“ANALYTICAL STUDY OF THE INDUSTRIAL CANTEENS .pdf

ANALYTICS

1. CHAPTER THREE: INDUSTRIAL CANTEENS

3.1.1 Need & Justification of Industrial Canteen
3.1.2 Industrial Canteens as a welfare facility
3.1.3 Composition of Industrial Canteen
3.2.1 Administrative Set up canteen committee
3.2.2 Administrative Set up canteen manager
3.2.3 Administrative Set up canteen personnel
3.3.1 Records & Registers in Industrial Canteen
3.3.2 Purchase, Cost & Sale Register
3.3.3 Financial Working in Industrial Committee
3.4.1 Accounts-Daily, Weekly, Monthly & Annual Accounts
3.4.2 Daily, Monthly Annual Budget
3.4.3 Income & Expenditure Ratios
3.5.1 Management Procedures : Supervision, Monitoring, Controlling
3.5.2 Management Procedures - Directing, Communicating, Reporting
3.5.3 Management structure of Industrial Canteens










CHAPTER THREE: INDUSTRIAL CANTEENS
3-1-1 Need and Justification of Industrial Canteens
In the industrial belt of Pune and Pimpri-Chinchwad there are many industrial
units that run round the clock -Kirloskar units, Bajaj units, Tata units, Kinetic units and
other units like Ruston Greaves, SKF, Thermax, Forbes Marshall and others run their
production units to the full capacity. The workforce has to report at least an hour before
the commencement of the shift. They start from the place of their residence at least an
hour or more before the reporting time. The same procedure is followed when they
finish their work. Their working schedule lasts for about nine and half hours. Add to
this time required before reporting and after the end of the work-shift. The total time
required for transport and work in the shift is of about eleven to twelve hours. It is but
natural that these workers need to be fed properly and sumptuously. This requires the
establishment of the catering unit on the premises of the industrial unit. It is obligatory
for industrial units having more than 250 employers to provide the canteen facility.
Though it is optional for them, many units having less than 250 employees in their
workforce, provide the canteen facility on their premises for the convenience of their
workforce. The provision of wholesome food needs to be made for the workforce that
is required to put in their hard physical labour in the industrial unit. It is essential to
maintain a balanced diet of sufficient nutritional values to be served in such industrial
canteens. The need for the provision of canteen facility for workers is thus universally
acknowledged in respect of the industrial units for more or less than 250 employees in
the workforce.
The need to establish such catering units is the main ground of its justification.
The physical necessity of the establishment of an industrial canteen justifies its
existence. It is a welfare facility to be provided to the workers in an establishment. It is
a humanitarian gesture on the part of the employers. The welfare facilities that are
given to the employees in a unit are considered to be the part and parcel of the
expenditure an employer is required compulsorily to incur. It is now a privilege of the

2. workforce to demand this facility. The provision of an industrial canteen is thus an
obligation for the
management of the industrial establishments. The need and justification of running an
industrial canteen in an industrial unit that is run satisfactorily need not be exaggerated
as the facility is acceptable to both the parties concerned that is the employers and the
employees working in those units.
3-1-2 Industrial Canteens as a Welfare Facility
The aim of every industrial organisation is to gain maximum at
minimum costs through a loyal and co-operative workforce. In order to achieve this aim,
it is necessary to provide a work environment that is comfortable, convenient and
pleasant to its workforce. The establishment is obliged to fulfil the needs of the
employees if they are to give their best to achieve organisational goals. The employers
ought to provide certain facilities and benefits to their employees to gain maximum at
minimum costs. These facilities and benefits are often, referred to as “Staff Welfare
provisions”. These provisions are classified under the heads of physical needs and
socio-psychological needs.
The physical needs are those which are required for comfort at work. The
welfare activities of this category are the provision of proper lighting, temperature and
humidity control, fresh air free from fumes and gases, low noise levels, a clean
environment, clean uniforms for staff, toilet and hand washing facilities, waste disposal
equipment, proper drainage and sanitation facilities, safety procedures and devices and
appropriately designed equipment and furniture. Sound proof ceilings, fitting exhaust
fans, provision of sinks and sitting and resting facilities are required in the industrial
establishments and particularly in the canteens.
The socio-psychological needs cover the needs for security through adequate
wage payments, provision for housing, infant creches for working mothers, transport,
social working hours, leisure and holidays, leave for sickness, maternity and
counselling services for stress at work-in-addition to the wages, subsidies on meals,
housing and others help to enhance wages indirectly.
The physiological needs are the needs of all the people. The provision of safe
drinking water, canteen facilities, rest periods and room, clean toilet facilities and
medical facilities are included in the physiological needs. Canteen facilities are a
statutory requirement. Irrespective of this, it is moral obligation on employers of catering staff to provide them with fully or partly subsidised meals. Health facilities
generally include regular medical check-up, treatment for ailments or injuries,
preventive medical care, health education and health insurance. Money is an important
motivator of people’s behaviour as far as it can help to satisfy basic physiological needs.
After that it is the non-financial incentives that take care of psychological and social
needs. The employee welfare measures include (a) work environment facilities related
to the maintenance of temperature, humidity, clean air, noise level and safety, (b)
hygiene and sanitation such as toilets, change rooms, rest rooms, waste disposal,
drainage protective clothing, and footware (c) welfare amenities such as canteen
services, safe drinking water, health facilities and medical checks, (d) housing facilities
such as HRA free accommodation and loans for housing (e) recreation as sports, games,
reading room, library and films and (f) training such as job development, individual
development, language training communications, craft training and lectures etc. The
provision of canteen facilities thus satisfies the physiological needs of the worker and
thus running a canteen in an industrial unit is a labour welfare facility.
3-1-3 Composition of Industrial Canteens
What is an industrial canteen composed of? An, industrial canteen exists in its
utilitarian functioning, which is plainly to feed the employees in an industrial unit. Its
functioning is a service-oriented facility. The core activity in the industrial canteen is
the cooking of the items of food in the kitchen and serving them fresh and not to the
consumers in the dining hall or its service area. The preparation of food production, the
actual food production and the food service to the consumers are the central activities to
be performed in an industrial canteen. In addition to these core activities, what goes
before the pre-production and production stages and what follows after the food is
served are also part and parcel of the schedule of the functioning of an industrial
canteen. What an industrial canteen is composed of is the continuous and complex
network of activities during the pre-production, production and post production phases
of preparing food and serving to the consumers in order to enhance their efficiency
through the provision of wholesome meals and by creating a comfortable work-
environment. The orderly sequence of these activities needs to be maintained and each
of the activities needs to be executed most efficiently and a delicate balance between
competent work culture and consumer satisfaction needs to be maintained in the
functioning of an industrial canteen. The composition of an industrial canteen lies on
the co-ordineted joint efforts of a group of workers involved in the canteen

3. management from the person at the top who is supposed to manage and supervise the
functioning of the industrial canteen to the person who is supposed to be a helper in the
dishwashing operations. The hierarchy of functions, roles and activities needs to be
cautiously put to the work on hand from day one to the next and from the next to the
next to that and so on and on throughout the year. It is a constantly moving cycle that
has no stops and keeping the cycle which is made of many many inner cycles, is what is
involved in the composition of the industrial canteen. It is a joint task of all the
concerned and any slip or error at any level is bound to have, its negative results on the
entire job, involved in the functioning of the industrial canteen. There are no material
components but a consistent chain of physical actions that need
physical labour, mental alertness and psychological strength to carry on the activities in
the industrial canteen. The administration, the management and the execution of these
core and related activities constitutes the composition of the industrial canteen. What an
industrial canteen composed of is the conscious combination of the head, the hand and
the heart domains to plan, to work out and to feel the various jobs involved in feeding
the people. In India, this task has been carried out in ceremonies and festivals from the
times immemorial and the one who cooks food does it as if he is worshipping God-as if
doing the pooja (worship) of Annadevta (the god that is food) and the one who eats the
food gives heart-felt compliments with satisfaction, in the words like Annadata sukhi
bhava (let the giver of food be perennially happy). Their sincere commitment to the
duty on hand in the production and service of food is at the heart of the matter in the
functioning of an industrial canteen.
3-2-1 Administrative Setup: Canteen committee
The administrative set-up of the industrial canteens is three-tier in pattern
because the higher decision-making body is generally the canteen committee, and the
middle level administration is carried out by the canteen manager and the lower level
administration which is operative management is to be executed by the canteen
personnel. The provision of the canteen committee is made in the rules and regulations
for the industrial canteens. It is suggested that the canteen committee is to be
constituted on the tripartite basis. The representatives of the management, the
representatives of the employees of the industrial unit and the members of the canteen
staff are required to form the canteen committee. The canteen manager or the contractor
is required to work on the committee. The members represent the different cadres of
employees such as clerical staff, workers and others, if it is so required. The composition of the canteen committee is determined by the industrial unit as a whole or
its management or its policy framework. The canteen committee thus constituted either
through the representation or the nomination of members is required to carry out the
functions of managing the said industrial canteen. The representation in some cases is
given to the members elected through elections conducted for the specific purpose
whatever is the nature of the composition of the canteen committee it has to function as
the governing body for conducting the affairs of the canteen.

The administration of the canteen is to be carried out by the canteen committee
by making the major decisions. It is observed that in some units, a non-interference
policy is observed and so the task of decision-making is entrusted to those who are
personally involved in running the industrial canteen and in such cases either the
canteen manager or the canteen contractor becomes the sole administrator of the
canteen. In some cases, the canteen committee decides what and when to purchase
provisions for the canteen, the quantity of provisions, of the mode of procuring the
provisions. The decision about menu planning is made by the canteen committee
whenever it is found necessary. The maintenance of the accounts and the provision of
money matters are sometimes entrusted to the canteen committee. In some units the
entire administration from the higher level to the lower level and all the tasks involved
from buying the provisions, preparing the food, serving the food to the consumers and
the different, post-production tasks are to be shouldered by the canteen committee. The
total administrative set-up and procedure depends on the canteen committee and its
efficient functioning in many industrial canteens. The canteen committee is the top
administrative body that varies in its nature from the most non-interfering functionary
to the most interfering authority and these differences are noticed from one unit to
another depending on the policy framework, administrative set-up and the style of
functioning of each of the industrial canteens in the units in the industrial belt and the
same is observed in the case of the industrial canteens surveyed in and around the Pune
region.
3-2-2 Administrative Setup: Canteen Manager
The canteen manager is the key functionary in the administrative set-up of an
industrial canteen. He occupies a central position between the higher level
administrators and policy-makers who decide the policy framework of the functioning
of the canteen and the canteen staff that actually brings into practice what has been

4. planned to be executed in respect of food to be fed to the consumers in the industrial
unit concerned. The canteen manager thus holds a very crucial post in the
administrative functioning and the managerial execution of the industrial canteen to
which he belongs. In some cases, the canteen manager is the sole administrator of the
canteen in the industrial unit. The canteen manager or the canteen contractor holds this
key position in many industrial canteens.
The canteen manager is required to play different roles in carrying out his duties.
He is required to look after the purchases to be made. It is his duty to fix the quality and
quantity of the items to be purchased. It is he who decides when and where to make
these purchases. He is responsible for making decisions about the rates to be approved
while finalizing the procedure of making purchases of grains, cereals, spices,
vegetables, fruits and other items required in the production of food. The physical
features are determined by the canteen manager such as the items of furniture, different
fixtures and the seating arrangement and the space management for the store, the
kitchen and the service area. The canteen manager has to carry out the important task of
deciding the menu and planning the menu per shift, per day, per week and even per
month. The material provision, the physical arrangement and the menu planning are for
the canteen manager the basic functions of his administrative responsibility. The
purchase manager, the supervising authority for the physical infrastructure and the
decision-making administrator for menu-planning are some of the roles the canteen
manager is required to play in the pre-production phase of the preparation and
production of food in the industrial canteen. In the phase of the production of food
items, the canteen manager is required to oversee the job done by the cooks, in
particular those involved in the making of vegetables, chapatti-roti-paratha-puri, the
sweets and salad and other supplements. Then he is required to supervise the work
carried out by the waiters and helpers. He is more or less a personnel-in-charge in this
phase. His role as a supervisor begins with the post production phases and cleaning,
washing and sanitation routine. He is required to work as a cashier in most of the units
and as such he has to occupy the seat at the reception counter. From this place he has to
control, manage, direct and supervise all the tasks being carried out on the premises of
the canteen. Many times he is required to maintain the accounts and prepare the records
and registers. He has to carry out the correspondence. He is the linking bond among all
the workers involved in the functioning of the canteen and he is the person who is
involved in a responsible capacity and who has to act as a bridge between the world of the canteen and the world of experience outside the canteen. His is a very delicate task
of maintaining balance between management and
workers, decision making and implementation and the worlds inside and outside the
industrial canteen. He is a single individual who has to work in multiple responsible
positions to make catering a comfortable and satisfying experience to those who gather
at the canteen to get refreshed physically and mentally.
3-2-3 Administrative Set-up : Canteen Personnel
The canteen personnel or the canteen staff works at the bottom of the pyramid-
like structure of the administrative set-up of an industrial canteen. These are called line
management or lower management workers. The different cadres make the canteen
personnel. Apart from the canteen manager, most of the other employees as the staff of
the canteen are included in the category of the canteen personnel. In the kitchen there
are cooks, assistant cooks, a maker of tea-coffee, dishwashing workers, the cleaning
workers, those are required to cut, slice, peel, and clean the materials of the food items
to be used for production of the items. In the service area there are the steward, the
captain, the waiters, the utility workers, the helpers and the cleaners. There are the
cashier, clerk, the accountant and the servants in the reception section. The maid
servants have to perform certain specific duties. The catering, the purchasing, the
service, the general administration, the financial management and the personnel
management are the major heads of activities that are involved in the running of an
industrial canteen. The staff that is employed to carry out these various activities forms
the category of the canteen personnel. This is the group of those individuals who
actually perform the different operations and complete the different procedures and
processes necessary in the running of an industrial canteen. This is the actual work-
force of the canteen activities to be performed in a routine schedule day in and day out
almost without interruption on all the working days of the year, which in majority of
cases, happen to be all the 365 days of the year. The management is of administrators
and the middle management of managers and supervisors and the line management is
that of the actual performers of the tasks in the running of an industrial canteen.
The canteen personnel are required to work together with a sense of
commitment and a high degree of efficiency to maintain the quality of food at the
industrial canteen establishment. It is the co-ordination of the different activities and
the simultaneous operative functions which enables the canteen establishment to bring
out a satisfactory feeding experience for the employees of the industrial unit. The

5. administrative set-up of canteens has to pay attention to this level of administration as it
is necessary to maintain a close watch and a supervisory attention on the working of the
employees in the canteen personnel. It is observed that a half-cooked roti or a burnt
chapatti, the supply of onions and a slice of lemon, the fresh, clean glass of cold water
or even the uncleaned plate or table cause complaints from the consumers. That is the
reason why the working of the canteen personnel becomes most significant in the
context of the running of an industrial canteen. This is the staff of the canteen that
maintains the quality and taste of the eatables prepared and served in the canteen. The
administration, the management and the actual performance thus make the three-tier
pattern of the administrative set-up of the catering units in the industrial canteens which
are in general practice represented by the all-rounder personality of the canteen
manager and the practical performance of the canteen personnel from cooks to cleaners
who are busy in the store, in the kitchen and in the service area of the canteen.
3-3-1 Records and Registers in Industrial Canteens
There are three main aspects of the functioning of the industrial canteens that
need to be appropriately recorded in specific books and registers. These are (a) the
administrative records (b) the records of financial transactions and (c) the records of the
staff working in the canteen.
The records which need to be maintained for administrative purposes are
records like the stock register, the attendance register, the record of leave of workers,
the record of menu-sheets, the record of meetings such as the minute-book, and other
such necessary records. The stock register may be a single book for all materials or
separate for consumables and non-consumables. The property register will keep a
record of the immovable assets. The store records will prepare the day to day actual
position of the material provisions to be used, being used and have been used in the
canteen. The cutlery register, the crockery register, the furniture register, the equipment
register and other registers will have to be prepared, provided the stock of these articles
is considerably large otherwise, the same single register may contain sections recording
the stock of these articles. To maintain the stock register as a single book with separate
sections or as separate books for different types of articles will depend on the size of
the catering establishment. For most of the canteens that are surveyed in this study will
need the main stock register.
The daily attendance register and the leave record register are meant for the
employees working in the canteen. The Wages and Salary Register, the PF account register and the Overtime Allowance register are related to the canteen staff. The
presence and absence in the daily attendance register and leave record register mark the
employees on duty or otherwise as the case may be.
The record of menu sheets is essential for the preparation of the cyclic menu for
a week or a month. Menu planning, menu preparation and menu scheduling will
enhance on account of these records and registers if maintained with accuracy and
efficiency in the establishment like the industrial canteen.
Like the stock register and registers related to the employees, the registers and
minute-book concerned with the meetings of the canteen committee are essential in the
administrative set-up of the industrial canteens. The canteen committee being the
responsible decision-making body makes decisions about the working, the daily
business and the general policy and these decisions are recorded in the minute book
which is an important document to run the canteen as per the resolutions passed in the
committee meetings.
The maintenance of the records is vital in the running of the industrial canteen.
The administrative aspects are duly recorded due to the up to date keeping of these
records and registers. The management of the canteen personnel is effectively made on
account of the different registers maintained to record the service profile of the
employees in the canteen. The registers and records keep the account of what should
happen and what actually happens in the administration, financial and personnel
management and the organisational working of the industrial canteens and therefore
those are of vital importance in the industrial canteen management.
3-3-2 Purchase, Cost and Sale Register
The financial transactions of an industrial canteen are mainly the purchase of
materials for the production of food and the sale of the items of food. What is
significant is the determination of the cost of food items and the cost pricing of the
items.
The purchase register may be a single register or a set of separate registers for
the perishable and non-perishable items or for the bulk purchases and the daily
purchases. There is the possibility of category-wise or item-wise keeping of the records
of purchases in the purchase register. The item-wise registers of purchases can be
useful if the details of the items, their quality, quantity, weight or measurement and
price are recorded in the relevant sections under different headings. The food and

6. beverage section may be kept separate from the sections of furniture, equipment and
utensil for cooking and for serving. The purchases of perishable items such as milk,
eggs, vegetables and fruits may be recorded with specific details. Purchases of the
materials determine the volume of expenditure. The purchase register gives information
about the materials and the other essentials in running the industrial canteen and the
planning, the preparation and the production of the items of food is decided on the basis
of what the store contains. The market, the store and the kitchen are the locational
points which are necessary in making an eatable item out of the provisions purchased
from the market and stored in the store of the industrial canteen.
The sale register keeps the record of what is sold, in what quantity and for what
price. In some cases, the cash transactions do not take place on the counter. In place of
the cash in return of the items sold, the coupons are used. The issue of coupons and its
utilization pattern is pre-determined as per the procedure fixed by the authorities of the
canteen. It becomes obligatory to keep a record of the coupons collected and to tally it
with the sales of the items served in the canteen. Whatever is used for the sale
transactions, the cash amount or the coupon collection, the sales determine the receipts
in the canteen. The expenditure from the purchase register and the receipt from the sale
register are the two sides that are necessary to present the financial position of the
transactions in the industrial canteen.
The purchase register and the sale register both together enable the canteen
management to determine the price of the item. The cost register and the cost pricing
procedure are to be essentially maintained in order to find out the inputs required in the
production of the food items and the determination of the level of the price of the item
concerned. The cost of materials, the labour charges, the establishment expenses and
the overhead charges need to be calculated to determine the price and on account of this
price of an item like potato-wada may vary from canteen to canteen. The range of price
may be Rs.5 to Rs.10 for such an item as the bare price of the product, but the way it is
served, where and when served and what other comforts are offered with it may
determine the actual price in the range of Rs.10 to Rs.25 depending on the cushion, the
furniture, the dishes and the environment in which the item is served. It is observed
these days that the price of the ambience today is much more that the actual price of the
item. It is for this reason that the industrial canteen management tries to maintain the
price level by keeping the ambience to the minimum and the quality and
wholesomeness of the food items as the matter of significance. It is for this reason that the subsidy is offered on the prices of the items, or discounts given, or free meals or
free coupons or subsidized item are given by the industrial units that ultimately control
the industrial canteen finances.

3-3-3 Financial Working in the Industrial Canteens
Financial statements in the industrial canteens are of different types. It has been
observed that the purchases denote the expenditure side and the sales present the
income side and the both need to be stated in the manner which is desirable. The
expenditure and the income sides both are presented through the information sheets to
be supplied in the statements of expenditure, that is, the report of the two factors shows
the actual financial position and other factors.
The income and expenditure statements provide just one aspect and those are
dependent on the purchases and sales recorded in the registers maintained specifically
to keep track of the two. These statements prepare the ground for the profit and loss
account. The profit and loss statements are required to prepare the trial balance and the
balance-sheet. In addition to the purchases of provisions, the other items such as wages
and salaries, the establishment expenses by way of expenses on furniture, linen,
equipment, bills for water, gas, power and telephone connections, the overhead
expenses and others need to be put in the appropriate format so that the financial status
becomes clear. These total expenses present one side that is of the outgoing flow of
cash transactions and therefore the other side of the sales, the coupons, the subsidy, the
monetary receipts need to be taken into account. The running of an industrial canteen is
a labour welfare activity and therefore an entirely commercial approach need not be
adopted in the consideration of the profit and loss statements of the establishment like
the industrial canteen.
Though it is not exactly a commercial enterprise, the running of an industrial
canteen requires the necessary monetary discipline and taking this into account, the
financial working of the industrial canteen must be carried out in the manner that is
required to be followed in the other establishments. In many cases, the industrial
canteen is run by the contractor and in all the industrial canteens, that are run by the
contractor the same financial working is found to be in actual practice which is
followed in the running of an eatery in the private sector by an individual or an
establishment that is constantly seeking to increase the margin of profit-making. It

7. becomes necessary in such circumstance to curb the profit-making tendency and to
maintain the balance in keeping the quality of food intact and keeping the welfare of
the employees uppermost and for this purpose the check and control procedures need to
put into operation by the controlling authority. It is essential to preserve the nature of an
industrial canteen as a welfare facility to feed the workforce sumptuously with a
balanced and highly nutritious diet at the low cost. In this respect, the financial working
of an industrial canteen is much more difficult and much more complex in nature than
that of the other catering establishments run for more and more margin of profit.
3-4-1 Accounts - Daily, Weekly, Monthly and Annual Accounts.
The accounts should be maintained meticulously. Funding, investing in
assets and controlling operations are the three major aspects of financial decision
making in any enterprise-private or organizational and irrespective of the fact whether
it is profit making or the non- profit making unit. The importance of financial
information is emphasized but more statements or figures have little significance. The
information needs to be related to the technical, staff and materials controls. This is a
continuous process because there is a side range of products and services offered for
sale in the catering establishment. In the west most catering establishments follow a
uniform system of financial accounting. In a developing country like India, there is a
large disparity in the methods of maintaining accounts.
The stipulated procedure of maintaining accounts is to be followed in the
financial canteen management. The daily accounts are to be maintained through
vouchers, bills, coupons and the recording of the incoming and outgoing cashflow
should be completed at the earliest. The daily accounts should prepare the ground for
the weekly accounts. The weekly accounts should lead to the monthly accounts. It will
be a good practice if the financial discipline the preparing quarterly, half yearly and
annual accounts is followed scrupulously. The general guidelines for preparing such
accounts are uniformly applicable to both the industrial canteens and the departmental
canteens. The inputs of capital, grants and subsidies from the departmental source are
available for the departmental canteens but for the other industrial canteens, the capital
inflow is procured from the norms prevailing in the market conditions and the
proprietor of the canteen will be responsible for such procurement. That apart,
maintaining the accounts procedurally and the time frame for the same and the method
of the preparation of accounts and the schedule of the submission of accounts are other related matters remain almost the same in both the categories of the industrial canteens
and the departmental industrial canteen.
Annual accounts comprising of Income and Expenditure, Trading and Profit and
Loss Account, Balance Sheet etc. must be prepared immediately on the close of the
year. After internal audit they should be submitted to the Integrated Financial Adviser
of the Department/ Office within three months of the close of the financial year. It will
be the responsibility of the Manager to complete and submit all accounts progressively
prepared as on the last day of every month, within seven working days of the following
month, after internal audit, to the Honorary Secretary for putting up to the Managing
Committee.
The following books of accounts are to be maintained by the Departmental and
other Industrial Canteens :
1. Cash Book 2. Ledger 3. Stock Register (for expendable items, coupon books,
crockery, empty containers etc.) 4. Dead Stock Register 5. Preparation
Register (to show the details of eatables produced) 6. Sales Register (Work
Sheet) 7. Coupon Sales Register 8. Salary Register 9. Attendance Register
10.Bill Register (for sale on credit) 11. Kitchen Register (if a number of
canteens is grouped together for Kitchen functions) 12. Journal (if number
of daily transactions of credit sales and purchase exceed five) 13.Annual
Accounts
The responsibility for proper maintenance of account books, submission of monthly
and annual accounts rests with the Manager of the Canteen.
The audit of accounts will be carried out by the internal Audit and after that it
will be carried out by the Statutory Audit Squad appointed for the same specific
function.The periods for retention of the records of the canteens are to be prescribed in
consultation with the competent authorities for a period form One year to Ten years
depending on the nature of the records and register. The annual rates of depreciation
will not be allowed to exceed the under mentioned limits for Furniture – 10 percent,
Equipment -20 percent and Crockery of 33 percent.
After applying reasonable rate of depreciation within prescribed limits the
unserviceable non- expendable equipment furniture, crockery etc. will be categorized as
“Beyond Economical Repairs” (BER), these articles will be disposed of through local
auction. The money received will be credited to the canteen funds. Book balances will

8. be adjusted accordingly. Each member of the Managing committee shall assume full
responsibility for efficient running of the canteen and to endeavour and strive for
avoidance of losses as far as possible, as per the duties allocated to him by the
committee. The net value of general working losses/ liabilities as reflected in the annual
accounts will be placed before the Managing Committee, which will go into the reasons
for losses and decide the remedial measures to arrest the losses for the future.
3- 4-2 Daily, Monthly, Annual Budgets.
Financial management is that area of business which deals with the effective
management of all the resources of an establishment in monetary terms. It involves
keeping account for all the transactions made, also recording any information to enable
the decision making on equipment, employees, purchasing sales and other areas of the
canteen management. The term accountancy is used to describe the process of
measuring in the financial terms the past, present, and future operations of a business. It
helps to assess the financial status of on organization at any particular point in time.
The term management accounting covers more than just the preparation of financial
statements or accounting reports. It is concerned with the interpretation of reports and
their presentation in a form that will enable canteen management to make profitable
decisions about utilization of resources.
Though based on knowledge of basic accounting techniques, it is chiefly a
matter of nature of attitude and approach towards the complex business problems. It
includes the preparation of cost statements and cost estimates. The direct and indirect
costs involved in the process of production need to be identified. This prepares the
ground for standard costing. Standard costing includes comparison of actual with
standards and determines variations. The importance of standard costing needs to be
properly understood in respect of the standard costing for dishes, meals, and other
eatables and beverages. The cost accountancy and standard costing are very useful to
prepare the cost estimates. These become part of the cost budgeting. Planning and
control of sales determines the extent of the use of materials. The materials estimates or
the materials budgeting help in the appropriate utilization of the materials. There is the
significant contribution of budgets in the management accounting. For this purpose the
fixed and flexible budgets need to be prepared. Similarly capital, and operating budgets
are used as standards for measuring actual performance. As the Daily, Weekly,
Monthly and Annual account are to be maintained to record the financial status, it is
necessary to plan and prepare in order to make the decision making process easier and to prepare daily, weekly, monthly, and annual budgets in the financial organization like
the industrial canteen.
Catering is essentially a service industry. Some of its special features
make it different from other industries and complex in terms of financial viability.
There is a wide variety in the types of products and services. There is a large variety of
costs incurred. The proportion of fixed costs is very large. A variety of prices needs to
be determined for the same items depending on the nature of services offered. Catering
establishments are always affected by the mood and the goodwill of the consumer and
the seasonal demand. All these diverse features make financial management of catering
and food services rather tricky, difficult job. Therefore, decisions are required to be
made at
every stage and for the decisions to be made effectively, budgeting men, manner,
materials and processes is required.



An illustration will serve the purpose
Date 01-04-2004 Estimate
s
% Actual %
Variable costs 5000 50% 3000 30%
Fixed costs 4000 40% 6000 60%
Net Profit 1000 10% 1000 10%
Total 10,000 100% 10,000 100%
This daily budget is in the simplest format. It can be detailed out including the
different products and services. The extension and addition to the same will possibly
generate by putting together the daily budgets, the weekly and monthly, budgets. The
seasonal budgets may to some extent correspond with the quarterly budgets such as the
summer budgets of the months of April, May and June, the rainy season budget of July,
August, September, The autumn season budget of October to December and the
Winter budget from January to March. This will finally lead to the preparation of the
annual budgets. The budgets exercise check and control mechanism on the financial
transactions of the industrial canteens. They provide a blue print for the “What” and

9. “How” of the operations to be performed with the cost estimates maintained from a
single day to even the span of the entire year in catering services.
3-4-3 Income and Expenditure Ratios.
Cost pricing in canteen Management is a process by which managers
attempt to direct, regulate and restrain the actions of the canteen personnel in order to
achieve goals. This is essential in the area of food and other costs because loss is
possible at every stage in a catering operation. The food costs in any catering
establishment, whatever its size, vary between 40 per cent of total sales. These costs
being variable need to be controlled because on them will depend the amount of profit
that the establishment makes. In the sequence of the production cycle and service, the
losses are possible because of lack of supervision at the point of receiving supplies,
insufficient menu planning, lack of care in the Kitchen production and lack of training
in the service of prepared food.
The exact cost of a dish should preferably be known before it can be
served to the consumer at a profitable price. It is important to cost dishes and meals
accurately to ensure that they are cost-effective and cover all costs incurred in their
preparation and service. It is the usual practice in catering to determine the total cost of
materials used in producing a dish of a standard quality and then adding to it a certain
percentage to cover labour and overhead costs to calculate the selling price. The
method of standard dish costing is useful in setting the targets for price and usage of the
materials, thus helping to detect differences in the process of food production and
service- Dish costing needs to be checked and altered periodically when food prices
change.

A sample of a standard costing sheet is given below.
Standard Costing Sheet
Dish – Chapati Date 12-7-2002
Portions 4(8 Chapatis)

Ingredients Quantity Price RS/Kg Cost (Rs.)
Whole Wheat
flour (atta)
75 gm 6.00 0.449 Soya flour 25 gm 8.00 0.200
Rice flour 05 gm 8.00 0.040
Salt 02 gm 2.50 0.050
Fat 10 gm 40.00 0.480
Total Food Cost
(4
Portions) 1.219
Selling price
Gross
Portion 0.304
+
profit %
66%

Sample costing Sheet for Chapati
Costing sheets for each dish on the menu may be prepared to calculate the
meal or menu costing. Since catering is a service industry, labour, staff costs form the
largest expense next to food. Labour costs include salaries of staff, the value of all
allowances, facilities and benefits to them such as meals, medical facilities, housing,
insurance, bonus, pension, and uniforms. Overheads include all other costs like rent,
depreciation, fuel, cleaning materials, linen, security, administrative and costing cost.
From costing we have to move on to the process of determining what to charge for food
items which is termed “pricing” in commercial catering. The pricing takes the profit
making goal but in the industrial canteens it has to take the cost effective goal. The
method of pricing used often is the cost plus method. The rate of return on the capital
method is also used for the determination of pricing of items. In general 150 per cent of
food cost is added to determine the pricing. It is evident that irrespective of the size and
nature of the food service establishment, price fixation must aim at covering all costs
involved in the preparation and service of food. The determination of prices varies with
the fixed cost and overhead expenses of every establishment.
A full part subsidy is provided to many factory or office canteens,
Generally, a supervisor runs a canteen who is accountable to the personnel manager or
to the works manager. Normally, the canteen provides main meals, snacks and tea.
Although employees generally like plain well cooked and attractively served food, the
canteen supervisor tries to introduce a weekly cycle for the sake of convenience and to
provide variety. It is however difficult to offer a choice of dishes everyday. The canteen
supervisor is responsible for controlling costs and therefore he collects cost in a manner
that facilities cost control.

10. When the principle of costing is applied to this field, the objective is to
keep the costs to the minimum consistent with quality. A monthly operating statement
is prepared to show the various expenses under appropriate heading. The total cost is
compared with the amount realized from the sale to find out the next operating profit or
loss.
Under the following main account headings, The costs are collected periodically.

(a) Provisions like - Meat, eggs, fish, vegetables, fruits, flour, rice, milk
vegetable oil, tea, coffee, sugar, soft drinks, etc.
(b) Wages and salaries of Labour Supervisor, cooks, waiter, kitchen
assistants, porters.
(c) Services as Gas, power, electricity, steam, water, light.
(d) Consumable Stores such as Table linen, cutlery, glassware, crockery,
cleaning materials, brushes, dustbins, etc.
(e) Miscellaneous Overheads like - Rent and rates, depreciation insurance
premium, etc. The sale of meals and subsidy is the source of revenue for the
canteen. Usually coupons of different colours are issued to workers, according
to the type of meal provided.
The receipts from running a canteen include company subsidy and sale
from provisions. A proper budget should be prepared starting from the volume of the
services to be rendered. Since the production of the canteen is mostly perishable, care
should be taken to avoid excess waste or supply as much as possible.
CANTEEN COST STATEMENT
NO. OF MAIN MEALS SERVED
NO. OF SNACKS SERVED
NO. OF TEA SERVED
PARTICULARS ACTUAL BUDGET
FOR THE
MONTH
CUMMULATIVE FOR THE
MONTH
CUMMULATIVE
A) Wages and
salaries

Supervision
Cooks Canteen Manager
Kitchen Assistant
SUB TOTAL



PARTICULARS ACTUAL BUDGET
FOR THE
MONTH
CUMMULATIVE FOR THE
MONTH
CUMMULATIVE
B) Provision
Meat
Fish
Eggs
Vegetables
Rice
Butter
Vegetable oil
Bread and cakes
Fruits
Biscuits
Milk
Tea and Coffee
Sugar
Soft Drinks
Grocery
SUB TOTAL
C) Consumable
Table line
Cutlery
Glassware
Crockery
Cleaning material
Dustbins
D) Services

11. Gas
Power
Electricity
Water
E) Miscellaneous
O/H

Rent and rates
Depreciation
Insurance
Maintenance
SUB TOTAL
F) Total cost
G) Deduct income
from sales
Subsidy by company
H) Surplus / Deficit
Mostly the canteens are subsidized i.e all costs are not borne by the
workers. For this reason from the total cost, subsidy and sale of coupon is deducted to
arrive at the profit or loss of the canteen. It is difficult to give format of the Canteen
cost sheet which will hold good in all circumstances. The required format should be
developed based on the specimen format given above.
Some times it is required to calculate the increment in subsidy per head
to be provided by the company this month over that in the same month last year. For
this purpose, monthly statement of canteen cost may be prepared in the following forms:
MONTHLY STATEMENT OF CANTEEN COST
Particulars This Month This month
last year
Materials consumed
Labour and Supervision Overheads
Total Rs.
Less : sales by Coupon
Subsidy for the period (a)
Number of employees served (b)
Cost per employee (a+ b)

Cost accounting with the objects of fixing prices for main meal, snacks,
tea etc. is difficult to organize because it requires equating one type of food with
another so that a common denominator can be obtained to determine the average cost
per meal. However, if such a common denominator cannot be ascertained, costs may be
expressed in terms of per employee to facilitate control. Though, it is difficult to
calculate the cost per meal the canteen supervisor with his experience can estimate the
cost involved for each type of meal provided. The canteen supervisor should have the
knowledge and judgment about the number of meals that can be served with various
combinations of meat, fish and vegetables and how many cups of tea can be provided
with certain quantity
of tea leaves and certain litres of milk. Thus the entire decision making is mostly left
upto the canteen supervisor who mostly handles situation single handedly.
It is necessary for the canteen supervisor to estimate correctly the
number of meals required each day. Wastage must be avoided to control the costs. The
personnel manager and the canteen supervisor should examine the waste food bins from
time to time. This is to ensure that food is not wasted.
Moving average charts for the main heading of expenses and income
received from various type of meals helps to keep a watch on trends. A moving average
charts can be prepared as below.
THREE – MONTHLY MOVING AVERAGE CHARTS FOR
CONSUMPTION OF VEGETABLE OIL
Month Date 3 Months Moving Total 3 Months Moving average
January 150 - -
February 135 425 141.67
March 140 413 137.67
April 138 420 140.00
May 142 420 140.00
June 140 423 141.00
July 141 418 139.33
August 137 416 138.67

12. September 138 420 140.00
October 145 426 142.00
November 143 427 142.33
December 139 - -

Note : The first figure against February in the 3
rd
column is the total of data for January,
February and March. The three months moving total for March is obtained by
discarding data for January and adding data for April. Each time while calculating a
moving total, the data is discarded for the 1
st
of the previous 3 months and data for the
month which is next to the last of the previous 3 months.
The moving total and the moving average are placed at the center of the time span
from which they are computed. The total data of January, February and March is placed
against February.
EXAMPLE
The industrial canteen in an industrial unit is run for the benefits of its workmen and
provides necessary subsidy to the canteen.
During the month of August 2000 the following purchases were made.
Commodity Quantity Rs. Rate (Rs.) Per. Kg.
1. Tea 4 160
2. Sugar 50 30
3.Milk 60 25
4.Atta 210 20
5.Flour 20 30
6.Vegetable Ghee 3 110
7. Besan 12 40
8. Dal 30 38
9. Potato 90 20
10. Green vegetable 20 15
11.Spices 2 150
The other expenses for the month were : Rickshaw fare Rs. 200, Salary to cook
(1) Rs. 2500 per month, Wages to waiters,
(2) Rs. 1500 per month each, Supervisors Salary Rs. 3000 per month. Fuel, Gas, Coal etc. Rs. 4000, Miscellaneous expenses-crockery and glassware
Rs. 1000. Depreciation of Utensils and Furniture Rs. 500, Sale of coupons @
Re. 0.15 per coupon.

Prepare Trading and Profit and Loss Account of the Canteen for the month of
August 2000 and find out the amount of subsidy paid by the company.
Tea Sugar Atta
Opening Balance 2 kg 10kg 30kg
Closing Balance 1kg 5kg 20kg

Solution :



Canteen subsidy during the month of August 00.
Rs. Rs.
Net Loss 5290 Subsidiary given by
company
15290
Establishment Expenses 5500
(Salary, wages )
Overheads 1500
Staff Overheads 3000
Total 15290 15290
TRADING AND PROFIT AND LOSS A/C FOR THE MONTH OF AUGUST
2000

Rs. Rs.
To Opening Stock By Sales 7,800 @ Rs.2.15 16770
Tea 2 kg x 160per kg 320 Closing Stock
Sugar 10 kg x 30 per kg 300 Tea 1x 160 = 160
Atta 30 kg x 20 per kg 600 Sugar 5x30 = 150
To Purchases : Atta 20 x 24 = 480 790
Tea 4 x 160 640
Sugar 50 x 30 1500

13. Milk 60 x 20 1200
Atta 210 x 20 4200
Flour 20 x 30 600
Vegetable 3 x 20 60
Besan 21 x 40 840
Dal 30 x 38 1140
Potato 90 x 16 1440
Green Veg. 17 x 20 340
Spices 2 x240 480
Fuel, Gas, Coal etc. 4000 By Net Profit / Loss -
Rickshaw fare 200
17560 17560

3-5-1 Management Procedures : Supervision, Monitoring, Controlling
Major policies are conceived and planned at the higher management and
then each policy decision passes through different channels and processes to the person
that is at the level of executing the decisions. In a catering establishment, decisions as
well as guidelines for performance of process activities and operations need to be
passed from level to level downwards to carry out the scheduled operations and the
programme of production. It is therefore essential to see that the management
procedures in the establishment have a suitable network for efficient supervision,
effective-monitoring and competent controlling mechanism well established for these
purposes.
The traditional concept of supervision has undergone many charges. The
method of supervision was mainly the spot visit. It was generally a fault – finding
mission in majority of the cases. At present supervision through the spot visit is not just
an occasion for fault finding but an opportunity to take stock of the situation on the
whole and to advise and guide those concerned with the operation.
In the industrial canteens the supervisory authorities have to carry on the
tasks of supervision. At the higher level of management the decision making procedure
is carried out by the management. On account of this, the top level management is the
supervisory authority. There is no direct supervision but the powers of supervision are
delegated to the canteen committee. The canteen committee on its part delegates this supervisory authority to the canteen manager or the canteen contractor or the proprietor
as the case may be. The canteen manager visits the spot concerned either in the store or
in the kitchen or the service area as often as it is convenient for him, considering the
nature and the size of the catering establishment under his charge. The supervision of
service is entrusted by the managers to the steward or the captain and then to the
waiters. The supervision over the maid servants, cleaners and waiters is carried out by
the steward or the canteen manager depending on the size of the industrial canteen. The
store – keeper is under the charge of the canteen manager and the store – keeper
concerned will supervise the functioning of the helpers, the cleaners and the maid
servants, if such a need arises. The canteen manager has to supervise the operations
carried out by the cooks.
The supervision task is closely related with the monitoring of the
operations in the functioning of the industrial canteens. A periodic monthly or quarterly
stock taking is necessary to monitor the store of the industrial canteens. To ensure
proper execution of the processes in food production and catering operations it is
essential to monitor the operations in the field. This monitoring process initiates the
necessary corrective measures at appropriate time and at appropriate level. Monitoring
helps to keep a watch on achievement of targets and appraise the execution of the plans
set in the light of actual experience. Field visits, meetings, and mutual discussions are
the methods used for monitoring and those who have the supervisory authority will
carry out the task of monitoring in the managerial procedures of the canteen
management.
Controlling is the process that measures current performance and guides
them towards some predetermined objectives. The controlling is essential for the
effective implementation of plan. Controlling is linked with planning. It is the process
of comparison of actual with the standard set. Controlling has to maintain a balance
between activities and operations and the set of goals set for the various operations of
the canteen management. Controlling is a means to plan policies, programmes, and
schedules of planning. Planning should precede controlling. Planning without control
is meaningless and controlling without planning is blind. Thus good planning can bring
concrete results through controlling.
The significance of supervision, monitoring, and controlling in the catering
operations needs to be emphasized as these management procedures help executing the
catering operations.

14. 3-5-2 Management procedures – Directing, Communicating, Reporting
The management procedures include directing which is that function
that initiates actual performance of tasks and requires greater interactions between
people through communicating and reporting. Directing includes instructing, guiding,
teaching, and reviewing. Instruction must ensure that each member understands how
his work fits into the total scheme of work to be achieved. Direction is the guidance, the
inspiration, the leadership of these men and women that constitute the real core of the
responsibilities of management. The task of directing people involves guiding them in
their jobs. Clearly, standing too close to be an employee or interfering with jobs is to be
avoided. Instead of watching people, by viewing their work positively, the performance
can be supervised to see how the work is being done. Teaching people to organize work
will make the work less stressful and better in performance and using quicker methods
will create a more relaxed atmosphere. Co-ordinating and evaluating the operations is a
part of directing the organization. To get the work done by the subordinates to achieve
desired results in a stipulated span of time is an important task. Getting the work done
by a person depends on whether he is motivated to do that work or not. Motive makes
a person active in a particular way. Motive is an inner impulse causing a person to act
Motivation refers to the way in which urges, drives, desires, aspirations, striving, or
needs direct control or explain the behaviour of human beings. The fine balance of both
the types of positive motivation and negative motivation is the core of management.
Directing involves leadership traits in the supervisory authority. The process of leading
depends on the elements such as possessing separate identity, being rooted in feeling
and attitudes in everevolving dynamic process and involving influence, direction and
guidance. Co- ordination is the combination of all efforts used in an enterprise for
obtaining objectives that are common in nature. Constant co- ordination helps to tackle
problems when they arise, gather ideas from various experiences, anticipate problems
and take timely action to prevent them from recurring, Co-ordination, leadership and
motivation enhance the efficiency of directing the effective implementation of the
sequence of operations to be carried out in the canteen.
All plans chalked out for the establishment to run smoothly will come to
nothing, if they cannot be interpreted and understood by the people who have to carry
them out.The ability to carry information or messages to others is known as
communication. It is an important tool of management when dealing with people. Yet it
is the most difficult to achieve effectively. In the catering establishment, communicating is central to unifying all the different activities which interplay in the
achievement of goals. Communication is a two way process and is completed when
there is the same response from the receiver of the information which the sender desires
to communicate. The types of communication on the basis of expression are verbal,
non- verbal, written, formal and informal communication. Oral directions, instructions
and commands, written letters, memos, notices, body gestures, facial expressions and
even silence are used to communicate messages from one end to another. The types of
communication on the basis of direction are upward communication, downword
communication and horizontal communication. The barriers of communication are
uncertainty, fear complex, cultural background, education and certain other causes and
these need to be removed and break – down in communication needs to be avoided.
The establishment of an effective communication system is essential for every
organization.
The Reporting system is aimed at providing necessary feed – back about
the status of activities and operations to the supervisory authorities. Such feed back
enables the authorities to keep a watch over the execution of plans and ensures
necessary
remedial measures to be taken to achieve the targets allotted. The lower level staff will
report orally to the middle level management. The waiters will report to the steward or
the head waiter. The utility staff will report to the head amongst them. The manager
will seek reports from the store, the kitchen and the service area. The upward reporting
will enable the manager to instruct as required. The manager in his turn will have to
report to the upper level management. The submission of written reports to the canteen
committee or management will have to be carried out in the periodic sequence. The
submission of accounts is reporting on the financial front and is to be carried out as
stipulated in the policy framework of the catering establishment. Reporting is the task
crucial in management but equally crucial is the fact of ‘who’ reports to ‘whom’.
The managerial procedures involve Supervision, Monitoring,
Controlling, Directing, Communicating and Reporting. These procedures need binding
together which is provided by the co- ordination of these management procedures. The
same can be presented through a figure as shown below

15. SUPERVISION


Management




MONITORING Middle Level Management DIRECTING


CO- ORDINATION



COMMUNICATING Lower Level Management CONTROLLING



REPORTING

MANGEMENT PROCEDURES IN AN INDUSTRIAL
CANTEEN


3-5-3 Management Structure of Industrial Canteens
The management structure is the out come of putting people and jobs
together and therefore represents the entire team involved in the running of the
establishment both at the operational and management levels. Any organization needs a
well set detailed structure, having functions logically arranged to achieve maximum
efficiency. The two types of authority relationships that most often exist in food
services are line and line staff relationships. In the line structure each individual is
responsible to the person ranking above him on the structural pattern. Thus authority
and responsibility are passed downward. In the line and staff pattern, specialists are
positioned at various levels to advise those along the line structure as the activities of
the establishment get diversified. The expertise of staff is utilized to maximize the
efficiency of line personnel to the utmost.
Organizational management structures can grow in two directions
vertically and horizontally. In vertical structural pattern the person above assigns the
work to his immediate subordinates down the line. In small catering establishments and
industrial canteens run for a limited number of employees, the vertical management
structural pattern is noticed. As the length of the vertical structural pattern increases,
the functional units begin to operate separately. The activities of the establishment
grow in size and volume. The structural pattern then spreads out to become a
horizontally spread structure. The structural patterns also indicate the functional units
and the interlinked relationships amongst them. The structural patterns indicate whether

16. authority is centralized or decentralized. The structural patterns can also be termed as
tall or flat patterns of management structure.
The management structural patterns are line or vertical or tall structures
and line and staff or horizontal or flat structures. These structural patterns of the
management organizations can also be termed as ladder and pyramid structural patterns
in which the ladder vertical, – tall, and line patterns present one group and the pyramid
– horizontal, flat, and line and staff structural patterns of management organization
present the other group. The small industrial canteens which serve up to 150 employees
are ladder type while those canteens that serve more than 150 employees are of the
pyramid structural pattern of management organization. The same cam be graphically
presented.

Management




Manager Manager
PYRAMID

Personnel ORGANISATION

Accounts SERVICE

Service PRODUCTION

Kitchen
MATERIALS
Store

LADDER AND PYRAMID PATTERN