Term 1 Project

The Western India Plywoods Ltd
PROJECT REPORT
Submitted in partial fulfillment of the requirements for the

award of the
INTERNATIONAL MBA IN OPERATIONS
By
Under the guidance of

Prof Prasanna Chandra, S.P Jain & Project Team Jaro
The Western India Plywoods Ltd. JARO Education
DECLARATION
I, Mr. hereby declare that this project report titled The

Western India Plywoods Ltd submitted in partial fulfillment
of the requirement for the International MBA in
OPERATIONS is my original work and it has not formed the
basis for the award of any other degree.
Place: Singapore
Date: 5th May 2017
Jaro Term-1 Project Page 1

ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and

deep regards to my guide Prof Prasanna Chandra, S.P Jain &
Project Team Jaro for his exemplary guidance, monitoring
and constant encouragement.
The blessing, help and guidance given by them time to time

shall carry me a long way in the journey of life on which I am
about to embark.
I also take this opportunity to express a deep sense of

gratitude to Project Team for their cordial support, valuable
information and guidance, which helped me in completing this
task through various stages.
Lastly, I thank almighty, my parents, brother, sisters and

friends for their constant encouragement without which this
assignment would not be possible.

INDEX
SR No. PARTICULARS PAGE NO
01 INDUSTRY PROFILE 5
02 COMPANY PROFILE 7
03 NEED FOR THE STUDY 43
04 LITERATURE SURVEY 44
05 OBJECTIVE OF THE STUDY 47
06 SCOPE FOR THE STUDY 47
07 RESEARCH METHODOLOGY 48
08 DATA ANALYSIS & INTERPRETATION 50
09 FINDINGS 78
10 SUGGESTIONS 79
11 CONCLUSIONS 80
12 BIBLIOGRAPHY / REFERENCES 83

INTRODUCTION TO STUDY
No business can plan its activities without considering its financial

resources. Financial management is that part of management which deals with
rising of funds in the most economical and suitable manner, using the funds as
profitability as possible, planning future operations, inspections, controlling current
performance and future development through financial accounting and other
means.
Finance in essence is considered with the acquisition and use of funds by a

business firm. The main objective of financial management is to control required
funds for meeting short term and long-term needs of business enterprise and to
maximize the value firm to its equity share holders.
To have a clear understanding of the profitability and financial position of

business, the financial statements have to be analyzed and interpreted. Financial
statements are prepared for decision making. They play a dominant role in setting
the framework of managerial decisions. But the information provided by the
financial statement is not an end in itself as no meaningful conclusions can be
drawn from these statements alone. However, the information provided by the
financial statement is of immense use in making decision through analysis and
interpretation of financial statement. It helps to summarize large quantities of
financial data and to make quantitative judgments 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
analyzing the recent trend.

1. INDUSTRY PROFILE
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
Bengal were set up in 1917 to manufacture the same, but they stopped production
owing to non-availability of suitable bonding materials, indigenous lead lining nails
and bands 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 matter 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 ground 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 post war period. In 1947, India was a net import of plywood, mainly tea-chest
plywood compared to the plywood production in 1947 which was negligible, the
present day production has grown up to 62 Million. These have been a steady
growth in the plywood industry. Since the last 3 -1 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 within 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
Plywood industry are mainly located in Assam, Karnataka, Kerala, Maharashtra,
Madhya Pradesh and Andaman & Nicobar Islands.

Role of Plywood Industries in India:-

Plywood industries have played a significant role in the Socio-economic
development of the country. They provided various types of plywood products that
are required for various infrastructural developments. This industry means the
strategic needs of our country like portion plywood, plywood for pre-fabricated
houses required for soldiers on the Himalayan frontiers and other government
needs. This industry also means the packaging requirements of the country
export. The industry also provides employment to a large number of people
directly and indirectly, through various sales outlets.
Problems regarding Plywood:-

Wood based industries in India faces a lot of problems. Major are in the
under utilization of installed capacity due to the non-availabil.ity 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 covers, which
was needed for maintaining ecological stability, the central goal controls the falling
of trees. Thus the diminishing forest covers inadequate natural degeneration and
subsequent for falling of trees, led the industries into hardships. Due to non-
availability the big industrial consumers resorted to import, which increased their
cost of production. However plantation would have the inherent deficiency of
susceptibility to bio deterioration and therefore expanded use of preservation like
Bora and Boric acid is imperative. But this may lead to environmental pollution.
High cost of production due to increased cost of gilth logs, urea formaldehyde and
phenol formaldehyde, competition from private and public sector, import restriction
imposed by government, mismanagement labour, and unrest are other factors
which adversely affected growth and profitability of the plywood industry.

2. COMPANY PROFILE
2.1 Origin of the Organization
The western India plywoods Ltd., the largest wood integrated industrial
Complex in 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 the
diverse products, which it now offers consumers.
A Hardboard plant was set up in 1959 - 1960 with West German Technical
collaboration. Initially with a capacity of 12. 5 tones. This has now increased its
capacity to 120 tons per day. Besides plywoods and Hardboard the company also
produces 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 Allyl Phalate (DAP) molding powder, a thermoplastic that has to be imported
until then, significantly the technology developed in house with support from Shree
Ram Institute of industrial Research Delhi.
In 1989, the company has put up a pre finishing plant with Italian and
German
Technical support for printing wood grains and plain colors on plywoods
and hardboards. The pre finishing plant is the only one of its kind in the country
and one of the very new plants in the world. The State-of-the-art-technology
adopted here 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 Baba Atomic Research centre, Mumbai
in order to upgrade the quality of low-grade timber. The company has set up a
modem Research and the most important feature of wood based complex is its
motto of cent percent utilization' of wood.
2.2 GROWTH
The manufacture of plywood was stepped up steadily by addition of new
machinery, mostly imported. The company also diversified from Tea chests and
Commercial plywood to Decorative plywood, Block board, and Flush door,
Shuttering and Marine Plywood, Aircraft Plywood etc. The Company planned and
executed the hardboard plant between the years 1956 and 1958 with an initial
installed capacity of 12.5 tones of hardboard per day. The company also installed
its own synthetic resin unit in 1959 with a capacity of 200 tones.
WIP moved into chemical plastics sector. In 1978 WIP setup a plant for
manufacturing Di-allyl Phthalate (DAT) molding powder a thermoplastic which has
to be improved, until then significantly the technology was developed in-house
with the 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 has been exporting decorative Plywoods and
veneers 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.
CORPORATE GOVERANANCE PHILISOPHY

As an ISO 9001: 2000 unit, engaged in the business of manufacture and sale of
diverse range of products, the company envisages the assurance of product
quality, transparency, accountability and integrity in its operations and in its
relation with all the share holders, that is customers: investors, employees, the
government and other business associates.

2.3 Achievements of the organization
First to make irradiated wood
First to make aircraft plywood
First to make synthetic resin adhesive bonded plywood using hot pressing
techniques.
First to make high pressure industrial laminates
First to make quality hardboard way back in 1959-60
First to manufacture Di Ally phthalate molding powder
First to manufacture GI Plywood-GI sandwich panel for anechoic

chamber.
First to make pre-finished Plywoods and hardboards using UV cured

surface finishing techniques.
First to get ISO 9000 certification for hardboard and prefinished boards.
The company has earned special appreciation from leading industries in

the automotive sector, Footwear sector, ISRO, BARC, Indian Railways etc.
PATENTS
Radiation induced polymerization of DAP, MMA & PE
Radiation induced polymerization of DAP & MMA
A process for manufacture of wood polymer composites by gamma

irradiation
Manufacture of ABS plastics
Manufacture of SAN plastics

2.4 VISION, MISSION AND QUALITY POLICY
VISION
Continue to remain the best plywood panel corporation in India with a growth in
allied areas
MISSION
To provided utmost satisfaction to the consumer through best quality and
customer care.
To continusely upgrade the product through innovation and convergence of new
technology and to produce the best quality product.
To safe guard and enhance share holders value
To respect the dignify of all employees and together to become instrumental in the
development of the country while protecting the environment.
To utilizes the surpluses for the welfare of employees and the society at large
QUALITY POLICY
Quality policy of WESTERN INDIA PLYWOODS LTD is to manufacture products
as per national/international standard and make them available to customers as
per requirement.
WESTERN INDIA PLYWOODS LTD endeavor to upgrade the quality of its

products and related services on a continual basis through regular improvement
effort. A well defined quality management system has been implemented. This
system is continuously revised to enhance its effectiveness and updated to meet
changing needs.

2.5 OBJECTIVES
Suitable equipments and machinery for process control at all stages.
Provision of adequate resources including raw materials and personnel to

ensure constant product quality.
Well defined process and product characteristics to enable monitoring

analysis and continual improvement
Communication of requirement of products including customers

requirement, statutory/regulatory requirements as per aspect of QMS
including policy and objective among all employees.
2.6 OWNERSHIP PATTERN:
The western India plywood is a public limited company. The organizational

structure consists of BOD at the top. At present, the members of BOD are,
Mr. P.C.D. Nambiar, Chairman

Mr. G.S.A. Saldanha, Director
Mr. N.L. Vaidyanathan, Director
Mr. V. Ramachandran, Director
Mr. Manoj Joshi, Director
Mr. Bhaskar Menon, Director
Mr. Ranjit Kuruvila, Director
Mr. A.J. Pai, Director (KSIDC, Nominee)
Mr. G. Gangadharan Nair, Director (IFCI, Nominee)
Mr. P.K. Mohamed. MD
Mr. P.K. Mayan Mohamed, Executive Director
The company has various departments the managers of these departments are
headed by a G.M, Who is responsible for all the affairs of the company in the
absence of M.D.

2.7 PRODUCT PROFILE

The major product for which the company has been the leaders in quality
since 1945 is just because of its finest quality products produced as per
international standards. The products of the company are globally accepted. Over
the last 50 years, through its close knit co-ordination of various processing units,
professional management and maximum utilization of facilities available, the
company has made an indelible mark in the wood industry a mark of glorious
achievements
WIPWOOD
Densified wood is used in the manufacturing of textile & jute mill
accessories
WIPLAM
Densified wood is used in the manufacture of insulation components for
transformers & switchgears
WIPCHECK
Densified compressed floor board, with both chequred and plain surfaces,
building & chemical industries
WIPROC
Densified wood used in the manufacture of high precision jig formatting
tools in aeronautical industry & neutron shields in reactors.
WIPBEAR
Densified wood used in the manufacturer of bearing and gears
WIPCHEM
Densified wood used in manufacture of electrical insulation components
like studs, nuts, cleats & other segments
WIPRESS
Rigid and high purity densified wood with excellent electrical and
mechanical properties, for use in the transformer industry.

WIPLAC
Pre-finished plywood & hard board, used in the manufacture of panel
coiling and furniture.
ULTRACLICK
Engineered wood flooring
COMPREG SLATS.
Used for railway coaches, paneling and as a building material.
DENSIFIED MOULDED SEATS

Used for railway coaches, auditoriums & restaurant.
WESTINDPLY
Decorative finished and commercial finished BWR and BWP grade
plywoods, manufactured from selected species of timber, water proof quality
used for boat building, concrete shuttering, furniture, partitions, paneling etc.
HARDBORDS
Used extensively by automobile industries, fiber drum manufactures, shoe
manufactures, photo frame backing, clock manufactures, school writing parts
and also for partitions.
FURNITURE
All type of furniture including molded a knock down furniture

2.8 ORGANIZATIONAL STRUCTURE

The usual way of depicting a formal organization is an organization chart.
The connecting line on this chart shows who is accountable to whom and who is in
charge of which department. Organization chart reveals the mode of authority and
responsibility delegated in organization.

2.9 DEPARTMENTALIZATION
2.9.1 FINANCE DEPARTMENT
The Chief Accounts officer is the head of the Accounts Department. He is
assisted by the Accounts officers. All financial decisions are taken by the Accounts
Department. 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
personal 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 all 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 consider aspects relevant to each committee. It is ensured that the share
transfer agents promptly attend to all Shareholders grievances. There is
comprehensive management reporting system on all aspects of operation and the

boards of directors them periodically.
FUNCTIONS
1. Allocation of Funds
2. Raising of Funds
3. Profit Planning
2.9.1 HIERARCHY OF FINANCE DEPARTMENT
THE BANKERS
Indian Overseas Bank, State Bank of India, Dena Bank and Punjab
National Bank are the bankers of the western India Plywoods Ltd.
DEMATERIALIZATION OF SHARE
The Company-had entered into an agreement with National Securities
Depositors service Ltd. (NSDL) from 15th March onwards for Company's share
traded in electronic form.
SOURCE OF FUNDS
Shares
Reserves and Surplus
Loans
Secured Loans
Unsecured Loans
ACCOUTING PROCEDURE
WIP follows double accounting system and also maintain four types of
journals. They are-
1. CPB (Cash Payment Book)
2. BPB (Bank Payment Book)
3. CRB (Cash Receipt Book)
4. BRB (Bank Receipt Book)
For these 4 types of journals a sub ledger is prepared. This is classified into three.
a. Accounts Receivable Book (ARB)
b. Accounts Payable Book (APB)
c. Personal Ledger (PL)
At the end of every month the sum total of the ledger are transferred to the
main ledger. Then there should have the equality in the amount of sub ledger and
the main ledger.
The next accounting procedure is preparing trial balance. At the end of

every financial year, profit and loss account and Balance sheet is prepared, from
which financial position of WIP is noticed.
CAPITAL STRUCTURE
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 the time of high profit. Their shares are registered in cochin and madras
stock exchanges. A part of company's profit was transferred 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 of
relative assets and others are charged to profit and loss account.
Dividends
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-
dividend in the following year.
Income Tax
Provisions for income tax are made based on the assessable income as
computed accordance with the provision of the Income Tax Act, 1961. Timing
differences between accounting and taxable income capable of reversed in
subsequent years are recognized as deferred tax.
WIP publishes Annual Report every year, which includes the Profit and
Loss account, Balance Sheet, accounting policies of the business etc.
2.9.2 MARKETING DEPARTMENT

Marketing is one of the most dynamic fields within the management arena.
The main duties of marketing department in an organization are to analyze
market, find opportunities, design product, formulate marketing strategies, develop
specific methods and action, propose a budget and establish a set of controls.
POLICY
High quality and high price is the policy of WIP. So the company aims
quality conscious customers.
OVER ALL MARKETING STRATEGIY

Marketing strategy revolve around its product quality. The company's
emphasis on product performance and reliability has enabled it to command a
performance premium in the market it as entered significant brand equity in its
target market coupled with superior product development capabilities has enabled.
PROMOTION
The very important point to be noted is that till now there has been no
advertising for WIP LTD. The main promotion activity of WIP is conducting and
participating in exhibitions to attract potential customers. They have more of a
direct selling approach. It has around 40 sakes depots nationwide.
COMPETITORS
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.
TARGET SEGMENTS
As wood based panels are essentially intermediate products that are used
for further processing and value addition, the most logical segmentation variable is
end use of application. WIP distinguishes between industrial marketing, export
marketing and marketing at the retail level and has developed separate programs
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
MARKETING MIX
A description of the marketing mix adopted for WIP's major product line is
provided below.

PRICING
Consequent to superior raw materials and additional processing
incorporated in the manufacture of the WIP's plywood panels - they are more
expensive than product offered by the competitors. WIP's philosophy of
continuously upgrading its machinery to help in line with state - of-the art
technology also adds to final produced cost. However the additional perceived
value arising out of such investments in more than the marginal cost addition and
hence customers are willing to retain loyal to WIP's products.
2.9.2 HIERARCHY OF MARKETING DEPARTMENT:
2.9.3 PRODUCTION DEPARTMENT

Production is the process by which raw materials are converted into
finished products. The production manager manages the Production Department
followed by production Executive, production Assistant and production
Supervisors. It is the responsibility of the Production Manager to determine the
product designed by the firm.

Care should be taken to ensure that the products manufactured are of high quality
and produced in the specified time.
The raw materials that are used to produce the output as follows:
1. Wood
2. Steams
3. Chemicals
WOOD
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, Beech Silver Oak, Kussia, Dhavala and Chempak.
STEAM
Steam is the energy used to operate the machines. The steam comes from
boilers. There 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.
CHEMICALS
The various chemical used in the preparation of plywood are Urea

formaldehyde, Acrolith. Phenol Formaldehyde etc
The product mix of WIP includes Hardboard, Plywood, Densified Wood, Industrial
Marinates, and Furniture and pre-finished Boards.

2.9.3 HIERARCHY OF PRODUCTION DEPARTMENT:
2.9.4 SALES DEPARTMENT

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
Department. They have their own value department where all the company's
products are displayed and sold WIP has their own list of value customers like
Indian Railway, Defense 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 house 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 etc. Products are mainly exported to the countries like United States of
America. France, Netherlands, Sri Lanka, Japan and Canada. Domestic buyers
are mainly carpenters, furniture companies and local people.

The Commercial Tax Orifice (CTD) heads the sales tax division. Sales tax
is the main 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
Government Sales Tax (KGST), There are five schedules to the General Sales
Act. To exempt from tax various firms submit F- from, 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 30th every year. If sales tax is not paid in time, interest is calculated @ 24%
per annum. The Central tax rate will change according to the rate created by the
Central/State government
2.9.4 HIERARCHY OF SALES DEPARTMENT:

2.9.5 HUMAN RESOURCE DEPARTMENT

The western India Plywoods Ltd is a forward looking organization
committed to identify, train, develop and sustain its human resources in such a
manner as to integrate the individual career aspirations of its executives with the
fulfillment 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 with the creation of harmonious relationship, among its employees,
bringing about their utmost individual development. This department is coming
under the authority 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 the welfare activities of the company. The chief time keeper
deals with the wage and salary administration provident fund etc. The clerks deal
with attendance. Leave time management, action ESI and PE.
The company has ensured that the work force in the company is kept at the
minimum. The strength last year was 958, which has come down to 884 (including
150 staff members) during the current year, which is 13% less than the previous
year. WIP is an ISO 9001:2000 certified company. Under the ISO set up, three
company conduct regular training programs to the employee to impress on them
the need for quality and productivity, thereby improving their performance. These
regular programs 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 performance. The workers of the company are paid by the time rate wage
system i.e. according to time spent on work. Though the basic pay defer, the
dearness allowance remains the same. The bonus is paid once in a year and it
ranges from 5.33% to 20%.
Out of remuneration paid to the employees, 8.33% contributes to the Provident

fund. 1.75% of workers wages is deposited in ESI and the management

contributes 4.75% of the worker's salary. (ESI is applicable only to those

employees whose salary is below 7500) ESI provides insurance and helps
workers in case of accident. Staff members are entitles to one leave for every 10
days works (2 1/2 days of leave in a month). The workers are eligible for 12 leave
if they had worked 240 days in the previous year. (One leave for every 20 days
work)
FUNCTIONS OF HUMAAN RESOURCE DEPARTMENT

1. Employee Evaluation and Selection
2. Defining job or skill requirement
3. Arranging for induction and training
4. Co-coordinating personnel Appraisal
HRD POLICY
HRD Policy of the WIP Ltd is as follows:
Select
Develop
Maintain competent Personnel
HRD OBJECTIVES
To integrate the growth opportunity of the enterprise with the fulfillment 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.
To seek and provide a continuous team of executors of sustained high
levels of competition in the company.
2.9.5 HIERARCHY OF HUMAN RESOURCE DEPARTMENT:
2.9.6 PURCHASE DEPARTMENT

Purchase department carries out the procurement of all indigenous items
like raw materials, machines, spares, other instruments etc. Purchase of materials
is done according to the recommendation and specification from the user
department.
In WIP, there is no separate store department or stores manager. It comes

under the functions of the purchase department and the store keeper carries out
the basic functions.
Purchase Procedure of a Non-Timber item:

l. Generation of Indent
Indent is obtained from stores as per the request of user department. This
gives the details of the material to be purchased. Colour coding system adapted to
differentiate 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 based 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 send to the Works Manager or General Manager for taking decisions
regarding the vendor's selection.
5. Issue of Order
The purchase order is issued to the recommended vendor. The purchase
executive or the Managing director prepares the purchase order. Five copies of
the purchase order are prepared.
6. Follow Up
If the supplier does not meet the order in time, follow up action is done by
email, telephone etc.
7. Receipt of Invoice
The purchase department receives the invoice copy for the party. It
contains details 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 stores.

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 then it is passed to the Accounts Department For making payments.
2.9.6 HIERARCHY OF PURCHASE DEPARTMENT:
2.9.7 RESEARCH AND DEVELOPMENT

The company has a well equipped Research and Development laboratory
which is one of the best research centers in wood working industry in the country
approved by the department of Scientific and Industrial Research Ministry of
Science and Technology government of India where continuous research is going
on for improvement of quality and development of new products, through
technological and methodological up gradation. The benefit of successful R & D
activities has had the distinct advantage of increasing the technical competence
and problem solving capability 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
assistance of Baba Atomic Research Centre, Mumbai, the only one of its kind in
the industry in India employing nuclear energy for peaceful purposes.

The company has also diversified its activities into the manufacture of
Resorcinol based glues, daily phthalate and sheet molding compounds, the
development daily phthalate based molding compounds, a raw material used in
the electronic component industry was the results of WIP's indigenous research
and development efforts. This R & D work enabled India to become the third
country in the world (other two countries being USA and Japan) to produce this
special item.
2.9.8 QUALITY MANAGENMENT SYSTEM (QMS)

A well defined Quality Management System is in place. The QMS is
certified by ISO 9001, the international benchmark of progressive organization
Quality Policy
Quality policy of WIP is to manufacture products as per national and/ or
international standards to upgrade the quality on a continual basis through regular
improvement efforts. A well defined QMS has been implemented. This system is
continuously reviewed to enhance its effectiveness and updated to meet the
challenging need.
Quality Objectives
1. Suitable equipment and machinery for process control at all stage.
2. Provisions of adequate resources including raw material and personnel to

ensure consistent product quality.
3. Communication of requirement of products including customer requirement,
statutory/ regulatory requirements aspects of QMS including policy and objective
among all employees.
The management representative has total responsibility for the Quality

Management System. Master copies of all QMS documents viz. Quality System
Manual, Work Instructions and other documents are available with the
Management Representative.

2.9.7 HIERARCHY OF QMS DEPARTMENT:
2.10 FUTURE GROWTH AND PROSPECTS

There is a lot of scope for the wood industry in India as well as in the global
economy.
The company is focusing on the waste utilization mainly through which it can
reduce the cost drastically. The future plans of the company are:
Development of wood panel products, wood preservation, synthetic

resin adhesive & wood waste utilization.
New product development value addition, cost reduction &
recognition of excellence relating to wood panel products.
Soft feel coating system for wood based products & development of bio-
fuel from industrial wood wastes.

McKinseys 7S Framework
Introduction to 7S Model:
The 7s framework has first appeared in the book The Art of Japanese
Management by Richard Pascal and Anthony Athos in 1981. The two authors
were looking at how Japanese industry had been so successful, at around the
same time Tom Peters and Robert Waterman were exploring what made a
company excellent. The 7S Model was born at a meeting of the four authors in
1978. It then appeared in the book IN search of Excellence by Peters and
Waterman in 1982. Subsequently, it was taken up as a basic tool by the global
Management Consultancy Company McKinsey to diagnose the cause of
organizational problems and to formulate programs for improvement, then on it
became famous as McKinsey 7S Model.
The Model starts on the premise that an organization is not just Structure,
but consists of 7 elements with a complex relationship between them.

i. STRUCTURE
The design of an organizational structure is a critical task of the top
management of an organization. It is the skeleton of the whole organization
edifice. Organizational structure refers to the relatively more durable
organizational arrangements and relationships. It prescribes the formal
relationships among various positions and activities. Arrangements about
reporting relationships, how an organizational member communicates with other
members, and what roles he/she has to perform and what rules and procedures
exist that guide the various activities performed by members are all part of the
organizational structure.
ORGANISATIONAL CHART

ii. STRATEGY
Strategy refers to the systematic action and allocation of resources to
achieve the companies aim the integrated vision and direction of the company as
well as the manner, in which it drives, articulate, communicates and implements
that vision and direction.
One of the most important evaluation of raw material utilization proper

manner and avoid the wastage through scientific and systematic manner concern
the management organization strategy and so on.
Strategy is a plan an organization formulates to gain a substantial advantage

over the competition. Strategy is the determination of basic long term goals and
objectives of an enterprise, and the adoption of course of action and the allocation
of resources available for carrying out these goals.
Western India Plywoods Ltd having potential statement of the technology

aware about the views growth of the marketing is booming income rise, demand
for goods increases and hence the performance brand image of its product.
WASTE CONTROL STRATEGY

In order to survive in the market company follows waste control strategy.
Western India Plywoods Ltd maintains all the materials in a systematic & in a
scientific way.
iii. SYSTEMS
Systems means all the producers, formal and informal, that makes the
organization go, day by day year by year; capital budgeting system, training
system, cost accounting procedures, budgeting. Training system of Western India
Plywoods Ltd is as follows
The following factors are considered for training
Strategic plans of the organization and meet operational areas as

estimated by the top management.

Training requirements as projected by the departmental heads and

individual employees
Reporting officer remarks in performance approvals reports.
Refresher training requirements in critical areas.
Career planning and succession planning inputs.
Inputs required by new entrants.
Training arising out of promotion and transfer.
Training calendar.
Identification of training needs.
Selection trainees, Evaluating of the training program.
Conducting the training program.
What is the system focuses in the Western India Plywoods Ltd

organizational factors impact on the taking perfect decision making skill
throughout the information regarding system than having training programs
conducted for the supervisors carrier planning process.
The main objective of the system towards formal and informal making
perfect decision analysis in the particular Refresher training requirements in
critical areas and Strategic plans of the organization and meet operational areas
as estimated by the top management.
Once an organization is setup and achieves its basic market share it

becomes more service oriented on the way to its growth. It has adapted the
systems like No Child Labor, employees are taken care of by providing them
the facilities like medical aids and their complaints are considered and overcome
immediately.
Innovation Systems
Performance Management Systems
Financial Systems / Capital Allocation Systems
Compensation System / Reward System
Total Quality System
iv. SHARED VALUES

It refers to the core or fundamental values that are widely shared in the
organization and serve as guiding principle that are important. These values have

great meaning because they focus attention and provide a broader sense of
purpose. Values are things that you would strive for even if they were
demonstrably not profitable. Values act as an organizations conscience, providing
guidance in time of crisis.
Shared Values are what engender trust. Values are the identity by which a
company is known throughout its business areas. These values must be explicitly
stated as both corporate objectives and individual values. A shared value is an
essential characteristic or attribute promoted by the organization to motivate the
behavior of members of the organization. In simple words, shared values are what
engender trust. Values are the identity by which the organization is known in its
business areas.
Western India Plywoods Ltd has the commitment in accepting the goals,
achievements and objectives. It has its organizational values with quality policy,
customer satisfaction and also with the employees.
v. STAFF
As a management function, staffing, or human resource management, is the

one that deals with the acquiring, training, appraising and compensation the staff
that work for a business. Effective staffing management is crucial to the success
of a business. Without the right staff, a business or organization may be unable
to deal with any changes or anything new in an efficient and successful manner.
Within staffing there are three main principles that should be adhered to in order
to run a smooth and cooperative business. These principles are that all
managers are human resource management, employees are very important and
that human resource management is a matching process.
Technical Staff
These are the staffs they are responsible for the work related to technical
aspect. In this company they are appointing well qualified and experienced
persons as technical staff .So these staff will have good knowledge about the
working environment.

Supervisory Staff
These are the person who is in charge with supervising the other employees
in the organization .In this company they are employing experienced staff as
supervisor. So they can observe the fellow workers and guide them as per the
companies need. The experienced supervisors are one of the key assets of this
company.
Clerical staff
These staffs are responsible for the office work .These people are the back
bone of the company. If they work well, it will be an asset to the company. In this
company they are employed well & qualified employees for office work. These
staffs are working together for achieving companies objectives.
Staffing may be defined as filling and keeping filled the positions in the
organization structure. This is done by identifying work force requirements,
inventorying the people available and recruiting, selecting, placing, promoting,
appraising, planning the careers of, compensating and training or otherwise
developing both candidates and current job holders so that tasks are
accomplished effectively and efficiently.
The responsibility and authority of all the persons affecting quality and their
interrelations have been defined and documented whenever personal
responsible for specific quality functions are not available the immediate
supervisor shall re-delegate their responsibilities. The responsibility and authority
of some key personnel, who performs, manage and verify the work including
persuades who need organization freedom to:
Initiate action to prevent the occurrence of any non-conforming relating to
the product, process and quality management system.
Identify and record any problem relating to product process and quality
management system.

Control the non-conforming product from further or until the non-conformity

is corrected.
vi. SKILLS
Skills include the distinctive competencies that reside in the organization.
These can be distinctive competencies of people, management practices, systems
and technology.
Training
Managers Team player, Communication skill, Negotiation skill, Inter Personnel
skill.
Engineers Technical knowledge of production, knowledge of machinery used,
updated knowledge of technology, Team player.
Semi skilled knowledge of the process, Hardworking, physically fit.

Employee skill is identified by way of performance appraisal. Depending on
the strength and weaknesses of the employee the training program is conducted.
The company has skilled, unskilled and semiskilled labors. Depending on the job
nature and importance on-job training will be given to them. The training will be
given to enhance the environmental awareness among employees through
training, development and education. The training to an employee shall be of 1
type.
On the job training by concerned supervision.
Class room training by HRD department.

A skill is the ability, knowledge, understanding and judgment to
accomplish a task. Skills may be defined as what the company does best; the
distinctive capabilities and competencies that reside in their organization.
The organization selects and assigns personnel performing work affecting

product quality based on appropriate education skills and experience. The
organization has also a system to assess the competence of its personnel on
periodic basis (performance appraisal and development report) to identify gap in

the performance, if any as well as assessing their training needs to bridge the
gap.
vii. STYLE
Top down, participative and authoritative.
Top down: It is decentralized authority and encourages subordinates to express
their opinion in decision making as well as in implementing the decision. However
decisions are taken by the leaders thus, decision are arrived at by consultation.
Participative: It is decentralize authority and encourage subordinates to

participate and involves in decision making and implementation processes.
Decisions are made by the top and his subordinate.
Authoritative
It is centralized power of decision making in themselves. Followers have no
say either in decision making or in implementation. They have to completely obey
and follow the instruction of the leaders. The leaders take full authority and full
responsibility.
Western India Plywoods Ltd has both top down and participative style of
functioning .since all the crucial decisions (strategic decisions) are taken by top
management and it is passed to the middle level management for implementation.
At the same time many day to day decisions are taken in participative manner. It is
taken with proper consultation and negotiation among the middle level mangers
and supervisor.
The companys decision making is done by way of selecting the tender as

government decides on sale to be done by the companies in a particular month.
So decision is based on government policies on how much unit of power sell by
companies.
This leads to the free flow of communication within the organization. The
management training is totally democratic there are no any restrictions to any

employees to express his opinion. Western India Plywoods Ltd has got open
door policy i.e. any level of employee can meet directly to his superior or
managing director without any hesitation.
Style of leadership or relationship refers to the manner in which an

individual uses his or her talents, values, knowledge, judgment and attitudes to
lead and relate to others. Style expresses the persons character. Style is the
leadership approach; also the way in which the employees in the organization
present themselves to the outside world, to suppliers and customers. In simple
words, a style is the pattern of behavior, which a leader adopts in influencing the
behavior of his followers (Subordinates) in the organization context.
SWOT ANALYSIS
SWOT stands for Strength, Weakness, Opportunities and Threats.
Strengths and Weakness are the internal factors of the company where as
Opportunities and Threats are external factors. SWOT Analysis is the tool for
auditing an organization and its environment. It is the first stage as planning and
helps marketers to focus on key issues have been identified, they feed into
marketing objectives. It can be used in conjunction with other tools as audit and
analysis.
i. STRENGTH
The company has been maintaining a high quality for its products and as its
products are well accepted in the market by quality conscious customers, it
does not anticipate any marketing problem. They are considered to be the
The Leaders in Quality Since 1945.
The company has a well established R&D unit, one of the best kinds in the
wood based industry.
The company is duly equipped to develop new products to meet the
requirements of the market.
The products of WIP are certified by ISO.


ii. WEAKNESSES
There is an acute shortage of good raw materials which has forced the
company to import a substantial portion of its main raw material viz. timber,
which has also seen a considerable increase in price.
Lack of good distribution network as compared to the competitors.
Promotion of competitors is better to that of WIP. The Company
concentrates only on Industrial Market.
The price of WIPs products is high as compared to its competitors.
iii. OPPORTUNITIES
The company is a leading supplier to Railways, Defense, Automobile,

Electrical, Transport, Civil Aviation and other industries.
Several products have been developed for the specific requirements of the
Automobile, Transport and communication sectors such as Densified wood
etc. and these products which have technological advantages over
competitive products.
The Company diversified from the production of chest and commercial
plywood to manufacture Decorative Plywood, Block Boards, Shuttering
Plywood and Aircraft plywood.
The products of the Company are being exported to Germany, France,
U.S.A, Sweden, West Asia and South Asian countries.
iv. THREATS
The high power tariff and increasing cost of furnace oil and other petroleum
products and chemicals.
There are many medium scale and small scale plywood industries. They fix
low price for their products.
In some product ranges, imported items are available at lower cost than is
currently produced in India.
In general, the working of the company has been adversely affected by the
effects of Globalization.

FINANCIAL ANALYSIS

BUSINESS AND OPERATIONS

During the year 2010-11, the Company achieved a turnover of Rs.
71.92crores and a profit before tax of Rs. 4.83crores. The Company has already
chalked out various action plans for further improvement in turnover and profit.
The construction boom in several areas of Kerala has helped the wood based
panel industry to improve production and demand for the related products has
seen an upward trend. The Company hopes that the availability of quality material
for plywood production will improve shortly when the Malaysian Joint venture
Company commences the dispatch of veneers from 2011- 12. This will enhance
the plywood production and turnover substantially. Also, various value added
products are being introduced which would give the Company higher returns.
The Company has maintained a satisfactory relationship with Bankers and Term
Lending Institutions and has been regular in paying interest, installments etc
DIVIDEND
The Board of Directors recommends a dividend due on Preference share
up to 31.03.2011 which works out to Rs.20.60lakhs. The Board also recommends
payment of dividend of 10% on equity shares, which works out to Rs.84.87lakhs.
REDEMPTION OF PREFERENCE SHARES

The Company had issued redeemable preference shares to IFCI Ltd. for
Rs. 2Cr, out of which Rs.1Cr was redeemed on 7.12.2009 and balance Rs. 1Cr on
28.05.2011 along with the accumulated dividend till the date of redemption. The
Company had transferred Rs.1Cr each to Capital Redemption Reserve Account
out of the profit of the years 2009-10 & 2010-11 respectively.
LEARNING EXPERIENCE
The learning experience gained by me during the in-plant training was very
much practical oriented. Mostly all the concepts and theories, which I studied in
the class, are applicable practically.
I had a great time working on the project, as it gives insights into the
working environment of an organization. The training has exposed me to many
facts of an organization and also helped me to know how various departments are
being functioned at various levels. All the staffs in the company were very much

co-operative and keen to explain each and every aspects of the company. During
the time of production process a systematic layout of machines were learnt. The
plant is systematically designed so that the production testing quality control is
systematically arranged.
I understood that the work allotted to specific departments depending upon

the nature and allotted work is expected to complete within time both effectively
and efficiently. The authority and responsibility relationship, information flow etc of
the organization was learnt. During the in-plant training the various concepts were
linked with the practical application of those followed the organization.
Concern of high quality, safety measures, good working environment, high

concern for environmental protection, developing the team spirit among the
employees and developing the morale of the employees etc were known. I
became more aware of the plywood industry and the role played by The Western
India Ply woods Ltd.
All together as a good learning experience as it could see the sum of the
things which studied in class is being put to practical use.
3. NEED FOR THE STUDY

The justification of existence of any company is determined by performing
as per expectations. Analysis of overall performance is one of the major
requirements for planning. Performance evaluation is necessary from the point of
view of creditors, public, government, other organizations and the company itself.
It is also necessary to bridge the gap between the current and expected position
by taking corrective measures. It acts as a yardstick of measuring how the
company has been able to move forward as per the plan.
This is to find out how Different financial components such as debt and
equity affect the financial strength and weakness of Western India
Plywoods.

The information provided through the analysis and interpretation of financial

statements is of immense help in making decisions. They play a dominant role in
setting the framework of managerial decisions.
4. LITERATURE SURVEY
No business can plan its activities without considering its financial
resources. Financial management is that part of management which deals with
rising of funds in the most economical and suitable manner, using the funds as
profitability as possible, planning future operations, inspections, controlling current
performance and future development through financial accounting and other
means.
Finance in essence is considered with the acquisition and use of funds by a

business firm. The main objective of financial management is to control required
funds for meeting short term and long-term needs of business enterprise and to
maximize the value firm to its equity share holders.
To have a clear understanding of the profitability and financial position of

business, the financial statements have to be analyzed and interpreted. Financial
statements are prepared for decision making. They play a dominant role in setting
the framework of managerial decisions. But the information provided by the
financial statement is not an end in itself as no meaningful conclusions can be
drawn from these statements alone. However, the information provided by the
financial statement is of immense use in making decision through analysis and
interpretation of financial statement. It helps to summarize large quantities of
financial data and to make quantitative judgments 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
analyzing the recent trend.

Tools for analysis:

The data collected was analyzed by using the following tools:-
Ratio analysis
Comparative balance sheet
RATIO ANALYSIS
The financial statements, Balance sheet and income statement depicts the
picture what has actually happened to earnings during a specified period and
presents summary of financial position of the company at a given point of time.
Ratio analysis is a very powerful tool useful for measuring performance of an
organization. The ratio analysis concentrates on the inter-relationship among the
figures appearing in the financial statements. The ratio analysis helps the
management to analyze the past performance of the firm and to make further
projections. Ratio analysis allows interested parties like shareholders, investors,
creditors, government and analysis to make an evaluation of certain aspects of a
firms performance. Ratio analysis is a process of comparison of one figure
against another which make a ratio and the appraisal of the ratios to make proper
analysis the about the strength and weaknesses of the firms operations. The
calculation of ratios is a relatively easy and simple task but the proper analysis
and interpretation of the ratios can be made only by the skilled analyst. Ratios
normally pinpoint a business strength and weakness in two ways.
Ratio provide an easy way to compare present performance with past.
Ratios depict the areas in which a particular business competitively

advantage or disadvantaged through comparing ratios to those of other
business of the same size within the same industry.
COMPARATIVE FINANCIAL STATEMENTS

Comparative financial statements are ones, which have been prepared in a
systematic manner and provides statistical information about a particular event

{financial transaction} or aspect, taking place on different dates or during different

periods.
The comparative financial statements are chalked out in columnar form (in
majority of the cases). One is also able to view comparative accounts of different
companies.
Comparative financial statements, like all other financial statements have the
following types of financial statements:
Income statements
Balance sheet
Income statements:
Also known as profit and loss financial statement, these types of
comparative financial statements suggest profit amount earned by a company as
well as amount of money lost by a company. Loss or profit may not always mean,
loss or profit of money, it may also include any asset or stock, which has an
economic value. Income statements also include expenditure incurred for
conducting activities, related to operations. This type of a financial statement is
referred as an operating financial statement.
Balance sheet:
Information pertaining to expenses and profit earned by a company are
recorded in the balance sheet. A balance sheet is often described as a "snapshot
of a company's financial condition". Of the four basic financial statements, the
balance sheet is the only statement which applies to a single point in time of a
business calendar year. The difference between the assets and the liabilities is
known as equity or the net assets or the net worth or capital of the company and
according to the accounting equation, net worth must equal assets minus
liabilities.

5. OBJECTIVE OF THE STUDY

To analyze the financial strength and weakness of the firm using various
analytical tools like Ratio Analysis and Comparative statements.
To examine the various components of the financial statements of the
company & to find out how the Debt and Equity affect the financial
performance.
To make an overall performance analysis and know the progress of the
concern through the five years data.
To evaluate the liquidity position and profitability of the company.
To involve comparison for a useful interpretation of the financial
statements.
6. SCOPE FOR THE STUDY

A companys profitability and efficiency can be evaluated only through the
device of financial analysis of its financial statements. This study is very much
useful to share holders and creditors of the company. The study mainly covers the
analysis of financial position and operational strength/weakness of the company.
The study is aimed at analyzing the financial statements of Western India

Plywoods on the basis of ratio analysis and comparative balance sheet in order to
know the companys financial & cash position and its performance during the past
five years from 2006-2011.

7. RESEARCH METHODOLOGY
The study is partly descriptive and partly analytical. It is descriptive as it

traces theoretical frame work of financial management. It is analytical in the sense
that it makes an appraisal of the financial management in Western India Plywoods
Ltd. The Research Design is needed because it felicitates the smooth sailing of
the various research operations. There by making research as efficient as
possible yielding maximum information with minimum expenditure.
The study is primarily based on the internal records and annual accounts of the
company. Besides this informations are gathered through discussion with the
officers of the company. Personal interview was held with various personnel
working in the company.
7.1 TYPE OF RESEARCH

DESCRIPTIVE RESEARCH
The study is primarily based on the internal records and the annual records of the
company. Besides information is gathered through discussions held with the
officers of the company
7.2 SAMPLING METHOD

7.2.1 Universe
The entire financial data of the company is considered as the universe of data.
7.2.2 Sample size
Financial data which is relevant to 5 years is taken as the sample size.
7.2.3 Sample method
Convenience sampling method is used to collect data for the study. A
convenience sample is one of the main types of non-probability sampling
methods. A convenience sample is made up of people who are easy to reach.
7.3 SOURCE OF DATA

Secondary data is the major base of the study. Secondary data is collected
from publications such as annual reports and other records which include journals,
magazines and company web sites of Western India Plywood ltd.
7.4 LIMITATIONS OF THE STUDY
The period of the study is limited to data of 5 years.

The study is based on the secondary data provided by the company
It is difficult to judge the financial performance with the said ratios
Both managers and employees are not ready to fully reveal the data
required for the project and the document of the company are not open for
the public scrutiny
The time period was limited to 10 weeks which is not sufficient to have a
complete study.

8. DATA ANALYSIS & INTERPRETATION
8.1 RATIO ANALYSIS

8.1.1 CURRENT RATIO
CURRENT RATIO = CURRENT ASSET/ CURRENT LIABILITIES

This ratio is most commonly used to perform the short term financial
analysis. Also known as the working capital ratio, this ratio matches the current
assets of the firm to its current liabilities.
TABLE NO: 8.1.1
CHART NO: 8.1.1

8.1.2 QUICK RATIO
QUICK RATIO = QUICK ASSETS/ QUICK LIABILITIES

This ratio is also known as acid test ratio or liquid ratio. It is a more severe
test of liquidity of a company. It shows the ability of a business to meet its
immediate financial commitments. It is used to supplement the information
given by the current ratio.
TABLE NO: 8.1.2
CHART NO: 8.1.2

INTERPERTATION
The ratio measures that the ability of the business to meet financial
obligations as they come due, without disrupting the normal, ongoing
operations of the business. The standard quick ratio is 1:1. Here, quick ratio
from 2007 2011 is lower than the ideal ratio, indicating that the firm is not
able to meet its quick liabilities in time.
8.1.3 WORKING CAPITAL TURNOVER RATIO
WORKING CAPITAL TURNOVER RATIO = NET SALES / WORKING CAPITAL

This ratio indicates the efficiency or inefficiency in the utilization of working
capital in making sales.
TABLE NO: 8.1.3
CHART NO: 8.1.3

INTERPRETATION
The ratio measures the efficiency with which working capital is being used
by a firm. A low working capital turnover ratio may reflect an in adequacy of
working capital and lower turnover of inventories or receivables. The working
capital turnover ratios show a declining trend from 2006 - 2007 to 2007 - 2008.
Thereafter it increased and again declined and reached to 1.82 during the year
2010 2011.
8.1.4 DEBTORS TURNOVER RATIO
DEBTORS TURNOVER RATIO = NET CREDIT SALES / AVERAGE DEBTORS

This ratio indicates the relationship between net credit sales and trade
debtors. It also shows the rate at which cash is generated by the turnover of
debtors.
TABLE NO: 8.1. 4

CHART NO: 8.1.4
INTERPRETATION
The ratio measures that the rate at which debtors are converted into sales
and then into cash. The increase in debtors turnover ratio will contribute towards
the profitability of the company. Here, the debtors turnover ratio of 9.42 during
2008 2009 is the highest and 3.49 in 2009 2010 are the lowest as compared to
any other year. It again rose in the year 2010-2011.
8.1.5 GROSS PROFIT RATIO
GROSS PROFIT RATIO = GROSS PROFIT / NET SALES X 100
Gross profit ratio expresses relationship between gross profit and net sales. It is
obtained by dividing gross profit by net sales and expressing this relationship as a
percentage. Gross profit is obtained by deducting cost of goods sold from net
sales. Net sales are basically determined by deducting sales returns from sales

Gross profit ratio evaluates the effectiveness of business. It indicates the

efficiency of firm in terms of its production and how much it has gained profit.
Gross profit reflects the profit firm has made on cost of goods sold.
TABLE NO: 8.1. 5
CHART NO: 8.1.5

INTERPRETATION
Gross profit ratio is increasing during the year 2007 2008 to 2010 2011.
A high gross profit ratio helps to cover all operating expenses, fixed interest
charges, dividend and appropriation of reserve. This ratio indicates the efficiency
of production or trading operations. In 2010-2011 it is high compared to the other
years.
8.1.6 NET PROFIT RATIO
NET PROFIT RATIO = NET PROFIT / NET SALES X 100
The net profit ratio is the overall measure of a firms ability to turn each
rupee of sales into profit. It indicates the efficiency with which a business is
managed. The net profits are obtained after deducting income-tax and, generally,
non-operating expenses and incomes are excluded from the net profits for
calculating this ratio. Thus, incomes such as interest on investments outside the
business, profit on sales of fixed assets and losses on sales of fixed assets, etc
are excluded.
TABLE NO: 8.1.6

CHART NO: 8.1.6
INTERPRETATION
The ratio indicates the firms capacity to withstand adverse economic
conditions. From 2006 2007 to 2007 2008 the company has been running in
loss due to the low demand and price competition. However, from 2008 2009
the company started making profit. In 2010-2011 the profit again declined
compared to the previous year.
8.1.7 DEBT EQUITY RATIO
DEBT EQUITY RATIO = EXTERNAL EQUITY / INTERNAL EQUITY
This ratio attempts to measure the relationship between long term debts
and shareholders fund. This ratio measures the relative claims of long term
creditors on the one hand and owners on the other hand, on the assets of the
company. A high debt/equity ratio generally means that a company has been
aggressive in financing its growth with debt. This can result in volatile
earnings as a result of the additional interest expense.

TABLE NO: 8.1.7
CHART NO: 8.1.7
INTERPRETATION
This ratio measures long term solvency. The ideal debt equity ratio is 2:1. A
high ratio shows that the creditors have invested more in the business than the
shareholders. A low ratio indicates a smaller claim of creditors. More precisely the

greater the debt equity ratio the greater the risk to the creditors. In 2010-2011 the
company is having the ratio compared to the other years.
8.1.8 PROPRIETARY RATIO
PROPRIETARY RATIO = SHARE HOLDERS FUND / TOTAL ASSETS
This is a variant of debt equity ratio. It measures the relationship between

share holders fund and total assets. Establishes relationship between
proprietor's funds to total resources of the unit. Where proprietor's funds refer to
Equity share capital and Reserves, surpluses and Tot resources refer to total
assets.
TABLE NO: 8.1.8

CHART NO: 8.1.8
INTERPRETATION
Proprietary Ratio keeps increasing during the year from 2006 2007 to
2010 2011. The proprietary ratio is high during the year 2010 2011, this
indicates that relatively favorable position to the creditors at the time of liquidation.
In 2006 2007, low proprietary ratio indicates that the lower proportion of net
worth is invested in fixed assets.
8.1.9 CAPITAL GEARING RATIO
CAPITAL GEARING RATIO = FIXED INCOME BEARING FUNDS / EQITY

SHAREHOLDERS FUND
This is the ratio between the fixed interest bearing securities and equity
share capital. Fixed income securities include debentures and preference share
capital.

TABLE NO: 8.1.9
CHART NO: 8.1.9
INTERPRETATION
From 2006 2007 to 2007 2008 the capital gearing ratio has slightly
increased and thereafter declined and reached up to 3.76 in 2010-2011, indicating
that the proportion of fixed income bearing funds declines each year, which
increases the risk of equity shareholders.

8.1.10 SOLVENCY RATIO
SOLVENCY RATIO = TOTAL ASSETS / TOTAL OUTSIDE LIABILITIES

These ratios are used to analyze the long term solvency of any particular
business concern. Acceptable solvency ratios will vary from industry to industry,
but as a general rule of thumb, a solvency ratio of greater than 20% is considered
financially healthy. Generally speaking, the lower a company's solvency ratio, the
greater the probability that the company will default on its debt obligations.
TABLE NO: 8.1.10
CHART NO: 8.1.10

INTERPRETATION
The ratio is used to test the solvency of a firm. Solvency ratio has slightly
increased from 2006 2007 to 2010 2011 which indicates the firms ability to
meet the outside liabilities out of total assets.
8.1.11 FIXED ASSETS TURNOVER RATIO
FIXED ASSETS TURN OVER RATIO = NET SALES / FIXED ASSETS
This ratio indicates the efficiency with which the firm is utilising its
investments in fixed assets such as plant and machinery, land and building etc. A
financial ratio of net sales to fixed assets. The fixed-asset turnover ratio measures
a company's ability to generate net sales from fixed-asset investments -
specifically property, plant and equipment (PP&E) - net of depreciation. A higher
fixed-asset turnover ratio shows that the company has been more effective in
using the investment in fixed assets to generate revenues.
TABLE NO: 8.1.11

CHART NO: 8.1.11
INTERPRETATION
This indicates the ratio of net sales to fixed assets. In the year 2008 2009
shows the highest ratio, 2009 2010 shows big fall due to lower sale. In the year
2006 2007 and 2007 2008 shows somewhat same ratio and 2010 2011
shows a recovery due to increase in sales.
8.1.12 CAPITAL RESERVE RATIO
CAPITAL RESERVE RATIO = CAPITAL / RESERVE
TABLE NO: 8.1.12

CHART NO: 8.1.12
INTERPRETATION
The capital reserve ratio is very low during the year from 2008 2009
which indicates the proportion between capital and reserve is low and high during
the year 2009 2010. In 2010-2011 also the company has a standard ratio.
8.1.13 INVENTORY TO WORKING CAPITAL RATIO
INVENTORY TO WORKING CAPITAL RATIO = INVENTORY / WORKING CAPITAL
This ratio establishes the relationship between the cost of goods sold
during a given period and the average amount of stock carried during the
period. A low value of 1 or less of inventory to working capital means that a
company has high liquidity of current asset.. It is not favourable for
management because excessive inventories can place a heavy burden on the
cash resources of a company.

TABLE NO: 8.1.13
CHART NO: 8.1.13
INTERPRETATION
The ratio measures the proportion between the inventory and working
capital. The inventory to working capital ratio is high during the year 2008 2009
and low in 2007 2008.

8.1.14 CASH TURN OVER RATIO
CASH TURN OVER RATIO = SALES / CASH
TABLE NO: 8.1.14
CHART NO: 8.1.14
INTERPRETATION
Cash turnover ratio during 20102011 of 21.65 which is very less
compared to other years. During the year 2008 2009 the increase shows that
there is proper utilization of the resources of the company. In 2006-2009 it was
high after that it declined highly.

8.1.15 CAPITAL TURNOVER RATIO
CAPITAL TURN OVER RATIO = SALES / CAPITAL TURNOVER
This ratio shows the efficiency with which capital employed in a business is
used. A high capital turnover ratio indicates the possibility of greater profit and a
low capital turnover is a sign of insufficient sale and possibility of lower profits.
TABLE NO: 8.1.15
CHART NO: 8.1.15

INTERPRETATION
The ratio measures the proportion of sales is made out of total capital employed.
A low capital turnover ratio means that no sufficient sales are being made and profit are
low. Capital turnover ratio has increased from 2006 2007 to 2008 2009 and
thereafter significantly declined to 0.28 in 2009-2010 and then again increased during
the year 2010 2011 to 0.6.
8.1.16 FIXED ASSETS COVERAGE RATIO
FIXED ASSETS COVERAGE RATIO = NET BLOCK / TERM LIABILITY
Determines a firm's ability to uphold its debt payments and contracts with
all of its fixed assets (cash, property, et cetera), minus any outstanding liabilities.
When calculated properly, a fixed asset coverage ratio demonstrates how well
the cash and properties owned by a company.
TABLE NO: 8.1.16

CHART NO: 8.1.16
INTERPRETATION
In 2009 2010 there is a high fixed coverage ratio because the firm using
the fixed assets to pay the term liabilities. In 2007 2008 there is a low fixed
coverage ratio because the firm not using the fixed assets to pay the term
liabilities. In 2010-2011 it is as par to the previous year.
8.1.17 DEBTS ASSETS RATIO
DEBT ASSET RATIO = TOTAL DEBTS / ASSETS
Debt Ratio is a financial ratio that indicates the percentage of a assets of

the companys assets that are provide via debt. It is the ratio of total debt (the sum
of Current liabilities and long term liabilities) and total assets (the sum of current
assets, fixed assets and other assets such as goodwill).

TABLE NO: 8.1.17
CHART NO: 8.1.17
INTERPRETATION
The debt asset ratio expresses the relationship between total debts and total
assets. The higher the ratio, the greater the risk exposure of the company. Debt
assets ratio has increased from 2006 2007 to 2007 2008 and thereafter declined
from 2008 2009 to 2010 2011. In 2010 2011 the debt asset rate was low which
reduces the risk of the company.
Jaro term 1 project Page 71

8.2 COMPARATIVE BALANCE SHEET
8.2.1 COMPARATIVE BALANCE SHEET ANALYSIS FOR THE YEAR ENDED 31 ST

MARCH 2007- 2008 (Rs in thousands)
TABLE NO: 8.2.1

INTERPRETATION
The total fixed assets have been decreased by Rs.25,904 during 2005.
For this purpose, investments worth Rs.151 have been realised.
The total assets have been reduced by Rs.25,700 and current assets have
been decreased by Rs.10,365. It indicates that the addition to fixed assets
have been financed partly by the sale or reduction of other assets.
The reserves and surplus of the company has no change during the year
2007 2008
The fixed assets of the company decreased by Rs.25,904 and the
percentage of decrease is 4.67%.
The relationship between current assets and current liabilities is
unfavorable.
8.2.2 COMPARATIVE BALANCE SHEET ANALYSIS FOR THE ENDED 31ST

MARCH 2008 2009 (Rs in thousands)
TABLE NO: 8.2.2

INTERPRETATION
The fixed assets have been decreased by Rs.49, 948 for this the investments of
Rs.1, 028 have been increased by Rs.39.52%.of the sale of fixed assets.
The reserves and surplus of the company has no change during the year 2008 2009
The secured loan of the company has reduced
MARCH 2009 2010 ( Rs in thousands)

TABLE NO: 8.2.3

INTERPRETATION
The equity capital of the company increased by Rs. 92,327 and secured loan has
been redeemed by Rs.1, 04,104 the redemption of secured loans out of profits.
The current assets of the company increased to an extend of Rs.30, 215 during
the period of 2009 2010.
The total fixed asset has been added by Rs.16, 548 during 2007. For this purpose
investment of Rs.2, 020 has not been realized


MARCH 2010 2011 (Rs in thousands)
TABLE NO: 8.2.4

INTERPRETATION
The equity share capital of the company has not been changed during the year
2010 2011. But the secured loans and the unsecured loans redeemed by Rs
(430) and unsecured loan for Rs.4, 269
The current assets of the company increased to an extend of Rs.67, 129 during
the period 2010 2011. This indicates that the company invested more in current
assets.
The total fixed assets have been reduced by Rs. (43,793). For this purpose
investments of Re.1 have been realized.
The reserves and surplus of the company increased by Rs.42, 768 and the
percentage increase is 102.51%. This indicates that the emergencies occur in
the company, the company uses reserves and surplus to overcome these
emergencies.
The current liability of the company is unfavorable. This indicates the funds are
not being economically used by the firm. The fixed assets of the company
decreased by Rs.(43,793) and the percentage of decrease is (8.85%).During the
period of 2010 2011 the companys overall performance was good.

FINDINGS
The analysis gives an inflated image of companys performance during the period
of 2006-2011
The company is having excess of fund where the current ratio of the company is
high therefore there is an excess of fund in the organization which is not utilized.
The quick ratio of the company also shows high as 2.30 in 2007 2008. There is
increase in quick ratio. Quick ratio is lower than the ideal ratio, indicating that the
firm is not able to meet its quick liabilities in time in 2010-2011.
The capital turnover ratio of the company is in a standard position due to the
increase in sales.
Fixed assets turnover ratio of the company is not satisfactory level.
The working capital turnover ratio of the company is almost to the standard in the
year 2010-2011.
The average margin of the goods sold is high compared to the previous years,
which shows a high percentage of gross profit.
The administrative expense of the company is high, where there is low net profit
to the company.
The proprietary ratio is high during the year 2010 2011; this indicates that
relatively favorable position to the creditors at the time of liquidation.
The capital gearing ratio declined and reached up to 3.76 in 2010-2011,
indicating that the proportion of fixed income bearing funds declines each year,
which increases the risk of equity shareholders
In 2010 2011 the debt asset rate was low which reduces the risk of the
company.
Return on investment ratio shows negative in 2006 2007 and 2007 2008, but
increase thereafter and reduces 13.89 2010 and 2011.
Debtors turnover ratio on the short collection period. It means a debtors has
short collection period which implies quick payment by debtors. WIP LTD is not in
a satisfactory level.

SUGGESTIONS
Though the sales of the concern is increasing year after year. The profitability of
the concern is not increasing proportionately. Firm should take effective steps
like keep stability in capital turnover, fixed assets turnover and try to maintain
return on investment.
The company is not depending much on outsiders fund which may affect its
functioning. Company tries to effectively utilize outsiders fund.
Firms dependence on creditors for its working capital has been decreasing
which is alarming for creditors.
The return on capital employed is unsatisfactory in almost all the years. Having
regarded to the risk factor the rate of return is lower than the bank rate. Steps
shall be taken to utilize the ideal fund to make the rate of return satisfactory.
The company should effectively utilize its working capital in generating sales.
Creditor's management has to be properly done by the company. Steps should
be taken so that the creditors are paid in time.

CONCLUSION
The Western India Plywoods Ltd has been serving the state for more than 60
years. It has contributed much to the industrial development of the state and is providing
employment to hundreds of people. Company is providing their products to various
sectors like railways, automobiles, civil aviation, transport etc. Over the last few years
the company has made an indelible mark in the wood industry.
The study conducted to measure the financial performance of the company has
observed that the financial position of the company is satisfactory, further improvement
has to be made.
To an extent the debt and equity of the company is affecting the financial
performance of the company.

ANNEXURE
FIVE YEAR FINANCIAL SUMMARY


BIBLIOGRAPHY / REFERENCE
PRASANNA CHANDRA FINANCIAL MANAGEMENT THEORY AND

PRACTICE, Fourth Edition, Tata Mc Graw Companies.
Last five year Annual Report(2007-2011) of Western India Plywoods Ltd.,
Kannur.
R.K.SHARMA AND GUPTHA: MANAGEMENT ACCOUNTING 2nd edition,
Kalyani Publishers, New Delhi.
I M PANDEY: Financial Management, 8th Edition, Vikas Publishing House
Wood Talk, Western India Plywoods
Websites
www.wipltd.org
www.wekipedia.org
www.google.com

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The Western India Plywoods Ltd

Submitted in partial fulfillment of the requirements for the

INTERNATIONAL MBA IN OPERATIONS

Under the guidance of

I, Mr. hereby declare that this project report titled The

Jaro Term-1 Project Page 1

I take this opportunity to express my profound gratitude and

The blessing, help and guidance given by them time to time

I also take this opportunity to express a deep sense of

Lastly, I thank almighty, my parents, brother, sisters and

Jaro Term-1 Project Page 2

SR No. PARTICULARS PAGE NO

03 NEED FOR THE STUDY 43

05 OBJECTIVE OF THE STUDY 47

06 SCOPE FOR THE STUDY 47

08 DATA ANALYSIS & INTERPRETATION 50

Jaro Term-1 Project Page 3

No business can plan its activities without considering its financial

Finance in essence is considered with the acquisition and use of funds by a

To have a clear understanding of the profitability and financial position of

The study entitled, An analytical study of Financial Performance with reference

Jaro Term-1 Project Page 4

The plywood industry consumes about 15 million M3 of timber. The other

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Role of Plywood Industries in India:-

Problems regarding Plywood:-

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CORPORATE GOVERANANCE PHILISOPHY

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2.3 Achievements of the organization

First to make irradiated wood

First to make aircraft plywood

First to make high pressure industrial laminates

First to make quality hardboard way back in 1959-60

First to manufacture Di Ally phthalate molding powder

First to manufacture GI Plywood-GI sandwich panel for anechoic

First to make pre-finished Plywoods and hardboards using UV cured

The company has earned special appreciation from leading industries in

Radiation induced polymerization of DAP, MMA & PE

Radiation induced polymerization of DAP & MMA

A process for manufacture of wood polymer composites by gamma

Manufacture of ABS plastics

Manufacture of SAN plastics

Jaro Term-1 Project Page 9

2.4 VISION, MISSION AND QUALITY POLICY

WESTERN INDIA PLYWOODS LTD endeavor to upgrade the quality of its

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Provision of adequate resources including raw materials and personnel to

Well defined process and product characteristics to enable monitoring

Communication of requirement of products including customers

2.6 OWNERSHIP PATTERN:

The western India plywood is a public limited company. The organizational

Mr. P.C.D. Nambiar, Chairman

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2.7 PRODUCT PROFILE

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DENSIFIED MOULDED SEATS

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2.8 ORGANIZATIONAL STRUCTURE