1. INTRODUCTION

1.1 Introduction to Wood Industry

India is very rich in its forest wealth having a huge land area under

forests. Fortunately, all varieties of forest growth are found in India, ranging

from tropical hardwood forests to high altitude coniferous forests and from

deciduous to evergreen forests and Plantation but unfortunately the forest

resources in India is depleting due to increase of population and other causes.

Sound principles of forest policy, administration, timber production and

conservation were introduced by an act of legislature in 1845, and ever since

Indian forests are being managed on scientific and progressive lines. Large

areas have abundance of some of the finest plywood timbers both for

constructional and decorative plywood, Indian teak, Indian Rosewood and

Padauk are world renowned for their beauty of figure, grain and texture.

Gurjan, Vellapine, Hollock and Hollong are only a few of the many

Indian timbers used for making good commercial plywood. Such continuous

depletion of the natural forest resources of the country due to various

consumption of solid wood, it was felt to conserve the natural resource forest

by reconstituted wood products such as Plywood, Hardboard, Particleboard and

Medium Density Fiberboard to meet the rising demand of Wood from the

general consumer, Railways, Defense, Furniture, Laminate manufacturers and

the builders. At the same time also it is trying to meet the wood demand by

Bamboo products which are alike to wood.

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As per a report published by Department of Industrial Policy and

Promotion Plywood, veneers of all types and other wood based products such

as particle board, medium density fiber have been delicensed, vide Department

of Industrial Policy & Promotion’s Press Note No.11 (1997Series) dated the

17th July,1997.

It also mentions that as Plywood forms the major segment of the wood-

based industry in the country, businessmen who wish to obtain approval from

the Government for setting up any wood based project should obtain prior

clearance from the Ministry of Environment & Forests before submitting the

applications to the Administrative Ministry/SIA and enclose a copy of the 'in

principle' approval given by the Ministry of Environment & Forests.

The English forests of hardwoods and conifer had been all but

decimated by the thirteenth century. Beginning in the 1540s, further

exploitation of its remaining forests ensued as British factories began

consuming vast amounts of wood to fuel its iron industry. In an attempt to

preserve its dwindling resource, parliament passed the Act for the Preservation

of Woods in 1543, limiting further felling of timber to 440 yards from landed

property. However, by the seventeenth century even the tracts that had been

reserved for the Crown had been depleted. As a result, the price of firewood

doubled between 1540 and 1570, leaving the poorest literally freezing to death..

The demand for wood is unlikely to reach the peak of 2005-2006 again

in the foreseeable future, FAO (Food and Agriculture Organization)," State of

the World's Forests 2009”reportsaid. He also mentions scale production is

widespread in almost all countries and all industries of timber, by registering a

saw mill to produce wood panels, pulp, paper and furniture.

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1.1.1 CURRENT SCENARIO

In a conservative scenario wood and wood products trade in the

international market will reach over 500 crore in 2025, but most

probably will be higher.

It provides direct employment to over 30 million people.

Not all the plantations will be for timber production, but even

considering that only 50% will be productive industrial plantations.

The area expansion together with gains in productivity will allow

producing sustainably around 1.8 billion cubic feet of wood per year

(potential sustainable production capacity).

This means that in 2025 plantations wood could, in principle, cover the

global demand of Industrial wood.

By the year 2025 emerging countries will have taken over a substantial

share of the international trade of wood products.

Other countries that have their relative importance substantially

increased are China and Vietnam.

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1.1.2 GOVERNMENT INITIATIVES

The Ministry of Natural Resources has programs and initiatives to help

keep the forest industry competitive. We also promote innovation and

investment in the forestry sector alongside the consumption of Indian

wood.

By connecting industry, associations and governments, they strengthen

India’s forest products sector.

Building consumer awareness of local wood products through Indian

Wood.

Promoting a culture of wood use in India

Helping the forest industry expand its export capacity and access new

markets for their products

Attracting and retaining investment in the forestry and wood

manufacturing sectors

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1.2 COMPANY PROFILE

Company Name : Kailas Wood Industries

Legal status of the firm : Sole Trading Concern

Proprietor Name : Narshilal Patel

Year of Establishment : 1990

Manager : Hitesh Patel

Banker : Karur Vysya Bank

Experience in trade : 25

Registered Office : 245, Kottur road,

Pollachi-642 001

E-Mail ID : kailaswood@yahoo.co.in

TIN No : 33202260712

CST No : 558316

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1.2.1 HISTORY OF THE COMPANY

KAILAS WOOD INDUSTRIES was started in 1990. This firm is

situated at Kottur road, Pollachi – 642 001.

The firm activity consists of manufactures of various types of wood

sizes, furniture in different sizes based on cubic feet.

At present the company is producing wooden doors, Furniture and sizes

based on orders.

The units is modernized one, 90% of the machineries are imported from

Taiwan, Italy and German.

The firm was started by Mr.Narshilal Patel. He was actually involved in

building the firm.

He is the proprietor and he is looking day-to-day affairs of the firm.

The company invested a capital of 1.75 crore at the beginning stage for

the production.

Today the company invested 8.25 crore and 10.30 crore from C.C loans.

Initially there were 78 employees in the firm but at present it increases

up to 212 employees.

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1.2.2 OBJECTIVES OF THE ORGANISATION

The main objectives of business organization to maximize “PROFIT”

beside that there are many other objectives too.

To create employment opportunities for the people.

To supply good quality goods at low prizes.

To bring out the various support required from the government to the

industry.

Maximization of profit.

The company gives job satisfaction to the employees by making the job

interesting and challenging.

To introduce modern techniques.

To improve production by means of improvement in quality and

quantity.

To satisfy the buyers wants and needs.

To transport the product at right time in right place.

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1.3 OBJECTIVES OF THE TRAINING

To study the organization structure and management of KAILAS

WOOD INDUSTRIES.

To get practical knowledge about the function of the industry.

To get experience in the field of Wood Industries.

To know the objectives of various departments.

To know the operating policies of the wood industries.

To know the business dealing of the concern.

To gain practical knowledge about the accounts department.

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1.4 ORGANISATION CHART

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PROPRIETOR ASSISTANT MANAGER

PURCHASE DEPARTMENT

PRODUCTION DEPARTMENT

ACCOUNTS DEPARTMENT

QUALITY CONTROL

DEPARTMENT

SALES DEPARTMENT

STORES DEPARTMENT

HUMAN RESOURCE

DEPARTMENT

PURCHASE MANAGER

SUPERVISOR

ACCOUNTANT

SUPERVISOR

MANAGER

CLERK

WORKER

WORKER

SALES INCHARGE

STAFF

HUMAN RESOURCE MANAGER

STAFF

2. PURCHASE DEPARTMENT

For every manufacturing concern there will be an item in the books of

accounts, the purchase of raw materials. The raw materials required for the

manufacture of door, furniture is wood logs.

The raw material of wood logs is imported from various countries based

on wood varieties. The concern imports various varieties of wood and wood

logs from various parts of world. The importing concern “KAILAS WOOD

INDUSTRIES” makes use of Letter of Credit for importing wood sizes and

wood logs from various parts of world.

The imported wood sizes and logs are stored in the concern “KAILAS

WOOD INDUSTRIES” itself. After that the stored wood is being tested to

rectify the problem of cracks and knots in the wood.

2.1 Important of purchasing:

Wood logs

Red Sal

Teak

Pinewood

Padauk

Vengai

Kapur Sal

2.2 Wood logs purchase:

Merchandiser requires wood logs for future production. The

merchandiser uses “Letter of Credit” to purchase the wood logs. The concern

imports wood varieties from countries like Malaysia, South America, Africa,

New Zealand, Burma and Vietnam. The wood logs will be shipped to

Thoothukudi dockyard and further moved to concern by cargo containers.

2.3 Duties of Purchase Department

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The purchasing department is responsible for all purchasing and contacts

with suppliers.

Selecting source of supply for wood logs and services to be purchased

for this purpose supplier’s pricelist and quotations are consulted.

Purchasing materials on the basis of requisitions from component

materials.

Checking the qualities and quantities of purchased materials.

Approving suppliers invoices on the basis of receiving reports and

adjustments made.

Maintaining purchase department records necessary for efficient

operations of its function.

2.4 Payment Terms

Minimum 30 days direct credit is obtained and payment is made through

bank cheque. The import purchase is made by payment using Letter of Credit

and later on paid to the banker. If the amount is below Rs.2000/- the cash is

paid directly to the suppliers.

3. PRODUCTION DEPARTMENT

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The production department is primary department in the company. The

production department is the department in which the production activity is

takes place. The process of this department is converting raw materials into a

finished product. Production department is handled by Mr.K.Thangavel.

Production is a very important and highly technical area in an

organization, which can be divided into several units. Thus for the purpose of

efficient production, co-ordination is needed in the organization.

Production today has been come more complex and complicated as a result

of technological evolution and mass production. This department is concerned

with the activities of men, materials and machines. The purchase manager will

purchase the raw material in according to its.

Price

Quality

Time and Quantity

Economical

3.1 PRODUCTION PLANNING

The production planning should be weekly, monthly, other suitable

period.

3.2 FUNCTIONS OF PRODUCTION DEPARTMENT

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Leading core team on all production activities.

Maintenance of factory facilities.

Preparation of production program.

Reviewing every day productions.

Monitoring progress of work in all stages & production.

Monitoring housekeeping.

Responsible for analysis of data related to production & improvement

activities.

Direct responsibility for all products manufacturing.

Identifying training needs for personnel reporting to him.

Internal quality problem analysis of correcting activities

implementation.

3.3 PRODUCTION PROCESS CHART

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WOOD LOGS

FACTORY(SAW MILL)

DEBARKING/PLAINING

CHEMICAL TREATMENT

SEASONING

FINGER JOINTING

WATER CURTAIN SPRAY BOOTH

CARVING

PACKING

3.4 PRODUCTION PROCESS

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3.4.1 WOOD LOGS

Wood logs are purchased from various places all over the world. Raw

Wood is coming by the type of logs either sizes, logs consist approximately 30

cubic feet to 80 cubic feet. This is the raw material for the process.

3.4.2 FACTORY (SAW MILL)

The Wood logs are being entered into the process of cutting as per the

order and needs with the help of band saw machines. Sometimes small wood

sizes are resized by hand saw machines.

3.4.3 DEBARKING/PLAINING

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Debarking removes bark from the wood sizes. Plaining is the process of

sorting the wood sizes.

3.4.4 CHEMICAL TREATMENT

Wood treatment refers to protecting wood from damage caused by

insects, moisture, and decay fungi. Of the millions of organic chemicals, only

less than ten can be used as active ingredients in the formulations. Wood is

treated for 10-40 minutes as based on sizes.

3.4.5 SEASONING

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Wood seasoning or drying reduces the moisture content of wood before

its use. For some purposes, wood is not dried at all, and is used green. Often,

wood must be in equilibrium with the air outside, as for construction and

wooden furniture, the wood must be dried. Wood is air-dried or dried in a

purpose built oven. Usually the wood is sawed before drying, but sometimes

the log is dried whole.

3.4.6 FINGER JOINTING

A finger joint is a woodworking joint made by cutting a set of

complementary rectangular cuts in two pieces of wood, which are then glued. It

is stronger than a butt joint or lap joint, and often contributes to the appearance

of the piece. The damaged wood sizes are only entered to this stage.

3.4.7 WATER CURTAIN SPRAY BOOTH

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As a constant up gradation effort KAILAS has setup two new modern Water

Curtain Spray Booths with fresh air and Drying Oven to give better finishes to the

furniture produced.

3.4.8 CARVING

Wood carving is a form of working wood by means of a cutting tool in one

hand or a chisel by two hands or with one hand on a chisel and one hand on a mallet,

resulting in a wooden figure or figurine, or in the sculptural ornamentation of a

wooden object

3.4.9 PACKING

The last and final step of process is packing of the finished products. The

furniture and doors are packed using poly sheets and the wood sizes are kept as for

loading. It will be finished product ready for selling.

4. QUALITY CONTROL DEPARTMENT

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The quality control department works in the name of “Statistical

Department”. The cutting master is the in-charge of quality control operators.

Quality control is the back one of the production department because the

uncontrolled quality production may spell the requisition of the organization.

Janka hardness test is made to improve quality of wood. There is a lab in

the concern where wood hardness test is made and is measured by pounds force

based on variety of wood.

In this organization the methods employed for quality control are

Testing for wood hardness

At each and every stage of production they used to check the percentage

of wastage, co-efficient of variation in,

Length

Breadth

Width

Machine speed study

Breaking study

Quality control department prepares a weekly report and it is submitted

to the factory director and is forwarded and signed by the chairman.

4.1 WOOD HARDNESS TEST

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Length:

The length of short staple is 7 feet.

Breadth:

The power of being strong, breadth of medium staple is 1 inch.

Width:

The width of long staple is 1.5 inch.

4.2 FUNCTIONS OF THE QUALITY CONTROL DEPARTMENT

Trash in saw mill.

Waste in debarking and Plaining.

Net control in seasoning.

Waste control in finger jointing.

Breakage rate in spray booth.

5. HUMAN RESOURCE DEPARTMENT

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Human resource department is fully responsible for the appointment of

workers. This department should take care of workers by collection general

information about them and providing facilities according to it. The safety

measures provided to the workers are like keeping fire extinguisher, first aid

box etc. Without permission of this department no one can enter in to concern.

Some of the responsibilities of human resource department are as

follows:

5.1 RECRUITMENT

The human resource department recruits the persons.

5.2 SELECTION

Only human resource department has the right authority to select the

persons to the concern.

5.3 TRAINING

This human resource department has responsible to give training for the

workers.

The safety measures should provide to the workers. It is the main

responsibility of the human resource department.

It contains name of the employee, department and date of joining and

details of experience. Training to the employees will according to the nature of

job.

5.4 WELFARE MEASURES

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The following are the welfare measures provided by the company to the

workers and staffs.

Facilities For Storing

There are separate rooms for man & women workers and staffs to

their clothes and to keep their lunch boxes.

Employee State Insurance (ESI)

ESI benefits are given to all employees. They are paying 4.75% for

employer and 1.75% for employee of their wages to ESI fund. They get

free medical consultant in ESI hospitals.

Provident Fund(PF)

Employees and staff get P.F benefits the management and employees

contribute 12% to be provident fund.

Canteen Facility

Canteen facility is available to workers and staff. Canteen slip is

given to them to get lunch, for etc., in the canteen at cheap rate.

Rest Room & Lunch Room

There is provision for rest room and a suitable lunch room with the

precision for drinking water. These rooms are daily cleaned.

5.5 TIME OFFICE / SECURITIES OFFICE

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Security office comes under the control of personnel department. The

following functions are performed as regard to personnel department.

There was STAFF IN and OUTGOING REGISTER here have records

regarding the products entering the factory and the products, which are

taken from the factory

The COMPANY VEHICLE REGISTER has the details regarding the

vehicle going out and returning to the company.

The CONTRACT LABOUR REGISTER has details regarding the

labours employed on contract basis.

5.6 THE TIMING OF SHIFTS

Day Shifts : 09:00 AM to 12:30 PM

Lunch : 12:30 PM to 01:00 PM

Noon Shifts : 01:00 PM to 06:00PM

6. SALES DEPARTMENT

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Production of goods is done for sales. Sales mean transfer of goods from

one person to another in the course of business for cash, deferred payment or

valuable consideration. The effectiveness of sales in the organization is the

most important factor for the progress of the firm, because the final figure

ultimate depends on the efficiency of the department.

The whole operation of an industrial concern depends on the ability of

the sales executive to obtain orders and to dispatch the products in time as soon

as they are ready for sale.

In Kailas Wood Industries after the finished furniture, wooden door and

wood size is produced it is packed well and stored in godown The manager in

the head office takes the decision regarding the sale of goods,

The duties of the sales manager is,

To collecting the order

To collecting payment from the dealers and also provides sales

service facilities.

6.1 DIREST SALES

The company takes up direct sales and agents are not involved. The

company sells most of its goods at Pollachi, Tirupur and Coimbatore. The final

invoice containing exact values as per sales in confirmation with the gate pass

is prepared by the administrative office. After collecting the lorry freight from

the concerned parties, the goods are delivered them. The dealers should remit

the full value as per the invoice.

Immediate fixation of rate and sales are made. The sales tax fixed by

the Tamilnadu government i.e., TNCST is paid within Tamilnadu. In states

other than Tamilnadu, the central sales tax is paid. The central sales tax

amounts to 14.5%.

6.2 SALES DEPARTMENT CHART

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6.3 Functions

Analyzing the market throughout the year.

Studying consumer psychology and demand.

Assisting in the preparation of market plan.

Studying the conditions existing in the competitive firms.

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SALES MANAGER

SALES INCHARGE

7. STORES DEPARTMENT

Stores department has to keep sufficient material and spares. The store

keeper is in-charge of store department and he is responsible over the goods

kept in store go down.

In stores department, the four process are involved they are;

Purchase requisition

Purchase

Issues

Stores stock.

7.1 PURCHASE REQUISITION

In purchase requisition, the material to be used is found out from the

order and place, quality, quantity etc… In this requisition, the goods which

have to purchase with quoted price to the seller, the sample bill of purchase

requisition of KAILAS WOOD INDUSTRIES.

7.2 PURCHASE

With the help of purchase requisition, oils, grease, blades and spares are

purchased on given price in purchase requisition.

No material is taken out without the consent of the storekeeper. If a

material enters the gate it is properly checked by the store keeper and the

security guard and then they are received by the stores department.

On the receipt of materials, store keepers maintain a material inward

note. If the supervisors ask any material, the store keepers issue it and enter in

the material issue slip. There is a note book maintained for this purpose and it

is called as on time.

During the full night with the consent of the security the material is

taken by the concerned shift supervisors opening of stores book. The stores

department prepares weekly report and sends it to the head office.

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7.3 ISSUES

With raw material purchased, the goods which are gap for production,

that goods are transformed to stores protecting the goods bill the production

time by entering in stock registration.

7.4 STORE STOCK (OR) STOCK REPORTING

In stores, the goods are stocked until the goods are sold; the store keeper

will protected the stock with entering issues and receiving goods in the stock

register.

7.5 The file maintained by the stores department:

Stores receipts daily note(SRN)

Material inward note (MIN)

Material issue slips (MIS)

Material issue book (MIB)

Returnable gate pass Book

Non-returnable gate pass Book

Contractors Note Book

Purchase requisition slip

Packing Material Checking Note

Stores Adjustment No

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8. ACCOUNTS DEPARTMENT

An account is the life blood of any company. The Accounts department

provides authorization and control to all other subsystems to utilize money

more effectively through a well-designed mechanism. Accounts department is

headed by the finance manager (finance and accounts) and his team of

efficient accountants. They maintain record for each and every transaction

relating to business. All the financial decisions taken are reviewed by the

Proprietor before being put it into action.

The accounting is done using popular software Tally.ERP9. This

department is in charge of all the tax computation involved with any

local purchase and sales made. They also take care of handling the

company’s tax processing and provide proper accounting documents

such as profit &loss account, balance sheet to the auditing authorities on

demand. The financial year of the company starts from 1st April and ends

with 31st March in every year. The accounts department also computes the

weekly wages and monthly salaries for the employees of the company.

8.1 SUMMARY OF FUNCTION

Collection/ filling of all vouchers and bill receipts.

Handle bank transactions.

Handle debtors and creditors transaction.

Prepare periodical documents to analyze business growth.

Wages/ salary computations.

Finance is very important for any business; no business enterprise can

be started and run smoothly without finance. The accounts department

comprises of the function like cash and bank transactions.

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8.2 CASH BOOK

The cash book is maintained to record all cash transaction, i.e., cash

receipts and cash payments. The credit transactions do not find any place in the

cash book. Only, cash sales, cash purchase and other expenses are recorded.

Receipt of cash is debited and payment of cash is credited in the cash book.

8.3 PURCHASE BOOK

The purchase book is maintained to record all cash and credit purchase

of goods made by the company.

8.4 SALES BOOK

The sales book is maintained to record all cash and credit sales of goods

made by the company.

8.5 LEDGER ACCOUNT

The company after preparing the above said books prepares the ledger

account. The ledger account is prepared by posting from the subsidiary books.

The company maintains two types of ledger they are

Debtors ledger

Creditors ledger

8.6 DEBTORS LEDGER

This will contain the accounts of those people to whom the business

sells goods on credit, showing goods sold cash received etc. this section of the

ledger will enable the business man to calculate the amount owing by his

customer rapidly.

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8.7 CREDITORS LEDGER

This section will contain the accounts of those people form that the

business purchases goods on credit, showing purchased, cash paid etc. This part

of the ledger will enable the trader to calculate rapidly the balance due to cash

creditor.

8.8 TRIAL BALANCE

After preparing ledger accounts the trial balance is prepared with the

help of postings are made in the ledger accounts.

8.9 TRADING, PROFIT & LOSS ACCOUNT

The preparation of this account is possible only after the preparation of

the trial balance. At the end of the every Financial Year final account is

prepared to know whether the company is making profit or loss, during the

year.

8.10 BALANCE SHEET

This is prepared to know the accurate financial position of the company.

This statement is prepared with the details of assets and liabilities of the

company. Normally financial statement is prepared at the end of the financial

year. And they are audited by the registered auditor. Auditing is done every

year with the appointed auditor of the company.

8.11 ACCOUNTS DEPARTMENT CHART

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ACCOUNTS MANAGER

9. CONCLUSION

During the period of my training in KAILAS WOOD INDUSTRIES, I

have studied the lot of functional aspects of the various departments like

production, purchase, accounts departments, etc., From this training, I have

also trained with the flow and delegation of authorities from the top level

management to middle level and lower level of management.

The industrial training has provided a valuable knowledge on various

functions of different departments, the harmonious atmosphere and the

efficiency of staff and employees were quite normal.

This course enables me to have a correct view of the various practical

aspects and difficulties of the various theoretical formalities are immensely

benefitted from the training program.

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ACCOUNTANT