REPORT

of the

ORGANISATION STUDY

conducted at

(CRESCENT TANNERS PVT. LTD)

Submitted in partial fulfillment of the requirement of the

Masters in Business Administration Programme
Offered by Jain University during the year 2017-19

Submitted by
SHRUTI PADHI

(CMS Annex, 319, 17th Cross, 25th Main. JP Nagar 6th Phase Bangalore, Karnataka, India – 560078)
Contact - +91 80 43430400 Website - bschool.cms.ac.in

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 DECLARATION

I do hereby declare that this report is a bona-fide record of the organization study
done by me under the supervision of Professor…………. at CRESCENT
TANNERS PVT LTD, during the academic year 2017-18, in partial fulfillment of
the requirements for the award of the Degree of Masters Programme in Business
Administration of School of Management Studies offered by Jain University,
Bangalore.

This work is original and has not been under taken or submitted elsewhere in
connection with any other academic course.

Place:

Date: Signature:

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 Acknowledgement

I wish to take this opportunity to express my sincere expression of gratitude to

each and everyone who helped me in the completion of this work

I am extremely thankful to the management of Jain University, Bangalore for

providing me with the opportunity to undergo the M.B.A course during the
academic year 2017-2019.

I would also like to express my sincere thanks and gratitude to our chancellor Dr.
Ishari k. Ganesh, M.com., Ph.D., for his kind words.

I would also like to express my sense of gratitude to our Dean Dr. P. Govindarajan
,M.A., Ph.D., for pr valuable guidance and encouragement.

I would also like to express my sincere thanks to our head of the department Mrs.
S.Preetha, M.B.A. , M.Phil., for giving us good guidance and suggestion.

I would like to express my deep sense of gratitude and sincere thanks to my guide
Mr S Siva Kumar M.B.A. M.Phil,. for giving me valuable suggestion, guidance
and encouragement.

I also wish to express my sincere gratitude to MR. Md, Ahsan, MANAGING

DIRECTOR at CRESCENT TANNERS PVT LTD, the individual who has taken
great pleasure to help complete my project successfully and others who have
helped me by providing sufficient information with regard to this organization
study.

I also extend my sincere and heartfelt thanks to my family members and my

friends, who provided me with their utmost co-operation and valuable help
throughout my project.

SHRUTI PADHI

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 TABLE OF CONTENTS

S.L.NO. PARTICULARS PAGE NO.

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1. Introduction

Chronologically the birth of Leather in India dates back to 3,000 years B.C. The innate
strengths, innovative technology and marketing strategies have converted the comparative
advantage of India into a commercial success making the country a cynosure of Leather and
Tanning in the Global Leather Map.

1.1 The Leather Industry Profile- Economic Significance

The Euro 5.25 Billon, Indian Leather Industry – 6th largest in the World, is one of the major
established manufacturing industries in the modern as well as traditional sector. It is an
indigenous industry in which the country is well endowed with an affluence of raw materials,
skilled manpower, innovative technology, increasing industry compliance to international
environment standards and the dedicated support of the allied industries.

The industry has undergone a structural change during the last three decades, from merely an
exporter of raw material in the sixties to that of value added products occupying a place of
prominence in the Indian economy in terms of foreign trade, employment generation and growth
and is among the top ten foreign exchange earners for the country, gradually parading towards
the magic figure of Euro 5.27 Billion of exports by 2016-17.

Leather is one of the most widely traded commodities globally. The growth in demand for
leather is driven by the fashion industry, especially footwear. Apart from this, furniture and
interior design industries, as well as the automotive industry also demand leather. The leather
industry has a place of prominence in the Indian economy due to substantial export earnings and
growth.

The Indian leather industry accounts for around 12.93 per cent of the world’s leather production
of hides/skins. The country ranks second in terms of footwear and leather garments production in
the world and accounts for 9.57 per cent of the world’s footwear production

1.2 Industry – Structure

Leather product / leather industry in India is spread over organized as well as unorganized sector
dominated by the presence of family units.

The small scale, cottage and artisan sectors account for over 90% of the total production.

Table 1- Sectoral Classification of the Production Units

Type of Unit Turnover

Small < Euro 2.25 Million
Medium Euro 2.25 -11.25 Million
Large Euro11.25 – 41.25 Million

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 1.3 Major production Centers

The major production centers for leather and leather products are located in Tamil Nadu -
Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dindigal; West Bengal –Kolkata; Uttar
Pradesh - Kanpur, Agra and Noida; Maharashtra – Mumbai; Punjab – Jallandhar;
Karnataka – Bangalore; Andhra Pradesh – Hyderabad; Haryana - Ambala, Gurgaon,
Panchkula and Karnal and Delhi.

Table 2- Top 8 States in Terms of Manufacturing Units

States Footwear Units ( Garments + Units

Leather Total Factories Leather Goods
+ Household)
Tamil Nadu 160 598 758
West Bengal 230 436 666
Uttar Pradesh 268 22 290
Haryana & Punjab 163 8 171
New Delhi 112 43 155
Andhra Pradesh 128 10 138
Karnataka 48 40 88
Maharashtra 20 48 68

Table 3 - Estimated Production Capacities

Item Capacity
Leather Footwear 909 Million Pairs
Leather Shoe Uppers 100 Million Pairs
Non – Leather Footwear 1056 Million Pairs
Leather Garments 16 Million Pieces
Leather Goods 63 Million Pieces
Industrial Gloves 52 Million Pairs
Saddlery & Harness 12.50 Million Pieces
Sources CLRI DATA. Central Leather Research Institute

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 800

700

600

500
Footwear Units ( Leather Total
400 Factories + Household)
Garments + Leather Goods
300
Units
200

100

1.4 Distinguishing Features of the Indian Leather Industry.

1. Own raw material source - 21% of world cattle & buffalo and 11% of world goat & sheep
population are housed in India.
2. Billion sq feet of leather produced annually.
3. 2nd largest producer of Footwear and Leather Garments.
4. 3rd largest producer of saddlery and harness items.
5. Generating employment for 2.5 Million people, mostly from the weaker sections with
30% women predominance.
6. Nearly 60-65% of the production is in the small / micro sector. Promising technology
inflow and Foreign Direct Investment.
7. World-class institutional support for Design and Product Development, Human
Resources Development and R&D activities.
8. Presence of support industries like leather chemicals and finishing auxiliaries.
9. Presence in major markets-Long European experience and strategic location in Asian
landmass.

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1.5 PORTER’S 5 FORCES ANALYSIS OF THE LEATHER INDUSTRY

1. Threat of substitutes:

In this industry the threat of substitute is moderate, due to presence of various leather
substitutes. Leather substitutes like rexine and canvas exist. Leather products cater to
countries like Germany, US, UK, etc., hence the threat of substitute is not very high since
the product is considered as a niche product in these countries. In the footwear sector and
leather goods sector there is a moderate threat from rexine and canvas shoes, handbags,
gloves, valets etc.

2. Bargaining power of buyers:

Indian leather industry basically is an export based industry catering to US and European
countries. The bargaining power of these countries has increased due to stiff competition
from other exporter countries like China and Italy. China is the biggest threat to Indian
leather industry due to its cheap labour.

3. Bargaining power of suppliers:

India is the largest livestock holding country with 21 percent of the large animals and
11percent of small animals in the world. The large population of cattle, buffaloes, goat
and sheep that the country possesses ensures that India has ten percent of the world’s raw
material base. In addition, some of the leather available in India is premium quality and
much sought after. These factors increase bargaining power of suppliers.

4. Competition and Rivalry:

The competition has increased due to entry of multinationals in domestic market.

Multinationals like Gucci, Louis Vuitton, Irving shoes and Liberty have entered in the
domestic market. Fast changing fashion trends are difficult to adapt by the small scale
sector hence the competition has increased in the domestic market as well as international
market.

5. Barriers to entry:

India’s advantage as a source of low cost, skilled labour is quite relevant to industries
such as manufacturing of leather goods and footwear that are manufacturing of leather
goods and footwear which are relatively labour intensive. India has among the lowest
cost of labour among key footwear producing countries.

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2. COMPANY PROFILE of

CRESCENT TANNERS PVT. LTD. has been a part of one of the oldest leather groups in India
and has been in the leather business for the past 70 years when the grandfathers of the current
generation started exporting raw hides & skins to USA and Europe. As time progressed Wet
Blue, EI Tanned and then eventually Finished leather of all types were being exported to Europe,
USA & the Far East. With time the company diversified in to leather goods of all types,
specializing in shoes, bags, belts and gloves. The shoes are manufactured and exported by SHOE
TECNIK INTERNATIONAL CORPORATION and the leather belts are manufactured and
exported by HDM LEATHERS under the name and style of BELLINI LEATHER BELTS both
located in NOIDA near NEW DELHI.

DOSTAM CREATIONS, a unit of CRESCENT TANNERS PVT.LTD. has branches in NEW

DELHI , KOLKATA AND NOIDA is a legacy left behind by the board’s elders and is now
carrying on the baton of producing top-notch quality leather.

The parent company which started with raw hides, moved to semi finished leathers and finally
setting up their own tannery under the name of ZAM ZAM Tanners in the year 1964, which went
on to become a producer and exporter of finest quality finished leather to all parts of the world.

The group started their shoe factory, SHOE TECNIK INTERNATIONAL CORPORATION in
1984, which till today produces finest quality men’s fashion shoes.

In 1998, the group added another tannery, CRESCENT Tanners Pvt Ltd. which produces the
finest quality goat fashion leather amongst other luxury items.

In the year 2013, HDM Leathers started their belt factory with 100% Italian state of the art plant
with a capacity of 2000+ belts per day catering widely to domestic and international market.

The company, CRESCENT TANNERS PVT LTD was established in 1998 and it has built a
reputation for high quality Goat, Sheep, Buff Calf and Cow leathers and is currently expanding it
further with leather goods and shoes.

The company currently has all modern and sophisticated manufacturing facilities for the
production & export of Leather, Shoes, belts, wallets, hand bags, driving gloves, Industrial
gloves and Industrial apparel in leather with production facilities in Kanpur, Noida, New Delhi &
Calcutta.

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2.1 MISSION STATEMENT

(As stated by Md. Ahsan, Managing Director of the Company) –

“At the company’s GROUP, we strive to create modern products that respect the past, our
philosophy continues a design minded approach with a deep commitment to crafting and
finishing item by hand.

We aim to choose carefully from materials we use and suppliers we select to the people we hire
and the partners we join. There is careful consideration for the items intended use and focus on
how that can be achieved in our best possible way.”

2.2 VISION STATEMENT

(As stated by Md. Ahsan, Managing Director of the Company) –

“WE MAKE LEATHER THAT BINDS US TOGETHER”

“The above-mentioned motto was created by us and it actually is the core of our leather
business. We don’t only make leather to sell but want our customers to feel part of the family
(Khawaja Tanneries) and bind our customers with the best quality and on time delivery”.

The honorable CEO Mr. P Mohammed Ahmed has also helped in the fast and steady growth of
the enterprise via his deep and in-depth knowledge. The company is also reckoned as one of the
most pre-eminent Fine Leather Gloves Exporters, Garments and Suppliers in India.

Moreover, they have also gained a specialization in the dealing of Leather Fashion Gloves and
Synthetic Leather Golf Gloves. Presently it’s maintained and managed by Mr. M.MD.Saif,
Mr.Owais Ahmad, and Mr. C.Ahsan who are the directors. In the year 2011, the company had
been awared the ISO 9001 -2000 certified company, The Noida unit is ear marked for processing
leather from raw to a finished stage and further value added goods are manufactured at Noida
and Unnao unit.

The company not only produces leather on the basis of their own resource by procuring raw and
hides and skin, arranging for labour and finally finishing the goods as well as converting leather
into readily usable articles for their own sake but, they also outsource work other concerns of the
industry.

Daily at least 100 labors are employed to carry out the work at the tannery. Apart from that
permanent staff is employed at the administrative department. They export their product to

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foreign countries such as ones that are a part of the “Indian Subcontinent, East Asia, Middle
East and South East Asia”.

 CRESCENT TANNERS PVT LTD is established in two production units.

 The total factory area (in square feet)

 UNIT I - 25,000.

16, Leather Complex, Unnao – 209801 (UP), India

 UNIT II - 20,000.

D-17, Site-2, Industrial Area, Unnao – 209801

(UP), India

 REGISTERED HEAD
OFFICE ADDRESS- Room NO. 201-205 Krishna Towers, Civil Lines,
Kanpur – 208001 (UP), India.

 EMAIL – ID sheikhs@szcindia.com,
dostamcreations@crescenttanners.com

 CONTACT INFO +91-515-2829351, +91-512-2531202

 They are an Indian supplier of, Clothing, Leather or Suede Clothing.

 They are the larger exporter of leather garments.

Other information about the leather group and linked companies and enterprises

 SHOE TECNIK INTL. CORP. LTD.

 ADDRESS - A-11, Sector-8, Noida – 201301 (UP), India

 WEBSITE - www.shoetecnik.com
 EMAIL - info@shoetecnik.com

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  HDM LEATHERS

 ADDRESS - A-4, Sector - 8, Noida - 201301, UP, India

 WEBSITE - http://www.hdmleathers.in
 PHONE - +91 - 120 4332851, 4575380

2.3 COMPANY PRODUCTS PORTFOLIO

Manufacturers and Exporters of - High Quality Finished Leathers and Leather Products,
CRESCENT TANNERS PVT. LTD, produces finished Sheep upper lining, Goat upper lining,
Leather Shoes, Leather Bags, Leather Belts, Leather Wallets and Leather Gloves and Kits
amongst several other products. The product portfolio is listed below :-

1. SHEEP UPPER LINING

COL 7001 COL 7002 COL 7003

COL 7004 COL 7005 COL 7006

COL 7007 COL 7008 COL 7009

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COL 7010 COL 7011 COL 7012

COL 7013 COL 7014 COL 7015

COL 7016 COL 7017 COL 7018

COL 7019

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2. GOAT UPPER LINING

COL 6001 COL 6002 COL 6003

COL 6004 COL 6005 COL 6006

COL 6007 COL 6008 COL 6009

COL 6010 COL 6011 COL 6012

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COL 6013 COL 6014 COL 6015

COL 6016 COL 6017 COL 6018

COL 6019 COL 6020 COL 6021

COL 6022 COL 6023 COL 6024

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COL 6025 COL 6026 COL 6027

COL 6028 COL 6029 COL 6030

COL 6031 COL 6032 COL 6033

COL 6034 COL 6035 COL 6036

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COL 6037 COL 6038 COL 6039

COL 6040 COL 6041 COL 6042

COL 6043 COL 6044 COL 6045

COL 6046 COL 6047 COL 6048

COL 6049 COL 6050 COL 6051

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 \

COL 6052 COL 6053 COL 6054

COL 6055 COL 6056 COL 6057

COL 6058 COL 6059 COL 6060

COL 6061 COL 6062 COL 6063

COL 6064 COL 6065 COL 6066

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 COL 6067 COL 6068 COL 6069

COL 6070 COL 6071 COL 6072

3. LEATHER SHOES FOR MEN

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4. LEATHER SHOES FOR WOMEN

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5. LEATHER BAGS

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6. LEATHER BELTS

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7. LEATHER WALLETS FOR MEN

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8. LEATHER WALLETS FOR WOMEN

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9. LEATHER GLOVES AND OTHER KITS

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FINER DETAILS ABOUT THE CRESCENT TANNERS PVT LTD’S PRODUCTS
CAN ALSO BE FOUND ON THEIR WEBSITE
@
http://crescenttanners.com

ON THE HOME PAGE ITSELF.

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2.4 ABOUT THE COMPANY

1. Clientele

CRESCENT TANNERS PVT. LTD’s clients are located in every nook and corner of the
world and are placing huge and repeated orders for the leather and leather gloves.
Additionally, customers are offered quality products that help in acquiring cent percent
satisfaction.

2. Quality Policy / Processes

As the prime motto of the organization is to serve quality products to their clients, various
stringent quality tests are conducted in their in-house laboratory and to satisfy their
customers, they also perform tests in SGS accredited environmental laboratories.
Additionally, all the testing procedures are performed under the supervision of their
quality control executives.

3. Infrastructure

Their state-of-the-art tanneries are equipped with the technologically advanced tools and
machineries that assist in the production of 10 million square feet of finished leather per
annum. Additionally, providing finished leather and allied products as per the
specifications of their clients have also become an easy task.

Fact Sheet:

Year of Establishment 1998

Nature of Business Manufacturer, Exporter

Major Markets Indian Subcontinent, East Asia,

Middle East and South East Asia.

2.5 LOCATION OF THE COMPANY

The registered office of the company is located at Kanpur, Uttar Pradesh. It has several
production units across the country. The units have the following facilities :-

1. Supply of the labor:

Labor is one of the most important inputs in an industrial enterprise. This facility is available
in the organization adequately: large numbers of local labors are available regularly near the
company.

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2. Transport facilities

Transport is very important for bringing raw material and this facility is also available to the
production facility in Kanpur and Calcutta and it also has access to a well connected with
rail- road and transport system.

3. Communication Facilities

Similarly good communication facilities like Internet, Postal, Tele Com and Fax are available
which helps greatly towards the commercial success of the organization.

4. Integration with the groups of companies

The area of Unnao, Calcutta and Kanpur in which the leather units are located is fully
surrounded by several other many competing tanneries, garment, gloves and shoes units. This
company has great integration with other key players in the industry

5. Supply of Operating Power

There is a continuous and adequate supply of power at every unit. This ensures that there is
no abrupt halt in the entire manufacturing process and everything runs smoothly and
efficiently

6. Suitability of land and climate

The land of the units is suitable for the production of leathers and shoes and similarly the
climate condition i.e. humidity, temperature and other atmospheric conditions are also
extremely favorable for the production of finished leather and gloves.

7. Availability Of Raw Material

Raw Materials that are required for all the finished products that are prepared and the specific
unit are also adequately available.

8. Availability of other Important Services

Good housing board facilities, adequate numbers of grocery and other shops, theatres,
restaurants, local transport services, rail services and sufficient availability of water, gas,
supply, drainage and disposal around all these facilities are also present.

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2.6 PLANT LAYOUT:

Plant layout implies the physical arrangement of machines, equipment and other industrial
facilities on the floor of factory in such a manner that they may be handled efficiently and
effectively.

The plant layout of this company’s units is so scientifically designed that is has the following
characteristics.

1. Economic in material handling from various processes and easy handling of raw materials,
semi finished and finished goods.

2. Proper and efficient utilization of available floor space.

3. Provision of better supervision and control of operation.

4. It provides adequate safety to the workers from unwanted major accidents.

5. It allows for suggestions and improvements in production and work methods through regular
routine examination by technical experts.

6. Benefits to the workers:

a) Lesser level and amount of operation and material handling.

b) More labor productivity.

c) More safety and security

d) Better working condition resulting in improved efficiency.

7. In Manufacturing Costs:

a) Maintenance and replacement cost are reduced.

b) Loss due to waste and spoilage in minimized.

c) Better cost control.

8. Production Control and Supervision:

a) Better and convenient facility

b) Results in less inspection activities than required.

c) Cost and efforts in the supervision of the production process are minimized.

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3. ORGANISATION STRUCTURE

ORGANISATION STRUCTURE OF CRESCENT TANNERS PVT LTD

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4. INTRODUCTION TO THE ORGANISATION STUDY

The project of the organization study was done at DOSTAM UNITS, CALCUTTA, a
manufacturing and production unit of CRESCENT TANNERS PVT LTD, KANPUR, UTTAR
PRADESH.

An organization is a social arrangement which pursues collective goals, which controls its own
performance, and which has a boundary separating it from its environment. Organization is the
association formed by a group of people who see that there are benefits available from working
together towards some common goal

Organization studies are the study of individual and group dynamics in an organizational setting,
as well as the nature of organizations themselves. Whenever people interact in organizations,
many factors come in to play. Organizational studies attempt to understand and model these
factors. Organizational study is essential to any MBA graduate as it helps them to connect theory
with practice. Organization study refers to the study of organization as a whole and getting
adequate knowledge with various departments in the organization.

The study was carried out at CRESCENT TANNERS PVT LTD. This study is based on the
different aspects and dimensions of different departments and production units of the company.

4.1 SCOPE OF THE STUDY

The organization study at DOSTAMS CREATION, a manufacturing unit of CRESCENT

TANNERS PVT LTED aims at getting accustomed to the business environment of CRESCENT
TANNERS for a period of 20 days. The study was conducted to understand the structure,
function and process of various departments and their interdependence and their combined co-
dependence.

4.2 OBJECTIVE OF THE STUDY

The organization study was carried out in CRESCENT TANNERS PVT LTD’s unit DOSTAM
CREATIONS, Calcutta, with the registered head office situated at Uttar Pradesh, to achieve the
following specific objectives ;-

1. To familiarize with the organization structure and its functioning

2. To familiarize with the different departments in the organization and their functions and
activities including documentation.
3. To understand how the key business processes are carried out in an organization.
4. To understand how information is used in organization for decision making at various
levels including its data flow diagram.

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 5. To understand the extent of technology adoption including ICT(Information and
Communication Technology), in the organization for various functions/activities.
6. To understand the growth and diversification strategies, portfolio and structure of the
organization.
7. To study the overall performance of the organization
8. To understand the performance measurements of employees and various employee
welfare activities and other training activities
9. To understand the steps taken to increase the productivity in the organization
10. To conduct a SWOT analysis of the organization
11. To also try and understand and come with valuable suggestions and remedies to solve the
problems in my limited scope of knowledge.

1.4. REASON FOR SELECTING THE COMPANY

The reason for selecting the CRESCENT TANNERS PVT LTD is that, they are one of the
largest suppliers, manufacturers and exporters of leathers to other industries. To understand the
leather industry, a thorough assessment of CRESCENT TANNERS PVT LTD would suffice as it
contains all the major areas that the leather industry in general deals with.

1.5. METHODOLOGY OF THE STUDY

The success of a research depends largely on the methodology used. The appropriate
methodology will improve the validity of the findings. The following methodologies were
adopted for the study.

1. Identification of the company

DOSTAM CREATIONS, a production unit of CRESCENT TANNERS PVT LTD was

selected for the organization study, considering various factors including reputation of the
firm, ease of getting permissions, industry, location etc.

2. Identification of the Objectives

The specific objectives of the organization study was identified and listed out in order of
priority. This helped in conducting the organization study in a systematic and effective
manner.

3. Data collection

Both primary sources and secondary sources were used in this particular research.

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 4. Primary Data

Primary data were collected through observation, personal interview, discussion with
managers and employees of the various departments of the organization.

5. Secondary Data

Secondary data were collected through literature review which includes company’s
internal records, publications, annual reports, journal, statutory report, website (official
and others) etc.

6. Analysis and Interpretation

The data collected must be properly analyzed to evaluate and enhance the data quality.
The analysis is done to identify the actual meaning of the data which helps in proper
interpretation. Data analysis involves working to uncover patterns and trends in data sets
and data interpretation involves explaining those patter ns and trends.

7. Documentation

After the analysis and interpretation of collected data, the information is documented in
the form of organization study report, which gives an elaborate report on the organization
study.

1.6 TIME PERIOD OF THE STUDY

The organization study was held from 01-01-2018 to 20-01-2018.

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1.7 LIMITATIONS OF THE STUDY

There were some limitations in conducting the organization study at the manufacturing unit of
CRESCENT TANNERY PVT LTD.

1. The findings need not be conclusive but only indicative.

2. There were difficulties in obtaining data from executives and managers due to
their busy work schedule.

3. An in-depth study of the company could not be carried out due to shortage of time. The
time span was very limited to collect all the information.

4. The reliability of data used for study is largely depends upon the companies reports
and the information given by executives.

5. The company has the limitation to disclose their financial details, so a detailed analysis
of financial performance of the company is not possible.

6. The area of the concentration of study was confined only to a single manufacturing
unit of CRESCENT TANNERS PVT LTD.

7. Due to the vastness of the data collected, analyzed, assessed and evaluated, it wasn’t
feasible to include each and conclusion in this study report.

8. Certain details with regard to the Research & Development Department, Customer
Redressal Department, The Waste Management & Treatment Department and of a few
other departments, despite being thoroughly documented could not be presented in the
report as certain practical circumstances prevented the same.

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4. DEPARTMENTAL ANALYSIS.

CRESCENT TANNERS PVT LTD is a Leather Export and Manufacturing enterprise known for
its commitment to quality and good values.

Leather was the first clothing fabric over the past few decades. Leather is currently emerging as a
hip look on the streets and in the office covering men or women, young or old from top to
bottom. Thanks to a blend of nature and modern technology, the new and latest look of leather is
soft and supple.

Leather has become a very specialized high fashion fabric that requires talented specialists to
turn into a quality garment. They design and develop leather garments such as leather jackets
men and women, leather bags, leather shoes and gloves amongst a host of other items.

The project is about the study of whole organization including their departments such as
Production department, Inventory department, Maintenance department, accounts department
Packing department amongst others.

1. PRODUCTION DEPARTMENT.

Production is the functional area responsible for turning inputs into finished outputs through a
series of production processes. The Production Manager is responsible for making sure that raw
materials are provided and made into finished goods effectively. He must make sure that work is
carried out smoothly, and must supervise procedures for making work more efficient and more
enjoyable.

Five production sub-functions

In a manufacturing company the production function may be split into five sub functions:

1. The production and planning department will set standards and targets for each section of
the production process. The quantity and quality of products coming off a production line
will be closely monitored. In businesses focusing on lean production, quality will be
monitored by all employees at every stage of production, rather than at the end as is the case
for businesses uses .

2. The purchasing department will be responsible for providing the materials, components and
equipment required to keep the production process running smoothly.

43
3. The stores department will be responsible for stocking all the necessary tools, spares, raw
materials and equipment required to service the manufacturing process. Where sourcing is
unreliable, buffer stocks will need to be kept and the use of computerized stock control
systems helps keep stocks at a minimal but necessary level for production to continue
unhindered.

4. The design and technical support department will be responsible for searching new
products or modifications to existing ones, estimating costs for producing in different
quantities and by using different methods. It will also be responsible for the design and testing
of new product processes and product types, together with the development of prototypes.

5. The works department will be concerned with the manufacture of products. This will include
the maintenance of the production line and other necessary repairs. The works department
may also have responsibility for quality control. A key aspect of modern production is
ensuring quality. The term quality means fitness for purpose i.e. a product; process or service
should do exactly what is expected of it.

CRESCENT TANNERS PVT LTD FOLLOWS A SIMILAR PRODUCTION DEPARTMENT

PATTERN.

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LEATHER PROCESSING CHART OF CRESENT TANNERS PVT. LTD

LEATHER IS PROCESSED AS INDICATED BY THE CHART ABOVE AT

CRESCENT TANNERS PVT LTD

45
1.1 .PRODUCTION PROCESS

The leather manufacturing process at CRESENT TANNERS PVT LTD is divided into three
fundamental sub-processes: Pre Tanning stages, tanning, and Post Tanning. All true leathers will
undergo these sub-processes. A further sub-process, surface coating, can be added into the
leather process sequence, but not all leathers receive surface treatment. Since many types of
leather exist, it is difficult to create a list of operations that all leathers must undergo.

It’s Initially Divided into Three Stages

They Are

 First Stages - Pre Tanning.

 Second Stages - Tanning.
 Final Stages - Post Tanning.

A. First Stages.

Pre Tanning.

The Pre Tanning stages are when the hide/skin is prepared for tanning. During the preparatory
stages many of the unwanted raw skin components are removed. Many options for pretreatment
of the skin exist. Not all of the options may be performed.

Preparatory stages may include.

1. Preservation :

 The natural fibers of leather will break down with the passage of time. Acidic leathers
are particularly vulnerable to red rot, which causes powdering of the surface and a
change in consistency. Damage from red rot is aggravated by high temperatures and
relative humidity and is irreversible.

 Exposure to long periods of low relative humidity (below 40%) can cause leather to
become desiccated, irreversibly changing the fibrous structure of the leather.

 Various treatments are available such as conditioners, but these are not recommended
by conservators since they impregnate the structure of the leather artifact with active
chemicals, are sticky, and attract stains.

46
2. Soaking :

Water for purposes of washing or rehydration is reintroduced.

3. Liming :

In Liming for parchment or leather processing, the hides are soaked in an alkalis solution by
a drum/paddle or pit-based operation where four main objectives are met. The objectives are

 Removal of interfibrillary proteins.

 Removal of Keratin proteins.

 Collagen swelling due to the alkaline pH.

 Collagen fiber bundle splitting.

Liming operations of cattle hides usually last 18 hours and are generally associated with the
alkaline phase of beam-house operations.

 Unwanted proteins and "opening up" is achieved.

4. Unhairing :

The majority of the hair attached to the skin and hide is removed.

 In the tanning industry the un-hairing stage concerns the removal of animal hair from
the skin by chemical burning of the hair root, or by chemical degradation of the hair
shaft. The type of hair removal depends on the type and length of the hair itself. Two
main groupings of hair removal exist: painting and drum/paddle/pit un-hairing.
Sheepskins—or animals with long hair (e.g. wool)—use the painting method to
remove the hair from the follicle. Animals with shorter hair (e.g. cattle hides) can have
their hair removed in a process vessel.

 Historically, scalding and singeing were other methods used to remove hair from
hides. These methods are still used today to some extent, in hides not destined to be
used for leather.

 Chemicals used - The chemicals used for un-hairing are numerous. Traditionally,
alkalis such as lime (calcium hydroxide) or soda ash (sodium carbonate) were used.
These treatments were lengthy and the hair retention was usually high. This meant a

47
 manual scraping of the hair from the follicle was required. It is now known that lime
(an alkali with a low solubility) and weak alkalis cause an immunization (to the action
of chemicals) of the keratin.

 To increase the speed of unhairing and to lower hair retention rates, sharpening agents
are added. The most common is sodium sulfide. Sodium sulfide, at pH values greater
than 11.5, break the disulfide bridges of cystine (found in keratin) and result in the
collapse of the hair or loosening of the hair resulting in depilation. Excessive
sharpening agent results in hair pulping which should be avoided. Controlled exposure
of sharpening agent, or other alkali, to the hair will result in hair-save unhairing
(during which the hair can be removed intact from the process vessel).

5. Fleshing :

Subcutaneous material is removed from the said hides and leathers before handing it over
to the next processes.

6. Splitting :

The hide/skin is cut into two or more horizontal layers and this sent to be relimed.

7. Reliming :

The hide/skin is further treated to achieve more "opening up" or more protein removal.

8. Deliming :

Liming and un-hairing chemicals that are required are removed from the pelt.

9. Bating :

Proteolytic proteins are introduced to the skin to remove further proteins and to assist
with softening of the pelt.

10. Degreasing :

Natural fats/oils are stripped or as much as is possible from the hide/skin during this
process

48
 11. Pickling

This is the process of lowering of the pH value to the acidic region. This must be done in the
presence of salts. Pickling is normally done to help with the penetration of certain tanning
agents, e.g., chromium (and other metals), aldehydic and some polymeric tanning agents.

B. Second Stages

Tanning

1. Tanning is the process that converts the protein of the raw hide or skin into a stable
material which will not putrefy and is suitable for a wide variety of end applications.

2. The principal difference between raw hides and tanned hides is that raw hides dry out to
form a hard inflexible material that can putrefy when re-wetted (wetted back), while
tanned material dries out to a flexible form that does not become putrid when wetted
back.

3. A large number of different tanning methods and materials can be used; the choice is
ultimately dependent on the end application of the leather. The most commonly used
tanning material is chromium, which leaves the leather, once tanned, a pale blue colour
(due to the chromium), this product is commonly called “wet blue”.

4. The acidity of hides once they have finished pickling will typically be between pH of2.8-
3.2. At this point the hides are loaded in a drum and immersed in a float containing the
tanning liquor. The hides are allowed to soak (while the drum slowly rotates about its
axle) and the tanning liquor slowly penetrates through the full substance of the hide.

5. Regular checks will be made to see the penetration by cutting the cross section of a hide
and observing the degree of penetration. Once an even degree of penetration is observed,
the pH of the float is slowly raised in a process called basification. This basification
process fixes the tanning material to the leather, and the more tanning material fixed, the
higher the hydrothermal stability and increased shrinkage temperature resistance of the
leather.

6. The pH of the leather when chrome tanned would typically finish somewhere between
3.8 to 4

49
Preparatory steps prior to tanning.

1. Curing

Preparing hides begins by curing them with salt. Curing is employed to prevent
putrefaction of the protein substance (collagen) from bacterial growth during the time lag
that might occur from procuring the hide to when it is processed. Curing removes excess
water from the hides and skins using a difference in osmotic pressure. The moisture
content of hides and skins gets greatly reduced. In wet-salting, the hides are heavily
salted, then pressed into packs for about 30 days. In brine-curing the hides are agitated in
a salt water bath for about 16 hours. Generally speaking, curing substantially reduces the
chance of spoilage by bacteria. Curing can also be done by preserving the hides and skins
at a very low temperature.

In a process known as soaking, the hides are then soaked in clean water to remove the salt
and increase the moisture so that the hide or skin can be further treated.

2. Lime processing, pickling and bating of hides and skins.

After soaking, the hides and skins are taken for liming: treatment with milk of lime (a
basic agent) that may involve the addition of "sharpening agents" (disulfide reducing
agents) like sodium sulfide, cyanides, amines etc.

The objectives of this operation are mainly to:

 Remove the hairs, nails and other keratinous matter.

 Remove some of the interfibrillary soluble proteins like mucins.
 Swell up and split up the fibres to the desired extent.
 Remove the natural grease and fats to some extent.
 Bring the collagen in the hide to a proper condition for satisfactory tannage.
 The weakening of hair is dependent on the breakdown of the disulfide link of the
amino acid called cystine, which is the characteristic of the keratin class of protein
that gives strength to hair and wools(keratin typically makes up 90% of the dry
weight of hair).
 The hydrogen atoms supplied by the sharpening agent weakent he cystine -
cysteine molecular link, and the covalent disulfide bond links areruptured, which
weakens the keratin.
 To some extent, sharpening also contributes to"unhairing," as it tends to break
down the hair proteins.
 The isoelectric point of the collagen in the hide (this is a tissue strengthening
protein unrelated to keratin) is also shifted to around 4.7 due to liming, which is
an acidic type of tannage.

50
  Unhairing agents used during liming are:
 Sodium sulfide,
 sodium hydroxide,
 sodium hydrosulfite, ,
 calcium hydrosulfide,
 dimethyl amine, and
 sodium sulfhydrate.

 The majority of hair is then removed mechanically, initially with a machine and
then by hand using a dull knife, a process known as scudding. Depending on the
end use of the leather, hides may be treated with enzymes to soften them in a
process called"bating."
 But before bating, the pH of the collagen is brought down to a lower level so that
enzymes may act on it.
 This process is known as "deliming."
 Once bating is complete, the hides and skins are treated with a mixture of
common(table) salt and sulfuric acid, in case a mineral tanning is to be done. This
is done to bring down the pH of collagen to a very low level so as to facilitate the
penetration of mineral tanning agent into the substance.
 This process is known as "pickling." The common salt (sodium chloride)
penetrates the hide twice as fast as the acid and checks the ill effect of sudden
drop of pH.4.1.3

Types Of Tanning:

1. Chrome Tanning.

It was invented in 1858, is tanned using chromium sulfate and other salts of chromium. It
is more supple and pliable than vegetable-tanned leather, and does not discolor or lose
shape as drastically in water as vegetable-tanned. It is also known as wet-blue for its
color derived from the chromium. More esoteric colors are possible using chrome
tanning.

2. Vegetable Tanning.

Vegetable tanning uses tannin (this is the origin of the name of the process). The tannins
(a class of polyphenol astringent chemical) occur naturally in the bark and leaves of many
plants. Tannins bind to the collagen proteins in the hide and coat them causing them to
become less water-soluble, and more resistant to bacterial attack. The process also causes
the hide to become more flexible. The primary barks, processed in Bark Mills and used in
modern times are chestnut, oak, redoul, tanoak, hemlock, quebracho, mangrove, wattle

51
 (acacia), and myrobalan. Hides are stretched on frames and immersed for several weeks
in vats of increasing concentrations of tannin. Vegetable tanned hide is flexible and is
used for luggage and furniture.

3. Aluminium Tanning:

Tawing is a method that uses alum and aluminium salts, generally in conjunction with
other products such as egg yolk, flour, and other salts. The leather becomes tawed by
soaking in a warm potash alum and salts solution, between 20°C and 30°C. The process
increases the leathers pliability, stretchability, softness, and quality. Adding egg yolks
and flour to the standard soaking solution further enhances its fine handling
characteristics. Then, the leather is air dried ("crusted") for several weeks, which allows it
to stabilize. Tawing is traditionally used on pigskins and goatskins to create the whitest
colors. However, exposure and aging may cause slight yellowing over time. and, if it
remains in a wet condition, tawed leather will suffer from decay. Technically,
tawing is not tanning.

Depending on the finish desired, the hide may be waxed, rolled, lubricated, injected with
oil, split, shaved and, of course, dyed. Suedes, nubucks etc. are finished by raising the
nap of the leather by rolling with a rough surface.

 The first stage is the preparation for tanning.

 The second stage is the actual tanning and other chemical treatment.
 The third stage, known as retanning, applies retanning agents and dyes to the material to
provide the physical strength and properties desired depending on the end product.
 The fourth and final stage, known as finishing, is used to apply finishing material to the
surface or finish the surface without the application of any chemicals if so desired

C. Final Stages

Finishing Stages – Post Tanning

For some leathers a surface coating is applied. Tanners refer to this as finishing.

Finishing operations may include:

1. Oiling:

Oiling is a process whereby leather is hand coated (usually by brush or tampon) with
either a raw (un-emulsified) oil or a combination of raw oil, blended with emulsified oils
and a penetrating aid. Hand oils can include fragrant oils that help with the smell
associated with the leather, e.g., Pine Oil. Hand oils commonly consist of sulfated

52
vegetable oils, e.g. sulfated castor oil. Oiling provides the leather with lubrication and
allows it to flex repeatedly without cracking. Leather fibres that are dry and un-lubricated
break very easily. Oiling does impart colour and an element of water resistance. Oiling
would normally be performed on full grain aniline leathers. The most common type of
leather oiled is vegetable tanned leather.

2. Padding:

The padding clears an area around the content (inside the border) of an element. The
padding is affected by the background color of the element. The top, right, bottom, and
left padding can be changed independently using separate properties. A shorthand
padding property can also be used, to change all paddings at once.

3. Buffing:

Leather from which the top surface has been removed by abrasion. Often known as suede
or nubuc.

4. Spraying :

It’s a mixture of chemical season that mixed with water and applied on skin. This mixture
contains

 Pigment: Its color solution that are applied on the top of skin.
 Dye solution : Its is another type of color solution. It depends on the article.
 Laker : It’s a chemical solution that fixing color.

5. Curtain coating :

Curtain Coating is a process in which the object or substrate to be coated is guided

through a curtain of fluid located in a gap between two conveyors. The mechanism is
formed by a tank of fluid from which a thin screen falls down in between the two
conveyors. The thickness of the coating layer that falls upon the object is mainly
determined by the speed of the conveyor and the amount of material leaving the tank
(Pump Speed). Curtain coating is a pre-metered method, which means that the amount of
liquid required is supplying from the tank to the screen in order to be deposited on the
substrate.

6. Polishing :

Polishing is the process of creating a smooth and shiny surface by rubbing it or using a
chemical action, leaving a surface with a significant specular reflection (still limited by
the index of refraction of the material according to the Fresnel equations.). In some

53
 materials (such as metals, glasses, black or trasparent stones) polishing is also able to
reduce diffuse reflection to minimal values. When an unpolished surface is magnified
thousands of times, it usually looks like mountains and valleys. By repeated abrasion,
those "mountains" are worn down until they are flat or just small "hills." The process of
polishing with abrasives starts with coarse ones and graduates to fine ones. Polishing with
very fine abrasive differs physically from coarser abrasion, in that the material is
removed on a molecular level, so that the rate is correlated to he boiling point rather than
to the melting point of the material being polished.

7. Plating:

Plating is a surface covering in which a metal is deposited on a conductive surface.

Plating has been done for hundreds of years, but it is also critical for modern technology.
Plating is used to decorate objects,

 for corrosion inhibition,

 to improve solderability,
 to harden,
 to improve wearability,
 to reduce friction,
 to improve paint adhesion,
 to alter conductivity,
 for radiation shielding,
 and for other purposes.

8. Embossing:

 Embossing is the process of creating a three-dimensional image or design in paper and

other materials. Embossing is typically accomplished by applying heat and pressure with
male And female dies, usually made of copper or brass, that fit together and squeeze the
fibers of the substrate.
 The combination of pressure and heat raises the level of the image higher than the
substrate, while "ironing" it to make it smooth. In printing this is accomplished on a
letterpress. The most common machines are the Kluge Letterpress and the Heidelberg
Letterpress. Most types of paper can be embossed, and size is not normally a
consideration.
 Embossing without ink, so that the image is raised but not colored, is called "blind
embossing." Embossing used in conjunction with ink, so that the raised area is colored, is
called "color register embossing." Embossing used in conjunction with foil stamping is
called "combination stamping" or "combo stamping."

54
 Embossing involves a separate stage in the production process, after any varnishing and
laminating. It requires a separate press run, and is priced accordingly. In addition to being
used as a design element, embossing can be used to improve the performance of paper
products like napkins, diapers, and tissue paper.
 The exact same process as described above is applied to piece of leather.

9. Ironing:

 Ironing is the use of a heated tool (an iron) to remove wrinkles from fabric.
 The heating is commonly done to a temperature of 180-220 °Celsius, depending on the
fabric.
 Ironing works by loosening the bonds between the long-chain polymer molecules in the
fibers of the material.
 While the molecules are hot, the fibers are straightened by the weight of the iron, and
they hold the new shape as they cool.
 Some fabrics, such as cotton, require the addition of water to loosen the intermolecular
bonds.
 Many modern fabrics (developed in or after the mid-twentieth century) are advertised as
needing little or no ironing.
 Permanent press clothing was developed to reduce the ironing necessary by combining
wrinkle-resistant polyester with cotton.

10. Toggle:

It’s a machine process by which skin is stretched and then is sent to the next process.

11. Measurement:

It’s the final stage of production where every skin is to be measured in

decimeter.(d.cm).Production department works under instruction of managing director of
the company.

Initially the process of leather skin that is raw material should follow processes
mentioned in the first stages.

In that it is converted from raw materials to wet blue(name of an article that’ll be

tanned).(works in progress).

In second stages the wet blue is coverted to crust(an article that’ll be sent to the post-
tanning stages).(semi finished goods) and this semi finished goods can be sold in the
local market based on measurement of skin in terms of dcm.(deci metre) per rate or the
crust can be used for finishing stages. The chief technician will receive a shade card. It’s

55
 usually an instruction from the managing director about the article.

In the finishing stages based on the order and requirement from the buyers, the order is
prepared and assembled in bulk and based on the type of product that is demanded, say a
wallet or a bag, the finished leather material is used to furnish the same.

AND BASED ON THE EXPERT TECHNICIANS AT CRESCENT TANNERS PVT LTD,

MOST LEATHER TANNERIES HAVE A PRODUCTION DEPARTMENT THAT
FUNCTIONS SIMILARLY.

2. INVENTORY DEPARTMENT

In the inventory department, absolute control and supervision lies with the managing director.
Under the inventory department there are currently two sections.

1. Chemical section.

2. Skin Section.

I. CHEMICAL SECTION.

 In the chemical section the store keeper maintains the daily records of chemical
consumption. Dye,Syntan Powder,Fatliqure, Finishing Chemical and other such
substances formulate a part of the chemical section inventory.
 The chemical is issued by the order from the chief technician. The chief technician will
write the requirement of chemical for the production process in an excel sheet format.

An example of an excel sheet is as follows.

 The purchase of chemical order will be issued in a company memo.

And the quantity of each material will be physical weighted.
 Before entering it into stock, the stock manager will receive the purchase bill and he will
report the purchase bill to managing director.
 And managing director will make the payment of chemical through cheque. The payment
will be issued by the stock managers.

56
II.SKIN SECTION

 In the skin section the store manager keeps the daily records of daily arrivals and
dispatching of skins, from the raw material to finished goods, everything is accounted for
while maintaining stocks.
 When the raw material arrives to the factory, the store manager will check the delivery
challan and receive the raw material. The managing director will decide when the raw
material is been taken to the one of the processes. And then he will instruct his sub-
ordinates about the production planning.
 The managing director has been conferred with a power to raise questions with regard to
skin consumption and daily usage. On the instruction from sub-ordinates the store keeper
will issue the raw skin. And the skin will be handed over to chief technician. The chief
technician will take care of the skin. All entries will be maintained in written hand books
and systems. In the format of excel sheets the skin is maintained and each material will
be allocated a lot no based on the pcs.

An example of an excel sheet is as follows.

 Inventory department will calculate the total counts of issued skin and dispatch skin. And
the report of skin consumption will reported to the managing director.
 The raw material is purchased by the managing director
 The purchasing bill will be collected by the store manager.

3. MAINTENANCE DEPARTMENT

 Maintenance department follows the instructions from the managing director. This
department maintains the factory, buildings, machine, electrical equipments and
generators.
 Maintenance head usually evaluated the condition of machine, if the machine is found to
be problematic or is prone to a malfunction, the chief technician of maintenance
department generally repairs the machine. The cleaning of any specific machine is
maintained by the maintenance department staff.
 The decision with regard to a replacement of any machinery is taken by the management
after adequate consultations from the other directors.

57
  Every machine is maintained based on the specific technical preventive maintenance
methods. Every machine is assessed singularly by the maintenance department head and
the department is managed by the central management.
 The main and primary motive of the Maintenance Department is to ensure that
production and the manufacturing of goods never cease and that the safety of the
employees from an accident due to a machine malfunction can be prevented.

4. PACKING & DISPATCH DEPARTMENT

 After completion of the measurement, the packing department starts working. The skin is
packed with folds of plastic and the measurement slip is placed inside the packing.
 The packing department head is solely in charge of taking care of all the skins and other
luxury products that are ready to be dispatched.
 Based on the urgency of the delivery time and other such factors, the packing department
issues the packing bundles.
 The department supervisor allocates a separate code for each bundle. The codes contain
a product description. These codes will be used to manage the packaged bundles.
 During the dispatch of packing, the bundles code are verified.
 Delivery of these items that are manufactured are done primarily through pre-booked
trucks.

5.MARKETING DEPARTMENT

 The main and major aim of marketing department is to identify the market demand and
supply the goods as per the demand.
 Marketing department at CRESCENT TANNERS PVT LTED is differential, and mainly
focuses on promoting the goods produced and gather a realizable order for the company
such that at no time there is stagnation experienced in the enterprise due to lack of orders
and such that the delivery can be made as per the predefined data.
 When we compare CRESCENT TANNERS PVT LTD with other similar industries, the
advantage is that it is located in the Special Economic Zone (SEZ) in Noida, which
exempts most of the duties and taxes imposed by the government.
 The labor overhead charges occurring here is low as compared to the foreign industries.
 The marketing department plays a vital role in the production planning as a constant
feedback of the quality of finished products is verified regularly to check the possibility
of finishing the production of the user specified products in time.

58
(The breakup of the Marketing department at CRESCENT TANNERS PVT. LTD)

Functions of the marketing department

1) Following a quality management system

2) Management review
3) Internal communication
4) Customer communication
5) On Time response to enquiries
6) Following up with production/relevant functions to ensure on time delivery
7) Invoice & Shipment
8) Handling of customer complaints
9) Customer satisfaction

59
Export trend analysis

The export trend analysis of last three years shows that CRESCENT is growing their
business in the global market. During the 2015-16 periods, the export has almost doubled
comparing to the 2014-15 period i.e. around 197%. During the 2016-17 periods, the
export has increased, but the percentage has come down to 108%.

Export %
200
180
160
140
120
Axis Title

100
80 Export %
60
40
20
0
2014-15 2015-16 2016-17
Export data of CRESCENT TANNERS PVT LTD

(The graph below shows the percentage change in exports during the last 3 years.)

INFERENCES DRAWN ON THE BASIS OF THE ABOVE

 The linear forecast trend line shows a positive growth trend for the next few
years.
 More revenue will be generated and a steady positive increment in the
cashflow of the enterprise is overall expected.

60
Customer Satisfaction Survey

Customer Satisfaction %

100
90
80
70 2012-13

60 2013-14

50 2014-15

40 2015-16

30 2016-17

20
10
0
2012-13 2013-14 2014-15 2015-16 2016-17

(The graph below shows the percentage change in customer satisfaction conducted
independently through CRESCENT Tanners feedback forms during the last 5 years.)

INFERENCES DRAWN ON THE BASIS OF THE ABOVE

 There seems to a positive trend in terms of growth of overall customer

satisfaction with regard to the products that are manufactured and sold
the enterprise.
 From a bird’s eye view, the overall customer satisfaction seems to be
extremely promising and there is nothing to worry about with regard to that,
at least in the current scenario.
 There is expected to be a greater influx of customers during the coming
years and hence the production, inventory and dispatch departments
have to be prepared accordingly.

61
Detailed description of the department.

 The marketing department collects the product order and the required dispatch
date from various customers.
 Based on this, marketing department prepares the sales order and hands over to
production department.
 This will be usually done 15 days ahead of a month.
 The final requirement for the month is prepared on the 1st of the respective
month.
 No more revision is done until unless the change is inevitable from the customer
side due to any urgent requirement.
 The final dispatch plan is prepared and given to production department. The
production will be planned according to this plan.
 Once the production is completed, the marketing department will verify it based
on the initial requirement plan and gives the approval for raising invoices for
shipment to dispatch department.
 The dispatch department will prepare the invoice and shipment documents against
the Performa invoice/Purchase Order.
 They will make the arrangements to take the consignments to the freight
forwarder who is nominated by the respective customer.

The main payments modes are followed in CRESCENT Tanners PVT LTD are:

1. Direct payment – The amount will be collected from the customer in advance i.e.
before the consignment is send.

2. Payment against document – payment is done after the consignment is shipped. The
bill of lading and other originals will be handed over to customer directly.

3. Letter of credit - In this mode, a bank will act as a mediator between the customer and
the enterprise. A contract is prepared based on this. The bank will act as a guarantee
for the customer for all the purchase done between the customer and CRESCENT.
Based
on the terms and conditions mentioned in the LC, CRESCENT should act.

4. Freight on board - CRESCENT submits the full set of shipment document such as
bill of
lading, shipping bills, packing list and other original invoices through the mediator
bank. The bank will send the originals to the customer bank. The total payment is

62
 taken care by the banker. The customer makes the payment after verifying the
Performa Invoice.

I. Promotional activities: CRESCENT takes part in the leather exhibitions conducted in

the
international and the domestic market. The strength of CRESCENT is delivering high
quality product at a competitive price which itself acts as a promotion.

II. Customer satisfaction survey: Currently the customer satisfaction survey is carried
out independently which is really useful as it helps the enterprise gauge if any
modifications are required with respect to the products they manufacture.

III. New marketing activities: Looking to capture the market through product
diversification in the same product line. CRESCENT has a strong R&D department with
the approval of the concerned authorities. This helps CRESCENT to develop innovative
and high quality products.

IV. Customer complaints: The customer complaints are given high importance and
immediate action is taken care. The customer complaints are received by the marketing
department. Marketing department assigns a unique ID to the complaint and
communicate the details to the quality assurance department. Then a meeting will be
arranged between the members associated with the particular issues and then handles the
issues through a step by step process.

5. HUMAN RESOURCE DEPARTMENT

HR department is the most important department in a business concern. Proper management of

human resource is very essential.

(Structure of the HR department at CRESCENT TANNERS PVT.LTD)

General Manager

HOD -PERSONNEL

STAFF

63
Functions of the HR department

1. Primary Functions

• Conducting job analysis

• Planning labour needs and recruiting job candidates
• Selecting job candidates
• Conducting orientation and training programs for new employees
• Managing wages and salaries
• Providing incentives and benefits
• Appraising the performance
• Communication with employee (interviewing, counseling, discipline)
• Training and developing managers
• Building employee commitment3.

2. Administrative Function

a. Liasoning with government and local bodies

b. Correspondence with various government and non government organization. All the
Internal and external mail, letter and memo, registered items handled by this
department.
c. Security – A well equipped security forced is provided for safeguarding everything
inside the factory complex.
d. Monitoring the daily inward and outward dispatch.

3. Personnel Function

a. Man power planning

b. To ensure optimum use to human resources employed.
c. To determine further recruitment level.
d. To forecast further skill requirements that will serve as a basis for training and
development programs

64
4. Recruitment Functions

Recruitment is the process of searching right persons and stimulating them to apply for job in the
organization. Recruitment in CRESCENT PVT. LTD is carried out based on departmental
requirements.

a. Executives – Asst. manager and above

i. Recruitment done through reference or consultants. Probationary period of 6

months

ii. CV is collected from the employees. It is scrutinized and a list for the interview
is prepared based on this CV. Interview is conducted under the observation of
HR and the respective departmental HOD. Conducted in the corporate office

b. Staff – Supervisors, line employees

i. Recruitment done through reference or consultants

c. Machine Operators

They are selected from the local environment. For the first 2 years, they are employed as
trainees and the 3rd year will be a probation period. After this, they will be promoted as
permanent employees. Employees are selected strictly based on their educational
qualification, work experience, technical knowhow and age.

5. Induction functions

a. A 12 day induction program is conducted for the newly selected employees .

b. A 6 day class room training and 6 days on the job training is also conducted.
c. Conducted by the HODs and HR
d. During the induction program the company policies, rules and regulation, plant
overview, job overview are explained to the employees
e. The induction helps the employees to gain information on the company and the
operation carried out.

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6. Training functions

a. Annual training plan is prepared and conducted throughout the plant

b. Training conducted for the employees at all levels
c. After training, the effectiveness analysis is conducted.
d. Different trainings conducted are:

i. Orientation training
ii. On the job training
iii. External training
iv. Internal training

7. Inter-departmental Relationship Functions

a. This department plays an important role to maintain good and healthy relationships
between the employees and the departmental heads.
b. Frequent meetings are conducted between the HOD and the employees.
c. Monthly departmental review meeting is also conducted to make the employees aware
of the departmental performances.

8. Grievance handling functions

a. Grievance handling is done by HR and the associated departmental heads. Employee

grievance is given greater importance in CRESCENT TANNERS PVT LTD. Immediate
action is taken in case of any reported grievance.

9. Separation and dismissal functions

a. Notice period of 1 month is delivered to the concerned employee.

b. No specific exit interview is conducted.
c. Separation procedures are done manually

10 Attendance management functions

a. The employee attendance management is also carried out HR department.

b. Punch card system for permanent employees.
c. Manual attendance management for the contractual employees.

The HR department takes care of the following statutory functions as well -

a. Companies holiday’s calendar making and distribution.

b. Salary and other remuneration. All of the executives, trainee workers and operators are
provided with their respective salary on the last working day of every month.

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Salary structure consists of :-

a. Basic Pay
b. Fixed Daily Allowance
c. House Rent Allowance
d. Conveyance & other necessary allowances.

9. FINANCE DEPARTMENT

For the smooth functioning of every organization proper money management is essential. Only
through proper money management a firm can identify it strength and weakness in the financial
structure. CRESCENT TANNERS PVT LTD also assigns great importance to its financial
department. Its finance department functions like that of any other enterprise. The various
activites are described as follows :

Financial Department Functions

1. Passing and the settlement of all miscellaneous advances.

2. Perform all works connected with insurance coverage of fixed asset.
3. Keeping a personal file of employees relating to salary computation and annual increment.
4. Prepare profitability trend reports and wage analysis.
5.Quarterly and yearly financial report preparation.
6. Making bank statements
7. Preparation and assisting the coordination of all works connected with finance and taxation
8. Finalization of accounts.
9. Assisting statutory/ vigilance/ auditors from head quarters.
10. Make internal and external purchases3.

Structure of financial department of CRESCENT TANNERS PVT. LTD.

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Capital budgeting

The capital budgeting is done at the beginning of the year itself. The requirement of capital will
be specified for approval. During the budgeted year, if any further requirement of capital is faced
then a proper justification has to be made. If the requirement is seen as an important one then
approval of the capital is sanctioned.

Cash management

Cash management system is one of the key areas in any business. Apart from the fact that it is
the most liquid asset, cash is the common denominator into which all current assets can be
reduced because other major liquid assets, receivable and inventory get eventually converted into
cash.

Credit control function

A trade credit arises when a company sells on credit and does not receive cash immediately. A
company grants credit to protect its sales from the competitors and to attract potential customers
to buy its product at favourable terms. Credit period allowed is 6 days to 90 days. The collection
of credit will be handled by senior sales officers up to 180 days and it will be handed over to the
factory manager. The company will give the creditors a further extension of one month , then
legal action will be taken against the person or the company. If the cheque has bounced or has
been dishonoured then the company can sue or take legal action against the person or the
company.

Planning of funds

Planning of funds is a careful estimate made by the manager about the total funds required. This
is the estimation done by the observation over the physical activities of the company.

Allocation of funds

Providing funds to proper place at proper time is also an important task to be done by the
financial manager. He studies the cash requirement of each department and then funds are
distributed. Recording of transactions. Each and every transaction that takes place in the
company has to be recorded properly for the purpose of having better control over the funds and
optimality. All the transactions are recorded in journal and posted to the ledgers.

Fixed assets

Fixed assets form the major part of the working of the company. Depreciation of fixed assets is
charged on diminishing balance method.

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Cost control

The cost is controlled either in the acquisition of raw materials or reduction in operating
expenses or both, as there should be limitation in the utilization of funds. The company always
has a comparison of budgets and actuals.

SIGNIFICANT ACCOUNTING POLICIES AT CRESCENT TANNERS PVT LTD.

Basis of Accounting

The financial statements are prepared under the historical cost convention on accrual basis,
except as otherwise stated and in accordance with the applicable accounting standards.

Use of estimates

The presentation of financial statements in conformity with the generally accepted accounting
principles requires estimates and assumptions to be made that affect the reported amount of
revenues and expenses during the reporting period. Fixed asset are stated at historical cost less
depreciation written off and impairment in value, if any, is adjusted.

Depreciation

1. Depreciation on assets is provided at the rate prescribed in the relevant schedule to the
Companies Act, 2013 as under;

a) In respect of plant and machinery, on straight line method

b) In respect of other assets, on written down value method

2. Depreciation on tools and moulds is provided on written down value method at the rate of
33.33% p.a on technical assessment, which is higher than the applicable rate prescribed in
the relevant schedule to the Companies Act, 2013.

Investments

These are valued at cost and permanent fall in long term investment if any is provided for.

Inventories

Inventories are valued at lower cost or net realizable value. For this purpose the cost ofbought
out inventories comprises of the purchase cost of the items and cost of bringing theitems to
factory on FIFO basis. The cost of manufactured inventories comprises the directcost of
production plus appropriate overheads.

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Foreign currency transaction

Monetary items denominated in foreign currency are reported at the exchange rate prevailing as
at the date of the balance sheet and the resultant exchange gain /loss, if any, has been adjusted to
the profit and loss account, to the extent they relate to items other than liabilities incurred for
acquiring for fixed assets. Those relating to liabilities for fixed assets have been adjusted to the
carrying cost of the respective assets.

Sales

Revenue is recognized when the significant risk and rewards of ownership of goods have been
passed to the buyer. Gross sales are inclusive of excise duty and are net of trade discount.

Retirement benefit

Liabilities of gratuity for employees determined based on actuarial valuation as on the balance
sheet, date is funded with the Life Insurance Corporation of India, and the contribution there of
payable is absorbed in the accounts. Liability for leave encashment benefit determined based on
actuarial valuation as on the balance sheet date is provided for in the account.

The finance department at CRESCENT TANNERS PVT LTD are engaged in all of the activities
as described above.

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