster than sales, examine costs carefully to find places to cut or control them.
Here are some more tips for using cash wisely:
 Take full advantage of creditor payment terms. If a payment is due in 30 days,
don't pay it in 15 days.
 Use electronic funds transfer to make payments on the last day they are due. You
will remain current with suppliers while retaining use of your funds as long as
possible.
 Communicate with your suppliers so they know your financial situation. If you
ever need to delay a payment, you'll need their trust and understanding.
 Carefully consider vendors' offers of discounts for earlier payments. These can
amount to expensive loans to your suppliers, or they may provide you with a
change to reduce overall costs. The devil is in the details.
 Don't always focus on the lowest price when choosing suppliers. Sometimes more
flexible payment terms can improve your cash flow more than a bargain-basement
price.
NJ Fundz receives the cash through the margin (brokerage) from

AMC’s transactions and sales of SIP. Every month, company receives a fix amount of
brokerage through AMC’s. This is cash inflow for NJ Fundz. Company distributes cash to
the partners as brokerage. Monthly expenses and brokerage of company is like current
liabilities for the company i.e. payments.

(B) Receivables Management:-

Receivables represent amounts owed to the firm as a result of sale of goods
or services in the ordinary course of business. The purpose of maintaining or investing in
receivables is to meet competition, and to increase the sales and profits.
The purpose of receivables can be understood if we can grasp the basic objective of
Receivables Management. The objective of Receivables Management is to promote sales
and profits until that point is reached where the returns that the company gets from
funding of receivable is less than the cost that the company has to incur in order to fund
these receivables. Hence, the purpose of receivables is less than the cost that the company
has to incur in order to fund these receivables.
Hence, the purpose of receivables is directly connected with the
company’s objectives of making credit sales, which are:
• Increasing total sales as, if a company sells goods on credit, it will be in a position to
sell more goods than if it insists on immediate cash payment.
• Increasing profits as a result of increase in sales not only in volume, but also because
companies charge a higher margin of profit on credit sales as compared to cash sales.
• In order to meet increasing competition, the company may have to grant better credit
facilities than those offered by its competitors.
Accounts receivable represents money owed by entities to the firm on the sale of products
or services on credit. In most business entities, accounts receivable is typically executed
by generating an invoice and either mailing or electronically delivering it to the customer,
who, in turn, must pay it within an established timeframe, called credit terms or payment
terms.
Payment terms
An example of a common payment term is Net 30, which means that payment is due at
the end of 30 days from the date of invoice. The debtor is free to pay before the due date;
businesses can offer a discount for early payment. Other common payment terms
include Net 45, Net 60 and 30 days end of month.
Accounts Receivables Age Analysis:
The Accounts Receivable Age Analysis Printout, also known as the Debtors Book is
divided in categories for current, 30 days, 60 days, 90 days, 120 days, 150 days and 180
days and over due that are produced in Modern Accounting Systems. The printout is done
in the order of the Chart of Accounts for the Accounts Receivable and/or Debtors Book.

(C) Inventory Management:-
Inventory management is primarily about specifying the size and

placement of stocked goods. Inventory management is required at different locations
within a facility or within multiple locations of a supply network to protect the regular
and planned course of production against the random disturbance of running out of
materials or goods. The scope of inventory management also concerns the fine lines
between lead time, carrying costs of inventory, asset management, inventory forecasting,
inventory valuation, inventory visibility, future inventory price forecasting, physical
inventory, available physical space for inventory, quality management, replenishment,
returns and defective goods and demand forecasting.
This would include the monitoring of material moved into and out of
stockroom locations and the reconciling of the inventory balances. It also may include
ABC analysis, lot tracking, cycle counting support, etc. Management of the inventories,
with the primary objective of determining/controlling stock levels within the physical
distribution system, functions to balance the need for product availability against the need
for minimizing stock holding and handling costs.
The reasons for keeping inventory:-

There are three basic reasons for keeping an inventory:
1. Time - The time lag from supplier to user at every stage requires that you maintain
certain amounts of inventory to use in this lead time.
2. Uncertainty - Inventories are maintained as buffers to meet uncertainties in

demand, supply and movements of goods.
3. Economies of scale - Ideal condition of "one unit at a time at a place where a user
needs it, when he needs it" principle tends to incur lots of costs in terms of logistics.
So bulk buying, movement and storing brings in economies of scale, and thus
inventory.

Inventory examples:-
While accountants often discuss inventory in terms of goods for sale, organizations
- manufacturers, service-providers and not-for-profits - also have inventories (fixtures,
furniture, supplies, etc.) that they do not intend to sell. Manufacturers', distributors', and
wholesalers' inventory tends to cluster in warehouses. Retailers' inventory may exist in a
warehouse or in a shop or store accessible to customers. Inventories not intended for sale
to customers or to clients may be held in any premises an organization uses. Stock ties up
cash and, if uncontrolled, it will be impossible to know the actual level of stocks and
therefore impossible to control them.

5.3) COMMON SIZE STATEMENT OF PROFIT AND LOSS

ACCOUNT AND BALANCE SHEET:-
Financial statements when read with absolute figures are not easily
understandable. They are even misleading. Each item of assets is converted into
percentage of total assets and each item of capital and liabilities is expressed to total
liability and capital fund. Thus the whole balance sheet is converted into percentage
form. Such converted balance sheet is known as common size balance sheet. When
balance of same concern for several years or when balance sheet of two or more than
two concerns for the same year is converted into percentage form and presented as
such they are known as comparative common size balance sheets. Again in profit and
loss account sales figure is assumed to be equal to 100 and all other figures are
expressed as a percentage of sales. Similarly in balance sheet the total of assets or
liabilities is taken as 100 and all figures are expressed as percentage of the total.
COMMON SIZE PROFIT AND LOSS STATEMENT
Particular 2011-12 2010-11 2009-10

Sales 100 100 100
Less Cost of goods 87.26 85.38 86.55

sold
Gross profit 12.74 14.62 13.45
Less administrative 2.13 5.36 6.50

expense
Less selling expense - - -
Net operating profit 10.61 9.25 6.95
Add other income 137.37 152.13 180.08
Less other expenses 25.74 64.57 74.82
Net profit 122 96.82 112.21

COMMON SIZE BALANCE SHEET
Particular 2011-12 2010-11 2009-10

Assets
FIXED ASSETS 51.64 39.95 34.89
INVESTMENTS 23.52 18.42 19.26
CURRENT ASSETS 0.00 -
BANK A/C. 0.89 0.53 0.44
CASH ON HAND 0.30 0.21 0.22
CLOSING STOCK 17.96 27.05 34.74
MUTUAL FUND BROKERAGE 3.66 6.92 8.70
RECEIVABLE
FD BROKERAGE RECEIVABLE 0.66 0.46 0.46
A/C.
P.I.BROKERAGE RECEIVABLE 0.02 0.01 0.01
PMS INCOME RECEIVABLE 0.07 0.05 0.05
OTHER BROKERAGE 0.02 0.01 0.01

RECEIVABLE
SUNDRY DEBTORS 0.86 5.70 0.60
ADVANCE FOR BRANCH 0.41 0.69 0.61
EXPENSES
TOTAL ASSET 100 100 100
LIABILITY
SHARE CAPITAL (PAID UP) 0.29 0.26 0.28
NET PROFIT RESERVE 94.48 80.24 50.38
Current liability
MUTUAL FUND PAYABLE 2.61 17.42 14.53
FD SUBBROKERAGE 0.38 0.27 0.28
PAYABLE A/C.
SUNDRY CREDITORS 0.52 0.34 33.28
(ASSETS)
(REIMBURSEMENT)
SUNDRY CREDITORS (RENT) 0.74 0.64 0.55
Total Liability 100 100 100
5.5) ACCOUNTING RATIOS:

Definition of Accounting Ratios:

The term "accounting ratios" is used to describe significant relationship between
figures shown on a balance sheet, in a profit and loss account, in a budgetary control
system or in any other part of accounting organization. Accounting ratios thus shows the
relationship between accounting data.
Ratios can be found out by dividing one number by another number. Ratios show
how one number is related to another. It may be expressed in the form of co-efficient,
percentage, proportion, or rate. For example the current assets and current liabilities of a
business on a particular date are $200,000 and $100,000 respectively. The ratio of current
assets and current liabilities could be expressed as 2 (i.e. 200,000 / 100,000) or 200
percent or it can be expressed as 2:1 i.e., the current assets are two times the current
liabilities. Ratio sometimes is expressed in the form of rate. For instance, the ratio
between two numerical facts, usually over a period of time, e.g. stock turnover is three
times a year.
Advantages of Ratios Analysis:

Following are some of the advantages / Benefits of ratio analysis:
 Simplifies financial statements: Ratios tells the whole story of changes in the
financial condition of the business.
 Facilitates inter-firm comparison: It provides data for inter-firm comparison.

Ratios highlight successful and unsuccessful firm. They also reveal strong firms
and weak firms, overvalued and undervalued firms.
 Helps in planning: It helps in planning and forecasting. Ratios can assist

management, in its basic functions of forecasting, planning, co-ordination, control
and communications.
 Help in investment decisions: It helps in investment decisions in the case of

investors and lending decisions in the case of bankers etc.

Limitations of Ratios Analysis:

Following are some of the disadvantages of ratio analysis:
 Limitations of financial statements: Ratios are based only on the information

which has been recorded in the financial statements. Financial statements
themselves are subject to several limitations. Thus ratios derived, there from, are
also subject to those limitations.
 Comparative study required: Ratios are useful in judging the efficiency of the
business only when they are compared with past results of the business. However,
such a comparison only provide glimpse of the past performance and forecasts for
future may not prove correct since several other factors like market conditions,
management policies, etc. may affect the future operations.
 Ratios alone are not adequate: Ratios are only indicators; they cannot be taken as
final regarding good or bad financial position of the business.
 Problems of price level changes: A change in price level can affect the validity of
ratios calculated for different time periods. In such a case, the ratio analysis may
not clearly indicate the trend in solvency and profitability of the company. The
financial statements, therefore, be adjusted keeping in view the price level
changes if a meaningful comparison is to be made through accounting ratios.
 Lack of adequate standard: No fixed standard or rule of thumb can be laid down
for ideal ratios.
 Limited use of single ratios: A single ratio, usually, does not convey much of a
sense. To make a better interpretation, a number of ratios have to be calculated
which is likely to confuse the analyst than help him in making any good decision.
 Personal bias: Ratios have to interpret and different people may interpret the same
ratio in different way.
 Incomparable: Not only industries differ in their nature, but also the firms of the
similar business widely differ in their size and accounting procedures etc. It makes
comparison of ratios difficult and misleading.

Classification of Accounting Ratios:

Ratios may be classified in a number of ways to suit any particular purpose. Different
kinds of ratios are selected for different types of situations. Mostly, the purpose for which
the ratios are used and the kind of data available determine the nature of analysis. The
various accounting ratios can be classified as follows:

(A) Revenue Statement (B) Balance Sheet Ratios: (C) Composite Ratios:
Ratios:
GP Ratio Current Ratio Return on capital

employed
NP Ratio Liquid Ratio Return on shareholder’s

Funds
Operating Ratio Acid-test Ratio Debtors Ratio and

Debtors Turnover
Expense Ratio Proprietary Ratio Creditors Ratio and

Creditors Turnover
Stock Turnover Debt-Equity Ratio Total Assets Turnover
Capital Gearing Ratio
Long-term funds to Fixed

Assets

(A) REVENUE STATEMENT RATIOS:
1. Gross Profit Ratio:

Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a
percentage. It expresses the relationship between gross profit and sales.
Gross Profit = Gross Profit *100

Sales
2011-12 2010-11 2009-10

PARTICULARS
GROSS 76622394 78060460 49031534
PROFIT
NET SALES 601504530 484812651 364511745
GP RATIO 12.74% 14.62% 13.45%
INTERPRETATION:
From the above calculations, we can see that the company’s gross profit was 13.45% in
the year 2009-10 which increased to 14.62% in the year 2010-11. But in the year 2011-12
it decreased to 12.74%. This can be because of the increase in the expense of the
company.

2. NET PROFIT RATIO:

The net profit ratio is net profit expressed as a percentage of total sales. Net profit
is taken before tax and other indirect costs.
Essentially the net profit ratio tells us about how the company's profits relate to
their sales. Different industries have fundamentally different net profit ratios. The net
profit ratio can tell us about the nature of the industry the company is operating in as well
as serving to compare past performances of a company.
Net Profit Ratio = Net Profit *100

Net Sales
PARTICULARS 2011-12 2010-11 2009-10
NET PROFIT 509704771 601504530 409000444
NET SALES 601504530 484812651 364511745
N.P. RATIO 80.60% 96.82% 112.21%
INTERPRETATION:-
From the above calculation we can conclude that the net profit ratio of the firm is
good. The profit ratio of the firm is consistently increasing. It increased upto 32% in 2
years. Therefore the firm is running on the good scale and is making good profits.

3. OPERATING RATIO:
A ratio that shows the efficiency of a company's management by comparing operating

expense to net sales is known as operating ratio.
Cost of Good Sold + Operating Expense

Operating Ratio = * 100
Net Sales
PARTICULARS 2011-12 2010-11 2009-10

OPERATING 3278166 25995212 23684835
EXPENSE
(administration
expense)
COGS 524882136 413952192 315480211
SALES 601504530 484812651 364511745
OPERATING 88% 91% 93%
RATIO
(O.R.)
INTERPRETATION:
This ratio shows the operational efficiency of the firm. For a manufacturing and service
concern an operating ratio between 75% and 80% is expected. In past three years
operating ratio of NJ is above 85% so we can say that the firm’s profitability is nice and it
is an efficient firm.

Calculation of cost of goods sold (COGS):
PARTICULARS 2011-12 2010-11 2009-10

COGS =53015630 + = 61498131 + = 23015211 +
(Opening stock 502503025 – 53015630 - 61498131 –
+ purchase – 30636519 405469691 353963131
closing stock)
COGS = 524882136 =413952192 = 315480211
4. Expense Ratio:
(a) Administrative Expense Ratio:

This is the ratio of administrative expenses to net sales expressed as a
percentage. It expresses the relationship between administrative expenses and sales.
ADMINISTRATIVE EXPENSE RATIO = Administrative Expense *100 /

Sales
PARTICULARS 2009-10 2008-09 2007-08
ADMINISTRATIVE 23684835 25995212 32781866

EXPENSES
NET SALES 601504530 484812651 364511745
ADMINISTRATIVE 3.9% 5.36% 8.99%

EXPENSE RATIO

5. STOCK TURNOVER:
Stock turn over ratio and inventory turn over ratio are the same. This ratio is a
relationship between the cost of goods sold during a particular period of time and the cost
of average inventory during a particular period. It is expressed in number of times. Stock
turn over ratio / Inventory turn over ratio indicates the number of time the stock has been
turned over during the period and evaluates the efficiency with which a firm is able to
manage its inventory.
Stock Turnover Ratio = COGS
Average Inventory
Cost OF Goods Sold = Sales-Gross Profit
(COGS)
Average Inventory = Opening stock + Closing stock

PARTICULAR 2011-12 2010-11 2009-10

S
COGS 524882136 413,952,19 315,480,211
2
AVERAGE 41826074. 57256880.4 84,513,341.8

INVENTORY 5 0
STOCK 12.55 7.23TIME 3.73 TIMES

TURNOVER TIMES S
RATIO
2011-12
AVERAGE INVENTORY: = 53015630+30636519
2
=41826074.5
2010-11
AVERAGE INVENTORY: = 61,498,131 + 53,015,630
2
=57256880.4

2009-10
AVERAGE INVENTORY: = 23,015,211 + 61,498,130.80

2
= 84,513,341.80
INTERPRETATION:-
Stock turnover ratio reveals the number of times the company’s stock gets used of. It
has increased from 3.73 times to 12.55 times in the year 2011. Therefore, it increased up
to 4 times in just 2 years. This reveals the smooth functioning of the firm and also reveals
that the business in expanding.

(B) BALANCE SHEET RATIOS:

1. CURRENT RATIO:
It measures the solvency of the company in the short term. It also indicates the
firm’s ability to pay its current liabilities .It shows the strength of credit, working capital
and capacity to carry on effective operation.
Current Ratio = Current Assets

Current Liabilities
PARTICULARS 2011-12 2010-11 2009-10

CURRENT 41674402 80244228 80079477
ASSETS
CURRENT 8917564.57 37872165 87335992
LIABILITIES
CURRENT 4.67 : 1 2.12 : 1 0.91 : 1
RATIO
INTERPRETATION:-
In the above calculation we can see that the current asset ratio has been
considerably increasing. It increased from 0.91 to 4.67 in just 2 years. This is because, of
the considerable increase in the current assets and current liabilities of the company.

2. LIQUID RATIO:
A class of financial metrics that is used to determine a company's ability to pay off

its short-terms debts obligations is known as liquid ratio. Generally, the higher the value
of the ratio, the larger is the margin of safety that the company possesses to cover short-
term debts.
Liquid Ratio = Liquid Assets

Liquid Liability
Liquid Assets = Current Assets-(Stocks and Prepaid Expenses)
Liquid Liabilities = Current Liability- Bank Overdraft
PARTICULARS 2011-12 2010-11 2009-10
LIQUID ASSETS 11,037,883 27,228,598 1 61,498,130.80
LIQUID 8,917,564.57 37,872,165 87,335,992

LIABILILTY
LIQUID RATIO 1.23:1 0.71 : 1 0.21:1
INTERPRETATION:-
Liquid ratio suggests the liquidity in the firm. The calculation reveals that the liquid
ratio has also been constantly increasing only. Therefore, the company is safe enough to

invest the funds. It has increased from 0.71% to 1.23%, which means it increased upto
0.50% in just the period of 1 month.
CALCULATION FOR LIQUID ASSETS:
PARTICULARS CURRENT PREPAID LIQUID

ASSETS EXPENSES ASSETS
(A) (B) (A-B)
2011-12 41,674,402 30,636,519 11,037,883
2010-11 80,244,228 53,015,630 27,228,598
2009-10 80,079,476.80 18,581,346 61,498,130.80

3. PROPRIETARY RATIO:-
This ratio shows the proportion of proprietors fund to the total assets
employed in the business. The higher the ratio the stronger the financial position of
the enterprise as it signifies that the proprietors have provided the larger fund to
purchase the assets. Proprietor’s funds include share capital, reserves and surplus.
Total Assets include the total of the asset side of the balance sheet.
Proprietary ratio = Proprietor’s Funds * 100

Total Assets
PARTICULARS 2011-12 2010-11 2009-10
PROPRIETOR’S 161665918 158,127,311 89,674,769

FUND
TOTAL ASSETS 170,583,483 195,999,476 177,010,760.80
PROPRIETARY 94.77% 80.68% 50.66%

RATIO
INTERPRETATION:-
This ratio suggests that the investment of the owners is the maximum in the firm.
The debt level of the firm is quite less or next to negligible. The proprietor’s ratio in the
year 2011 is 94.77%. This means that only 3% debt is there in the company.

PARTICULARS SHARE RESERVES PROPRIETOR’S

CAPITAL AND FUND
(A) SURPLUS (A+B)
(B)
2011-12 502000 161163918 161665918
2010-11 502000 157,625,311 158,127,311
2009-10 502000 89,172,769 89,674,769

(C) COMPOSITE RATIOS:
1. Return on Capital Employed:
The prime objective of making investments in any business is to obtain

satisfactory return on capital invested. Hence, the return on capital employed is used
as a measure of success of a business in realizing this objective.
RETURN ON CAPITAL EMPLOYED = Operating Profit * 100

Capital employed
PARTICULARS 2011-12 2010-11 2009-10

OPERATING 43840528 44865248 25346699
PROFIT
CAPITAL 502000 502000 502000

EMPLOYED
RETURN ON 8733.17% 8937.30% 5,049.14%

CAPITAL
EMPLOYED

INTERPRETATION:-
From the calculation we can see that the return on capital employed is
quite high, which reveals that the company is running in a good position and its
resources are utilized effectively.
PARTICULARS GROSS ADMINISTRATIO OPERATIN

PROFIT N EXPENSES G PROFIT
(A) (B) (A-B)
2011-12 76622394 32781866 43840528
2010-11 70,860,460 25,995,212 44865248
2009-10 49,031,534 23,684,835 25346699

2 . T O T A L AS S E T S T U R N O V E R R A T I O : -
It shows the relationship between total assets to sales. The sales are affected
through investment in fixed assets to earn profits. The higher the ratio shows that with
less amount of investment in total assets the business has a capacity to sell more as its
profitability is also more.
Total Asset Turnover = Net Sales

Total Assets
PARTICULARS 2011-12 2010-11 2009-10
NET SALES 601,504,530 484,812,651 364511745
TOTAL SALES 170,583,483 195,999,476 177,010,760.80
TOTAL ASSET 3.52 Times 2.47 Times 2.06 Times

TURNOVER
INTERPRETATION:-
This ratio shows that the ability of the firm to sell more without much more
investing in the fixed assets. The higher the ratio, higher the ability of the firm. In the
above calculation we can clearly see that the ratio is increasing. Therefore it shows that
the ability of the firm to sell more is also increasing.

CHAPTER-6
Recommendations and Suggestions
Recommendations:
1. The AMC (Asset Management Company) should create awareness among the
individuals about the benefits of Mutual Funds & the returns from the Mutual Fund
market.
2. This can be done by arranging at the household level or by conducing external program
at a public place to educate people about the nature, benefits & importance of Mutual
Funds.
3. As on many people are not aware about mutual fund & other financial products,
industry should conduct surveys to gauge the preferences of the investors as many people
do not invest there savings due to lack of knowledge & because of high risk.
4. They should have customer care department.
5. Make your future secure by investing in Mutual Funds, as investments in mutual funds
may assure based on various available schemes and funds, higher rate of return that
conventional investments like Banks and Post Office may not provide.
6. The prospective investors should diversify their monthly income by preparing the
Monthly Budget and they cab generate savings out of their regular income to invest in the
monthly plan of Mutual Funds.
7. It is found that minimum investment in case of HSBC Equity Fund is Rs. 10,000 which
is double than HDFC‟s, hence it is suggested to reduce it so that more number of
invertors can invest.
8. Investors who want to gain consistent profit but in a long time duration can invest in
these companies. The net asset value of the funds under consideration had proved to be
bullish and bearish in a very short period. But if we see the trend these schemes shows
bullish nature on an average.
9. Dividend acts as a good promotion tool to investors. In all AMC taken above only UTI
equity fund has given dividend, so other AMC can go for dividend.

10. In case of LIC Equity Fund, since the AMC has made short term borrowings from
money market and hence it might have affect its performance. Hence it is recommended
that AMC should attract more investors rather than borrowings from market.
Suggestion:
Most leads complain about its fees that are around Rs.6500 they said it is too much
amount to complete AMFI exam and become NJ partner.I know it is nothing in spite of
our company gives them.Consideration can be made to reduce the fee to stop
demotivating from taking our services

Bibliography
Refrence Books:
1) advertising communications and promotion management , McGraw-Hill international
editions), by Jone R. Rossiter
2) Marketing management, 12th ed.. pearson prentice hall, Philip kotler and Kevin lane
Keller (2006)
3) Financial management-Khan and Jain
4) Production Management-Ashwathappa
5) Human Resource Management-C.B. Gupta
6) AMFI Course Book
7) NJ INDIA INVEST Monthly facts from NJ INDIA’S library-Udhna Udyog Nagar
Website:
www.njindiainvest.com
www.moneycontrol.com
www.amfiindia.com
www.indianinfoline.com
www.equityresearch.com

Annexure
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Creating wealth, Transforming life…..

“Nishita Dalal” (40)

Under the Guidance of

In the Partial Fulfillment of the Requirement

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 1

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 2

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 4

SR.NO. CONTENTS PAGE NO.

Chapter-2 Marketing and Sales Department

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 5

Chapter-3 Production Department

Chapter-4 Human Resource Department

Chapter-5 Finance Department

Chapter-6 Recommendations and Suggestions

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 6

OVERVIEW OF THE INDUSTRY

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 7

OVERVIEW OF THE COMPANY: NJ INDIA

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 8

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 9

The key members of the management are

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 10

Wealth Advisors Network

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 11

Asset Management (NJ PMS)

NJ has ventured in asset management business with NJ Advisory Services Pvt.

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 12

Key customer services:

Real Estate (NJ Realty)

The NJ Realty venture offers an integrated service model offering end-to-end

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 13

to associate with stakeholders and engage actively in various stages of program

NJ Insurance Brokers Pvt. Ltd., a licensed insurance broker by IRDA, seeks to

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 14

 General insurance products, especially Health, Motor & Personal Accident,

Global Wealth Advisory

Information Technology (Fin logic Technologies)

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 15

NJ Technologies is a latest venture by NJ wherein we aim to provide quality

Training & Development (NJ Gurukul)

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 16

The NJ Gurukul is a venture aimed at providing valuable training & education

 AMFI MF (Advisors) Certification for prospective NJ Wealth Advisors

“NAVNIRMAN INSTITUTE OF MANAGEMENT” Page 17

First phase – 1964-87

Mutual Funds in India is gaining ground and getting popular as an investment

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Structure of Mutual Funds:

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Advantages and Disadvantages of Mutual Fund:

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Choice of Schemes (Variety):

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Entry and Exit load:

No control over costs:

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Major competitors of NJ India Invest are:

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2.2 Structure of Marketing Department

2.3 Functions of Marketing Department

2.4 Marketing Strategies of the Co.

2.5 Activities of Marketing Department