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The West Coast Paper Mills Ltd.
JAIN UNIVERSITYBANGALORE
MASTER OF BUSINESS ADMINISTRATION
ORGANISATION STUDYON
WEST COAST PAPER MILLS LTD
COMPANY GUIDE INSTITUTE GUIDE
Mr. R D Sarda Prof. Manjula Devi
Manager (Accounts and Faculty in finance
Finance)
SUBMITTED BY:
Mr. Shresth Bhandari
USN: 09MBA60087
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ACKNOWLEDGEMENT
Gratitude takes three forms A feeling from heart, an expression in words and
giving in return. Its human bound duty to acknowledge the personalities who
contribute immensely to their efforts and guide us in the right direction. I take this
opportunity to express my heartfelt feelings.
I take this opportunity to express my deep sense of gratitude to our company guide
Mr. R D SARDA Asst, vice president (Accounts & finance) Manager for his co-operation and valuable guidance without which the study would not have been
possible. I also thank Suket parwal (Manager, Cost Accounts and Finance) for
giving me necessary information during my project work. I also thank all the staff
of Accounts and Finance Department for giving the necessary details and guidance
in every walk of my project work.
I express my sincere thanks to our beloved DirectorProf. L.P. Rajan for his kind
support in providing me an opportunity to undertake this study.
I am also grateful to our facilitatorProf. Manjula Devi for her constant
encouragement, guidance and inspiration throughout the study.
Last but not the least I thank my parents and friends.
All Experiences Are Opportunities for Us To Learn And Grow
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CERTIFICATE
Certified that the Organization Study undertaken by Mr. Shresth Bhandari,
USN: 09MBA60087 at West Coast Paper Mill Ltd, for a period from 06.01.2010
to 16.01.2010 is a bonafide work submitted in partial fulfillment of the Master of
Business Administration course ofJain University, Bangalore during the year
2010. It is certified that all corrections/suggestions indicated by the internal guide
have been incorporated.
The report has been approved as it satisfies the academic requirements in respect
ofOrganization Study work prescribed for M.B.A course.
Signature of Signature of
Internal Guide Head - School of Business
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DECLARATION
I Mr. Shresth Bhandari student of MBA Jain University, Bangalore thank my
institution for giving me an opportunity to undergo my project work.
I the undersigned that the organization study wasundertaken at WEST COAST
PAPER MILLS LTD submitted in the requirement of the Degree in Master of
business Administration to the Jain University, Bangalore.
I hereby affirm that this organization study report has been undertaken by me
during the said period as a part of my academic curriculum.
I further declare that this project report is the result of my own efforts and the
conclusions drawn are based on the data and information collected by me.
PLACE: Bangalore
DATE: 30/01/2010Submitted By:
Mr. Shresth Bhandari
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Table Of Content
S. No. Content Page No.
1. Industry Profile 6-11
2. Company Profile 12-26
3. Organization Design 27-33
4. Department Study 34-47
5. Findings 48
6. Recommendations 49
7. Conclusion 50
8. Limitations 51
9. Bibliography 52
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The West Coast Paper Mills Ltd.
Design Of The Study:The organization study was undertaken at the West Coast Paper Mills Ltd, P.B
No.5, Bangur Nagar, Dandeli. The study was undertaken during the period from
06-01-2010 to 16-01-2010 that is a period of 10 days.
Methodology Of Study:
Sources of data:The data in this project is collected through primary and secondary data.
Primary data:Primary data time includes collection of data through interaction with the
company officials.
Secondary data:The secondary data is collected from various sources including of companys
annual report, internet.
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INDUSTRY PROFILE:
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Introduction:
The first paper mill in India was set up at Sreerampur, West Bengal, in the
year1812. India is currently the 15th largest paper producing country. The paper
industry is categorized into forest-based, agro-based and others (waste paper
secondary fibre, bast fibers and market pulp). Their contribution in the
manufacturing sector is 42.9, 28.1 and 29.0 percent respectively.
The west coast paper mills ltd. came into existence on 22-03-1955. This is located
at Dandeli in the midst of forest area of Uttar Kannada district of Karnataka state.
Dandeli is 56 kms from pune-bangalore highway No 4.The west coast paper mills
ltd is one of the renounced and reputed companies in the paper industry. It is one of
the large-scale companies in India.
Availability of bamboo in abundance, the basic raw material, water from theperennial kali river flowing close by which is so very essential for the paper
industry perhaps promoted the promoters to set up the plant in this remote area.
The company was inaugurated by honorable Shri. Morarji Desai the then finance
minister, Govt of India.
The initial authorized capital was Rs 5 crores. The trial production commenced inNov 1958 and the regular production started in 1959 with the initial capacity of
18000MT/annum.
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Brief History Of The Company:
The company was promoted by Shri Digvijay Cement Company Ltd, Sikka,
Gujarat state in 1955. Originally the plant was designed to manufacture 18000
capitals MT per year of writing, printing and packing paper.
The company also implemented the crash program in 1974 to increase the
production capacity to 60000 MT per annum against the license issued in July
1972 to 60000 MT.
The production capacity increased after successful completion of the first phase of
modernization/expansion program in August 1994.
The company has excellent track record of timely repayment of loans for lease,
rentals to financial institutions to leasing companies and has maintained such
record even in the recession period to which this industry has been subjected many
a times. This has been highly appreciated by the financial institutions/ lenders.
In 1964, the company promoted the Andhra Pradesh mills ltd to take over Andhra
Paper Mills owned by government of Andhra Pradesh. The company provided
technical assistance to this company for increasing its capacity from 21000MTpa
to 71000MTpa.
The installed capacity has since gone up to 92500.
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Global Scenario
The paper market in Asia is estimated at around 34% of global consumption. The
principal markets are China, Japan, India, Malaysia, Singapore and Thailand. The
developing markets of Asia present a vibrant growth opportunity for paper
manufacturers. Japan enjoys the highest per capita consumption (249.66kg),
followed by Singapore (228kg), Malaysia (101kg), China (28kg), Indonesia (22kg)
and Philippines (11kg). Singapore tops in per capita consumption of paper.
Malaysia is second with 101kgs. Interestingly the market growth rates are varying
by grades
Indian Scenario
Indian industries contribution to the global paper production is presently just 2%.
This offers a good potential for the paper makers in India. The signs are already
visible as the industry is growing at a faster rate in India (around 5% per year) than
in rest of the world (around 3%). The role the government is crucial in the Indian
paper industry as it plays the role of regulator, supplier (the wood supplying forests
are owned by the government) and the buyer (government is the single largest
buyer of paper).
The domination of small paper mills was high in India till nineties. But now these
have faded into oblivion, as they did not have the economies of scale. As compared
to 1995s production- 2.7 million tons- a growth of 5% can be reported for 1996. In
this year the government made radical changes in the import tariffs by reducing the
duty in paper.
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Further the minority slashed down customs duty on the other papers from 60 to 20
percent and the newsprint was allowed to be imported at zero percent duty.
As a result, traders started importing writing, painting and coated variety of paper
in huge quantities at zero percent duty. Due to prevailing depressed international
trade, imported material was cheaper as compared to the Indian material and also
availability was an additional benefit of credit which ran into months at a
significant low rate of interest. Thus price took a downward trend and inventories
started piling up.
However the demand growth for paper and paperboard is stable. The growth rate
for the different variety of paper and paperboard is witnessing the structural
changes as a major paper manufacturers plan and execute
consolidation/restructuring measures.
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PEST Analysis:
Political: Strong political motivation for globalization
Strong reputation and trust
Gradually liberalizing policies of the government
Favorable regulatory initiatives.
Liberalized foreign investment regime
Economic:
Mergers and Acquisition enables rapid expansion
Strong infrastructure links
Adaptive investment authority to technological investments
Highly mobile work force
Social: Highly trained, talented and educated professionals Strong management culture
New markets segments to be tapped provides scope for growth
Technological: Strong tie-ups with western technology companies
Adaptive to new technologies
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COMPANY PROFILE:
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Vision:To Excel in servicing the growing demands of the paper and paper products
worldwide and enhance the shareholder value with consistent and sustained
performance
Objectives:
1. To build on strength and synergies.
2. To seek out opportunities and to achieve them with commitment with quality.
3. To forge ahead in an increasingly competitive world.
Occupational Health And Safety Policy:
We are committed to achieve high standards of safety, demonstrate concern
towards health of employees and maintain safe workplace environment through
strict control in overall activities.
Quality Policy:
We are committed to provide quality products and services through the TQM
approach to ensure the customers satisfaction on a sustained basis.
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Several Firsts Of West Coast Paper Mills Ltd:
1. First in Asia to install twin wire papri former paper machine.
2. Recipient of The Best Productivity/Energy conservation awards from the
National Productivity council, Govt of India, New Delhi, paper makers
Association, Kolkata and IBPL Urja Research foundation, Mumbaiconsecutively for several years.
3. First in India to have synthetic wire on paper machine.
4. First in India to install drum chipper (Supplied by pall Mann, Germany),
disc refiners, rotary kiln to reburn lime sludge, 330 TPD SIDS Chemicals
recovery boiler and FBC Coal-fired Boiler.
5. First in India to use 100% hard wood in place of 100% Bamboo.
6. First to have captive plantation.
7. First to have well equipped research center.
First in India to establish and use sulphuric acid as a protective agent in
conventional bleaching.
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Export:
To strengthen its competitiveness in the global market, the Indian industry is
adding auxiliary equipment to reduce cost and improve efficiency (through
increased automation). This will enable the industry to compete with paper
manufacturers in china, Indonesia and Thailand, among others.
At WCPM, paper & bonds are at par with international quality standards and are
regularly being exported to various countries like Egypt, Iran, Jordan, Muscat,
U.A.E, Singapore, Hong Kong, Malaysia, Mauritius, Myanmar, Tanzania, Kenya,
Ethiopia and have been well accepted.
Product Range For Export:
Woodfree Writing & Printing Paper
Woodfree Offset Paper
Bristol Board-White & Colour
Security Paper
Super Print (H.B) Paper & Boards
Accounts Book Paper
Duplex LWC, HWC
Duplex White Back and Color
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Product Classification:
Paper is classified into two heads (based on its end use)
1. Writing / printing
2. Industrial and
3. Specialty grades
Writing/Printing Paper:
Classified into cream wove, maplitho (branded copier) and coated varieties.
The writing/printing category provides high margins.
Industrial Paper:
Classified into paperboard and kraft; paperboard can be sub-divided into
Duplex Board with Grey black, White board and MG Poster/Board. The
industrial variety accounts for high volumes and holds the potential for above
average growth.
Speciality Paper:
Speciality papers comprises of security and tissue paper. The speciality
grade paper provides increasing volumes and high realizations.
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Description Of The Products Classification Is As Follows:
PAPER
SEGMENT
SUITED
FOR
END USE DEMAND DRIVERS
Writing/Printing
Creamwove Black and
White
printing
Textbooks and
Note books
Govt accounts for a
sizeable share of
demand.
Govt spending and
demand for text
books and note books
influence demand
Maplitho Printing Premium
notebooks, writing
pads, diaries,
calendars and
annual reports.
Demand is linked to
economic growth and
national literacy.
Corporate literature
and books accounts
for a significant share
of demand.
Coated Paper High-
qualityprinting
Printing, publicity,
material, books,magazines and
office stationery
among others.
Demand influenced
by corporate marginsand health of the
national economy.
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Industrial Paper
Kraft Paper Packaging
purposes
Packaging
purposes
Corrugated boxes and
carry bags.
Duplex board Packaging
purposes
Small cartons for
the retail market.
Driven by the
industrial demand as
a packaging material
from the pharma,
cigarettes, hosiery
and matchbox
demand.
The production and sales of Paper/Paper Board & Multilayer Board for past
five year are as follows:
Year 2009 2008 2007 2006 2005Paper/paper board &
multilayer
board (tonnes)173682 169891 178871 176221 173070
Paper/paper boared
& multilayer
board (tonnes)
170686 170193 179915 180397 168315
The company has been playing a very active role in developing the backward
district of Uttara Kannada. Stabilizing fly-ash dumps by biological means,
developing better drainage systems, organizing education from primary to
graduate, including pulp and paper technology course, facilities for needy children,
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organizing various social awareness programmes etc. are some of the steps it has
taken to manifest its commitment to social and environmental causes.
Corporate Information:
Chairman:
Shri S.K.Bangur, Chairman & Managing Director
Board Of Directors:
Smt. Shashi Devi Bangur
Shri V.N.Somani
Shri R.N.Mody
Shri C.K.Somany
Shri P.N.Kapadia
Shri Saurabh Bangur
Shri K.L.Chandak,
Lt.Gen[Retd] Utpal Bhattacharyya
Shri Krishna Kumar Karwa
Management Team:
Mr. K.L. Chandak,Executive Director
Mr. S.S. Pal,President (Technical)Mr. J.K. Mandelia,President (Corporate)
Mr. V.Subbiah, Vice President (Marketing)
Mr. V.V. Bhatt, Vice President (Marketing)Mr. B K Bhuyan, Vice President (Operations)
Mr. P.K. Mundra, Vice President (Finance & Company Secretary)
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Bankers:
Central Bank of India
Oriental Bank of Commerce
State Bank of Mysore
Syndicate Bank
ICICI Bank
EXIM Bank
Auditors:
Batliboi & Purohit
Chartered Accountants
Cost Auditors:
Shri S. Sankaranarayanan
Cost Accountant
Legal Advisors:
Khaitan & Co.
Registered Office:
Bangur Nagar, Dandeli-581325
District. Uttar Kannada, Karnataka
Ph: 08284 231391-395
Fax: 08284-231225
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E-mail: [email protected]
Corporate Office:
Chandra Kiran, 4th floor, 10-A Kasturba Road
Bangalore-560 001
Ph: 080 22231828-1837, 22211760, Fax: 080 22231838
E-mail: [email protected]
SWOT Analysis:
Strengths:
History of the organization.
Experienced Mill 45 years.
Availability of Labor.
Cheap Labour.
Loyal Work force
Employee Attrition rate is low.
Strong Dealership network
Quick decision making process.
Location Advantage: Government policies, State Development Schemes
Availability of resources.
Huge domestic consumer base.
Low cost manufacturing destination.
Decade old culture in paper manufacturing
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Weakness:
Low safety level
Brand Management - lacking
Technological Obsolescence.
Old thoughts only & no induction of fresh blood in the Company.
Delay in getting jobs done.
Logistics problem.
Need for Empowerment for the employees.
Communication process is not good.
Promotion policy is not good given on seniority basis & not on
performance.
Unwillingness of the staff to change to new practices..
No Strategic Vision.
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Opportunities:
Technological up gradation
Going in for branding strategy.
Foreign market expansion.
HRD management
Online ordering process.
Performance based evaluation, Promotion, & increments in the salary.
Implementation of LAN for connectivity.
Product expansion.
Market Expansion (up country market like In Orissa - interior parts of
Orissa apart from Cuttack, in U.P. market expansion in areas like Allahabad,
Lucknow.
Planning for Personnel Relations Activity.
Advertisements for better communication for the market & also for the
brand building exercise.
The Company can reduce man power by say half, ask the remaining
workforce to give twice the output & pay them double the salary that is paid
now a Co. can save 25% of the cost directly & also can get a lot of other
kinds of advantages
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Threats:
Entry of foreign players.
Excess man power
Losses in resources water, inputs, repulping cost.
Bottom line Erosion.
Use of best available technology (BAT) by the competitors.
Product substitutions
Stringent environment laws as per CREP guidelines.
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Projects Under Consideration - Rs. 1300 Crore:
Complete fibre line of 725 TPD bleached pulp capacity comprising of wood
chipper, chip screen, chip silo,modified batch cooking system, brown stock
washing & screening, oxygen delignification of pulp, ECF bleaching and
chlorine dioxide generation plant.
New paper machine comprising continuous stock preparation, head box to
pope reel rewinder QCS & DCS systems, converting equipments,
mechanised handling of paper in converting, finishing and godown stages.
Rotary lime kiln of 230 TPD lime production capacity.
Black liquor evaporators of 230 m3/hr. water evaporation capacity.
Chemical recovery boiler of 1100 TPD black liquor solids firing capacity.
Causticizing section comprising liquor clarification equipments, mud
washing and thicknering etc.
Power plant comprising boilers and turbine to meet additional requirement
of steam and power.
Additional equipment for effluent treatment plant, environmental protection
and to improve basic infrastructure.
The production capacity will go upto 3,20,000 TPA after completion of the said
investment programme as against 1,80,000 TPA at present.
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ORGANIZATIONAL
DESIGN:
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The company has fully equipped finishing & converting section for rewinding,
cutting & packaging of the paper in reels or sheets. The company has also paper
machine IV & V to manufacturing multilayer board & duplex board.
Organization Design:
An organization is a formal way of communicating and getting things
done in a smooth and efficient manner. It should be designed in such a way that it
should clarify the role of each individual within the organization. It should reflect
and support the enterprises objectives.
Of the various forms of organization structure, the west coast paper mills ltd
follows a formal type of organization, which is flexible enough. It provides an
environment wherein the effort of employees is channelized towards the attainment
of the companys goals.
Some of the advantages which WCPM has in adopting such an organization
structure are as follows:
1. There is a logical reflection of functions.
2. The flow of information is very much channelized. Also the flow of
authority and responsibility is also inplace.
3. It ensures proper control over the activities.
The head of the organization is Executive Director. The organization is
efficiently headed and managed under the able leadership of ED, shri K.L
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Chandak. Its BOD has an appropriate mix of promoters, executives and
independent directors.
WCPM has got a lot of departments. Due to the time constraint, the study covers
only a few of many organizations. Hence the structure produced here is not an
exhaustive structure. Some of the departments required for analysis are as follows
The description provided below also consists only few of many departments
WCPM has. Some of the departments required for analysis are as follows:
1. Production Department
2. Finance Department
3. Purchase Department
4. Human Resource Department
5. Stores Department
6. Marketing Department
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Mc Kinseys 7s:
The 7-s Model is known as Mc Kinsey 7-s, because of the two persons who
developed this model- Tom peters and Robert Waterman. They have been
consulted at Mc Kinsey & co. They published their 7-s model in their article
Structure in Not Organized(1990) and in their books The Art of Japanese
Management (1981) and In search of Excellence(1982).
The model starts on the premises that an organization is not just a structure, butconsists of seven elements as shown in the figure.
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Shared Values:
Shared value means, what does the organization stand for & what it believes in.
These are the values shared by the members of the organization.
West Coast Paper Mills Limited is committed to comply with the requirements of
relevant environmental regulations and standards by implementing environmental
management system and continuously improve its effectiveness.
Skill:
Skill implemented in West Coast Paper Mills Limited has been divided into three
levels, They are:
1. Top level
2. Middle level
3. Lower level
Top level requires more conceptual skills, experience, and decision makingability.
Middle level requires Managerial skill, problem solving capacity.
Lower level requires more Technical skill, Technical knowledge.
Staff:
In West Coast Paper Mills Limited, the organization consists of nearly 4000 staff
employees.
The requirement qualification of the employees is graduation, post- graduation andexperience will be required for technical department. There is no qualification for
helper jobs.
Style:
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Style here refers to the leadership style, which the company follows. Leadership
style is the pattern of behavior, which a leader adopts in influencing the behavior
of his followers(subordinates) in the organizational context.
Autocratic leadership style is followed by West Coast Paper Mills Limited,
Company. This is also known as Authoritarian, Directive style. In this style
according to my observation a manager centralizes decision making power in
himself. The manager structures the complete work situation for his employees and
they follow.
Systems:
Security System:
The security system of West Coast Paper Mills Limited, is to safeguard the
property of the company. It functions as per the rules and the law and the order of
the company. Security system at VRL is not on contract basis. It is a 24 hours
service. Security with regard to theft and fire is provided.
Identity Cards:
Identity cards are given to each staff. In case replacement is required the costof cards should be brought by the individual concerned. Every employee should
swipe the card, when they enter the main gate.
Information System:
West Coast Paper Mills Limited maintains the speed and accurate information
system. The information is sent through the mail aids and they maintain pop
accounts like ABC. Local application are sent through local server.
Strategy:
The West Coast Paper Mills Limited has four dimension strategies:
1. To establish the market leadership.
2. To have strategic alliances and create break through with their own R&D.
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3. Bench mark their products and business process.
4. Committed to quality service.
DEPARTMENT STUDY:
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Departmental Study:
Purchase Department:
Purchase Department plays an important role in management of the company. Any
big concern has a separate department known as purchase department. The
efficiency of this department can save more money by purchasing the right quality
of items at the right time and at a right price. This department is under the charge
of purchase officer and he has a staff under him to assist in carrying the various
activities of the department. This department is of great importance as the
company has to perform all its activities efficiently and smoothly.
The Purchase Officer has to take decisions regarding all the purchases of the
company. He has to select the right suppliers, the right quality of material and the
right quantity required for a particular period. The purchase officer follows the
described procedure for making the purchases of the company as and when this
department gets indent from the stores department or from consuming department
gets indent from the stores department for procurement of the items. The
department studies the indent and then it takes necessary steps to procure the items
or material required. The company has two sources of supply. One is external
supply and the other internal supply i.e. from its own workshop.
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Procedure followed for purchasing the items:
1. Purchase activity shall be initiated after receiving indents from stores.
2. On the basis of indents, enquiries are floated on the approved sub
contractors or per decision taken by manager
3. Offers from supplies based on enquiry received either on phone or by
personal approach or some time in writing
4. Evaluation of an offers are done
5. To negotiated with suppliers for finalization of best possible rate the
proposals are kept for approval for high value orders.
6. Placement of order: After having scrutinized the details, the same is
communicated immediately to the party for immediate action. Then
purchase orders are mailed.
The Inventory Carrying Cost:
Storage Cost: 5%
Rate of Interest: 12%
Wastage: 2%
Sundry Expenses: 2%
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Stores Department:
It is a basically a service department. Stores department is maintained based on
nature of product and organization. They maintain the spares for different
departments like pulp mill, power house.
The foremost objective of the store is to ensure materials at right
time so that there should not be any hindrance or stoppage of work
due to shortage of materials.
The second objective of the stores is that the materials should be
arranged in a proper fashion and well preserved.
Economy in investments.
Better security arrangements.
Less storage space.
The department has to perform various important functions which are as
follows.
a) Fixing code number to each material.
b) Raising indents as and when needed.
c) Maintaining permanent card and stock card.
d) Issuing materials against issue vouchers raised by consuming departments.e) Receipt and Inspection.
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In general,
1) Visual Inspection: the goods which are bought from different places
should be checked whether it is in good condition or whether it is in a
damaged condition, otherwise insurance can be claimed.
2) Check the challan for quantity.
3) Inspection: Inspection should be done to know the materials brought
should be accepted or rejected.
4) Storage of the accepted items. Rejected items should be stored
separately.
5) Rejected items should be sent back and asked to replace.
In the WCPM stores department is divided into following sections.
1. Machinery spares parts stores.
2. General stores
3. Chemical department
4. Stores receipt department
5. Automobile spare parts
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Internal Audit:
It is mainly concerned with checking the policies and practices of all the
departments within the organization, whether correct rules and regulations have
been complied with or not. It also suggests if any changes are to be made in any
practices of the department. Then the top management will decide whether the
suggestions made by the Internal Audit department are to be implemented or not.
External Auditors are different from internal auditors. Internal auditors will check
only about the internal policies of the organization but external auditors will be
appointed by government and they are responsible to check the statutory
requirements, whether they are complied by the company or not.
Basic Principles of internal audit:1. Integrity, Objectivity and Independence
2. Confidentiality
3. Work performed by others.
4. Documentation
5. Planning
6. Evidence
7. Reporting
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Accounts Department:
The hierarchy is as follows in the accounts department is as follows
Assistant Vice President
Accounts & Finance
Senior Manager
Accounts
Manager
Accounts
Section Officer
Senior Accounts Assistants
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Accounts Assistants
The Accounts Department deals with all financial aspects of the firm. It is the main
department responsible for maintaining all accounts of the company. All Receipts
& expenditures relating to the company are recorded. It is the main department
which prepares budgets and assists management in investment decisions.
The overall functions performed by Accounts Department are:
Preparing the Balance Sheet, P/L A/c, & other necessary A/cs at theend of the Accounting or Financial Year.
Maintaining cash &bank transactions.
Pay slips.
Preparing Payment, Receipt, & Journal Vouchers File.
Dealing with Loans and other financial matters.
Preparing Branch A/cs of different branches. Dealing on T.D.S.
Preparing Monthly Trial Balance.
Framing of Annual Reports, etc.
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Cost Accounting System:
The costing department is essentially a link between the production department and
the management. The company is manufacturing different varieties of paper/ paper
board/ Duplex board which requires various types of raw materials and chemicals.
A process cost accounting system is followed upto the pulp stage. Thereafter batch
costing system is followed. Budgetary Control System is in vogue.
When the material is received, stores inward receipt is prepared by the stores
department, checks the material and after approval, it is recorded in the stock
cards. Chemicals are tested in the laboratory for its quality. Valuation is done by
the stores account department. The indenting departments draw the materials
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through the issue vouchers. A monthly statement of consumption is prepared
accordingly.
Detailed records for production and consumption of water, steam and power are
maintained production and service cost center wise classification of salaries and
wages are prepared.
The works overhead have been absorbed on the conversion cost basis in different
processes and service centers. The administration and selling and distribution
overheads are apportioned/ absorbed to final products on pre-determined basis i.e.,
machine hours, tonnes etc. As such system followed can be considered as adequate
to determine correctly the cost of the products.
Following are the daily reports sent to the Costing Department
a. Raw materials yard report
b. Pulp Mill Operation
c. Production Report
d. Power house report
e. Steam consumption report
f. Energy generation and consumption report
g. Chemical Recovery
h. Duplex Board
The above are the different reports prepared in their respective departments daily
and are later forwarded to costing department. There are also some departments
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which send their reports on monthly basis. For example, finishing house will take
all the reports into consideration. Daily production report is made in this
department which helps the managers to take decisions for the future production.
Human Resource Department:
The Establishment department is the department where the new employees are
recruited. The commercial and technical department sends an internal memo letter
regarding the type of employee needed. After receiving the letter the establishment
department gives the advertisement and details in the newspaper and other sources
and the selection process is carried on.The procedure for the selection of candidate is as follows:
1) Recruitment
2) Call Letter
3) Interview
4) Selection
5) Offer of appointment
6) Training
Sections of Human Resource/ Industrial Relations department are
1) Time office
2) Industrial Relation
3) Welfare
4) HRD
1) Time Office
The time office department deals with the time keeping of various employees in
the factory. Every worker should be punctual and proper attendance of the
worker is a must.
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At WCPM, employees are provided with the punch cards. They have to punch
the cards in the punching machine while entering the premises and also while
leaving the premises after the working hours.
Time office takes care of the following functions apart from the above
1) Record Maintenance
2) Pay Role
3) Wage and Salary Administration
4) Leave
5) Maintenance of Registers
2) Industrial Relations
Also called as the personnel department, is mainly concerned with the maintenance
of the record of individual employee. Each detail regarding the employees
personnel as well as academic and employment is filed.
It includes marks cards, appointment letter, promotion letter, performance
appraisal report and so on.
3) Welfare
The facilities organized for the welfare of the employees can be divided into two
categories.
1) Statutory Welfare Facilities
Statutory welfare facilities are those which are to be enforced compulsorily
because of the directives of the government. The facilities which are obligatory
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on the part of employer to his employees are drinking water facility, washing
facility, dress room, canteen, first aid, etc.
2) Non Statutory Welfare Facilities
The non statutory welfare facilities are those which are undertaken by the
employer, governmental agencies and the private welfare organizations. These
facilities include education, housing facility, co-operative society, shopping
complex, banking facility, cultural activities, sports, employers club, transport
facility, reading room, loan facility etc.
Training committee
A committee has been formed in order to access, evolve, co-ordinate and meet the
training needs to bring in visible improvements in understanding the shop floor.
Training Requirements
1. The training need has to be spelt out with clarity.
Training can be imparted on any of the following areas
Technical competencies
Safety training
ISO initiatives
Legal requirements and compliance
Behavioral aspects
2. Objectives of training must be made clear and measurable
3. Areas/ Departments must be specified
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4. Need for improvement to be clearly spelt out
5. Specific lack of understanding should also be clearly spelt out.
Marketing Department:
The marketing system at WCPM is handled by the marketing department which is
located in the administrative office at Mumbai. This marketing department
procures order from different zones. Then copy of confirmation order will be sent
to the sales department, located at register office, Dandeli.
The confirmation orders contain all the details about the party such as partys name
and address, terms and conditions, final destination of goods, quantity and size
required etc.
After receiving the confirmation, sales department will send copy of it to the
production department and they will manufacture the paper according to the sizeand quantity required by the party.
As per the demand of the party, sales department will give dispatch order to the
paper godown and then it is dispatched from the godown after the completion of
formalities.
The discount system of WCPM is as follows:
1) Trade Discount
2) Additional Discount
3) Quantity Discount
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The sales department will produce the final bill by deducting the required
deductions and adding some expenses like the excise duty, freight charges (if any),
insurance charges etc.A copy of such bill will be sent to the party and concerned
branches after recording the transactions in the sales ledger.
Findings:
The performance of the company under review has been satisfactory due to
increase in the production, sales, profitability, apart from process
efficiencies.
There is a continuous growth in the production on one hand and cost
reduction on the other hand.
The Indian paper industry is the fifteenth largest in the world in terms of
consumption. And eighteenth in terms of production.
The proportion of customized paper marketing is increasing faster than ever
before and the end user is getting increasingly quality conscious.
Increase in the sales volumes from 1,68,315 tonnes in 2004-05 to 1,80,397
in 2005-06
The company has taken effective anticipatory measures to cut the costs by
various equipments.
There is continuous increase in the production of paper due to which the
plant is now operated at rated capacity.
The cost of wood has gone consecutively due to increase in royalty,
procurement rates.
The company is maintaining proper records of inventory.
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There are adequate internal control procedures commensurate with the size
of the company and the nature of its business, for the purchase of inventory
and for sale of goods.
Recommendations:
Replacement of inefficient equipments/motors in the mill in order to
reduce the manufacturing cost.
As there is sustainable growth of the industry, development of efficient
technology is the need of the day. The development that meets the needs
of the present without compromising ability, and with the needs and
expectations of future generations.
Increase the operation capacity and strengthen the stringent quality
standards.
Improvements in quality, reduction in cost of production and
manufacturing of value added products by using modernized equipments.
Using their own lands for plantations so as to meet the requirement of
wood not only for present production but also for the proposed expanded
capacity.
Use of auxiliary equipment which help in reducing the cost and improve
efficiency which help the company to compete with paper manufacturers
and strengthen in competitiveness in the global market.
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As there is a rise in the income, the company needs to address a growing
challenge and need to manufacture a wider range of paper to address
growing needs across various occasions.
The company should increase the quality of paper as there is a closer
correlation between a rise in peoples income and quality of paper they
use.
Conclusions:
If standards are properly set in that they are reasonable and accurate and are
revised from time to time in the light of changed circumstances, deviations would
be true deviations. However, if standards are not properly set, conclusions drawn-
favorable or unfavorable-will be distorted. A still more serious situation would
occur, when guided by such wrong conclusion,
If the standards are properly set (currently attainable), variances would serve as
useful tool in the implementation of the concept of management by exception in
that variances keep the management informed about the erratic and out-of-line
behavior of the business.
The performance of the company under review has been satisfactory due to
increase in the production, sales, profitability, apart from process efficiencies due
to which the variance turned out to be favorable. The company also increased the
operation capacity and strengthens the stringent quality standards.
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Though all the variances are favorable but there is increase in the variances like
expenditure, labour cost etc, the company is taking effective anticipatory measures
to cut the costs by comMr.ioning various equipments.
Apart from standard costing there are other tools like marginal costing and cvp
analysis to measure the performance of the company but standard costing has been
useful for the company to measure its performance.
Limitations:
1) The company is very rigid in providing financial information
2) All the aspects of accounts are secret so they are not disclosed to
anybody
3) As the corporate office is in Bangalore, no much of the financial aspects
is available.
4) Since the companys major decisions are confidential they are not
disclosed to outsiders.
5) As the time given for project was not sufficient.
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Bibliography:
Main Web Sites:
http://www.westcoastpaper.com/
http://www.iseindia.com/research/v%20Share/Paper%20sector%20Vol
%20.4.pdf
http://www.tafcon.com/papahmed07/index.html
http://www.capv.com/public/gsearch.html?q=paper+industry
Other sources:
Company annual reports
Materials provided by the company officials
Information through interaction
BooksReferred:
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http://www.westcoastpaper.com/http://www.iseindia.com/research/v%20Share/Paper%20sector%20Vol%20.4.pdfhttp://www.iseindia.com/research/v%20Share/Paper%20sector%20Vol%20.4.pdfhttp://www.tafcon.com/papahmed07/index.htmlhttp://www.capv.com/public/gsearch.html?q=paper+industryhttp://www.westcoastpaper.com/http://www.iseindia.com/research/v%20Share/Paper%20sector%20Vol%20.4.pdfhttp://www.iseindia.com/research/v%20Share/Paper%20sector%20Vol%20.4.pdfhttp://www.tafcon.com/papahmed07/index.htmlhttp://www.capv.com/public/gsearch.html?q=paper+industry -
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Financial ManagementTheory & Practice
- Prasanna Chandra
Financial ManagementText, Problems & Cases
- M Y Khan & P K Jain
Financial Management
- I M Pandey