Amity Global Business School

Mumbai

Project Report on

Internal Audit & Stock Management

Jani Sales Pvt Ltd.

Submitted to

Mr. Hardik Pathak

Faculty
Amity Global Business School Mumbai

Submitted by

Juzer Rajkotwala
A30206408035
BBA Class of 2008-2011
Amity Global Business School Mumbai
 TABLE OF CONTENTS

S.No CONTENTS Pg. No

1. Acknowledgement 2

2. Executive Summary 3

3. Introduction to the Company 4

The Project
• Stage 1
• Stage 2
4. • Stage 3 11

5. Learnings 13

6. Interview & Recommendations 14

 ACKNOWLEDGEMENT

It takes immense pleasure for me to express my sincere gratitude to all the helping hands
who have guided me in the completion of this project. It was a great learning experience
for me to work on my project for two months in such a charged and highly motivated
organization . As a student of AMITY Global Business School (Mumbai), I got an
opportunity for doing my summer internship in Jani Sales Pvt Ltd .
I would like to express my deep gratitude to Jani Sales Pvt Ltd, for giving me the
opportunity to improve my skills and learning through a practical approach with this
Summer Internship Project. I would like to give my regards to Mr. Fakhruddin,
financial head who was my mentor and a continuous source of inspiration during these
two months. Without him this project could never be succeeded. His guidance and vision
helped us in exploring different ways to complete this challenging task.
I owe special thanks to all the employees at Jani Sales Private Limited
204, Oberoi Chambers-I, New Link Road, Opp. SAB TV, Andheri (W), for their support
during the training period.
Last but not the least, my effort will remain incomplete if I do not express my
indebtedness to my teachers, friends and family members for their love and blessings and
whose assistance and support are instrumental in the successful completion of this
project.

Juzer Rajkotwala

BBA 2008-2011

Amity Global Business School

 EXECUTIVE SUMMARY

This project is based on my learning and research that I underwent during my

training at Jani Sales Pvt Ltd. First phase involved internal audit of the company
so as to check any leakage in the financial reports. Second phase consists of the
procedures involving the collection and analysis of various information required
to wholly understand the Stock Valuation and Management of one godown at
Saakinaka.
This project was completed using primary data, gathered directly from Sales
Executives and past sales reports. The primary objective of the project is to
maintain the stock with respect to its demand so there is no shortfall when
required and to minimizes the current dead stock by circulating it in different
places also maintaining the valuation of stock.

About The Company

Introduction

With more than two decades of trading experience in paper and paper board industry Jani
Sales Pvt Ltd have emerged as leading wholesalers in India. For Saifee Jani it began in
1979 as a smallish trading unit. Later, even as business flourished, the organization
became authorized wholesale dealers for the paper giant ITC Limited [Paperboards &
Specialty Papers Division] –India, Gayatrishakti Paper & Boards Limited and Kherani
Paper Mills Private Limited - Vapi. Saifee Jani who is the Managing Director of Jani
Sales Pvt Ltd. is a reputed name in the printing industry - what with dealings of more
than 40,000 tonnes of paperboards (domestic & export) in a year. Which is why, Jani
Sales has been heralded as super-specialists in the paperboards segment.

They advise their clients on issues of gram mage substitution, better run ability and lower
wastage. Such improved efficiencies provide their customers with a competitive
advantage on two important counts: quality and cost.

Since Jani Sales offers board directly from the mills, end-users in INDIA will be able to
take advantage of modvat facility.
Location
In order to give smooth service to their customers they have offices at 3 locations :

The Corporate office is at:

Jani Sales Private Limited
204, Oberoi Chambers-I,
New Link Road,
Opp. SAB TV,
Andheri (W), Mumbai - 400 053.

Email : info@janisales.com
Tel.: 91-22-2673 1488
Fax: 91-22-2673 1499

Branch offices at :
Jani Sales Private Limited
308, Skylon Building, 3rd floor,
Silvassa Road, Vapi - 396195.
Vapi – 396 195
State – Gujarat

Tel. : +91 260 32962

Jani Sales Private Limited

Keshav Properties,
Shop No. 03, 1st Floor,
Opp. Glaxo, Pinjore Road, Baddi District Solan
State – Himachal Pradesh

Tel. : +91 93187 11086, 93187 60620

Jani Sales are also available 24hrs a day and 7 days a week through the internet.

Godowns
In order to keep inventory of material, for faster delivery of goods and prompt service
they have godowns at strategic locations with their own transportation facility so as to
avoid any transit damage or loss.

Godown outside the octroi limits of MUMBAI helps them to be competitve !!

Godowns at : Sakinaka – Andheri, Baddi – Himachal Pradesh.

Excise Godown at : Bhiwandi – District Thane.

Products

Mills with whom they do business are:

• ITC Limited [Paperboards & Speciality Papers Division]-India

Products:

• Safire Graphik
• Safire XL PAC
• Pearl XL PAC
• Pearl Graphik
• Cyber XL PAC
• Cyber Plus
• Art Maestro
• MG Triplex Board
• Coated Board Grey Back
• Coated Board White Back
• Alfa Zap
• Hi Brite Paper
• Fusion Board
• Indolux Safire

• Gayatrishakti Paper & Boards Limited - Vapi

Products:

• Coated Packaging Board (Grey Back)

• Silkia (Fully Coated White Back)

• Kherani Paper Mills Private Limited - Vapi

Products:
DOUBLE COATED (H.W.C) (M/c Deckle: 160 to 168 cms)
(OFFLINE COATED BOARD)

SUBSTANCE (GSM) BULK CALIPER TABER STIFFNESS

(gm.cm)
(cc/gm) Microns
MD CD
200 1.10 220 40 15
230 1.16 267 65 25
250 1.16 295 80 30
260 1.18 312 95 35
285 1.20 348 115 40
296 1.20 361 125 45
329 1.22 405 150 55
350 1.22 438 175 65
360 1.22 454 185 70
400 1.24 504 230 90
410 1.24 525 240 100
450 1.29 576 280 110
SUBSTANCE : ± 3% BULK: ± 5% GLOSS: ± 5% STIFFNESS: ± 10%

BOARD CONSTRUCTION
Surface Sized with Pigment
Solution
Bleached Chemical Puip
Bleached Chemical Puip
Bleached Chemical Puip
Surface Sized with Pigment
Solution
 PARAMETER
UNITS VALUE
COBB
TOP g/m² 40 - 50
BOTTOM g/m² 50 - 60
PLYBOND J/m² 65
Min
SOA sec.
220 -270
Min
BRIGHTNESS % 78 ± 1%
GLOSS AT 75° % 42 ± 5%
PPS ROUGHNESS Microns 3.5 ± 0.5%
IGT PICK VELOCITY m/sec. 0.7
BURST FACTOR Min 13
MOISTURE
< 250 gsm % 6.0 - 6.5
250 -300 gsm % 6.5 - 6.8
> 300 gsm % 6.8 - 8.0

The above tests are done as per TAPPI's standard procedures, details of
which will be supplied on request
Features:
1. No detectable levels of Dioxins ( < 1 parts per trillion)
2. Free from any flavour and odour
3. Low levels of heavy metals content (Each < 20 PPM)
4. Suitable for high quality offset and gravure printing
5. Suitable for high quality embossing and foil stamping
6. End uses: Personal Care, health care, hygeine products, confectioneries,
chocolates, POPs, greeting cards, book covers, brochures etc.
• Three M Paper Mfg. Co. Private Limited - Chipalun

Products:

• White Back Board

• HWC Duplex Board

• Deevya Shakti Paper Mills Pvt. Ltd. Hyderabad

Products:

• LWC Grey Back Board (Double Coated)

• HWC Grey Back Board

• Multiwal Pulp & Board Mills Private Limited – Kashipur

• Murli Industries Ltd.
 The Project

When I joint the company on 2 June 2010, I was completely new to the working
environment and was unaware how the financial department used to work in a company.
So through out my internship there were different stages of platforms where I portray
myself.

Stage 1

This stage is called the learning path, where I was introduced to the various aspects of
financial responsibilities. They were from entering the accounts to maintaining them,
learning the business software (spectrum) and maintaining the petty cash book for the
initial stage.

Stage 2

Once after understanding the concept of finance in the corporate world, I was placed on
my next assignment that was internal audit. Under the guidance of C.A Bhavin Kumar
and with the assistance of Mr. Bhavesh Jobanputra I started my work in auditing. We
had to examine financial records, information storage systems and internal controls to
ensure there are no indications of mismanagement, unnecessary waste of resources or
fraud. We review all records and information related to expenditures, cost, taxes and
internal controls to determine if a company is secure and has a strong financial
foundation.

Stage 3

After completing the auditing work, I was told to assist the financial head Mr. Fakhruddin
along with his 2 fellowmen and 2 sales executive to control the inventory of a particular
godown at saakinaka. Due to unavailability of some products they had missed on some
selling opportunities and also there was much of dead stock in the godown which was
restricting them from ordering new products due to lack of space, so this had to be
figured out. My first duty was to account the present inventory which was there in the
godown and value it. Then next step involved counting of dead stock and its
management. Then came the crucial stage where in we had to sit with the past sales
report and the sales executive responsible in that location to establish the trend of sales
for that godown. This included evaluation of item performance in season and make
recommendations for re-orders, consolidations and return-to-vendors. Recommend and
forecast initial quantity and allocations for key items. Responsible for forecasting at the
supplier, product and style level and reconciling with the buyer and planner. Also to
determine the ordering period so as to avoid lack of stock or excess of stock.
 Experience and Learning

It was a great learning experience for me. I was allotted a very diligent and
intelligent person as my mentor, Mr. Abiali Jani from whom I got to learn a lot of
things. He and his colleagues referred to me various persons from the industry and
various companies from which I may get the various details relating to my project
 which not only increased my knowledge about the products but also added to the
general understanding.

I was given work pertaining to my topic of study like maintaining of accounting

system, knowledge about business software spectrum and excel, internal auditing
so as to minimize defects in financial reports and to maintain and value the
inventory. These activities made me understand the internal working of the
company. Apart from academics, this two month’s training helped me develop
soft skills like time management and positive attitude in spite of work pressure
and deadlines.

It also taught me how to build professional & personal relationship among the
individuals working in organization right from the office assistant, subordinates,
colleagues to your superiors as it reduces the work pressure and make it more
pleasure to work.

This summer training was an experience where I could learn as well as enjoy
myself. Thanks to every staff member of Jani Sales Pvt Ltd for making this
experience a memorable one.

Interview

You’re Comments on the price rise done by the duplex board manufacturers.

Paper mills have resorted to price increase aggregating about Rs. 5.50 per kg. (Which is
roughly 25%) over the period of last 5 to 6 months. Reasons for the increase are (a) Due
to steep oil price increase globally; all input costs have gone up such as chemicals,
transportation, labor etc., (b) There has been a spurt in price of recycles fiber due to fiber
shortage as recycling of fiber is being mandatory in Europe and USA and increased
demand from other parts of world. (c) Recently the import cost again gone up due to
rupee weakening. Therefore price increase by mills was justifiable.

What has been the overall impact on your business with these frequent increases?

AS a dealer of paper and paperboard, there is a direct impact on our finance as we have to
pump in more funds to finance our purchase from the mills which is on cash basis. Mills
do not give any credit but we have to extend credit to our customers and we have to incur
the additional interest burden on the increased capital requirements. With the increase of
about t25% price, our exposure also increased in the market and also due to unexpected
price increases customers are delaying payments. Our margins are already squeezed and
therefore with every price increase our return on investment is affected directly.

What are your expectations from the mill owners?

We expect that mills understand the situation and either give credit facility or introduce
cash discount so that we get reasonable return on our investment as we are unable to
increase our margins to the customers due to increased competition. Mills should also
consider reducing penal interest burden to our customers. Bigger dealers have bigger
exposure with large customers and Mills’ support is required to maintain volume
business.

Do you foresee or expect the prices to come down in future?

We do not see any immediate possibility of price reduction. However, since the oil price
is now come down, if the government reduces the fuel prices, it will impact the direct
cost. Also there is already some softening of secondary fiber cost which will also give
some relief to the mills and call for a price reduction, although there will be only a
marginal effect due to the rupee becoming weaker.

Recommendations

• Many of their stock management activities are done manually which rises the
chances of mistakes in interpretation so as far as possible they should change it to
computerized form in order to maintain stock even better.
• Since they have such a huge exposure to the world and they do sometimes buy
scrap paper for recycling purpose they should start into that completely so as to
get discounts in their purchases.
• They had a factory for manufacturing paper bags in Vapi which was a failure and
is now used for cutting purpose which is at 30-40% efficiency, so they should
start doing job work of cutting paper board for others and improve their
efficiency.