ORGANISATION STUDY AT ENGLISH INDIAN CLAYS LTD

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.

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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 necessary

guidance at all levels.

I thank all the professors and teaching staff of TKM institute of management for their guidance in

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.

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CHAPTER 1

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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

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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.

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CHAPTER 2

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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 Sèvres (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.

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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

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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

Board Printing and writing paper

Newsprint Typical kaolin content (%)

10

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, vitreous-

china 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:

Cable insulations: cable sheath; hose; extrusions; belting; footware; pharmaceutical; seals; general

mouldings; plant lining; domestic mouldings; latex; tyres/inner tubes.

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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 free-

flowing 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 pencils; toothpastes and cosmetic applications; chemicals industry.

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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.

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CHAPTER 3

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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 1980’s 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

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

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of 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 company’s 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:

“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

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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

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

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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: MR KARAN THAPAR

DIRECTORS: 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 MR D.KOHLI

VICE PRESIDENT MR S.K.JAIN

COMPANY SECRETARY MR.P.S.SAIN

AUCITORS M/s PRICE WATERHOUSE

CHARTERED ACCOUNTANTS

BANKERS UTI BANK LIMITED

ORIENTAL BANK OF COMMERCE

ICICI BANK LIMITED

STATE BANK OF INDIA

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STATE BANK OF INDORE

REGISTERED OFFICE TC79/4, VELI, THIRUVANANTHAPURAM 695021,Kerala.

CORPORATE OFFICE 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 Number

Officers 55

Administrative staff 38

Workers 192

Mine workers 24

Total 287

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

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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.EICL’s 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 Grade Industry

Very fine coating clays Super coat Paper

Fine coating clays Hi gloss Paper

Normal coating/Paint grade clays BCK Paint/Paper/Printing Ink

Coating/Filler grades KCG(Spray dried) rubber

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Fiberglass grades Fiberline Fiberglass

Very fine calcined clays Himafine Fiberglass/paper

Coatin/paint/paper/printing inks

Fine calcined clays himacot Fiberglass/rubber/soap

Normal Coating/Paint Grade

Calcined Clay

Himatex Paper Coatin/Paint/Printing Inks

Coarse calcined clay Himapol Paint/ready mix

Concrete/pvc compounding

Cement grade calcined clay Himacem

Himablue

Ready mix concrete

Cement/ultramarine

TABLE 2.3 Industry wise market break up

INDUSTRY % OF SALE

PAINT 38

PAPER 30

RUBBER 15

FIBRE GLASS 15

OTHERS 2

EICL EXPORTS

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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.

COMPANY’S 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

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

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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 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

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Commercial

Finance & Accounts

Research &Development

Marketing

Production

Quality Control

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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 company’s 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 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,

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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 customer’s 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

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

QC department

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

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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 competitor’s 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.

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

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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 customer’s

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

EICL develop new products based on the customer’s 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.

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SALES FORCE MANAGEMENT

The sales force management will meet the customer’s requirements on time and good customer’s

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 - Ballarpur

Paper straws products - New Delhi

Harayana coated paper Ltd -Faridabad

Rohit pulp & paper mills Ltd - Gujarat

Sreevidya paper mills Ltd - Nazik

Soap & Detergent Industry

Hindustan Lever Ltd - Mumbai

Colgate Ltd - Mumbai

Godrej Soap Ltd - Mumbai

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Paint Industry

Asian Paint India Ltd - Mumbai

Jemson & Nicholson India Ltd - Mumbai

Berger Paints India Ltd -Calcutta

Shalimar Paints - Calcutta

Ceramics Industry

Spartek Ceramics India Ltd -Madras

Naices India Ltd - Pondicherry

Surya Pottery Ltd - Himachal Pradesh

Eagle Potter Private Ltd - Gaziabad

Diamond Pottery Private Ltd - Bahduge

Rubber Industry

MRF Ltd - Chennai

JK Industries - Vdaipur

Paragon Rubber Industries - Kottyam

Bata India Ltd - Bangalore

Ceat Ltd - Hyderabad

Fiber Industry

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FCP Ltd - Thana

UP-Tiywa Glan Ltd - New Delhi

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:

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

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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

Middle-East 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.

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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 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

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1. Workmen’s compensation Act 1923

2. Trade unions Act 1926

3. Industrial disputes Act 1946

4. Factories Act 1948

5. Industrial employment standing orders Act 1947

6. Mines Act 1952

7. Employees State Insurance Act 1948

8. Employees provident fund Act 1852

9. Payment of wages Act 1936

FUNCTIONS

The major functions of Human Resource department include

a) Human Resource Development function

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

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5. Welfare activities

Administrative functions

The main Administrative functions include

1. Attendance management

2. Wage and salary administration

3. PF Administration

4. ESI scheme administration

5. Office management

6. Security matters

7. 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

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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

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.

36

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. User HOD

2. HOD HR

b) For executives up to MMA level

b) For executives up to MMA level

1. User HOD

2. HOD HR

3. Subject expert

c) Above MMA level

1. Pre interview by VP/Corporate HR

2. Subject expert if any

3. 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. Signed copy of appointment order

ii. One passport size photograph

iii. Copy of relieving order if any

37

iv. Age certificate

v. Copy of mark list

vi. Experience certificate if any

vii. Relieving order if any

viii. PF Enrolment form

ix. ESI enrolment form

x. GME/GPA Enrolment form

Inputs

i. Bio data from interview

ii. Letter for interview

iii. Application blank

Output

i. Job specification database

ii. Guideline for recruitment

iii. Short list candidate

iv. Approval from VP/Ed

v. Appointment order

vi. Joining report

INDUCTION TRAINING

OBJECTIVE:

38

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

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

Joining report

Medical certificate format

Induction training schedule

Outputs

39

Induction training slides for presentation

Induction training report

Feedback for induction training

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

40

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 HOD’s 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.

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

41

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.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

Appraisal formats from corporate HR

PAS format

Outputs

Filled appraisal forms

Increment letter/additional/promotional orders

PAS review

Training calendar and training plan.

42

PERFORMANCE APPRAISAL FOR WORKERS IN MINES AND VELI

OBJECTIVE:

To identify the performance rating of trainers/probationers and confirmed employees 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. 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 doesn’t 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

Appraisal form

Outputs

Filled appraisal form

Increment letter

Training calendar and plan

43

Letter of absenteeism

PERFROMANCE APPRAISAL FOR STAFF

OBJECTIVE:

To identify the performance rating of trainers/probationers and confirmed employees 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

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

Appraisal formats from corporate HR

PAS format

Outputs

Filled appraisal forms

Increment letter/additional/promotional orders

PAS review

44

Training calendar and training plan.

PROMOTIONS

OBJECTIVE:

The objective is to fill the vacancies by promoting eligible workers, staff and officers grade.

Workers are categorized in 5 grades

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

45

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.

PF ADMINISTRATION

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

TRADE UNIONISM

UNION Affiliated with political party

INTUC I.N.C

AITUC CPI

CITU CPI(M)

KTUC KC(M)

UTUC RSP

46

BMS 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 1

VP (WORKS) 1

GM 2

Dy GM 3

Senior Managers 5

Managers 3

Asst Managers 16

Executives 15

Junior Executives 12

Staffs 35

Workers 192

Workers (Mines) 24

47

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 high-powered 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.

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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.

TABLE 3.3.1

Types of clay produced Available Forms Plants

Hydrous Clay(with water

content)

Lump,Powder,Spray,dreid 1 and 2

Calcined Clay(without water

content)

Spray dried,Powder 4

PROCESSES

The various processes involved in the production of hyrous and calcined clays at EICL are as

follows:

Mining

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The raw material is extracted from the bottom portion of the earth using excavators and is

transported to the plant.

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.

Hydro cyclone Process

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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

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.

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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. The product obtained in powder form contains only about 2% moisture, which is then

send to silos for packing.

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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

4. Greater scope for expansion as the capacities of different lines can be easily increased.

Vendor Selection

53

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 criteria’s 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,

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

54

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:

Quality

Density

Grit

55

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

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

56

Clay(Grade) Brightness Ph

Hi gloss 86.5-87.5 4.55

BCK 85.86 4.55

KCG 84.85 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 company’s 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

customer’s 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

experts, enabling them to not only recommending right products to the customers but also to develop

customized minerals if required.

57

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

6. Pilot plant trail

7. Testing and application (sample given to customer’s first small sample and the large sample).

58

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

59

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

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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

61

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 tender’s issue the stored items to the user department as advised

to them.

FUNCTIONS

Review of stock materials indents

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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.

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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 company’s 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.

FINANCE DEPARTMENT CHART

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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

Financial concurrence and advice

65

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 for the second plant is known as spray drier ledger. Ledger for the third plant is known as

66

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, debtor’s 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 firm’s performance and financial situation. Most ratios can be calculated from information

provided by the financial statements. Financial ratios can be used to analyze trends and to compare the

firm’s financials to those of other firms.

67

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 company’s 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

It represents the ration of current assets to current liabilities. Current Ration is an index of

concern’s financial stability since it shows the working capital which is the amount which the current

68

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

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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

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GROSS PROFIT RATIO(GPR)

NET PROFIT RATIO(NPR)

EARNING PER SHARE(EPS)

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.

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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 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

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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 company’s capacity to pay dividend to its equity shareholders.

TABLE 3.3.6.5

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

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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

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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

.

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STOCK TURNOVER RATIO

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

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

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 owner’s fund can help absorb possible losses of income and capital.

The figures indicate favorable situation.

TABLE 3.3.6.12

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PROPRIETARY RATIO

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

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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 firm’s 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.

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

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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

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

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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:

Finance Module(FI)

Materials Management(MM)

Plant Maintenance(PM)

Quality Management(QM)

Production Planning(PP)

Human Resource(HR)

Controlling Module(CO)

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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

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

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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.

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CHAPTER 4

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CHAPTER 4

CONCLUSIONS

4.1 SWOT ANALYSIS

A SWOT analysis is a close look at a company’s 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

Opportunities: potential favourable conditions for an organization

Threats: Potential unfavorable conditions for an organization

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Strengths Weakness

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

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

Opportunities Threats

Having gained a foothold in the

international market,EICL products offer

techo-commercial advantage due to its

geographical location

Very few competitors

Presence of a tourist village in close

proximity to the company may raise

environmental concerns

Possibility of encroachment of land by

railway authorities

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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.

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

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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.

BIBILIOGRAPHY

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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

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