You are on page 1of 19

Project Report 2009

Western India Plywoods Ltd

No business can plan its activities without considering its financial resources.
Financial management is that part of management which deals with raising of fun
ds in the most economical and suitable manner, using the funds as profitability
as possible, planning future operations, inspections, controlling current perfor
mance and future development through financial accounting and other means.
Finance in essence is considered with the acquisition and use of funds by a busi
ness firm. The main objective of financial management is to control required fun
ds for meeting short term and long-term needs of business enterprise and to maxi
mise the value of firm to its equity share holders.
To have a clear understanding of the profitability and financial position of bus
iness, the financial statements have to be analysed and interpreted. Financial s
tatements are prepared for decision making. They play a dominant role in setting
the framework of managerial decisions. But the information provided by the fina
ncial statement is not an end in itself as no meaningful conclusions can be draw
n from these statements alone. However, the information provided by the financia
l statement is of immense use in making decision through analysis and interpreta
tion of financial statement. It helps to summarise large quantities of financial
data and to make quantitative judgement about the firm s financial performance.
The study entitled An analytical study of Financial Performance with reference to
The Western India Ply woods Ltd. Kannur has been oriented with a view to study
the financial position of the company that help in making sound decision by anal
yzing the recent trend.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
This problem is to find out how the debt and equity affects the financial streng
th and
weakness of Western India Plywoods.
The study of financial performance is composed of the following:
Analysis of the liquidity between current assets and current liabilities.
Analysis of liquidity and profitability of current assets and current liabilitie
Analysis of the long term finance of the firm over a period of time.
Analysis of various components of working capital e.g. cash.
Marketable securities receivable and inventories.
Find out the impact of business fluctuations, technical developments etc., on
financial performance.
Ratio analysis is an important technique of analyzing the financial statement an
d it helps the analyst to make quantitative judgment with regard to concern s fina
ncial position and performance.
The followings are the main points of importance of ratio analysis:
Managerial uses of ratio analysis:
Helps in decision-making
Helps in financial forecasting and planning
Helps in communication
Helps in co-ordination
Helps in control
Utility to shareholders/investors:
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
An investor in the company will like to access the financial position of the con
cern where he is going to invest. His first interest will be the security of his
investment and then a return in the form of dividend or interest. For this purp
ose he will try to access the value of fixed assets. Long-term solvency ratios w
ill help him in accessing financial position of the concern.
Profitability ratios, on the other hand, will be useful to determine the directi
on of change and reflects whether the company s performance and financial position
has improved, deteriorated or remained constant over a period of time, one has
to be careful about the changes, if any, in the firm s policies and accounting pol
Projected ratios:
Ratios can also be calculated for future standards based upon the projected or p
erformance financial statement. These future ratios may be taken as standards fo
r comparisons and the ratios calculated on actual financial statements can be co
mpared with the standard ratios to find out variances, if any, such variances he
lp in interpreting and taking corrective action improvement in future.
Inter-firm comparison:
Ratios of one firm can also be compared with the ratios of some other selected f
irms in the same industry at the same point of time. This kind of comparison hel
ps in evaluating relative financial position and performance of the firm.
Finance is the life blood of the business. It is rightly termed as the science o
f money. Finance is very essential for the smooth running business. Finance Mana
gement is that managerial activity which is concerned with the planning and cont
rol of a firm s financial reserve. Financial Management as an academic discipline
has undergone fundamental changes as regards its scope and coverage. In the earl
y years of its evaluation it was treated synonymously with the raising of funds.
In the current literature pertaining to this growing academic discipline, a bro
ader use of resources is universally reorganized.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The published financial statement of a business may of considerable to interest
percent or potential shareholder, bank, financial intuition government, research
ers, trade organization, many other group may be interested in different aspects
of the business and would us like to analyse the financial statement with their
respective purpose in mind.
To analyse the financial strength and weakness of the firm using various analyti
tools like Ratio Analysis, Trend Analysis and Comparative statements.
To find out how the Debt and Equity affect the financial performance.
To examine the various components of the financial statements of the
To understand the financial policies and procedures of the company.
To suggest ways and means to improve the financial performance.
To decide about the future prospects of the firm.
To make inter-firm comparison.
To measure managerial efficiency of the firm.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
Plywood Manufacture in India
In 1916, Government of India set up a committee to explore the feasibility of
manufacturing tea chest plywood in Bengal and Assam and the other in North Benga
were set up in 1917 to manufacture the same, but they stopped production owing t
o non-
availability of suitable bonding materials, indigenous lead lining nails and ban
ds for
packing. Both the imported plywood and sawn wood chest were used together. No
development took place for some time until two factories in Assam took up the ma
tter as
a challenge and started making plywoods for tea chest by around 1924 1925. These
were resistance from the tea industry for the use of locally made plywood on the
that quality of timber used was not suitable.
Since independence, the plywood industry has regained strength and has grown to
a full-pledged industry in spite of some setbacks faced by the industry in the p
ost war period. In 1947, India was a net imports of plywood, mainly tea-chest pl
ywood compared to the plywood production in 1947 which was negligible, the prese
nt day production has grown up to 62 Million M2. These have been a steady growth
in the plywood industry. Since the last 3-4 years.
The plywood industry consumes about 15 million M3 of timber. The other main raw
materials used by plywood industry in the synthetic rain, which is available wit
hin the country.In Kerala, there are more than 500 plywood industries including
large scale
industries such as Hindustan New Print and Western India Plywood Ltd. In India P
lywood industry are mainly located in Assam, Karnataka, Kerala, Maharashtra, Mad
hya Pradesh and Andaman & Nicobar Islands.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
Role of Plywood Industries in India:-
Plywoods industries have played a significant role in the Socio-economic develop
ment of the country. They provided various types of plywood products that are re
quired for various infrastructural developments. This industry means the strateg
ic needs of our country like portion plywood, plywood for pre-fabricated houses
required for soldiers on the Himalayan frontiers and other government needs. Thi
s industry also means the packaging requirements of the country export. The indu
stry also provides employment to a large number of people directly and indirectl
y, through various sales outlets.
Problems regarding Plywood:-
Wood based industries in India faces a lot of problems. Major are in the under u
tilization of installed capacity due to the non-availability of required timber
in India. Most wood based industries depend upon the government owned forest for
their raw material. But due to the shortage in the effective forest cover, whic
h was needed for maintaining ecological stability, the central goal controls the
falling of trees. Thus the diminishing forest covers inadequate natural degener
ation and subsequent for falling of trees, led the industries into hardships. Du
e to non-availability the big industrial consumers resorted to import, which inc
reased their cost of production. However plantation would have the inherent defi
ciency of susceptibility to bio deterioration and therefore expanded use of pres
ervation like Borax, and Boric acid is imperative. But this may lead to environm
ental pollution. High cost of production due to increased cost of gilth logs, ur
ea formaldehyde and phenol formaldehyde, competition from private and public sec
tor, import restriction imposed by government, mismanagement labour, and unrest
are other factors which adversely affected growth and profitability of these
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
industries. The wood based industry also face strict competition from the metal
plastic make industries.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The western India plywoods Ltd., the largest wood integrated industrial Complex
Southern Asia was started in the year 1975 at Baliapatam, Kannur.
Thanks to the dynamism and vision of its founder late Mr. A.K.Kaderkutty, who is
acknowledged doyen of the Indian Wood working industry.
The Company which commenced as a Plywood unit has steadily expanded to produce t
diverse products, which it now offers consumers.
A Hardboard plant was set up in 1959 - 1960 with West German Technical collabora
tion. Initially with a capacity of 12.5 tones. This has now increased its capaci
ty to 120 tonnes per day. Besides plywoods and Hardboard the company also produc
es quality flush doors, Block boards, Densified wood, Modern furniture items and
a boost of other products to suit the end market needs.
In 1978 the Western India Plywoods Ltd., set up a plant for manufacturing a Di-
Allylphalate(DAP) moulding powder, a thermoplastic that has to be imported until
then, significantly the technology developed in house with support from Shree R
am Institute of industrial Research, Delhi.
In 1989, the company has put up a pre finishing plant with Italian and German Te
chnical support for printing wood grains and plain colours on plywoods and hardb
oards. The pre finishing plant is the only one of its kind in the country and on
e of the very few plants in the world. The State-of-the-art technology adopted h
ere eliminates the pollution problem completely.
The company has also for the first time in the country, put up a pilot plant for
radiating wood in collaboration with the Bhabha Atomic Research centre, Mumbai
in order to upgrade the quality of low-grade timber. The company has set up a mo
dern Research and
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
the most important feature of wood based complex is its motto of cent percent uti
lization of wood. This has great significance in present times when the scarcity
of quality timber is keenly felt with in the country and we are totally dependen
t on imports.
The manufacture of plywood was stepped up steadily by addition of new machinery,
mostly imported. The company also diversified from Tea chests and Commercial pl
ywood to Decorative plywood, Block board, and Flush door, Shuttering and Marine
Plywood, Aircraft Plywood etc. The Company planned and executed the hardboard pl
ant between the years 1956 and 1958 with an initial installed capacity of 12.5 t
onnes of hardboard per day. The company also installed its own synthetic resin u
nit in 1959 with a capacity of 200 tones.
WIP moved into chemical plastics sector. In 1978 WIP setup a plant for manufactu
ring Di-allyl Phthalate (DAT) moulding powder, a thermoplastic which has to be i
mproved, until then significantly, the technology was developed in-house with th
e support from Shree Ram Institute of Industrial Research, Delhi.
All the raw materials and processes employed in the plant are 100% eco friendly.
From 1971 onwards the company have been exporting decorative Plywoods and venee
rs to USA, Germany, France, Dubai, Sweden and other countries of Middle East. In
the present WIP products are exported to more than 29 countries spread across 4
continents to buyers associated with the company for over three decades.
As an ISO 9001 : 2000 unit, engaged in the business of manufacture and sale of d
iverse range of products, the company envisages the assurance of product quality
, transparency; accountability and integrity in its operations and in its relati
on with all the share holders, that is customers, investors, employees, the gove
rnment and other business associates.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The subsidiary companies of the Western Indian Plywoods Ltd., are M/s Southern
veneers and Wood Works Ltd. and the Kohinoor Saw Mill Co. Ltd.
The associates of the Western Indian Plywoods Ltd., are Wood Plast Industries an
Western Indian Cottons Ltd.,
The company caters to a wide variety of customers, which include Railways, Defen
ce, Automobile, Civil Aviation, Electrical, and Transport, Office markets, Shipp
ing and other areas. Though the industry was facing the adverse effects of globa
lization and liberalization in India, particularly due to the liberal import pol
icy allowed by the govt., the company due to intelligent mix and aggressive mark
eting strategy during the year could register a significant improvement in sales
for the previous two years.
Sourcing good raw material continued to be problem. Even in the overseas market,
price fluctuated widely while there could be no guarantee about the quality. Th
e company continued to depend heavily on import of timber from different source
all over the globe.
However the company has been able to overcome the problem to a great extent by a
dopting improved technology, manufacturing methods and better marketing strategy
. Introduction of value added items also helped to offside the disadvantages to
a great extent.In view of the increasing cost of petroleum products, in order to
reduce the fuel
cost, the management decided to change over to the natural fuel. The company has
already purchased a Thermax boiler which is under installation and one this is
commissioned, the company will switch over to industrial fuel, this will lead to
cost effectiveness and considerable saving.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The Western India Plywood Ltd. is the Asian leader in hardwood, plywood
production and innovative leader in the field.
Its brand name means superior products and service quality.
The Western India Plywoods are a team you want to work with.
To provided utmost satisfaction to the consumer through best quality and custome
To continuously upgrade the product through innovations and convergence of new
technology and to produce the best quality at the lowest cost.
To safeguard and enhance shareholder value.
To respect the dignity of all employees and together to become instrumental in t
development of the country while protecting the environment.
To utilize the surpluses for the welfare of employees and the society at large.
First to make irradiated wood
First to make aircraft plywood
First to make synthetic rersin adhensive bonded plywood using hot pressing techn
First to make high pressure industrial laminates
First to make quality hardboard way back in 1959-1960
First to manufacture Di Allyl Phthalate molding powder
First to manufacture Gl-Plywood -GI sandwich panel for anechoic chambe
First to make pre- finished Plywoods and hardboards using UV cured Surface finis
First to get ISO 9000 certification for hardboard and prefinished boards
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The Chief Accounts officer is the head of the Accounts Department. He is assiste
by the Accounts Officers. All financial decisions are taken by the Accounts Depa
WIP Ltd. Maintains 5 subsidiary books. They are as follows:-
1. Cash Receipt a\c
2. Cash Payment a\c
3. Bank Receipt a\c
4. Bank Payment a\c
5. Journal
Journal entries are maintained in order to rectify the errors. The three persona
l ledgers
maintained are:-
1. Account receivables
2. Account Payables
3. Advance to Staff
Rest all entries are included under direct expenses. Each and every transaction
is reflected in general ledger. General Ledger includes direct expenditure and a
ll other items like total sales, purchases, payables, receivables etc. The sale
Department maintains Sales Day Book, Debit Note and Credit Note.
Depreciation is provided on the straight-line method at the rebate specified in
schedule XIV of the Companies Act 1956.
The audits, finance, share transfer and grievance committee regularly meets to c
onsider aspects relevant to each committee. It is ensured that the share transfe
r agents promptly attend to all Shareholders grievances. There is comprehensive
management reporting system on all aspects of operation and the boards of direct
ors review them periodically.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
1. Allocation of Funds
2. Raising of Funds
3. Profit Planning
Indian Overseas Bank, State Bank of India, Dena Bank and Punjab National Bank
are the bankers of the Western India Plywoods Ltd.
The Company had entered into an agreement with National Securities Depositors Se
rvice Ltd. (NSDL) from 15th March onwards for Company s share traded in electronic
Reserves and Surplus
Secured Loans
Unsecured Loans
WIP follows double accounting system and also maintain four types of journals.
They are:-
CPB (Cash Payment Book)
BPB (Bank Payment Book)
CRB (Cash Receipt Book)
BRB(Bank Receipt Book)
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
For these 4 types of journals, a sub ledger is prepared. This sub ledger is clas
sified into
Accounts Receivable Book (ARB)
Accounts Payable Book (APB)
Personal Ledger (PL)
At the end of every month the sum total of the ledger are transferred to the mai
n ledger.
Then there should have the equality in the amount of sub ledger and the main led
Total amount of Sub Ledger = Total Amount of main Ledger
The next accounting procedure is preparing trial balance. At the end of every fi
nancial year, profit and loss account and Balance sheet is prepared, from which
financial position of WIP is noticed.
The capital structure of WIP was made up of equity chare and preference shares.
They issue only redeemable preference shares. They also issue bonus shares at th
e time of high profit. Their shares are registered in cochin and madras stock ex
changes. A part of company s profit was transferred to profit and loss account is
on the board s decision.
Foreign Currency Transaction
Foreign currency liabilities outstanding as at the balance sheet are translated
to exchange rates prevailing on the date and the loss or gain arising out of the
said transactions relating to acquisition of fixed assets is adjusted to cost o
f relative assets and others are charged to profit and loss account.
Revenue Recognition
Revenue from sales has been recognized on rising of sales invoices on respective
and inclusive of Excise duty but exclusive of Sales Tax.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
In view of the lack of disturbance profit, directors are unable to recommend any
dividends for the past five accounting years. Company is proposing to pay divid
end in the following year.
Retirement Benefits
Contribution to provident fund is made monthly, at the rate prescribed by the em
Provident Fund Act and charged to Profit and Loss Account on accrual basis.
Income Tax
Provisions for income tax are made based on the assessable income as computed ac
cordance with the provision of the Income Tax Act, 1961. Timing differences betw
een accounting and taxable income capable of reversed in subsequent years are re
cognised as deferred tax.
WIP publishes Annual Report every year, which includes the Profit and Loss accou
Balance Sheet, accounting policies of the business etc.
Marketing is one of the most dynamic fields within the management arena. The mai
duties of marketing department in an organization are to analyze market, find
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
opportunities, design product, formulate marketing strategies, develop specific
and action, propose a budget and establish a set of controls.
High quality and high price is the policy of WIP. So the company aims quality co
Marketing strategy revolve around its product quality. The company s emphasis on p
roduct performance and reliability has enabled it to command a performance premi
um in the market it as entered. Significant brand equity in its target market co
upled with superior product development capabilities has enabled. The Western In
dian Plywood Ltd. to sustain its performance premium equity in to new market seg
ment it enters.
Due to high standard of quality maintained by the quality control department of
this company, the product of the company have found ready acceptance in the mark
et both in India and Aboard. The company has succeeded in arranging manufacturin
g programmes on the basis of firm orders, which flow in regularly used for manuf
acture of TV cabinet, bus bodies, building construction, railways, furniture ind
ustry etc. The Hardwood is used for partition wall. False ceiling, furniture ind
ustry etc. The Densified wood is being supplied to the electrical industries, in
various forms and also to the textile and chemical industries in the form of fi
lter plates and as chequered board for flooring in buses and railway coaches. Th
e DAP and FRP compounds are being used by the electronic and moulding industries
. The furniture manufactured by the company is being absorbed by the market in d
rawing rooms, Bed rooms, offices, gardens etc. The products of the company are b
eing exported to West Germany, France, USA, Sweden, West Asia and South East Asi
an Countries regularly.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The company has also achieved 100% utilization of scarce raw materials due to it
s integrated production system. Therefore it would be apt to call the Western In
dia Plywoods Ltd., the company with a conscience
The very important point to be noted is that till now there has been no advertis
ing for WIP LTD. The main promotion activity of WIP is conducting and participat
ing in exhibitions to attract potential customers. They have more of a direct se
lling approach. It has around 40 sakes depots nation wide
At first there was no strong competition. WIP was the monopolistic company. But
now it faces strong competition from IPM (Indian Plywood Manufacturing Company)
as a slight a competition from Polymer, Kitply and Century etc.
As wood based panels are essentially intermediate products that are used for fur
ther processing and value addition, the most logical segmentation variable is en
d use of application.
WIP distinguishes between industrial marketing, export marketing and marketing a
t the
retail level and has developed separate programmes for each.
Some of the major segments are:-
The interior design and furniture manufacture segment
The building construction segment
The automotive coach - building segment
The boat - building segment
Specific application segment for various heavy duty industrial uses.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
A description of the marketing mix adopted for WIP s major product line is provide
Consequent to superior raw materials and additional processing incorporated in t
he manufacture of the WIP s plywood panels - they are more expensive than product
offered by the competitors. WIP s philosophy of continuously upgrading its machine
ry to keep in line with state - of-the art technology also adds to final produce
d cost. However the additional perceived value arising out of such investments i
n more than the marginal cost addition and hence customers are willing to retain
loyal to WIP s products.
Production is the process by which raw materials are converted into finished pro
The production manager manages the Production Department followed by production
Executive, production Assistant and production Supervisors. It is the responsibi
lity of the
Production Manager to determine the product designed by the firm. Care should be
to ensure that the products manufactured are of high quality and produced in the
The raw materials that are used to produce the output as follows:
1. Wood
2. Steams
3. Chemicals
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
For general purpose the wood used are Kalpine, Cellapine, Mango, Neeli, Pali,
Mullanpali, Redcidar, Pula, Redpine, Cher etc.
For decorative purpose, the woods used are Rosewood, Teak, Mahogony, Padauk, Bee
Silver Oak, Kussia, Dhavala and Chempak.
Steam is the energy used to operate the machines. The steam comes from boilers.
are four to five types of boilers. They are:-
1. Saw Dust Boiler
2. Fire wood Boilers
3. Industrial Engineering & Agricultural Cooperation Boilers
4. Thermo Pack Boilers.
The various chemical used in the preparation of plywood are Urea formaldehyde,
Acralyte, Phenol Formaldehyde etc.
The product mix of WIP includes Hardboard, Plywood, Densified Wood, Industrial
Maminates, and Furniture and pre-finished Boards.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
Sales department is one of the core departments in WIP Ltd. Sales volume is one
of the most important variables affecting profit. Sales are done directly by the
company itself. The finished goods after inspection are sent to Sales Departmen
t. They have their own value department where all the company s products are displ
ayed and sold. WIP has their own list of value customers like Indian Railway, De
fence etc. Besides they have an exciting range of specialty products from which
customers can choose. Any wood materials used at the time of construction of a h
ouse are available at the sales depots.
WIP Ltd engages in industrial sales, export sale and in domestic sale. The main
industrial customers of the company are Indian Railways, HMT, KSRTC, Shipyard et
c. Products are mainly exported to the countries like United States of America,
France, Netherlands, Sri Lanka, Japan and Canada. Domestic buyers are mainly car
penters, furniture companies and local people.
The Commercial Tax Office (CTO) heads the sales tax division. Sales tax is the m
ain revenue to the government. Sales tax is paid according to the General Sales
Act 1963. Sales Tax is divided into Central sales Tax (CST) and Kerala Governmen
t Sales Tax (KGST). There are five schedules to the General Sales Act. To exempt
from tax various firms submit F-form, C-form and H-form. If one copy of bill of
dealing is shown, sales tax need not be paid.
Separate return should files for KGST and CST. Annual return is filed on April 3
0th every year. If sales tax is not paid in time, interest is calculated @ 24% p
er annum. The Central tax rate will change according to the rate created by the
Central / State government
Export functions are carried out by General Manager (Administration) and Import
/Export - in-charge.
Quotation / Performa invoice is send to customer along with details of the
products to be supplied with samples wherever required for their approval.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
Exports orders are obtained against payment through letters of credit or other t
of payment.
Once the price is proved, the customer opens L/C ,covering value, quantity,
destination of supply, specification etc. / arranges for payment according to th
e terms.
On conformation of the order and consequently on the placement of order and open
ing of L/C for arranging for payment according to the terms with the foreign buy
er, product note is send to the production department to start production strict
ly as per the requirement of the foreign buyer and as per the delivery schedule
given by them.
As soon as the cargo is ready, necessary clearance is obtained and cargo is move
to the nearest port of shipment to destination port. Besides, house stuffing is
also arranged according to the requirement of the importer, in WIP factory by b
ringing container from the port of works.
The cargo is handed over at the port to WIP s clearing agents and they undertake a
ll customs formalities to get the clearance for the shipment within the least po
ssible time, including getting back the AR 4 from the customs immediately after
shipment for submission to the Central Excise Department .
Once the shipment is effected and Bill of Lading obtained from the steamer agent
s, the shipment documents are prepared for foreign buyer and negotiated through
WIP s bankers immediately.
After negotiation of L/C or arrangement for payment according to the terms, the
payment for the cargo dispatched to the customer is obtained; customer takes rel
ease of the cargo on its arrival at the destination port and also
takes receipts of original
documents from their bankers.
Proper care and supervision are taken in all process of production, packing and
sufficient care is taken to ensure the products exported are top most quality an
d strictly according to the requirement of the buyer so as to keep up WIP s produc
t image high in the International market.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The western India Plywoods Ltd is a forward looking organization, committed to i
dentify, train, develop and sustain its human resources in such a manner as to i
ntegrate the individual career aspirations of its executives with the fulfilment
of the objectives. Towards this, WIP accepts basically that fair equitable and
performance oriented policy with respect to its human resources.
WIP ltd is having a well-government personnel department, which is concerned wit
h the creation of harmonious relationship, among its employees, bringing about t
heir utmost individual development. This department is coming under the authorit
y of general Manager followed by Factory Executive and the Welfare Officer. The
Chief time keeper and the time clerks assist them. Welfare Officer deals with th
e welfare activities of the company. The chief time keeper deals with the wage a
nd salary administration, provident fund etc. The clerks deal with attendance. L
eave, time management, disciplinary action, ESI and PF.
The company has ensured that the work force in the company is kept at the minimu
m. The strength last year was 958, which has come down to 884 (including 150 sta
ff members) during the current year, which is 13% less than the previous year. W
IP is an ISO 9001:2000 certified company. Under the ISO set up, three company co
nduct regular training programmes to the employee to impress on them the need fo
r quality and productivity, thereby improving their performance. These regular p
rogrammes have helped to achieve cost effectiveness and improve the overall work
ing of the organization. The company has employees both permanent and temporary
worker. The trainees are selected by the supervisor according to their performan
ce. The workers of the company are paid by the time rate wage system i.e. accord
ing to time spent on work. Though the basic pay defer, the dearness allowance re
mains the same. The bonus is paid once in a year and it ranges from 8.33% to 20%
Out of remuneration paid to the employees, 8.33% contributes to the Provident fu
nd. 1.75% of workers wages is deposited in ESI and the management contributes 4.7
5% of the worker s salary. (ESI is applicable only to those employees whose salary
is below
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
7500) ESI provides insurance and helps workers in case of accident. Staff member
s are entitles to one leave for every 10 days works (2 1/2 days of leave in a mo
nth). The workers are eligible for 12 leave if they had worked 240 days in the p
revious year. (One leave for every 20 days work)
1. Employee Evaluation and Selection
2. Defining job or skill requirement
3. Arranging for induction and training
4. Co-coordinating personnel Appraisal
HRD Policy of the WIP Ltd is as follows:
Maintain competent Personnel
At all functional positions within the organization.
To integrate the growth opportunity of the enterprise, with the fulfilment of
company s objectives.
To identify, train and develop competent personnel with the growth potential and
to provide a policy environment for high levels of performance.
To provide a system of equality in opportunity, equality in assessment and
uniformity in implementation
To ensure continuity of the management by systematic succession.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
To seek and provide a continuous team of executors of sustained high levels of
competition in the company.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
Purchase department carries out the procurement of all indigenous items like raw
materials, machines, spares, other instruments etc. Purchase of materials is do
ne according to the recommendation and specification from the user department.
In WIP, there is no separate store department or stores manager. It comes under
functions of the purchase department and the store keeper carries out the basic
Purchase Procedure of a Non-Timber item:
1. Generation of Indent
Indent is obtained from stores as per the request of user department. This gives
details of the material to be purchased. Colour coding system adopted to differe
different sections
2. Store Indent Register
Managing Director Signs all the indents received from the stores indent register
and the
indent number is given for easy verification.
3. Sending Enquiry
The company decides from which supplier they have to buy the required material b
ased on the approved vendors list as enquiries are send to the approved vendors
specifying the requirements of the material in detail.
4. Offer of Quotation by the supplier
Quotation is to reach the company within a specified period. Quotations received
are clubbed together with the relevant indents and the copy of the enquiry is s
end to the Works Manager or General Manager for taking decisions regarding the v
endor s selection.
5. Issue of Order
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The purchase order is issued to the recommended vendor. The purchase executive o
r the Managing director prepares the purchase order. Five copies of the purchase
order are prepared.
Follow Up
If the supplier does not meet the order in time, follow up action is done by ema
telephone etc.
7. Receipt of Invoice
The purchase department receives the invoice copy for the party. It contains det
regarding terms of the payment, Dispatch details etc.
8. Checking the invoice
The purchase department checks the invoice with the purchase order in respect of
specification of materials, quantity, price etc. and sends it to the stores.
9. Arrangement for the collection of the materials.
Purchase department arranges for the collection of materials and delivers to the
10. Payment of the bills
Bill entered in the purchase day book is sent from the purchase department duly
signed by the Purchase Executive and Secretary \ GM and it is passed to MS and t
hen it is passed to the Accounts Department for making payments.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The company has a well equipped Research and Development laboratory which is one
of the best research centres in wood working industry in the country approved b
y the department of Scientific and Industrial Research, Ministry of Science and
Technology, government of India, where continuous research is going on for impro
vement of quality and development of new products, through technological and met
hodological up gradation. The benefit of successful R & D activities has had the
distinct advantage of increasing the technical competence and problem solving c
apability of the organization in general and the R & D group in particular.
A Pan Bit irradiator was set up in the R & D with the co-operation and assistanc
e of Baba Atomic Research Centre, Mumbai, the only one of its kind in the indust
ry in India employing nuclear energy for peaceful purposes. One of the noteworth
y features of this development is the employment of both thermoplastic and therm
osetting system for the up gradation of secondary species, an achievement of the
first time in the world. The process further utilizes one of the residues that
did not find earlier an appropriate end use.
The company has also diversified its activities into the manufacture of Resorcin
ol based glues, dially phythalate and sheet molding compounds, the development d
ially phythalate based molding compounds, a raw material used in the electronic
component industry was the results of WIP s indigenous research and development ef
forts. This R & D work enabled India to become the third country in the world (o
ther two countries being USA and Japan) to produce this special item. The DAP mo
ulding compound is an import substitution and improved formulation and the in-ho
use technology enabled the material to compete favourable with imported material
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
A well defined Quality Management System is in place. The QMS is certified by IS
9001, the international benchmark of progressive organization.
Quality Policy
Quality policy of WIP is to manufacture products as per national and/ or interna
tional standards to upgrade the quality on a continual basis through regular imp
rovement efforts. A well defined QMS has been implemented. This system is continu
ously reviewed to enhance its effectiveness and updated to meet the challenging
Quality Objectives
Suitable equipment and machinery for process control at all stages.
Provisions of adequate resources including raw material and personnel to ensure
consistent product quality.
Well- defined product and product characteristics to enable monitoring, analysis
and continual improvement.
Communication of requirement of products including customer requirement, statuto
ry/ regulatory requirements, aspects of QMS including policy and objectives amon
g all employees.
Quality policy and objectives are displayed for general awareness. Internal comm
unication is achieved through periodic awareness programs as well as discussions
and interactions by Head of the Department (HODs) with the employees.
The management representative has total responsibility for the Quality Managemen
t System. Master copies of all QMS documents viz. Quality System Manual, Work In
structions and other documents are available with the Management Representative.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
A paper in the title of Efficiency, Customer Service and Financing performance a
mong Australian financial institutions (Elizabeth Duncan, and Elliott, 2004) sho
wed that all financial performance measures as interest margin, return on assets
, and capital adequacy are positively correlated with customer service quality s
cores. Generally, the concept of efficiency can be regarded as the relationship
between outputs of a system and the corresponding inputs used in their productio
n. Within the financial efficiency literature, efficiency is treated as a relati
ve measure, which reflects the deviations from maximum attainable output for a g
iven level of input (English M. and Warng, 1992). However, there have been numer
ous studies analyzed the efficiency of financial positions of the organizations.
Among these, (Rangan N. and Grabowski, 1988) use data envelopment analysis to a
nalyze technical efficiency in US banking into pure technical and scale efficien
(Aly H., and Rangan 1990) extend this analysis to contain analysis of allocative
efficiency, and (Field, 1990), (Dark, 1992), (Chu-Meiliu, 2001), (Tser- Yieth Ch
and Tasi Yeh, 1998), and (Leigh D.,and Howcroft, B., 2002)have conducted some
studies into banking efficiency.
Reference: The hindu, February 25th 2009
Ben, Director of Mc clure & co mentioned that there are many different ways to
measure the financial performance, but all measures should be taken in aggregati
on line items such as revenue from operations, operating income and cash flow fr
om operations can be used as well as total unit sales. Furthermore, the analyst
or investor may wish to look further deeper into financial statements & seek out
margin growth rate or any declining debts.
Reference: Insight into the operations, business
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The study is partly descriptive and partly analytical. It is descriptive as it t
races theoretical frame work of financial management. It is analytical in the se
nse that it makes an appraisal of the financial management in Western India Plyw
oods Ltd.
A Research Design is needed because it felicitates the smooth sailing of the var
ious research operations. There by making research as efficient as possible yiel
ding maximum information with minimum expenditure.
The study is primarily based on the internal records and annual accounts of the
company. Besides this, information will be gathered through discussion with the
officers of the company. Further personal interview will be held with various pe
rsonnel working in the company.
Descriptive Research
The study is primarily based on the internal records and the annual records of t
he company. Besides, information is gathered through discussions held with the o
fficers of the company.
The entire financial data of the company is considered as the universe of data.
Financial data which is relevant to 5 years is taken as the sample size.
Convenience sampling method is used to collect data for the study.
The study was conducted for 21 days.
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
The data for the study are to be collected from secondary and primary sources. T
he study
mainly depends on secondary data.
The primary data have to be collected with the help of informal discussion with
Annual Report of Western India Plywoods
Informal discussion with Account Officers
Company Website
Journals and Magazines
Ratio Analysis
Trend Analysis
Comparative Statements
Common Size Statements
The period of study is limited to data of 5 years
The study is based on secondary data provided by the unit.
It is difficult to judge the financial strength and weakness with the said ratio
Dept of Mgt Science
MES College of Engineering
Project Report 2009
Western India Plywoods Ltd
Dept of Mgt Science