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A PROJECT REPORT

ON

“Financial Compliances MIS Setup created for the


Executive Desk for M.D at Donear Industries Ltd.”

Project Submitted in partial fulfillment of

(MMS)

Submitted by:

Jasmeeta Setpal

Roll No. MMS 1244

Batch 2012-2014

Under the guidance of

Mr. Ashok Agarwal

Prof. Dipika Jain

Prof. Roizman Monteiro


Declaration

I, Jasmeeta Bhagwan Setpal solemnly declare that the project work entitled
“Financial Compliances MIS Setup created for the Executive Desk for M.D at
Donear Industries Ltd”, is my original work, it is neither copied from any earlier
submitted work elsewhere or not merely copied, this is specifically prepared as a
part of MMS/PGDM curriculum, to be conducted in Year 2013.

Signature of the student:

Name of the Student: Jasmeeta Bhagwan Setpal


CERTIFICATE

This is to certify that the project titled “Customer Satisfaction Survey” been successfully and
satisfactorily completed and submitted by “Miss Jasmeeta Setpal” bearing a roll number,
M1244 as a student of Chanakya Institute of Management Studies & Research as
Prescribed by AICTE in fulfillment of the requirement for MMS during the year 2012 – 14.

Internal Guide Director

Prof. Dipika Jain Mr. Biswa B. Das

Co-Internal Guide

Prof. Roizman Monteiro


Acknowledgement

A summer project is a golden opportunity for learning and self-development. I consider myself
very honored to have so many wonderful people lead me through in completion of this project.

I wish to express my indebted gratitude and special thanks to "Mr. Ashok Agarwal, V.P Finance
at Donear Industries Ltd." who in spite of being extraordinarily busy with his duties, took time
out to hear, guide and allowed me to carry out my industrial project work at their esteemed
organization.

I express my deepest thanks to Prof. Dipika Jain for her guidance and support.

I also wholeheartedly thank Prof. Roizman Monteiro forgiving his precious time and effort
during my whole project. He supported me by showing different methods of information
collection about the company. He helped me all the time when I needed him and he gave me
the right direction towards completing my project.

I would also like to thank Prof. Mughda Kulkarni for helping me decide the objectives for my
study.

I express my deepest thanks to them for taking part in useful decision & giving necessary
advices and guidance and arranged all facilities to make life easier. I choose this moment to
acknowledge their contribution gratefully.

Place: Mumbai Jasmeeta Bhagwan Setpal

Date: 20/8/2013 – M1244


TABLE OF CONTENTS
Executive Summary ..................................................................................................................................... 1
Corporate Overview ..................................................................................................................................... 2
Insight ....................................................................................................................................................... 2
Company History ....................................................................................................................................... 3
Promoters & Board of Directors ................................................................................................................ 4
Vision & Mission ........................................................................................................................................ 5
Expansion Plans......................................................................................................................................... 7
Chairman Message ................................................................................................................................... 9
Factory .................................................................................................................................................... 10
Production Process .................................................................................................................................. 11
People...................................................................................................................................................... 12
Domestic – Over the Counter .................................................................................................................. 13
Exports .................................................................................................................................................... 14
Readymade Garments(RMG) .................................................................................................................. 16
Associates................................................................................................................................................ 16
Media Watch........................................................................................................................................... 18
Industry Insight............................................................................................................................................ 19
Inside India .............................................................................................................................................. 20
Exports .................................................................................................................................................... 20
Other ....................................................................................................................................................... 20
Product Range ......................................................................................................................................... 21
Brands ..................................................................................................................................................... 22
Corporate Gifting .................................................................................................................................... 23
Objectives of the Project Work .................................................................................................................. 24
Scope of the study ...................................................................................................................................... 24
Limitations of the study .............................................................................................................................. 25
Literature Review ....................................................................................................................................... 26
Research Methodology ............................................................................................................................... 28
Research Objective:- ............................................................................................................................... 28
Sample Size:- ........................................................................................................................................... 28
Data Collection ........................................................................................................................................... 30
Primary Research: ................................................................................................................................... 30
Questionnaire Design ............................................................................................................................. 30
Secondary Research:- .............................................................................................................................. 30
Data Analysis .............................................................................................................................................. 31
Organization Chart of Accounts Department ........................................................................................... 39
Dashboard for MIS Reporting .................................................................................................................... 45
MIS for Statutory Compliances................................................................................................................... 46
Eg :- Secretarial Practice ......................................................................................................................... 48
MIS for GRN Based Reports........................................................................................................................ 49
Eg:- GRN Based Reports .......................................................................................................................... 53
Ratio Analysis .............................................................................................................................................. 54
Findings ....................................................................................................................................................... 62
Suggestions.................................................................................................................................................. 64
Conclusions .................................................................................................................................................. 65
References/Bibliography ............................................................................................................................. 66
Annexure 1.1 ................................................................................................................................................ 67
Questionnaire.......................................................................................................................................... 67
LIST OF FIGURES
Figure 1: Need for MIS ................................................................................................................................ 31
Figure 2: Standard MIS formats .................................................................................................................. 32
Figure 3: Type of MIS Report ...................................................................................................................... 33
Figure 4: Use of Accounts MIS .................................................................................................................... 34
Figure 5: Fixed & Standard formats ............................................................................................................ 35
Figure 6: Frequency of MIS Reporting ........................................................................................................ 36
Figure 7: Availability of Data ....................................................................................................................... 37
Figure 8: Purpose of MIS Reporting ............................................................................................................ 38
Figure 9 : Org Chart for Commercial Reports ............................................................................................. 40
Figure 10 : Org Chart for Accounts Report.................................................................................................. 41
Figure 11 : Org Chart for Import Export ...................................................................................................... 42
Figure 12 : Org Chart for Banking & Working Capital ................................................................................. 42
Figure 13 : Sales Accounting (Donear) ........................................................................................................ 43
Figure 14 : Sales Accounting (Other than Donear) ..................................................................................... 43
Figure 15 : Statutory Compliance................................................................................................................ 44
Figure 16 : D'cot .......................................................................................................................................... 44
Figure 17: Dash Board (MIS Accounting Reporting) ................................................................................... 45
Figure 18: Main Screen for Statutory Compliances Report ........................................................................ 46
Figure 19: Indexing Of Statutory Compliance Report ................................................................................. 47
Figure 20: ROC Filing Compliance ............................................................................................................... 48
Figure 21: Old Formats of GRN Based Report ............................................................................................. 49
Figure 22: Old formats for GRN Based Reports .......................................................................................... 50
Figure 23: New formats main screen for GRN Based Reports .................................................................... 51
Figure 24: New formats for Indexing of GRN Based Reports...................................................................... 52
Figure 25: Example for GRN Based Reports ................................................................................................ 53
Figure 26: DPS & EPS ................................................................................................................................... 54
Figure 27: Operating Profit Margin ............................................................................................................. 55
Figure 28: GPM & NPM ............................................................................................................................... 56
Figure 29: Debt Equity Ratio ....................................................................................................................... 57
Figure 30: Current & Quick Ratio ................................................................................................................ 58
Figure 31: Fixed & Total Asset Turnover Ratio ........................................................................................... 59
Figure 32: Inventory & Debtors Turnover Ratio ......................................................................................... 60
Figure 33: Return on Capital Employed ...................................................................................................... 61
Executive Summary
The project is basically divided into two parts:-

A) To create an MIS Reporting Framework for ensuring financial compliance for all the
accounting and commercial reports.

The project basically talks about the need faced by Donear Industries Ltd with respect to reporting to
Top Management.

To overcome this problem there was a need to setup an Accounting MIS Framework which in
turn will help them to ensure financial compliance for all the accounting and commercial
reports.
We first conducted a survey with the help of a questionnaire within the department to
understand the attitudes of people and their comfort level in reporting to top management for
ensuring financial compliance for all the accounting and commercial report management.
This compliance gave rise to creation of new reports and some modification in existing reports.
Now to setup a financial framework, a checklist was prepared which gives details about all the
accounting reports, their frequency, the date of submission etc.
A proper MIS was made for commercial reports and new reports were created as per demand.

B) To analyze the efficiency and profitability of the firm of last five years with the help of
Ratio analysis as my major tool.

To analyze the efficiency and profitability, different ratios were classified as:

 Profitability Ratios
 Liquidity & Solvency Ratios
 Management Efficiency Ratios
 Investment valuation Ratios

Donear Industries Ltd. Page 1


Corporate Overview
Insight
DONEAR with its three decades of expertise in the textile industry is a reputed and fastest
growing fashion fabric brand creating a wide variety of exoticSuiting’s, Trouser & Shirting
Fabrics.

One of the top three well-known brands in India in its product category... Donear primarily
caters to the middle and the premium segments with high quality apparel fabrics that are
woven with Natural Fibers, Synthetic Fibers and its Various Blends.

As a brand, Donear has succeeded by maintaining pace with the changing demands of the local
and global fashion trends, and primarily due to the company's innovative approach in
continuously developing newer products, using state-of-the-art-technology along with highly-
skilled workforce, strong logistics, by being perpetually quality conscious, and thereby creating
World-Class Fabrics.

These highly ingenious fabrics are available in a wide range of Colour, Texture and Comfort
along with Contemporary Designs. Donear fabrics are simply anaffordableluxury that suits every
desire!

Fabrics created by Donear have steadily captured the domestic textile markets as a result of its
well-planned and expanding sales network consisting of; 44 Agents, 290 Wholesalers and
12,000 Retailers, that are spread in all the 29 States&7 Union Territories of India. Similarly,
fabrics created by Donear have a wider reach in the overseas markets too, with exports to over
28 Countries across the globe.

Donear currently produces 11 million meters of fabric annually in its production unit located at
Silvasa - UT of Dadra & Nagar Haveli.

To augment the production capacity further, another plant with an investment of US $ 27


million is being set up at Surat - the textile hub of western India. This will lead to an increase in
the total production capacity up to 17.5 million meters of fabric per annum.

Donear Industries Ltd. Page 2


Company History
The textile scenario in India was poised to become more enterprising and proficient with a
global outlook in the seventies, when MR. VISHWANATH AGARWAL - a visionary with immense
entrepreneurial skills realized the importance of futuristic fashion and fabrics in India.

Woven intricately with Mr. Agarwal's vision, foresight and determination, the brand - DONEAR
was created in the significant year of 1977, and within a short span of time it became a
household name along with other Indian brands.

Known for its Pioneering Fabrics, Continuous Product Development and very Strong Marketing
Network, Donear persisted on building its reputation by catering to the ever growing needs of
the textile markets in India and abroad, and thus defined new standards in the field of fabric
manufacturing along with... excellent customer service.

Donear Industries Ltd. Page 3


Promoters & Board of Directors
A Public Listed Company on the Bombay Stock Exchange (BSE) in India as Donear Industries
Limited (DIL), the firm has grown into a vast textile conglomerate with its quality fabrics.

The Board of Directors includes:

Mr. VishwanathAgarwal

The Chief Promoter and Chairman of DIL started his career in textiles way back in 1959. He
has over four decades of experience and expertise in the textile industry.

Mr. RajendraAgarwal

The Promoter and Managing Director of DIL is a gold medalist in Textile Technology, and have
over two decades of techno-commercial experience in the textile industry.

Mr. Ajay Agarwal

The Promoter and Executive Director of DIL is a Commerce Graduate and is well experienced
in the textile industry since two decades. He has excellent marketing skills to his credit.

Apart from the above mentioned, Donear's success has a notable contribution from the
following eminent board of directors, namely;

Mr. SantkumarAgarwal
(Independent and Non-Executive Director)

Mr. Durga Prasad Agarwal


(Independent and Non-Executive Director)

Dr. Ramesh Tainwala


(Independent and Non-Executive Director)

Donear Industries Ltd. Page 4


Vision & Mission
"If you can dream it, you can do it."
True to the saying, what started as a dream earlier... Donear has now flourished into one of the
largest textile-business enterprise in India.

Determined to fulfill its vision, Donear is on a mission to establish itself as one of the
prominent fabric manufacturers and to be known as a;

  Reliable Producer of world-class quality Suiting’s, Trouser &Shirting’s Fabrics.

  Timely Supplier of pioneering fabrics with the most contemporary designs & trends.

  Understanding & Satisfying the need of the end-user with feedbacks and continuous
interaction.

  Catering to the reputed and well-known branded Readymade Garment


Manufacturers in India and oversees.

And in accordance with the above... Donear now advances towards its mission with an
upcoming expansion plan that will have a technologically advanced production unit located at
Surat. It will specifically create High Value Yarn Dyed Cotton Shirting’s& Bottom Wear Fabrics
catering to the garment fabric supply (RMG) segment along with additional production of
Suiting & Shirting Fabrics.

“Add Value To Your Lifestyle with... Donear's Real Life Fabrics!”

“Reliable Producer and Timely Supplier of world-class fabrics”

Work Environment
Donear strongly believes that the textile industry is full of opportunities; especially for those
candidates who are dexterous and competent with a constant will to learn. And considering the
need for the best business practices, Donear provides a very conducive and friendly
environment to work with.

Donear Industries Ltd. Page 5


The clarity and focus is reflected in Donear's dedication and unremitting attention to textiles. Its
policy of long-term association provides a solid platform to ensure the growth of the
individual, and the company as well.

By recruiting unsurpassed talent, Donear remunerates at par with the best in the industry
standards allowing a substantial career growth. The core values of the organization lies in its
honesty and integrity, and due to all these above factors... The turnout ratio of employees is
minimal!

Donear Industries Ltd. Page 6


Expansion Plans
With mounting demands for Donear's premier products and as a part of its future plan, DIL has
taken concrete steps to increase its production by investing US$ 27 million in a Greenfield
integrated textile-unit project at Surat - based on the western region of India in Gujarat, with
facilities for Yarn Dyeing, Weaving, Processing and garment manufacturing.

The upcoming production unit at Surat is spread over an area of 7.7 Hectares (19 Acres), and is
about 300 km from Mumbai City. The first phase has already been operational since December
2007.

With only a few hours of drive from Mumbai, the strategic location of the new unit is a great
advantage in terms of Strong Logistics, Better Connectivity and Quicker Accessibility via Rail
and Road links; ensuring on-time procurement of raw materials, and deliveries to Donear's
clients.

Another reason to increase production is, due to the rapid globalization; the spending power of
the growing middle-class segment in India has increased tremendously along with awareness in
fashion due to better exposure to the west.

Presently, Upper wear&Bottom wear fabrics account for 20% and 80% of the total production
created by Donear, and considering the expansion project, this would increase up to 45% and
55% respectively.

Nearly 10% of the total production is currently exported and this percentage will increase up to
25% with the underlying opportunities created by the post WTO scenario, and also due to the
expansion plans for creating 100% High Value Cotton Fabrics.

The Technology, Machinery, Know-How & Training at the upcoming Surat factory has been
conceived as one of the best in the global textile arena, specifically from Europe, considering
the future trends, fashion and committed service to all the customers.

The laboratory will be provided with state-of-the-art equipment to meet technical


requirements for; Research, Product Development & Quality Control of various incoming raw
materials and outgoing finished products. All these tests will be carried out in accordance with
relevant International & Industrial Standards.

Donear Industries Ltd. Page 7


Through this new set-up, Donear will be able to offer diverse custom designed fabrics for the
domestic and international textile markets from the middle to the upper-end segments.

The shirting collection will cover complete range of styles such as; Classic, Formal, Fashion &
Casual in plain, dobby and jacquard with each range having various categories like:

  Yarn Dyed
  Chambrays
  Seersucker
  Embossed
  Crushed
  Voiles, etc

With the above mentioned machinery and equipments, fabrics created by Donear will offer
various normal as well as Functional Finishes such as:

  Crispy Finish
  Anti-crease Finish
  Stain Repellent Finish
  Anti-bacterial Finish
  Soft & Smooth Finish
  Fire Retardant Finish
  Mosquito Repellent Finish
  Cool Touch Finish
  Perfume Release Finish
  Water Repellent Finish
  Easy Care Finish
  Enzyme Treatment Finish

Donear by entering into High Value Yarn Dyed Cotton Shirting & Bottom Wear Fabrics will be
manufacturing 6.5 million meters of fabric annually. This will increase the current production
capacity from 11 million meters, to a total of 17.5 million meters of fabric every year.

Donear Industries Ltd. Page 8


Chairman Message
"I always believe in giving full confidence and true value for money in every aspect to the
consumer, and have fair dealings with all our associates from the Supplier, to the Agent,
Wholesaler, Retailer, Investor, Share Holder, and above all the End-User."

"I shall never lose them!"

"The future is very bright for Donear! It intends to diversify and expand its activities in the
textile industry, and develop into one of the prominent fabric manufacturers in India and
abroad."

Donear Industries Ltd. Page 9


Factory
Donear's penchant for being techno savvy and quality conscious, culminated in a state-of-the-
art technologically advanced factory situated at Silvasa- a serene land comprising of 70 villages
sandwiched between the states of Gujarat and Maharashtra, is about 180 km from the
commercial capital of India, Mumbai.

The factory's strategic location derives


logistical advantage in terms of better
connectivity and quicker accessibility via rail
and road links. The roads are well developed
and aid in better commuting, including timely
delivery to Donear's patrons.

Spread over an expanse of 3.6 Hectares (9 Acres), the Silvasa plant has the most modern
machinery that produces 11 million meters of fabric annually.

Complying with stringent quality tests at all levels; be it testing of raw materials to the finished
products, is done cautiously at an in-house Quality Control Laboratory.

“With all the above incorporated... Fabrics created by Donear are of


world-class quality in its true sense!”

Donear Industries Ltd. Page 10


Production Process
One of the top three textile brands in its product category in India, Donear produces 11 million
meters of fabric annually to create a variety of;
 Suiting’s
 Trousers
 Shirting’s

The fabrics created by Donear consist of a range of Popular Blends like:

 Polyester/Viscose
 Polyester/Cotton
 Polyester/Wool

The Superior Compositions include:

 100% Wool
 100% Linen

Cotton/Linen

Donear follows the conventional procedure in producing all its world-class quality fabrics. Right
from procuring the raw material in the form of yarn to the finished fabric, it abides with
stringent quality tests at all levels to ensure that... The end-user of Donear fabrics gets value for
money!

Donear Industries Ltd. Page 11


People
Every person employed with Donear is affectionately known as a Donearite! This affection is
witnessed in all the end-products created by Donear, where each meter of fabric is created
with a professional & personal touch.

The management team headed with an able and dynamic leadership of Mr.
RajendraAgarwal(M.D), ensures the smooth functioning of the organization that has
professionals in all departments like; Finance, Administration, Production, Sales & Marketing
and Exports.

The Executive Director Mr. Ajay Agarwal by way of his exceptional skills in sales &marketing,
makes certain that the world-class fabrics created by Donear, reaches the destined customer
within the stipulated period. His expertise is also shared in product designing and development.

At DIL, Quality & Innovation along with industrious effort is a daily ritual. Creating Quality
Fabrics for the 1500 expert textile workers who are familiar and well-experienced in
technology-skills, is customary like the daily chores that are performed with conscientious,
precise and result-oriented attitude.

Determined to create new bench marks, Donear imparts regular training programmes to all
the Donearites in technology-advancement to ensure that... The desired knowledge is updated
constantly!

“Quality & Innovation along with industrious effort is a daily ritual for
all Donearites!”

Donear Industries Ltd. Page 12


Domestic – Over the Counter
The finished fabrics created by Donear are packaged and distributed Over The Counter (OTC)
of retail outlets in all the 29 States & 7 Union Territories of India, through its effective and
efficient network via...
44 Agents
290 Wholesalers
12,000 OTC Multi Brand Retail Outlets

...Reaching millions of customers keen to patronizeDonear’s; Suiting’s, Trousers and Shirting


Fabrics.

An impact of Donear'sregular interaction with the retailers, along with routine market surveys
in terms of; Designs, Colours, Textures etc., guarantees a quicker and a firsthand feedback,
which results in… providing fabrics to customers as per the trend!

“Fabrics created by Donear are packaged & distributed in all the 29


States & 7 U T's of India”

Donear Industries Ltd. Page 13


Exports
Donear by catering to the textile markets all over India…simultaneously caters to the needs of
the global markets too. As a result of this, Donear currently exports 10% of its fabrics created
annually from its current production of 11 million meters.

The Suiting, Trouser and Shirting Fabrics produced by Donear are provided to prestigious
Garment Makers and Wholesalers to over 28 Countries that are located in regions like;

The fabrics that are exported by Donear have Several End Uses like;

 Suits
 Trousers
 Shirts
 Jacketing
 Skirts
 Work wear
 Corporate Wear
 Uniforms
 Ladies Tops

Donear Industries Ltd. Page 14


The Various Blends of fabrics which are exported abroad comprise of;

 100% Wool
 Polyester/Viscose
 Polyester/Wool
 Polyester/Cotton (CVC)
 Polyester / Viscose /Cotton
 Polyester / Viscose /Lycra
 Polyester /Wool/Lycra
 100% Cotton
 Linen Cotton
 100% Linen
 Cotton Modal

Donear's exports include to a diverse nature of customers like;

 Wholesalers
 Distributors
 Garment Manufacturers
 Known/Large Retailers
 Buying Houses
 Departmental Stores

Donear is in a position to export these varieties of fabrics either with its brand – DONEAR, or
can also supply with the desired specifications provided by the customer, in terms of packaging,
selvedge etc.

To keep itself updated, Donearregularly attends various Trade Shows that are held world-wide.
It also regularly participates in the 'TEXWORLD TRADE FAIR' that is held twice in a year in
Paris,France.

Considering the ever growing demands for Donear's fabrics abroad, the exports percentage is
slated to increase by up to 25%, due to its expansion plans, taking the total production from
the present 11 million to 17.5 million meters of fabric every year. And with an increase in the
production of cotton fabrics, Donear will be able to expand its activities and clientele in the US
& Europe.

Donear Industries Ltd. Page 15


Readymade Garments (RMG)
The RMG segment has a very high demand in 100% Cotton, and specifically for the
Upperwear Fabrics. In this segment Donear caters to several wholesalers, garment
manufacturers including top brands, large retail chains, buying houses and departmental stores.

Donear has developed an in-house Design Studio for bringing out new designs. An 'R & D' on a
regular basis is done to enable Donear to present its range of collections. Apart from this, the
fabrics are also made according to the specifications provided by the buyers.

Donear has an efficient team of Sales Professionals to meet out timely delivery. With a branch
office in place at Bangalore, it intends to open similar branch offices in different garment
manufacturing cities of India, where the staff will work closely with Donear's customers to give
them…The best services at all times!

“Donear also caters to several Domestic Brands, Converters,


Specialized Wholesalers, and Departmental Stores”

Associates
Donear Industries Ltd. Page 16
In the words of the Chairman Mr. VishwanathAgarwal - "I would never lose them"... This is
truly practiced by Donear Industries Limited with all its associates namely:

 Suppliers
From yarn, spare parts, packaging materials, to office automation products, etc,
ensure timely delivery of Good Quality Raw Materials and Products required for
Donear's unhindered functioning. Besides making on-time payments to all the
suppliers, Donear also provides them with feedback about the possible trends, and
suggestions for new developments, which enable them to develop their products
accordingly.

 Agents
Spread all over India, these 44 Agents are the first ones to know and understand the
fabrics created by Donear. The efforts of all our agents ensure the product reaches on
time to all the wholesalers.

 Wholesalers
Donear's 290 Wholesalers are the ones who not only stock the various fabrics but also
guarantee prompt supply to all the retailers located in their respective regions.

 Retailers
A direct link between Donear and the end-user are the 12,000 retailers spread
through the length and the breadth of India. Their untiring efforts make sure that
every inch of fabric created by Donear is truly valued by the customer!

With such a close-knit bond between Donear and all its associates, regular
conferences are organized at well-known places in India like; Goa, Mount Abu,
Mussorie, Manali, Agra, Jaipur and so forth. Also, similar conferences are organized at
international destinations like Malaysia, Kathmandu & Dubai.

 Investors
Are the financial backbone of Donear – who ensure Fair return to all the shareholders,
where Dividends are distributed regularly and bonus issues are made. Donear
expresses its thanks for your firm belief by way of investing in our company regularly
to help it grow and prosper.

 End-Users
There is a special bond between the end-users and Donear! It voices its heart-felt
gratitude to all its consumers for patronizingDonear'sSuiting’s, Trousers & Shirting
Fabrics.

Donear owes its success to all their associates who have played a significant role in the

Donear Industries Ltd. Page 17


company's growth and success, and similarly looks forward... To have more such associates in
India and the world-over!

Media Watch
Donear Industries Ltd. Page 18
Events
Donearhasorganized the following important entertainment events like:

 Shah Rukh / Juhi Night - Bangalore


 Salman / Karishma / Raveena - Indore
 Tour Daler DA (14 Cities) - Delhi, Jalandhar, Chandigarh, etc
 Miss Karnataka - Bangalore
 NIFT Annual Fashion Collection - Mumbai
 Salman / KarishmaMasti Live - Bangalore
 Salman / Raveena Show - Hyderabad
 Salman / Karishma Show - Ahmedabad
 KhulJaSimSim (AmanVerma) - Kanpur, Kolkata
 SunidhiChauhanGujrat Concert - Surat, Ahmedabad, Baroda

Tradeshows
Donear regularly takes part in TEXWORLD TRADE FAIR, which is held Paris, twice every year.
Apart from this, Donear have also participated in following exhibitions organized by the export
promotion council in following countries, namely:

 Bangladesh
 Colombia
 Brazil
 Sri Lanka
 Tunisia
 Morocco
 USA

Ads & Commercial


DONEAR regularly conducts Sales Promotion and Product Launch campaigns on the Prime
Television Channels like Star Plus, Zee TV, AajTak etc.

Industry Insight
Donear Industries Ltd. Page 19
Inside India
India has a very rich history in textiles. By the first century AD, India was already producing
woven cottons of noteworthy quality. Besides natural fibers such as Cotton, Jute and Silk,
Synthetic Raw Material products such as Polyester Staple Fiber, Polyester Filament Yarn,
and AcrylicFiber& Viscose Fiber are produced in India.

India's cotton textile industry has a high export potential as cost competitiveness is driving
the penetration of Indian yarns and fabrics in international commodity markets. This will
provide an expanded opportunity alongside enhanced competition for the Indian textile
units, as more markets would be open for access.

Presently, textiles account for 14% India's industrial production and around 27% of its export
earnings. India is the second largest employer in the textile sector in both rural and urban
areas as well, contributing to nearly 30% of the total exports, and employing 35 million
people approximately.

India is also in a position to provide a larger variety of casual wear and leisure garments at
significantly lower costs due to the availability of a large pool of experienced and low-cost
skilled textile workers.

Exports
The textile policy of 2000, in India, aims at achieving the target of textile and apparel exports
of US $ 50 billion by 2010 of which the share of garments will be US $ 25 billion. The main
markets for Indian textiles and apparels are USA, UAE, UK, Germany, France, Italy, Russia,
Canada, Bangladesh and Japan.

Other

Donear Industries Ltd. Page 20


On the 26th of January, 2006 - On the eve of Republic Day of India. The President Dr. Abdul
Kalam said, "India is presently exporting US $ 6 billion worth of garments, whereas with the
WTO regime in place, we can increase the production and export of garments to US $ 18 to
20 billion within the next five years. This will enable generation of employment in general,
and in rural areas in particular. By tripling the export of apparels, we can add more than 5
million direct jobs and 7 million indirect jobs in the allied sector, primarily in the cultivation
of cotton. Concerted efforts are needed in cotton research, technology generation, transfer
of technology, modernization and upgrading of ginning and pressing factories and an
aggressive marketing strategy."

Manmade fibers account for around 40% share in a cotton-dominated Indian textile industry.
India accounts for 15% of world's total cotton crop production and records as a largest
producer of silk.

The entire current output of the Indian textile industry (for domestic and export
consumption) is about US $ 35 billion.

“India has a very rich history in textiles...Presently accounting a 14%


industrial production”

Product Range
Fabrics like Suiting, Trouser &Shirting’s created by Donear come in a wide variety and range
Donear Industries Ltd. Page 21
meant for Menswear &Women’swear, such as:

  Polyester Viscose Blended Fabrics


  Polyester Cotton Blended Fabrics
  100% Polyester Fabrics
  100% Cotton High Value Plain and Yarn Dyed Shirting Fabrics
  100% Cotton Plain and Yarn Dyed Bottomwear
  Polyester Wool, Wool Rich & All Wool Fabrics

These above mentioned blends of fabrics can be also made available With & Without Stretch
properties as per end use. These products can as well be made available with the desired
Patterns, Colours and Designs.

Brands
DONEAR is one of the most prestigious textile houses in India,
Our Retail EBOs:
DONEAR NXG

D'CotQualitywear

Our Garment Brands:

DONEAR SUITING’S&SHIRTING’S

DONEAR ROYAL CLASSICO

DONEAR QSF

Donear Industries Ltd. Page 22


DONEAR GIFTS 4 U

DONEAR SOFT & SMOOTH

DONEAR INTERNATIONAL

DONEAR INTERNATIONAL WITH FIT

Corporate Gifting
A gift is an excellent way to show how much you value a relationship! It's an unspoken
acknowledgement of Shared Bonds, Warmth and Life's Experiences, which at times words
cannot express... Just say it with a gift!

Donear Industries Limited has pioneered Corporate Gifting with its unique and very popular...
'Gifts 4 U' – The Perfect Gifts for All Occasions.

Gifts 4 U is a unique collection of finest quality Suiting’s, Trousers & Shirting Fabrics in Elegant
Gift Packs with packaging material in PP, PVC, Leatherette Pouches, Travel Bags, Briefcases,
Laptop Bags, Trolleys, Thermo ware, etc.

Gifts 4 U includes a Classic collection of Gifts & Promotional items that are Innovative, Useful,
and in keeping with the Current Trends. These are designed and packaged exclusively with an
aim to strengthen business relations, especially in the Corporate World.

Donear Industries Ltd. Page 23


Objectives of the Project Work
 To understand the attitudes of people towards Accounts MIS Reporting.

 To create an MIS Reporting Framework for ensuring financial compliance for all the
accounting and commercial reports.

 To analyze the efficiency and profitability of the firm of last five years with the help of
Ratio analysis as my major tool.

Scope of the study


 The scope of the study was limited to the Accounts & Finance department at Donear
Industries Ltd.

 This department was selected for the purpose of the survey.

 The project is defined only to the extent of information made available by the
organization.

Donear Industries Ltd. Page 24


Limitations of the study
 Time for study is limited to 2 months only.

 The sample was confined to 20 respondents. So this study cannot be regarded as an


exhaustive one.

 The findings and conclusions are based on the knowledge and experience of the
respondents which may be subject to bias.

 Respondents did not have earlier experience of answering questionnaires.

 Lack of experience as a Researcher.

Donear Industries Ltd. Page 25


Literature Review
The article is of IMF (International Monetary Fund) Working Paper on “Introducing Financial
Management Information systems in Developing Countries” written by “Jack Diamond and
PokarKhemani” in the year October 2005.

In the past decade, developing countries (DCs)have been encouraged to reformtheir public
expenditure managementsystems and have increasingly embarked on major projects to
computerize their government operations. Most popular among these have been projects to
computerize government accounting and payment operations,by introducing government
financial management information systems (FMISs).

In most developing countries (DCs), budget execution and accounting processes were/are either
manual or supported by very old and inadequately maintained software applications. The
consequentlack of reliable and timely revenue and expenditure data for budget planning,
monitoring, expenditure control,andreporting has negatively impacted budget management of
many companies. Further, it was found to be difficult to provide an accurate, complete, and
transparent account of their financial position to other interested parties, including donors and the
general public. This lack of information has hindered transparency and the enforcement
ofaccountability in developing countries.

The establishment of an FMIS has consequently become an important benchmark for the
country, often regarded as a precondition for achieving effective managementof the budgetary
resources. Although it is not a panacea, the benefits of anFMIS could be argued to be profound.

First, the improved recording and processing of financial transactions also allows prompt and
efficient access to reliable financial data. This supports enhanced transparency and accountability
of the companies to the general public, and other external agencies.

Second, an FMIS strengthens financial controls, facilitating a full and updated picture of
commitments and expenditure on a continuous basis. Once a commitment is made, the
systemshould be able to trace all the stages ofthe transaction processing frombudget releases,
commitment, purchase, payment request, reconciliation of bank statements, and accounting of
expenditure. Thisallows a comprehensive picture of budget execution.

Third,it provides the information to ensure improved efficiency and effectiveness of


companies’financialmanagement.

FMIS (Financial Management Information System) is usually a computerized Management


process for budgetary control and is fully integrated financial system for line managers in the
organization.

Donear Industries Ltd. Page 26


Main Features of FMIS is

 It is a Management Tool
 It should provide a wide range of non-financial and financial information.
 It is a system

FMIS should include following attributes

 Be modular and capable for progressive upgrading


 Common platform for all the users
 Should handle monthly rolling short term and longer term forward estimates of revenues
and expenditure
 Be flexible enough to provide user-defined management information, aggregated at the
desired level of detail.

Donear Industries Ltd. Page 27


Research Methodology
The research conducted was organized and systematic which helpedto find answer to
questions. Both methods were used primary and secondary.

Research Objective:-
To understand attitudes of people in accounts department with respect to MIS Reporting.

Research Plan:-
 It was decided to conduct a survey within the organization and precisely in Accounts
Department as we are planning to make MIS Reporting Setup for only accounting and
commercial reports.
 The main objective of this survey was to find out the attitudes of people towards
reporting system and comfort level in reporting to top management.
 The survey was restricted only to employees working in accounts, stores and
commercial departments.
 The survey was analyzed and feedback was sent to management.

Sample Size:-
 20 Respondents (out of 35 employees working in the accounts department i.e almost
60%) were selectively chosen for the survey.
 The criteria for these respondents were,
o People who maintained a team (8 people)
o Senior employees having more than 10 years experience in the accounts
department (4 people)
o People who provide reports to the Finance Vice President (8 people)

Parameters of Interest:-
 It will help to know the interest level of the people with MIS
 Helps to control their activities
 Provide proper organized MIS Framework as per their requirement

Budgeting Constraint:-
 Cost consideration from a practical point of view has a major impact upon decisions
relating to not only the size of sample but also the type of sample.

Donear Industries Ltd. Page 28


Sampling Technique:-
 The sampling technique used for the survey is Simple random Sampling which is a basic
type of sampling, since it can be a component of other more complex sampling
methods. The principle of simple random sampling is that every object has the same
probability of being chosen.
 Conceptually, simple random sampling is the simplest of the probability sampling
techniques. It requires a complete sampling frame, which may not be available or
feasible to construct for large populations. Even if a complete frame is available, more
efficient approaches may be possible if other useful information is available about the
units in the population.
 Advantages are that it is free of classification error, and it requires minimum advance
knowledge of the population other than the frame. Its simplicity also makes it relatively
easy to interpret data collected in this manner. For these reasons, simple random
sampling best suits situations where not much information is available about the
population and data collection can be efficiently conducted on randomly distributed
items, or where the cost of sampling is small enough to make efficiency less important
than simplicity.

Statistical Technique:-

Statistics is the study of the collection, organization, analysis, interpretation and presentation of
data. It deals with all aspects of data, including the planning of data collection in terms of the
design of surveys and experiments.

The methods used in our research are


1. Graphical Method: - There are number of graphical methods available for describing
data. Majorly we made use of pie charts and bar charts
 A bar graph is a graphical device for depicting qualitative data that have been
summarized in a frequency distribution. Labels for the categories of the qualitative
variable are shown on the horizontal axis of the graph.
 in the corresponding class
A pie chart is another graphical device for summarizing qualitative data. The size of each
slice of the pie is proportional to the number of data values.

Donear Industries Ltd. Page 29


Data Collection
Data was collected through both primary as well as secondary research.

Primary Research: -
 A designed questionnaire for my primary research allowed us to find out information
such as facts, attitudes and opinions about the people.
 With the help of questionnaire it became easier to know about the attitudes of the
people in Donear industries Ltd and understand whether there is a need for MIS
reporting and what is their comfort level in reporting to Top Management.

Questionnaire Design
 The questionnaire used was a printed, well-structured formalized schedule to obtain
and record specified and relevant information with fair accuracy and completeness.
 The questioning process was face-to-face interviews and the questionnaire was
designed in such a way that it could be understood and answered easily by the
respondents
 My questionnaire includes more of closed ended questions such as
o Yes/No Questions (Dichotomous)
o Multiple Choice Questions
o Ranking Questions
 It also include 1 open ended question for their suggestions and opinions, if any.

Secondary Research:-
 Published data was used from
 Annual reports
 Standard Operating Procedures of Accounts Department
 Tally
 Existing MIS reports

Donear Industries Ltd. Page 30


Data Analysis

Do you think there is a need for


accounting MIS reporting in the
organization?

Yes

100%

Figure 1: Need for MIS

Interpretation:-

 As per the survey conducted 100% of the people agreed that there is a need for MIS
Reporting.
 With this we can say people there understand that proper MIS reporting will optimize
their work and this will benefit the company in long run.

Donear Industries Ltd. Page 31


What will be your comfort level in
reporting to top management with the
help of standard MIS format?

15%

50%
Comfortable

35% Neutral
Very Comfortable

Figure 2: Standard MIS formats

Interpretation:-

 Nobody marked “Very Uncomfortable” or “Uncomfortable” in their feedback which was


a very good sign.
 More than half the organization is comfortable reporting to top management.
 Efforts will be required from the senior management to convert the Neutral employees
into accepting a new reporting framework that includes reporting to senior
management. This is very important and necessary because if it is not done, then
discontent can spread and endanger the reporting framework.

Donear Industries Ltd. Page 32


Figure 3: Type of MIS Report

Interpretation:-

 The majority of the population preferred scheduled reporting.


 Scheduled reporting will serve the objective to control the activities in the department
because at present there are no scheduled reports.
 In addition to the above reports, a dashboard can also be provided to track the status of
every report to ensure timely report creation.
 No one displayed any preference for key indicator reports. This could be because of a
total lack of awareness of the importance of this type of report. Hence proper
awareness is necessary.

Donear Industries Ltd. Page 33


Figure 4: Use of Accounts MIS

Interpretation:-

 Majority of the people agreed that that the main benefit of the MIS framework will be
Timeliness since timely reports do not exist currently and most of the times this leads to
delayed status updates.
 If the reports are maintained in a timely manner then there will be proper control over
the reports and discrepancies(if any) can be rectified immediately.
 This will further result in completeness and greater accuracy of the reports leading to
improved efficiency and increased productivity in the organization.
 It is disturbing to note that no one mentioned relevance as a benefit. Again this could be
because of lack of understanding of this term. However the entire list of reports must be
frequently (quarterly) checked for their relevance to ensure the time is not wasted on
preparing useless reports.

Donear Industries Ltd. Page 34


Do you think fixed and standard formats
of accounting reports will improve the
productivity of the people and help to
keep data in organized manner?

10%

No
Yes
90%

Figure 5: Fixed & Standard formats

Interpretation:-

 90% of the people agreed standard formats will be improving the productivity and keep
data in organized manner.
 Standard formats ensure consistency in reporting formats. Suppose any employee
leaves the organization and a new employee joins in his/her place it will be easier for
him/her to report in the standard format.
 10% of the people who disagreed need to be made aware of why such a framework is
important and how they could benefit from it. Ideally there should be 0% in this
category because every employee must believe in the work they do.

Donear Industries Ltd. Page 35


Figure 6: Frequency of MIS Reporting

Interpretation:-

 It will be very difficult to maintain reports on a daily basis as their daily routine work will
be affected. Also there is currently no need for many daily reports.
 Most of the reports required by the organization are either weekly or monthly. However
proper follow up is required to ensure timely execution of the reports.
 Very few reports are quarterly in nature. But more reports can be added of the key
indicator report type once the key employees understand its importance and identified
the area where it is needed.

Donear Industries Ltd. Page 36


How will you rate for availability of
data in making the report?

40%
50%
Average
Excellent
Good
10%

Figure 7: Availability of Data

Interpretation:-

 Nobody marked “Worst” or “Bad” in their feedback which was a very good sign.
 However better control of the data sharing process is necessary to target a “Good” or an
“Excellent”.
 The MIS framework ensures that people share their data on time and this will take care
of this problem once it is implemented properly.

Donear Industries Ltd. Page 37


Will the following purpose be fulfilled with the help of MIS reporting?

Figure 8: Purpose of MIS Reporting

Interpretation:-

 As major portion of the population has agreed that implementation of MIS reporting will
benefit the organization and at the same time will make the work computerized which
in turn will reduce paperwork.
 For those that disagree, once the benefits of the MIS reports are seen the employees
will realize its importance.
 Frequent MIS awareness must be carried out to stress the need of these reports and the
benefits to the organization and the employees.

Donear Industries Ltd. Page 38


Organization Chart of Accounts
Department

Donear Industries Ltd. Page 39


Figure 9 : Org Chart for Commercial Reports

Donear Industries Ltd. Page 40


Figure 10 : Org Chart for Accounts Report

Donear Industries Ltd. Page 41


Figure 11 : Org Chart for Import Export

Figure 12 : Org Chart for Banking & Working Capital

Donear Industries Ltd. Page 42


Figure 13 : Sales Accounting (Donear)

Figure 14 : Sales Accounting (Other than Donear)

Donear Industries Ltd. Page 43


Figure 15 : Statutory Compliance

Figure 16 : D'cot

Donear Industries Ltd. Page 44


Dashboard for MIS Reporting
After making the flowcharts for the entire sub- department in accounts, we finalized the frequency for
all the reports and made a checklist which gives details about

 Who will update?


 What is the frequency?
 When it should be updated?
 What time and when it should be submitted?

This checklist acts as a DASHBOARD which tells you whether the file is updated on time or not and also
provides escalation time and status to track record and take immediate actions.

Dashboard includes detail columns such as

 Escalation Time
 Escalation Status
 Escalation Closure Time
 Escalation Closure Comments

Figure 17:Dash Board (MIS Accounting Reporting)

Donear Industries Ltd. Page 45


MIS for Statutory Compliances

Figure 18:Main Screen for Statutory Compliances Report

This is the main screen for the MIS which gives details such as

 Name of the Report


 Who is the Owner
 Who is the Co-coordinator
 What is the Frequency
 When it should be updated
 Who are the reports Input
 What is the Objective

Donear Industries Ltd. Page 46


Figure 19:Indexing Of Statutory Compliance Report

This sheet includes details index about the MIS with the name of the report and its scheduled
frequency.

Donear Industries Ltd. Page 47


Eg :- Secretarial Practice
ROC Filing & BSE/NSE Compliance Status Report - Weekly (Frequency)

Figure 20:ROC Filing Compliance

Formula:-

 Column H=IF(F5="","",IF(G5="SENT"," ",IF($F$2=F5,"TODAY IS LAST DAY",F5-$F$2)))


 If due date is equal to nil, then display nil and if status is sent then display nil and if
status is blank than check whether due date is equal to today’s date (Cell F2=TODAY())
o If it equal display “TODAY IS LAST DAY” otherwise give the difference between
the two dates.
o If the date is positive that means so many (159) days in hands
o If the date is negative that means we are delayed by so many days (-15)
Donear Industries Ltd. Page 48
MIS for GRN Based Reports
GRN – Goods Receipt Note

Objective of the Report: -The main objective of the report is to track pendency from the GRN
series in different units and reduced delays’.

Old Formats:-

Figure 21:Old Formats of GRN Based Report

Donear Industries Ltd. Page 49


Figure 22:Old formats for GRN Based Reports

 These are old formats of reports which are too lengthy and difficult to maintain.
 So to lower down their difficulty level and to systematically maintain these reports, we
have modified these reports by deleting and adding some columns which will give the
complete picture and control the delays and track pendency.

Donear Industries Ltd. Page 50


New Formats

Figure 23:New formats main screen for GRN Based Reports

This is the main screen for the MIS for GRN based reports which gives details such as

 Name of the Report


 Who is the Owner
 Who is the Co-coordinator
 What is the Frequency
 When it should be updated
 Who are the reports Input
 What is the Objective

Donear Industries Ltd. Page 51


Figure 24:New formats for Indexing of GRN Based Reports

This sheet includes details index about the MIS with the name of the report and its scheduled
frequency.

The GRN based reports includes

 Yarn Purchase Bill Passing


 Grey Bill Passing
 Process Bill Passing
 Finish Bill Passing
 Packaging Bill Passing
 Administration Bills

Donear Industries Ltd. Page 52


Eg:- GRN Based Reports
Yarn Bill Passing

Figure 25:Example for GRN Based Reports

Formula:-

IF(F6="","",IF(L6="",IF($K$3=J6,"PAYMENT DUE TODAY",J6-$K$3),""))

 If bill date is nil, displayed nil and if cheque prepared date is nil, then check whether due
date is equal to today’s date,
o If it is equal display “PAYMENT DUE TODAY” and if it is not equal display the
difference
o If the difference is positive (i.e. 30 days) that means 30 days in hand to make the
payment
o If the difference is negative (i.e. -38 days) then that means you are delayed by
these many days.

Donear Industries Ltd. Page 53


Ratio Analysis
5 25.00
4 20.00
2.96 17.07
3 15.00

Dividend Payout Ratio (%)


13.82
Amount Per Share (Rs)

2 10.00
8.69
1 0.5 0.5 0.5 0.5 0.68 4.8 5.00
0.2 0.01
0 0 0.00
-1 2008 2009 2010 2011 2012 -5.00
-2 -10.00
-3 -15.00
-4 -3.5 -20.00
-5 -4.33 -25.00
Year

Dividend Per Share Earnings Per Share Dividend Payout Ratio Cash Profit

Figure 26:DPS & EPS

Interpretation:-

 As from the above chart you can see that the dividend per share is decreased in the year
2012 to 0.20 from 0.50 in all the year, from investor’s point of view it depicts that the
company is not doing well financially.
 This will reflect a drop in market value of firm and investor may sell off share due to
fear.
 Earnings per share is showing a decreasing trend
 In the year 2009 & 2010 it displayed negative EPS which show this year proved to be a
bad year and in this year the company made huge losses which affected the earnings on
share drastically.

Donear Industries Ltd. Page 54


16 16
Operating Profit Per Share (Rs)
14 14.22 14

Operating Profit Margin (%)


13.68
12 12
10 10.59 10
9.23 8.51
7.68
8 8
6 4.61 6
4.33
4 4.21 4
1.51
2 2
0 0
2008 2009 2010 2011 2012
Year

Operating Profit Per Share (Rs) Operating Profit Margin(%)

Figure 27: Operating Profit Margin

Interpretation:-

 Operating Profit margin is showing a fluctuating trend as its shows the proportion of
revenue after paying for all the variable cost such as raw material, wages etc.
 In the year 2009 the operating margin is the least as in that year the company made
huge losses and 2011 is highest that is 14.22 % which shows its earnings per rupee.
 It is always favorable to have a higher operating margin as it helps us to now the firm
capacity to fulfill the fixed expenses such as interest on debt and taxes. Thus the
company has a favorable operating margin.
 As you can see it is downwards dip may affect the company in future to pay its fixed
expenses. Therefore it is necessary to maintain a considerable amount of operating
margin to maintain its business.

Donear Industries Ltd. Page 55


15
9.91
8.65
Gross Profit & Net Profit (%)

10
4.2 3.94
5
1.12
0.01
0
2008 2009 2010 2011 2012
-5
-5.52
-6.54 -7.39
-10

-15 -11.92
Year

Gross Profit Margin(%) Net Profit Margin(%)

Figure 28: GPM & NPM

Interpretation:-

 From this graph we can see that year 2009 and 2010 proved to be a very crucial year for
Donear Industries as the company had made Gross Loss and Net loss.
 The reason behind this loss was high capital investment as the company started a new
manufacturing unit in Surat
 As the capital investment in the initial year was too high, losses also increased which
affected the Gross and Net Profit of the company in the next subsequent years.

Donear Industries Ltd. Page 56


Debt Equity Ratio
5 4.01
3.74
Debt Equity Ratio
4 3.42

3 2.23
1.55
2
1
0
2008 2009 2010 2011 2012
Year

Debt Equity Ratio

Figure 29: Debt Equity Ratio

Interpretation:-

 Debt Equity Ratio is showing an increasing trend and in the year 2012 the debt equity
ratio was the highest i.e 4:1 which is not favorable because it means that the company
relies more on external lenders thus resulting in higher risk especially at higher interest
rates.
 Thus we can say the liability of the company is increasing which will affect the working
capital.
 An increasing trend of debt-to-equity ratio is also alarming because it means that the
percentage of assets of a business which are financed by the debts is increasing.

Donear Industries Ltd. Page 57


4 3.73
3.5

Current & Quick Ratio


3 2.81

2.5
2 1.64 1.73
1.55 1.55
1.5 1.06
1 0.77 0.79 0.78
0.5
0
2008 2009 2010 2011 2012
Year

Current Ratio Quick Ratio

Figure 30: Current & Quick Ratio

Interpretation:-

 Current ratio is showing a decreasing trend till 2011 which means the company is unable
to pay off their obligation which shows the company is not in good financial health.
 One of the major reasons for this decline is new capital venture which started in the
year 2009 which affected the net profit as well.
 But in 2012 the current asset ratio is 3.73 which is higher which means the financial
health of the company is becoming better and it is capable of paying its short term
obligation
 Quick Ratio is showing a decreasing trend which means the company’s financial health is
not good as the company's ability to meet its short-term obligations with its most liquid
assets is low.
 (that means the company debtors turnover ratio is declining which impacted on its
quick ratio)

Donear Industries Ltd. Page 58


3

Total & Fixed Asset Turnover Ratio


1.46
2.5
1.75 1.29
2 1.05
1.5 0.92
1.18
1 1.04
0.88
0.63 0.69
0.5

0
2008 2009 2010 2011 2012
Year

Total Assets Turnover Ratio Fixed Assets Turnover Ratio

Figure 31: Fixed & Total Asset Turnover Ratio

Interpretation:-

 Fixed Asset turnover ratio is low in the year 2009 as the company made huge capital
investment in fixed assets due it expansion plans in Surat, which increased the fixed
asset and was not able to generate more net sales from that year as it was not fully
operational.
 To achieve optimal utilization for optimal production targets, the plant would require
more time as such development is gradual in nature which is reflected in subsequent
years. This would in turn result in higher sales and hopefully be factor in decreasing a
debt equity ratio.
 Total Asset turnover is showing an upward trend which implies the firm’s efficiency in
generating sales or revenue with that of its fixed assets.

Donear Industries Ltd. Page 59


9
3.29 4.73

Inventory & Debtors Turnover Ratio


3.68 4.07 4.43
8
7
6
5 4.32
3.53 3.37
4 3.04 2.89
3
2
1
0
2008 2009 2010 2011 2012
Year

Inventory Turnover Ratio Debtors Turnover Ratio

Figure 32: Inventory & Debtors Turnover Ratio

Interpretation:-

 Inventory Turnover Ratiois showing a downward trend which means the rate of sales is
lesser than rate of production. Therefore the company must target new customers as it
cannot rely solely on its existing customers as demand is very low.
 Debtors Turnover Ratio is showing anincreasingtrendwhich implies that its extension of
credit and collection of accounts receivable is efficient.

Donear Industries Ltd. Page 60


Return On Capital Employed(%)
8
6
4
2
0
2008 2009 2010 2011 2012
-2
-4
-6

Return On Capital Employed(%)

Figure 33: Return on Capital Employed

Interpretation:-

 Return on capital employed in the year 2009 and 2010 is negative as company set up a
new manufacturing plant in Surat which increased the borrowings and reduce
shareholders earning.
 As the production started in the subsequent years in the new plant the ROCE started
improving.

Donear Industries Ltd. Page 61


Findings
A) For creationof an MIS Reporting Framework to ensure financial
compliance for all the accounting and commercial reports.
 It was found that people of Donear Industries Ltd understand the need for MIS reporting
and feel that implementation of such MIS framework will be beneficial for the
organization for long run.
 There are some people noticed not so much comfortable in reporting to top
management. Efforts will be required from the senior management to convert the
Neutral employees into accepting a new reporting framework that includes reporting to
senior management. This is very important and necessary because if it is not done, then
discontent can spread and endanger the reporting framework.
 There is need for a dashboard to track the status of every report to ensure timely report
creation.
 It is disturbing to note that no one mentioned relevance as a benefit. Again this could be
because of lack of understanding of this term. However the entire list of reports must be
frequently (quarterly) checked for their relevance to ensure the time is not wasted on
preparing useless reports.
 Standards and set formats will be helpful for future references and the people who
disagreed need to be made aware of why such a framework is important and how they
could benefit from it.

Donear Industries Ltd. Page 62


B) For analyzing the efficiency and profitability of the firm for the last five
years with the help of Ratio analysis.
 Decrease in DPS depicts that the firm is not doing financially well and will reflect drop in
market value of firm and investors may sell off their shares.
 In year 2009 operating profit margin was too low because of upcoming plant in Surat as
the fixed expenses increased.
 Debt equity ratio is showing and increasing trend which is not favorable because it
shows the company relies more on external lenders thus resulting higher risk.
 One of the major reasons is why Quick ratio is showing a decreasing trend because
inventory is excluded because company have difficulty in converting its inventory into
cash
 Fixed Asset turnover ratio is low in the year 2009 as the company made huge capital
investment in fixed assets due it expansion plans in Surat, which increased the fixed
asset and was not able to generate more net sales from that year as it was not fully
operational.
 To achieve optimal utilization for optimal production targets, the plant would require
more time as such development is gradual in nature which is reflected in subsequent
years. This would in turn result in higher sales and hopefully be factor in decreasing a
debt equity ratio.
 Inventory Turnover Ratio is showing a downward trend which means the rate of sales is
lesser than rate of production. Therefore the company must target new customers as it
cannot rely solely on its existing customers as demand is very low.

Donear Industries Ltd. Page 63


Suggestions
A) For creationof an MIS Reporting Framework to ensure financial
compliance for all the accounting and commercial reports.

 IT department of the company should now work towards integrating the system on a
higher level and making the company Paper-Less Office. This should be done
by integrating the system in a way that the manual intervention is minimized
in the day-to-day process.
 A strong follow-up is necessary so as to continue with the process of reporting as per
weekly and monthly frequencies.
 Any changes in the set formats should only be done only with the permission of
concerned persons and if any changes are required in the process a set procedure
should be followed.
 Immediate action should be taken on those who are not following the process of
reporting as per schedule and proper dashboard should be maintained on weekly basis
to send to the top management which should give details about whether the reports are
updated or not.

B) For analyzing the efficiency and profitability of the firm for the last five
years with the help of Ratio analysis.

 The company should maintain its Debt – Equity Ratio. As of now it is quite high which may
affect the company’s efforts to attract additional capital in future.
 From the investor’s point of view the company should give a considerable DPS to its
shareholders to improve the market value of the firm.
 As the company is expanding, the company should also start targeting new prospects to
increase its sales and improve its profitability.

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Conclusions
 The implementation of MIS framework will be beneficial for the organization inthelong
run. Efforts will be required from the senior management during formulation and
implementation of this process but it may reap fruitful results in achieving its strategic
goals.

 To measure the efficiency and financial health of the company Debt – Equity Ratio gives a better
understanding than that of current and quick ratio as it includes only the short term loans and
advance and not long term debts.

 The Debt – Equity Ratio is showing and upward trend which is not good and may affect the
company’s financial leverage in the long run.

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References/Bibliography
 Literature Review
IMF Working Paper: - Introduction Financial Management Information System in
Developing countries by Jack Diamond and PokarKhemani

 Company Profile

http://www.donear.com/donear2006/corporate_over.asp

 Annual Reports

http://www.donear.com/donear2006/annual_report.asp

Donear Industries Ltd. Page 66


Annexure 1.1
Questionnaire
Dear Sir/Mam,
Donear Industries Ltd is looking forward for ways to improve its
MIS reporting for top management and wants to know your comfort
level. We are taking this initiative to understand your needs and good
suggestions.
We appreciate your honest suggestions to enhance our
relationship which in turn will help to increase your and companies
productivity and efficiency.

Name:-

Designation:-

Date:-
1. Do you think there is a need for accounting MIS reporting in the
organization?

2. What will be your comfort level in reporting to top management with the
help of standard MIS format?
Very Uncomfortable
Uncomfortable
Neutral
Comfortable
Very comfortable

Donear Industries Ltd. Page 67


3. What kind of MIS report do you think is necessary?
Scheduled Report
Key Indicator Report
Demand Report
Exception Report
4. What do think accounts MIS will be useful for?

Timeliness

Accuracy

Consistency

Completeness

Relevance

5. Do you think fixed and standard formats of accounting reports will


improve the productivity of the people and help to keep data in organized
manner?

6. What do you think this MIS reporting should be on which basis?

7. How will you rate for availability of data in making the report?

Donear Industries Ltd. Page 68


8. Do you think MIS report will help to keep control over the activities of the
department?

9. Will the following purpose be fulfilled with the help of MIS reporting?
Yes No

a. To organize monthly accounts transaction

b. To maintain cash flow

c. To know deviation of actual performance with that of


set standards

d. To control the activities

e. For planning for future goals and decision making

10.Any other suggestions or opinion for MIS reporting?

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