I am the only HR in a company of 50+ people. All others are in IT - software development. With my entrance, an HR department has evolved in my company, and I've been the only HR handling everything for two years.
I believe you have included too many things that are not required at this stage of your company. Excluding a few and keeping only those from your list that are required:
1) Human Resources Manual - Keep a soft copy/ppt. Don't spend too much on hard copies and printing.
2) Policy & Procedures Manual - Not absolutely required. Do not clutter with too many policies, and a manual is a big NO.
3) Dress Code - Are you introducing a dress code only after setting up the HR department? If yes, don't do that.
4) BUSINESS EXPENSES - Prepare an expense sheet taking care of all expenses and segregate as per different parameters - travel, office expenses. Or prepare software. Let the employees fill it on their own. Let the HR try doing this as well.
5) INDUCTION - Let the HR prepare it themselves.
6) PERFORMANCE MANAGEMENT SYSTEM - Will come in the later part after a few months.
7) Recruitments - The person should have an understanding of your IT business; better if they have some technical knowledge. They should be able to analyze the future positions that you might require to hire. But this will come only with time.
8) Performance Appraisals & Training (technical and soft skills) - Let the HR assist the seniors in this. For soft skills, HR can see what can be done.
Initially, when I joined, my director would ask me to sit with him while he conducted interviews to understand how to judge, what questions can be asked, even if the person is selected technically, can they be taken on managerial grounds. If not, why... He has been very supportive throughout.
9) LEAVE POLICY - Just keep required types of leaves - casual or earned, sick, vacation, study (if applicable to pursue higher education). The more leaves you have, the more complications you create for yourself.
10) EMPLOYEE RELATIONS - HR should be friendly with employees and management. Always remember, since you are going to set up the HR department now, do not clutter with too many HRs. Do not make an HR union. Get one, make them learn, make them comfortable with other employees. They will be the only person who will act as a mediator between you (management) and your team. They could think that our message can be put across to you through the HR. Possibly, we will be heard now. Getting in more than one HR person will not allow the HRs to move freely within your technical team. Free communication will be barred.
At the same time, the employees should not feel that now there will be too many policies, manuals, and management rules with the entry of an HR person.
Firstly, analyze what all you need to have depending on your company's nature of work; and whether it is necessary to have at this very moment.
I do not think you need to set up an HR Department as such. One person to handle all these things is sufficient. More than qualification, see the learning potential and initiative-taking capability of the person. An MBA might demand more pay considering their degree (nothing personal as I'm also an MBA), but are they the best fit for your company at this stage cost-wise? Similarly, an experienced person might help you out in a certain way as they know the way of dealing with things. But is that person capable of handling the stuff alone? Have they done something like this single-handedly, or do they always work in a group and can't manage these things alone? You need to be careful while recruiting the person who will be responsible for helping you set up this HR department.
All this is from experience.
And, I hope I have written well.
Regards, Ashlesha Dere