ORGANISATION STUDY AT ENGLISH INDIAN CLAYS LTD

In partial fulfillment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by

LEEMA.H.
Under the guidance of

Dr. M. Mohammed Sulphey (Faculty TIM)

T.K.M.INSTITUTE OF MANAGEMENT, KOLLAM

2007-2009

DECLARATION

I, LEEMA.H hereby declare that the project report titled as ORGANISATION STUDY OF ENGLISH INDIAN CLAYS LTD. TRIVANDRUM KERALA is an original work done by me in partial fulfillment for the degree of Master of Business Administration under the University of Kerala. I further declare that this work is not partially or wholly submitted for any other purpose and the data included in the report, collected from various sources, are true to the best of my knowledge.

LEEMA.H.

ACKNOWLEDGEMENT

The success of a project depends up on frame work and co operation of the various people involved either directly or indirectly. I take this opportunity to express gratitude to all those who helped in this project First and fore most I thank GOD the almighty for his blessing for the successful completion of this work I take the opportunity to acknowledge my indebtedness to all the persons who have helped me in successful completion of my work. I would like to convey my sincere gratitude, and thank Mr. Varkiachan Petta General Manager (Personnel) for allowing me to undertake this study at English Indian Clays Ltd, Kochuveli, Trivandrum I extend my sincere thanks to all the Staff of English Indian Clays Ltd who helped me in this work. I thank Prof: A. M.Salim Director TKM Institute of Management for his support through out my endeavor. It is my privilege to express my sincere thanks to Dr. M. Mohammed Sulphey faculty for the guidance at all levels. I thank all the professors and teaching staff of TKM institute of management for their guidance conducting this study. Finally I wish to thank my family and friends and express my sincere gratitude to them for their support the eternal love, guidance, protection and blessings those have showered upon me throughout this Endeavour.

nec

CHAPTER 1

CHAPTER 1 INTRODUCTION

1.1 PURPOSE OF STUDY The purpose of the study is to familiarize with the industry and attain a first hand experience of the functioning of the organization. It provide a chance to interact with the different department and authorities in the organization, and also enable to know how the theory learned are practically applied in an organization. 1.2 OBJECTIVES OF STUDY The objectives of this organizational study are: To fulfill the requirement of the curriculum To study about the organization policies and procedures, its vision and mission To understand the organization hierarchy To study the functions of various departments To study about the products and production process To understand the day to day activities of the departments and how they are interrelated. To analyze financial performance To know how the theory learned are practically applied in an organization

 To evaluate the strength,weakness,opportunity and threats of the company To study the overall performance of the company

1.3PERIOD OF STUDY The organization study was conducted at English Indian Clays Limited, Trivandrum for period of 15 days from April 15 to April 30, 2008. 1.4 METHODOLOGY OF STUDY

This report was prepared based on both primary and secondary data collected from English Indian Clays Limited. Primary data includes data collected by means of face to face interviews with officials in various departments and by observation. Secondary data includes data collected from internet, company annual reports and manuals of various departments. The data collected was analyzed and organized into details relating to each of the department.

CHAPTER 2

CHAPTER 2 EXTERNAL ENVIRONMENT ANALYSIS

The external environment analysis gives the business opportunities and threats of an organization. External factors include the socio-cultural factors, government and legal factors, demographic factors and economic factors etc. Industry Profile China clay occurs in the deposits in the form of china clay rock, a mixture of up to 15 per cent china clay and up to 10 per cent mica, and the remainder being quartz. One of the purest of the clays, composed chiefly of the mineral kaolinite usually formed when granite is changed by hydrothermal metamorphism. Usage of the terms china clay and kaolin is not well defined; sometimes they are used synonymously for a group of similar clays, and sometimes kaolin refers to those obtained in the United States and china clay to those that are imported. Some authorities term as china clays the more plastic of the kaolins. China clays have long been used in the ceramic industry, especially in fine porcelains, because they can be easily molded, have a fine texture, and are white when fired. France's clays are made into the famous Svres (see A. Brongniart ) and Limoges potteries. These clays are also used as a filler in making paper. In the United States, deposits are found primarily in Georgia, North Carolina, and Pennsylvania;

china clay is also mined in England (Cornwall) and France.

The formation of clay Granite is one of the commonest igneous rocks, but varies considerably in its composition from place to place. While the quartz is never anything but quartz, the feldspar can be a silicate of alumina with potash, soda or lime and the mica the potash-rich muscovite or the iron-rich biotite. In some parts of the South West, the feldspar in the granite is higher in its soda content than its potash content and these places are where china clay is found today. It came into being through a complex sequence of events. While the molten rock was still cooling, it was attacked successively by steam, boron, fluorine and tin vapour, these acting on the alkali content of the feldspar and converting it into china clay. Development of the China Clay Industry The early history of the industry is, as would be expected, very much concerned with the discovery and production of china clays for use in ceramics. The story, though, starts thousands of years ago and thousands of miles away.

China, the pure white porcelain used by the Chinese, was discovered many thousands of years ago and has always been a much-prized material. Despite many attempts to find sources elsewhere, it remained elusive until a few deposits were found in some parts of Europe and in America early in the eighteenth century. The search to find deposits in England was increased.

When china clay, or kaolin, was discovered in England, it was realised that it was of a much finer quality than found elsewhere in Europe. A Quaker apothecary-cum-potter, William Cookworthy made the discovery in Cornwall in 1746. He experimented with various samples and in 1768 he took out a patent to

use the material, soon producing items at his Plymouth Porcelain Factory. Until that time English pottery had consisted of coarse earthenware and stoneware ceramics and had suffered considerable competition from elsewhere. As more potteries made use of porcelain, so the demand grew and by the early nineteenth century the kaolin industry had become highly successful, with many of the Potters owning rights to mine the material for themselves. In addition, by the middle of the nineteenth century, china clay was increasingly being used as a raw material by the developing paper industry. Early in the twentieth century, the industry was made up of some seventy or so individual producers, each competing on price with little regard for marketing or standards. There was almost no capital investment or product development and over-production was great, wages were low and working conditions were poor. Despite this, by 1910, production was approaching a million tons a year and paper had completely overtaken ceramics as the prime user of china clay. Over 75% of output was exported, with North America and Europe being major markets. The china clay industry in Cornwall and Devon held a virtual monopoly on the supply of that mineral to the world market. Just after the First World War, the three leading producers joined forces - forming English China Clays Limited in 1919, placing almost 50% of the industry's capacity under one banner. USES OF CLAY Paper, Kaolin performs two quite separate functions in papermaking. As a filler or loading, it is incorporated within the body of the paper, both reducing its overall cost and improving its printing properties. It is also a coating pigment, enhancing the surface properties of the paper, such as brightness, smoothness and gloss, thus allowing the accurate reproduction of colour printing. Type of paper

10

Board Printing and writing paper Newsprint Typical kaolin content (%) up to 10 up to 30 up to 8 Ceramics, Kaolin was originally used in the manufacture of whiteware ceramics. The amount of kaolin used for this purpose is now greatly exceeded by that used in the paper industry. The ceramic and refractories industries remain a major market, accounting for nearly one million tonnes of kaolin in Western Europe.

The major markets for English kaolins in the whiteware ceramic industry are tableware, vitreouschina sanitaryware, wall tiles (in the UK), electrical porcelain and glazes. In addition, kaolin and calcined clay are used for refractory applications.

Paint applications: Water based decorative paints: gloss; semi-gloss and silk; exterior matt - smooth and textured; interior matt; primers.

Solvent based decorative paints: gloss; semi-gloss and eggshell; matt; undercoats; primers. Protective and OEM coatings: metal primers; furniture lacquers; domestic appliance finishes; electrophoresis coatings; coil coatings; traffic markings; printing inks.

Rubber applications: Kaolin is incorporated into both natural and synthetic rubber compounds and is the rubber industry's most widely used non-black filler with reinforcing properties:

11

Cable insulations: cable sheath; hose; extrusions; belting; footware; pharmaceutical; seals; general mouldings; plant lining; domestic mouldings; latex; tyres/inner tubes.

Plastics applications: Kaolin has many uses as a filler in plastics:

Specialty films: PE master batch; PE cables; PE film; pPVC cables; pPVC extrusions; pPVC plastisols; PP moldings; polyamide moldings; PBT/PET moldings; unsaturated polyester; urea formaldehyde; phenol formaldehyde.

Metakaolin for the building and construction industry. A high quality pozzolanic material which is blended with Portland cement in order to improve the durability of concrete and mortars.

White cement: In the production of white cement, iron is a deleterious component which can be avoided by using kaolin, an alumino silicate with a very low iron content.

Glass fibre: The preferred raw material for introducing alumina to glass compositions for glass fibre manufacture is kaolin.

Agricultural industries: The caking or setting of granular fertilisers (prills), is a serious problem since the caked mass must be broken down into its individual particles before it can once again become a freeflowing product. Kaolin, some of which is amine-coated, acts a non-stick coating to the fertilizer prill. As color is of no significance, cheaper grades can be used.

Other industries: Pharmaceutical applications; quality leather; textiles; inks, dyes, adhesives, crayons and

12

pencils; toothpastes and cosmetic applications; chemicals industry.

Into the future Some of the uses listed below are already commonplace while others are innovative and in the development stage. 1. Plastic film, Video and audio tapes, where clays are used as anti-blocking agents. 2. Laundry products, Washing powders and detergents. 3. Decorative concrete, Mortars and renders. 4. Mark-resistant polypropylene for automotive use Thermoset mouldings for baths, shower trays. 5. Lightweight concrete Water treatment systems 6.Biotechnology, Ability of lightweight high-strength ceramic materials to support micro-organisms.

13

CHAPTER 3

14

CHAPTER 3 INTERNAL ENVIRONMENTAL ANALYSIS

3.1 HISTORY OF EICL English Indian Clays Limited was established by Maharaja of Travancore along with Mr.M.N.Ramakrishna Iyer in 1966, in collaboration with English China Clay (ECC), UK who provided the machinery and expertise. The first plant commissioned was the Rotary Drier Plant with a capacity of 15000TPA.Thapar group took over the company in the year 1970.The company went in for automation during the second half of 1980s to improve productivity and the company registered significant growth and by the end of 1985,it began to achieve a steady profit. By 1990 a second plant was commissioned, a spray drier plant with a capacity of about 20000TPA.In 1994, EICL was awarded ISO 9002 certification for quality assurance in production. In 1995, 3 rd plant, the calciner plant was commissioned by EICL with a capacity of 2000TPA.It produces clacined clay which is another variety of China clay. In 2003.the company commissioned a 20000TPA Calciner plant at Thonnakkal as a part of its continuous expansion.

3.2COMPANY PROFILE

15

English Indian Clays Limited is one of the leading manufacturers of processed China clay in our country. The company was established in 1966.It is limited company incorporated under provision the Indian companies Act,1956 and is owned by the Thapar Group, one of the industrial giants in the country. The Thapar Group in a span of less than eight decades has grown to be among the largest and most diverse industrial groups in India .from a modest beginning in local mining the group has expanded into a wide spectrum of activities representing major industries. The companys clay mining and refining operations centre around Trivandrum where the processing plant produces several grades of refined kaolin(china clay-both spray dried and rotary dried) ,meta kaolin and calcined kaolin(clays) to cater to paper,paint,rubber,plastic,fiberglass,cmenent and ultramarine. The company has been certified to ISO 9002:1994 since 1996 and has now been upgraded to ISO 9001:2000.EICL has a well equipped R&D Centre, which is recognized by the Department of Science and Technology, Govt of India.EIClL has been successful in maintaining strict quality control and consistent conformity to international standards. VISION OF EICL The vision of English Indian Clays is: To be a leader in processed china clay market in Asia and to be an employer of choice, fostering a culture that values dedication, respect and continuous improvement. MISSION OF EICL The mission of English Indian Clays is: of

16

To provide consistently high quality products and materials to our customers in a safe,

timely,

and efficient manner, at lowest possible cost and grow with them and ensure the growth and development of employees of the company in order to achieve the objectives of the organization and the career goals of the employees.

CORPORATE OBJECTIVES The corporate objectives of English Indian Clays are:

To adopt transparency and responsibilities in its operation and enhancement of overall long term values of it shareholders, customers, lenders and employees.

To ensure maximum utilization of available human resources. To procure material of required quality or quantity at most competitive process for uninterrupted production and maintenance of plant with least tie ups in inventories.

To develop services and retain customers for the range of products manufactured by the company and to meet customer needs in terms of new products or services.

QUALITY POLICY OF EICL EICL is committed to processing and supply of value added hydrous and calcined clay, meeting customer requirements of quality, delivery and application support through continual improvement of the effectiveness of its quality management system.

CORPORATE SOCIAL RESPONSIBILITY

17

1.

The company continued to pursue its agenda on social responsibility during this

year. Water provided round the year to the neighboring villages around the Thonakkal Mines through pipeline, and through water tankers
2.

The rain water harvesting scheme worked efficiently and the water is stored in the

reservoir was shared with surrounding villages. 3.8 CORPORATE PROFILE

CHAIRMAN: DIRECTORS: MR KARAN THAPAR MR B.M.THAPAR MR.S.N.DUA MR.S.K.TOSHNIWAL MR.S.PADMAKUMAR MRJ.K.JAIN (ICIC Nominee) MR VIJAY RAI MANAGING DIRECTOR VICE PRESIDENT COMPANY SECRETARY AUCITORS MR D.KOHLI MR S.K.JAIN MR.P.S.SAIN M/s PRICE WATERHOUSE CHARTERED ACCOUNTANTS BANKERS UTI BANK LIMITED

18

ORIENTAL BANK OF COMMERCE ICICI BANK LIMITED STATE BANK OF INDIA STATE BANK OF INDORE REGISTERED OFFICE CORPORATE OFFICE TC79/4, VELI, THIRUVANANTHAPURAM 695021,Kerala. GLOBAL BUSINESS PARK,801-803, TOWER-B, 8TH FLOOR, MEHRAULI, GURGAON (HARYANA) WORKS THIRUVANATHAPURAM (KERALA)

EMPLOYEE PROFILE EICL has 287 employees of which 55 are officers, 38 administrative staff, 177 workers and 17 mine workers. TABLE 2.1Employee Profile Category Officers Administrative staff Workers Mine workers Total Number 55 38 192 24 287

19

RAW MATERIAL PROFLIE The raw material used in the production process is china clay. It is known as kaoline.Chemically it is Hydrous Aluminum Silicate and is formed by the decomposition and weathering of rocks containing aluminum silicate compound (feldspar).It occurs in the deposits in the form of china clay rock, a mixture of up to 15 percent china clay and up to 10 percent mica, and the remainder being quartz. China clay is naturally available in three forms. The primary deposits are available in rock form. Some china clay deposits are found a long way from the site of their formation, having been formed originally by weathering, and then having been washed away and transported by rivers to the places where they have eventually become deposited. These deposits are known as secondary deposits. The tertiary deposits are the fine dust that is carried by air. These deposits are seen in France.Kaolinite or kaolin is important to the production of ceramics and porcelain. It is also used as filler for paint, rubber and plastics since it is relatively inert and is long lasting. PRODUCT PROFILE The company manufactures hydrous and calcined clays ant it is supplying to paper, paint, rubber, fiberglass and other industries.EICLs products have been in use in below industries in India, Africa and the Far East. The product range is as given below: TABLE 2.2 Product Grades Type Very fine coating clays Fine coating clays Grade Super coat Hi gloss Industry Paper Paper

20

Normal coating/Paint grade clays Coating/Filler grades Fiberglass grades Very fine calcined clays Fine calcined clays Normal Coating/Paint Grade

BCK KCG(Spray dried) Fiberline Himafine himacot Himatex Himapol Himacem Himablue

Paint/Paper/Printing Ink rubber Fiberglass Fiberglass/paper Coatin/paint/paper/printing inks Fiberglass/rubber/soap Paper Coatin/Paint/Printing Inks Paint/ready mix Concrete/pvc compounding Ready mix concrete Cement/ultramarine

Calcined Clay Coarse calcined clay Cement grade calcined clay

TABLE 2.3 Industry wise market break up INDUSTRY PAINT PAPER RUBBER FIBRE GLASS OTHERS % OF SALE 38 30 15 15 2

EICL EXPORTS

21

Over the last 10 years, EICL products have established themselves in the international market. With hydrous and calcined clays of quality comparable with the best grades available in the world, EICL products offer distinct techno-commercial advantage in Africa, South East Asia and Middle East markets due to its geographical location. COMPANYS ORGANISATION STRUCTURE Grouping of activities is an essential step in every organization ant it helps to design an organization structure. Grouping of activities into departments or divisions can be done by grouping tasks into jobs,combinig of groups into identifiable segments, on the basis of functions,products,process,territory etc. At EICL, the departments are classified according to their functions i.e. Functional Departmentation, which follows the principle of grouping activities in accordance with the functions. The functional area consists of 7 departments, each headed by Senior Managers or Deputy General Manager. They include the following: Human Resource Management Commercial Finance & Accounts Research &Development Marketing Production Quality Control
22

The organization structure of the company is diagrammatically represented by an organization chart. The chart shows the lines of responsibilities between the various departments of EICL

3.3 FUNCTIONAL DEPARTMENTS Departmentation is the process of dividing the work of organization into departments or either manageable units. Departments are classified on the basis of grouping activities. Functional, product, territorial customer, process, time and numbers are the main patterns of grouping activities. The basic purpose of the departmentation is:

To make the size of the each departmental unit manageable To secure the advantages of specialization To help the organization to expand and grows To facilitate management development To delegate responsibility To facilitate Administrative Control

Detailed and well defined policies and procedures which each department has to follow during its different operations have been laid down by the company. Under ISO, all the procedures are highly standardized and separate manuals are issued to all departments. This is issued and controlled by various HODs.The efficient and effective functioning of all the departments in an organization is important for the

23

progress of the organization. A good organization structure is determined by the type of communication and coordination existing between various departments in an organization. With the various departments responsibility is delegated to various persons, who help in decision making and makes the functioning of the organization simpler. The functional departments include: Human Resource Management Commercial Finance & Accounts Research &Development Marketing Production Quality Control

24

3.4 MARKETING DEPARTMENT Marketing is performance of business activities that direct the flow of goods and services from the producer to the customer. It is a system of interacting business activities designed to plan, promote and service to existing and potential customers. The main function of marketing is to view the customer as the very purpose of the business. It emphasizes on identification of a market opportunity and fulfilling the needs of the customers. Without marketing there is no consumer and without the customer there is no use for the product or service the company is producing.

At EICL, the marketing department acts as a guide and lead the companys other departments in developing, producing, fulfilling and servicing products and services for their customers. Communication is vital and the marketing department typically has a better understanding of the market and customer needs. The goals and guidelines set by ht marketing department are in line with the vision and mission of the company. The upper management is also involved in and endorses cooperation by all departments in

25

following and implementing the plan and integrating a consistent message into all communication channels.

EICL goes n for Industrial marketing, as its product (kaolin) is used as raw material by other industries such as paint, paper, rubber and ceramics. The company also has its own Export Division in the marketing department. Over the last 10 years, EICL products have established themselves in the international markets. It exports products o about 18 countries some of which include UAE, Philippines, Mauritius, Oman, Yemen, and South Africa. With hydrous and calcined clay of quality comparable with the best grades available in the world. MISSION To develop service and retain customers for the range of products manufactured by the company and to meet customers needs in terms of new products and services. FUNCTIONS The functions of marketing department are:

Identify prospective customers Conduct market survey and market research Source orders and execute them as per delivery schedules agreed upon Service the existing customers-Servicing involves o Meeting customers schedules on time o Keeping track of customers stores and purchase department

26

Provide application support to customers in coordination with EICL R&D center and department

QC

Attend customer complaints and take preventive action against recurrence of similar complaints Motto of the department is to provide products of right quality and quantity at the right time and at right place.

ELEMENTS OF MARKETING MIX 1. Product Marketing department ensures that the product is of the same grade as specified by the customers and meets the quality standards. Currently 35grades of clay are available, each with 2 main specification-brightness and fineness. The right quality clay should contain 78-88% brightness and fineness content from 60-100%. 2. Price The prices are based on pricing policies taken by the company based on the market conditions. The pricing decisions are taken by the marketing department after studying the market conditions and also comparing the competitors price. 3. Promotion It deals with advertising and sales promotion for the product.Since the company goes for Industrial marketing department concentrates on direct marketing as a means of promotion which enjoys the advantage of two way communication.EICL has marketing offices in Mumbai and Delhi and has marketing agents in Mauritius, South Africa, GCC, Yemen, Sri Lanka, Indonesia.,Philippines,Jordan and New Zealand.

27

4.

Packaging Packaging is done in laminated High Density Poly Ethylene (HDPE) bags.EICL products are

generally packed in 50 kg, or 1000 kg (Jumbo bags).they are also packed in 25 kg bags as per the requirements of the customers. The 75 kg bags are used to pack the product in the form of lumps. 5.Place In this clay industry the place is not that much important. The production plant is setup in Trivandrum and Thonakkal. Market Research Marketing research is the systematic design,collection, analysis,and reporting of data and findings relevant to a specific marketing situation facing the company.At EICL ,the HOD of marketind department also maintains a good marketing department also maintains a good Market Information Systems.It uses internet for collecting information ,interacting with customers, etc.The department goes in for product analysis and competition analysis.Product analysis is required to find out customers preferences for the product.Competition analysis is done to study the recent or proposed production ,sales and pricing policies of the competitors. Benefits:
1. Helps to identify the customer behavior and to choose customers

2. Helps to know which products move in the market and why 3. Helps to know the current market trends and segments

NEW PRODUCTS DEVELOPMENT

28

EICL develop new products based on the customers requirement and their expected quality. For this there will be constant interaction with the customers, commercial and technical department. Research and Development department is responsible for making new product and grades to the market. Now EICL has a focus on import substitution.The customers can import some other products which EICL is not producing from some other place. They can collect the samples of that product and replicate the product, so that the customers can buy it if meet there specifications. SALES FORCE MANAGEMENT The sales force management will meet the customers requirements on time and good customers relations are being maintained. They will also provide the customers with right information in right time.

LIST OF MAJOR CUSTOMERS Clay being the major raw material for various products EICL has got paper industry, soap and detergent industry, paint industry, ceramic,rubber and fibre industry. The major customers of EICL include Paper Industry Ballarpur Industries Ltd Paper straws products Harayana coated paper Ltd Rohit pulp & paper mills Ltd Sreevidya paper mills Ltd - Ballarpur - New Delhi -Faridabad - Gujarat - Nazik

29

Soap & Detergent Industry Hindustan Lever Ltd Colgate Ltd Godrej Soap Ltd Paint Industry Asian Paint India Ltd Jemson & Nicholson India Ltd Berger Paints India Ltd Shalimar Paints Ceramics Industry Spartek Ceramics India Ltd Naices India Ltd Surya Pottery Ltd Eagle Potter Private Ltd Diamond Pottery Private Ltd Rubber Industry MRF Ltd JK Industries - Chennai - Vdaipur
30

- Mumbai - Mumbai - Mumbai

- Mumbai - Mumbai -Calcutta - Calcutta

-Madras - Pondicherry - Himachal Pradesh - Gaziabad - Bahduge

Paragon Rubber Industries- Kottyam Bata India Ltd Ceat Ltd Fiber Industry FCP Ltd UP-Tiywa Glan Ltd - Thana - New Delhi - Bangalore - Hyderabad

COMPETITORS EICL ,being the largest producer of China Clays in India ,has a very few competitors. The monthly production of EICL (ABOUR 12000 TONS) is higher than the annual production of same of the companies in the same sector. Hence competitors are not a threat to EICL.Some of its competitors are 1. Kerala Ceramics, Quilon 2. 2o microns 3. Wolken AGENTS Agents are appointed by EICL because it is not possible for the company to cater to the needs of all the customers who are situated at various cities of which are far from their branches .Agents are appointed as per the recommendations made by the branch offices to the management. Criteria for appointment of an agent are the following:

31

An agent should have a business in the potential area or in the particular industry. The person to be appointed as the agent should be financially strong The agent should have sufficient technical knowledge to deal with the customer problems .The agent should have sufficient market as well as office infrastructure like Fax ,Telephone, warehouse etc.The person appointed as agent should have good contacts in the industry. After satisfying the above conditions the appointed agent enters into an agreement with the company which is signed both by the agent as well as the Vice president and the marketing manager of the company.

INTERNATIONAL MARKETING Over the last 10 years, EICL products have established themselves in the international market. With Hydrous and Calcined Clays of quality comparable with the best grades available in the world, EICL products offer distinct techno-commercial advantage in Africa, South East Asia, and Far East and MiddleEast markets due to its geographical location.The location is selected based on auction freight advantage countries.They will have agents an dthey will do the marketing part.This agents will have regular touch with the customers asking them about the quality of the product.The main products in international marketing are paint,rubber,insulators,ready mix concrete,rubber etc.

32

3.3.2 HUMAN RESOURCE MANAGEMENT The Human Resource department act as a link between the employees and the top management. It works in close contact with all other departments and also coordinates various activities within the organization.

VISION Human Resource department is responsible for ensuring the growth and development of the employees and to ensure maximum utilization of available human resources of the company in order to achieve the objectives of the organization and career goals of the employees. MISSION Human Resource department aims at ensuring that all employees in the company are well versed with the job that they are doing with respect to the quality and services and that optimum contributions are

33

made by all employees through teamwork and to maintain the morale of the employees through rewards for performance by enriching their knowledge and skills and by ensuring proper work environment and welfare amenities. The policies and practices of HR department are in line with ISO 9001:2000 and also conform to the provisions laid down in various Acts of which include

1.
2. 3. 4. 5. 6. 7. 8. 9.

Workmens compensation Act 1923 Trade unions Act 1926 Industrial disputes Act 1946 Factories Act 1948 Industrial employment standing orders Act 1947 Mines Act 1952 Employees State Insurance Act 1948 Employees provident fund Act 1852 Payment of wages Act 1936

FUNCTIONS The major functions of Human Resource department include

a)

Human Resource Development function

34

b)

Administrative function

Human Resource Development Function

The important function of Human Resource Development include

1. Selection and placement of employees 2. Performance rating of trainees/probationers and confirmed employees 3. Training need assessment 4. Training and development programmes 5. Welfare activities

Administrative functions The main Administrative functions include

1. 2. 3.

Attendance management Wage and salary administration PF Administration

35

4. 5. 6. 7.

ESI scheme administration Office management Security matters Safety management

RECRUITMENT AND SELECTION OBJECTIVE: Selection and placement of right candidate for right job at all levels in EICL (Veli and Thonnakal and other future projects). Activities Performed: Raise job specification data base and requisition for recurtment with sanction from VP/ED Source application through advertisement and local contacts and other manpower supply resources Receive application and prepare comparision sheet Short list applicants Short list applicants called for interview and send interview letters Constitute interview committee Candidate fill application blank and conduct interview Interview board members and issued assessement sheet to other interviewers Rank list preparation reference check and submitted for approval of VP/ED Send letter for appointed person and joining report prepared

36

PROCESS OVERVIEW The recruitment and selection is the first activity of the HR function. The aim is to select and recruit appropriate candidate capable to contribute to the growth of the organization. The job specification for manpower requirement along with approval of VP/ED to HR department showing detailed educational qualifications and experience. The HR head has to discuss with the indenter to access the nature of requirement like casual, trainee, temporary, permanent etc and also the sanctioned manpower for the department. If the requirement is beyond the sanctioned strength indenter ha to give a detailed justification note to HR head with the approval of the appropriate authorities. If it si within the approved strength the qualification, experience etc required for the candidate should be assessed by the HR head in consultation with indenter. To verify the availability of suitable candidate in the company so that the post can be filled through transfer and if available actions to be taken with the consent of VP/ED.If the internal candidates are not available, get application form from suitable candidate through reference, advertisement, local medias or through manpower consultants.

All application received to be screened against qualification, experience etc by the user HOD and HOD HR.Screened candidates to be called for test and interview. There are three interview committee: a) For workers and staff 1. 2. b) User HOD HOD HR For executives up to MMA level

37

b)

For executives up to MMA level 1. User HOD 2. HOD HR 3. Subject expert c) Above MMA level 1. 2. 3. Pre interview by VP/Corporate HR Subject expert if any Final interview by ED

Selected candidates to be offered appointment in the specified format in duplicate. Candidates who report for joining duty to be subjected to medical examination by company medical officer and medical examination fitness certificate to be issued. Documents are to be collected at the time of joining: i. ii. iii. iv. v. vi. vii. viii. ix. x. Signed copy of appointment order One passport size photograph Copy of relieving order if any Age certificate Copy of mark list Experience certificate if any Relieving order if any PF Enrolment form ESI enrolment form GME/GPA Enrolment form

38

Inputs
i.

Bio data from interview Letter for interview Application blank

ii. iii. Output i. ii. iii. iv. v. vi.

Job specification database Guideline for recruitment Short list candidate Approval from VP/Ed Appointment order Joining report

INDUCTION TRAINING OBJECTIVE:

To familiarize himself with operations of the company with emphasis on quality management system. Customer reuirement, process requirement etc.

To understand process and monitoring activities of the company To impart necessary knowledge and skill for effective performance.

PROCESS OVERVIEW

39

Familiarization of existing system and quality management impart necessary knowledge and skill development and familiarization of operations and quality system. Candidates who reports for joining duty to be subjected to medical examination by the company medical officer and medical fitness certificate to be obtained. Duty joining form should be filled up by the candidate and obtain signature from the reporting Head of Department. Human Resource personnel prepare the induction training schedule and subject for approval of the HOD HR.Then the approved schedule is circulated among faculty members. For newly joined workers the induction training is for 3 days, staff and officer one week and above MMA level for four days. Daily monitoring will be done by HR personnel. After the training the trainee should have to do a presentation in front of the VP, HOD HR, GM and other faculty members and other experts. Detailed training report should be submitted on the last date of training. The induction report will be reviewed by VP and HOD HR. Inputs Outputs Induction training slides for presentation Induction training report Feedback for induction training Joining report Medical certificate format Induction training schedule

40

TRAINING AND DEVELOPMENT OBJECTIVE: 100% employee shop floor training Employee under general training and the main objective is quality and customers requirement 100% coverage of employee in new equipments and new process from time to time Conduct survey of employee satisfaction

Process overview Training plan will be finalized before 31st of every year and an estimate amount will be included in the annual budget earmarked for HR department. Training programs are to be organized at 3 stages for employees Induction training General training Functional training

Induction training are to be organized for newly joined employees.Functional and general training are being organized externally for officers and staff on the basis of annual appraisal and assessment.The HODs of each department should assess the need of the training..Service of internal trainer are to be utilized whenever in house training programme which require their specialization and experience are being held.

41

Inputs Training need assessment Training calendar Course material Evaluation format

Outputs

Evaluation sheet Training review Safe working Productivity improvement

PERFRMANCE APPRAISAL (OFFICERS) OBJECTIVE: To identify the performance rating of officers of the company Process overview All the HODS are responsible for rating the performance of the officers for trainee, probationers and permanent staff on annual basis. On completion of training period the trainee to be appraised by the concerned HOD and to be reviewed by VP for placing him in the probation period.If performance is good, orders are to be issued by HR department placing the employee I probation period.Probatioers to be appraised on completion of 6 months probationary period in prescribed form. Annual appraisal form
42

confirmed employee to be made during April of every year in the prescribed form. Appraisal forms with details of the employee to be prepared by HR department before 28th of February. Completed appraisal to be approved by ED and increment/additional/promotional orders to be issued on 1st April.Quaterly appraisal(PAS) for officers is to be prepared for every quarter and ratings to be done by concerned HODs.Review of the rating is to be done by VP for all officers at last for one quarter in an year. Schedules for quarterly appraisal are to be prepared and given to HODs and schedules for reviews of appraisals to be given to VP. Inputs Outputs Filled appraisal forms Increment letter/additional/promotional orders PAS review Training calendar and training plan. Appraisal formats from corporate HR PAS format

PERFORMANCE APPRAISAL FOR WORKERS IN MINES AND VELI OBJECTIVE: To identify the performance rating of trainers/probationers and confirmed employees of the company.

43

Process overview All the HODS are responsible for rating the performance of the officers for trainee, probationers and permanent staff on annual basis. Wherever performance is not up to the required level the concerned employee to be informed/warned in writing. On completion of training period the trainee to be appraised by the concerned HOD and to be reviewed by VP for placing him in the probation period. The performance doesnt improve on the basis of continuous reviews, the concerned employee to be charged sheeted and appropriate decision regarding the extension of training period further should be taken and if the management deems that service of employee is to be enquired and other formalities should be taken as per provision of certified standing orders of company. .If performance is good, orders are to be issued by HR department placing the employee in probation period. Inputs Outputs Filled appraisal form Increment letter Training calendar and plan Letter of absenteeism Appraisal form

PERFROMANCE APPRAISAL FOR STAFF OBJECTIVE: To identify the performance rating of trainers/probationers and confirmed employees of the company

44

Process overview All the HODS are responsible for rating the performance of the officers for trainee, probationers and permanent staff on annual basis. On completion of training period the trainee to be appraised by the concerned HOD and to be reviewed by VP for placing him in the probation period. If performance is good, orders are to be issued by HR department placing the employee I probation period.Probatioers to be appraised on completion of 6 months probationary period in prescribed form. Annual appraisal form confirmed employee to be made during April of every year in the prescribed form. Appraisal forms with details of the employee to be prepared by HR department before 28th of February. Completed appraisal to be approved by ED and increment/additional/promotional orders to be issued on 1st April. Inputs Outputs Filled appraisal forms Increment letter/additional/promotional orders PAS review Training calendar and training plan. Appraisal formats from corporate HR PAS format

PROMOTIONS OBJECTIVE: The objective is to fill the vacancies by promoting eligible workers, staff and officers grade. Workers are categorized in 5 grades

45

Unskilled Semiskilled Skilled 1 Skilled 2 Highly skilled Promotion of workers will normally be effected from the next wage period following the date on

which the vacancy arises and the promotion process will be completed within a period of 45 days subjected to the following selection procedure.The selection for promotion will be based on the following eligibility norms: Seniority -----------------60 marks Attendance --------------20 marks Performance rating----- 20 marks

WELFARE ACTIVITIES The objective is for organizing employee welfare activities like redressal of employee greviances,canteen,recreation club, Benevolent fund, welfare fund, co-operative society, issues of soaps and towels to workers, medical assistance and sanitation facilities. WAGE AND SALARY ADMINISTRATION The objective of wage and salary administration is for preparation, verification and disbursement of wage and salaries for workers, casuals, contract workers, trainees, staff and officers.

46

PF ADMINISTRATION The objective is for the administration of PF of employees of (EICL) as per PF Act and Rules.

TRADE UNIONISM

UNION INTUC AITUC CITU KTUC UTUC BMS

Affiliated with political party I.N.C CPI CPI(M) KC(M) RSP BJP

These are the trade unions which are recognized by the management.CITU is the major trade union which has the maximum memebership. MANPOWER DETAILS

CEO VP (WORKS)

1 1

47

GM Dy GM Senior Managers Managers Asst Managers Executives Junior Executives Staffs Workers Workers (Mines)

2 3 5 3 16 15 12 35 192 24

48

3.3.3PRODUCTION DEPARTMENT

The Production Department of EICL is mainly concerned with the mining and processing of china clay.EICL produces about 1,50,000 tons of china clay and calcined clays per year which cater to the needs of paper,paitn,fiber glass rubber cable,soaps and detergents and plastic industries in the country.The plant capacity is 190,000 metric tons per annum and is the biggest in south east asia.The mining activity is performed by experts who ensures that the art equipment grinds the ores to the particles ,with highpowered machineries ensuring a product that meets highest quality standards conforming to international class.

PLANTS Plants refer to the buildings used in connection with the manufacturing, processing, packaging, labeling and storage of calcined and hyrous clay.EICL has 4 plants. First 3 plants are at veli unit fourth plant at Thonakkal.The entire production process takes place in these plants.

In Plant 1 the product is dried using a rotary drier, which operates at high temperature. Plant 2 is a spray drier plant which does direct drying. In Plant 2, a spray drier called Atomizer is used for obtaining products in the granular form. Both the plant are used for producing hydrous clay. Plant 3 has been shut down and the plant 4 at Thonakkal is used for the production of calcined clay.
49

TABLE 3.3.1 Types of clay produced Available Forms Plants

Hydrous Clay(with water content) Calcined Clay(without water content)

Lump,Powder,Spray,dreid Spray dried,Powder

1 and 2 4

PROCESSES The various processes involved in the production of hyrous and calcined clays at EICL are as follows: Mining The raw material is extracted from the bottom portion of the earth using excavators and is transported to the plant.

50

Matrix Analysis It mainly deals with analyzing and grading the caly matrix based on colour.Gnenrally the matrix is found in 3 colours- white,grey and pink.White clay indicates clay in pure from.grey clay indicated the presence of graphite and pink colour indicates the presence of iron(ferric) content.This is done with the help of process control lab which decides the blend of grades that go into the production process according to customer requirements.

Matrix Blending The different grades of clay matrix in appropriate proportions as per process control lab to obtain raw materials of desired characteristics according to customer requirements.

Blunger Requirements Here water is added with the raw material(clay matrix) to form the slurry.The clay matrix in bulk form is fed to the machine called Blunger with addition of water to form the required amount of slurry.

Classification It is the process of separating the higher grid particles from the slurry. Through this process 25 to 30% of sand gets removed.

51

Hydro cyclone Process This is a two stage process. In the first stage the slurry after classification is passed to 14 hydro cyclone where there is a primary vortex formation by which the residue moves downward to the nozzle and the secondary vortex moves the product upwards and in the second stage it is passed to 3 hydro cyclone where the remaining sand gets removed. The first stage removes the heavier sand particles, and the second stage removes the smaller grit particles. Bleaching agent used is HydrosulphiteHydrosulphite bleaching of clay removes iron impurities and allows clay to be bleached to perfect whiteness. Sodium Hydrosulphite transforms trivalent iron to bivalent which, on subsequent acid treatment (by adding su;phuric acid which reduces the pH value to 2.5),dissolves and removes iron from the clay. To neutralize the acidic content of the slurry and to prevent from revamping, carbonate and soda ash is added to the slurry and the bleached slurry is then collected in a holding tank. Having refined the clay, it is moved on to the final process i.e. drying Drying Drying refers to converting the slurry which contains 65% water into final products in the from of solid (lumps and powder) through the following operations. Screening The bleached slurry (containing 12% salts) is subject to screening through which graphite and other foreign materials are screened off ant the pumped and passed through a filter cloth. Filter Pressing

52

Here, a hydraulic filter press is used to drain off t excess water. On passing through the filter cloth, the slurry gets converted to cake form with 65% salts and 35% water. The cake is collected and it is sliced using a cutter. Here on, the drying process varies depending on the plant in which it is carried out. Plant 1 makes use of indirect drying through a rotary drier and plant 2 does direct drying by means of a spray drier. The different operations at plant 1 are mentioned below a. paddle mixing operation the sliced clay are mixed with 12% dry powder in paddle mixer which converts the moisture content to 22% and put in the rotary drier. b. Rotary Drying operation The drier runs on fuel, hot air is passed through it and to this 12% dry powder is added. It turns to lump form containing around 12% moisture. The lumped product is sent to the lump silo from where it is either sent to packaging section or it is send to attritor mill where the lumps are milled to powder form with 2% moisture and then sent to silos for packaging. The different operation at plant 2 is mentioned below: a. Kneading Operation At Plant 2, the sliced clay cakes (containing 65% salts) are mixed with chemicals (dispersal agent) like accumer or calgon to convert it to slurry form. This process is known as kneading. b.Atomization The slurry is then stored in storage viscosity tank. It is then passed to the spray drier called atomizer with the help of a feed pump where hot air is passed through the slurry which is kept in a closed chamber.

53

The product obtained in powder form contains only about 2% moisture, which is then send to silos for packing. b. Packaging The product stored in silos is send to either jumbo (1 ton bag) bagging or 50kg bagging machine and dispatched. The different operations at plant 4 are mentioned below Calcinations At plant 4, which is a calciner plant where the moisture content from clay is removed by adding chemicals to get calcined clay. The powdered product from the attrition in the first plant or spray dried powder in the second plant is sent to the calciner where the moisture is removed and then sent to silos for packing. The calcite produced is of high value.

TYPE OF LAYOUT A layout essentially refers to the arranging and grouping of machines which are meant to produce goods. The type of layout followed in EICL is process layout. It involves grouping together of like machines in one department. The process arrangement is signified by the grouping together of like machines based upon their operational characteristics. The advantages of process layout are 1. Reduced investment on machines as they are general purpose machines 2. Greater flexibility in production 3. Better utilization of men and material

54

4. Greater scope for expansion as the capacities of different lines can be easily increased. Vendor Selection Vendor selection is one of the most important process the vendor have to supply the raw materials. The selection is done on the basis of following criteria Capacity of vendors Reasonable price Reliable supplier Responding time Quick delivery Meet the customers requirements Considering the reputation of the supplier

Vendor Rating The vendor rating will be done on how the vendor is able to meet the requirements of the customers.The goodwill of the vendor is very important. If all the criterias of a vendor selection is met then that vendor will be in good list.If the vendor is unable to meet the customers requirement then first warning will be give but after the third warning that vendor will be black listed. Logistics The major Indian Arabian Sea port of Cochin is only 220 kms from our works. Regular connections to all the major ports in the world are available from Cochin.A new Port at Tuticorin,
55

managed by Singapore Port Authority has come up in a major way to the East in Bay of Bengal. This Port is 200 kms from their works and major shipping lines have started calling here.These two Ports together ensure minimum lead time for their cargo to be shipped out of India to destinations all over the world. For domestic cargo, EICL offers movement of material by coastal route as well as CONCOR rail in addition to the direct truck option.

3.3.4 Quality Control Department Quality control refers to those activities which ensure that the manufacturing process produces quality perfect products. It is responsible for ensuring the quality of products as per the specified standards and the resulting product will perform its intended function.EICL being ISO certified company, its quality standard has to be maintained. This department tries to improve the quality of the product according to the specifications given by the customer. The QC department takes samples from the plants every hour to check the following properties:

56

Quality Density Grit Brightness Ph Moisture Viscosity,etc.

FUNCTIONS The major functions of QC departments are Raw material testing- checks the standard and quality of raw materials(clay) from mines and on its delivery Process testing- assures proper processes int the production of raw materials Intermediate testing-hourly testing to ensure the quality of the product at each stage Product testing- checks the quality of the finished products also.great care is taken to maintain quality during packing and dispatching.Quality of finished product is measures by taking 50g as sample from every 20 bags Some of the important operations performed by quality control department in EICL are a. Magnetic Separation It is the process of separating the impurities(iron particles) from the product
b. Paint matching

57

It is used to check the brightness of the product as per customer specifications. The brightness and ph values for the different grades of clay are listed below: TABLE 3.3.4.1 Clay(Grade) Hi gloss BCK KCG Brightness 86.5-87.5 85.86 84.85 Ph 4.55 4.55 4.55

The quality control dept in EICL assures quality of its products till it reaches the hand of the customer. This adds to the companys reputation and goodwill.

3.3.5 RESEARCH AND DEVELOPMENT DEPARTMENT EICL has a well equipped R&D center that is approved by the department of science and technology. It was started in 1992 with the view to provide technical advice to the customers and to offer technical assistance including testing services to other departments of EICL.Its in-house research and development unit is known for stringent quality control and developing suitable products as per the customers requirement. The company has regular samples of various minerals taken at various stages of the production process to analyze complete mineralogical and chemical composition by their competent team of R&D

58

experts, enabling them to not only recommending right products to the customers but also to develop customized minerals if required. The department has close relations with the national laboratories and the research wings of major customers. Hence it is able to draw upon the expertise of these esteemed organizations bringing out innovative products and finding new applications for the existing products. FUNCTIONS
a) Develop new products b) Provide application support to customers c) Iinternal testing for each industry d) Generate application data e) Process improvements and technical assistance to production department f) Interaction with external institutes and research organizations

g) Interaction with research departments of major customers to understand their needs and meet quality requirements. DEVELOPMENT OF NEW PRODUCTS Development of new products is one of the major activities of R&D department. It is carried out by following steps 1. Feedback from customers by visiting them directly 2. translate it into Product Specification 3. Identifying resources 4. Sample preparation as per the specification 5. Application test

59

6. Pilot plant trail 7. Testing and application (sample given to customers first small sample and the large sample). 8. Plant trail at customer site

The R&D department has developed varieties of grades of clays of which the important are the following. Hydrous clay Surface treated clay Calcined clay Specialty clay

AREAS IN WHICH R&D WAS CARRIED OUT Provided technical support to improve the quality of Speciality Hydrous clays for the paint industry Provided technical assistance for identifying and providing suitable blend of raw matrix Introduced a cheaper process chemical to reduce the production cost.

BENEFITS DERIVED AS RESULT OF R&D Established specialty clays in paint and paper industry Achieved cost saving in value added products

60

APPLICATION SUPPORT EICL has well-equipped application laboratory in Trivandrum.This laboratory is under the control of R&D department. The different kinds of labs available with R&D are paper, rubber, cement and ceramics labs. It is used to meet the changing requirements. The lab has paper, paint, rubber, cement and ceramic industry specialists, supported by most modern equipments, who constantly thrive for offering proactive solutions to the respective industries. The paint lab carriers out manufactures and testing of paint. Some of the qualities analyzed are opacity, gloss, smoothness and viscosity. The chemical lab conducts analysis of clay. There is also an instrumentation room which houses world class equipments for testing, some of which includes sedigraph,hi-shear viscosity, abrasion tester, tensile tester, ultrasonic diposer spectrometer, Brookfield viscometer and x rat diffractometer.The investment in lab is very high as it is fully equipped with the most modern equipments to carry out all types of analytical tests for its customers. LIBRARY COLLECTION The R&D department also equipped a library which has a collection of books,journals,magazines,records and other literary documents pertaining to the industry and standard test procedures to increase the efficiency of the company.Books are available for reference and borrowing for the employees of the company. FUTURE PLANS ACTION

Commercialization of Speciality Clays in new industries Development of delaminated clay

61

Optimization of super-gloss quality to replace imported clay in paper coating Develop cheaper and suitable process chemicals for reducing the cost of production Collaborative research works with major customers to develop cost effective formulations in all areas of application

Developing new products

3.3.6COMMERCIAL DEPARTMENT The commercial department in EICL is responsible for the procurement of raw materials, chemicals, spares and packing materials, vendor development and procurement of imported materials. The department consists of purchase and stores sections. MISSION To procure material of required quantity and quality at most competitive prices for uninterrupted production and maintenance of the plant with least possible tie up in inventories and with consistent endeavor to make it economical COMMERCIAL DEPARTMENT CHART

62

Senior Manager Commercial is responsible for giving the approval for purchase of materials,assessing,rating and finalisatin of vendor,settling disputes pertaing to terms of contract and purchase order.Any indents regarding project purchase are taken car of by the AssistanceManager Purchase.Vendor Development vests with him.Assistant Manager(store)control the functions performed in the stores section. He is responsible for supplying materials to the user department, preparation of gate pass for items bought inside or taken out of the company. The Executive(commercial) is responsible for verification of indents, sending inquires, obtaining quotations, preparation of comparative statements, renewal of licenses, clearing the materials, preparation of transport documents and follow up with the vendor. The executive(stores) responsible for receipt of materials, handling non conforming items, carry our the work for incoming materials, systematic inspection and storage of materials, periodical stock verification of stores materials, preparation of records for sending out and receipt of outward materials, and lay down procedures for calibration of balance used for measurement related to store activities. The supervisor in purchase section is responsible for verification of indents, sending, inquires, obtaining quotations, preparation of comparative statements and obtaining approval of purchase from Sr Manager Commercial. The Assistant prepares the purchase orders. Senior Assistant (stores) assists the Executive (stores) in his job and store at tenders issue the stored items to the user department as advised to them. FUNCTIONS Review of stock materials indents

63

Selection of materials source, obtaining offers, evaluation of offers,negotiation,terms of purchase,ordering,follow up,receipt,payment,vendor rating and evaluation, approved suppliers list and new source development

Market Intelligence-continuous interaction with market and collecting data on costs, demand and product substitution

Receipt of goods, inspection and their approval Storage Proper storage and materials accounting and reconciliation, safety and security, easy accessibility and identification of the location.

Scrap Material-Systematic storage of scrap and periodical disposal Physical stock verification and identification of surplus/obsolete item, its disposal and perpetual inventory system.

Transportation of materials-Fixing transporters for transportation of all materials, rate contract for bulk materials ad insurance claim for shortage, damage losses.

Issue of materials to the user department Clearance of incoming materials Obtaining and renewal of licenses Liaison with all department, effective and timely communication with all concerned Compliance with statutory and audit formalities.

64

3.3.7 FINANCE DEPARTMENT The Finance and Accounts department is responsible for the financial functions and activities of the company and for the administration of the companys fiscal policy. The main activities include preparation, monitoring the income and expenditure,MIS reporting,audit,tax administration,updating the shareholders on the financial health of the company, maintaining accounting records, preparation of financial statements, ledger administration etc.

65

FINANCE DEPARTMENT CHART Sr Manager is the head of the department and authorized signatory of the unit. He is responsible for the consolidation functions. Executives(Accounts) and Sr Manager are responsible for balance sheet preparation. The executive Accounts also participate in audits, prepare statements related to MIS reporting, handles taxation matters and accounting.Sr Superior and jr Superior are responsible for accounting and returns preparation. The cashier receives and disburses funds, records monetary transaction issue of receipts, balance records, transfers funds and prepares cash receipts.

Costing Practices There will be a bill of materials (BOM) in which the materials required for the production and there amount will be there. By calculating the amount of those raw materials we can find the price of finished goods. The moving average price will be entered in the system automatically. The price will also include the routing charge. i.e. via which all machines the product has passed.

FUNCTIONS Budget preparation and Administration Accounting Audit MIS Reporting Administration of taxes
66

Financial concurrence and advice Compilation of Codes, Rules and procedures concerning financial transactions and having bearing on their implementation

General accounting records Cash flows Investments Cost allocation Internal and External financial reports Control of expenditure Statutory reports and tax reports Working capital management

Budgeting Individual budgets are prepared by concerned departments and master budget is prepared by finance department. Budget is normally prepared 3 months in advance and has to be approved by the chairman. Accounting EICL has in-house accounting software and has standardized on clipper as their developments platform. The database used is FoxPro. Financial department maintains separate ledgers for the plants in EICL.The ledger for first plant is known as manufacturing ledger. This includes office expense and normal administrative expenses. Ledger

67

for the second plant is known as spray drier ledger. Ledger for the third plant is known as calciner ledger. A separate ledger is maintained for the R&D department. The total control of all these rests in the general ledger. MIS (Management information System) EICL has installed MIS for better operation. It is maintained by the finance department. It is prepared on the second of every month. This includes various financial statements like profitability statements, cost sheets, profitability statements like power trend, debtors age wise analysis, cash flow and fund flow statements and ratio analysis. Auditing Both internal audit and statutory audit is conducted. Internal audit is done once in 6 months by Varma & Varma.Statutory audit is done on a quarterly basis by M/s.Price Waterhouse, Chartered Accountants, Delhi.

FINANCIAL ANALYSIS INTRODUCTION Ratio analysis is one of the most used techniques of financial analysis. Financial ratios help to find out a firms performance and financial situation. Most ratios can be calculated from information provided

68

by the financial statements. Financial ratios can be used to analyze trends and to compare the firms financials to those of other firms. For the financial analysis of EICL, data from the following financial statements of the company has been utilized: Balance sheet Profit and Loss Account Cash Flow Statement

Ratio analysis is used as a tool for analyzing and interpreting the financial statement of EICL.Its financial performance is studied through the calculation of different financial ratios such as liquidity, profitability, and solvency ratios. Financial ratios can be classified according to the information they provide. The following types of ratios are frequently used. Liquidity ratio Leverage ratio Activity ratio Profitability ratio

Comparative ration analysis helps to determine a companys strength and weakness, evaluate its financial position, and understand the risks. LIQUIDITY RATIOS It refers to the ability to the firm to meet its current liabilities as they fall due. It includes the current ration and quick ratio. CURRENT RATIO

69

It represents the ration of current assets to current liabilities. Current Ration is an index of concerns financial stability since it shows the working capital which is the amount which the current assets exceed the current liabilities. It is expressed as (Current assets/Current liabilities).A current ratio of 2:1 is the ideal ration and is expressed as a safe margin solvency. TABLE 3.3.6.1

YEAR

2006-2007

2007-2008

CURRENT ASSETS(1)

339679893

347420539

CURRENT LIABILITIES(2)

136151221

151240420

CURRENT RATIO(1)/(2)

2.49

2.29

Here the ratio is above the ideal ratio and thus the situation is favourable i.e. firm can meet its current liabilities as they fall due. QUICK RATIO

70

This ratio, also termed as acid test ratio, is determined by dividing quick assets by current liabilities. The ratio may be expressed as (Quick or Liquid Assets/current liabilities).The ideal ratio is 1:1 and is also an indicator of short term solvency of the company. The figures in the table show a current ratio of more than 1,hence it indicates that financial position of the company is sound TABLE 3.3.6.2

PROFITABILITY RATIO Profitability ratio is an indication of the efficiency with which the operation of the business is carried out. Poor operational performance may indicate poor sales and hence poor profits. A lower profitability may arise due to the lack of control over the expenses. The following are the important profitability ratios

GROSS PROFIT RATIO(GPR) NET PROFIT RATIO(NPR) EARNING PER SHARE(EPS)

71

OPERATING EXPENSES RATIO

These ratios are important to calculate the profitability and it also helps to find out tge financial situation of the firm. GROSS PROFIT RATIO(GPR) This ratio extresses relationship between gross profit and sales.It is given by (Gross Profit*100)/Net Sales. TABLE 3.3.6.3

An increase in the gross profit ratio may be due to Increase in the selling price without a corresponding increase in the cost of goods sold. Decrease in the cost of goods sold without a corresponding decrease in the selling price of goods. NET PROFIT RATIO (NPR) This ratio establishes the relationship between profit after tax and sales. This ratio is determined by dividing the net income after tax to the net sales for the period. An increase in the ratio over the

72

previous period indicates improvement in the operational efficiency of the business.The ratio is thus an effective measure to check the profitability of the business. TABLE 3.3.6.4

Figure show a constant increase in the above ration year after year which is a definite indication of improving conditions of the business.

EARNINGS PER SHARE(EPS) It helps in the assessment of the profitability of a firm from the stand point of equity share holders.It is calculated by dividing the profit available to the equity share holders by the number of shares issued(Net Profit after Tax/No of equity shares).The earning per share helps in determining tge market price of the equity shares of the company.A comparision of EPS of the company over the years will also help in determining whether the equity share capital is being used effectively or not.It also helps in determining the companys capacity to pay dividend to its equity shareholders. TABLE 3.3.6.5

73

OPERATING EXPENSES RATIO This ratio is the test of the operational efficiency with which the business is being carried. The operating ratio should be low enough to leave a portion of sales to give a fair return to the investors. A ratio of 85-90% is considered as normal operating ratio in many cases.

TABLE 3.3.6.8

74

Here the ratio is very high indicating unfavourable condition. ACTIVITY RATIOS The activity ratios indicate the efficiency with which capital employed is rotated in the business. The overall profitability of the business depends on two factors:

The rate of return on capital employed, and The turnover i.e. the speed at which the capital employed in the business rotates. Higher the rate of rotation, the greater will be the profitability. Turnover ratio indicates the number of times the capital has been rotated in the process of doing

business. FIXED ASSETS TURNOVER RATIO This ratio indicates the extent to which the investments in fixed assets contribute towards sales. If compared with a pervious period, it indicates whether the investment in fixed assets has been judicious or not. It is given by (Sales)/(Fixed Assets). TABLE 3.3.6.9

75

WORKING CAPITAL TURNOVER RATIO This ratio indicates whether or not working capital has been effectively utilized in making sale.Working capital is calculated by deducting current liabilities from current assets.The ratio can be found out by dividing sales by net working capital

TABLE 3.3.6.10 .

STOCK TURNOVER RATIO

76

This ratio indicates whether investment in inventory is efficiently used or not. It explains whether investment in inventories is within proper limits or not,ie it signifies the liquidity of the inventory. The ratio is calculated as (Cost of goods)/ (Average stock).The average stock/inventory may be calculated on the basis of the average of inventory at the beginning and at the end of the accounting period. A high inventory turnover ratio indicates brisk sales. The ratio is, therefore,a measure to discover the possible trouble in the form of overstocking. A low inventory turnover ratio results in blocking of funds in inventory which may ultimately result in heavy losses due to inventory becoming obsolete or deteriorating in quality. It is difficult to establish a standard ratio of inventory because it will differ from industry to industry. TABLE 3.3.6.11

The figures in the table indicate a fall and rise in the stock turnover ratio.

77

LEVERAGE RATIOS Financial leverage ratios provide an indication of the long term solvency of the firm. Unlike liquidity ratios that are concerned with short term assets and liabilities, leverage ratios measure the extent to which the firm is using long term debt. DEBT EQUITY RATIO This ratio is determined to ascertain the soundness of the long term financial policies of the company. The ratio indicates the extent to which the firm depends on the outsiders for its existence. A high ratio means less protection for creditors. A low ratio indicates a favourable situation since the creditors feel the owners fund can help absorb possible losses of income and capital. The figures indicate favorable situation. TABLE 3.3.6.12

PROPRIETARY RATIO

78

It establishes relationship between the proprietors or shareholders funds and the total tangible assets. This ratio focuses attention on the general financial strength of the business enterprise. It is given by(Shareholders fund/Total Assets).Higher the ratio, the better it is.

TABLE 3.3.6.13

USE AND LIMITATION OF FINANCIAL RATIOS

A reference point is needed. To be meaningful, most ratios must be compared to historical values of the same firm.

Most ratios by themselves are not highly meaningful. They should be viewed as indicators, with several of them combined to paint a picture of the firms situation.

Year end values may not be representative. Certain account balances that are used to calculate ratios may increase or decrease at the end of the accounting period because of seasonal factors.

79

Such changes may distort the value of the ratio. Average values should be used when they are available.

Ratios are subject to the limitations of accounting methods. Different accounting choices may result insignificantly different ratio values.

Distribution of Equity Shareholding pattern as on March 31, 2008) Category No of shares of Rs 10/- each Percentage

Promoters

3760768

84.16

Indian institutional Investors

__

__

Other bodies corporate

823335

1.84

Foreign institutional investors

508998

11.39

NRIs/OCBs

3337

0.07

Mutual funds

General public

84143

1.88

80

Directors & relatives

29400

0.66

Total

4468979

100

SYSTEMS Enterprise Resource Planning Enterprise resource planning (ERP) systems attempt to integrate several data sources and processes of an organization into a unified system. A typical ERP system will use multiple components of computer software and hardware to achieve the integration. A key ingredient of most ERP systems is the use of a unified database to store data for the various system modules. The two key components of an ERP system are a common database and a modular software design. A common database is the system that allows every department of a company to store and retrieve information in real-time. Using a common database allows information to be more reliable, accessible, and easily shared. Furthermore, a modular software design is a variety of programs that can be added on an individual basis to improve the efficiency of the business. This improves the business by adding functionality, mixing and matching programs from different vendors, and allowing the company to choose which modules to implement. These modular software designs link into the common database, so that all of the information between the departments is accessible and real-time. Each department will have a power user. The modules will also have a user id and password. The systems have been divided into some modules such as:
81

Finance Module(FI) Materials Management(MM) Plant Maintenance(PM) Quality Management(QM) Production Planning(PP) Human Resource(HR) Controlling Module(CO) Sales and Distridution(SD)

Finance Module In the finance module the activities that have been carried out are ledger preparation, report preparation, accounts receivable. accounts payable etc will be noted. Sales and Distribution In this module the activities that have been carried out are invoicing, ordering, rebooking, billing etc. Materials Management In this module the activities that have been carried out are movement of materials, issue of stock, warehouse management etc. Human Resource

82

In this module the activities that has been carried out are salary posting. After the posting is done it will be given to the finance module. Plant Maintenance In this module the history of equipments, maintenance history, and maintenance order all will be noted and activities regarding the maintenance will be carried out. Production Planning In this module the activities that has been carried out are production order booking. It will be based on the marketing plan. The production booking and confirmation will take place thus the actual output is being entered Controlling Module Each department will be having a product Bill Of Materials.The semi finished goods are the product of the each plant that will be converted into finished goods by packing. Quality Management In this module the data regarding the quality will be stored.The quality of all incoming materials will be checked and will be reported.

83

CHAPTER 4

84

CHAPTER 4 CONCLUSIONS 4.1 SWOT ANALYSIS A SWOT analysis is a close look at a companys strengths, weakness, oppourtunities and threats in terms of important factors such as the economy, the product, staff resources, competition, technology, legislation, consumer trends, environment, and etc.It is a common tool used in organizational planning and strategy development. The basic assumption of a swot analysis is that organizations must align internal activities with external realities to be successful. Strengths and weakness are essentially internal to the organization and relate to matters concerning resources and programmes within the company whereas opportunities and threats are external factors confronting a company such as new technologies, competition etc.The four factors can be described as follows: Strength: What an organization can do Weakness: what an organization cannot do

85

Opportunities: potential favourable conditions for an organization Threats: Potential unfavorable conditions for an organization

Strengths Availability of rich mineral resources Experience and expertise of workforce Better customer service High end infrastructure Superior quality products On time delivey of products R&D and innovation Reputation of the organization Opportunities

Weakness Presence of 7 trade unions in the company The company is running at full capacity Company website has few information regarding the various functional ares/departments

Threats

86

Having gained a foothold in the international market,EICL products offer techo-commercial advantage due to its geographical location

Presence of a tourist village in close proximity to the company may raise environmental concerns

Possibility of encroachment of land by railway authorities

Very few competitors New product development Export potential of the company is high

Emergence of new companies may lead to competition in the long run

4.2 SUGGESTIONS & RECOMMENDATIONS

New areas for application of china clay have to be found out A proper inventory management techniques should be evolved The company faces severe competition in the global market hence it should develop a new strategy not only to increase exports but also to produce the products all cheaper rate.

Company website has few information regarding the various functional areas /departments The company should keep a check on the number of trade unions in the long run The company should give due care to environmental concerns.

87

The plant is running in full capacity which leads to high wear and tear and maintenance costs so company should take better alternative strategies

4.3 CONCLUSION The organizational study conducted at EICL enabled me to get hands on experience of the overall functioning of the company and to translate academic knowledge into practical experience. The visits to various departments were very informative and added to my awareness about the organizational atmosphere. Face to face interviews with EICL officials helped to understand the vital role played by each department and their functioning. The clay industries are very important in providing needed e3mployment in many areas. With its rich reserves, hi-tecnology, vast experience of its motivated employees and deep commitment to quality, EICL is all set to take a place of pride in the twenty first century as the preferred source for the best companies in the business.

88

BIBILIOGRAPHY 1. Annual Report of EICL(2003-2004) 2. Annual Report of EICL(2004-2005)

3. V.S. Ramaswamy,S Namakumari,Marketing Management, 3rd Edition,

Macmillan Publications. 4. S.P.Jain, K.L. Narang,Higher Accountancy, Kalyani Publications. 5. www.eiclclays.com 6. www.wikipedia.com

89

90