INTRODUCTION

INTRODUCTION
Inventories constitute the most significant part of current assets of a large majority of companies in India. On an average, inventories are approximately 60% of current assets in public limited companies in India. Because of the large size of inventories maintained by firms, a considerable amount of feuds is required to be committed to them. It is therefore, absolutely imperative to 1

mnage inventories efficiently and efficiently in order to avoid unnecessary investment. A firm neglecting the management of inventories will be jeopardizing its long run profitability and may fail ultimately. It is possible for fore a company to reduce its levels of inventories to a considerable degree e.g. 10 to 20 percent, with out any adverse effect on production and sales, by using simple inventory planning and control techniques. inventory carries a favorable impact on a companys profitability. The reduction in excessive

MEANING OF INVENTORY:Inventory is the physical stoke of goods maintained in an organization for its smooth sunning. In accounting language it may mean stock of finished goods only. In a manufacturing concern, it may includes raw materials, work-in-progress and stores etc. In the form of materials or supplies to be consumed in the production process or in the rendering of services. In brief, Inventory is unconsumed or unsold goods purchased or manufactured.

NATURE OF INVENTORIES :Inventories are stock of the product a company is manufacturing for sale and components that make up the product. The various forms in which inventory exist in a manufacturing company are raw materials, work in progress and finished goods.

RAW MATERIALS:Raw materials are those inputs that are converted into finished product though the manufacturing process. Raw materials inventories are those units which have been purchased and stored for future productions.

WORK IN PROGRESS:These inventories are semi manufactured products. They represent products that need more work before they become finished products for sales.

FINISHED GOODS:Finished goods inventories are those completely manufactured products which are ready for sale. Stock of raw materials and work in progress facilitate production. While stock of finished goods is required for smooth marketing operation. Thus, inventories serve as a link between the production and consumption of goods. The level of three kinds of inventories for a firm depend on the nature of its business. A manufacturing firm will have substantially high levels of all three kinds of inventories, while a retail or wholesale firm will have a very high and no raw material and work in progress inventories. Within manufacturing firms, there will be differences. Large heavy engineering companies produce long production cycle products, therefore they carry large inventories. On the other hand, inventories of a consumer product company will not be large, because of short production cycle and fast turn over. Firms also maintain a fourth kind of inventory, supplies or stores and spares.

SUPPLIES:
It includes office and plant cleaning materials like soap, brooms, oil, fuel, light, bulbs etc. These materials do not directly enter production, but are necessary for production process. Usually, these supplies are small part of the total inventory and do not involve significant 3

investment. Therefore, a sophisticated system of inventory control may not be maintained for them.

MANAGEMENT OF INVENTORY
Inventories constitute the principal item in the working capital of the majority of trading and industrial companies. In inventory, we include raw materials, finished goods, work-in-progress, supplies and other accessories. To maintain the continuity in the operations of business enterprise, a minimum stock of inventory required. However, the physical control of inventory is the operating responsibility of stores superintendent and financial personnel have nothing to do about it but the financial control of these inventories in all lines of activity in which they comprise a substantial part of the current assets is a frequent problem in the management of working capital. Management of inventory is designed to regulate the volume of investment in goods on hand, the types of goods carried in stock to meet the needs of production, and sales while at the same time, the investment in them is to be kept at a reasonable level.

OBJECTIVE OF THE
STUDY

OBJECTIVES 1. To find out the efficiency of Inventory management in Jubilant Organosys Limited Gajraula, J.P. Nagar, (U.P.) 2. To study how inventory management practices plays an important role in supporting other activities of an organization. 3. To gain familiarity with the various methods and techniques followed by Jubilant Organosys Limited in maintaining their inventory. 4. To gain an in-depth knowledge of the tricks of faster conversion of inventories into cash in Jubilant Organosys Limited. 5. To find out the difference between the theoretical and practical aspect of inventory management.

SCOPE OF INVENTORY MANAGEME

SCOPE OF INVENTORY MANAGEMENT

The term inventory management is used in two ways- unit control and value control. Production and purchase officials use this word in term unit control whereas in accounting this word is used in term of value control. As investment in inventory represents in many cases, one of the largest asset items of business enterprises particularly those engaged in manufacturing, wholesale trade and retail trade. Sometimes the cost of material used in production surpasses the wages and production overheads. Hence, the proper management and control of capital invested in the inventory should be the prime responsibility of accounting department because resources invested in inventory are not earning a return for the company. Rather, on the other hand, they are costing the firm money both in terns of capital costs being incurred and loss of opportunity income that is being foregone.

OBJECTIVES OF INVENTORY MANAGEMENT

The basic managerial objectives of inventory control are two-fold; first, the avoidance over-investment or under-investment in inventories; and second, to provide the right quantity of standard raw material to the production department at the right time. In brief, the objectives of inventory control may be summarized as follows:

A.

Operating Objectives:

(1)

Ensuring Availability of Materials: There should be a continuous availability of all types of raw materials in the factory so that the production may not be help up wants of any material. A minimum quantity of each material should be held in store to permit production to move on schedule.

(2)

Avoidance of Abnormal Wastage: There should be minimum possible wastage of materials while these are being stored in the godowns or used in the factory by the workers. Wastage should be allowed up to a certain level known as normal wastage. To avoid any abnormal wastage, strict control over the inventory should be exercised. Leakage, theft, embezzlements of raw material and spoilage of material due to rust, bust should be avoided.

(3)

Promotion of Manufacturing Efficiency: If the right type of raw material is available to the manufacturing departments at the right time, their manufacturing efficiency is also increased. Their motivation level rises and morale is improved.

(4)

Avoidance of Out of Stock Danger: Information about

availability of materials

should be made continuously available to the management so that they can do planning for

procurement of raw material. It maintains the inventories at the optimum level keeping in view the operational requirements. It also avoids the out of stock danger.

(5) Better Service to Customers: Sufficient stock of finished goods must be maintained to match reasonable demand of the customers for prompt execution of their orders. (6)Highlighting slow moving and obsolete items of materials.

(7) Designing poorer organization for inventory management: Clear cut accountability should be fixed at various levels of organization.

B. Financial Objectives:

(1)

Economy in purchasing: A proper inventory control brings certain advantages and economies in purchasing also. Every attempt has to make to effect economy in purchasing through quantity and taking advantage to favorable markets.

(2)

Reasonable Price: While purchasing materials, it is to be seen that right quality of material is purchased at reasonably low price. Quality is not to be sacrificed at the cost of lower price. The material purchased should be of the quality alone which is needed.

(3) Optimum Investing and Efficient Use of capital: The basic aim of inventory control from the financial point of view is the optimum level of investment in inventories. There should be no excessive investment in stock, etc. Investment in inventories must not tie up funds that could be used in other activities. The determination of maximum and minimum level of stock attempt in this direction.

10

TYPES OF INVENTORY
1. Movement Inventories:Movement inventories are also called transit or pipeline inventories. Their existence owes to the fact that transportation time is involved in transferring substantial amount of resources.

2.Buffer inventories:In Buffer inventories are held to protect against the uncertainties of demand and supply. An organization generally knows the average demand for various items that it needs. Prod.deptt. issue store inspect receive supplier Supplies Demand Inventory in Hand Purchase dept. Net order Quantity issue tenders receive tender quotation evaluations place Orders

Inventory cycle

11

3. Anticipation Inventories. Anticipation inventories are held for the reason that future demand for the product is anticipated. Production of specialized times like crackers well before dewily, umbrellas and raincoats before taints set in, fans while summers are approaching; or the piling up of inventory stocks when a strike is on the anvil, are all examples of anticipation inventories.

CONTROL OF MATERIALS :
Rigid control over materials are necessary not only to guard against theft, but also to minimize waste and misuse from causes such as excessive inventories, over issue, deterioration, spoilage, and obsolescence. There are certain prerequisites to an effective control system for materials: 1.Materials of the desired quantity will be available when needed; 2.Materials will be purchased only when a need exists and in economical qualities; 3.Purchases of materials will be made at most favorable prices; 4.Vouchers for the payments of materials purchased will be approved only if the materials have been received in good condition; 5.Materials will be protected against loss by proper physical control; 6.Issue of materials will be properly authorized and accounted for; and 7.All materials, at all times, will be charged, as the responsibility of some individual. The control of materials, as an element of cost of production, is illustrated with reference to the purchase and issues procedures, inventory systems, and inventory control techniques.

12

IMPORTANCE OF INVENTORY CONTROL:

The importance or necessity of inventory control is well explained in the terms of the objects of inventory control, which are obtained through it. A proper inventory control lowers down the cost of production and improves profitability of enterprise.

ADVANTAGES OF INVENTORY CONTROL:

(1)

Reduction in investment in inventory.

(2)

Proper and efficient use of raw materials.

(3)

No bottleneck in production.

(4)

Improvement in production and sales.

(5)

Efficient and optimum use of physical as well as financial resources.

(6)

Ordering cost can be reduced if a firm places a few large orders in place of numerous small orders.

(7)

Maintenance of adequate inventories reduces the set-up cost associated with each production run. 13

Risk and cost Associated with Inventories:

Holding of Inventories expose the firm to a number of risks and costs.

Major risks are:

(a)

Price decline: They may be due to increase in market supply of the product, introduction of a new competitive product, price-cut by the competitors etc.

(b)

Product deterioration: This may due to holding a product for too long a period or improper storage conditions.

(c)

Obsolescence: This may due to change in customers taste, new production technique, improvements in product design, specifications etc.

The Costs of holding inventories are as follows:

(a)

Material Cost: This include the cost of purchasing the goods, transportation and handling charges less any discount allowed by the supplier of goods.

(b)

Ordering Cost: This includes the variables cost associated with placing an order for the goods. The fewer the orders, the lower will be the ordering costs for the firm.

14

(c)

Carrying Cost: This includes the expenses for storing and etc.

handling the goods. It

comprises storage costs, insurance costs, spoilage costs, cost of funds tied up in inventories

ESSENTIALS OF INVENTORY CONTROL SYSTEM

For an efficient and successful inventory control there are certain important conditions that are a follows:

(1) Classification and Identification of inventories: The usual

inventory of

manufacturing firm includes raw-material, stores, work-in-progress and component etc. To facilitate prompt recording the dealing, each item of the inventory must be assigned a particular code number and it must be classified in suitable group or sub-divisions. ABC analysis of material is very helpful in this context.

(2) Standardization and simplification of inventories: In order to facilitate inventory control, the inventory line should be simplified. It refers to the elimination of excess types and sizes of items. Simplification leads to reduction in classification of inventories and its carrying costs. Standardization, on the other hand, refers to the fixation of standards of raw material to be purchased and specification of the components and tools to be used.

(3) Setting the Maximum and Minimum limits for each part of inventory: The third step in this process is to set the maximum and minimum limits of each item of the inventory. It avoids the chances of over-investment as well as running a short of any item during the cost of producing. Reordering point should also be fixed beforehand.

(4) Economic Order Quantity: It is also a basic inventory problem to determine the quantity as how much to order at a time. In determining the EOQ, the problem is one to set a 15

balance between two opposite costs, namely, ordering costs and carrying costs. This quantity should be fixed beforehand.

(5)Adequate storage Facilities: To make the system of inventory control successful and efficient one, it is also essential to provide the adequate storage facilities. Sufficient storage area and proper handling facilities should be organized.

(6)Adequate Reports and Records: Inventory control requires the maintenance of adequate inventory record and reports. Various inventory records must contain information to meet the needs of purchasing, production, sales and financial staff. The typical information required about any class of inventory may be relating to quantity on hand, location, quantities in transit, unit cost, code for each item of inventory, reorder point, safety level etc. Statements forms and inventory records should be so designed that the clerical cost of maintaining these records must be kept a minimum.

(7)Intelligent and Experienced Personnel: An important requirement of successful inventory control system is the appointment of qualified and experienced staff in purchase and stores department. Mere establishment of procedures and the maintenance of records would not give the desired results as there is no substitute for sincere and devoted as well as experienced hands. Hence, the whole inventory control structure should be manned with trained, qualified, experienced and devoted employees.

(8)Coordination: There must be proper coordination of all departments involved in the process of inventory control, such as purchase, finance, receiving, approving, storage and accounting departments. These all departments have different outlook and objects in inventory management but financial manager has to coordinate them all.

16

(9)Budgeting: An efficient budgeting system is also required. Preparation of budgets concerning materials, supplies and equipment to ensure economy in purchasing and use of material is also necessary.

(10)Internal Check: Operating of a system of internal check is also vital in inventory management so that all transactions involving material supplies and equipment purchase are properly approved and automatically checked.

FACTORS AFFECTING STOCK INVESTMENT LEVEL

These factors can be put in two categories: General and Specific.

General Factors: These factors include those factors, which affect directly or indirectly level of investment in any asset. These are as follows:

(1) (2) (3) (4) (5) (6)

Nature of Business Size and scale of Business Expected Sales Volumes Price Level Changes Availability of Funds Management view Point

Specific Factors: These factors are directly related with investment in stock.

17

Following are the main factors:

(1)

Seasonal Character of Raw Materials: If supply of raw material used in the firm is seasonal, the firm will require more funds for the purchase of raw material during season. Usually, raw materials are available at cheaper rates during is production season.

(2)

Length and Technical Nature of the production process: If production process is lengthy and of technical nature, higher investment is required in raw material. In the technical nature production process, quality control of raw material is given more emphasis.

(3)

Terms of Purchase: If some concessions or discount in price or facilities of credit are provided by suppliers on purchase of raw materials in huge quantity then the firm is inspired for excessive purchase of goods and hence comparatively more investment is required in inventory.

(4)

Nature of End Product: Nature of end product also influences investment in inventory. If the end product is a durable good, high investment will be required because durable goods can be stored for a long period. On the other hand, perishable goods cannot be stored for a long period. Hence, investment in inventory of such products is low.

(5)

Supply Conditions: If the supply of raw material is regular and there is no possibility of interruption in future, high investment in inventories is not required.

(6)

Time Factor: The lead time of raw material time token in production process and sale of product also influence investment in inventories. Longer the period, higher will be the investment in inventories.

18

(7)

Loan Facilities: If raw materials are purchased on credit or loan from the bank or other financial institution can be obtained on the security of raw material, lesser investment would be required. In the absence of such loan facility, higher investment would be required.

(8)

Price Level Fluctuations: If there are expectations of price rise in future then raw materials may be store in high quantity and so more investment would be required. On the contrary, if the prices of raw materials are expected to go down in future, then comparatively lesser investment would be required.

(9)

Other factors: Price control, rationing, change in taxation and export policy of governments etc. also influence investment in inventories.

19

COMPANY PROFILE

20

Company Profile:

Jubilant Organosys Limited is the largest specialty chemical company of India and a leading global manufacturer in defined chemical categories viz, second largest in pyridine and its derivatives, third largest in solid polyvinyl acetate and leading positions in acetyls and other specialty chemicals. These include pharmaceuticals and life science chemicals, performance chemicals, organic intermediates, agri products and a range of other specialty chemicals. It was incorporated in the year 1978 under the companies Act, 1956. The company is a part of Jubilant Corporation, which also includes Jubilant Enpro, Dominos, Jubilant Biosys. The manufacturing facilities located at Gajraula in J.P.NAGAR District, U.P. The company estabilished an Research and Development Group in the year 1982 and Research and Development was recognized by the Department of Science and Technology. The groups have developed a number of products, which have been commercialized over a period of time. The various group of the Research and Development carryout research in the field of Polymers and Adhesives, Organic chemicals, Biotechnology and Environment. The company differentiates itself in its manufacturing approach which is based on the use of a renewable resource as the main feed stock, the conserve energy requirement and a complete recycling and reuse of the final wastage at the plant. The main feed stock for jubilant's product line is Molasses, a renewable bio-mass, occurs as a by product in the sugar mill from which industrial alcohol is produced from the process of fermentationand distillation. This makes the manufacturing approach inheretantly eco=efficient. Industrial alcohol is further proccessed to produced a series of value added chemicals. 21

Jubilant Organosys Limited has historically, been a producer and leading manufacturer of acetyls in India for more than two decades. Jubilant Organosys also enjoy a global position in these products. Jubilant Organosys derive our strengths in this business from our molasses based production process. Jubilant Organosys use renewable biomass (molasses), as feedstock for manufacturing acetyls. Jubilant Organosys, therefore, are not impact by the cost cycle that affects the industry worldwide.

Globally Jubilant Organosys are the; *Largest Alcohol Distillery Outside Brazil. *Largest Acetic Acid Manufacturer From Renewable\Green Resources. *6th Largest in Acetaldehyde. *8th Largest in Ethyle Acetate. *9th Largest in Acetic Anhydride.

Jubilant Organosys owns distilleries at Gajraula and Nira. These are strategic to the business as they are located in two largest sugar belts of India ( U.P. & MAHARASHTRA ). Company has long term contracts with sugar mills to meet alcohol requirements while providing easy access to feed stock. Jubilant Organosys Limited is an integrated pharmaceutical industry player with a wide range of products and services for global life sciences companies. Company is one of the largest Custom Research and Manufacturing Services (CRAMS) and Drug Services Companies in India. Jubilant Organosys have presence across the pharmaceuticals value 22

chain right from drug, discovery, medicinal chemistry and clinical research services to custom research and manufacturing services for advance intermediaries and fine chemicals, Active Pharmaceutical Ingredients and Dosage Forms.

Jubilant Organosys Limited has a strong international presence having international subsidiaries in USA, BELGIUM and CHINA. Jubilant Pharmaceutical, Inc is a full service clinical research organisation providing clinical research, clinical data management, biostatics, QA/regulatory and contract staffing servicing.Our products are sold across the globe in more than 50 countries. Jubilant Organosys Limited is a collaborative, innovative provider of products and services to the global life sciences industry, striving to accelerate the process of pharmaceutical drug approval. Jubilant Organosys also enjoy leadership in Industrial products and Preformance Polymers products in India. It is headquarted in NOIDA, with net sales of - US $ 337 million in FY06 and more than 3300 employees.

23

OUR VISION

24

OUR PROMISE

25

HISTORY

26

2005 Acquires Target Research Associates, Inc., renamed Clinsys Inc.; a US based Clinical Research Organisation (CRO) Acquires Trinity Laboratories, Inc. and its wholly owned subsidiary, Trigen Laboratories, Inc., renamed Jubilant Pharmaceuticals, Inc., a generic pharmaceutical company in USA having a US FDA approved formulations manufacturing facility Enters Clinsys Clinical Research Ltd. business by setting up wholly owned subsidiary Jubilant Clinsys Ltd. 2004 Sets up medicinal chemistry services business through wholly owned subsidiary Jubilant Chemsys Ltd. Enters formulations and regulatory affairs businesses by acquiring Pharmaceuticals Services Incorporated, N.V. and PSI Supply N.V., the pharmaceutical companies in Europe. 2003 Sets up a new state-of-the-art Research & Development Centre in Noida, near New Delhi equipped with all latest scientific instruments. 2002 Acquires the Active Pharmaceutical Ingredients business
27

2001 New corporate identity: Jubilant Organosys Ltd. reflecting changed corporate and business profile 2000 Enters the Bio / chemo informatics arena by setting up Jubilant Biosys Ltd. 1998 Enters high value-added Pyridine derivates. Commissions Pyridine HBR and Cyano Pyridine plants. Forms marketing subsidiary in the USA. Acquires acetyl plant in western India. 1997 Commissions first Multi-purpose fine chemicals plant. Plant for food polymer commissioned. 1995 Gets ISO 9001 certification. 1990 Commissions Pyridine & Picoline plant. 1988
28

Launches its first branded product: Vamicol, an adhesive product. 1987 Introduces new products in Performance Chemicals segments: Poly vinyl acetate emulsion for paint, textile, paper & packaging and woodworking industry. 1985 Research & Development center gets recognition from Government of India. 1983 Commercial production of Vinyl Acetate Monomer (VAM). 1981 Initial Public Offering. Listing on leading stock exchanges of India.

1978 Incorporated as Vam Organic Chemicals Ltd.

29

PRESENCE ACROSS VALUE CHAIN:

30

AWARDS
Jubilant's rapid progress across all corporate aspects has consistently been acknowledged by various industry bodies, government and non-government agencies in the form of awards and certifications. Golden Peacock award for Innovation Management - 2003 Six-sigma Quality Award at the All India CII Convention -2004 The Greentech Foundation Award for Environment Excellence The Energy Conservation Award (Chemical sector) from the Government of India for the Gajraula unit Best Managed Manufacturing Plant for Single super phosphate by FAI - 2003 Best HR Practices Award by Centre for International Businesses - 2004 P C Acharya Award for Development of Indigenous Technology by ICMA - 2004 Top 5 Best Managed Workforce in India - Hewitt Award The DSIR Award for Innovation in Chemicals & Allied Industries

31

GUIDING PRINCIPALS OF JUBILANT ORGANOSYS LTD

1. We will conduct ourselves or business with the highest standards of honesty, integrity and professionalism. 2. We will recognize the positive contribution that individuals & our team members to produce business successfully. 3. We will encourage a learning environment where people can constantly grow, develop & contribute. 4. We will strive for excellence and seek continuous improve in everything. 5. We will respect all stockholders including employees, partners and suppliers & still them with a passion to deliver the highest quality goods services. 6. We will foster initiative &creative by empowering individuals to attain well defined objectives.

32

STRUCTURE OF THE COMPANY

33

STRUCTRE OF THE COMPANY

Jubilant Organosys Ltd. act upon the rules & regul- ations of the Companies Act, 1948. The company have well defined structure .It have the following departments:

1. HR/ Personnel department 2. Accounts departments 3. Purchase departments 4. Store department 5. Quality department 6. Shipping department 7. Sales & Excise department

34

ORGANISATIONAL CHART OF JOL

35

RESEARCH METHODOLOGY

36

RESEARCH METHODOGY
The study is based on secondary data. The secondary data has been collected from annual reports, manuals, purchase, registers, storage records of the organization. But, it was supplemented by with interaction with the concerned personal with regard to some primary data.

Research methodology is the way to systematically solve the research problem . Objective of research study is Analysis of inventory of Jubilant Organosys Ltd. Analyzing of inventory, we determining following inventories1. Raw materials inventory. 2. Work in progress inventory. 3. Finished goods inventory & 4. Supplies inventory.

37

In this section of inventories, we should analyze the annual investment in inventories, Valuation of inventory after closing balance of items in inventory. In this manner, we calculate reorder point, safety stock levels, minimum & maximum levels of inventory. Working hypothesis of the objective is that inventories are the stock piles of goods .The all organization on their inventories. JOL invests about 60%of total assets inventory should be analyzed their records. The analysis of inventory according to their data available in the company. The data collection of inventory for analysis by the direct store department. We should record primary and secondary data by the helps of assistants ledger books M R N etc. We went to the all inventories as raw material, work in progress inventory, finished goods inventory by the proper observation of datas of the company.

RESEARCH DESIGN:
Research is an art of scientific, investigation and systematic research for pertinent information on a specific. I have used analytical type of research. Under Analytical research we use facts or information already available and analyses these to make critical evaluation of the material. I have gathered the information from different sources and analyses it is better way. The data for research is collected using the survey technique. Surveys are best suited for analytical research. I undertake survey to learn about peoples knowledge, belief, satisfaction, attitude, value and so on and to measure these magnitudes in the general population.

SAMPLE DESIGN

38

It is not possible for any researcher to include each and every member of the universe in his research process. So, he selects small portion of the universe, which is its true representative. This group is known as sample and this process is called sampling. Sampling techniques can be categorized into two broad categories namely: Non-probability Sample Probability Sample

DATA COLLECTION
In analysis of inventory of JOL, We collect the data by the different sources. We collect the primary and secondary data. SECONDARY DATA The secondary data are those data the already in presence for

specific purpose we use the secondary data about inventory to looks old records of the company .For the daily information about the items We show the MRN, ledger register and daily issue slip of materials the purchase register and other documentary evidence used for the findings. In the analysis of inventory the secondary data are not sufficient .then We collect primary data. PRIMARY DATA

39

Primary data are those data that are originated very first time or fresh data .with the help of primary data formulated the research objectives. are the accurate attainable reliable and useful data. 1. Inventory control techniques used by the company 2. Inventory systems as perpetual and periodic systems. 3. Stock levels etc. 4. Questionnaire Primary data

LIMITATIONS
40

LIMITATION OF INVENTORY CONTROL

There may be approximations. The study is purely based on secondary data.

In managing inventories, the firms objective should be in consonance with the wealth maximization principle. To achieve this, the firm should determine the optimum level of investment in inventory. To deal with the problems of inventory management effectively, it becomes necessary to be conversant with the different techniques of inventory control. Although the concepts involved in inventory management are production-oriented and are not strictly financial it is important that the financial manager understand them since they have certain built-in financial costs. The different techniques of inventory control may be summarized as follows:

(1)

Inventory level Technique

41

The main objective of stock control is to determine and maintain the optimum level of stock so that there is neither shortage of any material nor unnecessary investment in inventory. For this purpose, determination of maximum and minimum limits of inventory and ordering level is necessary.

(2)

Maximum stock Limit: This represents the quantity of inventory above which it should not be allowed to be kept. The main object of fixing this limit is to ensure that unnecessary working capital is not blocked in stores. The quantity is fixed keeping in view the disadvantages of overstocking.

42

FINDING OF JUBILANT ORGANOSYS LTD

FINDING OF JUBILANT ORGANOSYS LTD

1. We will conduct ourselves or business with the highest standards of honesty, integrity and professionalism. 2. We will recognize the positive contribution that individuals & our team members to produce business successfully. 3. We will encourage a learning environment where people can constantly grow, develop & contribute. 43

4. We will strive for excellence and seek continuous improve in everything. 5. We will respect all stockholders including employees, partners and suppliers & still them with a passion to deliver the highest quality goods services. 6. We will foster initiative &creative by empowering individuals to attain well defined objectives.

44

FINANCIAL STATEMENTS

45

Profit & Loss Account Particulars Gross Sales Excise Net Sales Domestic Sales International Sales Other Income Total Income Expenditure Cost of materials Manufacturing expenses Selling, general and administrative expenses Total Expenditure PBIDTA Depreciation PBIT Interest PBDT PBT Tax PAT Share of Profit / (Loss) in Associate Minority Interest PAT after share of profit / loss in associate and minority interest 8158.9 1597.0 3127.1 12883. 0 2367.4 513.4 1854.0 172.7 2194.7 1681.3 392.4 1288.9 0.00 7.8 1296.7 6177.7 1394.4 2054.0 9626.1 2243.0 381.4 1861.6 220.4 2022.6 1641.2 431.6 1209.6 0.00 -17.7 1191.9 4443.7 1171.0 1426.7 7041.4 1650.1 326.2 1323.9 357.6 1292.5 966.3 179.0 787.3 -8.9 4.0 782.4 3649.1 929.6 1313.3 5892.0 1281.7 237.5 1044.2 402.5 879.2 641.7 160.6 481.1 -0.3 0.00 480.8 3118. 5 841.4 1153. 3 5113. 2 879.7 255.8 623.9 411.1 468.6 212.8 -19.4 232.2 0.00 0.00 232.2 FY 2006 16242. 9 1189.4 15053. 5 9102.1 5951.4 196.9 15250. 4 FY 2005 12737. 0 1034.3 11702. 7 7501.0 4201.7 166.4 11869. 1 FY 2004 9456.7 864.7 8592.0 6304.7 2287.3 99.5 8691.5 FY 2003 7853.9 719.5 7134.4 5161.1 1973.3 39.3 7173.7 FY 2002 6598. 2 649.4 5948. 8 4766. 3 1182. 5 44.1 5992. 9

46

615

645

670

720