shresth bhandari office 2007

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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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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:

54
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

shresth bhandari office 2007

Documents