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Recent trends Capital Market
In the Year of 2009-10
NSE
Following the pherwani committee recommendation the government have
inititated steps for NMS and recognized the NSE in 1993 for setting of national
market system in which electronic trading and the settlement is possible throughbout
the country on the basis of standard price and a fix margin service charge of
commission for the broker NSE was the 23rd stock exchange to be recognised under
SC (R) act.
With increasing regulation by SEBI on exchange the future role of exchange will
be radically different from the present , as their development role will be increasing
much faster than there regulatory role not only stock exchange but all the players in
the market, namely, companies , brokers , intermediaries and investors have come
under the supervision and control of SEBI and along with increasing self regulation
and stricter enforcement of a code of conduct on the member the stock exchange will
have to emerge as public service institutions catering to increasing demands of
investors in the country. Listed companies have also a role in this process to
collaborate and extend all help for more efficient functioning of exchange. To
improve the quality and efficiency of service, trained and professional category of
intermediaries and broker is also necessary. education and training and research
would be the hallmark of future stock brokers and other intermediaries, in the market
NATIONAL MARKET SYSTEM
the pherwani committee recommended the setting up of the national market system
based on the new stock exchange which was already set up in Mumbai. To make the
national market system effective, the committee recommended several support
agencies to provide high quality trading, settlement and depository services. In this
context, it has recommended that there should be three tires, namely, stock exchange
at Mumbai, Calcutta etc. regional stock exchange like those in major state capitals and
1
additional trading floors sponsored or managed by principal or regional stock
exchange. The structure of securities markets was on the following lines:
(1) regular stock market which are 21 in number at present.
(2) National market system with a separate set of licensed broker all over the
country mostly banks and corporate units, attached to NSE.
(3) Retail broking trough a series of registered sub-broker attached to the
regular stock markets or to NMS.
(4) OTCEI for risky and venturesome companies and companies which can
not satisfy the listing requirements of regular stock exchange, such as
small companies. Most of those recommendation have already been
implemented
NEED FOR LARGER FINANCIAL BASE
Although pherwani committee on stock market reforms recommended the opening of
four more stock exchange in addition to the existing 21 exchange, the trading floors
recognized by SEBI can operate in those place linked to a main regional exchange.
Because the stock exchanges in the future cannot function without better
infrastructure, computerization, etc, this recommendation is not implemented. But in
sept.1996 Visakhapatnam stock exchange is recognized for electronic trading. For
brokers also capital adequacy norms have been laid down by SEBI but not yet
implemented
Not only there is need for better infrastructure in the form of space,
telecommunications, electronic network connecting all broker firms but also the
broker firms shall themselves need a better capital base.
2
A
PROJECT REPORT OF
GENERAL MANAGEMENT STUDY
AT
SACHIN PAPER MILL PVT. LTD
Bhagwan Mahavir College Of Business administration
Veer Narmad South Gujarat University,
SURAT.
BATCH: 2009.
Submitted By Patel Yatin
Patel Pratik
3
Shah Hemil
Shah Moxit
Tanawala Sandip
Declaration
We the undersigned declare that this project report entitled “a project report on
Sachin paper mill” is result of our own training work carried out during may-june 09 &
have not been previously submitted to any other institutions & for any other purposes
by any other person.
We will not use the project report in future to use as submission to any other
university, institutions or any other publications without written permission of any
guide.
We also promise not to all of any other person to copy from this report in any form.
If we are found or caught as defaulter of our declaration, we know that our present or
further submission may become invalid or we may not be permitted to appear in the
final exam.
4
Signature---
Acknowledgement
We would like to thank B.M.E.F College for providing this opportunity for summer
training in this organization.
It was great pleasure to complete our summer training in healthy & co-operative
atmosphere of Sachin paper mill, Surat. We enjoyed our training under the guidance
of well experienced, intelligent, hard working & ambitious team, which will be a
memory for ever. We are greatly indebted to all the management & staff members of
Sachin paper mill for the valuable guidance provided by them during the training.
We wish to represent our deep sense of gratitude to or director Dr Manoj Joshi &
General Manager Pravin without whose valuable co-operation this training would
have been practically incompleted.
We would like to show genuine appreciation for the support given by Marketing,
Finance Management, Human Resource Management, Production Department, &
also the staff of Sachin paper mill needed from time to time changing the course of
our training.
5
INDEX:
ChapterNo.
Particulars P.g. n.o.
1 INTRODUCTION
COMPANY DETAILS
LOCATIONS
8
10
2 HISTORY OF PAPER 11
3 PRODUCTION MANAGEMENT 16
DEFINATION 18
ORGANIZATION STRACTURE OF A PRODUCTON 19
6
DEPARTMENT
PRODUCTION PLAN 20
MRP AND PURCHASE PLAN 20
PLANT LAYOUT OF A COMPANY : 21
PLANT LAYOUT OF PRODUCTION DEPERTEMENT 22
PRODUCTION PROCESS : 23
MATERIAL HANDLING : 38
INVENTORY CONTROL SYSTEM 39
CLASSIFICATION OF INVENTORIES 40
QUALITY CONTROL SYSTEM 41
4 MARKETING MANAGEMENT 45
DEFINATION 47
TYPES AND CLASSIFICATION OF SALES
FUNCTION
48
UNIQUE FEATURES OF VARIOUS PRODUCTS 48
CUSTOMER SEGMENTATION AND TARGET
MARKET :
50
DISTRIBUTION NETWORK : 51
SALE PROCEDURE / HOW CUSTOMER ORDER
ARE PROESSED
52
COMPARISON OF 4Ps 53
FORCASTING AND SALES PREPARATION : 55
PRICING POLICIES : 55
PROMOTION AND ADVERTISING POLICIES : 56
TAXES APPLICABLE ON SALE ACVTIVITY 57
5 FINANCE MANAGEMENT 58
CLASSIFICATION OF COSTS : 60
ACCOUNTING POLICIES : 61
CAPITAL STRUCTURE OF SACHIN PAPER MILL 62
WORKING CAPITAL MANAGEMENT 64
INTERNAL AUDIT POLICIES & FINANCIAL 65
7
CONTROL SYSTEM
METHOD TO CALCULATE DEPRECIATION 66
STATEMENT OF DEPRECIATION 67
TREND ANALYSIS 68
RAW MATERIAL DETAILS 69
BALANCESHEET 70
PROFIT AND LOSS ACCOUNT 71
RATIOS 72
6 HUMAN RESOURCE MANAGEMENT 77
INTRODUCTION: 79
DEFINATION 79
HUMAN RESOURCE PLANNING 82
RECUITMENT 83
SELECTION 87
JOB DESCRIPTION AND JOB SPECIFICATION 90
PERFORMANCE APPRAISAL 91
PROMOTION, DEMOTION AND INCREMENT
POLICIES
91
WELFARE 92
HUMAN RESOURCE INFORMATION SYSTEM 93
TRAINING 94
WAGES AND SALARY 94
INCENTIVE PLAN 94
8
9
INTRODUCTION
COMPANY DETAILS
The Sachin paper mill was established in 1996. The intention on investment was
about 2.5crore.
It is a continuous production plant. There is only one product MG craft paper. The
raw material used to produced the paper are waste paper, husks paper, Polytubes,
corrugated boxes etc. the main point to notice hear is all these raw material are made
up of MG craft paper itself. We can say that they used MG craft paper as a recycle
use.
It make used of waste material, which is beneficial to country like India, Sri-Lanka
where resources are limited. The water is used in the process is used again and
again after recycling. Because of that there is no requirement of trees and bamboo
sticks. It proves to be beneficial from environmental point of view.
This MG Kraft paper is produced in different qualities based on different bust factors
and gram. Generally the highest production in the mill is of sixteen bust factors Kraft
paper there if of 70% of total production.
There are mainly seven departments in the company namely Purchase, Production,
Personnel, Sales, Finance, Electrical and Mechanical. But their main emphasis lies
on production department.
10
LOCATION OF OFFICES, BRANCHES & FACTORIES
REGISTERED OFFICE
Sachin Paper Mill Pvt. Ltd.Hojiwala Estate,Sachin Udyog Nagar Sahkari Mandli ltd,Sachin Palsana Road, Near Vanz gaon,Dist. - SURAT.
HEAD OFFICE
103, J.R.House,Opp, Vakharia Market,Ring Road, Surat.
BRANCH OFFICE
66, Rushab Market,Beside Millennium Market,Ring road, Surat.
11
12
HISTORY OF PAPER INDUSTRY
A PAPER historical place EGYPT
When we think of the origins of paper, our minds might wander back over 5000 years
ago to the Nile river valley in Egypt. It was there that a marsh grass called Cyperous
Papyrus flourished. The Egyptians cut thin strips from the plant's stem and softened
them in the muddy waters of the Nile. These strips were then layered in right angles
to form a kind of mat. The mat was then pounded into a thin sheet and left in the sun
to dry. The resulting sheets were ideal for writing on. Since they were also lightweight
and portable they became the writing medium of choice of Egyptians, Greeks and
Romans for record keeping, spiritual texts and works of art.
It is from papyrus that the word paper comes from. Although papyrus sheets were
similar to paper in terms of function, being laminated sheets they were technically
more like a mat and therefore not the same as the papers of today.
Similar processes were developed in other lands - in Central America during the 2nd
Century AD the Mayans fashioned a similar product for bookmaking. In the Pacific
Islands, a paper was made by beating a fine bark over specially shaped logs to make
clothes and ritual objects. However, none of these sheets would qualify as true paper
today.
13
The father of true paper - T'sai Lun
Paper as we know it today comes from another source - China. Excavations of tombs
of the former Han Dynasty (207BC-9AD) have revealed silk cloth bearing the texts of
Lao Tzu - the father of Taoism (born in 604BC). In 105 AD, Han Emperor Ho-Ti's
chief eunuch T'sai Lun experimented with a wide variety of materials and refined the
process of macerating the fibre of plants until each filament was completely separate.
The individual fibres were mixed with water in a large vat. Next, a screen was
submerged in the vat and lifted up through the water, catching the fibers on its
surface. When dried, this thin layer of intertwined fiber became what today we call
paper. T'sai Lun's thin, yet flexible and strong paper with its fine, smooth surface was
known as T'sai Ko-Shi, meaning: "Distinguished T'sai's Paper" and he became
revered as the patron saint of papermaking.
What Is Paper?
True paper is characterized as thin sheets made from fiber that has been macerated
until each individual filament is a separate unit. Medieval paper was made of diluted
cotton, linen fiber. The fibers are then intermixed with water and by the use of a
sieve-like Screen; the fibers are lifted from the water leaving a sheet of matted fiber
on the screen. The thin layer of intertwined fiber is paper.
Many people include think of papyrus and rice paper as paper. They are not.
Papyrus is not made from macerated fiber so, it is not true paper. Papyrus is made
from a grass like aquatic plant in the sedge family called Cyprus papyrus. It has
woody, bluntly triangular stems that are cut or sliced end to end with metal knife.
Then these thin "boards" are pasted together much like laminated wood. Rice paper
is not paper. It is made from strips of the cut spirally from the pith of the rice paper
tree, a small Asiatic tree or shrub, Tetrapanax papyriferum that is widely cultivated in
China and Japan. The pith is cut into a thin layer of ivory-like texture by means of a
sharp knife. Parchment and vellum are also not paper. They are made from the skins
of animals.
14
Where It Began?
Paper as we know it, was invented in China, AD 105, by the Chinese Eunuch T’sai
Lun. It was thin, feted, formed, and flat made in porous molds from macerated
vegetable fiber. Before the 3rd century AD, the first paper was made of disintegrating
cloth- bark of trees and vegetation such as mulberry, hemp, china grass. Paper was
used in China from AD 868, for engraving religious pictures and reached its height of
in 1634 with the wooden block prints made popular by Sung Ying-hsing.
The technology of making paper moved from China to Japan and then
to Korea in AD 610 where it was commonly made from mulberry bark and Gampi.
Later it was made from bamboo and rice straw. Marco Polo gave one of the first
descriptions of Chinese papermaking in his 'Milione'. He mentions that the Chinese
emperors jealously guard the secrets of papermaking and that fine paper is
manufactured from vegetable fiber: rice or tea straw, bamboo canes and hemp rag
cloth.
Chinese paper made from bark and the fibers of rags and hemp may
have traveled on caravans following the Gobi Desert, the Desert of Takla Makan and
the Tarim Valley and finally arrived in Samarkan. But papermaking was a closely
guarded secret and it was not actually made there until after 751 AD. In 751 the
Chinese lost a battle in Turkistan on the banks of the Tharaz River. It was recorded
that among the Chinese prisoners were skilled papermakers. The craftsmen began
making paper in Samarkan. Samarkan was a good place to make paper because it
had an abundant supply of hemp and flax and pure water.
The first wire mold for making paper is identified in Spain dating to 1150.
Bamboo molds were common in China, but it was not readily available in Europe.
The bamboo allowed the mold to be flexible, but the European rigid wire mold, was
better suited to the formation of rag fiber. Europeans also invented the Fence or
Deckle, which keeps the paper within bonds.
The earliest paper was called 'cloth parchment', but it often contained wood
and straw in addition to cloth. All these raw materials were beaten to a fine pulp and
mixed with water. Sheets of paper were then pressed out, dried and hardened.
The demand for paper was slight in the 1st Century Europe. Paper cost
more than vellum, it was more fragile than parchment and it was associated with
15
Jews and Arabs who were not trusted. In fact, The Church in Western Europe initially
banned the use of paper calling it a 'pagan art' believing that animal parchment was
the only thing 'holy' enough to carry the Sacred Word.
It was only with the advent of printing in the middle of the 15th Century that
the demand became greater. The first representation of the printing process is the
1568 wood print Der Papierer by Jost Amman in the Little Book of trades.
16
PRODUCTION MANAGEMENT
17
No. Particulars P.g. n.o.
1 DEFINATION 18
2 ORGANIZATION STRACTURE OF A PRODUCTON
DEPARTMENT
19
3 PRODUCTION PLAN 20
4 MRP AND PURCHASE PLAN 20
5 PLANT LAYOUT OF A COMPANY : 21
6 PLANT LAYOUT OF PRODUCTION DEPERTEMENT 22
7 PRODUCTION PROCESS : 23
8 MATERIAL HANDLING : 38
9 INVENTORY CONTROL SYSTEM 39
10 CLASSIFICATION OF INVENTORIES 40
11 QUALITY CONTROL SYSTEM 41
18
PRODUCTION MANAGEMENT
DEFINATION:
According to Russian writer Alexander Solzenstyn, "In relation to physical goods,
production means manufacturing of an object using various inputs like raw material,
labour, power, land, capital equipments and technical know-how. In relation to
services, production means discharge of any function which has got some Utility.
According to Everett Adams, "Production management is defined as management of
conversion process in which various inputs like material, labour, land, machines &
technical knowledge are converted in value added goods and services."
ORGANIZATION STRACTURE OF A PRODUCTON
DEPARTMENT
19
Production
General Manager
Production Manager
Mechanical Foreman Electrical
Mech. Incharge Employees Wireman Senior fitter Employees
Post Name
General manager Mr.Panchal
Production manager Mr.Pradip jain
Foreman Mr.S.N.verma, Mr.Gyaneshwar
Mech.Incharge Mr. Nilesh Patel
Senior fitter Mr.Somnath yadav
Fitter Mr.Rajesh
Assistant Mr.Manahar Khalashi
Turner Mr. Pradip Waghela
Welder Mr. Mohan patil
Wireman Mr. Mata Prasad,Mr. Jairam gupta
Fitter
Assistant
20
Turner
Welder
PREPARATION OF PRODUCTION PLAN TO SALES PLAN :
Firstly, Sales department received an order. On the basis of that order sales
department gives an order to production department. As per customers’ order,
production department know about various manufacturing product about how much
quantity to be manufactured. In that order, Information of orders given like how much
quantity they want, which kind of product they want. Which kind of paper they want
and which size paper they want.
After receiving order, Sachin paper mill start to make a product. And after
given to the customer has better quality than its competitors. So customer need not
to worry about their products’ quality.
PREPARING MRP AND PURCHASE PLAN:
Material requirement planning is defined as, “Technique for determining quality and
timing for the acquisition of dependent demand items needed to satisfy master
schedule requirement.” For preparing material requirement plan, it is necessary to
convert manufacturing quantity of finished product into raw material requirement.
This process of converting is known Bill of Material. This Bill of Material is always
there with the production department.
21
The raw material requirements are never considered as generated by MRP.
Following logic is considered:
Requirement generated by MRP
Less: Present stock of material Less: Pending purchase order = Balance (new order quantity)
ANALYSIS OF PLANT LOCATION CONSIDIARING VARIOUS FACTORS :
Sachin paper mill is located in a Sachin Udyog Nagar away from GIDC. Most of mills
are located in the GIDC. In Sachin paper mill, workers come from the village area. In
GIDC, workers come from city areas. So their salary is high then worker who working
in Sachin Udyog Nagar. It is the main advantage of a company.
Generally Sachin paper mill is located in a nearby a market, so they easily buy a raw
material from market paying a less charge. Mostly raw material like paper tubes and
paper rills are mostly get from the looms units so here is a less transportation charge
and no need to pay Octroi. This is main advantage from them. The raw material is
easily gets from city area.
PLANT LAYOUT OF A COMPANY :
22
PLANT LAYOUT OF PRODUCTION DEPARTMENT :
ENTRY
MACHINE
23
WARE HOUSE
REWINDER
DRYER {POST}
MG CYLINDER
FIRT PRESS
SECOND PRESS WIRE PLANT
HEAD BOX
SENDY CLENER
CONTROLROOM
PULP SECTONNCHESTREFINERTHICKNER3 F SCREENHIDH DENSITY CLENERPULPER
RAW MATERIAL PLANT
CONVYERBELT
RAW MATERIAL PLANT
PRODUCTION PROCESS:
1. Raw material Yard -
The main raw materials for paper are waste Kraft paper, waste paper,
corrugated boxed, POY tubes, paper tubes etc. stored in raw material yard. All these
material comes in mixture so workers differentiate them into their categories and they
remove polythene from it.
24
2. Conveyer Belt -
Conveyer belt is placed between the raw material yard and pulper
machines, so all the material can be easily carried and provide to pulper fro process.
Mainly three workers engaged with it. One worker for putting materials on one side
and other for collecting that material from another side.
3. Pulper -
Pulper is a machine which grinds raw material like waste paper
corrugated boxes etc with adding water in it, so we can say that it is a big grinder
machine. It makes a primary pulp by materials.
25
4. Dumpid -
Dumped is a big storage tank which stores pulp came from pulper.
From the Dumped pulp goes for other stage of process.
5. Send draft -
Send draft is divided in three channels. These send draft machine
collects the pulp from the dumped. Then pulp passes through 3 channels. In this
process all the foreign materials are settle at down and other fibrous material go for
next process.
6. Chest no. 5 -
After removing sand, heavy material, the pulp comes in chest through
pump. It is another storage tank, which collects pulps and sends for other process.
7. High density cleaner -
High density cleaner removes the maximum heavy particles like metal
from the pulp. Its work is same as send draft.
26
8. Saper plats -
Here pulp is screens.
9. 3F screen -
It works same as sapper plats. Here pulp is screened between three
dishes. Screened fibrous materials are goes through small holes to the thickener.
10. Refiner -
Here all the extra useless material is restricted and remaining pulp is
going for the next stage of production.
27
11. Chest -
Chest is another storage tank. It collects the pulp coming from refiner.
Pulp stored in chest and chemicals like alum, silicate, gum added in it. Different
colour also included in the pilp of the chest. But these colour are added according to
customers.
28
12 SR Box -
SR Box is also called as a controller box. It maintains the level of the
pulp when it sends for process.
13. Fan Pump -
Fan pump is them is the machine which push the pulp with pressure
and send the pulp to Sandi cleaner.
29
14. Sandi cleaner -
Sandi cleaner is like big injections. There are three Sandi cleaners.
Fan pump come from Sandi cleaners with lots of forces. Sandi cleaner helps to
remove all remaining dusts, sands and other minor unusual objects from the pulp.
15. Head Box -
FN screen is connected with head box. FN Screen received spiral pulp
from Sandi cleaner and sends it to head box. It spreads the pulp on the synthetic net
which is called as wire part.
30
16. Wire part -
It consists of suction boxes, foils, table rolls, formation board and
vacuum box. Here the water from the pulp and then it is converted into paper.
17. First press and Second press -
31
In first press there are two types of roll named top roll and bottom roll.
Paper come from last stage is pressed between these two rolls and by this excess
water is drained.
18. Dryer -
There are three sub parts in second press named PN dryer, MG
cylinder is large dryer, which provide lots of steam and heat to make a paper drier.
Almost 75% papers become dry in MG cylinder and pass it to post dryer. Post dryer
has 4 dryer rollers, which makes a paper completely dry and send it to pop rill.
19. Pop rill -
32
In dryer, paper becomes completely dry and then come at pop rill. Pop
rill is useful for rapping the paper. It makes a huge roll of papers.
20. Reminder -
When a huge roll of paper rapped on pop rill then with the help of
crane these rolls are put on reminder. Reminder helps to cut the paper according to
customers demand.
33
21. Finished product -
After the whole production process mentioned above, finished product that
is paper comes out which is tied up with plastic string and also distributed to
distributors through logistics.
Water Plant :
1. Collection of water
In different stages of production process, there is a lot of wastages of water.
The channels for water recycling process collect this water.
2. Storage in tank
34
The second stage in the process is storage water in tank.
3. Screen
From the tank, the flow of water is passed through the screen. Here with the
help of screen some pulp and water is divided. Divide pulp is send to pulper for
process. And remaining water sends to the next stage of process.
4. Slug water
35
Slug water pond collects all non fibrous and fibrous material. And send for
process is pulp section. With the help of pipeline water is provide for the next stage of
process.
5. Lamella
In lamella water is collected and overflow of the water goes to sand filter. In
lamella heavy materials s removed and overflow with some fibrous materials goes for
other process in sand filter.
6. Sand filter
Water come from the last stage is filtered in sand filter. All the types of dust
sand and other objects are removed in this stage of process. Then the clean water is
sent for the process in mill and one overflow of water is sent for the next stage of
process.
36
7. Erosion tank
Erosion tank look like a pond. This tank is helpful in absorbed the oxygen
from climate and maintains the level. Then send to the next step.
8. Secondary filter
Water comes in secondary filter or last stage. All the remaining send, dust is
removed and then it sent in process house.
37
Boiler House -
In production process of paper at some stage steam is required to make paper dry.
So boiler is most important for making steam by coal.
1. COAL YARD
In boiler house there is a coal yard. There are at least 500-ton coals in
yard. This coal is provided for boiler.
2. COAL CRUSHER
Coal crusher is a machine which crushes the pieces of big coal in to
the small pieces and sent that small pieces for boiler.
38
3. BOILER
Boiler is machine in which with the help of fire and coal steam is
produced. The fire is manually started.
39
4. IN PRODUCATION PROCESS
The steam produced in boiler. This steam provide in production
process with the help of pipeline, which is attached between boiler and production
house.
MATERIAL HANDLING:
Defination -
“Material handling is defined as Control movement of material from receipt of
material, through storage & production & shipment of finished product. In other word,
Material handling means a movement of equipments from one place to another.”
MATERIAL HANDLING EQUIPMENT -
In Sachin paper mill following equipments are use as material handling equipments.
1. Conveyer belt
2. Pipe line
3. Wire part
4. Electrical cranes.
1 Conveyor Belt:
Conveyer belt is most useful equipment in Sachin paper mill. It moves raw material
from raw material yard to a pulper. Conveyor belts are designed to handle material
between 2 fixed locations.
40
2 Pipelines
Pipeline is one of the most important equipment. In Sachin Paper mill whole
production process done through pipe line. Pipelines are used for vertical movement
of material.
For example
Raw material go in a pulpur, in pulper raw material mixed, that mixed material moves
in dump pit through pipe line, dump pit to sand trap, sand trap to high density
cleaner.
These way pulpur to head box whole process done through pipe line.
3 Wire Part
Wire part is a small material handling equipment. Mixed material comes in head box
and that material dropped on a wire part. That is final mixed material which is going
in a first press.
4 Electric Cranes
Electric cranes is use to handle heavy equipment like Poprill.
INVENTORY CONTROL SYSTEM :
“Inventory control means the process of controlling timings and quantities of two
inventory transactions.” In which the first is purchase or acquisition of inventory and
the second is usage of inventory. It is neither possible nor advisable to exercise
equal degree of inventory control on all items.
So it is essential to classify inventories and then to exercise inventory control. In
Sachin paper mill, there is also arrangement for proper inventory control. The
movement of inventory are also considering in the inventory control system. The
record keeps on the basis of the movement of inventory both inside or outside the
inventory.
41
CLASSIFICATION OF INVENTORIES:
There are two type of classification of inventory in Sachin paper mill are as follows.
1. Raw material inventory
2. Maintenance inventory
Inventory Classification
Raw material inventory Maintenance inventory
Carton boxes Part of machine Poy tubes Nuts bolt Waste Crane Paper tubes Ball bearing
ABC is ALWAYS BETTER IN CONTROL. ABC analysis and VED (VITAL
ESSENTIAL AND DESIRABLE) analysis is the method of classification of inventory
and apply inventory control measures selectively. In ABC analysis the inventory is
classified on monetary basis in to A, B, C, CLASS. While in VED analysis the items
are classified in to V, E, D.
In Sachin paper mill, the classification of ABC and VED are as follows.
A CLASS: ball bearings, spare parts of machine B CLASS: nuts bolt, valve, cranes plate and ringsC CLASS: LUBRICANTS, OIL
V CLASS: nut bolt and bearingE CLASS: valve and etcD CLASS: oil, grease
42
DIFFERENT RECORDS KEPT IN STORE :
There are many records are kept in store which is related to movement of material,
taxes, expenditures. They also take care of the movement of material. They keep
records of quantities which entered in store and go outside the store also determined.
Various expenses which are applicable while doing a production activity. Various
expenses related to safety of the material, various taxes which are regulated on the
production inputs and finished products.
MATERIAL RECEIPT PROCEDURE :
When any raw material is required, production department gives order to the supplier
on phone, email, and fax. Generally SACHIN PAPER MILL is having a continuous
production system raw material is ordered on a daily basis. When the order is
received from supplier, truck driver delivered our order with a CHALAN.
SACHIN PAPER MILL also having a weight bridge. Before unloading the truck, it is
weighted on the weight and it also weighted after unloading too. After checking all
this things, CHALAN is signed by one who received the order. The quality and
quantity of material are checked and then entered into store. The delay occurs may
be loss in the production of various inputs.
MATERIAL ISSUED PROCEDURE
Material issued procedure is a very simple procedure which is done in Sachin paper
mill. Whenever material is unloaded it is note in a register by a store manager. It is a
long time record, which store manager presents this record to production manager.
Material issued procedure may be same as material receipt procedure but difference
is that the former is related to the material receipt and latter is related to the material
issue in the store.
43
PURCHASE PROCEDURE :
The raw material mainly required by Sachin paper mill are coal, waste paper,
corrugated boxes, POY tubes, paper tubes, colour chemicals etc. they follow a very
informal and short purchase procedure.
Their monthly requirement of waste paper, corrugated boxes etc. is approximately
800-900 tones and they pay different prices for materials. These types of materials
are easily available in market. They have no fixed dealers; they buy it from any
dealer and in any quantity according to daily price.
In Sachin paper mill raw material like west paper poy tubes and so are easily get by a
neighbors firm in HOJIWALA ESTATE. Mainly small dealers want a cash payment
but big dealers give a 30 days credit. But Sachin paper mill believed in cash
payment.
Sometime Sachin paper mill import their material from Dubai, or Netherlands.
Coal is also an important raw material for Sachin paper mill monthly requirement for
coal is 500 tones. Coal is also an easily available material in market. Generally price
for coal is Rs.2900 per ton. The order for coal is placed from head office. There are
many dealers of coal in local market.
Colour chemical are also a useful material which is easily available in local market.
So Sachin paper mill purchase chemicals as per the need in business.
List of the some Suppliers of Raw Materials:
S.K.Corporation.
Aishwarya Cartoons.
Saroj Textiles.
44
QUALITY CONTROL SYSTEM :
Generally in Sachin paper mill, quality control procedure is very simple. The whole
production procedure is done by machine so there is no need to check a quality.
They check which type of paper is manufacture means paper is in a different
colour. For example: XYZ company wants a yellow colour paper. They check
that they manufacture a product is complete or not which xyz company want.
They check paper which is rewind carefully or not. They check that paper is
successfully rewind on rill which is not cut to one end to another end or not
spoiled groom one end to another.
They check that final product is cut on the requirement of a consumer.
They check a weight of each rill.
They check that final product is cut on the requirement of a consumer.
45
They check a weight of each paper sample.
Weight Checking Machine
RECORDS RELATED TO PRODUCTION OPERATIONS :
There are some records which are related to the production operations at different
machines. For example, the time period when the material kept near the machine for
further production, when worker loaded the material and kept on machine, material
processed time, time when worker unloaded the finished product and worker packing
the finished product in a box etc.
The records within different department also kept. For example, electricity, wages,
incentives, bonus, maintenance charges, depreciation etc. are considered for various
departments.
46
.
47
MARKETING MANAGEMENT:
No. Particulars P.g. n.o.
1 DEFINATION 47
2 TYPES AND CLASSIFICATION OF SALES
FUNCTION
48
3 UNIQUE FEATURES OF VARIOUS PRODUCTS 48
4 CUSTOMER SEGMENTATION AND TARGET
MARKET :
50
5 DISTRIBUTION NETWORK : 51
6 SALE PROCEDURE / HOW CUSTOMER
ORDER ARE PROESSED
52
7 COMPARISON OF 4Ps 53
8 FORCASTING AND SALES PREPARATION : 55
9 PRICING POLICIES : 55
10 PROMOTION AND ADVERTISING POLICIES : 56
11 TAXES APPLICABLE ON SALE ACVTIVITY 57
48
MARKETING AND SALES FUNCTION
DEFINATION :
According to American Marketing Association “Marketing is an organizational
function and a set of processes for creating, communicating, and delivering value to
customers and for managing customer relationships in ways that benefit the
organization and its stake holders.”
“Marketing management is as the art and science of choosing target markets and
getting, keeping and growing customers through creating, delivering and
communicating superior customer value.”
TYPES AND CLASSIFICATION OF SALES FUNCTION :
The main product of Sachin paper mills is making of MG Kraft paper. They have
produce different size of MG Kraft paper on the bases of GSM and BF. Various kind
of paper size is follows:
Material used Type of Kraft
paper
Weight age
In GSM
100% local
waste paper
12 BF 80
90
100
180
220
250
100% Local 14 BF 110
49
west paper 120
5 to20%
imported
waste paper
16 BF 100
120
150
180
20 to 22%
imported
waste paper
18 BF 100
120
150
180
20 to 22%
imported
waste paper
20 BF 100
120
130
150
180
20 to 22%
imported
waste paper
22 BF 120
140
180
Shades of paper:-
50
They are produce different kind of paper shades and colours etc., are follow:
1. Natural paper
2. Pink paper
3. Yellow shades
These are the three kind of basic shades of the paper. If customers want any other
paper they are provided with it.
Generally monthly sales volume of Sachin paper mill is 300 tones. But the sales of
Sachin paper mill changes with the change in demand in textile industry. When the
textile business is facing a boom period the sales of Sachin paper mill is high and
vice versa.
So here we can say that when there is need of product they produce more, or they
produce only on the consumer order. If order is more so they produce more. Overall
there production system produce more than their competitors.
UNIQUE FEATURES OF VARIOUS PRODUCTS :
Product means converting various inputs into particular items by producer. There is
only one product manufactured by the company is MG Kraft paper. This MG Kraft
various qualities based on grams and bust factor. It is a recycling unit. The raw
materials used are the wastes of the textile industry, which are recycled to
manufacture MG Kraft paper.
To produce product, Sachin paper mills use POY tubes, wastages, etc., as a raw
material. There is no requirement wood for making of paper. In short they use
recycling method to produce the product. Generally paper is made from the wood
pulp but this company use wastages to help to prevent the environmental Pollution.
CUSTOMER SEGMENTATION AND TARGET MARKET :
51
Customer segmentation means dividing the entire market into smaller segment, so
that the company can give concentration to its main customers. Customer
segmentation can be divided into geographic, demographic, psychographic, and
behavioural. Mg Kraft paper is an industrial product. Manufacturers of corrugated
boxes, POY tubes, paper tube, paper bag, core pipes etc. are their main customers.
For doing so firstly they have decided what type of paper to be produced. There two
types of machine design, which produces different types of paper.
1. wire design
2. mould design
They selected wire design machine. In this machine they are manufacturing light
weight paper. While in Mould design machine heavy weight papers are produced.
The customers of light weight paper are mainly corrugated boxed manufacturer and
very few customer of POY tubes, paper bags manufacturers etc. 80% of their
customers are corrugated box manufactures and remaining 20% consist of POY
tubes, paper bags manufacturers etc.
Customers are allowed credit depending on their reputation in the market and their
previous payment records. If any new costumer is there they are not providing credit
policy.
DISTRIBUTION NETWORK :
The producer and final customer are part of every channel. There are the four types
of channel which a company can adopt. Sachin paper mill has adopted 0-level
channel for their product. It also called as “direct marketing”. This means that they
don’t have any dealer or agent or any other mediator selling their products on their
behalf. It means that they sell their product directly to their customers. So, here we
can say that they are mainly 0-level channel use.
52
By using 0-level channel it of distribution the SPM is able to capture local market. But
if it uses1-level distribution channel it will be able to capture markets at other places
too. E.g. Right now they are planning to go to Goa as they see a very good
opportunity over there. But in case they have had 1-level distribution channel it would
help them to expand their market earn more as well as save their personal time and
expenses fort traveling frequently to distant places.
SALE PROCEDURE / HOW CUSTOMER ORDER ARE PROCESSED:
Generally, Sachin paper mill majority of the orders are received through phone, fax,
e-mail. Sometimes the customers do visit the mill to place their orders. Customers
give all the details of the quantity, quality, colour, weight, and size etc. required. All
these details required by the customer are register in the order book along with his
name. The details of customer’s order are also considered while delivering product to
the customer.
This order is then given to the programming department, where it is decided that on
which day which order is to be processed. The size is also set there only. Then this
whole program is given to production department to produce the final product. The
order is completed within 3 to 7 days. Sometimes if the order is urgent it is also
completed in 1 day. The customer is not dissatisfied about quality of their product.
They are taken well care about new customers.
53
Some of the important consumers name is bellow whose order is more than
the others.
List of some customers of Sachin paper mill
1. Siddhi Packaging
2. Sai Lamination
3. Jayesh Packaging
DETAILS OF COMPETITORS / GENETIC LEVEL OF COMPETITION :
Generally, there are no close competitors of Sachin paper mill in the same area. So
Sachin paper mill can cover entire the local market well enough. But there are some
paper mills in different areas, which are proved as competitors. This all competitors
are in small and make different product. The level of competition can be lower in the
same regions, but it may be high in different regions.
Name of the competitors; -
1. HariOm paper Mill Dastan Fatak, Gangadhara, Surat - Bardoli Road. Dist. - SURAT.
2. Akshat paper Mill Mahuwa, Dist. - SURAT.
54
COMPARISON OF 4Ps
The marketing mix is the set of marketing tools the firm uses to pursue its marketing
objectives in the target market. Marketing mix consist of 4Ps are price, promotion,
product, and place. Here is diagram of 4ps.
Product Price Promotion Place
Product Quality List Price Sales Promotion Locations
Quality Discounts Advertising Assortments
Design Allowances Sales Force Coverage
Features Payment Period Public Relations Channels
Brand Name Credit terms Direct Marketing Inventory
Packaging Transport
Sizes
Services
Warranties
Returns
55
MARKETING
MIX
The 4Ps represent the seller’s view of the marketing tools available for influencing
buyers. From a buyer’s point of view, each marketing tool is designed to deliver a
customer benefit. Robert Lauterborn suggested that the sellers 4Ps correspond to
the customers 4Cs.
4Ps 4Cs
Product customer solution
Price customer cost
Place convenience
Promotion communication
The product manufactured by Sachin Paper Mill does not vary from the quality asked
by the customer. GSM does not vary. The company also temporarily pays Octroi and
freight. This facility provides the customer with the credit on the purchase as well as
on government charges like freight and Octroi. They have their own tempos so that
they can deliver the product to the customer any time. There are no warranties and
returns in this product.
The price of the mg Kraft paper produced by Sachin paper mill is the highest
compared to their competitors. Though its price is highest the quality is also the best.
They give discounts for early payments. Payment period is generally 30-45 days.
There is no need felt by the company for promotion of its product as orders are
received on their own. But sometimes when there is slack period, it does use some
promotion techniques.
Sachin paper mill is located in Sachin Udyognagar. The mill is near to the customer
as well as to the raw material market. So the transportation cost of bringing the raw
material and delivering the finish good is also has as compared to their competitors...
56
FORCASTING AND SALES PREPARATION:
Here, Sachin paper mills’ Production depends upon the textile industry. The main
customer of MG Kraft paper is the whole textile market. So the marketing department
forecast the demand of Graft paper by keeping in mind the situation of textile market.
Like in the month of May and June the textile business generally remain weak in
that time the sale of Sachin paper mill also remain low. At the same time in the
month of August to November the textile business increases at that time the sale
of Sachin paper mill also remain high.
Having complete information of future demand well in advance the management can
make planning of buying the raw material at a cheap rate and also make
maintenance planning to avoid machine break down in season. They take good care
about the price of the material. They buy material at very cheapest price.
PRICING POLICIES:
Sachin paper mill has some pricing policies. There are some points which the
directors of Sachin paper mills are keep in mind while making of pricing policies.
Then directors discuss about the factor which effect on demand of Graft
paper, like market situation of textile business. Sometimes they also analyze
past price and quantity sold on that price.
The main objective of any organization is to get maximum profit. All the
directors weather to get maximum profit or to get maximum market share.
Then directors have to estimate the cost of raw material like waste paper,
coal, colour chemicals and some variable cost like labour, salary etc.
Then directors make a price range and compare it with the competitors.
At last from the above discussion the directors decide the best price for their product.
This price is beneficial for organization as well as customers.
57
PROMOTION AND ADVERTISING POLICIES:
Sachin paper mill is a private limited company. Their customers are very satisfied
with the product and the services they provide. And we know that best advertising is
done by satisfied customer. Most of the time, their customer themselves are
advertising about the product in their business circle. No other advertising policy is
followed by such, because they never felt the need of doing so.
For promoting their product, they make use of customer direct channels to reach and
deliver goods and services to the coauthor without using any middlemen. These
channels include telephones and faxes. Generally they receive orders in abundance,
but doing slack season they call upon to their customer and ask them to replace thief
order. They try to tempt them by saying that production 0of so-so paper is going on
and if they place their orders soon then they will get prompt delivery or else they will
have wait for 4-5 days to get the delivery.
E.g. During our summer training, we found that during first week of May. There were
quite a few orders with company. They called up to their customers and ask them to
give their orders by tempting them as they are very busy and if they give their orders
now they will get delivery soon.
This type of direct marketing helps them to build continuous relationship with each
customer and also make their offers and strategies less visible to their competitors.
Also they provide the booklet containing samples of their varieties of paper to their
customers.
TAXES APPLICABLE ON SALE ACVTIVITY
In every business it is necessary to pay taxes. By paying taxes, we do not help
government in fact we help ourselves because the government use these money for
our development only.
Sachin paper mills pay all kind of tax during the production and take proper care of
the records. They have to pay various taxes like VAT, EXCISE DUTY, EDUCATION
TAX, SECONDARY EDUCATION TAX etc.
Sachin paper mill have to pay 4 % Sales Tax and 8% Excise Duty.
58
CONTROL AND REPORTING SYSTEM
In every company, sales staff should be properly organized. If sales staff is not
proper and not well organized the company has to lose their customers. This
situation leads the industry in darkness. It means their loyalty towards customer,
goodwill, market prices of their shares may be lost.
Sachin paper mill is small unit. That’s why in every department they have put
camera to see what kind of activity worker is doing. In every department, they have
two managers in production department manager’s name is sunilbhai who is in
charge of this department.
Sachin paper mill has well organized sales staff. In sales staff, they have sales in
charge and two helpers under sales in charge. If any new customer arises then sales
in charge provide them full information about the product, price, delivery dates,
payment dates, terms and conditions. Some regular and big customers make direct
contact with directors. First of all customer came and place their order then sales in
charge give the report to the assistant manager of production department about the
quality and quantity of the paper.
The sales in charge have to provide order to the customer on given delivery date. He
also controls the due dates of payment.
59
FINANCE INDEX
60
No Particulars p.g no
1 CLASSIFICATION OF COSTS : 60
2 ACCOUNTING POLICIES : 61
3 CAPITAL STRUCTURE OF SACHIN PAPER MILL 62
4 WORKING CAPITAL MANAGEMENT 64
5 INTERNAL AUDIT POLICIES & FINANCIAL CONTROL SYSTEM 65
6 METHOD TO CALCULATE DEPRECIATION 66
7 STATEMENT OF DEPRECIATION 67
8 TREND ANALYSIS 68
9 RAW MATERIAL DETAILS 69
10 BALANCESHEET 70
11 PROFIT AND LOSS ACCOUNT 71
12 RATIOS 72
61
FINANCE & ACCOUNTS
CLASSIFICATION OF COSTS :
Material Cost:
Ascertainment of material cost is fundamental important in any cost accounting
system. This is because of the fact that material cost constitutes the large member of
cases, the most important element of cost. It is depend upon not merely on the
purchase price of the material but also there issue price. The purchase price of the
material knows from the invoice.
Labour Cost:
Wages of the worker constitutes the second important element of cost. labour is also
distinguish as direct and indirect. All labour engages in the production of work order
or job is direct in nature. These costs are direct labor cost, like wages paid to
machine operator. Indirect wages are paid to workers who are not engage directly in
the work of converting material in the finished product. Salaries and wages are
supervisory staff for instance, constitutes in indirect wages.
Direct & Indirect Cost:
The total cost of finished product is made up of prime costs and overhead. While
prime cost is sum of direct material, direct labor and direct expenses and overhead
comprises all indirect costs it is made of indirect material, indirect labor and indirect
expenses.
62
ACCOUNTING POLICIES :
Following accounting policies has been followed in presentation and preparation of
financial statement.
(a) Basis of Accounting:
Accrual basis of accounting has been followed in preparation &
presentation of financial statement.
(b) Fixed Assets:
Fixed Assets are stated at cost of acquisition including installation /
incidental cost, wherever applicable.
(c) Depreciation:
Depreciation on depreciable fixed assets has been provided at the rates
and in the manner prescribed in schedule 15 to. The companies Act, 1956
under written down value method basis considering single shift working,
wherever applicable.
(d) Investment:
Investments are stated at cost of acquisition including acquisition / transfer
cost, if any.
(e) Revenue reorganization:
Sales have been recognized as and, when signification risk &
reward of ownership has been transferred to the buyer. Sales have
been accounted net of excise duty, sales tax & other taxes. Other income
has been recognized on accrual basis.
( f ) Inventories :
(a) Finished Goods: Finished goods have been valued at cost or
net realizable value, whichever IS lower on FIFO Method basis.
(b) Raw Materials & Other Stores: Raw "materials and Other Stores &
Spares have been valued at cost on FIFO method basis.
63
(g) Taxation:
Deferred lax assets resulting from brought forward losses has not been
recognized in absence of virtual certainty created by supported
convincing evidence that sufficient future taxable income which arises
against which the asset can be set off.
(h) Retirement Benefits:
Company's contribution to provident fund & other fund have been charged
to Profit & Loss Account. No provision for gratuity has been made as it has
not accrued till date.
(1) Borrowing Cost:
Borrowing cost other than directly attributable to acquisition or construction of
qualifying assets has been charged to Profit & Loss Account. The rebate
available on loan is accounted for on cash basis.
(j) Miscellaneous Expenditure:
Miscellaneous expenditure has been written off over period of ten
years.
CAPITAL STRUCTURE OF SACHIN PAPER MILL :
64
Authorized 2008-2009 2007-2008
3000000 Equity shares of Rs. 10/-each 30000000 30000000
Issued, Subscribed and Paid–Up
2900000 Equity shares of Rs. 10/-each
Fully Paid-Up 29000000 29000000
Total 29000000 29000000
It is a private limited. So hear we can see only a total equity share
capital.
Capital structure during the year (Amount in Rs. Thousands)Public issue -------- NILBonus issue --------- NILRights issue --------- NILPrivate Placement --------- NIL
WORKING CAPITAL MANAGEMENT:
65
“Working capital refers to that part of capital which is not tied up in fixed assets but is
used to meet the day-to-day requirements of business.” Working capital signifies
money required for day-to-day operation of an organization. No business can run
without the provision of adequate working capital. The requirement of working capital
may differ from organization to organization.
Formula to calculate Operation Cycle is
OP = R + W +F + D – C
1) Raw Material Storage period
R = Average stock of raw material / Average raw material consumption per
day.
= 15 Days
2) Finished Goods Storage period
F = Average finished stock inventory / Average cost of goods sold.
= 1 Day
3) Debtors Collection period
D = Average debtors / Average credit sales per day
= 36 Days
(4) Creditors Payment period
C = Average creditors / Average credit purchases per day
= 20 Days
Operating Cycle = R + F + D – C
= 15 +1 +36 – 20
66
= 32 Days
INTERNAL AUDIT POLICIES & FINANCIAL CONTROL SYSTEM :
Internal audit system is very important for any industry. By the audit, management
can know where the industry stands. This is the best way to control and remove
difficulties. Audit is an evaluation of policies, procedures and practices in all phases
of a business. The object of audit is to report on financial position of undertaking as
disclosed by its balance sheet and the profit and loss account.
The balance sheet and profit and loss account of Sachin paper mill is audited every
year at the end of the March.
An audit of Sachin paper mill is conducted in accordance with auditing standards
generally accepted in India. Audit is planned and performed to obtain reasonable
assurance about weather the financial statements are free or material misstatement.
An audit includes examining on test basis evidence supporting the amount and
disclosure in the financial statement. An audit above includes assessing the
accounting principles used and significant estimates made by the management as
well as evaluating the overall financial statement presentation. Here auditing is done
half yearly.
The balance sheet and profit and loss account comply with the accounting standards
referred to in subsection 3C of section 211 of the company’s Act 1956.
Balance Sheet of Sachin Paper Mill Pvt. Ltd. have audited by:-
Sethia and Bohra associates Chartered accountants 501, HiraPanna Market, Ring Road, Surat.
Types of Payment to Audits CURRENT PREVIOUS
67
YEAR
YEAR
Audit Fees 15000 15000
Tax Audit Fess 5000 5000
Other Matters 5000 5000
Service Tax 3090 3060
METHOD TO CALCULATE DEPRECIATION :
Each asset in the business has its own useful life. The main base of such useful life
depends upon the period for which the asset can be used. Because of the usage of
the asset the working capacity of it is decreasing continuously and therefore the utility
price of the asset.
The useful value of the asset will also decrease because of the factors like passage
of time, new inventories etc. The reduction in the useful value of any asset is known
as depreciation.
With reference to above, depreciation can be understood as the amount to be written
off, out of the cost price and asset during its useful life is known as depreciation.
DEFINITION :
According to Carter, “Gradual and permanent reduction in price of the asset is known
as depreciation.”
According to Spicer and Pegler, “Depreciation is a measurement of the reduction in
the effective life of the asset due to certain reason during the given period of time.
In Sachin paper mill, depreciation has been provided according to the Company’s Act
1956 considering Written down value method (W.D.V.) using single working in
respect of plant and machineries. It means every year, the value of asset can be
68
decrease. For other assets depreciation is provided according to rates prescribed in
Schedule VI of Company’s Act 1956. In case of addition during the year depreciation
is provided on private basis
Statement of Depreciation for the year ended on 31/03/2009
Sr.
No.
Block of
Asset
Rate of
Deprecia
tion.
Bal. On
1/4/2008
Addition Depreciatio
n.
Bal. On
31/3/2009
1 Staff
Quarter
10% 31089 0 3109 27980
2 Factory
Building
10% 3482727 0 348273 3134454
3 Plant &
Machinery
15% 4812709 3146990 1156629 6803070
4 Office
Equipment
10% 19394 0 1939 17455
5 Shop 5% 225492 0 11275 214217
6 Computer 60% 774 0 464 310
7 Fax
Machine
15% 17615 0 2642 14973
8 Electric
Installation
15% 795036 0 119255 675781
9 Land 00 350000 0 00 3500000
10 Vehicles
(NFW)
15% 105413 723503 124337 704579
11 Vehicles
(TW)
15% 0 45831 6875 38956
12 Vehicles
(FW)
15% 1250098 0 187515 1062583
13 WiP-
(building)
0% 352714 434668 119255 675781
10 Total 11217569 4350992 1951038 13617523
69
TREND ANALYSIS :
Particular 2007-08 2008-09
Amount Amount
Sales 87121896 133167320
Administrative
ex.
1813783 1561423
Profit before
tax
967361 843469
Current liability 10538980 13670488
Selling ex. 461578 1029329
70
Quantitative details in respect of quantities:
(1) Licensed Capacity: Not Applicable(2) Installed Capacity: 30 Metric Tones per Day (P. Y. 30 Metric Tones per Day)(3) Actual Production:Kraft Paper 9058100 Kgs. (P. Y. 615345 Kgs.)
Particulars Unit Quantity Amount(in Rs.)
Current Year
Previous Year
Current Year Previous Year
Turnover
Kraft Paper
Kgs. 9488265 7035302 133167320 87121896
Purchases
WastePaper
Kgs. 9488265 7035302 61271540 33441942
Opening Stock
Kraft Paper
Waste Paper
Kgs
Kgs..
194828 706848
263584 1269612
3127052 5209332
3426592 4301474
Closing Stock
Kraft Paper
Waste Paper
Kgs. Kgs.
79249 348930
194828 706848
1089677 2408223
3127052 5209332
Consumption:
Waste Paper
Kgs. 9846185 7598066# 64072649 32534084
Shortage: WastePaper Kraft Paper
Kgs. 788085 501237
71
SACHIN PAPER MILLS PRIVATE LIMITED BALANCESHEET AS AT 31ST MARCH2008:NO PARTICULARS CURRENTYEAR PREVIOUS
YEAR
1 Shareholder’s funds
Share capital
Share application money
29000000
11675000
29000000
8800000
Total 40675000 37800000
2 Loan funds
Secured loans 19616608 21312502
Total 19616608 21312502
II Application of funds:
1. Fixed assets
Gross block 41561886 36973615
less: depreciation 27121552 25434566
Net block (Total) 14440334 11539043
Work in progress 352714
Net block 14440334 11891763
2. Investments 505100 505100
3. Current assets, loans &advances
Inventories 8647900 11707384
Sundry debtors 25792361 15208913
Cash & bank balances 387265 370451
Loans & advances 5595767 10568674
Less Total 40423293 37855422
Current liabilities & provisions
Liabilities 13670488 10538980
Provisions 115000 35000
Net current assets 26637805 27281442
P&L A/C 18708369 19434197
Total 60261608 59112502
72
SACHIN PAPER MILLS PRIVATE LIMITEDTRADING AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2008No Particulars Current year Previous year
A INCOMES
Sales 133,167,320 87,121,896
Increase/(Decrease) in Finished Stock Other Income-Total
2,037,375 299,540
Other Income-Total 1,110,968 582,418
Total 132,240,913 87,404,774
B EXPENDITURES
Consumption of Raw Material 75,509,339 41,156,198
Manufacturing and Other Direct Expenses 48,818,900 41,432,975
Administrative Expenses 1,561,423 1,813,783
Financial Expenses 2,427,967 1,706,268
Selling & Distribution Expenses 1,029,329 461,578
Depreciation 2,050,486 1,801,333
Total 131,397,444 88,372,135
A-B Profit/(loss)
Profit/(Loss) Before Taxation 843,469 (967,361)
Less: Tax Expense
Current 85,000
Fringe Benefit Tax 30,000 35,000
Deferred - -
Short/(Excess) Provision of Income Tax 2,641 18,202
Total 725,828 1,020,563
Balance B/F from Previous Year (19,434,197) (18,413,634)
Total (18,708,369) (19,434,197)
Weighted Average Number of Equity Shares of Rs. 10/ each outstanding during the year
2,900,000 2,900,000
73
RATIOS
NO PARTICULARS 2008-2009 2007-2008
1 Current Ratio:--
Current Ratio = Current Assets Current Liabilities
IN 2008-2009 = 40423293 13670488
IN 2007-2008 = 37855422 10538980
2.96
3.59
2 Quick Ratio
Quick Ratio = Quick Assets Current Liabilities
IN 2008-2009 = 31775393 13,670,488
IN 2007-2008 = 11707384 10,538,980
2.32
1.11
NO PARTICULARS 2008- 2007-
74
2009 2008
3 Capital gearing ratio
Capital gearing ratio = fixed int. or dividend bearing Share holders’ fund
IN 2008-2009 = 19616608 40675000
IN 2007-2008 = 21312502 37800000
0.48
0.56
4 Debt Equity ratio
Debt Ratio = Total Debt Share holders’ fund
IN 2008-2009 = 19616608 40675000 IN 2007-2008 = 21312502 37800000
0.48
0.56
NO PARTICULARS 2008-
2009
2007-
2008
75
5 Gross profit ratio:
Gross Profit ratio = Gross Profit *100 Net Sales
IN 2008-2009 = 7240706 *100 133167320
IN 2007-2008 = 4230983 *100 133167320
5.44%
4.86%
6 Net profit ratio
Net Profit ratio = Profit after Tax * 100 Sales IN 2008-2009 = 843469 *100 133167320
IN 2007-2008 = 967361 *100 49384026
0.63
1.11
NO PARTICULARS (ACTIVITY RATIO) 2008-
2009
2007-
2008
76
7 Debtor’s turnover ratio
Debtors Turnover Ratio = Credit Sales Average Debtors
In 2008-2009 = 133167320 25792361
IN 2007-2008 = 87121896 15208913
5.16
5.72
8
debtors conversion period = 365 DTOR
In 2008-2009 = 365 5.16
IN 2007-2008 = 365 5.72
70
days
63
days
NO PARTICULARS (ACTIVITY RATIO) 2008- 2007-
77
2009 2008
9 Creditors Turnover Ratio
Creditors Turnover Ratio = Credit Purchases Average Creditors
In 2008-2009 = 75509339 13670488
IN 2007-2008 = 41156198 10568674
Note: creditors are not given so we take creditor as a
liability.
5.52
3.89
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79
HUMAN RESOURCE MANAGEMENT:
NO PARTICULAR P.g. NO.
1 INTRODUCTION: 79
2 DEFINATION 79
3 HUMAN RESOURCE PLANNING 82
4 RECUITMENT 83
5 SELECTION 87
6 JOB DESCRIPTION AND JOB SPECIFICATION 90
7 PERFORMANCE APPRAISAL 91
8 PROMOTION, DEMOTION AND INCREMENT
POLICIES
91
9 WELFARE 92
10 HUMAN RESOURCE INFORMATION SYSTEM 93
11 TRAINING 94
12 WAGES AND SALARY 94
13 INCENTIVE PLANS 94
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Human resources Management
INTRODUCTION: -
Organizations are not only the building, machineries or inventories. They are people
who run and operate organization.
"Managing people is the heart and essence of being a manager."
Human resource management involves the application of management functions and
principles to acquire, develop, maintain and remunerate employees in the
organization.
Personnel function covers all levels of personnel including not only blue collared
employees like craft men, foremen, operatives and labours but also white collared
employees like professional, technical, kindred workers, managers, officials and
proprietors, clerical workers and sales workers.
DEFINATION: -
"Personnel management is planning, organizing, directing and controlling of the
procurement, development, compensation, integration, maintenance and separation
of human resources to the end that individual, organizational and social objectives
are accomplished.
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Departmentation in Sachin paper mill is done according to the work. In total there are
seven departments.
Departmentation
The basic purpose of departmentalization is to make the size of each departmental
unit manageable and to secure advantage of specialization.
Departmentation is the delegation of responsibility in which each and every individual
is responsible for his or her performance.
Because of departmation each and every big organization divides in individual
flexible administrative units, which help to personnel to facilitate administrative
control.
Purchase: -
In purchase department they handle all kind of purchase activity like purchasing of
POY tubes, wastage materials, Kraft paper, etc. It includes raw material, electrical
parts, machinery parts, coal, diesel for generator etc.
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Production: -
In this department the production manager has to look after quality of the
finished good as per the requirement of the customer, also to minimize the cost.
Personnel function: -
The personnel manager keeps the record of the employees. Here employees are
hired on contract loading unloading. In plant unit there are permanent employees .
Sales: -
The function of sales department is to generate sales and to keep records of sales
Finance: -
The function of finance department is keep records of accounts therefore no
misappropriation can be done.
Electrical and Mechanical:-
If any electrical or mechanical problem arises then this is the duty of the in charge of
these departments to seek them out.
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DEFINITION
It is a process of forecasting, developing and controlling human resource in an
enterprise to ensure that it has right no. and right kind of people at right place and
right time, performing task to meet individual and organizational goals. '
Human resource planning in Sachin paper mill:
Sachin paper mill is established in 1996, at times they calculate a total manpower
required in different department. And SACHIN paper mill having a continuous
production plan with 24 hour and 365 working days. So they divide worker working in
three shifts each having a 8 hour {6 am to 2 pm to 10 pm and, 10 pm to 6 am}
The directors then differentiated the workers required as skilled, unskilled. They then
decided the required educational qualifications, skills, experience and responsibilities
of each and every worker, foremen, manager and assistance manager needed for
the job.
Finally they decided to hire unskilled worker on contract basis as well as some of
them on fixed salary.
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HUMAN RESOURCE PLANNING
RECUITMENT:
DEFINATION: -
Recruitment is the process of identifying the sources of potential employees and
encouraging them to apply for jobs in the organization.
According to McFarland, "The term recruitment applies to the process of
attracting potential employees to the company".
In other word recruitment is the process of hired right person at right job.
The directors then differentiated the workers required as skilled, unskilled. They then
decided the required educational qualifications, skills, experience and responsibilities
of each and every worker, foremen, manager and assistance manager needed for
the job.
Finally they decided to hire unskilled worker on contract basis as well as some of
them on fixed salary.
85
Steps of recruitment process
86
STEPS OF RECRUITMENT IN SACHIN PAPER MILL:
Every organization work with different policies. Sachin paper mill also having a
different
Recruitment policy.
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1. Find out employee need:
Recruitment process only starts when organization has a heavy load of work; crises
of worker, when organization is expand. There is a vacancy in a particular
department or some employee left the job, this time organization recruit the
employee
2. Check the alternative:
In Sachin paper mill manager has checks stable person, who can do other work
along with his work. This is the source of internal recruitment. Or hired from outside it
means a external source of recruitment. These situations only arise when employees
are absent.
3. Select the alternative
Now the management analysis the alternative and select the most efficient
alternative to perform the work. They mostly try to recruit most internal source as it
improve the moral of employees. And the growth of organization
4. Employee selection: -
After selection of the alternative they prepare a list of people, which they can select a
person which are already doing work in organization and also select the person out
of the organization.
5. Check the performance: -
Manager check the performance of employee, mostly manager must know a internal
recruit person so they check a performance of a externally recruit employees
6. Evaluation:
After evaluating the whole process, manager never recruit a wrong
employee for the job.
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SELECTION
Selection is the process of picking individuals with requisite qualifications and
competence to fill jobs in the organization.
DEFINATION: -
"It is the process of differentiating between applicants in order to identify those
with a greater likelihood of success in a job."
Recruitment is said to be positive in its approach as it seeks to attract as many
candidates as possible. Selection is negative in its application as it’s seeks to
eliminate as many unqualified applicants as possible in order to identify the right
candidates.
89
90
STEPS IN SELECTON IN SACHIN PAPER MILL:
In sachin paper mill there is a very dimple selection process. Selection process of
sachin paper mill are as follows.
91
1. Application received { employee received}
It is the first step of selection process. In the meaning of application received, in
Sachin paper mill mostly employees are recommended by other and they select
those person which a bought by a present employee.
2. Interview
It is the second steps of a production process. In Sachin paper mill employee is
mostly a recommended so there is no need to take a selection test, screening the
applicant temporary selection. In Sachin paper mill it is the major part of a selection
process.
3. selection :
After application received and interview as mentioned above organization select an
employee and directly recruit for a job
JOB DESCRIPTION AND JOB SPECIFICATION
There is no need for job description and job specification in Sachin paper mill
because the majority of workers are from the same industry so they are aware of the
kind of work they have to perform. If a worker is new to the industry then he is kept
under the guidance of well-trained employee.
PERFORMANCE APPRAISAL
"Performance appraisal is formal structured system of measuring and evaluating an
employee’s job related to behavior and outcomes to discover how and why the
employee is presently performing on the job and how an employee can perform more
efficiently in the future so that the employee organization and society all benefit."
92
Performance is measured against factors as: job knowledge, quality and quantity of
output, initiative, leadership ability, dependability, co-operation, decision-making,
versatility, and health.
PERFORMANCE APPRAISAL IN SACHIN PAPER MILL:
The Performance appraisal process in Sachin paper mill is very informal. They don't
follow particular criteria to analysis the employee's Performance.
In Sachin paper mill performance should be check on the basis of a record of an
employee. This record such as attendance sheet, working hour report behavior with
other employees etc.
While conducting the above process they try to gather information, which would help
them to decide whether to promote or to demote the worker.
PROMOTION, DEMOTION AND INCREMENT POLICIES
Definition
Promotion may be defined as an increase in pay, prestige, position in the
organization or out of the organization.
Promotion is motivating the employee to do better work in organization, and improve
his or her work ability to get a promotion. Promotion may also useful to increase the
prestige of organization.
Importance of promotion: -
• To motivate employees to higher productivity.
• To attract and retain the services of qualified and competent people.
• To increase the effectiveness of the employee and of the organization’s
• To fill up higher vacancies from within the organization.
• To increase the position and prestige of an organization.
93
WELFARE
DEFINATION
Labour welfare is a term, which must necessarily be elastic, bearing a somewhat
different interpretation in one country from another, according to the different social
customers, the degree of industrialization and educational level of the workers.
WELF ARE ACTIVITIES IN SACHIN PAPER MILL
Cleanliness and safety is ensured for the workers in the workplace
They provide a better physical enviournment to employee.
Safety equipments like gloves, helmet, first aid equipment etc.
There is a good facility for urinals, washbasins, and bathroom.
They provide a onetime meal for each worker
Paper mill give a housing facilities to his employee which is in the campus of
organization.
The company bears rent for the houses, water bill, and light bill, maintenance
charges.
Sachin paper mill having a continuous production process so there is no
holidays given. Normally holidays are granted on big festival like DIWALI,
HOLI etc. if worker is absent on other day it’s on his own risk.
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HUMAN RESOURCE INFORMATION SYSTEM
A Human Resource Information System is a systematic procedure for collecting,
storing, maintaining, retrieving and validating data needed by an organization about
its human resources.
Every organization must have a human resource information system. Sachin paper
mill do HRIS on the basis of the record of an employees and on the other employees
feedback.
In Sachin paper mill they keep the records in file in written form and a prepare a
employment card which is given below.
Hear shift of employee should be changed. If shift may change, employment card
also change.
Attendance record
Attendance record is also a important data to maintain HRIS properly.
95
Name
Address
Date of birth
Date of joining
mill
Two photo
Shift of
employee
Training:
Definition
Training may be defined as a process of improving a skills, knowledge and attitude of
an employee for a particular job.
Sachin paper mill is a continuous system so there is no need to updating new
machines. The present employees are a well trained and full of skills so there is no
need to training. In the case if a new employee the existing employee can trained for
particular job.
Wage and salary:
Definition
Wage and salary can be defined as a basic or a primary return as a worker refuse for
his contribution in the company.
Wage and salary refers to the establishment and implementation of sound policy and
practice for employee compensation.
Different organization has a different wage and salary compensation policy. Sachin
paper mill have his own salary structure. In Sachin paper mill give a satisfactory
salary on the basis of job position. (They not give us a statement of a employee
salary). Sachin paper mill also gives an occasionally bonus.
Incentive plan
Incentive means an extra pay in a salary. Incentive refers a both primary and
secondary too.
It is not compulsory to have incentive plan for the all organization. Sachin paper mill
not having an incentive plan & and no planning to take action in future.
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