Name & Address of the Company

Registered office:-

Indian Rayon Division

Veraval-362226
Junagadh-Veraval Highway,
Dist.:- Junagadh
Fax no. : - 91-2876-243220
Email: abnlveraval@adityabirla.com

Rayon and Caustic Soda Plant

Indian Rayon Division

Veraval 362 266
Gujarat
India
Tel: 91-2876-245711
Fax: 91-2876-243220
Email: abnlveraval@adityabirla.com

PRESENT MANAGING BODY

Promoter : Mr. Morarjibhai

Managing Director : Dr. Bharat K. Shing

Managing Group : Aditya Birla Group

Board of Directors : Mr. Kumar Manglam Birla, Chairman

: Mrs. Rajashree Birla

: Mr. H.J. Vaidya

: Mr. B.L. Shah

: Mr. P. Murari
 : Mr. B.R. Gupta

: Ms. Tarjani Vakil

: Mr. S.C. Bhargava

: Mr. G.P. Gupta

: Dr. Rakesh Jain

: Mr. K.K. Maheshwari

: Dr. Bharat K. Singh

: Mr. Arun Maira

: Mr. Pranab Barua

Managing Director : Dr. Bharat K. Singh

Joint Managing Director : Dr. Rakesh Jain

Chief Financial Officer : Mr. Shusil Agarwal

Company Secretary : Devendra Bhandari

Executive Rayon Division

Mr. K.K. Maheshwari : Business Director

(Whole Time director)
Mr. Rahul Mohnot : President

Mr. K.C. Jhanwar : Senior Executive President

Bankers

State Bank of India

United Bank of India
UCO Bank
Corporation Bank
Canara Bank
Punjab National Bank
City Bank
American Express Bank Ltd.
Hongkong & Shanghai Bank
Allahabad Bank
Standard Chartered Bank
HDFC Bank Ltd.

Auditors

Khimji Kunverji & Co., Mumbai

S. R. Batliboi & Co., Mumbai

Solicitors

Mulla & Mulla And Craigie, Blunt & Caroe, Mumbai

Vision, Mission & Values of the Indian Rayon

1. INTRODUCTION TO YARN INDUSTRY

Viscose Filament Yarn (VFY) is made from natural fibers.
Fabric made with VFY feels like cotton, drapes, like wool sheaths & clings like
stain and has the luster & feel of silk.VFY is used by manufacturers of apparel,
saris, Suit linings etc.
India is the second largest producer of VFY in the world.
Aditya Birla Nuvo Ltd. Has a 28 percent market share. With capacity of 16400 tons
per annum (TPA). Aditya Birla Nuvo Ltd. Also account for 33% of VFY exports from
India. Continues Spinning yarn (CSY) of 1000tpa.
Introduction to Aditya Birla Group.

Aditya Birla Group is India’s second largest business house with

turnover of Rs. 200 billion assets and 65000 employees in 15 all over several
countries and make it India’s first truly multinational conglomerate.
Aditya Birla group reaches out to the core sector in India industries
integral to the nation growth:
Cement

Fertilizers
Viscose staple department
Textiles
Petroleum refining
Telecommunication
Industries chemicals and
Financial services
Aditya Birla Nuvo Ltd. (previously known as Indian Rayon and industries limited)
is 16000 Cr. Multi products and multi-location industrial conglomerate, a part of
Aditya Birla Group, organization 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
Managalam Birla taking the aspirations from the legacy of leading industrialist,
Late Aditya Vikram Birla.

Beyond the Business

A Value-based caring corporate citizen the Aditya Birla group

inherently lives in the Trusteeship concept of management. Part of the group’s
profits is ploughed back into meaningful welfare-driven initiative that makes a
qualitative difference to the lives of marginalized people. These activities are
carried out under the aegis of the Aditya Birla centre for community initiatives
and rural development, which is spearheaded by Mrs. Rajashree Birla.

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
India’s second largest private sector insurance company.
5. Insulator joint venture with Birla NGK insulators pvt. Ltd. Is India’s
largest and word’s third largest producer of insulators.
6. Emerging player in high growth IT services and BPO sector.
Capacities of ABNL

BUSINESS CAPACITY
Viscose filament yarn (VFY) 16400 tpa.
Caustic soda 82125 tpa.
Carbon black 230,000 mtpa.
Flax yarns 15340 spindles
Wool combing 8000 tpa.
Worsted yarns 25548 spindles
Synthetic yarns 57208 spindles
Linen/fire retardant fabrics/other fabrics 107 looms
Insulators 38000 tpa.
BPO 9089 seats
(Source: Fact and Figures of Birla Group Publication)

MILESTONES

2009
Acquired 76 per cent stake in appolo sindhoori, a retail broking company,
for Rs. 251.6 crore in February – March – 2009.
Acquired balance 50 per cent stake in Birla Sunlife distribution for Rs. 7.6
crore in March 2009.

2008
Promoters infused Rs. 341.3 crore on conversion of 17 lakh warrants and Rs.
377.4 crore as 10 per cent application money on 1.88 crore warrants in march –
2008.

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.
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 Trans
Works, a leading Indian ITES / BPO company
2002

Insulators business hived into a separate subsidiary, effective from 1st

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

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 Gummidipundi, 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 in cement business.

1981

Jay 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

ADITYA BIRLA GROUP COMPANIES

COMPANY KEY PRODUCTS /SERVICES

1 GRASIM Viscose staple fiber, cement sponge, iron textiles, exports,
software consulting
2 HINDALCO Aluminum
3 INDIAN RAYON Viscose filament yarn, textiles, insulator, carbon black
4 INDO GULF Fertilizers, copper
5 BIRLA GLOBAL FINANCE Financial services
6 HIGI INDUSTRIES Files, casting gases
7 ESSEL MINING Iron and manganese or mining Ferro alloys, HPE woven sacks
8 SHREE DIGVIJAY CEMENT Blended yarns

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 26th 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.

LOCATION

Indian Rayon unit is located at VERAVAL, in district of Junagadh on NH-8

approx.185 kms. From Rajkot. The place is 1 meter above sea level. The eternal
land, popularly known as ‘Prabhas Kshetra’, the out ridge of Veraval, which has
religious radius of approx.5.5kms envelopes Lord Somnath Temple, The Bhalka Tirth
and Triveni.
 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.

INPUTS

Material
Labors
Capital
Energy
OUTPUTS

Product
Services
information

PRODUCTION
PROCESS

Introduction to company’s product

There are 12 units working under INDIAN RAYON (A unit of Aditya Birla Nuvo Ltd.)
division of Birla group. Various types of products are producing in each an every
unit. Here we are mainly concern with rayon division where total four products are
manufactured. These are as under.

1. VISCOSE FILAMENT RAYON YARN

2. SULPHURIC ACID (H2SO4)
3. CARBON-DI-SULPHIDE (CS2)
4. ANHYDROUS SODIUTEM SULPHATE

Vital and essential raw material for Viscose filament Rayon Yarn are wood
pulp, caustic soda (NaOH) while for the production of sulphuric acid – sulphur,
oxygen gas and water are required and super and are required for production of
carbon-di-sulphide. There is separate plant for each and every product. The fourth
product sodium is a by product. Than use of each product is as under.

Use of Rayon Yarn in manufacturing of:

1. Menthol of gas lanterns.

2. Dress materials and saris, .
3. Elastic tapes.
4. Fancy yarns and finishing fabrics.
5. Warp and /or weft for weaving of suiting and shirting’s
Use of sulphuric acid (H2SO4) in:

1. Chemical industry &Agro- chemical industry.

2. Paint & Dye industry
3. Medicine industry
4. Rayon industry.
Use of carbon-disulphide (CS2):

1. Glass industry
2. Pharmaceutical industry
3. Rayon industry
4. Base for Agro-chemical industry

Use of Sodium sulphide in:

1. Glass industry
2. Paper industry
3. Dye industry

Production process of Viscose Filament Yarn

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

(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 xanthenes.

Conversion of sodium cellulose xanthenes 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
Birla 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).
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 SECTION

Spin bath is quality section to spinning rayon yarn. Spin bath is an

important constitute for the viscose to be re-generated in to cellulose. The main
composition of the spin bath solution acid (H2SO4) and sodium hydroxide (NaOH)
other composition is ZnSO4, Na2SO4, temperature etc.
Which constitute the spin bath solution and the sodium sulphide (Na2SO4)
is receive is a by Sodium sulphide 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 transferred to 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 contact with spin bath coagulation
of viscose which takes place to form yarn of particular denier.

(D) AFTER TREATMENT 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 hydros expected chemicals etc. are used to removed
impurities, dust and dirt. Afterward the cakes are dried in the dryer room by the
air.

(E) TEXTILE SECTION

The dry cakes are now dry to wining. The yarn is in the form of consort,
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.
After that the cartoon are stepped with Polly propylene type. 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.
Registered trade mark of the company
Date of packing
Quality grade and weight
The color of cones and hanks
Denier
PLANT LAYOUT

“A good plant layout is one which allows material rapidly and directly for
processing. This reaches transport handling, clerical and after costs down per
unit, space requirements are minimized and reduce idle machine and idle main
time.”
Objectives of ideal plant layout

(1) Minimization of material handling.

(2) Avoidance of industrial accident.
(3) Better working conditions for the employees.
(4) Effective utilization of resources.
(5) Improves the quality of operations
(6) Achieves minimum overall cost.
IR & IL Co. adopt process layout in his Viscose Filament yarn plant also in
caustic soda plant. There is separate department of each process such as viscose
dept, spin bath dept, spinning dept, after treatment dept, textile dept and
packing dept and raw material, semi finished goods and finished goods are transfer
one process to another process by using conveyers, rails, cranes, trucks

SELECTION OF LOCATION

There was no regional advancement before the establishment 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 develop the area with the establishment of the factory. For this the
land cost guarantee 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 up gradation is being 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.
 MATERIAL HANDLING

“Material handling is the art and science involving the movement, packing and
storing of substance in any form.”
-- American
Handling society

Material handling can be defined as “controlling the amount, location, movement

and timing of the various commodities used in and produce by the industrial
enterprise.”
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.
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, Sulphuric etc. are brought by land route. I.e. rails
and truck to the factory.

PURCHASE DEPARTMENT

Purchasing function is the heart of any business and it is suppose to be cast

goldmine to profits.
“The task of purchasing is too related to going to the open market, finding the
desire material at the lowest possible price and selecting the supplier to offer
minimum prices having required quality of material.”

• Purchase the right quality of material

• To purchase right quantity of material
• To make the material available at right time
• To purchase the material at right price
• To purchase material from right source

PURCHASE PROCEDURE OF INDIAN RAYON

INVENTORY DEPARTMENT

Inventory dept. of INDION RAYON (A unit of Aditya Birla Nuvo Ltd.) scientific
mounting level method. In this company, inventory control is long process.
Any dept. that is in need of any material prepares an indent after filing it is
sent to the purchase dept. of the company.
While the placing the purchase order INDIAN RAYON (A Unit of Aditya Birla Nuvo
Ltd.) 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.

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.”
The objective of plant maintenance is to improve functional reliability of
production facility to glorious opportunities.
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.
Inventory control one of the key factor on the basis of which the company can
take, decision on behalf of that the cost can be controlled. If the company having
a good control on the inventory than the cost can be controlled more effectively.
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 uses 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.

QUALITY CONTROL

“Quality is an asset which may be offered to the potential customer of a product

or a service.”
It mainly depends 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.

Environmental policy

We believe that preservation of environment is essential for the survival of our

business, employees, society and surroundings. We shall achieve it with the
involvement of our workforce, venders, customers and neighborhood.

Major function undertaken by INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.)
• Regular checking of set parameter.
• Checking individual.
• Checking abnormally in the process.
• Highlighting the variation from the set operation procedure/parameters.
TECHNICAL SALES:-

• Regular market visits to meet consumers demand.

• Regular comparison of yarn quality and physical properties of other
manufacturer.
• Checking and suggestion to eliminate market complains.

IMPROVEMENT CELL:

• Analysis of breakdown and stoppage of process.

• Suggestion for improvement in existing operational system for better plant
control.
• To carry out study on specific problem/effect and to suggest their steps.
• To develop different shades/ product for sales promotion.
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) has receive Occupation Health &
Safety Assessment series 18001-1999 (OHSAS) certificate and it is the first
company to receive ISO 9002 certificate in Rayon industry in Nation. It has also
received 14001 environment certificates.

INSPECTION

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) maintains very high standard of
quality. Each and every cone/hank is subjected to visual inspection in order to
decide the quality of cone/hank. One operator is inspecting 1400 cones/shift and
1200 cones/shifts of color yarn. After inspection the operator is putting a gummed
quality label on every cone. These cones are being wrapped in transparent
polythene sheets along with and ungummed quality label.

Production planning and Control System

Total Production Management (TPM)

Maintenance is the key to zero loss, zero breakdowns, zero accidents, and
zero defects. It is in short a Zero-sum philosophy. This concept was put forward
by the Japanese Management expert Seiichi Nakajima in his gospel “Introduction to
total production Management” in 1984
Yamaguchi works at the Japanese institute of plant management (JIPM). This
is a temple of total productive Management (TPM). Yamaguchi is teaching TPM to
Indian companies.
IR & IC Co. follows eight pillars of total production management (TPM), which is
following.

(1) Autonomous Maintenance.

(2) Focused Improvement.
(3) Planned Maintenance.
(4) Quality Maintenance.
(5) Education & Training.
(6) Mass Production design & initial flow control.
(7) Office Improvement.
(8) Safety hygiene and environment control.

Total Production Management (TPM)

World Class Manufacturing

 The economy is integrated to the global economy and industry is
facing global competition. It is therefore, necessary to improve performance so IR
& IL co. adopt WCM model to improve performance and fitting with global
competition.
The following characteristics of WCM are used to fulfill the
customer expectations.
(1) Products of high quality.
(2) Products at the right price.
(3) Product with the enhanced features.
(4) Product in a wide variety.
(5) Products delivered in time, in fact short time.
(6) Products delivered with shorter lead times.
(7) Flexibility in fulfilling the demand for the product.
The above listed performance measures are external to the
manufacturing system but are vital for the success of the organization. IR & IL
Co. follows WCM excellence model for competitive advantage as we seen in above
diagram.

WCM POLICY followed by IR&IL Co.

To maximize equipment effectiveness
Achieve zero breakdowns, zero defects, and zero accident and eco-friendly
environment through innovative methods with total involvement of our employees and
b continuous up gradation of technology. This will lead us to excellence and
perfection in all spheres of management, to be globally. Competitive and preferred
choice of customers.
WCM Excellence Model for Competitive Advantage
Introduction

Personal department is a link between the top management and the workers or we can
say it acts like bridge between the employees and employers. It is basically
concerned with human relationship within the organization and helps in maintaining
smooth relationship between employee and employers. It is the art of getting
things done by other people.
Manpower is the most important resource among all the resources. Factors
such as funs, machineries, technological advancement etc that are require in order
to run the organization doesn't have sufficient manpower and suitable managerial
personnel and practices.
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.
Organization Structure of Personnel Department

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. All
the department that is needed of additional requirement of manpower has to contact
the personal dept. which makes the arrangement for the require manpower. Every
month the personal dept. issues personal requisition from the dept. and this
forecasts its manpower demand of each dept. and this forecasts its manpower demand
of each dept. accordingly the requirement is made.

In INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.)The workers are divided into
three categories.-Permanent, Badly and Temporary.
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.)Man Power Resource Is:

Permanent 2144
Badly 785
Staff 533
Total Manpower 3462
Job Description

The job description means to give the information and guidance to candidate about
his particular job for which he has been selected.

INDIAN RAYON (A unit of Aditya Birla Nuvo Ltd.)Started the Job analysis
and evaluation (JAE) Initiative across all the businesses with an objective of
creating clear documentation of roles and responsibilities, to help to clarify
accountabilities and expectation from the jobs. And also facilitate goal setting
and performance measurement of all managerial personnel.
In INDIAN RAYON (A UNIT OF ADITYA BIRLA NUVO Ltd.) the duties and
responsibilities of administrative dept. are collected though job description
which is as under:
- Observation of employees at the time of their work
- Discussions with departmental head and outside experts.
In INDIAN RAYON (A UNIT OF ADITYA BIRLA NUVO Ltd) the employees are categories:

CATEGORIES OF EMPLOYEES
Total 9 categories - from senior vice president to Assistant
CATEGORIES OF WORKERS
Total 4 categories - Unskilled, Semiskilled, Skilled, Highly Skilled.
MANAGERIAL LEVEL
Those personnel that Are selected at this level are being made well converse with
their:
- Nature of job
- Duties n responsibilities
- Job summary
- Position and status
- Working condition

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.
Workers are selected by the concern supervisors and the labour welfare officers.
Physical fitness, attitude for work etc. are concerned at the time of selection.
With reference to the method, 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.

Recruitment and Selection Procedure for White Collar Force

White collie job refers to the selection of officers and managers. For this
purpose the INDIAN RAYON (Aunt of Aditya Birla Nuvo Ltd.) is largely depended upon
the fresh candidate and/or the Co. is following the formal selection procedure:

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

Induction
Induction is a technique by which a new employee is rehabilitating into the change
surrounding and introduces to the practices, policies and purpose of the
organization. INDIAN RAYON (Aunt of Aditya Birla Nuvo Ltd.) doesn’t believe in
induction because it believes that it wastage of time and so it doesn't give any
importance to the induction
 INDIAN RAYON (Aunt of Aditya Birla Nuvo Ltd.) Maintains record of every
employee for long term uses and for this purpose the HR Depts. the Co. Prepares
separate files for the workers and staff. This reports include the application of
the employees, bio-data, salary, increment, etc. This report is maintained to keep
the record of each and every employee and which can be referred to whenever any
grievance or dispute arises.

Personnel Records
Personnel Records is a piece of writing or a chart which provides ready
information and which preserves evidence for future reference.
IR&IL Co. Maintain records of every employee for the long term uses and for this
purpose the HR dept. of the Co. prepares separate files for the workers and staff.
This report includes application of the employee, bio-data, salary, increment,
etc. This report is maintained so as to keep the record of each and every
employee and which can be referred to whenever any grievance or dispute arises.

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 (A unit 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 leadership quality

The other purpose of INDIAN RAYON (A unit 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.

Executive Development
INDIAN RAYON (Aunt of Aditya Birla Nuvo Ltd.) aims at improving the managerial
skills and effectiveness of its every individual through a planned and deliberate
profile and process of learning.
The Personal & HR Dept. of the Co. arranges various conferences and invites guests
and other executive from its different units to audit the organization and to
impart training to the executives. On the contrary the officers and the managers
of this Co. are also sent to its different units within the country as well as
abroad for the exchange of ideas and relate to operation management and also for
improvement of this technical knowledge.

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.
The main aim of the evaluating system is to identify the performance gap (if
any).this gap is the shortfall that occurs when performance doesn't meet the
standard set by the organization as acceptable.

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.

In this Co. normally three years of period is considered to be qualified period

for promotion. At the meanwhile of three years the performance of thru employee is
continuously is observed and taken into account while giving promotion. During
this period the management prepares the confidential report of the performance and
behavior of the candidate.

The performance appraisal system adopted by INDIAN RAYON (A unit 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.

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) 06: 45 AM - 02: 45 PM
(B) 02: 45 PM - 10: 45 PM
(C) 10: 45 PM - 06: 45 PM

General shift 8: 30 AM - 5:30 PM

Lunch break 12:30 PM - 1: 30 PM

Promotion and Transfer

Promotion
"A promotion is the transfer of an employee to a job which pays more money or one
that carries some proffered status."

--Scott and Clothier

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) Have sound personnel policy. The
policy is a blend of seniority and merit consideration stressing more emphasis on
seniority. And employee is promoted considering his ability to deal with the
problems occurs among the subordinates and seniors as well as level of
proficiency, loyalty, etc.
Promotion is given after every 3 or 4 years on the basis of disciplinary action
and by performance appraisal system.
Employees are promoted within the organization in term of vacancies or creation of
new post .INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) Adopts to take the
advance of the employees, one very well aware of companies policy and production
procedures in term to motivate them.

Transfer
" A lateral shift causing movement of individuals from one position to another
usually without involving any marked change in duties, responsibilities, skilled
needed or compensation."

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) runs various units located at
different places within the country, yet under this unit transfer practice are not
followed. Sometimes some workers are transferred from one department to another
because of physical fitness problem.

Absenteeism
Absenteeism is the total man shifts lost because of absence as a percentage of the
total number of man shifts scheduled to work.
IR&IL Co.’s personnel department is very alert about absenteeism in company. The
Time Office Department of the Co. which comes under Personnel dept. keeps the
records of the daily presence and absents and accordingly the wage sheets of the
employees are prepared.
The Time Office of the Co. keeps records of two types of absenteeism – one which
is called as authorized leave and the other one unauthorized leave. In the month
May the percentage ratio of absenteeism is more and so the overtime wage bill of
the employee increases.

Role of Human Resource Development

The HRD department of the IR&IL Co. undertakes training programs in various
sectors:
• Development of effective communication
• Managerial assessment of proficiency
• Relationship management
• Managerial effectiveness
• Leadership development
• Team building
• Time management, etc.

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 can’t arrest any
representative of trade union. Henceforth company has been keeping a good
relation with trade union.
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.
Grievance Handling

“Grievance is a written complaint filed by an employee and claiming unfair

treatment”

- Dale Yoder.

“Any real or imagined feeling of personal injustice which an employee has

concerning his employment relationship”

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; like wise
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.
3. The management brings out the situation to the grievance shift if the
workers are not satisfied. Or reply is not received within seven working days.
If the solution is satisfactory the copy of it is forwarded to grievance
committee, otherwise the matter will be included in the agenda for discussion at
the next meeting of the grievance committee.
Employees Services & Welfare Activities & Amenities

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.
IR&IL Co. has provided these facilities to almost 90% or its staff level
employees.

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.

WELFARE CENTER:
The centre was established in 1993 for the benefit of workmen and their
families. The facility includes games like volley ball, tennis, carom, chess,
reading room and library. For ladies embroidery and 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 person’s family. And the company itself also gives Rs 1400 along with
the amount received from United India Insurance Company.

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.
Where as 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.

LABOUR WELFARE FACILITY:

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

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 any loss bases. It provides
snacks, tea and coffee at nominal rate to the employees.

FIRST AID FACILITY:

IR&IL Co. had its own 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. The co. had its own Ambulance too.
INTRODUCTION

Financial management can be defined as:

The management of the finance of a business/organization in order to achieve

financial objective.

Taking a commercial business as the most common organizational structure, the key
objectives of financial management would be to:

• Create wealth of the business.

• Generate cash, and
• Provide an adequate return on investment.

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 short 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.
There are three major decisions.

(1) INVESTMENT DECISION

Investment decision related to the selection of assets in which funds will
be invested by the firm. The assets that can be acquired fall in two category (I)
Long term assets, which yield return over period of time in future (II) Short term
assets, which are convertible into cash within a year. This includes,
(1) Capital budgeting
(2) Working capital Management.

(2) FINANCE DECISION

Finance decision is generally concerned with financing mix or capital
structure or leverage. It is generally a decision made on the composition of
capital with reference to equity share and debt.
(3) DIVIDEND DECISION
Dividend decision is generally related to distribution of dividend. Two
alternatives are available in dealing with the profits of a firm. They can be
distributed to the share holders as dividend as they can be retained in business
itself. The decision as to which course should be followed depends largely on a
significant element in dividend decision i.e. decide the dividend payout ratio
(D/P ratio).

ORGANIZATION STRUCTURE

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 debt, preference share capital and equity share capital
including reserve & surplus.
The company should planed and get optimum capital structure.”
PARTICULARS (RS. IN CRORES)
2008-09 2007-08
Share Capital 95.01 95.01
Reserves & Surplus 5396.50 3510.45
Secured Loans 5033.10 4463.50
Unsecured Loans 3860.90 2184.40
Preference share capital 25.50 50.00
Source: Annual Report of year 2008-09

Share Capital of the INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) has increase
by 0% as compared to previous year. Company has also increase reserves & surplus,
secured loans, unsecured loans respectively, 53%, 12.50%, and 76.71% as compare to
the previous year.

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.
YEAR WISE EPS RS. IN CRORES
2008-08 (45.73)
2007-08 15.95
2006-07 31.98
2005-06 26.11
2004-05 19.00
2003-04 18.59
2002-03 20.71
2001-02 7.04
2000-01 11.44
1999-00 9.62

Book value per share is Rs. 578.05

Book value Equity share Capital + reserves & surplus

No. of Equity Shares (%)

= 95.01 + 5396.50
9.5
= 578.05 Rs.
There are three conditions of the company in term of the capitalization are as
follows.
(1) FAIR CAPITALIZATION
– It is received when earning of the unit is same to the capital employed.
Earning = Capital Employed
- And book value of a safe is also equal to the real assets.
Book Value = Real value

(2) Under Capitalization

- It is found when earning is more than capital employed.
EARNING > CAPITAL EMPLOYED
- In this case book values of assets of the firm are less than the real value.
BOOK VALUE < REAL VALUE

(3) Over Capitalization

- It is found when earning is less than the capital employed.
EARNING < CAPITAL EMPLOYED
- In this case book values of the assets of the firm are more than the real
value.
BOOK VALUE > REAL VALUE
The closing market price of the Co. per share is Rs 399.25 as on march-08 which is
greater than its book value per share.
From this we can say that Co. is facing under capitalization. The above
graph depicts that the Co’s 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.

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 ordinary 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 2008-09.
The revenue has grown to 13643.19 Crores against 11861.11 Crores in the previous
year.
Financial Leverage = EBIT
EBT
= 419.71
162.30

= 2.59 %
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 firm’s sales revenue and its earnings before interest and tax (EBIT).
Operating leverage results from the existence of fixed operating expenses in the
firm’s income stream. With fixed cost the percentage change in profit
accompanying a change in volume is greater than percentage change in fixed asset.

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 firm’s 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.
(3) 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.

Inventory management

“Inventory refers to the stockpile of the products a firm is offering for sale and
the components that make up the product.”

The IR&IL Co. is the manufacturing organization, so being manufacturing

organization it needs a large among of the inventories for the smoothing of
business operation. The Co. invests nearly 48 to 50 percent of total current
assets in the inventories.

In the IR&IL Co. the inventory is maintain by finding the actual requirement and
the analyzing material, which is scared or not easily meet at the proper time.
Then after the Co. decides the optimum level for each inventory based on the
requirement. But because Co. has a good image to the supplier, it maintains the
three days stock inventories for most of the goods even though the industry
standard is seven days.
In IR&IL Co. there is a special storage dept. and separate inventory management
force which perform certain functions for efficient management of inventories in
the company. It maintains sufficient stock of raw materials in period of short
supply and anticipates price change. It helps sales dept. by maintaining
sufficient finished goods inventories for smooth sales operation.
The company is maintaining proper records of inventory. No material discrepancies
have been noticed on physical verification of stocks as compared to book records.

Inventory Turnover Ratio = Net Sales

Inventory

= 13643.19
747.60
= 18.25 Times

Cost of inventory is compared on a weighted average or FIFO basis. For the

inventories of stores and spares the organization uses the Music 3D system (Multi
Unit Selective Inventory Control) of inventory management.

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 ash
collection centers all over the India.

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.

OPTIMUM CASH BALANCE

The IR&IL Co. keeps a maximum level of cash balance worth and average payment for
three days. If cash is more than its maximum level than the cash if transferred to
the CFD and if cash is less than the level than the requirement of the cash is
borrowed from the CFD.
IR&IL Co. manages it’s in a manner that enables the firm to remain in liquidity
position at its best.

The company has no accumulated losses at the end of the financial year and it has
not incurred any cash losses in the current or in the immediately preceding
financial year.

Dividend Distribution

Dividend refers to that portion of a firm’s Net Earnings which are paid out to the
Shareholders. A major decision of financial management is the dividend decision
in the sense that the firm has to choose between distributing the profits to the
shareholders and plugging them back into the business.
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 ratio of 2005-06
is increase 3.44% as compared to previous year.

YEAR DIVIDEND
Per Share Payout (%)
2008-09 4.0 31.0
2007-08 5.8 26.3
2006-07 5.5 26.0
2005-06 5.0 25.5
2004-05 4.0 24.1
2003-04 4.0 20.6
2002-03 3.8 24.0
2001-02 3.3 45.5
2000-01 3.0 28.9
1999-00 1.0 2.8
1998-99 4.0 28.3

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.

Generally two major types of profitability ratios are:

(1) Profitability in relation to sales.
(2) Profitability in relation to investment.

(1) ROI (Return on Investment)

EBIT
ROI= * 100
Capital Employed

YEAR EBIT CAPITAL EMPLOYED RATIO (%)

2007-08 492.85 6686.16 7.37

2008-09 419.71 8521.46 4.93

(2) ROE (Return on Equity)

EBIT
ROE= * 100
Equity Funds

YEAR EBIT EQUITY FUNDS RATIO (%)

2007-08 492.85 4032.87 12.22

2008-09 419.71 5894.40 7.12
 Balance Sheet 2008-09

Financial year 2008-09 (Rs crore)

Balance sheet consolidated 2008-09 2007-08
Sources of funds
Shareholders’ funds:
Share capital 95.01 95.01
Preference share capital 25.50 50.00
Share warrants 377.41 377.41
Reserves and surplus 5396.50 3,510.45
5894.40 4,032.87
Minority interest 179.20 174.41
Loan funds:
Secured loans 5033.10 4463.46
Unsecured loans 3860.90 2184.40
8894.00 6,647.86
Deferred tax liabilities 214.00 226.19
Policyholders funds 8596.90 6,484.67
Fund for future appropriation 129.00 25.88
Total funds employed 23907.50 17,591.88
Application of funds
Fixed assets
Goodwill on consolidation 3422.60 2571.04
Net block 3653.20 2533.44
Capital work-in-progress 128.80 70.70
6665.80 5,447.80
Investments 11082.40 7320.10
Current assets, loans and advances:
Inventories 747.60 776.60
Sundry debtors 887.20 753.20
Cash and bank balances 89.80 97.20
Interest accrued on investments 0.00 0.20
Loans and advances 532.60 524.00
2257.20 2151.10
Less: current liabilities and provisions
Current liabilities 677.00 559.10
Provisions 96.40 133.50
773.50 692.60
Net current assets 2589.80 2,252.80
Total funds utilized 23907.50 17,591.88
 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.”

Marketing is a process by which individuals and groups obtain what they need and
want by creating and exchanging products and values with others.
Marketing is typically seen as the task of creating, promoting and delivering
goods and services to consumers and businesses. Marketing people are involve in
marketing ten types of entities goods, services, experiences, events, persons,
places, properties, organizations, information, ideas.

Marketing has often described as “The Art of Selling Products.”

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 are
one through centralized system.
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) has its main sales office at
Mumbai. But at Veraval it has only dispatch office from where they send product
per instruction of Mumbai head office for sales.

ORGANIZATION STRUCTURE
 Marketing mix

Marketing mix is the set of marketing tools that firm uses to pursue its marketing
objectives in the target market.

It consists of everything the firm can o to influence the demand for its products.
The many possibilities can be collected into 4 groups of variables known as the
four Ps i.e.
Product Price Place Promotion

PLACE
Channels
Coverage
Assortments
Locations
Inventory
Transport

PRODUCT
Product Variety
Quality
Design
Features
Brand Name
Packaging
Sizes

PROMOTION
Sales promotion
Advertising
Sales force
Public elation
Direct marketing

PRICE
List Price
Discounts
Allowance
Payment period
Credit terms

Chart: 4.1

Product

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. Not
only that,
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.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) main product VFY has certain
length in terms of:
• Color yarn
• Dull yarn
• Spunned yarn

And it has depth in terms of:

• Quality
• Denier

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) with includes various other
chemicals and by products:
• Caustic soda
• Sulphuric Acid
• NA2SO4

MARKETING OBJECTIVES:-

• To have a highly delighted customer base.

• To develop committed, target oriented internal customer supplier
relationships.
• To ensure cost effective, profitable marketing operations.
• To maximize realizations, through focus on direct sales and reduced
logistics.
• To develop customer centered, profit oriented long term marketing
strategies.
• To ensure transportation of goods in strict adherence of safety and
environmental guidelines.
• To ensure timely Redressed of customer complaints / grievance.

PROCESS TO MEET OBJECTIVES

• Market environment analysis.

• Customer requirement need gap analysis.
• Strategic planning and budgeting.
• Production delivery alignment.
• Systems improvements.
• Customer satisfaction assessment.
• Internal customer – supplier relationship assessment.
• Review mechanism.
ACTION PLANS

• Periodic market visits.

• Strengthening relations with buyers –direct sales.
• Reducing distant sales.
• Reduced credit days – encouraging cash sales.
• Minimizing inventories.
• Better co-ordination with co producers.
• Dedicated transporters.
• Effective utilization of toner charges.
• Optimize Hydrogen utilization.

Customer support services

Product planning and development

“Product planning determines the characteristics of the product best meeting the
consumers numerous desires, characteristics that a stability, to products and
incorporate this characteristics into the finished products.
- Johnson

Product planning involves three important considerations:

1. The development and introduction of products.

2. The modification of the existing products.
3. The elimination of unprofitable product.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) plans its product design according
to the demand of the clients, market situation, price of the product, its
competitors.

Product Life Cycle

A company’s positioning and differentiation strategy must change as the product,

Market and competitors change over time.

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) is passing from maturity sate.
Hence, this company can make changes in its products and technology by adopting
new machines like horizontal spinning machine and pot spinning yarn process.

Because of the technology adaptation, absorption and innovation the benefits

derive by the INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) are:
• Quality improvement in existing range.
• Development of new market segment.
• Improvement in process, cost control and productivity.
• Improvement energy efficiency.
• Reduction in import material consumption.
New Product Development

New product development shapes the company’s future. Given the rapid changes in
tastes, technology and competition a company can’t rely solely on its existing
products.
Companies that, fails to develop new products are putting themselves at great
risk. Company can a new products though acquisition and development.
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) has made efforts in technology
absorption and in specific area that bring:
1. Development in its rayon division, i.e.
• Developing new shades of spun ye yarn
• Enhancement of sodium sulphide recovery.
• Development of new products, i.e. flat yarn
2. Development in carbon black division.
3. Development in textile division
Brand

The American Marketing Association defines brand is:

“A name, term, sigh, symbol or design or a combination of them, intends to
identify the goods or services of one seller and to differentiate them from those
competitors.” Thus brand identifies the sellers or makers.
With six of the foremost name in the apparels business into its fold, Indian Rayon
is today the largest branded apparel Co. in the country. The portfolio includes
leading brand names like Louis phillipe, San Frisco, Van Heusen, Allen Solly,
Peter England, and Byford - together making Indian Rayon the undisputed Market
Leader for branded men’s wear.
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.

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

• Cones (2 to 2.1 kegs each), Bobbins(2.5 to 2.7 kegs each ), Hanks, Cakes
• All wrapped in transparent polythene sheets
• Each cartoon to contain 24 cones
• Best logistic management to suit the client’s 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 then 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.

Labeling

Seller must label products. The label may be a simple tag attaché to the product
or an elaborately design graphic that is part of package. Label performs several
functions:
1. It identifies the products or brand
2. It grades the product
3. It described the products
4. It also promotes the product.

In INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd.) label carry only the brand name
or and information regarding the quality of the yarn as per denier.

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

Promotional Tools

“Promotion consists of those activities that are designed to being a company’s

goods or services to the favorable 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

Marketing Research

“To manage a business well is to manage its future, and to manage the future is to
manage information.”

Marketing research specifies the information needed to address marketing issues,

designs the methods for collecting information, manages and implements the data
collections process, analyzes the results, and communicates the findings and their
implications.
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd) in its initial stages was using the
service of professional persons and sponsor trade delegation for the purpose of
market research. But there after from 1988, they installed their own quality
control department for market research. The company is also sending its higher
level executives to the foreign countries for the purpose of survey and market
research.
The form of marketing research adopted by the company is continuous research. It
has also adopted survey method.
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd) has its own research and
development dept. That undertakes market surveys and functions as per the trend of
the market. This Dep’t. Enables the co. to carry out the productions of yarn and
various
Chemicals as per the demand of the customer and market condition.

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 ways 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 company’s
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.

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
Bangalore Amritsar Calcutta Veraval
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.

Advertising Management

“Any paid form of non-personal communication of ideas, goods or services by

business firm identified in the advertising message intend to lea to sale
immediately or eventually.”
--American Marketing Association
 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 in India are under one
management i.e. The Birla group. The Aditya Birla Group has covered near about 75%
of the yarn market. Thus there is no question of advertising.

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.
The company publishes magazines, which depicts various facts and figures of
companies manufacturing process, EXIM policy, pricing policy, strategies, etc.
I short; the companies adopt the direct advertising method.

Transportation

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd) Uses road way and railway for
transportation. The products are distributing though trucks. The unit utilizes
contract carriers. They give contract to transport agencies. Transportation is one
by truck up to Mumbai, but above Mumbai the product is transported by rail. It
pays Rs. 3.24 per ton for a kilometer. The unit faces transportation problem
during monsoon season.
 Channel of Distribution

“The middleman is not a hire link in a chain forgets by a manufacturer, but rather
and independent market, the focus of a group of customers for whom he buys.”
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd) has adopted its own sales branches
and sales offices in context of its channel distribution. The company has selected
the distribution channel keeping in view the demand of the customer and the
current market trend.
In INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd) the main product is rayon yarn
so, this unit utilize zero level (Direct selling) and one level of channel of
distribution. They are conduction the sales activity with the help of their own
sales depots and agent’s dealers, sub dealers etc. indifferent cities and
different states
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. All the
sales branches of
INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd) maintains the facilities like
storage, after sales service etc.

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

Dealing With Competitors

To be successful, the company must a better job than its competitors of satisfying
target consumers. Thus, marketing strategies must be adapted to the needs of
consumers and also to the strategies of competitors. Base on its size and industry
position the company must fin the strategy that gives it the strongest possible
competitive advantages.

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

International Marketing

International marketing refers to the organization which are international owned

and which operate in more than one country, though subsidiary and associate
companies.

“A traveler without knowledge is like a bird without wings.”

INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd) Exports its product to the various
countries through its own officers in abroad companies. Being well diversified,
Birla management group has its own offices in various countries and abroad. It
manufactures the product which is in great demand in almost all the countries of
the world.

It also imports its raw material called pulp from Canada which is use in the
production of Rayon Yarn. They have established their own training house in
foreign country which enables INDIAN RAYON (A Unit of Aditya Birla Nuvo Ltd) to
get export order and create export demand. The co. is having its various branches
abroad too. Over the above this the company’s export contributes 17% to the
division revenue.

Future Plan of Action and Achievements

Future Plan of Action

• Development of spatiality yarn
• 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 division base on its safety record and performance
• The caustic division has achieved the Greentech award in 2004

Recommendation

The process of improvement is an 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 an 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.

Conclusion

After going through the two month long training program, functioning of the
organization which I observed from that it can be concluded that Indian Rayon &
Industries Ltd. is the large scale manufacturing organization and successful
player in the VFY and chemical products. The company has the strong financial
structure and has a good reputation in the market.

In the backdrop of various initiatives taken and strong performance during the
year, Indian Rayon is on the path of superior performance. The company has
strategically moved into various growth businesses and these are backed by
traditional business that generates strong cash flows to drive the growth.

As concerned with the personnel Dept. it is well organize. If there are certain
problems than they are solve by mutual understanding between the personnel and the
management. Manpower Planning and human assets are well organized.

The company is also doing its business with the Global Market. In India, the
share of Indian Rayon and the total export of the VFY are highest.

SWOT ANALYSIS

The overall evaluation of division’s Strength, Weakness, and Opportunity Threats

is called SWOT analysis.

STRENGTH
• Division has won several SAFETY AWARDS for their prompt and effective work
of the safety of the workers and staff.
• Division has technical library, for the extra knowledge about the textile
industry and new updating for their employees.
• Division has a well-equipped lab for fining of new effective chemicals.
• Division has a well-develop modern caustic plant as an inter unit to it for
the production of caustic an by products. It also has the computerized power
plant for the fulfillment of the power supply.

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 towards proper human resource
management
• Location away from consuming centers.
• Bigger process cycle / higher process stock.

OPPORTUNITY

• Division should find new market area for its products specially chemicals
• Export markets are high, so the division should look for the increment of
the exports.
• 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 more weight age in international market. IR&IL Pot Spinning
Yarn is next to Asahi Japan and better than Chinese an Russian Yarn used in
international market.
• Biggest opportunity, when opening up of global market when MFA expires in
2005. Quota restriction will go which will boost the export of Yarn directly
though Textile in world’s two biggest market Europe and US.
 THREATS

• Government policies are the main hurdles of the division’s 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.
Bibliography

Annual Reports of the Financial year 2007-2008

I.M. Panday (2008), Financial Management, 9th Edition.

Vikas Publishing house Pvt. Ltd., New Delhi.

Fillip Kotler & Kevin Lane Keller (2007), “Marketing Management”, 12th
edition, Dorling Kindersley Pvt. Ltd., New-Delhi.

K. Aswathappa (2008), Human Resource Management, 5th Edition. Tata McGraw

Hill Publishing Company limited, New Delhi.

Fact and Figures of Birla Group Publication

Financial statement of Rayon Division, ABNL.

“Aditya Kiran” Aditya Birla Group Publication

Web References:-

www.Adityabirla.com
www.indianrayon.com
www.adityabirlanuvo.co.in.
www.adityabirla.com/the _group/heritage.htm
www.fabriclink.com/History.html