SUMMER TRAINNING REPORT

ON INDIAN RAYON (A UNIT OF ADITYA BIRLA NUVO LTD.)

SUBMITTED BY

JADEJA SANJAY V.
MBA Sem-III

Guided by Dr. Asha Alexander

ACADEMIC YEAR 2007-2009

SUBMITTED TO
JAYSUKHLAL VADHAR INSTITUTE OF MANAGEMENT STUDIES (JVIMS) BIPIN T. VADHAR COLLEGE OF MANAGEMENT

JAMNAGAR

AFFILIATED TO SAURASHTRA UNIVERSITY RAJKOT

SUMMER TRAINNING REPORT

ON INDIAN RAYON (A UNIT OF ADITYA BIRLA NUVO LTD.)

SUBMITTED BY

JADEJA SANJAY V.
MBA Sem-III

Guided by Dr. Asha Alexander

ACADEMIC YEAR 2007-2009

SUBMITTED TO
JAYSUKHLAL VADHAR INSTITUTE OF MANAGEMENT STUDIES (JVIMS) BIPIN T. VADHAR COLLEGE OF MANAGEMENT

JAMNAGAR

AFFILIATED TO SAURASHTRA UNIVERSITY RAJKOT

DECLARATION
I undersigned JADEJA SANJAYKUMAR V.a student of MBA 3rd semester declare that I have prepared this project report on Organization study at INDIAN RAYON and guided by Dr. Asha Alexander of JVIMS.

I also declare that this project report is my own preparation and not copied from anywhere else.

___________ Student's Name: JADEJA SANJAYKUMAR V Roll No.: 14

ACKNOWLEDGEMENT
It is my personal belief that no report is the result of only its authors efforts. There are many people who contribute something or the others, and thus play a significant role in laying the foundation of a truthful and an effective report that is capable of achieving its purpose. Therefore, I would like to take this opportunity to thank all those people who have helped me in preparation of this project, guiding me towards the achievement of its purpose.

First of all I would like to thank HR Manager Mrs FALGUNI AGRAVAL. He was very supportive during my training period in all the ways.

It gives me great pleasure and privilege to acknowledge my deep sense of gratitude to Dr. Asha Alexander for becoming my project guide and for her kind support through my project.

And I would like to thanks all workers of INDIAN company who co cooperate me and give me some advantage information about my project report.

And last but certainly not the least; I would like to thank all my friends, family members for creating a congenial environment and encouraging me in every way.

INDIAN RAYON
(A UNIT OF ADITYA BIRLA NUVO LTD.)

Contents of Project Report

Sr. Particulars No 1 2 Executive Summary Introduction (a) Overview of Industry (b) Company Details (c) Competitors details (d) Regulatory Environment details Organisational Study a) Marketing Department study b) Production Department Study c) Financial Department Study d) Human Resource Department Study Conclusion Recommendations/Suggestions Appendixes : (1) List of Graphs (2) List of Tables (3) Glossary of Terms Bibliography

Page no 7 9 10 13 28 30 35 37 48 62 85 105 106

4 5

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EXECUTIVE SUMMERY

Innovation is the hallmark of the manufactured fiber industry. INDIAN RAYON AND INDUSTRIES LIMITED (formally known as INDIAN RAYON CORPORATION LTD.) is a 1600 Cr. Multi-product and multilocational industrial conglomerate, a part of Aditya Birla Group, the organization of a long, illustrious and magnificent legacy spread over a period of 125 years .

The Rayon Division is one of the 12 Divisions of Indian Rayon, located in Veraval, Gujarat. The main product of the Rayon Division is the Viscose Filament Yarn apart from chemicals like sulphuric Acid, Carbon-disulphide, which are both consumed in-house and Sodium Sulphate, which is by Product.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) is very sound company producing industrial product. Major factories producing rayon yarn inindia are under one management i.e. The Birla group. The Aditya Birla Group has covered near about 75% of the yarn market

INDIAN RAYON at veraval is producing a product which is used by all manufacturing industries. Hence, all marketing activities works through centralized system at Mumbai.

Production management INDIAN RAYON deals with production process, so that the resulting goods or service is produced according to specification, in the amounts and by schedule demanded and at minimum cost. INDIAN RAYON manage the finance properly and to make the financial management effective special finance department is created which mainly perform the function like Financial Planning, Raising of Funds ,Allocation of Funds, Financial Control. INDIAN RAYON has a separate HR department. the welfare activities done for their employees are remarkable. In this company it can be seen that there is bonding between management and workers and hence result is to smooth functioning of the organizational activities. The HR activities under taken by HR department are the best.

The effective functioning of Marketing ,HR,Production,Finance departments has made Indian Rayon one of the top Corporate company in our country.

ADITYA BIRLA GROUP

ADITYA VIKRAM BIRLA (November 14, 1943 October 1, 1995)

The Aditya Birla Group. Epitomizing the philosophy of its Legendary leader the late Aditya Vikram Birla one man who Made a difference. Rooted in Indian values, yet global in vision. Rock solid in fundamentals. Nurturing a culture where success does not Come in the way of the need to keep learning afresh, to keep Innovating, to keep experimenting. Transcending the conventional Barriers of business to send out the message that it cares.

Industry detail

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Industry Detail
Innovation is the hallmark of the manufactured fiber industry. Fibers more numerous and diverse than any found in nature are now routinely created in the industrys laboratories. Nylon variants, polyester, and olefin are used to produce carpets that easily can be rinsed clean even 24 hours after they have been stained. Stretchable spandex and machine washable, silk polyesters occupy solid places in the Indian apparel market. The finest micro fibers are remaking the world of fashion. For industrial uses, manufactured fibers relentlessly replace traditional materials in applications from super-absorbent diapers, to artificial organs, to construction materials for moon-based space stations. Engineered non-woven products of manufactured fibers are found in applications from surgical gowns and apparel interfacing to roofing material m roadbed stabilizers, and floppy disk envelopes and liners. Non-woven fabrics, stiff as paper or as soft and comfortable as limp cloth, are made without knitting or weaving. As they always have, manufactured fibers continue to mean, Life made better. Fig.no-1 First Commercial Indian Production 1918 Rayon 1931 -- Acetate 1938 -- Rubber 1939 -- Glass 1945 -- Nylon

1945 --Vinyon 1949 -- Saran 1945 -- Metallic 1958 -- Modacylic 1958 -- Olefin

1959 -- Acrylic 1964 -- Polyester 1964 -- Spandex 1968 -- Agamid 1985 -- PBI

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Fig.no-2 Production Data for Rayon Industry in India

YEARS (DECADE) 1918 1920 1921 1930 1931 1940 1941 1950 1951 1960 1961 1970 1971 1980 1981 1990 1991 2000 2001 2006

PRODUCTION(IN TPA) 2,480 25,687 85,939 1,96,540 2,04,460 3,75,504 6,39,902 10,08,076 23,85,584 19,52,570

Fig.no- 3 Production Data for Rayon Industry in India

production capacity in India

3000000

production in TPA

2500000 2000000 1500000 1000000 500000 0 1918- 1921- 1931- 1941- 1951- 1961- 1971- 1981- 1991- 200020 30 40 50 60 70 80 90 00 06 years

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Introduction to Aditya Birla Nuvo ltd. INDIAN RAYON AND INDUSTRIES LIMITED
INDIAN RAYON AND INDUSTRIES LIMITED (formally known as INDIAN RAYON CORPORATION LTD.) is a 1600 Cr. Multi-product and multilocational industrial conglomerate, a part of Aditya Birla Group, the organization of a long, illustrious and magnificent legacy spread over a period of 125 years. The Group is consolidating its position under the chairmanship of Shri Kumar Manglam Birla taking the aspirations from the legacy of a leading industrialist, Late Shri Aditya Vikram Birla. The organization came on the sphere of Rayon Industry in 1963 when its foundation stone was laid down by Late Shri Lal Bahadur Shastri.

The Rayon Division is one of the 12 Divisions of Indian Rayon, located in Veraval, Gujarat. The main product of the Rayon Division is the Viscose Filament Yarn apart from chemicals like sulphuric Acid, Carbon-disulphide, which are both consumed in-house and Sodium Sulphate, which is a by-product. The total production is 38.5 TPD of yam likely to will be increased to 40 TPD by June 1998. Rayon industry consists of seven domestic players, and we are the market leader in terms of sales. Exports constitute about 15% of the total turnover. Besides, 100 TPD Caustic Soda plant and 16.5 MW Power Plant have also been commissioned in 1996.

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The company is engaged in the manufacture and production of viscose filament yarn, carbon black, branded garments, textiles and insulators. In addition, IRIL through its subsidiaries has made forays into insurance, IT services and business process outsourcing (BPO). The company is headquartered in Mumbai, India.

Indian Rayon is accredited with ISO: 9002 for "Quality Systems" and ISO: 14001 for "Environmental Management Systems". A scheme for another 15 MW captive Power Plant is in the pipeline.

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HISTORY AND DEVELOPMENT OF INDIAN RAYON

The late prime Minister shree Lal Bahadur Shastri laid the foundation stone of Indian rayon and industries ltd. It was incorporated on the 26 th September 1956 under the company act of 1956 and the company was getting the commencement certificate on 13th feb.1958.

The inauguration of the company was done or an American ambassador Mr.H.H.Galbreth on 13th April 1963 and on the same day company took its trial production. Shree Morarji Vaidya one of the leading industrialist of Gujarat with a view manufacture viscose filament yarn (VFY) in collaboration with von-kohorn international of USA started this organization.

Once a sick company and virtually on the verge of closure was taken over by shree ADITYA VIKRAM BIRLA in 1966,Who believed consolidation, expansion and diversification, because of his believed and sincerity toward work the company has not only turned around but has also made up strong market position today. By 1975 the JAYSHREE TEXTILES has merged with Indian rayon. The Indian rayon industries ltd. is public ltd. Company.

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Vision & Mission of the Indian Rayon

16

A leading Player
1. The second largest producer of viscose filament yarn (VFY) in India. 2. The largest branded apparel company in India. 3. The second largest producer of carbon black in India. 4. Life insurance joint venture, Birla sun life insurance company Ltd, is Indias second largest private sector insurance company. 5. Insulator joint venture with Birla NGK insulators pvt. Ltd. Is Indias largest and words third largest producer of insulators? 6. Emerging player in high growth IT services and BPO sector.

CAPACITIES Fig no-4 Chart of Production Capacities

Business
Viscose filament yarn (VFY) Caustic soda Carbon black Flax yarns Wool combing Worsted yarns Synthetic yarns Linen/fire retardant fabrics/other fabrics Insulators BPO

capacity
16400 tpa. 82125 tpa. 230,000 mtpa. 15340 spindles 8000 tpa. 25548 spindles 57208 spindles 107 looms 38000 tpa. 9089 seats

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MILESTONE

2007 Wholly owned subsidiary "Aditya Birla Insulators Ltd." merged into Aditya Birla Nuvo w.e.f. 1 April 2007 Raised Rs. 777 crore through rights issue of equity shares Brownfield expansion of 60,000 tpa completed at Hi-Tech Carbon, Gummidipundi, taking total capacity to 2, 30,000 tpa

2006 Increased stake from 20.7 per cent to 35.7 per cent in Idea Cellular Limited Acquired Minacs, a leading Canadian BPO company in August 2006 Insulators JV with NGK terminated mutually in November 2006 Caustic soda capacity increased by 65 TPA taking total capacity to 225 tpd 18 mw power plant commissioned in September 2006 in the Rayon division The chlor alkali and chlorine derivatives businesses of Aditya Birla Nuvo, Bihar Caustic and Grasim become a single SBU

2005 Indian Rayon rechristened as Aditya Birla Nuvo Merger of Indo Gulf Fertilizers Limited and Birla Global Finance Limited with the company, effective from 1 September 2005. By Virtue of the merger, Birla Sun Life Asset Management and Birla Sun Life Distribution, leading players in high growth Asset Management and Wealth Management industry came into the company's fold.

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 Increased stake from 4.3 per cent to 20.7 per cent in Idea Cellular Limited, a company in the high growth telecom sector

2004 Brownfield expansion of 40,000 tpa completed at Hi-Tech Carbon, Gummidipundi, taking total capacity to 1,60,000 tpa

2003 Greentech Environment (Silver) Award 2002-2003 in Chlor-Alkali sector for outstanding achievement in environment Joint venture with NGK of Japan Birla NGK Insulators Pvt Ltd launched on 6 February 2003 Entry into business process outsourcing (BPO), with the acquisition of TransWorks, a leading Indian ITES / BPO company

2002 Insulators business hived into a separate subsidiary, effective from 1 August 2002

2001 Life insurance joint venture Birla Sun Life Insurance Company commences operations in March Indian Rayon acquires PSI Data Systems

2000 Indian Rayon acquires Madura Garments, taking the Aditya Birla Group to the top of the league in the branded apparels sector

1999 Indian Rayon returns surplus cash to shareholders through a buyback 19

1998 Indian Rayon's cement business transferred to Group company Grasim, as part of cement business consolidation Production commences at Hi-Tech Carbon's second carbon black plant at Gummidipoondi, Chennai

1988 Indian Rayon forays into carbon black. Hi-Tech Carbon (Renukoot) goes on stream

1987 Indian Rayon Corporation renamed as Indian Rayon And Industries Limited, to reflect the diversified activities of the company

1984 Indian Rayon enters cement business

1981 Jaya Shree Insulators' second unit at Halol goes on stream

1976 Indian Rayon's viscose filament yarn plant at Veraval goes on stream

1966 The Birla acquire Indian Rayon Corporation Ltd

1963 Indian Rayon's viscose filament yarn plant at Veraval goes on stream

1956 Indian Rayon Corporation Ltd is incorporated 20

ADITYA BIRLA GROUP COMPANIES Fig no.5

COMPANY 1 GRASIM

KEY PRODUCTS /SERVICES Viscose staple fiber, cement sponge, iron textiles, exports, software consulting

2 3

HINDALCO INDIAN RAYON

Aluminum Viscose filament yarn, textiles, insulator, carbon black

4 5 6 7

INDO GULF BIRLA GLOBAL FINANCE HIGI INDUSTRIES ESSEL MINING

Fertilizers, copper Financial services Files, casting gases Iron and manganese or mining Ferro alloys, HPE woven sacks

SHREE DIGVIJAY CEMENT

Blended yarns

Objective of Indian Rayon

To produce viscose filament Yarn to meet the expectations of customer in premium segment. To achieve minimum cost of production through innovation development, involvement, employees, vendors. To maintain clean pollution free environment. To Make continual improvement in all spheres at activities

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 To Compliance of all applicable legal requirements through adopting the world class manufacturing, practices maintaining high moral of employees.

SWOT Analysis
The overall evaluation of division like strengths, weakness, opportunity and threats is called swot analysis.

STRENGTH Yarn produce here is of high quality then also management always tries to increase the quality of yarn in order to fulfill their potential customer and new ones. Total produced items+

wasted are being sold; this shows the efficiency of sales activity. Better pacing, carriage and transportation system with all modern equipment and good after sales service. Regular meeting and seminars are conducted in the entire department in order to find our loopholes and solve the same.

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 Division also have continuous spinning yarn department in which the modern technology is used for the spinning the yarn and its is adopted fro Germany. Divisions have domestic as well as export market and for this they are doing the Internet marketing in order to find new markets. Division has WCM (World Class Manufacturing) ceil in which they look out for better way of manufacturing. ISO 9002 for the better quality of the production carries division. Division is certified by ISO 14001 for the good environment management system, for their division has hoti-culture

department in order to look to the surrounding environment.

WEAKNESS: Cost of production is more due to existence of very old technology installed in this division. Many process steps and process is more sensitive to normal process variations. Division is unable to pay more attention toward proper human resource management.

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 Location away from consuming centers. Bigger process cycle/higher process stock.

OPPORTUNITY Division should find new market area for its products specially chemicals. More research activity should be done, as there is chance of finding new markets. VFY use for certain textile items is specific and indispensable. Quality has ore weight age in international market. Indian rayon Pot Spinning Yarn is next to Asahi Japan and better than Chinese and Russian Yarn used in international market. Biggest opportunity, when opening up of global market

MFA

expires in 2005. Quota restriction will boost the export of yarn directly and though Textile in Worlds tows biggest market Europe an US.

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THREATS Government policies are the main hurdles of the divisions performance. Emergence of cotton threads made the market share of Rayon Yarn low. Fashion changes are also basic threats for such division. The Viscose Process is highly polluting. The basic raw material (pulp) is again pollution prone.

Challenges ahead

The Rayon division along with the industry facing the following challenges.

Comparatively poor quality

Unregulated dumping of the products from China

Higher cost per Kg. of production

Sustaining sales volume

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Company Profile
Name Location : INDIAN RAYON AND INDUSTRIES LIMITED : Indian Rayon Division Veraval-362226 Junagadh-veraval highway road Dist.:- junagadh

Registered Office

: Rayon and Caustic Soda Plant Indian Rayon Division Veraval 362 266 Gujarat India

Phone No.

: + 91 - (02876) - 245711, 245735

Fax No. Email Website

: + 91 - 2876-243220 : abnlveraval@adityabirla.com : www.indianrayon.com

Promoter

: Mr. Kumar Mangalam Birla, Chairman Mrs. Rajashree Birla

Products

: Viscose filament yarn, Sodium sulphate, Caustic acid

Raw Materials

: Pulp, caustic soda, acid, zinc

Workforce

: 3462 Members

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Management Committee
Board of Directors:
Mr. Kumar Mangalam Birla, Chairman Mrs. Rajashree Birla Mr. H. J. Vaidya Mr. B. L. Shah Mr. P. Murari Mr. B. R. Gupta Ms. Tarjani Vakil Mr. Vikram Rao Mr. S.C. Bhargava Mr. G.P. Gupta Mr. S. K. Mitra Dr. Rakesh Jain Mr. Sanjeev Aga(Managing Director) Mr. K. K. Maheshwari (Whole-time Director) Mr. Adesh Gupta (Whole-time Director) Business heads :

Mr. K. K. Mahehwari (Viscose filament yarn) Mr. Vikram Rao (garments) Dr. Rakesh Jain (carbon black) Mr. S. K. Saboo (textiles) Chief Financial Officer (CFO) Mr. Adesh Gupta Company Secretary Mr. Devendra Bhandari

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Competitors Detail
NAHAR INDUSTRIAL ENTERPRISES LIMITED
Unit: Nahar Fabrics, Lalru, Mohali (Punjab)

Nahar Fabrics is a unit of NAHAR INDUSTRIAL ENTERPRISES LIMITED (Unit: Nahar Fabrics) aimed to manufacture and process of 100% Cotton, polyester Cotton, Cotton/Lycra and other blended fabrics for high quality conscious overseas markets and domestic leaders in garment sector. using update technology in weaving and processing. The Company is ISO- 14001:2004 certified with production capacity of 1, 50,000 meter Grey and 1, 00,000 meters Processed finished fabric per day and now going for the certification of Integrated Management System IMS as under : EMS-14001: 2004, QMS-9001: 2000 and SA-8000.The management is heaving the target to make the organization clean and green. GREEN NAHAR Plant has identified significant Energy and environmental aspects and set the objectives and targets to improve he Energy performance as well as environmental performance ahead the legal obligations. Nahar Fabrics is committed to The Company is

preserve the health & safety of its employees and other associates working at its sitesThe plant processing is based on ecofriendly dyes and chemical from reputed companies like BASF, Clariant, Huntsman, Daystar, Cognis, Atul etc. The dyes andchemicals used are azo free and conform to Oeko-Tex and reach standard.

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MARAL OVERSEAS LIMITED

Sarovar Plant, Khalbujurg, Khargone (Madhya Pradesh)

MARAL OVERSEAS LIMITED is a group Company of renowned LNJ Bhilwara group. The LNJ Bhilwara group founded by Shri Laxmi Niwas Jhunjhunwala has a global presence. MOL plant was set up in the year 1989 as 100% Export oriented, vertically integrated Textile manufacturing Unit (An ISO 9001 accredited Co.). This is one of the few textile Cos. to have facilities of Spinning, Knitting, Processing & Garment manufacturing at single location. MOL has the honour to have supplied articles all over to the world known Cos., e.g.,NIKE,MARKS&SPENCERS,HUGOBOSS,MANGO,ERICA,TIMBERLAN D etc. Emphasis on training and regular re-training is integral to the way the unit works training workshops, conducted for the workers and managers, help sharpen professional skills needed for optimizing energy consumption on the sophisticated Japanese and other imported machines.

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Other competitors
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) enjoys the monopoly in the market because of its total market of Rayon Yarn industry. The Indian Rayon covers almost 25% of the market and the Aditya Birla Group have also other two units of rayon yarn so altogether three units covers the 75% units of the total market. Competitors of INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) are :

Century Rayon National Rayon Baroda Rayon South Indian Rayon Kesavram Rayon Shriram Rayon

Regulatory Environmental
In todays era societal marketing is getting more and more important, which includes environmental considerations are to be taken into consideration apart from other operations. INDIAN RAYON comes under purview of Gujarat Pollution Control Board control (G.P.C.B.) for pollution control. It follows the norms and pollution control measures laid down by G.P.C.B. Environment policy is maintained by keeping workers feel in the best condition. The following particular shows the measures taken by Rajhans Impex.

Gujarat Pollution Control Board

Paryavaran Bhavan, Sec.-10 (A), Gandhinagar Gujarat. www.gpcb.gov.in

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In exercise of the power conferred under sec.-25 of the Water (prevention & control of pollution) Act.-1974, under sec.-21 of the Air (prevention & control of pollution) - 1981 and Authorization under rule 3(c) & 5(c) of the Hazardous waste (Management & Handling) Rules 1989 & as amended up to year 2003 framed under the Environment (protection) Act1986.

Conditions under Water Act:1.1 The quantity of trade effluent from the factory shall be Nil and entire quantity of traded effluent shall be recycled back into pickling tank.

1.2 Domestic effluent shall be disposed off through septic tank / soak pit system.

Conditions under Air Act:2.1The flue gas emission through stack shall conform to the following standards: Fig no-6 - Standards of flue gas emission stack Sr. No. 1. Stack attached to Power plant Stack height in meter 52.5m Parameter Particulate matter SO2 NOx Permissible limit

150 mg / NM3 100 ppm 50 ppm

2.2The concentration of the following parameters in the ambient air within the premises of the industry shall not be exceed the limits specified hereunder. Fig no-7 - Parameters & permissible limits of the ambient air within the premises Parameter Suspended particular matter Oxides of Sulpher Oxides of Nitrogen RSPM Permissible limit 500 Microgram per cubic water 120 Microgram per cubic water 120 Microgram per cubic water 150 Microgram per cubic water

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2.3The industry shall take adequate measures for control of noise levels from its own sources within ambient air quality standards in respect of noise to less than 75dB(a) during day time & 70dB(a) during night time. Day time is reckoned in between 6 a.m. and 10 p.m. and night time is reckoned between 10 p.m. & 6 a.m. 2.4Industry shall have to display on-line data outside the main factory gate with regard to quantity & nature of hazardous chemical being handled in the plant, including waste water and air emissions & solid hazardous waste generated within the factory premises. INDIAN RAYON. here by granted an authorization to operate facility for following hazardous wastes on the premises situated at Veraval ,Gujarat India.

Fig no.8 - permission granted to operate hazardous waste on the premises Sr. No. 1. Waste ETP sludge Quantity / Year 0.006 MT Schedule 12.9/I Facility Collection, Storage, Encapsulation, Transportation Disposal at TSDF Collection, Storage, Encapsulation, Transportation Disposal at TSDF

2.

Process Waste

276 MT

II

General Conditions:3.1The waste generator shall be totally responsible for (i.e. Collection, Storage, Encapsulation, Transportation and ultimate disposal) of the waste generated. 3.2Records of waste generation, its management and annual return shall be submitted to GPCB in Form 4 by 31st Jan of every year. 3.3The unit shall maintain the records of production & consumption of electricity & water for each day during the period of production.

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The unit shall maintain separate figures for consumption of electricity for running the Air pollution control measures / incineration system by having a separate meter/ sub-meter for each Air pollution control measures. The number of unit consumed by operating the diesel generating sets, if any, shall also be maintained.

The unit is committed to preserve its environment and safety of its employees. Following major improvements have been made during last three years : a) Water Effluent The effluent from various section of industry is led to the common effluent treatment plant. The acidic effluent flow are neutralized by addition of lime slurry and then fed to two zinc clarifiers for effective removal of zinc. The overflow from clarifier is fed to the mixing chamber where the effluent from other two drains also joined. The mixed effluent is then pumped to suspended solid clarifier. The overflows flows into a holding tank, from where it is disposed off to sea creak. The quality of this treated effluent will within the prescribed norms of GPCB. b) Air Regarding control of air pollution the company has installed ESP & Bag filter in power plant & boilers, scrubbers in acid plant & caustic plant for dispersion of process gas. The industry has provided a stack of 52.5 mtrs height. The company is regularly monitoring the all polluting parameters of stack & also the ambient air quality surrounding the industry. All the gaseous emission are always found well within the norms prescribed by GPCB norms. c) Solid waste Mainly lime sludge is generated & disposed as a solid waste in low lying land area. The unit has got ISO 14001 & OHSAS certification and is committed to follow all the guidelines as per ISO standards.

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34

Organizational study

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ORGANIZATION STRUCTURE

Fig no.9 Chart of Organization structure

DIRECTOR

HR manager

Production Manager
Assistant Assistant

Marketing Manager
Assistant

Finance Manager
Assistant

Time -Keeper

Engineers

Dealers

Accountant

Workers

Clerks

Peon

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Fig no-10 Chart of Marketing Department

ORGANIZATION STRUCTURE OF MARKETING DEPARTMENT

Vice President

Raw Material & Storage

Legal & Liaison

Sales & Marketing

Transport

General Manager

Sr. Officer

General Manager

Sr. Officer

D. Manager Sr. Officer

Manager Sales Officer

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Introduction
Marketing deals with identifying and meeting human and social needs. One of the shortest definition or marketing is meeting needs profitably. A market may be considered as a convenient meeting place where buyers and sellers gather together for exchange of goods and services.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) at veraval is producing a product which is used by all manufacturing industries. Hence, all marketing activities is one through centralized system.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) has its main sales office at Mumbai.

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MARKET PROFILE

AMRITSAR VARANASI PANIPAT DELHI AHMEDABAD VERAVAL Factory & Caustic Soda Mktg.. SURAT MUMBAI VFY Mktg.. BELGAUM

KOLKATA

BANGALORE SALEM

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Market Segmentation
Market Segmentation consists of taking this total market for the product and dividing it into several sub-marketer segments each of which tens to be homogenous in all the significant aspect.

The company identifies different waya to segment the market and develops the profiles of the resulting market segments. There are two approaches regarding market segmentation : People oriented approach Product oriented approach

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) uses people oriented approach method for market segmentation. They classify their consumer on the basis of place,income, geographical location, etc.

The branches of INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) are located at Ahmedabad,Delhi, Mumbai, Amritsar, Surat, Bangalore, and Madras. Its head office is situating at Mumbai which takes all the decisions regarding the companys products.

There are different manufacturing companies that consumes and demand for the specific type of yarn of very fine quality. The demand for yarn differs from company to company on the basis of their handloom production. So, this company has segmented the total market on the basis of product application consumer industry wise:-

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The INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) marketing office is at Mumbai. The company has various type of segments. They are selling its product in India as well as exporting in many countries.

Branches in India : Surat Delhi Mumbai Varanasi Veraval

Bangalore

Amritsar Calcutta

Branch Abroad : Korea Italy Africa Saudi Arabia Bangladesh

The above mentions are the major market of INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) There are various other branches of INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) spread over the world.

PRODUCTS OF INDIAN RAYON

Product mix which is also called as a product assortment is the set of all product items that a particular seller offers for sale. A co. s product mix has certain with, length, depth, & consistency.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) product is VFY but along with it the co. also manufactures some chemicals and by products, which are require for the production of Yarn, and the excess of this product is out in the market.

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INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) is manufacturing the Yarn which is of different colors and different quality denier wise as per the requirement of the client.

Fig no-11 Product of Indian Rayon

Name of the final product Viscose filament yarn Apparel, home furnishings,slipovers,industrial uses Pulp, caustic soda,acid,carbo n di sulphide,zinc Carbon disulphide Rubberchemicals,agrochemicals,pesticides,pharm a, Viscose Sodium sulphate Sulphuric acid Caustic acid lye Fertilizers, intermediates,viscose,dyes,chemicals Paper,alumina,viscose,fibre,soaps&detergents Drugs,demineralization dyes & intermediates and other chemicals Liquid chlorine Organic & inorganic chemicals,paper,HCL,PVC,CPW etc. Hydraulic acid DM Water plant, pickling of steel, phosphoric acid, synthetic rutile,ossein,DCP,calcium chloride sulphur Salt,coal Glass industries,paper,textile,dyes,gum By product Charcoal End users of final product Raw material

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Channel of distribution
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) has adopted its own sales branches and sales offices in context of its channel distribution.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) sales marketing office is at Mumbai which performs the functions of selling the product of the company. The marketing office collects all the orders from the twelve different sales branches.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) also produced chemical along with the yarn like sodium sulphite, sulphuric acid and carbon-di-sulphide are distributed though dealers and selling agent.

DISTRIBUTION CHANNEL Fig no-12 Process of Distribution Channel

Companys premises

Sole distributors

Dealer

Retailer

Final consumer

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Pricing
Pricing is a key factor, which remarkably effects the sales operations. Price may be defines as The value of the product attributes expressed in monetary terms which a consumer pay or is expected to pay in exchange and anticipation of the expected or offered utility.

The firm has to consider many factors in setting its pricing policy : Pricing objective Determining demand Estimating costs Analyzing competitors prices and offers Pricing methods (selecting) Selecting final price

Price is the only element in the marketing mix that produces revenue.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) has not adopted any clear pricing policy but it follows the mixture of following pricing strategy :

Competition oriented pricing policy Demand oriented pricing policy Cost oriented pricing policy

45

Promotional Tools Promotion consists of those activities that are designed to being a companys goods or services to the favourable attention of customer.

Sales Promotion Companies use sales promotion tools to create a stronger and quicker response.

There is a separate organization , which jointly made efforts for sales promotion and this organization is followed by INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) This organization is known as The silk and Rayon Textile Export Promotion Council.

The head office of INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) does all the activities of the sales promotion. It promotes its sales via dealers i.e. the product is sale thought middle man.

Following tools have been use in this method ;

Buying allowance discount Display allowance Dealers contest Concession on the net sales 25 Free gift

46

Advertising
Advertising is basically used for: Creating or enhancing goodwill Preparing ground for new product Creation of demand Facing the competition

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) is very sound company producing industrial product. Major factories producing rayon yarn inindia are under one management i.e. The Birla group. The Aditya Birla Group has covered near about 75% of the yarn market.

Rayon Yarn is use as a raw material in textiles industries that are not affected by any media of advertisement and that is the reason why the company is not advertising its product.

47

48

INTRODUCTION

Production means creation of utilities and entails and procurement and utilization of factors of production, which includes manpower, material, buildings and equipments. Production is fabrication of physical object through use of men, material and equipment. Production management deals with decision making related with production process, so that the resulting goods or service is produced according to specification, in the amounts and by schedule demanded and at minimum cost.

Production must be operated in an economic and efficient manner because cost of production is vital factor in facing market competition and in ensuring normal profit or return on investment.

49

SELECTION OF LOCATION
There was no regional advancement before the astablishment of factory. Veraval region was very much backward in terms of industrial activities. People over here were also socially as well economically backward. So the government decides to devlop the area wirth the establishment of the factory. For this the land cost gurantee an various other incentive like smooth supplement of the water an electricity were also provided by the Govt. up to 1979. From 1979 the company has establishment its own power plant and water supplement from Govt. is still continuing but the company has to pay the water charges as per the Govt. rule. This industry was not paying octroy duties local Veraval city.

A slew of initiatives are underway to improve quality, increase the share of value added products and lower the cost. Technology upgradation is beaing under taken to improve quality. During FY 2006-07, caustic soda capacity increased by 65 tpd taking total capacity to 225 tpd. New 18mw power plant commissioned in September 2006 in rayon division. Out of VFY capacity expansion by 1000 tap, first phase of capacity enhancement by 400 mtpa has been accomplished in January 2007.

Types of plant layout:

The plant layout production centers for the manufacture of a product basically there are mainly three types of layouts:

Product/line layout. Process/functional layout Combination of product and process l

50

Production Process
Indian Rayon & Industries Limited (IRIL), a Rs 15.95 billion Aditya Birla Group company, operates a wide range of businesses. Incorporated in September 1956. As a part of its backward integration process, IRIL set up a 33,000-tone caustic soda plant with bi polar membrane cell technology from Krupp UDHE Gmbh of Germany .

Located at Veraval in Gujarat, the Caustic Soda Division was commissioned in 1997. A 50 TPD Flaking plant was commissioned in January 1998. In the process,Caustic Soda Lye,Chlorine & Hydrogen gases are simultaneously produced from cells as by products.The Capacity of Caustic Soda is 100 TPD, Chlorine gas and Hydrogen gas are 88.60 MT and 29400 nm3, per day respectively.

The Chlorine and Hydrogen gases produced from cells are further purified in respective sections. The products produced are of high quality since the process demands very high quality of raw materials. The Hydrochloric acid is produced with chlorine and Hydrogen gas.

The capacity of HCI is 90 TPD on 32%. About 30 per cent of Caustic Soda is for self-consumption and remaining is for sales Caustic soda lye produced is of 32%concentration , chlorine and hydrogen are produced as gases from cells. These two gases are further purified in respective sections. The Plant is divided in to the following sections Brine Section, Catholyte & Anolyte Handling Chlorine Liquefaction ,Hydrogen Bottling, Caustic Evaporation & Flaking Hydrochloric Acid Synthesis Sodium Hypo Chlorite.

51

52

Production process of viscose filament yarn

# Sources
Wood pulp is made of cellulose from the following trees. Eucalyptus (South Africa) Sprell (Canada) Bamboo (India)

Department of production:(A) VISCOSE SECTION

The process is carried out in the following stages: Conversion of wood cellulose into alkali cellulose i, e. mixing of wood pulp with NaOH Conversion of alkali cellulose into sodium cellulose xanthate. Conversion of sodium cellulose xanthate into viscose solution.

Branded as ray one, the VFY is available in more than 400 shades. These include natural whites as well as a wide array of colors, ranging from purest tints through medium tones to vibrant deep shades;

Located at Veraval in Gujarat, VFY plant is the first in Aditya Birala nuvo to be accredited with the ISO 9001 and the ISO 14001 certification. It also has the OHSAS 18001 Life at Indian Rayon. As a part of its backward integrated process, it has an 82125 tones caustic soda plant with membrane cell technology from UDHE gmbh (Germany).

53

Recently Indian Rayon won the top rank award

at the

national Energy conservation Awards 2006 presented by Ministry of power, of India.

(B) SPIN BATH SECTON

Spin bath is quality section to spinning rayon yarn. Spin bath is an important constitute for the viscose to be re-genarated in to cellulose.the main composition of the spin bath solution acid(H2SO4) and sodium hydroxide (NaOH) other composition is ZnSO4, Na2SO4, tempreture etc. which constitute the spin bath solution and the sodiuam sulphate (Na2SO4) is recive is a by

Sodium sulphate is by product which is requires 22 tones per day. This by product Na2SO4 should be removed from spin bath solution and spin bath solution is transferredto spinning section by total six drums out of which two of them are in old spin bath dept. while other four are in new spin bath dept.

(C) SPINING SECTION

In this section viscose solution from viscose section is directly supplied through dye to spinning machine for bright and colored yarn. Merging pump drives fixed amount viscose in one minute depending upon the capacity of the pump. Viscose temperature is around 28 degree centigrade. Spin bath is also following with high speed from the spin bath section at 56 degree centigrade to spinning section. Viscose coming from heat cons in the contect with spin bath congulation of viscose which takes place to form yarn of particular denier.

54

(D) AFTER TRETMENT SECTION Raw cake from spinning section is brought to A.T. section in raw cake trucks. Here the raw cakes pass through 20 parts for 19 minutes each. In these 20 parts the different machines are fixed in which the washing, bleaching and draying are done by soft water. Various hydro extected chemicals etc. are used to removed impurities, dust and dirt. Afterward the cakes are dried in the drayer room by the air.

(E) TEXTILE SECTION

The dry cakes are now dry to wining. The yarn is in the form of conesor, and hank time duration of coming depends upon the denier of yarn. The textile departments place where the manufacturing process of rayon yarn comes to an end. Although it comes under production processes but its function is auxiliary and very important in nature.

(F) PACKING SECTION After wining the cones and hank, they are sent to the pacing section where they are visually check by the inspectors a grades are given as per the quality. At present cones are packed in cardboard boxes. Then the cartoons, which are filled by inspection side; helpers, are first brought to the weighting balance where the weight is balance as per the pre-determined standard. After that a computer pacing slip is made having various necessary details. On is paste on cartoon, second is kept inside the cartoon and third is kept for record purpose.

55

After that the cartoon are steppd with Polly propylenetype. Finally B.O.P.P. adhesive tape is applied at the joint of top flaps of cartoons. They fully packed and sealed cartoons are sent to bonded stores room (B.S.R.) for sales department to be dispatch.

The packing slip is having following details: Name of the parts. Date of packing Quality grade an weight Registered trade mark of the company The color of cones and hanks Denier

MATERIAL HANDLING
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) is totally using the automatic process for production, but at certain stage uses equipment for the sifting of raw material. The company use trolley as an equipment for material handling in its viscose section to brought up the wood pulp from the storage department an in after treatment department to put the cakes in washing and knitting. After the last stage of production, the final product sends to the packing section with the help of trolley.

56

 Many a times INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) uses Conveyers Rails Crain Trucks

For the supply of raw material to various departments.

The diesel power house of the INDIAN RAYON (A Unit of Aditya Birla Nuvo ltd.) uses conveyer belts for the supply of coal that is import from Bihar.

Where the other raw materials like wood pulp, sulphur etc. are brought by lsnd route. I.e. rails and truck to the factory.

INVENTORY DEPARTMENT
Inventory dept. of INDION RAYON (A unit of Aditya Birla Nuvo Ltd.) scientific mounting leval method. In this company, inventory control is long process.

Any dept. that is in need of any material prepaire an indentcafter filing it is sent to the purchse dept. of the company

While the placing the purchase order INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.)

57

Considers the following factors.

Old rate of the product Lowest bids Reputation of supplier Delivery period Payment terms Technical evolution After sales service Performance guarantee

The above question are comparing on the basis of comparison chart which they prepare with the help of all the information. The decision of purchase is one by the authority. The purchase order is placed on the basis of feasibility. So, we can say that INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) applies integrated material management concept.

STORE MANAGEMENT
The store dept. of the INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) receives the raw material which was ordered from the supplier. This dept. prepares good receipt note (GRN). One copy of GRN is send to that dept. which has placed an indent.

Particular dept. approves the materials and sends requisition to store dept. and collect the material. On the basis of GRN, final invoice is paid Account dept.

58

INVENTORY CONTROL
Plant maintenance ensures that all production facilities are in serviceable condition at required time, causing no production hold-up, interruption, or loss of individual efficiency for operation.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) follows word class manufacturing policy (WCM) of plant maintenance, which it has adopted in the recent years. However formally it was using total productive maintenance (TPM) of plant maintenance.

The inventory control helps the company in forecasting the feature demand of the goods as per the requirement of the production and the market. The commonly used inventory control methods that a company use are the EOQ and ABC

EOQ:- (economic order quantity) In this method the feature demand of the inventory is been identified as per the requirement of the industry, the key focus in this type of inventory control method is the optimum utilization.

ABC:- (always better control) In this type of inventory control method the name itself states the use and potentially which lies in theirs method. In this method the goods are divided in such a way that in response to its use and order and cost as the goods are divided in parts as according to A.B.C.

59

QUALITY CONTROL
Quality is an asset which may be offered to the potential customer of a product or a service. It mainly depend upon two factors: 1. product-service design 2. operating system-makes a product/provides a service

Quality Policy
We are committed to, Meets customer s expectation of quality an services in premium segment. Maintain high morale of employees. Use eco-friendly technology and maintain pollution free environment.

Packaging

It includes the activities of designing and production the container for a product.The container is called the package. In recent years, product safety has also become a major packaging concern. Companies are also realizing the power of good packaging to create instant consumer recognition of the company or brand.

60

Packaging system INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.)

Cones (2 to 2.1 kgs each), Bobbins(2.5 to 2.7 kgs each ), Hanks, Cakes All wraped in transparent polythene sheets Each cartoon to contain 24 cones Best logistic management to suit the clients requirement and ensure timely delivery.

Packaging procedure of INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.)

The cartoons which have been filled by inspection side are first brought to the weighing balance of packaging of 50 kg and than passed to the computer slip.

Important details of slip are stenciled on the cartons in order to meet excise dept requirement. These cartons are than rechecked for weight, packing slip and stenciling. After polypropylene packing cartons are transported to store room for sales dept.

61

62

ORGANIZATION STRUcture
Board of director

Executive president (Rayon Division)

President & CFO Corporate finance Division

Sr. Vice President (Finance & comm.)

G.M. Finance

Sr. Manager

Assistant Manager Cash

Assistant manager creditor

Assistant Manager Salary

Officer

Officer

Officer

Officer

Officer

Officer

63

Introduction
There are three key elements to the process of financial management.

1. FINANCIAL PLANNING. Management to need to ensure that enough funding is available at the right time to meet the need of the business. In the sort term, funding may be needed to invest in equipment and stock, pay employees a fund sales made on credit.

2. FINANCIAL CONTROL: Financial control is a critically important activity to the help the business ensures that the business is meeting its objectives.

3. FINANCIAL DECISION- MAKING A key financing decision is weather profits earned by the business should be retained rather than distributed to shareholders via dividends. If dividends are too high, the business may be starved of funding to reinvest in growing revenues and profit further.

64

CAPITAL STRUCTURE
Capital structure may be defined as the combination of debt and equity that lead to the maximum value of the firm. Capital structure refers to the mix of long-term sources of funds such as debenture, long-term debit, preference share capital and equity share capital including reserve & surplus. The company should planed and get optimum capital structure. Fig no-15 Capital Structure

Particulars
Share Capital Reserves & Surplus Secured Loans Unsecured Loans Preference share capital

(Rs. In Crores)
2007-08 95.01 3510.45 4507.65 2140.21 50.00 2006-07 93.31 3026.29 4079.99 1381.60

Share Capital of the INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd. Has increase by 1.8% as compare to previous year. Company has also increase reserves & surplus, secured loans, unsecured loans respectively, 16%, 10.48%, and 54.91% as compare to the previous year. Company has paid to the preference share capital fully In this year.

65

CAPITALIZATION
From accounting point of view capitalization means accumulated funds which have been invested for same business purpose to earn quite of return For the Co. the Book value and Real value of Share are two main components or assessment of Co. financial position which can be calculated as per under. Fig no-16 Chart of Capitalization Year wise EPS 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 1999-00 Book value per share is Rs 226 Rs. In Crores 15.96 31.98 26.11 19.00 18.59 .71 7.04 11.44 9.62

66

Book value = Equity share + Capital reserves & surplus No. of Equity Shares = 59.88 + 1294.18 5.98 = 226 Rs

The closing market price of the Co. per share is Rs 399.25 as on march-05 which is greater then its book value per share.

From this we can say that co. is facing under capitalization. The above graph depicts that the cos earning per share has increased by 10.83% as compared to its previous year.

The reason for the increase in the value of Co. is

Increase in sales and profit. Increase in price of yarn.

67

Leverage
The employment of and asset or source of funds for which the firm has to pay a fixed cost or fixed return is termed as Leverage. There are two types of leverages: Operating Leverage Financial Leverage.

FINANCIAL LEVERAGE: The leverage associated with financial activities is called Financial Leverage. It represents the relationship between the firms earnings before interest and taxes and the earning available for rdinary shareholders.

It is defined as the ability of firm to use fixed financial charges to magnify the effects of change in EBIT on EPS IR&IL Co. has posted a superior financial performance during the year 2003-2004. The revenue has grown to 1860.06 Crores against 1577.04

Crores in the previous year. Financial Leverage EPS = 164.73 157.08 = 1.05% = EBIT

68

OEPRATING LEVERAGE

The leverage associated with the investment (asset acquisition) activities is referred to as Operating Leverage. It is determined by the relationship between the firms sales revenue and its earning before interest and tax (EBIT).

Operating leverage results from the existence of fixed operating expenses in the firms income stream. With fixed cost the percentage

change in profit accompanying a change in volume is greater than percentage change in fixed asset.

69

Working Capital
Working capital concerned with the Management of current assets. It is important and integral part of financial management as short-term survival is prerequisite for long term success. Concept of working capital

(1) Gross working capital It refers to the firms investment in current assets. Current assets are the assets which can be converted into cash within an accounting year or operating cycle. (2) Net working capital It refers to the difference between current assets and current liabilities. Positive new working capitals arise when current assets exceed current liabilities. It is negative in case of current liabilities are in excess of current assets. Working capital management consists of three main aspects

(1) Inventory Management. (2) Receivable Management. (1) Cash Management.

The divisional management of IR&IL Co. manages the working capital within the broad framework laid by and with consultation of Corporation Finance Division (CFD). Decision regarding the utilization of the current assets is made in accordance with the policy of company.

The operating cycle can be said to be at eh heart of the need for working capital.

70

RECEiVABLE MANAGEMENT
The term receivable is defined as debt owned to the firm by customers arising form sale of goods or services in the ordinary course of business.

IR&IL Co. sells its products to the industries. So it needs to grant credit to its buyer.

Receivable treated as marketing tool to aid the sale of goods as well as use for protecting the customers form the competitor and attract the new customers and thereby profit.

CREDIT STANDARDS
As per the industrial standard for rayon, the organization runs well on the track of Average collection period.

But because of the core competition in the chemical market the avg. collection period increased and reach near to the 25 to 30 days, so it can conclude that organization investment in receivables is not very high.

The customers are paying its obligation to the organization in time. The default rate is nearly zero in the organization.

CREDIT TERM VFY = 15 days Chemical = 45 days

71

The collection of the fund is done by HDFC Bank, which plays and agent role. The avg. collection period for the account receivables between 21 to 27 days. Total debt of company as on 31st March, 2005 is 260.90 crores which have increased as compare to that of the last years debt. i.e. 31 st March, 2004 was 186.14 crores. So, it can be said that debtors are up by Rs. 74.72 crores. marketing. Major addition was on account of insulator domestic

As a result of the above mention, there is and increase in the Net Sales of the company by 9% as compare to that of last years sales.

Receivables Turnover Ratio

Net Sales

S. Debtors

1860.62 260.90

= 7.13

72

Cash Management
Generally any organization holds the cash for Transaction motive, Precaution motive, Speculative motive, Compensating motive.

The IR&IL Co. holds the cash only for the transaction motive. It holds the cash for smoothing the day-to-day operation only. If there is surplus of cash in the Co., it is transferred to the CFD while if there is deficit of the cash in the organization, it borrows it from the CFD and also decision regarding the investment of cash in to Marketable Security is done through the CFD only.

CASH COLLECTION

IR&IL Co. operating in various geographical area of the country. It tries to speed up the cash collection by decentralization with the help of ten Cash collection centers all over the India.

CASH DISBURSEMENTS

The disbursement is one through centralized system by the organization. The payment of the bill will be made from the central account (at division place) and form the head office. So the Co. can enjoy the transit time delay using the factoring.

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Dividend Distribution
In IR & IL Co. the board proposed the dividend of Rs. 4.00 per share for the year 2005-06. It is same as compared to previous year. Dividend payout ration of 2005-06 is increase 3.44% as compared to previous year. Fig no-17 Dividend Distribution Year Dividend Per Share Payout (%) 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 5.75 6.25 6.75 5.00 4.00 1.00 3.00 3.30 3.75 4.00 4.00 16.70 15.20 15.55 17.46 28.25 (2.76) 28.88 45.47 24.05 20.58 24.02

Fig no-18 Graph of Dividend Distribution in Year wise

50 40 30 20 10 0 Dividend Per Share Dividend Payout (%)

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

-10

2003-04

74

Profitability Ratio
The profitability ratios are calculated to measure the operation efficiency of the company. Besides Management of the company, creditors and owners are interested in the profitability of the firm creditors want to get interest and payment of principal regularly. Owners want to get a required rate of return on their investment. This is possible when company earn enough profit. ROI (Return on Investment)

EBIT ROI= Capital Employed Year EBIT Capital Employed Ratio (%) * 100

2005-06 2006-07

161.48 164.73

1673.49 1847.09

9.65 8.92

Gross Profit Ratio : GROSS PROFIT GPR (Gross Profit Ratio) = NET SALES
YEAR 2005-06 2006-07 GROSS PROFIT 10886 14059 NET SALES 38555 44146 RATIO (IN % ) 28 % 32 %

* 100

75

 Return on Equity (%)

EBIT ROE = EQUITY FUND * 100

YEAR 2005-06 2006-07

EBIT 6421 9328

EQUITY FUND 19217 20376

RATIO (IN % ) 33 % 46 %

Operating Ratio : PBIT OR (Operating Ratio) = NET SALES

YEAR 2005-06 2006-07 PBIT 8971 12422 SALES 38555 44146 RATIO (IN % ) 23 % 28 %

*100

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 Net Profit Ratio : PROFIT AFTER TAX NPR (Net Profit Ratio) = NET SALES *100

YEAR 2005-06 2006-07

PAT 5460 7866

NET SALES 38555 44146

RATIO (IN % ) 14 % 18 %

CURRENT RATIO : CURRENT ASSETS

CURRENT RATIO = CURRENT LIABILITIES

YEAR 2005-06 2006-07

C.A 11005 12729

C.L. 3716 5218

RATIO 2.96 2.44

77

Financial year 2007-08 (Rs Crore)

78

Profit and loss consolidated Income Income from operations Other income

2007-08

22006-07

12,134.04 93.13 12,227.17

8,366.77 63.86 8,430.63

Expenditure (Increase) / decrease in stocks Cost of materials Salaries, wages and employee benefits Manufacturing, selling and other expenditure Actuarial liabilities Interest and other finance expenses (net) (93.22) 2,261.79 1,995.42 3,921.53 3,040.39 425.02 11,550.93 Profit before depreciation / amortization and exceptional items Depreciation / amortisation Marketing / technical knowhow expenditure written off Profit before exceptional items and tax Less: loss/(gain) due to exceptional items Profit after exceptional Items Provision for current tax Provision for deferred tax Fringe benefit tax Provision for tax for earlier years written back 151.30 0.73 152.03 103.58 45.57 11.84 (35.13) 353.47 0.52 353.99 114.58 18.37 9.26 (30.31) 524.94 422.78 676.24 (53.84) 1,962.69 1,262.80 2,600.36 1,519.04 363.33 7,654.38 776.25

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Net profit before minority interest Minority interest in the loss of consolidated subsidiaries Share of profit / (loss) of associates Net profit Basic earning per share

26.17 (124.61)

242.09 (38.34)

150.78 15.95

0.46 280.89 31.96

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Fig no-21 Cash Flow Financial year 2007-08 (Rs Crore) Cash flow consolidated A Cash flow from operating activities Net profit before tax Add: adjustments for Depreciation Change in the valuation of liabilities in respect of life policies Provision for diminution in value of investments Provision for ESOP Marketing and technical know-how written-off Interest expenses (net) (Profit) / loss on fixed assets sold (Profit) / loss on sale of investments Dividend income Effect of exchange fluctuation on Foreign Currency Translation Reserve Invsetment Income on shareholders Fund (Gain)/ loss on long term strategic Investment/Transfer of Business 525.15 3040.39 3.16 1.68 425.02 (6.67) (17.91) (11.14) (4.83) (23.02) (0.73) 3931.10 Operating profit before working capital changes Add: Adjustments for Decrease / (increase) in trade and other (863.15) (620.75) 196.89 4083.13 0.37 363.33 (1.79) (9.52) (21.10) 27.26 (15.38) (2.53) 2283.23 2637.22 1468.81 1751.70 0.68 103.83 0.45 (3.23) (14.69) (9.36) 152.03 353.99 423.54 1519.05 225.07 1166.06 282.89 2007-08 2006-07 2005-06

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receivables Decrease / (increase) in inventories Increase / (decrease) in trade and other payables (276.30) 690.46 13.69 (118.21) 379.46 (119.99) (41.31) 1710.39 (93.92) 1616.47

(448.99) (227.60) Cash generated from operations Income taxes refund (paid) (net) Net cash from operating activities 3634.14 (97.18) 3536.96 2409.62 (92.81) 2316.81

B Cash flow from investing activities Sale / redemption / (purchase) of investments (net) (3100.72) (1752.26) (944.83)

Interest received Amount received on disposal of RST/ subsidiary Dividend received (Increase) / decrease in corporate deposit

47.60 5.06 11.14 (85.08)

21.86 10.00 21.10

10.39 14.69

193.91 (193.95)

(Purchase)/ sale of fixed assets Investment in equity Investment income on Shareholder's Fund Investment in equity of subsidiaries Net cash (used in) / from investing activities C Cash flow from financing activities

(2192.98) (1387.47) (412.63) - (1317.56) (645.14) 23.02 15.38 9.36 (0.11)

(2.16) (630.18)

(5294.12) (4825.22) (2162.22)

82

Proceeds from issue of preference shares Proceeds from issue of equity shares Proceeds from issue of share warrant Proceeds from issue of share capital to minority Proceeds from issue of shares under rights issue Redemption of preference share in joint venture Security premium received Proceeds from / (repayment of) borrowings (net) Dividends paid (including tax thereon) Interest and finance charges paid Net cash (used in) / from financing activities Net increase in cash and equivalents Cash equivalents (opening balance) Cash of BGFL subsidiaries and JV Cash of IGFL and BGFL Cash outflow on sale of RST unit

50.00 1.70 377.41 156.78

137.59

28.60

9.81

- (153.50) 427.51 1185.58 1223.69 2428.34 0.06 710.59 (27.31)

(1.58) (107.44)

(462.09) (368.30) (111.23) 1,735.31 (21.85) 815.85 3170.19 661.78 154.07 (0.01) 600.71 54.96 88.72 4.23 6.16 -

Cash and cash equivalents (closing balance)

793.99

815.85

154.07

83

Financial year 2006-07 (Rs crore) Fig Balance sheet consolidated 2007-08 2006-07 no-22 Balanc e 95.01 50.00 377.41 3,510.45 4,032.87 Minority interest Loan funds: Secured loans Unsecured loans 4,507.65 2,140.21 6,647.86 Deferred tax liabilities Policyholders funds Fund for future appropriation Total funds employed 226.19 6,484.67 25.88 17,591.88 4,079.99 1,381.60 5,461.59 179.64 3,761.95 0.03 12,666.08 174.41 93.31 3,026.29 3,119.60 143.27 Sheet Sources of funds Shareholders funds: Share capital Preference share capital Share warrants Reserves and surplus

84

Application of funds Fixed assets Goodwill on consolidation Net block Capital work-in-progress 2,571.04 5006.48 441.32 2,594.89 3,396.11 381.45

5,447.80

3,777.56

Investments Current assets, loans and advances: Inventories Sundry debtors Cash and bank balances Interest accrued on investments Loans and advances

7,367.02

4,543.39

834.74 1,203.43 793.99 13.63 1,810.88 4,656.67

558.37 990.73 815.85 10.27 1,059.40 3,434.62

Less: current liabilities and provisions Current liabilities Provisions 2,300.89 149.76 2,450.65 Net current assets Total funds utilized 2,206.02 17,591.88 1,607.85 76.53 1,684.38 1,750.24 12,666.08

85

86

Organization Structure of Personnel Department

Personnel Department

Vice President

Personnel

H. R. D.

General Manager

Manager

Chief Manager

Sr. Officer

Welfare

Disp.

Labor Office

Dy. Manager

Manager

Labor Manager

Time Officer

Sr. Officer

Sr. Officer

87

Introduction

Personnel department is a link between the top management and the workers or we can say it acts like bridge between the employees and employers.

With reference to INDIAN RAYON (A unit of Aditya Birla Nuvo Ltd.) the personnel department of which is divided into i.e. HR & Training and the other one is personnel department.

PERSONNEL DEPARTMENT

It mainly deals in the process of recruitment of manpower, and acts as a consulting agent between the officers and the workers.

HR & TRAINING

It deals with the staff members of and organization and is accountable to the vice president.

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Manpower planning

"The process of determining manpower requirements and means for meting those requirements in order to carry out the integrate plan of the organization." : - Coleman

INDIAN RAYON (A unit of Aditya Birla Nuvo Ltd.) uses 'PURTA' which is known as the system of control through budgets and standards in modern cost accounting and management costing. 'PURTA' summaries the objective of the whole organization.

In INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) The workers are divided into three categories.-Permanent, Badli and Temporary.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.)Man Power Resource Is: Permanent 2144 Badli Staff 785 533 3462

Total Manpower

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Fig no-23 HRP Process

Organizational Objectives & Policies

HR Need Forecast

HR Supply Forecast

HR Programming

HRP Implementation

Control & Evaluation

SURPLUS

SHORTAGE
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RECRUITMENT AND SELECTION

RECRUITMENT:

"Recruitment is process to discover the sources of manpower to meet the requirement of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of and efficient working force."

The recruiting procedure of INDIAN RAYON (A unit of Aditya Birla Nuvo Ltd.) consists of three segments. Requirement of Workers Requirement of executives and Managerial staff. Requirement of technical Personnel.

So far as INDIAN RAYON (A unit of Aditya Birla Nuvo Ltd.) is concerned the requirement procedure is directly depended upon human forces and is related to the selection of well qualified personnel's.

SELECTION
The selection process is concerned with securing relevant information about an application.

INDIAN RAYON (A unit of Aditya Birla Nuvo Ltd.)Recruitment and selection procedure for blue collar force is as per the labor laws. For the recruitment of the labour in the Co. it is essential that he should acquire the certificate of ITI examination.

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Workers are selected by the concern supervisors and the labour welfare officers. Physical fittness, attitude for work etc.are concerned at the time of selection.

With reference to the methode, the INDIAN RAYON (A unit of Aditya Birla Nuvo Ltd.)Uses the indirect method more frequently for the recruitment of its employees.

Sometimes the INDIAN RAYON (A unit of Aditya Birla Nuvo Ltd.)Also uses the Third Party Method at the time of selection of high level personnel like General Manager, Secretary and vice-president.

Application Receipt Employment Test Group Discussions Final Interview Medical Examination Reference checked Orientation

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TRAINING & DEVELOPMENT

Training: "Training is a process of learning a sequence of programmed behavior. it is a short-term process utilizing a systematic and organizes procedure by which non-managerial personnel learn technical knowledge and skill of definite process.

Training for the workers

The HR department of INDIAN RAYON (Aunt of Aditya Birla Nuvo Ltd.) prepares schedule for training of the workers in order to make them familiar with their task and to develop the job. The main purpose of the company behind imparting training is to make the workers well converse with the new technology.

Training for clerk and Technical staff

The INDIAN RAYON (Aunt of Aditya Birla Nuvo Ltd.) is not imparting any training course as far as clerical staff is concerned. But the supervisors are trained for: Gaining knowledge of responsibility. Cost control and Cost effectiveness Knowledge of all disciplinary action Development of eldership quail

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The other purpose of INDIAN RAYON (Aunt of Aditya Birla Nuvo Ltd.)Behind imparting training is: To create awareness among the workers regarding the quality of products and to improve knowledge thereby. Enchantment of technical knowledge and various safety

measurement techniques. To improve the discipline of the workers, good conduct and job responsibility

PERFORMANCE APPRAISAL

It is the process of evaluating the performance and qualification of the employees in terms of the requirement of the job, for which he is employed.

INDIAN RAYON (Aunt of Aditya Birla Nuvo Ltd.) the management is using the open system of studying performance appraisal system. When a new candidate is recruited management examines his performance for two years which is called as the apprentice period.

The performance appraisal system adopted by INDIAN RAYON (Aunt of Aditya Birla Nuvo Ltd.) is traditional one. It conducts the performance appraisal programmed in the of May every year and all the employees are divided into two categories .i.e. staff members and operating workers.

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TIME KEEPING SYSTEM

Time is precious and we cannot get the time once passed so it is not only the responsibility of an individuals but only the responsibility of the industries to make best use of the time. The company has time keeping system.

There are 3 shifts at Aditya Birla Nuvo Ltd. They are as under: Shift a 7: 00 AM - 03: 00 PM B 3: 00 PM - 11: PM C 11:00 PM - 1: 30 PM

General shift 8: 30 AM - 5:30 PM Lunch break 12: PM - 1: 30 PM

Thus, for each and every employee working hours is eight hours. The employees are given leave as per the company's rule the overtime payment rate is double than usual payment rate.

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Wage and Salary Administration

"Wage and salary administration refers to the establishment and implementation of sound policies and practices employee compensation.

Wage Administration of INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.)

It includes wages of operating manpower. Wage sheets are prepared by Time Office and payment is done on the basis of Time Rate. In case of late comers, the part of the amount from their wages is deducted. Payment of wages to the workers is done dept. Wise and the period of payment is normally between 4th and 10th of every month.

The state Govt.has revised rates of minimum wages for contract labour w.e.f. 01.04.204 to 30.09.2004 as under and these rates are supposed to be followed by the INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.)

Basic/day (rs/ps) Unskilled Semi-Skilled Skilled 71.18 72.45 73.71

DA/day (rs/ps) 10.40 10.40 10.40

Total (rs/ps) 81.58 82.85 84.11

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Trade Union
A Trade union is a continuous association of wage earners for the purpose maintaining or improving the conditions of their working force Webb Nature of Trade Union (1) A combination of workers or employees. (2) Combination could be permanent or temporary. (3) To regulate relation among workmen, and employers.

In IR&IL Co. there are more than 4000 employees in the organization and for the state of the protection of their rights that have formed their trade union. Presently there are three trade unions.

1. Indian Rayon Employee Union (IREU) 2. Indian Rayon Karmachari Mandal (IRKM) Which is associated with the Hind Mazdoor Sabha Karmachari Mandal? 3. Rayon Mazdoor Sangh (RMS) This is associated with Bhartiya Mazdoor Sangh

Not only the workers are the member of trade union but the staff employees have also got the membership of trade union. The strength of IREU is about 60% of total working force, the rest of two uses to follow the decision and negotiations made by the IREU. The advantage of registered trade union is that police cant arrest any representative of trade union. Henceforth company has been keeping a good relation with trade union.

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Industrial Relation
Industrial relation is the part of management which is concerned with the manpower of the enterprise whether machine operator skilled workers or managers Bethel Smith. Industrial Relation covers the following areas (1) Collective Bargaining. (2) Role of Management unions and government. (3) Machinery for resolution of individual disputes. (4) Individual grievance and disciplinary policy and practice. (5) Labour legislation. (6) Industrial relations training.

As it is useful for the organization, the IR&IL Co. has also developed good and appreciable industrial relation.

There exist three Trade Unions all over the unit that are: 1. Indian Rayon Employee Union 2. Rayon Mazdoor Sangh 3. Indian Rayon Karmachari

The last major strike in this unit was in 2001 after that no strike has been occurred till now. This strike was settled down by the Memorandum of Settlement which was made by the Co. along with the Labor Union. The strike was basically in reference to the wage payment of the worker and bonus.

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Grievance Handling

Any real or imagined feeling of personal injustice which an employee has concerning his employment relationship By: - Keith Davis. Course of Grievance (1) Concerning wages. (2) Concerning supervision. (3) Concerning working conditions. (4) Collective bargaining.

To handle and solve such grievance the IR&IL Co. have special procedure: 1. In IR&IL Co. the workman will take his grievance in oral or written to his immediate superior, such as section head. In case if the

complaint is against the immediate supervisor it should be written and submitted to the next higher authority. 2. If the decision of his immediate superior on the next higher authority is not satisfactory, he has to forward to the manager of the department.

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Employees Services & Welfare Activities

To motivate the employees and to increase their morals it becomes very necessary for every company to perform the activities which can be helpful in the achievement of this motive and there by the efficiency and satisfaction of the employee can be raised accordingly.

In this regard IR&IL Co. provides the following facilities:

QUARTERS FACILITLY: The IR&IL Co. gives quarter facilities to its employees the staff as well all as the workers. Basically this quarter a facility is given on the basis of the category of employee. The management staff and the executive level employees are also given the housing facility but it would be with some extra and specific facilities.

RECREATIONAL AND ENTERTAINMENT FACILITY:

The company has its won auditorium in which it conducts different types of programs and games on different type of occasions especially for its staff members. It also provides many type of sports

facility to its workers. There are lawn tennis courts, table tennis, cricket grounds, etc. It has competitive players units in its cricket team. The

company also arranges Rayon Cup cricket tournament every year between the very large companies in Saurashtra.

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WELFARE CENTER:

The centre was established in 1993 for the benefit of workmen and their families. The facility includes games like volley ball, tennis, For ladies embroidery and

carom, chess, reading room and library.

tailoring classes are conducted as a continuous activity.

INDEPENDENCE AND REPUBLIC DAY CELEBRATION:

The company celebrates the Independent & Republic Day every year. On this day the program of the national flag hosting is followed by sweet distribution to all the employees of the company.

CREDIT COOPERTIVE SOCIETY:

Members are given loan facility up to and amount of Rs. 60000 at the nominal interest rate. This is managed by cooperative society.

DEATH RELIEF FUND:

In case of death of any employee while working in the company, management provides his family with Rs. 4000 as funeral expenses. The company also deducts Rs 10 of all the employees and collects about Rs. 50000 and provides to the dead persons family. And the company itself also gives Rs 1400 along with the amount received from United India Insurance Company.

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SCHOOL FACILITY:

It has set up a school both English Medium as well as Hindi Medium. English Med. Is up to 12th standard having both Science and

Commerce stream and affiliated with Gujarat Board (GSEB). Every year 2000 approx. number of students is admitted over here out of which more than 50% of the students are employees children. Whereas Hindi Med. School has been set up four years back. It is the only Hindi Me. School in the entire district. It is upgraded by one standard every year. 50% of the school fee is reimbursed by the company of the employees children.

LIBRARY FACILITY:

Company is having its own library which contains useful books related to all the sectors of the study and magazines of all kinds. It also provides internet facility to its employees.

BIRLA MANDIR:

It is been set up by Birla Group for spiritual and religious activities. It is one of the popular land mark and religious spot in Veraval. LABOUR WELFARE FACILITY:

Welfare activities are one of the major activity, which is closely related with IR&IL Co. activities. 102 the company is doing various types of welfare

CANTEEN FACILITY:

The company has followed the Factories Act that reveals that wherever there are 250 or more workers working, there should be a canteen facility for them. This canteen facility runs on no profit no loss bases. It provides snacks, tea and coffee at nominal rate to the employees.

FIRST AID FACILITY:

IR&IL Co. had its won dispensary in the factory, besides first aid box, which is being provided in every dept. the dispensary is taking nominal fee from the employee and its family. Ambulance too. The co. had its own

REST ROOM FACITLITY:

IR&IL Co. has provided a rest room where the employees used to take rest and can have their lunch during their intervals

VOLUNTARY RTIREMENT SCHEME (VRS)

VRS would be shortly introduced at IR&IL Co. for the retirement of the surplus manpower. This would be applicable to both staff and the workers of the company provide with employee is above 40 years of age or have minimum of 10 years service.

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PROVIDENT FUND SCHEME:

Provident Fund Scheme of IR&IL Co. for the employees is as per the rules and regulations of the Govt. The provident fund refers to eh compulsory saving of the employees from their own salary. The company follows the law of 1952 in terms of PF Scheme. According to this scheme, employees will get the amount which he has saved at the time of his retirement in terms of PR. The company is generally regular and depositing with the appropriate authorities undisputed statutory dues including PF. Out of this PF fund, the employee can get the loan or can withdraw the required amount form it whenever he is in need. Round about 10% of the amount from the employees salary is reserved as PF.

GROUP PERSONAL ACCIDENT POLICY (GPAP): 1. This policy is for tall the staff members. 2. This policy covers the damages of every accidental injury while on employment. 3. The premium amount shall be borne by the Company.

WORKMEN CONPENSATION:

All the workmen of the company are compensated for damages caused by any injury while performing his job, as per the provisions of Workmen Compensation Act 1923.

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Future Plan of Action and Achievements

Future Plan of Action Development of spatialityyarn Eco and energy auditing Improvement in intrinsic quality of yarn Developing new shades of spun ye yarn Development in the quality of existing range.

Achievements
Rayon division has begged Gold Trophy for highest export from synthetic and Rayon Textile Export Promotion Council. The Certificate of merit 2003 of national energy Conservation of VFY. First Prize of National Energy Conservation Award -2003 for chlor Alkali sector both from ministry of power , New Delhi. The prestigious Greentech Environment Excellence Silver Award 2002-03. In chlor-Alkali sector for outstanding achievement in the field of environment from greentech foundation, New Delhi. The Gujarat safety Council has conferred upon the Certificate of Honor 2002 upon the devision base on its safety record and performance. The caustic division has achieved the greentech award in 2004.

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Conclusion
The Indian Rayon division is the large scale manufacturing organization and successful player in the VFY and chemical products. The companies have the strong financial structure and have a good reputation in the market. The Rayon Division is one of the 12 Divisions of Indian Rayon, located in Veraval, Gujarat. The main product of the Rayon Division is the Viscose Filament Yarn apart from chemicals like sulphuric Acid, Carbon-disulphide, which are both consumed in-house and Sodium Sulphate, which is by Product. Company also doing its business with the global market. In India, the share of Indian rayon in the total export of VFY is nearly 42 %. The company follows the accounting laws and standard in its accounting. The accounting department for the internal and external disclosure of the accounting statement regularly prepares the books of accounts. The company manage its working capital very effectively. For cash management it has Corporate Finance Division. It collects the cash from various centers all over the India. While for the payment are paid through two centers. Production management deals with decision making related with production process, so that the resulting goods or service is produced according to specification, in the amounts and by schedule demanded and at minimum cost. INDIAN RAYON has a separate HR department. The welfare activities done for their employees are remarkable.. The HR activities under taken by HR department are the best.

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Recommendation
The process of improvement is and unending journey.World class performance is a moving target that requires constant attention and efforts.

The management of INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) is well organized and has established INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd ) as a quality based, High speed, High performance, cost effective organization. The co. is having and excellent management worker relationship with transparent and adaptive management approach.

This experience from my organization study it can be said that the co. is constantly hardworking for the improvement of its product quality through the adoption of world class manufacturing policy.

Thus it is a truly highly bench marked company. It does not require any recommendation. Only one thing the co. should pay more attention towards its human assets and technology.

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Bibliography
Annual Report of Year 2004 Financial Statements of Rayon Division, IR&IL Co. Aditya Kiran, Birla Group Publication Financial Management By I.M. Pandey, Khan & Jain Facts and Figures of Birla Group Publication

Web Sites: www.rayone.com www.adityabirla.com www.indianrayon.com www.google.com Intranet of the IR&IL Co.

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