Professional Documents
Culture Documents
For
BIT (BARODA INSTITUTE OF TECHNOLOGY)
Submitted to
Prepared by
KRINA BHATT
ID No.: 20BBA248
BBA Second Year
July 2022
DECLARATION
Date: 05/07/2022
I was placed at BIT INFO TECH for training purpose it has been a pleasure and honor to
work at such a great organization. I am highly thankful to the management of BIT INFO
TECH and to all of them who have directly or indirectly helped in this project. My first
word of gratitude is due to MS. Dhavani . pandya my corporate guide, for his kind help
and support and his valuable guidance throughout my project. I am thankful to her for
providing me with necessary insights and helping me out at every single step. I am also
thankful to all the employees of organization of staff as well as Production Department
who given me desirable guidance when it’s required.
I would like to thanks my faculty guide Prof. MS. Pooja Shah for providing best support
and guidance for project as well as also I would like to thanks to my professors for
providing me needed information and help during my project work.
Table of Contents
PART-I Organizational Profile
No.
1
9. Top Management Mr. Prakash Parekh (Managing Director) Mr.
Pritesh Parekh
2. The Company/Organisation:
It acquired the Oswal Polymers division in the year 2003 at the time of its dissolution and
in the year 2005 the company started manufacturing Woven sacks and Woven fabrics,
Flexible packaging products in Nani Chirai unit for serving domestic salt units, cement
2
and fertilizer industries and then it gradually expanded its product by manufacturing
Jumbo bags, Tarpaulin, Laminates, Multifilament yarn, masterbatches, Flexible
packaging for food grains, chemical, agricultural products, automotive spare parts, etc.
Plastene India Limited converted from Private Limited to Public Limited in 2006. In the
year 2006 Oswal Extrusion Limited was set up in KASEZ (Kandla Special Economic
Zone) as a subsidiary company of Plastene India Limited with a built up area of 14,985
sq meters and it manufactures FIBC/ Jumbo Bags of different sizes, Food Grade Bags,
Woven Bags, Woven Fabric, and Masterbatches. In 2009, the company installed an
Extrusion Line with 16 circular Looms and Coating Line.
The Company wants to be a leading exporter of its product with the following requirements:
The unit gets benefits from the Technology Upgradation Finance Scheme (TUFS) from
the Ministry of Textiles. It is also entitled to concessional rate of interest and 5%
reimbursement on finance of new machinery. This helps the company in lowering the
overall cost of funds. Oswal Extrusion Limited being set up in KASEZ (Kandla Special
Economic Zone) has benefits of single window clearance for import and export.
Apart from it, Oswal Extrusion Limited receives various government department
clearances such as clearances from the Ministry of Finance and Ministry of Commerce
and Industry from a single office situated within the KASEZ. This improves efficiency
by saving the time it takes in taking the goods to the Customs clearance.
Being set up in KASEZ it also has the benefit of 100% income tax exemption for the first
5 years starting from 2005-06 and 50% thereafter for next the 5 years. It also gets an
exemption from stamp duty, Customs duty. IGST (Integrated Goods and Service Tax) is
applicable in KASEZ. The Unit is a leading exporter of Jumbo Bags known as FIBC
(Flexible Intermediate Bulk Container), Food and Pharma Grade Bags, Woven Bags, and
Woven Fabric. Its Registrar office is in Ahmedabad.
3
6. Plastene India Limited Unit-2 (Raipur)
7. Plastene India Limited Unit-3 (Singapore)
8. Plastene India Limited Unit-4
Mission:
“The Mission of Company is to develop an outstanding customer-centric
organization that offers the widest range of high-quality cost-effective products to
its customers and meets customer’s requirements. This mission will be achieved
by creating mutually beneficial relationships between companies’ Customers,
Vendors, Bankers, Employees, Shareholders and Society at large”. The Company
makes continuous efforts to achieve this mission.
Vision:
“The Vision of the company is become one of the top global packaging companies that offers
the widest range of futuristic packaging solutions”.
Core Values:
1. Excellence: The Company believes in giving best and wants continuous improvement.
4
2. Leadership: It believes in showing results to those who are engaged with the company
and being accountable for them.
3. Respect: The Company believes that values should be given to each individual and
professionals and creates a culture that encourages participation of stakeholders and
employees.
4. Integrity: It tries to maintain the highest moral and ethical standards in whatever it does
and believes in doing the right thing.
5
Organization Structure:
7
(Source: Given by Mr. Rabindra Kumar Shah-HR Manager)
Objectives of the Company:
1. The objective of the company is to attain the cost leadership by focusing on
achieving maximum operational efficiency and best customer satisfaction which
in turn helps its partners to group and enjoy the benefits in years to come.
2. One of their major objectives is to grow rapidly and keep pace with the growing
plastic packaging industry.
3. Their objective is to take lead in four key areas:
a. Achieving the best performance
b. Strengthening relationships with their customers and suppliers
c. Relentlessly pursuing operational excellence
d. Building a winning organization
4. In order to achieve the best performance, their focus is on the fundamentals of
cash generation, cost control, improved return on capital and absolute profits.
5. Their objective to strengthen their relationship with customers and suppliers
hinges on continuing to develop their market insight to guide about their quality
and services as well as their innovation and product development, and delivering
value through the whole supply chain and being recognized for these aspects of
their offering.
6. Their objective of relentlessly operational excellence means taking the lead in key
areas such as safety, operations, sustainability, and risk management. These are
the fundamentals of quality business and play an important role in proving their
core strengths.
7. Their objective of building a winning organization means encouraging the
development of a culture that consistently drives performance towards the
company’s vision and delivers on promises.
8. In the coming year’s company is looking forward to work with its members to
accelerate change in the plastic packaging industry and it wants to create an
environment that improves the future of all.
9. Their objective is to maintain the highest level of moral and ethical values in
every sphere of their work through habitual integrity.
10. It wants to offer the highest standards of quality while maintaining the
costeffectiveness to its clients in the market.
11. It wants to lead the market through its innovative designs and profitable solutions
to all its customers.
9
Major Achievements of the Company:
10
Major Product of Wholly-Owned Subsidiary Company:
Functional Areas
Director
General
Manager
Marketing
Senior
Manager
Marketing
Assistant
Managers
Executives
12
The Marketing Department promotes the company business globally and drives
sales of bags by identifying target customers and other audiences.
13
Participating in Exhibitions, Online globally seraching for new
customers and contacting members of association for orders
14
Figure 8 : 4Ps of Marketing
Product Price
1) Flexible Intermediate Bulk Price of the product is not fixed . Price of
Containers(FIBC) raw material in international market is
2) PP Woven Bags almost same but conversion cost , profit
and customer's specifiactions in global
3) Woven Fabric market varies so price is calculated based
4) Masterbatches on it.
4Ps of Marketing
Mix
Place Promotion
1) Europe 1) Exhibitions
2) USA (North America, Canada ) 2) Online Search
3) South America 3) Word of Mouth Marketing
4) Australia 4) Sales Promotion
5) Middle East
6) Africa and New zealand
2. PP Woven Sack
3. Woven Fabric
4. BOPP Woven Sack
(Source: As Discussed with Ms. Veena Udasi- Marketing Executive)
The Plastene India Limited the parent organization of Oswal Extrusion Limited is the
only industry in the world that makes Tarpaulin, FIBC, Woven Sacks, Multilayer Films,
Fillers, Masterbatches, and Multifilament Yarn under one roof. But, Oswal Extrusion
Limited produces limited products. So, from the above table, we can conclude that even
though the company faces tough competition from its competitors it is able to make its
presence in the market because of its quality, certification, price, and exporting in bulk
quantity. Being set up in Kandla Special Economic Zone it enjoys the benefits of single
window clearance for import and export compare to its competitors. Apart from it, as the
unit is located near to Mundra port and Kandla port it provides the unit efficient logistics
thereby reducing its transportation and raw material cost compare to its competitors.
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Making goods available to the consumer at convenient points is the key
responsibility of the company.
The choice of an appropriate distribution channel depends upon the nature of the
market, nature of the product, nature of the company and other factors.
The distribution network is a key element in the placement of the product. The
unit is located near to Mundra port and Kandla port it provides the unit efficient
logistics thereby reducing the firm’s transportation cost.
The company uses both direct and indirect distribution channels.
PP Woven
Sack
Woven Fabric
BOPP Woven
Sack
Food Grade
Bags
Pharma Grade
Bags
Price Food Grade Approx. Approx. - - -
Bags 250 220-250
Baffle Bags Approx. Approx. Approx. Approx. Approx.
150 150 130-140 130-160 170
Conductive Approx. Approx. Approx. Approx. Approx.
Bags 250 230 230-250 250 260-270
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U- Panel Bags Approx. Approx. Approx. Approx. Approx.
150 130 130-150 150 160
Circular Bags Approx. Approx. Approx. Approx. Approx.
150 150 140 130-140 150
Four-Panel Approx. Approx. Approx. Approx. Approx.
130 130 100-130 120-130 150
Place Distributors 25 major 30 major 33 major 20 major 30-35
distributors distributor distributors distribut
ors
Promotion Exhibition
Online Search
Word-of-
Mouth
Marketing
Sales
Promotion
Advertisement
(Source: As Discussed with Mr. Dilendra Singh- General Manager Marketing)
Product Life Cycle:
Figure 9: Product Life Cycle of FIBC Bag
The FIBC bags of Oswal Extrusion Limited are in Maturity Stage as the growth in
sales is diminishing due to increase competition among competitors with similar
products. So it is necessary for company to maintain its market share and
maximize its profits. Product differentiation from its competitors is necessary at
maturity stage.
BCG Matrix:
18
Figure 10: BCG Matrix
Four Panel Bag and Food Grade Bag are stars for the company as it has high
market growth rate and high market share. The market share of company for Four
Panel Bag is 30% and market growth rate is 25% and for Food Grade Bag is 25%
and 15% respectively. But competition is very strong and it can be easily
overtaken by competitor with high market share. The company should invest in
sales promotion and advertisement strategies so that star can become cash cows.
Conductive Bag, U-Panel Bag and Baffle Bag are question mark for the Company
because it has low market share compare to high growth rate of Industry. Such
products are uncertain whether they will generate consumer interest or not but
they can be converted into high market products as there is not much difference in
market share and market growth rate so by generating new strategies of attracting
customers and research they can converted.
1) Segmentation:
Market Segment consists of a group of customers who share a similar set of needs
and wants. The FIBC bags are used for storage or transportation of powder form,
flake or granule goods. The FIBC bags market is segmented on the basis of grade,
product type, bag design, and by the application of the Bag.
On the basis of grade, it is segmented in food grade. On the basis of product type,
it is segmented into Type A, Type B, Type C, and Type D bags. On the basis of
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bag design, it includes one-loop, two-loop, four-panel, U panel, circular-cross
corner, baffle, and others. On the basis of application, the FIBC bags
manufactured by the company are used in different industrial segments such as
cement, fertilizers, chemicals and minerals, sugar, food grains, salts, sand, and
gravels, etc.
Geographical segmentation divides the market into geographical units such as
nations, states, regions, cities, or countries. The company geographically
segmented in a location such as Europe, the USA (North America, Canada), South
America, Australia, New Zealand, Middle East, and Africa.
2) Target Market:
Once the company has identified its market segment opportunities it decides its
target market.
Particularly due to the low-cost Indian FIBC industry is favored for FIBC globally
so, the main aim of the company is to target and capture new global markets.
Recently the company wants to target the market of Japan and Korea and provide
high quality, cost-effective, and customized products.
3) Positioning:
The Company has positioned itself in the market because of its excellent quality,
meeting requirements of customers, lower manufacturing cost compared to
countries like Turkey and China, diversified customer base, maintaining long term
relationships with customers, etc.
SWOT Analysis:
1) Strength:
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Location Advantage as it is set up in Kandla Special Economic Zone (KASEZ)
and near to the major ports.
Diversified Customer Base globally
Fiscal Incentives
Strong management team
Quality Assurance
Single window clearance for export and import thus by saving time in taking the
goods to the customs clearance and helps in delivering goods on time to customer
2) Weakness:
The Company does not have any long term sale contracts.
The Company has to pay penalty if it fails to meet export obligations.
Wastage of material.
Increase in input prices as the company has to absorb some part of increase as it
cannot be passed entirely to the customer.
Strong Competition both domestically and globally.
3) Opportunities:
Increasing demand for food globally the requirement for packaging is also
increasing creating more demand in this segment.
India being the 3rd largest manufacturer of FIBC Bags there is a huge scope for
getting customers globally.
Increasing profitability by supplying products to end-users.
4) Threats/Challenges:
Currency fluctuation might affect the business since the company makes export to
various countries.
The FIBC industry is labor-intensive, thus non availability of labor or strike, work
stoppage may hamper the company’s business.
Non-availability and volatility in the prices of raw material used in manufacturing
the product may adversely affect the business.
Dependence on Transport Company may affect the business at the time of strike.
A slowdown in economic growth in India may affect the business.
Any ban on plastic packaging product manufactured by the company in India or
any other countries might affect the business.
The company manufactures the product and then either it sells directly to the
enduser or they sell the goods to the distributor and then the distributor sells to the
end-user. The goods are exported from Kandla port and Mundra port to the
endusers.
As Oswal Extrusion is located near to port it is easily accessible by road and its
easy connectivity ensures minimum time lag for a shipment.
22
Managing Director
Director
Vice-President
General Manager
Finance
Finance Manager
Executives
(Source: As Discussed with Finance Manager Arvind Bansali)
Major functions of the finance department of both Plastene India Limited and
Oswal Extrusion Limited are handled and managed by the head office of the
company situated in Ahemdabad.
Finance is one of the important pillars of the success and growth of the company.
How efficiently finance is maintained, utilized, and proper financial planning
plays an important role in the performance and success of the company.
In Oswal Extrusion Limited the function of the finance department is to acquire
funds for the company, managing, and proper utilization of funds on various
assets and expenditure of the company.
23
Proper financial planning is done by the finance department so that the business
can operate smoothly without a shortage of cash. Apart from it, decisions related
cash flow management, long-term investments, working capital management,
income-expenditure decisions, finance control management decisions, and other
financial decisions are taken by the finance department for the smooth working of
the company.
The major role and responsibilities of the Finance Department is resourcing of
finance, fund based and non fund based financial services management,
discounting of sales bill, cash flow management, book-keeping and
payables/receivables, working capital management, forecasting and budgeting,
sourcing for long term finance, payment of taxes, preparing financial statements
of the company, analyzing the company’s financial statements, and providing
guidance to the managers in the strategic decision making.
Bank Realisation Certificate (BRC) is issued by banks based on the realization of
payments against export by an exporter which is applying for benefits under
foreign trade policy. Issuing and taking follow up of Bank Realisation Certificate
for export is the responsibility of the finance department.
Cashier of the company Mr. Bharubha Jadeja manages all the petty expenses of
the company and bank related transactions of a small amount. The cashier makes
payment of expenses up to Rs. 10,000 but not more than that and he gives salary
in the form of a cheque to the employees and in the form of cash to the workers of
the company. The cashier makes an entry for all the payments made by him.
The financial data of Oswal Extrusion Limited is maintained by the commercial of
the company. Firstly, Commercial on monthly basis prepares financial statements,
afterward, modifications or changes are done by head office and the final
statements are prepared at the end of the financial year by the head office.
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Figure 14 : Ratio Analysis
Ratio Analysis
Operating Growth
Solvency Ratio Risk Analysis
Performance Analysis
Operating
Liquidty R atio Effeciency Business Risk Growth Rate
Ratio
Operating
Turnover R atio Profitability Financial Risk
Ratio
Externa l
Liquidity Risk
A. SOLVENCY RATIO
I. Liquidity Ratio:
“Liquidity Ratio Analysis measures how liquid the company’s assets are (how
easily the assets can be converted into cash) as compared to its current liabilities.”
As the company has to meets its commitments it requires liquid funds. There are
five liquidity ratios which are as follow:
1) Current Ratio:
Current ratio shows the relationship between current assets and current liabilities.
This ratio is a simple measure to estimate whether the business can pay short term
debts.
Current Assets
Current Ratio = Current Liabilities
Interpretation: Ideal ratio is 2:1 which means that for every one rupee of current
liability; double current asset is available for the company. The current ratio is a measure
of the firm’s short-term solvency. If current assets are greater than current liabilities, it
can be said that company can liquidate its current assets and pay off its current liabilities.
Oswal Extrusion Limited has maintained a current ratio of greater than 1 in past 5 years
which can be interpreted to be insufficiently liquid. Current assets of the company are
more than current liabilities which is a good sign for the company. But, since last 5 years
inventory is increasing so company should investigate the reason for increasing in
inventories if it is increased because of bulk orders then it is profitable but if inventory is
not of used that it is may affect the liquidity position of the company. It should also be
noted that current ratio measure only quantity of assets and not quality of assets.
2) Quick Ratio:
Quick ratio shows the relationship between cash & cash equivalents, receivables
and current liabilities.
Cash is considered as most liquid asset and other assets that can be considered as
relatively liquid are bills receivables and debtors they provide the company with a
better picture on the coverage of short term obligations. Quick ratio measures the
ability to meet current debt immediately.
This ratio is known also known as Acid Test Ratio.
3) Cash Ratio:
Cash ratio measures Cash and cash equivalents to current liabilities as cash is
most liquid asset.
It measures absolute liquidity of the business.
Cash & Cash Equivalent
Cash Ratio = Current Liabilities
Interpretation: The Company’s Interval Measure indicates that it has sufficient liquid
assets to finance its operations for 145 days in 2018 even if it does not receive any cash.
The internal measure of the company is reduced from 279 days to 145 days in last 4 years
which can be interpreted as company’s liquid assets are reducing. So, the company
should take measures to increase it for operating efficiently and smoothly even if it does
not receive any cash for few days.
Interpretation: The Company has maintained a net working capital ratio near to 0.5
since last 5 years which means company can meet its current obligations. The asset of
company is continuously increasing compare to liability of firm which is a good sign for
the company. Even though a firm having larger NWC has the greater ability to meet its
current obligations but it should be remembered that the measure of liquidity is a
relationship, rather than the difference between current assets and current liabilities.
28
II. Turnover Ratio:
Turnover ratios indicate how much time the firm takes to convert or turn over its
assets into sales or time taken to pay its suppliers.
This ratio is also known as Activity Ratio and they are employed to evaluate the
efficiency with which the firm manages and utilizes its assets.
A proper balance between sales and assets shows that assets are managed well by
the company. There are 7 types of turnover ratio which are as follow:
Accounts Receivables
Interpretation: The Receivable Turnover Ratio in 2014, 2015, and 2016 was less
compare to 2016 and 2017. The ratio for 2016 was highest which means that the
company is able to turnover its receivables 7.19 times in a year. The ratio then decreased
in 2018 by 0.93 but still the company is able to turnover its receivables by 6.26 times in a
year so company is efficient in managing its receivables. Generally, the higher the value
of Accounts Receivables Ratio, the more efficient is the management of credit.
7) Days Receivable:
The Days receivable show number of days in a year in which Account
Receivables are converted into cash.
The average number of days for which debtors remain outstanding is called the
average collection period.
Days Number of days in a year
Receivable = Accounts Receivables
Turnover
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Table 11: Days Receivable
Year Ratio
2014 90 Days
2015 96 Days
2016 106 Days
2017 50 Days
2018 58 Days
(Source: Own Compilation from Annual statements of the Company)
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9) Days Inventory:
The day’s inventory shows the number of days the company holds its inventory to
convert it into finished goods.
Inventory Turnover
Accounts Payables
31
(Source: Own Compilation from Annual statements of the Company)
Interpretation: Payables turnover ratio of the company is fluctuating in 2014 it was 1.82
times, and then it rose to 4.01 times in 2015, 5.41 times in 2016, 10.12 times in 2017, and
then it directly fall down to 2.80 times in 2018. In 2018 it paid only 2.8 times to its
supplier which means that company is taking longer time to pay its suppliers compare to
last year. A deteriorating ratio indicates that this year company may not have enough
cash to pay off its creditors or may be the credit period allowed by creditors is high.
Payable Turnover
Table 15: Days Payable Ratio
Year Ratio
2014 198 Days
2015 90 Days
2016 67 Days
2017 36 Days
2018 129 Days
(Source: Own Compilation from Annual statements of the Company)
Interpretation: In 2018, the average number of days taken by the company to pay its
creditors is 129 days. The day’s payable ratio of company has increased compare to last 3
years if this continues it may hamper the credit-worthiness of the company. The credit
period allowed by suppliers is generally 60 days. The company should take advantage of
credit facilities allowed by the creditors and use that money to increase their working
capital and cash flows but it should also make timely payments to its creditors or
suppliers to maintain a healthy relationship with them.
32
Cash Conversion Cycle Ratio = Receivable days + Inventory days – Payable Days
Interpretation: This ratio shows the time taken by the company to receive cash from its
customers after converting inventory into finished goods. In 2014 and 2018 the company
is having negative cash conversion cycle ratio, which means that it is generating cash
from customers before it has to pay its suppliers and it is using that cash in working
capital management and fulfilling short-term capital requirements. Receivable period has
decreased which has contributed to a decrease in the cash conversion cycle ratio and on
the other hand payable days and Inventory days have increased which contributed in
increase in the ratio. The cash conversion cycle was high in 2016 because of increase in
receivable and payable days. The cash conversion cycle of the company is average as it is
able to sell its products, receive cash from customers, and make payments to its suppliers.
The company should take measures to improve its cash conversion cycle by making
changes in the 3 variables.
B. OPERATING PERFORMANCE
Interpretation: A firm’s ability to produce a large volume of sales for a given amount of
assets is the most important aspect of its operating performance. The assets turnover ratio
of 1.67 implies that the company is producing Rs. 1.67 of sales for one rupee of capital
employed in total assets. The asset turnover ratio of the company in 2018 has decreased
compare to 2017 but increased in comparison of 2016, 2015, and 2014. For last 2 years,
the turnover ratio is increased which means that company has marginally improved its
utilization of assets. Total sales and assets of the company have also increased.
Net Assets
Table 18: Net Asset Turnover Ratio
Year Total Sales Net Assets Ratio
2014 29,400.69 16,150.94 1.82 times
2015 27,076.01 16,141.89 1.67 times
2016 22,692.05 16,605.93 1.36 times
2017 36,142.31 17,116.22 2.11 times
2018 37,165.62 17,869.80 2.07 times
(Source: Own Compilation from Annual statements of the Company)
Interpretation: The net asset turnover ratio for 2018 is 2.07 times which means that the
company is producing Rs. 2.07 of sales for one rupee of investment in net assets. The
ratio has increased compare to last 3 years as there is increase in investment of both
current assets and fixed assets. An unutilized or under-utilized assets increase the
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company’s need for costly financing and maintenance and becomes burden for the
company, so assets should be optimally utilized by the company.
Interpretation: The net fixed asset turnover ratio in 2018 has decreased by 0.06 times
compare to 2017. In 2018, the ratio is 4.38 times which indicates the company generates
a sale of Rs. 4.38 for one rupee investment in fixed assets. The ratio was 3.60 times in
2014 but it has increased to 4.38 times in 2018, even the net fixed assets of the company
have also increased it indicates that firm is efficiently utilizing its assets but still the ratio
is not very high more utilization of fixed assets should be done by the company. The use
of depreciated value of fixed assets in computing the ratio may affect firm’s performance
over a period or comparing with other firms as it may create an impression of high
turnover without any improvements in sales. The company should use Gross Fixed
Assets for a better comparison.
Current Assets
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Table 20: Current Asset Turnover Ratio
Year Total Sales Current Asset Ratio
2014 29,400.69 14,839.32 1.98 times
2015 27,076.01 11,921.68 2.27 times
2016 22,692.05 11,869.21 1.92 times
2017 36,142.31 11,310.18 3.19 times
2018 37,165.62 13,836.90 2.68 times
(Source: Own Compilation from Annual statements of the Company)
Interpretation: The current asset turnover ratio in 2018 has decreased by 0.51 times
compare to 2017. In 2018, the ratio is 2.68 times which indicates the company generates
a sale of Rs. 2.68 for one rupee investment in current assets. The ratio was 1.98 times in
2014 but it has increased to 2.68 times in 2018. The current assets of the company have
decline from 14,839.32 in 2014 to 13,836.90 in 2018. The company has marginally
improved its utilization of both fixed assets and current assets. Oswal Extrusion Limited
turns over its fixed assets faster than its current assets. Interpreting the reciprocals of
these ratios in 2018, it can be said that for generating a sale of one rupee, the company
needs Rs. 0.22 investments in fixed assets and 0.37 investments in current assets.
Interpretation: The working capital turnover ratio in 2018 has decreased by 0.07 times
compare to 2017. In 2018, the ratio is 3.95 times which indicates the company generates
a sale of Rs. 3.95 for one rupee investment in working capital. The ratio was 3.68 times
in 2014 but it has increased to 3.95 times in 2018. Interpreting the reciprocals of these
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ratios in 2018, it can be said that for generating a sale of one rupee, the company needs
Rs. 0.25 investments in net current assets. This gap can be met by bank borrowings and
long-term sources of funds. There are high sales in comparison of working capital which
indicates over trading and represents lower investment in working capital and more
profits to the company. High ratio shows that the company is running smoothly and
efficiently and there is sufficient cash, its performance is better compare to last 3 years
but it should make efforts to increase the working capital and take measures so that it
doesn’t decrease in 2019.
Shareholder’s Equity
Interpretation: The Indian packaging industries are highly labor intensive and no so
capital intensive industry. The equity turnover of the company is very high and the reason
for increase in the ratio is increase in sales. The ratio was 33.40 times in 2014 which
increased to 39.63 times in 2018. This shows that company efficiently utilizes its
shareholder’s equity to generate sales. Increasing equity ratio shows positive and efficient
equity management by the company.
37
survive and grow over a longer period of time. The profitability ratios are
calculated to measure the operating efficiency of the company.
Normally, two major types of profitability ratios are calculated:
a. Profitability in relation to sales
b. Profitability in relation to investmen
19) Gross Profit Margin:
This ratio shows the difference between sales and cost of making a product or
rendering services.
The ratio indicates the efficiency with which management produces each unit of
product. It also shows the average speed between the cost of goods sold and the
sales revenue.
This ratio also indicates the ability of the company to control its production cost
or to manage the margin it makes on product sit purchases and sells.
It is calculated by dividing the gross profit by sales:
Interpretation: The gross profit margin of the company has been in the range of 1719%.
However, in 2016 the gross profit ratio was negative which means that the cost of
manufacturing the product exceeded the revenue generated from the sales of the product.
The decline in the ratio was because of fall in the prices of the product due to fluctuating
prices of raw material and increase in the cost of goods sold, so its sales also declined and
its ratio was negative. But, in the next year the sales directly raised from Rs. 22,692.05 in
2016 to Rs. 36,142.31 in 2017 thus the increase in gross profit margin is a sign of good
management by the company. Increase in the ratio was due to a lower cost of goods sold
as well increase in sales price and sales of the company.
Sales
Interpretation: The operating profit margin has decreased compare to last 3 years which
is not a positive sign for the company. The ratio is 0.89% in 2018 which means that only
0.39% of income is left after paying all operating expenses which is very low. This shows
that company is not running is operations smoothly and immediate measures should be
taken by the company to improve its operations. A higher operating profit margin helps
the company to generate high revenue from operations so that it can meet both its
operating and non-operating expenses.
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Tax
2014 63.28 29,400.69 0.0021 0.215
2015 435.50 27,076.01 0.0160 1.608
2016 563.30 22,692.05 0.0248 2.482
2017 437.29 36,142.31 0.0120 1.209
2018 159.32 37,165.62 0.0042 0.428
(Source: Own Compilation from Annual statements of the Company)
Interpretation: The net margin of the company is decreasing; it was 0.215 in 2014, then
it increased to 1.608 in 2015, then it again increased to 2.482 in 2016, then it started
declining. Even then profit after tax of the company is decreased compare to last year.
The sales have increased but net margin has decreased because more sales of low-margin.
The operating expenses of the firm have decreased as a result of which net margin has
also decreased. A firm with low net margin is not able to withstand in the face of falling
selling prices, rising cost of production or declining demand of the product. The company
should reduce its operating expenses and should increase its net margin.
40
2018. The FIBC jumbo bags margin is low because of the undifferentiated nature of
FIBC’s, but it varies sometimes producers get more margin and sometimes they get less
margin as result the margin decreased in 2018 compare to 2015 to 2017. Efforts should
be made by the company to capture majority of the markets so they get bulk orders and
can increase their profits.
23) Profit Margin:
Taxes are not controllable by the company. Therefore, the margin ratio may be
calculated on the before-tax basis. This ratio shows the profitability of the
company or how much sales are turned into profits.
Sales
Interpretation: The profit margin of the company has reduced even though the sales
have increased in 2018. The prices of raw material keep on fluctuating in global markets,
as result of which the company has to increase the prices of the product to the end-users
or has to decrease its profit margin. Apart from it strong competition from Shankar
Packaging, Flexituff, and Karur-KCP affects the profit margin of the company. The
operating margin and gross profit margin of the company is more than its net margin as a
result of which profit margin is low in 2018.
Interpretation: The operating expense ratio of the company is between the ranges of
9394% only in 2016 the ratio is 120.70%. The operating expense ratio of the company is
94.62% in 2018 that indicates 94.62 per cent of sales have been consumed together by the
cost of goods sold and other operating expenses and 5.38 per cent of sales is left to cover
interest, taxes, and earnings to owners. A higher operating expense ratio is unfavorable
because it will leave a very small amount of operating income to meet interest, taxes and
other expenses. The ratio has increased from 93.31% in 2014 to 94.62% in 2018. The
variations in the ratio has occurred due to changes in the demand for the product in global
market, changes in the sale price which is based on raw material and conversion cost
price, changes in administrative or selling expenses or products with different gross
margins. This ratio shows the managerial policies and programmes of the company.
There is a general rise in the selling expenses of the company which contributed to an
increase in operating expenses ratio. This ratio is affected by number of controllable and
uncontrollable factors so it should be thoroughly examined and it should be compared
with similar firms so that unnecessary expenses can be reduced and ratio can be
controlled.
Sales
Table 29: Cost of Goods Sold Ratio
Year Cost of goods sold Sales Ratio
2014 24,377.98 29,400.69 0.8291
2015 21,751.06 27,076.01 1.2448
2016 23,661.36 22,692.05 1.0427
2017 29,859.17 36,142.31 0.8261
42
2018 30,694.06 37,165.62 0.8258
(Source: Own Compilation from Annual statements of the Company)
Interpretation: The cost of goods sold ratio 82.58 per cent of sales have been consumed
together by the cost of goods sold and other operating expenses. Both cost of goods sold
and sales have increased in 2018. This indicates that 17.42 per cent of sales are left to
cover other expenses. The Cost of goods sold and sales both have increased. The ratio has
decreased in 2018 compared to last 4 years. The cost of goods sold ratio of the company
has decline because of changes in prices of raw material, demand of the product,
conversion cost, etc.
43
This ratio shows what the company earns from all the capital invested in the
business. It also measure the profit of the company in relation to total assets
employed in the company.
This ratio measures net profit per rupee of total assets including both current and
fixed assets.
As taxes are not controllable by management, and opportunity of getting tax
benefit differs, it is better to use EBIT to measure return on total assets.
Total Assets
Interpretation: The Company’s return on total assets has declined in 2018 which means
that company needs to reduces its expenses and it has to generate more returns from the
capital or assets employed in the company to get future benefits. The ratio of the
company is very low means it is not able to fully utilize its assets to generate sales for the
company. EBIT has decreased and total assets have increased, even though there is
increase in assets the company is not able to fully utilize its assets to get more returns.
The assets which require high maintenance and increases cost of the company should be
replaced so that cost can be reduced and company can earn more returns from its assets.
28) Return on Investment:
This ratio measures the returns which the company gets from its overall
investments. The term investment refers to total assets or net assets.
As taxes are not controllable by management, and opportunity of getting tax
benefit differs, it is better to use EBIT to measure return on investments.
44
2016 538.617 16,605.93 0.0324 3.2435
2017 442.7055 17,116.22 0.0258 2.5864
2018 159.0048 17,869.80 0.0088 0.8897
(Source: Own Compilation from Annual statements of the Company)
Shareholder’s Equity
45
increase its net income by reducing expenses and optimally utilizing its shareholders and
owners fund.
Common
Shareholder’s Equity
Table 34: Return on Owner’s Equity
Year Net Income Common Ratio %
Shareholder’s
Equity
2014 63.28 880.14 0.0718 7.1897
2015 435.50 880.14 0.4948 49.48
2016 563.30 937.74 0.6006 60.06
2017 437.29 937.74 0.4663 46.63
2018 159.32 937.74 0.1698 16.98
(Source: Own Compilation from Annual statements of the Company)
Interpretation: It shows how efficiently the firm has utilized its resources of owners.
The return on owner’s equity ratio of the company is fluctuating as in 2014 it was just
7.1897%, then in suddenly increased to 49.48% but in that year net income of the
company has also increased, then it rose to 60.06% in 2016 and net income also
increased, it decreased to 46.6% in 2017 and net income of the company has also
decreased, it then again decreased to 16.98% in 2018 and net income also decreased from
437.29 to 159.32 because expenses of the company was almost equal to its revenue and
tax expenses have also increased in this year so the ratio declined because of low returns.
The profit margin and net profit margin has also decreased in 2018 because of which also
the ratio has decreased. The ratio should be compared with similar companies so that
strength and performance of the company can be known to attract future investments.
46
In DuPont ROE, equity multiplier will show whether the company is dependent
on debt instead of equity, and profit margin and total asset turnover will show the
profitability of the company.
DuPont ROE = Net Income
Shareholder’s Equity
Table 35: DuPont ROE
Year Net Sales/Total Total Ratio %
Income/Sales Assets Assets/Shareholder’s
Equity
2014 0.00215 1.277860 26.141011 0.0718 7.1897
2015 0.01608 1.355604 22.693423 0.4948 49.48
2016 0.02482 1.177721 20.547017 0.6006 60.06
2017 0.01209 1.858425 20.739021 0.4663 46.63
2018 0.00428 1.665465 23.797054 0.1698 16.98
(Source: Own Compilation from Annual statements of the
Company) Interpretation: It shows how efficiently the firm has utilized its resources of
owners. The return on equity ratio based on DuPont ROE of the company is fluctuating
as in 2014 it was just 7.1897%, then in suddenly increased to 49.48% but in that year
profit margin and total asset turnover ratio has increased but equity multiplier has
decreased which means that less assets are financed by shareholders, then it rose to
60.06% in 2016 and net income increased but return on total asset and equity multiplier
has decreased which means that company has not fully utilized its assets in 2016, again it
reduced to 46.63% in 2017 the profit margin of the company reduced also reduced but
because of other two factors ratio was high, in 2018 the ratio declined directly from
46.63% to 16.98% the profit margin and return on total asset ratio also declined as a
result of which the company has not performed well in overall return on equity. The
company should increase its profit margin and should optimally utilize its assets to
increase its overall DuPont ROE ratio. This ratio gives better and clear picture to the
investors.
Number of shares
outstanding
47
Table 36: Earning Per Share (EPS)
Year Rs.
2014 3.59
2015 24.72
2016 22.94
2017 18.71
2018 6.82
(Source: Own Compilation from Annual statements of the Company)
Interpretation: The Earning per share over the years indicates the company earning per
share basis ability has changed. It indicates the profitability of the company on per share
basis but not indicates retained and dividends of the company. A higher EPS ratio shows
strong financial position and high earnings. The ratio has declined because net income
has decreased compare to past years and number of shares has increased. Declining
earnings per share ratio is not a positive sign for the company and it should be improved.
But for better analysis the ratio should be compared with similar industries earning per
share.
C. RISK ANALYSIS
I. Business Risk:
Business risk refers to the probability that the company will have less profits
compare to expected profits or it will experience a loss in future instead of getting
profits.
48
Interpretation: The operating leverage of the company is negative as the expenses of the
company has increased, purchase of assets, and raw material which is granules have also
increased as it was available at low rate and in comparison to expenses sales have not
increased with much speed due to high competition in international market because of
which the operating leverage ratio of the company is low. But, the ratio is expected to
improve in 2019 as sales in this year have increased.
Interpretation: Financial leverage is affected mainly by the debt of the company. The
financial leverage ratio of the company is not stable. The long term borrowings of the
company has reduce but long term liabilities as well as short-term borrowing of the
company has increased which has affected the financial leverage ratio. The short term
borrowings have increased because of debt taken to purchase material and assets which
company will pay soon so ratio will be reduced. Apart from year in this year net income
as also reduced which affected the ratio.
49
Change in Change in
Net Income Sales
2014 - - -
2015 372.22 (2,324.68) (0.1601)
2016 127.80 (4,383.96) (0.0291)
2017 (126.01) 13,450.26 (0.0093)
2018 (277.97) 1,023.31 (0.2716)
(Source: Own Compilation from Annual statements of the Company)
Interpretation: The total leverage ratio of the company is stable as it is negative for all
the 4 years. Even though the net profit has decreased but sales have increased because of
which there is less variation in ratio. Apart from it operational and financial leverage ratio
have also affected total leverage ratio of the company.
Net Assets
Interpretation: The debt ratio of the company is decreasing and it is lower which is
positive sign is for the company as it indicates that the firm is has assets to cover its
liabilities. The ratio has increased in 2018 compare to 2017 due to increase in liabilities
of the company but the firm has sufficient ability to cover its liabilities from its assets.
50
This ratio shows the ability of the company to pay its liabilities from its own
capital employed in the business. This ratio indicates to financial position of the
business and help bankers to decide whether to invest in such company or not.
Shareholder’s Equity
Interpretation: The Debt service coverage ratio of the company in last 5 years is less
than 1 which indicates that the company is not able to cover its debt which is principal
51
amount and interest from its operating income. This shows that the company should
increase its operating income so that it can over its debt. Low operating income of the
company is result of increase in competition and increasing expenses of the company.
Total Assets
Table 43: Overall Profitability Ratio
Year Net Profit Total Ratio
Assets
2014 63.28 23,007.75 0.002
2015 435.50 19,973.39 0.021
2016 563.30 19,267.76 0.029
2017 437.29 19,447.81 0.022
2018 159.32 22,315.45 0.007
(Source: Own Compilation from Annual statements of the Company)
Interpretation: The overall profitability ratio of the company is declining which is not a
positive sign for the company. The Net profit of company has declined because of high
expenses in purchase of raw material and other expenses and in comparison to net profit
assets of the company has increased. As a result of decrease in net profit and increase in
total assets overall profitability ratio of the company has declined.
Interest
52
Interpretation: The Interest coverage ratio of the company has declined but in 2017 the
ratio was 86.48% which shows that the company was able to cover its interest. In 2018
the ratio dropped down to 34.00% because the EBIT has also declined in that year
because of increase in expenses of the company. Thus, decrease in EBIT and decrease in
interest have contributed in decline in interest coverage ratio.
53
3.3 PRODUCTION DEPARTMENT
Production Department Structure:
Figure 15: Production Department Structure:
Managin g
Director
Uni t Head
Cutting Operator
Incharge Supervisior
Supervis or
Operator Helper
Mr. Prakash Parekh is the Managing Director of the company under which the unit
head Mr. Dewankar works. Mr.Virendra Thakkary is Deputy General Manager of
Production and he manages Tape Plant, Loom, Needle Loom, and Lamination and
with his guidance all the other departments in Production Department works.
54
As per the specifications mentioned by the customer about the bag like density,
size of bag, type of bag, liner, FIBC options, Filling method, Discharging spout,
etc. the drawing of the bag is made and supplied by the plant for customer’s
approval and after being approved by the customer, production department starts
production. GSM (Gram Square Meter) is calculated by the department based on
mesh and denier and the boards stating wrap, weft, GSM, denier is put in each
department in production so that bags are made as per customers need.
It is responsibility of the production department to check that the production is
completed within time allotted by customer, to check targets of production are
achieved as per production plan, wastage is minimum, to ensure bags should not
be rejected by the customer for which utmost care is to be taken, quality
assurance, inventory management, maintenance of machines, waste management,
it has to ensure that no problems should be occurred which interrupt production
process, methods to reduce manufacturing cost, efficient utilization of resources,
manage labors, to check safety measures are followed in the department, hygiene
and cleanliness is maintained in food grade department, taking care of dispatch
and bailing, etc.
The responsibility of production manager is to prepare material requirement data,
maintains production schedule, does production planning to achieve targets,
reviewing wastage and scrap value, dispatch handling, finding methods to reduce
cost of making bag, taking care of administration and coordination with other
departments.
With the help of Man, Machine, Material, Method and proper environment the
product department carries out the production process. Cooperation and
coordination of all the five elements is necessary for completing the orders on
time along with full efficiency and utilization of resources.
Production Department includes following 16 Sub-Departments which are as
follow:
1. Raw Material Dispatch (RMD)
2. Cutting Department
3. Printing Department
4. Quality Department
5. Production Department
6. Bailing Department
7. Loading/Dispatch
8. Maintenance/Electrical Department
9. House Keeping
10. Store
11. Wastage/NGR
12. Loom
13. Needle Loom
14. Tape Plant
55
15. Lamination Section
16. Liner Section
Types of Jumbo Bags/Bulk Bags as per their Properties: Figure 16: Types of Bulk
Bags/Jumbo Bags as per their Properties
flammable products.
• Type C Bulk Bags are conductive bags. They are made from
plain woven polyproplyene but are interweaven
56
(Source: Given by Mr. Anil Patel Production Incharge)
Types of Bags Manufactured by the Company:
Four-Panel
U -Panel Bags Baffle Bags Circular Bags
Bags
U-Panel
Conductive Conducti ve
Conductive
UN Bags
Facility Equipments:
Table 45: Major Machinery used for Production
Equipments/Machineries No. of
units
Tape Plant 1
Loom -GSL 8 Shuttle 4 Looms
-LSL 610 6 Looms
-LSL 6 11 Looms
Twister 1
Lamination 1
Needle Loom 7
Filler Cord-6 head 1 Machine
Filler Cord-2 head 6 Machine
Stitching Machine 160
Webbing 24 head
Cutting Machine
Liner Machine 2
Bailing Press 1
57
Printing Machine 1
(Source: Given By Mr. Virendra Thakkary and Mr. Anil Patel)
1. Flexible Intermediate Bulk Containers (FIBC)/Jumbo Bags: Figure
18: Manufacturing Process of Jumbo Bag
58
(Source: Given By Mr. Virendra Thakkary- General Manager Production)
Manufacturing Process of Jumbo Bags:
Capacity of Bags- 500-3000 kgs
Safety - 5:1 and 6:1
Size of the bag- Size of the bag is made as required by customer
Material used in Polypropylene (PP) UV stabilized , and other addictives
Bag-
Polyethylene Liner - 30-200 Microns
Quality- Certified by ISO 9001:2008, 14001:2004, India and Labordata,
Germany and others
The process of FIBC Bags/Bulk Bags/Jumbo Bags are as follow:
1. Tape Plant:
Figure 19: Process of Tape Plant
Tape plant granules (PP) and some addictives are mixed
and extracted into film .
Example: For 3.2 mm, 2000 Denier Polypropylene (PP)
100%, Calcium 5%, Low liner Density 2%, UV 1.5%,
Master Batch for whitness 0.2 kg is mixed.
3. Lamination: Laminated fabric is called coated fabric and it protects the bag from
dust, UV rays or any abnormality. Lamination is optional it is done as per
requirements of customer. Thickness of lamination is 10-80 microns.
61
5. Cutting, Printing and Stitching:
Here, fabric is put into automatic cutting machine and cut as per the size and
length mentioned by the customer. Spout and nozzle is also cut in this section.
Then cut pieces goes in printing machine and are printed as per customers
requirements even pouches are attached with bag to keep details of the customer.
After printing, the fabric goes to stitching department and the stitchers stitch all
the components of bag to make the final bag.
62
2. Manufacturing Process of Woven Sacks:
The Woven sacks are made from Polypropylene as base material which depends
upon the application of bag in a particular market segment. The manufacturing
process of woven sack is same as FIBC bags only the mixing of raw material
varies.
Woven sacks are used for seeds, rice, flour, sugar, spices, pluses, tea, fertilizers,
cement, fish food, animal food, and for all products in power or granules form.
Raw Material
Extruder
Tape Plant
Circular Loom
Unlaminaed Fabric
Lamination(Optional)
ABC Analysis:
ABC analysis (Always, Better, and Control) is one of the techniques of Inventory
management in an organization.
-Category A products contribute more and uses very less resources. They are
Valuable products for the company.
-Category B products contribution and amount of resources utilization is same.
They are also important resources but not as Category A products.
-Category C products uses majority of resources but contributes very less to the
company. These category products must be controlled by the company.
EOQ = √ 2𝐴𝑂
𝐶 EOQ = √ 2𝐴𝑂
=2*720*120/10 𝐶
Man-Machine Chart:
65
Table 55: Man-Machine Chart
Sr. Machine Man Number of Man at Idle Time
No. each Machine
1. Tape Plant Mix material, Checks cutting is 16-Inchrage, 20 mins (only
proper, Winds tape into bobbin Operators, winder man winder man
and Helper when tape is
making)
2. Needle Loom Sets loom for making fabric 12-Incharge, Operator, 10 mins
Helper
3. Webbing Handle of bag is made, 30 man -
material is mixed
4. Cutting Cuts the bags in automatic 20-22 man-Incharge, 10-15mins (Till
Department cutting machine, cutting of Supervisor, Operator, the time next
nossel Helper fabric roll is set)
5. Stitching Stitches every component of 160-Stitchers 1-2 mins
bag
6. Bailing & Folds bag, bale press and 90-Folding 5-10 mins
Dispatch packs consignment 2-3 people in each
machine
7. Lamination Cutting lamination sheet and 20-25- helpers and 5 mins
manually coating operators
66
(Source:
As
Circular Loom
Tape Plant
Cutting Machine
67
Needle Loom
68
Figure 25: Quality Department Structur e
Quality
Department
Raw Inspection of
Cutting & R&D Sample
Material/Woven Bags & Final Bag Load Test
Printing and D ispatch
Sack QC
Inprocess
Supervi sior Supervisi or Incharge
Incharge Incharge
Supervisiors Supervisior
Supervisio r
Checkers
Mr. Upendra Singh is the Senior General Manager Quality Assurance and under his
guidance all the whole Quality Department works.
69
Being a Food Grade bag manufacturing company maintaining quality and hygiene
is at most responsibility of the quality department.
70
Table 57: Machines Used in Quality Department
Machines Used Purpose
Tensile Testing Machine To check Strength of the bag
Weight Scale To check weight of the bag
Gauge Meter To check thickness of the bag
UV Tester To check UV protection rays
MFI Tester To check easy melt flow rate
Thermo Hydro Meter To check gravity of liquids
Radio Meter To check radiant of energy or heat
Bag Cleaning Machine To clean the bags
Air Blower To check if there is any holes or not
Muffle Furnace To check the bag at high temperature
(Source: As Given by Quality Department)
71
3.4 HUMAN RESOURCE DEPARTMENT
Human Resource Department Structure:
HR
Manager
HR Executive
Security
Officer
Security
Supervisior
Security Guard
Head of Department gives guidance to the HR manager and then the HR manager
provides guidance, solutions, keeps a report about work done by Senior Executive
and Executive. In Oswal Extrusion Limited Head of Department is Mr. Anil Oza
and Mr. Rabindra Kumar Shah is HR Manager.
72
proper accommodation facilities are provided to workers and they are not facing
any issues in the colony, and provides First Aid to workers in case of injury or
sickness.
Functions of HR Department:
1. Recruitment and Selection Procedure:
The Recruitment process is a process of identifying the job vacancy, analyzing the
job requirements, reviewing applications, screening, short listing and selecting the
right candidate.
Selection is the process of picking or choosing the right candidate, who is most
suitable for a vacant job position in an organization.
HR Department of Oswal Extrusion Limited uses both Internal as well as external
sources of recruitment.
In Internal Sources Company uses Employee referrals for the recruitment of top
level employees. They ask the preferences of candidates having the required skills
and qualifications for the required post. They even promote current employees
having the required skills and qualifications.
The Company uses External Sources when required skills are not possessed by
current employees or when in want to obtain employees with different
backgrounds to provide a diversity of ideas.
In the case of External Recruitment company recruit employees from
Employment agencies and Consultant firms.
73
Salary is pre-decided for fresher as well as workers and for others negotiations are
done based on criteria and work of that post.
b. For Middle Level Employees:
The process followed in middle level management is the same as bottom level but
in middle level management, certain years of experience is required and some test
is conducted as per the required post and their references are also checked. The
Interview is taken by the Director, Vice President, and requisite Departmental
head.
c. For Top Level Employees:
For Recruitment of top level employee company completely rely on internal
sources of recruitment such as Employees referrals and Job posting. They ask
references from all the subsidiary companies of Champalal group and its
interview is conducted by the Managing director of the company. Reference
check of the employee is done and experience is needed for top level recruitment.
Sometimes the current employee is promoted if he has required skills,
qualifications and experience.
Documents to be submitted by all levels of the employee to the HR
Department in a file after selection are as follow:
i. Resume of the candidate along with passport size photo (4 pcs.). ii. Identity card
which includes Pan Card, Adhar Card, Election Card, Passport (not mandatory) and for
address proof employee can submit any of the above mentioned documents. iii. Xerox of
all educational certificates and if he has experience then past company’s experience
certificate.
iv. Provident Fund UAN no. copy (not mandatory) and Bank Passbook Xerox.
The file of all the documents is maintained and kept by the HR Department.
74
Table 58: Training and Development of Employee
Sr. No. Training & Development Given To
1. ISO-9001 Awareness For all Employees in the Production
Department
2. Good Manufacturing Practice (GMP) For all Employees in the Production
Department
3. BRC-IOP, HACCP Awareness Food For all Employees in the Production
Safety Incident Department
4. Print Packaging Control For the Printing Department
5. Online Inspection For Quality Control Department
6. Pest Control (IMP & IPP) For Quality Control Department
7. CCP Monitoring For Senior executives
8. SA 8000:2014 Certification For HODs
9. Metal Detector Operation For Security
10. Labor condition and For all employees
employee relations
11. EHS & EMS Awareness For all employees
12. Emergency Awareness For all employees
13. Fire Fighting For Skilled employees in the plant
14. Electrical Safety For Senior executives
15. Site Security For Security
16. Risk Assessment For Senior Employees
17. First Aid by Doctors Selected Employees
18. Machine Safety Electrical, Mechanical(Operator)
19. MOC drill Activity It is an Activity
(Source: Given by HR Manager-Mr. Rabindra Kumar Shah)
*PF is compulsorily deducted if the salary of the employee is below 15,000 and for
15,000 or above it is not compulsory to deduct PF.
2. HO-HR Policy:
A. Leave/Holidays Entitlement:
There are different types of leaves & holiday rules in different states, central
government, different sectors of industries, different autonomous bodies, NGOs,
Shop & establishment act in different states subject to the number of working
hours, etc.
However, while formulating the company’s leave policy it has taken care of all
types of leaves and the maximum number of leaves that are available as per
government guidelines in a different category. The leaves and holidays provided
to the employee are as follow:
76
Table 59: Leaves and Holidays Provided to Employee
Sr. DAYS PARTICULARS
No.
1. 09 Holiday on account of the festival:
Uttarayan, Republic Day, Holi, Raksha Bandhan, Independence
Day, Diwali, New Year, Bhai Dooj, Teej.
2. 06 Casual Leaves: These leaves are credited in the month of April
in the employee account.
3. 18 Personal Leaves: It can be used to take Sick leaves, Personal
leave, an individual’s own religious festival, etc. Balance leaves
are carried forward to succeeding years and balance leaves are
enchased at the time of full and final settlement.
Total 33 Days leaves in a year
52 Sundays
Total 85 Days Leaves/Holidays in a year
Comp. A pre-approved compensation is to be provided in case of work
off on any non-working days. It is to be availed within 3 months.
(Applicable for junior-level employee)
(Source: Given by the HR Department)
General Rules:
i. Leave should be taken in writing.
ii. Leave should be pre-approved by all the Managers/ HOD employee
is working for via email and cced to HR otherwise action will be taken. iii. Any
employee suffering from a contagious disease shall on the advice of doctor
nominated by management be sent on compulsory leave. A. Hours of Work:
Official Timing 9:30 Am To 6:30 Pm.
8 Hours of active working, lunch break 1:00-2:00 Pm fixed. Half-day: 4 hours
of working B. Punctuality:
Every employee will observe punctuality and if an employee is late in attending
and/or early in leaving the office without prior information it will be treated as
disobedience.
Continuous late coming in succeeding month there will be the termination of the
service of the employee immediately without notice period and without any
compensation in lieu of notice period.
C. Irregular Attendance:
First time warning/counseling.
2nd time disciplinary action will be taken which could be suspension without pay.
D. Policy For Desktop & Laptop usage:
Laptop/Desktop is provided for the performance of specific job-related duties and
responsibility and as determined by management.
The Employee should have full time and active status.
77
Installation of any other software is restricted and shall remain the legal and
financial responsibility of employees if such authorization for installment is
secured in advance from the office of IT. E. Other policies of the company:
Wood Policy
Hygiene Policy
Forced Labor Policy
Glass & Brittle Plastic Policy
Laundry Policy
Metal and Sharp Policy
Environment, Health, and Safety policy
78
APPRAISAL FORMAT- A
(THIS FORMAT CAN BE USED FOR BELOW EXECUTIVE LEVEL)
DESIGNATION
DATE OF
QUALIFICATION APPOINTMENT
79
Satisfaction)
PERFORMANCE SUMMARY:
AREAS OF STRENGTH
AREAS OF IMPROVEMENT
SIGNATURE SIGNATURE
(With Name)
80
SIGNATURE OF HRD SIGNATURE OF REVIEWING AUTHORITY
DATE: DATE:
APPRAISAL FORMAT- B
(THIS FORMAT CAN BE USED FOR EXECUTIVES AND ABOVE)
DESIGNATION
DATE OF
QUALIFICATION APPOINTMENT
AREAS OF STRENGTH
AREAS OF IMPROVEMENT
SIGNATURE SIGNATURE
(With Name)
82
COMMENTS OF REVIEWING AUTHORITY
83
7. Resignation process of the Company:
The Resignation letter is to be submitted to the Head of Department and a 1
month notice period is to be given by the employee so that the HR department can
find a candidate for the vacant post.
On the last day of his job a Dues/clearance form is to be given by the HR
department to the employee then only final resignation will be accepted.
The form contains information related to any material taken by employees or
nonpayment of canteen fees or any other pending dues which he has to clear
before leaving the organization. After that final resignation is accepted and he is
paid his salary, leaves, bonus, and gratuity if he has served for more than 5 years
in the company.
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3.5 IT DEPARTMENT
IT Department Structure:
Figure 27 : IT Department Structure
Head of Department
Deputy Manager
IT Engineers/
Assistant
Executive
Managers[ERP
Infrastructure
Software Division]
Division
(Source: As Given by Jignesh Kacha)
IT Department Overview:
The main server of the company is ERP server and it was implemented from 2009
and it has connectivity through VPN (Virtual Private Network).
Apart from ERP the company uses cloud system, for anti-virus it uses Admin
Console, for cuber home security it uses Fortinet, and Router –winbox v.64.
The IT department manages the sensitive information about the company and it
works in coordination with all the departments of the company.
Any issues in the ERP system or software or systems are also managed and
handled by the IT department team.
IT Policy:
1. Email Policy
2. Mobile Device Policy
3. Network Security Policy
4. Password policy
5. Physical Security Policy
6. Wireless Network and Guest Access Policy
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3.6 PURCHASE AND CUSTOM DEPARTMENT
Process of Placing an Order and Receiving it by Store
Selection of Vendor
Place Order
Collection of material by
store
For Placing the order of any material first requirement of material is given in form
of indent by a particular department and purchase order of the same is sent to
vendors by store manager, then vendor who provides good at low rate is selected.
Order is placed to him and bill is requested from the vendor after that material is
collected by the store and a bill receipt is issued from store. Lastly, Bill settlement
is done by the Accounts department as per the terms and conditions of the
Company.
In Purchase Department purchase entry is done daily basis. Purchase order on per
day rate of material is sent to store by the vendor then store generates Material
Receipt Note (MRN) to Purchase Department and then Account Assistants
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Radhika Bhatia, Sunil Bhajikar, Pradeep Negi does entry in the ERP. For Excess
or shortage of any amount or material debit note is given to the party by the
department.
Custom Department
Process of Import:
Process of Export:
Learning
• Learned about how the Purchase department works in the company, inventory
management, data collection of purchase on daily basis, preparing ledgers and
book-keeping.
• Learned about how MRN is filled in the ERP system of the Company and how the
Departments scan the bills and maintain it.
• Learned about the HR policies of the company, various HR related strategies and
human management skills.
• Learned about how attendance record is maintained by the organization and
prepared attendance sheets.
• Learned about how the production process is carried out, how many types of bags
are made and their usage, process of bag making, strategies and planning process
and understanding of technical terms.
• Learned about the parameters followed by the company in checking quality of
each department in bag making.
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• Learned how GSM is calculated as per the specification given by the customer.
• Learned benefits of establishing company in special economic zone and rules and
regulations of SEZ.
• Learned about the process of purchase and maintenance of stock of the company.
• Learned about the process of supply chain and follow-up process.
• Learned about the concept of standard costing and variance analysis.
• Learned about the analysis of balance sheet and its effect on profitability of the
company.
• Learned about the Finance Department of the company, its sources of fund,
working capital management and overall functions of finance department.
• Learned about the software used and IT policies of the Company.
• Learned about the increasing waste of organization and managements strategies in
reducing it.
• Learned about purchase process entries and preparation of monthly purchase
reports.
• Learned about the process of Purchase department, how payments are made,
invoice process, how records are maintained and entries are made in ERP with
MRN.
• Learned about standard costing and variance analysis of FIBC bags, studying
material, labor, overheads, sales, and time variance its interpretation and reasons
for favorable and unfavorable variances.
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Part-II Research Study
Keywords:
Standard Costing, Variance Analysis, Cost Control, FIBC Bags Industry, Operational
Efficiency, Profitability, Performance Evaluation, Decision-Making.
Introduction:
Modern tools and techniques such as the balanced scorecard, target costing and
activitybased costing have gained importance in the business community. But still
traditional method of accounting practices continues to be prevailing in practice.
Standard costing is a traditional method of cost accounting. In order to get operational
efficiency and profitability the company’s standard costing should match its actual
costing. It ascertains what the actual cost is and what the standard cost is and then
analyzing the causes of variations. The Oswal Extrusion Limited is also implementing the
standard costing method. The purpose to use this method is to assist management is cost
control as to gain profitability and operational efficiency. The company uses this method
because it takes into consideration both fixed and variable cost incurred in the production
process. This technique is useful for management of manufacturing undertaking to
measure cost of goods sold more efficiently and for cost control. In this system specific
values are assigned to each component of material, labor, and overheads. Then, these
standard cost are compared with actual cost and the differences between both helps to
identify variances showing which cost is higher or lower. If the standard cost is more
than actual cost then the variance is favorable for the business but if the standard cost is
less than actual cost then the variance is unfavorable for the business. Standard cost is a
predetermined cost calculated before production on basis of factors affecting costs. The
types of standards for any business are basic standard, current standard, ideal standard,
normal standards, and expected standards. It is an effective tool for management in
increasing efficiency and profitability of the company by improving variances which
affect the standard cost. Standard costing is a cost controlling and cost reducing device
for the Oswal Extrusion Limited. It also helps in performance evaluation of the company.
It is a make-to-order company and manufacturing process is also of long duration so it is
difficult to exactly estimate cost and follow standard costing system but company with
experts and proper planning try to correctly estimate the cost and follow standard cost for
optimum efficiency and cost reduction. The company also tries to control its material,
labor, overhead expenses, and time variances.
According to CIMA Official Terminology, 2005, standard costing is a control system that
enables any variances from standard cost or budgeted cost to be analyzed in some detail.
It suggested four elements of standard costing system which are as follow:
1. Setting standards for each operation in the business
2. Comparing actual performance with standard
3. Analyzing and reporting the variances occurring from the difference
between actual performance and standard performance
4. Investigating variances and taking appropriate steps to improve it.
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The standard committee costing of Vice President, General Manager of Production,
Purchase Manager, Commercial, and Cost Accountants etc. sets standards for each and
every element of cost i.e., Standard material costs, standard labor costs, and standard
overhead expenses.
Variance Analysis is the most essential part of standard costing. In order to achieve the
purpose of cost accounting, the costing through variance analysis is to be done in
standard costing. Variances of each element of cost i.e. Material, labor, and overhead
expenses are to be calculated so that elements having more variances can be reported,
analyzed and improved by the company.
FIBC (Flexible Intermediate Bulk Containers) is the technical name for Polypropylene
bags (PP) used for bulk packaging of Cement, Fertilizers, Chemical and minerals, Sugar,
Food grains, Salts, Sand and gravels, granules, and other commodities. FIBC industry is a
labor intensive industry so it requires more labors so following standard rate and standard
working hours is essential for optimal efficiency and profitability of the company. The
price of raw material which is plastic granules also varies so comparing actual cost with
standard cost of material is essential for the company. The exchange rate volatility also
affects the cost of the firm. This study focuses on standard costing and variance analysis
of FIBC bags and its impact on profitability and operational efficiency of the firm. With
standard costing system the company is able to focus on variances of large and make
improvements in it to reduce the variances.
Literature Review:
Artur de Souza. A, Kingmans. B, (2016) have conducted a research on analysis of cost
estimation and pricing in make-to-order companies, which was carried out to understand
how much variances occur in estimated and actual cost of metal manufacturing make-
toorder company. Estimated and actual costs of assembly and fabrication hours of 4
orders were collected and variances in estimated and actual cost were calculated and
reasons for it were found out that estimators wee overestimating. The study concluded
that confidence factor, experience factor, and similarity factor records maintaining at the
time of estimates is useful in analyzing and controlling cost variances.
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Rashid. M, (2016) conducted a research on standard costing practices in listed
pharmaceuticals and chemical industries in Bangladesh to study the present scenario of
standard costing in spite of the modern management accounting techniques. He has taken
28 listed pharmaceutical companies for the studying the reasons of using standard costing
system. Standard cost of each component of material, labor, and overhead in listed
pharmaceuticals companies was studied and were compared with actual cost and
variances were evaluated to control the performance. The study revealed that companies
used standard costing because of cost control, costing inventories, performance
evaluation, and for budgeting of activities. It also revealed that size of the variance is
most important factor in investigating the reasons of variances and efforts are taken to
improve it. The study shows that failure to meet certain standards is reduced by
McDonaldization as well as setting proper standards.
Moses. A, (2015) have done research on effectiveness of costing techniques which are
ascertain for cost control and decision-making process within Graphics Systems Limited.
It uses standard and absorption costing technique. The company uses both these methods
because it takes into consideration standard cost and actual cost of both fixed and
variable cost which incurred in the production process to determine operational
efficiency. He studied the relationship between costing techniques and the effectiveness
of the Graphics Systems Limited. The evaluation criteria to measure relationship were
employees’ satisfaction, profitability of firm, sales revenue, financial growth rate, and
competitive strength of the company. The research concluded that the costing techniques
used are beneficial for the company as growth rate, sales, profits, customers, proper
inventory management, goodwill have increased and corporate responsibility have
improved. The company used standard costing because of its simplicity, compatibility,
analysis of reasons of variances.
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Gubunje. M, (2015) have studied on effectiveness of standard costing system in cost
control within motor industry (Toyota). The study was done because of low profitability,
hike in operational cost, and low motivation among employees of the company
irrespective of having standard costing system since inception of Toyota Company.
Changes in economic conditions has led the company to incur additional cost through
standard setting and variance analysis as a result of which there is low profitability. The
researcher finds that there is significant relation between standard costing system and
cost control. In order to effectively implement standard costing system in the company
the management has to ensure correct standards are set and followed, coordinate
activities, proper allocation of work, and efficient report making system should be done.
The researcher concluded from the study that for effective implementation of standard
costing system, cost control, and to maximize profitability the firm should established an
experienced standard setting committee, motivate employees to participate in standard
setting process, and to improve communications from standard settings.
Badem.C, Ergin.E Drury, (2013) have executed the research on Is Standard Costing
still used? Evidence from Turkish Automotive Industry, as modern cost estimation
techniques are used by manufacturing unit so this is a debatable concept. But the
researcher finds that majority of manufacturing industries are still using standard costing
system only the small firms are not using it. The main purpose for using this method is
cost control, performance evaluation, and decision making for estimating product cost,
budget control, and inventory management. Material and labor standard are set by the
firms by historical averages or techniques used by the firm. Material usage, sales, price
variances, expense and labor variances are important variances.
Marginean.R, (2013) have studied the cost management by applying the standard
costing method in the Romanian Furniture Industry. The analysis was made on real data
by determining the standard material, labor, and overhead costs of Boston chair and then
85
comparing the data with actual cost. It concludes that standard costing method can be
applicable in furniture industry that is in medium size industries apart from
manufacturing units and can help in decision making and cost reduction of production
process.
Ngozi, O.V, (2013) have carried out research to study on effects of standard costing on
the profitability of manufacturing company in Nigeria. The objective of the research was
to know that whether using standard costing system have any impact on profitability of
the companies. She discovered that standard costing was efficiently followed in the
manufacturing units of Nigeria proper records of costs were prepared, maintained, and
presented to the management for decision making, cost controlling. The proper
implementation and use of standard costing system has helped in increasing the
profitability of manufacturing firms in Nigeria.
Ocneanu.L, Radu Bucsa.C, (2012) have explained the advantages of using standard cost
method in managerial accounting in the decision process. The research explains that
standard cost finds out the cost of product under given conditions and then it is compared
with actual cost and the variance between them helps managements in taking various
measures. This method is also used is planning of production and formulation of policy
of firm. A standards calculation of each raw material and direct materials was done and
deviation from material cost was recorded and analyzed. He concluded that the standard
cost helps in budgetary control and setting effective cost based on causes of variances.
Dekan.T, Nabardi.A, Bacs.Z (2011) Production cost management is one of the most
difficult and complex factor in the company, this study focuses on understanding of
production cost variances in hectic business environment. He explains that in the
changing environment it is difficult to manage actual costs with expectations, so it is
important to understand the external and internal variance drivers. The main reasons of
variances can be cost of raw material, volume of production by the company, and product
mix of the production process. The researcher concluded that in order to control
variances the management should have a proper eye on fluctuations in cost of raw
material, production volume and mix impact by the products manufactured should be
carefully examined, and actual costs should be compared with standard cost to get
operational efficiency, budget control, proper decision making, and profitability in the
business.
Morelli.B, Wiberg.C.J (2002) the research contains information about the standard
costing system at SKF and recommendations to improve the same. Even though modern
management techniques have gain prominence traditional costing technique such as
Standard Costing is still used by many firms. The researcher finds that the standard
costing systems is appropriately used in the firm but less emphasis is made by the
management to improve it. Inventory evaluation, budgeting, raw material, and labor,
86
overhead, cost levels are calculated and compared with actual cost and variances are
identified. Both fixed and variable costs are used in evaluation standard costing system
by SKF. Variances in Pricing, less communication in the organization, and proper use of
guidelines in estimating and allocating costs are also affecting the system which should
be analyzed and improved in SKF.
D.W.M Johnstone, N.J. Horan, (1994) have carried out research on Standard, Cost, and
Benefits of discharge of waste waters an international perspective. The study aimed for
developed, developing, and the newly industrializing nations. It studies the
environmental benefits of imposing standards and weighs against economic costs of
meeting the set standards. The researchers conclude that standards should be set based on
logic, scientific grounds, and it should aim at minimizing the cost. The standards set in
developed countries are too high as a result of which implementation of cost control is
not possible and the standards set by developed countries are copied by newly
industrialization which leads to inappropriate technology in pursuing the objectives as
setting high standards are demoralizing.
Statement of Problem:
In FIBC bag manufacturing company setting standards and efficiently following them is
not easy as production time is long and depends totally on quantity of order made by the
customer. Each order is of different quantity, specification, different bag type so
efficiently record them and follow set standards is difficult task for management. But,
setting standards helps in reducing conversion cost of bag, overhead cost, labor cost, and
material cost. This study seeks to investigate the standard costing and variance analysis
of FIBC bag, Oswal Extrusion Limited. It also includes investigation of whether
standards are efficiently followed and helps in improving the profitability and cost of the
company.
Research Gap:
The research done by the authors was very useful and remarkable but it contained certain
gaps in article or research paper published which are as follow:
1. Detail study of material, labor, overhead, sales margin was not possible due to
limited time with researcher.
87
2. The research was limited to few components in estimation of standard cost and
studying variance analysis.
Research Model:
Independent Variables
Raw Material
Variance
Sale Variance
Time Variance
Source of Data:
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It is a secondary research so data is collected from Commercial department, Production
department, and annual reports of the company.
Independent Variables:
Material Cost
Variance
90
Material Yield Variance = (Standard per unit cost of Output*Actual Output)
Labor Cost
Variance
Labor
Wage Rate Labor Idle Time
Efficiency
variance Varaince
Variance
91
Skilled = 250* Rs.41.25 = Rs. 10,313
Semi-Skilled = 260* Rs.40 = Rs. 10,400
Unskilled = 270* RS.39 = Rs. 10,530
= Rs.31,243
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Figure 33 : Overhead Variance Analysis
Total
Overhead Cost
Variance
Variable
Fixed Overhead
Overhead
Varaince
Variance
i. Capacity Variance:
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= (Standard Production from Actual Hours-Revised Budget quantity for actual
working days)*Standard rate per unit
= 400 ton-450 ton*45
=Rs. 2250 Unfavorable
4) Sales Variance:
i. Value Variance:
= Budgeted Sales- Actual Sales
=450 ton – 400 ton = 50 Favorable
ii. Volume Variance:
= Budgeted Sales- Standard Sales
=450 ton – 500 ton = (50) Unfavorable
iii. Price Variance:
= Standard Sales- Actual Sales
=500 ton – 400 ton = 100 Favorable
iv. Quantity Variance:
5) Time Variance:
Actual time of producing 1 ton bag by 3 labor = 26 Hours (More than 3 Days)
Standard time of producing 1 ton bag by a labor = 24 Hours (3 Days)
Findings:
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From Variance Analysis it is found out that company Material Variance Analysis
of Bag, Yarn, Granule, label, Zip doc is favorable which means that company is
following set standards which help in cost-effectiveness and profitability of the
company and it shows efficient planning of the company in setting standards. But
there is variance in Standard cost of webbing it is unfavorable as actual cost of
webbing is higher than standard cost. Material cost variance for webbing exceeds
Rs.800 (14%), material price variance exceeds Rs.300 (5%), material usage and
mix variance exceeds Rs. 500 (9%) which increases cost and shows inefficiency
in planning and managing raw material. Setting material standards helps in
procurement and efficient usage of raw material.
From Labor Cost Variances it is found out that Labor wage rate variance Rs. 1710
(5.5%), Labor idle time variance Rs. 1203 (4%), Labor efficiency and yield
variance Rs.1180 (4.1%), all the factors are unfavorable for the company as
wages given to them is high compare to standard cost because being an labor
intensive industry the company appoints labor at high cost. But the idle time of
labor is high which is not good as it occurs due to abnormal reasons such as
nonavailability of required material, breakdown of machine or any technical
issues. Standard labor hour is followed in the organization.
From Total Overhead Variance it is found out that Variable overhead variance
both expenditure and efficiency ratio is unfavorable as it exceeds by Rs.5460 and
Rs. 2700 because expenses such as raw material, labor cost, other expenses are
uncertain based on customers order and uncertainty in currency so it is difficult to
follow set standards. As variable overhead standards are not followed total cost is
high.
From Sales Variance it is found out that it is favorable as actual sales are 400 ton
and standard sales are 500 ton. The estimation made by the planning committee
regarding sales is overestimated but still it is favorable and company is able to
efficiently and on time exports bag.
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From Time variance it is found out that estimated time for producing 1 ton bag by
3 workers is 24 hours (3 days) but it exceeds by 3 days around 26 hours
depending on time taken by each labor or any delay in production process or
machine breakdown.
Conclusion:
The research was conducted to examine the use of standard costing system in
Oswal Extrusion Limited and to investigate whether the guidelines are followed
by the company. For that purpose material, labor, overhead, sales, and time
variances is calculated. It is concluded that material, fixed overhead, and sales
variances are favorable for company which means that company is following set
standards for the same which helps them in proper decision making, cost control,
estimation of price of producing bag, efficient management, inventory
management, and increases profitability. But variable overheads, labor, time
variance is unfavorable due to variances in efficiency and volume set. The
unfavorable variances show the inefficiency and lack of investigation of planning
committee in setting standards. Price is an uncontrollable variance but cost is an
controllable variance so management should emphasis to overcome the factors
responsible for unfavorable variances and properly study the past records for
proper estimation of standard cost.
Limitations:
1. Process of data collection was difficult because of inappropriate record maintaining
and confidential matters to allow access of data to an outsider.
2. It is difficult to set accurate standards and follow them due to bulk orders and
uncontrollable factors.
Bibliography:
Artur de Souza. A, Kingmans. B, (2016). An Analysis of Cost Estimation and Pricing in
Make-To-Order Companies. Antonio Artur de Souza, A. Kingmans, Federal University
of Minas Gerals, Department of Management Science.
Oliver Schwabe, Essam Shehab, and John Erkoyuncu, (2016). An Approach for selecting
cost estimation techniques for innovative high value manufacturing products. CIRP
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Global Web Conference Research and Innovation for Future Production, Cranfield
University.
Cemkut Badem, Emre Ergin, Colin Drury, (2013). Is Standard Costing Still Used?
Evidence from Turkish Automotive Industry. Accounting and Finance Department,
Faculty of Economics and Business Administration Science, Kocaeli University, Kocaeli,
Turkey.
Radhu Marginean, (2013) The Cost Management By Applying The Standard Costing
Method In The Furniture Industry. University of Alba-Iulia, Romania.
Lucian Ocneanu, Radu Cristian Bucsa, (2012). Advantage of Using Standard Cost Method
in Managerial Accounting. George Bacovia University in Bacau, Romania.
Tamas Dekan, Andras Nabardi, Zoltan Bacs, (2011). Understanding of Production Cost
Variances in Hectic Business Environment. University of Debrecen and Budapest
Business School, Debrecen, Hungary.
Beata Morelli & Carl-Joachim Wiberg, (2002). The Standard Costing System at SKF. A
case study of Swedish Manufacturing Company. Accounting and Finance, Goteborg
University, Sweden.
D.W.M Johnstone, N.J. Horan, (2007). Standard, Cost, and Benefits: An International
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Carole B. Cheathman, Leo Cheatham (1996). Redesigning Cost Systems:Is Standard
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