A STUDY ON THE BUSINESS PRACTICES IN

GHCL (UNIT: SREE MEENAKSHI MILLS), MADURAI

A SUMMER PROJECT REPORT
Submitted by

JAIGANESH.K
Register Number: 1391014
in partial fulfillment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

IN
DEPARTMENT OF MANAGEMENT STUDIES
SRI RAMAKRISHNA ENGINEERING COLLEGE
COIMBATORE-641022
AUGUST 2014

SRI RAMAKRISHNA ENGINEERING COLLEGE

COIMBATORE-641022
Department Of Management Studies
A SUMMER PROJECT REPORT
AUGUST 2014

This is to certify that the project report entitled

A STUDY ON THE BUSINESS PRACTICES IN

GHCL (UNIT: SREE MEENAKSHI MILLS), MADURAI
is the bonafide record of project work done by
JAIGANESH.K
Register Number: 1391014
of Department of Management Studies during the year 2013-2015

Project Guide

Director
Department of Management Studies

Submitted for the project viva-voce examination held on ____________________

Internal Examiner

External Examiner

DECLARATION
I affirm that the Summer project work titled A Study on the Business Practices in GHCL
(Unit: Sree Meenakshi Mills), Paravai, Madurai being submitted in partial fulfillment for the
award of MBA, is the original work carried out by me. It has not formed the part of any other
project work submitted for award of any degree or diploma, either in this or any other University.

JAIGANESH.K
1391014

I certify that the declaration made above by the candidate is true.

Mr.R.Rajesh Kumar,
Assistant Professor,
Department of Management Studies

ACKNOWLEDGEMENT
First of all I would like to thank God Almighty for giving me strength and opportunity to
do my Summer Project successfully.
I am very thankful to the management, Dr.A.Ebanezer Jeyakumar, Director (Academics) and I
would like to express my deep gratitude to Dr.N.R.Alamelu, Principal of Sri Ramakrishna
Engineering College for giving me this opportunity to do my MBA programme in this college.
Though my words cannot pay to this deed, I present my salutations which honor to our Director,
Dr.K.Chitra, Department of Management Studies, Sri Ramakrishna Engineering College to
have the source of inspiration by her thoughtful words and deeds.
I am highly indebted to my guide, Mr.R.Rajesh Kumar, Assistant Professor, Department of
Management Studies, Sri Ramakrishna Engineering College for his continuous motivation and
moral support extended from the very beginning.
I also wish to thank Mr.Jayamuthumagesh, HR-Manager, GHCL and Co-workers of the
department in GHCL for providing me the opportunity to do my summer project at the
organization and provided me all facilities to complete my project successfully.
Once again I extend my sincere and heartfelt thanks to all who helped me to complete this
project successfully.

Executive Summary
GHCL Limited (Unit: Sree Meenakshi Mills) is a name linked with quality and brilliance.
They are one of the outstanding Manufacturers and Exporters of diverse types of yarns. The
company is certified with ISO 9001-2000, 14001-2004, and also with OHSAS 18001
Certification by DNV Netherland. Their offer include of 100% Cotton Combed yarn, Cotton
compact Yarn, Cotton knitting yarn, weaving yarn ranging from 40s to 92s. State of the art
machineries in the mill make easy outstanding quality and top ranking in SIMA. They offer 40s,
50s, 60s, 80s and 92s combed/compact/knitting/weaving/Elitwt/slub yarn. The achievements of
the company include First Rank in Production and Third Rank in Productivity from SIMA (year
2010-11). They have burly presence in the markets of Europe and Asian Countries.
The textile division at GHCL is a vertical integrated operation that manufactures
premium quality yarn, griege fabric and home textile products like bed linen, curtains, made ups
and cotton yarns.

Objectives
The primary objective is to study the business practices in GHCL Limited (Unit: Sree
Meenakshi Mills). The secondary objectives are to understand about a corporate world and to
implement the learning now and in future.

Learnings
I had a detailed study on the business practices followed in the textile division of the
company at Sree Meenakshi Mills, cotton yarn production unit at Paravai, Madurai. The
company mainly concentrates in production of cotton yarns, spinning cotton and also exporting
the finished goods. GHCL is known for their good organization value and also for their CSR
activities. The company has various functional areas like Production, Maintenance, Computer,
Electrical, Marketing, Human Resource, Accounts Departments.

TABLE OF CONTENTS

Chapter No.

Title

Page No.

ORGANIZATIONAL PROFILE
1.1

Introduction

1.2

About the Company

1.3

History of GHCL

1.4

Vision

1.5

Mission

1.6

Parent Company

1.7

Organization Value

1.8

Nature of the Business

1.9

Management of the company

1.9.1 Classification of Employees

1.9.2 Team & Manpower

1.10

Company Infrastructure

1.11 Certifications and achievements of GHCL Madurai

1.12 Corporate Social Responsibility

1.13 Network of GHCL

1.14 Divisions of GHCL

1.14.1 Textile division

1.15 Various Units of GHCL ( Sree Meenakshi Mills)

1.16 GHCL Offices

MICRO AND MACRO ANALYSIS

2.1

Micro Environment

2.2

Macro Environment

2.3

SWOT Analysis

11

2.4

Competitors

12

FUNCTIONAL AREA
3.1 MANUFACTURING DEPARTMENT

13

3.1.1 Quality Policy

13

3.1.2 Quality Objective

13

3.1.3 GHCL products

13

3.1.4 Varieties of cotton

14

3.1.5 YARN

14

3.1.6 GHCL cotton yarns quality

14

3.1.7 Count Manufacture

14

3.1.8 Raw cotton procurement

15

3.1.9 Making cotton yarns

15

3.1.10 Types of cotton yarn produced in GHCL

16

3.1.11 Yarn Manufacturing process

17

3.1.12 CTL in GHCL

24

3.2 MAINTENANCE DEPARTMENT

26

3.2.1

About the Department

26

3.2.2

Addressed Questions

26

3.2.2.1 What is to be maintained?

26

3.2.2.2 How is the maintenance to be done?

26

3.2.2.3 Where is the maintenance done?

27

3.2.2.4 Who does the maintenance?

27

3.3 ELECTRICAL DEPARTMENT

28

3.3.1 About the Department

28

3.3.2 Hierarchy in Electrical department

28

3.4 COMPUTER DEPARTMENT

29

3.4.1

29

Nature of work

3.4.2 Relationship with other departments

29

3.5 MARKETING DEPARTMENT

30

3.5.1

About the Department

30

3.5.2

Functions in Marketing

30

3.5.3

Pricing

32

3.5.4

Segmenting

33

3.5.5

Targeting

33

3.5.6

Positioning

33

3.5.7

Sales Activities

33

3.5.7.1 Consignment Sales

33

3.5.7.2 Direct Sales

34

3.5.7.2.2 Within Tamil Nadu

34

3.5.7.2.2 Export Sales (Head & Formalities)

35

3.5.7.2.3 Merchant Export (Third Party Export)

37

3.6 HUMAN RESOURCE DEPARTMENT

39

3.6.1 About the Department

39

3.6.2

39

Objective of HR Department

3.6.3 Recruitment

39

3.6.4 Recruitment Process:

40

3.6.5 Employee Engagement

40

3.6.6 Factors determining Employee Engagement

40

3.6.7 Salary/ wages

41

3.6.8 Other Compensation

41

3.6.9 Pension and Gratuity

41

3.6.10 Bonus

41

3.6.11 ESI (Employee State Insurance)

41

3.6.12 Contribution of HRM

42

3.7 ACCOUNTS DEPARTMENT

43

3.7.1 About the Department

43

3.7.2 Accounting Books

43

3.7.3 Business Plan of GHCL Ltd

43

3.7.4 Bankers of the Company

44

LEARNINGS

45

REFERENCES

46

LIST OF THE FIGURES

Chart No.
1.1

Title

Page No.

Organization Structure

3.1.1

Yarn Manufacturing Process

17

3.3.1

Hierarchy in Electrical department

28

Chapter 1
ORGANIZATION PROFILE
1.1 Introduction:
GHCL Limited (Unit: Sree Meenakshi Mills) is a Madurai, Tamil Nadu based company,
contributing Cotton Yarn. The company was included in the year 1983. The company is headed
by Shri R. S. Jalan, the Managing Director of the company. They are recognized as the
outstanding Manufacturers and Exporters of Cotton Yarns from India.
The company has three manufacturing units. The yarn division of M/S. GHCL LIMITED
(UNIT: SREE MEENAKSHI MILLS) is situated in Samayanallur have two units which is
situated near Madurai. The third unit is situated at Manaparai (Trichy District). The combined
manufacture capacity is around 1200 metric ton/month. The infrastructure includes Spinning
Yarn with 1,50,000 spindle capacity. Over 1000 devoted professionals are employed in the
Textile Division.
1.2 About the Company:
GHCL Limited (Unit: Sree Meenakshi Mills) is a name linked with quality and brilliance.
They are one of the outstanding Manufacturers and Exporters of diverse types of yarns. The
company is certified with ISO 9001-2000, 14001-2004, and also with OHSAS 18001
Certification by DNV Netherland. Their offer include of 100% Cotton Combed yarn, Cotton
compact Yarn, Cotton knitting yarn, weaving yarn ranging from 40s to 92s. State of the art
machineries in the mill make easy outstanding quality and top ranking in SIMA. They offer 40s,
50s, 60s, 80s and 92s combed/compact/knitting/weaving/Elitwt/slub yarn. The achievements of
the company include First Rank in Production and Third Rank in Productivity from SIMA (year
2010-11). They have burly presence in the markets of Europe and Asian Countries.
1.3 History of GHCL:
GHCL was established in 1956 at Paravai, Madurai with 30,000 spindle capacity. During
2004 and 2006 the unit has been modernized with the state of art and technology. After the
modernization the total spindle capacity is nearly above 1,07,280.

Manaparai Unit of 40,000 spindle capacity was established and managed by late Sri.
Karumuthu Thiyagarajachettiar. Then it was taken over by Dalmia Group during the year 1983.
1.4 Vision:
GHCL Textile division will be customer focused company committed to leadership
through quality. We strive for building trusting relationships, encouraging entrepreneurs and
sharing prosperity.
1.5 Mission:
To reach to the slot in the textile industry by way of productivity, quality and customer
satisfaction. Continual technology upgradation, Human resource development and cost
effectiveness.
1.6 Parent Company:
GHCL LIMITED (UNIT : SREE MEENAKSHI MILLS) is the sister concern of Dalmia
Group of Companies, which was established in the year 1943.1. The company has a turnover of
1500 crores. It is has Soda Ash Division, Refined Salt Division, Home Textiles Division, etc.
The company is managed by a panel of experienced professionals.
1.7 Organization Value:
Values are at the core of an organization giving it a distinct identity. The organization has
a greta emphasis on individuals responsibility and assures right of equal participation values to
all in fulfilling objectives by promoting certain values. These values reflect a shared view of how
we seek to operate and be perceived by others.
The company has identified the following values to strive to inculcate among its employees.

Openness, Empowerment and delegation

Listing ability / willingness

Honoring commitment

Harmony and co operation

Keeping others in decision making

Being open to new ideas

Spending time in training others

Upholding declared values

Displaying consistency in behavior

Humility and compassion

Initiation & Recognizing and acknowledging good work

1.8 Nature of the Business:

In GHCL, Madurai, the nature of their business is Spinning cotton and also

Manufacturing

Whole sale supplying

Exporting

And also importing raw materials from:

Switzerland, U.S.A, Australia, Egypt.
1.9 Management of the company

Sri Sanjay Dalmia, the Chairman

Sri Anurag Dalmia, the Vice Chairman

Sri Neelabh Dalmia, the Promoter

1.9.1 Classification of Employees:

Based on the size and nature of function and responsibility, the employees have been
classified into various levels as under.

The staff and technicians are classified from level 1 to level 5.

The managers and DGMs are classified from level 6 to level 8.

General Managers and above are classified from level 9 to 14.

1.9.2 Team & Manpower

Over 1000 dedicated professionals are employed in the Textile Division. The team
members are well-trained to operate hi-tech machinery and remain aware of the latest
manufacturing techniques. All the team members loyally back the companys vision of attaining
absolute satisfaction of the clients.
1.10 Company Infrastructure:
The entire manufacturing setup is backed by advanced machinery, enabling smooth
production process. Due to the state-of-the-art infrastructure, we have a large production
capacity. The hi-tech manufacturing setup enables us to smoothly execute the production
process, incorporating the specific requirements of the clients as and when needed.
1.11 Certifications and achievements of GHCL Madurai:
The company is certified with,
An ISO 9001:2001 for Quality management.
An ISO 14001:2004 for Environmental management.
An ISO 18001:2007 for Occupational Health & Safety Management Systems (OHSAS).
And some of its achievements are,
GHCL was awarded with State of the art textile machinery by Reiter Switzerland for
keeping with the time and competitive environment.
I-Rank in Production and III-Rank in Productivity which was participated by 120 mills in
this competition and the ranks were given by the SIMA (Southern Indian Mills Association) for
the year 2010-2011.
1.12 Corporate Social Responsibility:
GHCL is regularly conducting Medical camp in rural areas as well as in and around the
GHCL factory premises.
Water facility provided to local living people around the factory premises.

1.13 Network of GHCL:

GHCL has established its presence all over India to effectively serve the various markets.
GHCL has 10 area sales offices at present. GHCL India also has an export division to cater to the
overseas market.
1.14 Divisions of GHCL:
GHCL has eight divisions. These are as follows:

Textile division

Home test division

Soda ash division

Salt division

Chemicals division

Herbal division

Tobacco division

ITES (Information Technologies Enabled Services)

1.14.1 Textile division:

The textile division at GHCL is a vertical integrated operation that manufactures
premium quality yarn, griege fabric and home textile products like bed linen, curtains, made ups
and cotton yarns. The manufacturing units at the textile company have state of the art textile
machinery from:
1. Reiter-Switzerland
2. Schlafhorst-Germany and
3. Muratec-Japan
Among others to lend that cutting edge to quality Wind-power is used for generating and
meeting out the energy requirement for the spinning operations, which is not only cost effective
but also eco-friendly.

The product range includes flat sheets, fitted sheets, pillow cases, shames, valences, curtains,
duvet covers and other top of the bed items in 100% cotton and blends.
The make and design of bed linen, make up`s, cotton yarn and curtains match up to the global
standards and are available in wide ranges to choose from.
GHCL has in house design studios in New York, United Kingdom and India, with experienced
team of designers working to cater to the specific needs of clients and markets.
1.15 Various Units of GHCL ( Sree Meenakshi Mills):
GHCL (Unit: Sree Meenakshi Mills)

100% Cotton Unit at Paravai

OE Unit Rotors

Vaigai Unit 1,07,280 Spindles

Synthetic Unit at Manaparai

Capacity 41,000 ton

In Paravai Unit, they are manufacturing only 100% cotton yarn. The cotton counts are
40`s to 92`s.
In Paravai Unit, the production capacity per day is 37 ton(approx.)
In Manaparai Unit, they are manufacturing Polyester blended yarn, Polyester viscose
yarn and the counts are 30`s to 60`s.
In Manaparai Unit, the production capacity per day is 13 ton(approx.)
1.16 GHCL Offices:
Corporate Office: Noida. Export division: Noida.
Registered Office: Ahmadabad
Area Business Managers Location: Ahmadabad, Baroda, Mumbai, Agra, Chandigarh,
Delhi, Kanpur, Hyderabad and Chennai.

Fig 1.1 ORGANIZATION STRUCTURE

VICE CHAIRMAN

BOARD OF
DIRECTORS

MANAGING DIRECTOR

SENIOR VICE PRESIDENT

SENIOR
GENERAL
MANAGER
(PRODUCTION)

SENIOR
GENERAL
MANAGER
(MAINTENANCE)

SENIOR
GENERAL
MANAGER
(MARKETING)

SENIOR
GENERAL
MANAGER
(FINANCE)

SENIOR
MANAGER

MANAGER
AND
TECHNICIANS

SENIOR
MANAGER

MANAGER

STAFF

STAFF

STAFF

STAFF

Chapter 2
MICRO AND MACRO ENVIRONMENT
2.1 Micro Environment:
The immediate context of a companys operations including elements such as suppliers
customers and competitors.
2.1.1 Micro Environmental Factors:
These are internal factors close to the company that have a direct impact on the organizations
strategy.
2.1.2 Distribution Mix Of Ghcl
There are two ways of distribution adopted in GHCL,
1

Direct channel

Indirect channel

Direct channel
Mostly GHCL deal and distribute their goods direct to customers.
Indirect channel
GHCL also deal and distribute their goods through agents/buying houses to avoid heavy
losses in foreign countries because of unknown market situations in the beginnings of its
business and investing huge amounts in that particular country.

2.2 Macro Environment:

The external factors which affect a company's planning and performance, and are beyond
its control: for example, socio-economic, legal and technological change.

2.2.1 Macro environment Factors:

Uncontrollable factors that constitute the external environment of marketing including
demographic, economic, technological, natural, social, cultural, and regulatory forces.
2.2.1.1 POLITICAL FACTORS
It is fact all government agencies and influential groups that somewhat influence various
organizations and individuals in a given society are included among political factors. Present
change in the political scenario can definitely be favorable for economy of the next financial
year. Now with the change of political situation, the exports of the country are increasing day by
day. In this way foreign exchange earning has increased. It is also duty of the government to take
care of textile sector and make good policies for this sector for the exports and imports.
2.2.1.2 ECONOMIC FACTORS
The products of GHCL textile have positive image in local and international market. The
economic environment consists of factors that reflect consumer purchasing power and spending
pattern. The consumptions of GHCL products are considered best in quality in most of the
international markets. GHCL has a large impact on their markets. So, before entering the
international markets, the company must consider the changes in major economic variables such
as income, cost of living, interest rates savings and borrowing patterns.
2.2.1.3 SOCIAL FACTORS
The cultural and social environment is made up of institutions and other forces that affect
a societys basic values, perceptions and preferences and behaviors. People grow up in a
particular society that shapes their basic beliefs and values.
This is the policy of GHCL that the products for exports are designed according to the
beliefs and values of the international consumers. The products are made according to the
changing lifestyles and liking and disliking of the customers.

10

2.2.1.4 TECHNOLOGICAL FACTORS

Being one of the largest in the textile sector, GHCL has great financial resources and they
are always in a position to install the latest and advanced machinery in their production
department. With the help of modern technologies they are in position to design new products.
While in the engraving they are going to install CST engraving for flat bed screens and it is the
first machine introduce by the manufacturing company. Introduction of new technologies creates
new markets and opportunities for GHCL Ltd. Companies that do not keep up with technological
changes soon will find their products out-dated and they will miss new product and market
opportunities. Because of good financial resources GHCL has been prompt in introducing new
technology in all its departments.
2.2.1.5 LEGAL FACTORS:
A number of legal and political macroenvironmental factors affect small businesses in the
clothing industry. The industry has repeatedly been affected by issues such as workers' rights and
child labor laws. Union workers in clothing manufacturing plants may picket their employers,
especially if their wages or medical benefits are less favorable than workers in comparable
industries. Workers picketing their clothing employers impacts production. This can cause delays
for retailers in getting spring or fall fashions on time. Activists who are not employed by the
companies may also picket retailers who purchase clothing from countries known for violating
child labor laws. This negative publicity may impact a small clothing retailers' sales and profits.
Also, a trade embargo against another company's imports would force clothing wholesalers to
find different suppliers.
2.2.1.6 ENVIRONMENTAL FACTROS:
Water is the environmental factor with the most impact on cotton production. The water
for irrigating cotton is sourced from both regulated and unregulated sources. Regulated sources
of water comprise rivers and creeks with significant water storage facilities. Water policies and
climate change will together cause significant reductions in water available to cotton farmers,
such that they will not be able to maintain normal levels of production. The most likely response
is mixed farming whereby cotton farmers use the experience gained from growing cotton to grow

11

other crops such as wheat, alongside cotton. However, if cotton prices remain high and water is
available, farmers will grow cotton, as cotton provides the best return per megalitre of water.
Some cotton growers are optimistic about the impact of the governments water policy on their
output. Provided they are fairly compensated for water sold to the government, cotton farmers
will invest the money into finding more efficient ways of using water. This could involve
reducing the amount of water lost through evaporation, buying water from farmers with more
water than they need, and diverting or capturing and storing water from unregulated sources. The
general position among industry members is that the cotton industry is reasonably robust with
flexible farming systems that will enable it to readily adjust to variability in water availability.
2.3 SWOT Analysis of GHCL
2.3.1 Strength:
1. Caters not only to domestic markets but major overseas markets such as South-East Asia,
Middle-East Asia and Europe.
2. Heavy Investments in superior technology and infrastructure.
3. R&D division is well-established and houses some major innovative set-ups for pilot
testing and research.
4. Awarded a 5-star rating by the British Safety Council for excellent health and safety
management systems and also by ICMA for waste reduction and management practices.
2.3.2 Weakness:
1. Stiff competition from international and domestic market leaders means limited market
share growth.
2. Strict government norms and policies makes it difficult to have a strong operational
efficiency.
2.3.3 Opportunities:
1. Strategic acquisitions have established a stronghold for GHCL in both the textiles and
chemicals sector globally.

12

2. Social programs like Gokul Gram Yojana have come to highlight the social activeness of
the company and helped establish a name in rural India as a customer-friendly and
trustworthy company.
2.3.4 Threat:
1. International exchange rate mechanisms are in a state of turmoil as more and more
exports continue to get affected.
2. Economic downturn in affecting product prices, particularly in the European nations.
2.4 Competitors:
1. Tata Chemicals Ltd
2. Gujarat Alkalies and Chemicals Ltd.
3. Aditya Birla Chemicals (India) Ltd.

13

Chapter 3
FUNCTIONAL AREAS
3.1 MANUFACTURING DEPARTMENT
3.1.1 Quality Policy:
GHCL are committed to achieve customer satisfaction by manufacturing and supplying
quality yarns to their needs and expectation. The commitment and support of top management,
dedicated work force, modern machines and techniques, optimum utilization of resource and
continual improvement of quality management system ensure this.
3.1.2 Quality Objective:

Achieve and maintain ISO 9001:2000 certificates

Continually enhances customer satisfaction

Continually upgrades the skills of Human Resource

Take timely actions on The Non-Conformance

Adopt Cost Effective Measurement

Comply with all relevant statutory requiremen

PRODUCT PROFILE OF GHCL

3.1.3 GHCL products:

Compared yarn

Blended yarn

Fancy yarn

Eli twist Poly viscose yarn demand in domestic markets

Cotton yarn demanded in domestic & international markets

Poly cotton yarn suitable for woven and knitted fabrics

14

3.1.4 Varieties of cotton:

Shankar 6 Gujarat

MCU5 A.P

DCH A.P

Bunny A.P & Karnataka

GIZA

PIMA

3.1.5 YARN
Yarn is a continuous twisted strand of wool, cotton or synthetic fibers, usually used for
knitting or weaving.
3.1.5.1 Types of YARN:

Staple or Filament yarn

Single or Plied or Cord yarn

Simple or Complex yarn

There are three types of yarns produced in GHCL.

Normal Yarn, Elite Yarn, Rogal Yarns.
3.1.6 GHCL cotton yarns quality:

Premium quality, Skin friendly

Feather soft, Light weight

3.1.7 Count Manufacture:

16 and 20 Open-End yarn

40`s to 80`s Combed yarn for weaving

40`s and 50`s Combined yarn for knitting

30`s, 40`s, 60`s polyester/cotton blended yarn

40`s polyester viscose yarn

15

3.1.8 Raw cotton procurement:

Gujarat

Karnataka

Maharashtra

Andhra Pradesh

Tamil Nadu

Apart from these, they are importing raw cotton from U.S & Egypt.
3.1.9 Making cotton yarns

Bales of cotton of various grades are moved from the WAREHOUSE to the BALE
OPENING room.

Selected bales are opened and placed in position beside the BREAKING and OPENING
MACHINE. This is actually a line of machines, working as a unit, that tear apart and
partially clean matted, compressed and baled cotton. The result is small loose bunches of
cotton.

The cotton is then placed into the BLENDING MACHINE. This is a group of devices
that are synchronized to proportion definite amounts of various grades of cotton which
are to be blended together.

At this time, mated cotton and waste yarn salvage form operations in the mill are placed
into the WASTE MACHINE. This machine beats, pulls apart and fluffs up waste cotton
to prepare it for re-use.

Cotton from both the BLENDING MACHINE and the WASTE MACHINE is fed into
the BREAKER PICKER. In this unit the raw cotton is partially cleaned by beating and
fluffing and then fed into the FINISHER PICKER.

The FINISHER PICKER receives partially cleaned cotton in the form of LAP from the
BREAKER PICKER and completes the cleaning and fluffing process. LAP is a general
term used to designate wide sheets of loosely matted cotton.

The cotton is next processed by a CARDING MACHINE, where dirt and short fibers are
removed. Other fibers are laid parallel and formed into a rope like strand called a
SLIVER. The SLIVER is deposited in large cylindrical containers called CANS.

16

Subsequent processing depends on whether better grade (combed yarn) or lower grade
(carded) yarn is desired. For the lower grade, processing continues at the DRAWING
FRAME.

The cotton is next processed by the DRAWING FRAME. It is a machine which several
strands of SLIVER are combined into one strand and DRAWN OUT so that the
combined strands approximate the weight and size of any one of the original strands. The
team DRAWN OUT means to stretch a strand of cotton, usually by running the strand
between several pairs of rollers, each pair turning faster than the pair before it.

For better grade yarn, the SLIVER is first processed by the SLIVER LAPPING
MACHINE, which draws and combines several strands of SLIVER into a sheet of LAP
and winds it on a spool ready for RIBBON LAPPING or COMBING.

The LAP is processed by a RIBBON LAPPING MACHINE which draws and combines
several rolls of LAP into one roll of RIBBON LAP, straightening the fibers slightly and
making the lap more uniform in weight and texture, ready for feeding to a COMBING
MACHINE. RIBBON LAP is a roll of closely matted cotton fibers, about 10 inches wide.

COMBING is the process of extracting fibers below a predetermined length and

removing any remaining dirt. Output of the COMBING MACHINE is deposited in
CANS.

The SLUBBING MACHINE then draws out strands of SLIVER and twists then together
loosely in order to give the strands (now called ROVING) sufficient strength to withstand
subsequent operations.

The ROVING is processed by the FLY FRAME. This machine progressively combines
two strands of partially processed ROVING into one, draws out the combined strands
until they are of prescribed weight and twists them loosely in order to give them
sufficient strength to withstand subsequent operations.

3.1.10 Types of cotton yarn produced in GHCL:

Fly, Cabled, Doubled, Novelty, Slub, Flake, Spiral, Routine, Loop or Curl, Knot or Spot,
Chenile.

All the above yarns are used in the Kin or Woven fabric manufacturing process.

17

3.1.11 Yarn Manufacturing process

Fig 3.1 Yarn Manufacturing Process
MIXING
BLOW ROOM
BALE PLUCKER
VARIO CLEANER
FLEXI CLEANER
CCS (CONTAMINATION CLEARING SYSTEM)
CARDING
PRE-COMBED DRAWING
LAP FORMER
DRAWING OUT
COMBING
SIMPLEX
RING FRAME (SPINNING)
WINDING (AUTO CONER)
YCP (YARN CONDITIONING PLANT)
PACKING
DISPATCH

18

3.1.11.1 Mixing:
The purchase of raw material is from different states and the quality of it will vary. So,
the cotton purchased, were unloaded in the mill, the bales of cotton are removed and compressed
cotton is opened. The cotton coming from purchaser it is compressed and tie with bale. So, that
more cotton can be stored. The different quality of cotton is mixed according to the count and
proportion. The counts can be from the range of 40`s to 100`s, then the mixing is laid on the
floor for moisture in order to make the mixed cotton suitable for production process.
The raw material is tested in lab for quality. The quality of cotton will not be the same.
So, the quality of different cotton is mixed to form a fine proportion of quality cotton. The one
bale of cotton contains 170kg of cotton.
3.1.11.2 Blow room:
This step is for opening, cleaning and dust removal, blending and preparing for carding
process. In this process there will be large machine which is in rotating motion. The mixed
cotton is put in the machine. The rotating machine has a magnet; the use of the magnet is to clean
the cotton. In the cotton there will be some dust foreign particles, etc. the cotton is cleaned and
the foreign particles are removed. After the cleaning process, the cotton is sucked through air and
the same will be produced in lap form. As the machine is rotating, the unauthorized person are
not allowed. The yellow line is drawn in the floor behind which no one is allowed except the
worker.
In Blow room using VETAL SCAN MACHINE is the most effective way of removing
foreign particles like feather, color cloth bits discolored threads, yellow fabric pieces by Line
Scan cameras and high density impurities like white/transparent polypropylene, plastic, colored
polythene bag fragments using sonic acoustics / ultrasonic sensing. Detected materials are
ejected through high-speed nozzles by pneumatic air jets.
METAL DETECTION SYSTEM: Electro Magnetic Detector detects small metal impurities
covered like broken nails, pins, scrap, ring travelers, etc., in traveling cotton and diverts them
into a collection chamber without disturbing the production much thereby reducing the damage
caused by spikes, cleaning rollers and fire generation.

19

FIRE DIVERSION SYSTEM: It is used for Spark detectors coverage of 360 degrees consisting
of infra-red sensors (cameras) detects ember in the pneumatically conveyed cotton / synthetic
fibers inside ducts traps them and diverts them into a Quenching tank through an extra suction
motor (Ventilator fan) coverage for continuous, infra-red, automatic waste evacuation system,
fiber compactors, filter rooms.
3.1.11.3 Bale Plucker

BALE PLUCKER MACHINE: No textile mill can work efficiently without this machine.
All it does is to pluck cotton from bales placed by its side and take it into the machine for
opening and cleaning. This is an automatic machine just to pluck cotton like you pluck a
flower.

The amount of cotton that it should pluck is adjusted and the traverse length is also set for
the number of cotton bales that are kept by its side. As cotton is a fiber which has
different set of fiber parameters from bale to bale and from place to place where it is
grown, we need to have a homogeneous mixture of cotton which will carry the desired
quality in the fibers.

This bale plucker plucks cotton from several bales and makes a homogeneous mixture
fed in to the machine. As the cotton is constantly plucked the bale gets exhausted and the
operator pushes the new set of bales and allows the machine to start once again. The
bales are arranged in such a way that it gets exhausted once in 4 hours or even 8 hours so
that a rest or a break is made for the operator to have his lunch.

The next process is a set of various machines in a row operating as per programmed
settings which opens, cleans and feeds it to the next machine where again it is opening
and cleaned, this opening and cleaning is repeated till the desired opening and cleaning is
done as per requirement or standards. The final machine is a LAP former of fixed length
and weight. There is also a provision to take the opened cotton to the next process.

Vario Cleaner and Flexi Cleaner are the check points in the cotton cleaning process.
These machines are in built in 48 cameras to find and check the various dusts in cotton.

20

3.1.11.4 Vario cleaner:

Higher Production up to 1500 kg/hr

Twin Element beater for gentle cleaning and effective opening.

Opening, cleaning and de-dusting combined.

Effective micro-dust and seeds removal.

Roller type waste collection system.

Cleaning efficiency up to 40%.

Unique user friendly controls.

3.1.11.5 Flexi cleaner:

Infinitely variable production achieved by inverter drive.

Controlled fiber feed for optimum opening and maximum clea froning efficiency.

Fine opening achieved by Saw tooth or Needle beater`s Effective suction.

3.1.11.6 CCS (Contamination Clearing System):

These machines are designed in full sealing structure so as to effectively remove impure
particles that get accumulated during processing of cotton.
3.1.11.7 Carding:

Carding, in yarn production is a process of separating individual fibers, causing many of

them to lay parallel and removing most of the remaining impurities. Cotton, wool, waste
silk and man-made staple are subjected to Carding. Carding produces a thin sheet of
uniform thickness that is then condensed to form a thick, continuous untwisted strand
called SLIVER. When very fine yarns are desired, Carding is followed by Combing, a
process that removes short fibers, leaving a Sliver composed entirely of long fibers, all
laid parallel and smoother and more lustrous than uncombed types. Carded and combed
sliver is then spun.

There are 33 Cardings in GHCL Vaigai Unit.

21

3.1.11.8 Pre-combed Drawing:

Pre-combed drawing is an operation in which dirt and short fibers are removed from
sliver lap by following ways:
o In a specially designed jaw, a narrow lap of fiber is firmly gripped across its
width.
o Closely spaced needles are passed through the fiber projecting from jaws.

3.1.11.9 Lap former:

In Lap-former machine, slivers are fed to form a lap of 20 inches wide condensed with a
slight draft and weighing as per set length. The machine run smoothly so as not to disturb
the fibers which undergo combing at the comber machine? One such Lap former is
sufficient to feed 8 comber machines.

3.1.11.10 Drawing Out:

After Carding or Combing, the fiber mass is referred to as the sliver. Several slivers are
combined before this process. A series of rollers rotating at different rates of speed
elongate the sliver into a single more uniform strand that is given a small amount of twist
and fed into large cans. Carded slivers are drawn twice after carding. Combed slivers are
drawn once before combing and twice more after combing.

3.1.11.11 Combing:

Combing is the process which is used to upgrade the raw material. It influences the
following Yarn qualities.
o Yarn evenness
o Cleanness
o Smoothness

In addition to above, cotton needs less twists than a carded yarn.

Good fiber goes to the Simplex process.

22

3.1.11.12 Simplex:

Simplex simplifies and help to easily made yarn for machine. The chief function of
simplex frame is the attenuation of sliver. Insertion of protective twist in order to hold the
fine strand of sliver. Winding of roving into a package that can be transported, sorted,
donned on ring spinning machine. After carding the cotton is passed through draw
frames. The draw frames draws the cotton into thick strands. These are then spun into
thinner strands on the simplex frame spindles.

3.1.11.13 Ring frame (Spinning):

The Ring Spinning is the most widely used form of spinning machine due to significant
advantages in comparison with the new spinning process. The ring spinning machine is
used in the textile industry to simultaneously twist staple fibers into yarn and then wind it
onto bobbins for storage. The yarn loop rotating rapidly about a fixed axis generates a
surface referred to as balloon. Ring frame settings are chosen to reduce yarn harness
and the risk of glazing or melting the fiber.

Spinning is the first step of textile processing. The process of making yarns from the
textile fiber is called spinning. They are producing various types of yarn. If we notice, we
can see that the cotton fibers are converted into carded yarns, combed yarns and rotor
yarns. For producing this three types of cotton yarn, spinning methods also differ.

3.1.11.14 Types of spinning process:

Spinning process is varying depending on the fiber type which we want to process.
1. For Staple yarn:
Ring, Rotor, Friction, Self-Twist, Electro-static, Vortex, Air jet, Twist less.
2. For spinning filament yarn:
Wet, Dry, Melt, Bi-Component, Film Spitting Reaction.
3. For Integrated multi-component yarns:
Integrated composite, Cover spun, Selfill yarn, Acro-dynamics.
By the Spinning process, various counted yarns are produces. Spinning frames are set for
producing specific counted yarn.

23

3.1.11.15 Winding (Auto Coner):

Winding is the final process for producing yarn. Ring frame cops are taken and placed in
winding machine. These small cops are rolled on the empty paper cone depending on the
requirement market.

3.1.11.16 YCP (Yarn Conditioning Plant):

This step follows for improving moisture for yarns.

3.1.11.17 Packing:

Air compressor cleans yarn paper cones and the cone yarn is packed by polythene covers
and arranged in order and kept in box. A box contains 24 cones. Then the label is pasted
on the cotton box. The label contains the name GHCL (UNIT: SREE MEENAKSHI
MILLS). Then kept in bags. The bag is printed with details like Name, Weight, Length,
etc

Then the bags are stored in godown for direct marketing and export as per the equipment
and order.

3.1.11.18 Dispatch:
The yarn which is packed is ready for dispatch. The packed yarn is transformed to
dispatch section. From dispatch it is distributed to customers as they require through Lorries. If
the quantity order is bulk the mill itself delivers the goods to customers. If quantity is small, then
the customer has to make their own arrangement to take the delivery of goods from the mill to
their organization. During the mill delivery if any damage the mill will responsible and in case of
own arrangement the mill will not responsible.

24

CENTRALIZED TESTING LAB

3.1.12 CTL in GHCL:
The raw material cotton is processes through various stages and final product yarn is
produced. The produced yarn is checked for quality. To check the quality of the yarn the quality
technical lab is used.
GHCL have a modernized lab for testing their own produced yarns to check its quality.
After finishing the tests they should satisfy and are packed to sales. If there is any difference
between yarn and the parameters, the yarn is rejected.
The new and modernized equipments are as follows:
3.1.12.1 Premier Art:
The first machine in the lab is named as Premier Art. It is an Indian made machine. It is
used to check the strength, quality, width, color, length of the yarn. The machine is provided
with small display and keyboard. The information relating to the yarn quality is stored. The
thread of yarn is inserted into the machine and the machine checks the quality and report is
displayed on the screen. The good quality is lead and bad quality is trash.
The raw material cotton when purchased will be sent to the quality testing lab and
checked. If there is 1% of trash in the cotton and remaining 99% can be used. If there is 5% of
trash present in the cotton the remaining 95% can be used. But most of the companies will reject
the raw material if there is more percent of trash. The whole raw material will not be checked.
The samples from each bales are selected and are checked.
3.1.12.2 AFIS Pro:
This machine is used to check whether yarn is even or uneven. The produced yarn may
be even or uneven. To check this status, this machine is used. The machine is fully automatic and
it is connected to computer. The reading is like the ECG that monitors and checks inch and
records in the computer. The recorded information is compared with parameter and then
necessary action is taken. The thin of yarn, thick of yarn, nets are checked.

25

3.1.12.3 CSP System:

CSP is acronym of count, strength and percentage. The strength of the yarn is checked.
The machine which has some hand like spokes in which the yarn is tied-up is rotated and the
strength is checked.
3.1.12.4 Twisted Per Meter:
The yarn should be given a twist for the strength of yarn. When the twist is more in the
yarn, it will be more in strength and when the twist is less the strength is low. The yarn will be
like hair and when more number of yarns are combined and twisted the fine yarn will be
produced.
3.1.12.5 Statex Machine:
The yarn appearance winder machine is used to check the appearance of yarn. They are
four grades of appearance A, B, C, D. The grade A is top quality, B is inferior to A, C is average
in quality and the last quality grade is D. These frames A, B, C, D are photocopied, framed and
are hang on the wall. They will check the appearance of yarn by comparing to the photo copy of
the yarn appearance. The appearance of the yarn will be changed according to the quality and
count.
3.1.12.6 Classimat:
The machines that are mentioned above are used to check the quality of yarn in small
quantity. But the Classimat machine is used to check the quality in large volume. It saves
considerable amount of time. This machine is operated by a single person who is well trained in
this field.
When we compare the GHCL to some other spinning mills, it outsources the testing for
checking the quality of yarns because the testing equipments are luxurious.

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3.2 MAINTENANCE DEPARTMENT

3.2.1 About the Department:
Maintenance department consists of all such needed to keep the plant, machinery, tools
and equipments in standard working condition.
It ensures that all production facilities are in serviceable conditions at all times causing no
production hold-up, interruptions or loss of their individual standard efficiency of operations.
3.2.2 Addressed Questions:
What is to be maintained?
How is the maintenance to be done?
Where is the maintenance done?
Who does the maintenance?
3.2.2.1 What is to be maintained?
Plant and Building.
Machine and Equipments.
Supporting facilities and service.
Factory premises and surrounding area.
House-keeping and safety.
Wastage disposal and recycling.
Environmental protection and pollution control.
3.2.2.2. How is the maintenance to be done?
Corrective maintenance.
Preventive maintenance (or) Planned maintenance.
Predictive maintenance.
TPM (Total Productive Maintenance)

27

3.2.2.3. Where is the maintenance done?

There are four classification of maintenance work.
First line
Second line
Third line
Fourth line
1st and 2nd line maintenance are done in situation. These are routine work carried out daily or
weekly.
3rd and 4th line maintenance are done in special factories or overhaul depots.
3.2.2.4. Who does the maintenance?
Depending on the Policy of the enterprise and the Complexity of the work, the maintenance is
done by internal or external agencies.
External Agencies:
Sub-Contractor
Original equipment manufacturer
Specialized factories

28

3.3 ELECTRICAL DEPARTMENT

3.3.1 About the Department:
The GHCL has separate department also for Electrical side. This department is
responsible for all electrical works that has to be done in the mill. The electrical department has
to maintain all the electrical items in working condition all the time. Each department has
electronic utilities, suppose any problem in there they will make a complaint to the electrical
department. The complaint can be made writing, telephone or through e-mail.
The electrical department on receiving the complaint takes necessary action. The time
depends on the emergency of the work. After the complaint work is over, the electrician should
specify the nature of work done who attend the work in a complaint note.
The tube lights, bulbs, fans, switch board, etc. are purchased and kept in stores. Before
they are stored in stores the inspection officer will check the working of the lights, fans, A/C
during the inspection. If the electrical items are not performing well, they are rejected and sent
back to the supplier. If it is satisfied by the inspector, it is labelled as OK and stored in stores. It
will be distributed as required by the electrical department.
Every transaction is been recorded in the computer. All materials are stored sufficient to
the needs. GHCL spends 83,000 units electricity per month for production.

Fig 3.2 Hierarchy in Electrical department

Electrician

Apprentice

Technical Trainers

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3.4 COMPUTER DEPARTMENT

The department plays a key role in automating all the official tasks in GHCL.
3.4.1 Nature of work:
All the processing departments are continuous by nature.
3.4.2 Relationship with other departments:
In GHCL Ltd, all the departments are inter-connected. Here the finished process of one
department will be the initial of the other department. Hence, the departments in GHCL cannot
be separated. And they are dependent on each other.

30

3.5 MARKETING DEPARTMENT

3.5.1 About the Department:
The marketing department is engaged in the selling of the company products. The
department keeps detailed record of their customers, products, dispatch and payments.
In GHCL, they are producing yarn for that they are using cotton as their raw material. To
market Yarn they are using many steps.
3.5.2 Functions in Marketing:
1. Market Survey
2. Customer Requirement and Customer Satisfaction
3. New Market Development
4. Marketing Network Development
5. Sales Forecast
6. Sales Administration
7. Product Development
3.5.2.1 Market Survey:
In Market Survey, they are analyzing the industrial weavers. In this we are concentrating
on six major aspects.
Customer Requirement-Quality
Customer Requirement-Quantity
Customer`s Financial Status
List of Competitors in the market
Quality of Competitor`s products
Price of Competitor`s products
They know well about their competitors. Then only they can be able to compete them in the
market. They also have to know well about their strategies and the competitor`s product and its
quality to make improvements in their own product.

31

Next step is quality. They have to see about the yarn quality like unevenness, thin, thick and neps
& strength of yarn.
Next is Price. They have to fix price depending on their quality and comparing competitor`s
price and quality.
Finally, they have to analyze about their customer`s requirement on how much quantity and of
what quality they require and about the customer`s financial status also. So in market survey they
have to analyze all these six aspects properly.
3.5.2.2 Customer Requirements and Customer Satisfaction:
To market the product they have to know about the customer requirements very well.
Customer requirement is very important for one to market the product. After selling the product
they have to find out whether their customers are satisfied with their product or not, they have to
analyze it, then only they are successful in marketing their product. This feedback has to be
given to manufacturing head for corrective measures.
3.5.2.3 New Market Development:
In the market development they are analyzing who are all the industrial users suitable for
the product quality, produced at GHCL. According to their industrial customer needs, they have
to develop their product quality. So they have to analyze first where they are having the highest
opportunity to market their product and then they can develop their market level. Different
market segments are there; one is Domestic and other one is International. So to develop their
market they need to develop both the segments of Indian market and International market.
3.5.2.4 Marketing network development:
To market the development of the product and to make their product to reach the
customers, they must have networks like agent, retailers, wholesalers, etc. or else they can
directly go to the customers if the customers are financially sound. Agent is mainly required to
promote sales and to take care of credit management. In yarn marketing agents are involved apart
from other networks. In marketing network development, agents play a major role, due to credit
business.

32

3.5.2.5 Sales forecasting:

Forecasting is nothing but estimating future requirements of customers for their products.
They have to analyze their product requirements among the customers during market survey. By
forecasting the product requirement, they can produce the product according to the requirements
of quality and quantity.
3.5.2.6 Sales administration:
Sales administration starts from getting purchase order. They have to properly arrange
transport to dispatch the product. After dispatching they have to follow and get proper payment.
In their industry they are selling the product on credit basis. But they are having some certain
limited credit period. They will not extend the credit period beyond a limit because it will be a
loss to the company due to increased working capital. They can give limited credit period only
for their regular customer, but for new customers they will get advance payment. So these are all
the major follow up in sales administration, from getting purchase order till payment receipt.
Apart from this, they have to fulfill the legal requirements like C-form (in case of sales in
other state) and F-form (in case of consignment sales).
3.5.2.7 Product development:
Generally for product development management should analyze which quality would
give more profit and they offer that product. Then only they can market their product more
successfully in the market.
3.5.3 Pricing:

Pricing is based on the Quality of the product

Export Quality
Domestic Quality
Based on Competitor`s pricing

33

3.5.4 Segmenting:
Customers who demand trustworthy, long-term relationships with high quality products
and services.
3.5.5 Targeting:
Customers in the business of manufacturing of garments, bed linen, curtains, made ups
and other textile products.
3.5.6 Positioning:
GHCL Ltd is positioned as a premiere Global Chemicals and Textiles company.
3.5.7 Sales Activities:
GHCL divides its sales functions as below:
Sales

Consignment

Direct

Through Agent

3.5.7.1 Consignment Sales:

GHCL Mills Ltd does its sales through agents if form F to be provided by the buyer.
There is no tax for that king of sales.
Commodity moved or dispatched from the consigner then the consignee things on consignment
tax is ended and the consignment sales agent has no tax to consignment sales. Form-F refers to
the form which is issued by the consignee of goods to the consigner, declaring that the goods
stated there has been received by him.

34

3.5.7.2 Direct Sales:

1. Within the State

5% V.A.T (or) 2% Central Sales Tax [against C-form]

for registered dealer- 4% for unregistered dealer

2. Outside the State

3.5.7.2.1 Within Tamil Nadu:
In the sales process, within Tamil Nadu is the first step of the orders made by the
customers. The customer places the orders directly or through the agents and brokers. On
receiving such orders the marketing department makes the allotment. The customers pay some
amount as advance through demand draft. The production department on the advice of the
marketing department starts the production. As allotted earlier, on the basis of FIFO method, the
goods are distributed to the respective customers.
If the quantity is large the mill itself takes the responsibility to distribute the goods to the
customers door, through Lorries. Final payment is done through the banks.
GHCL has its own terms and conditions of sale. The customers place the order only when
they are satisfied with the terms and conditions.
3.5.7.2.1.1 Terms and Conditions:
Any changes in duty, whether excise or otherwise by the government will be to the
buyers account.
The goods covered by this contact will be delivered as per delivery period.
In the event of failure of buyers to pay or to take delivery within the time specified and
agree, the sellers shall be at liberty to cancel the contract or sell the goods by private sale
or public auction with power to postpone any sale (or) sales at their own discretion.
Charging buyer with all interest and expenses incurred and lose sustained.
The sellers undertake to ensure delivery during the time specified above but they shall not
be responsible for delay or non-delivery of the goods due to circumstances beyong the
control of the sellers.

35

Where sales are made on Mill Delivery terms. Delivery is complete as soon as the
goods are delivered to carries.
The buyer shall not withhold payment on account of any claim nor shall any deduction by
reason of any such claims.
Goods paid for but not taken delivery of the buyer shall be underline for all money due
from the buyer to the sellers on any account what so ever.
The buyer whenever called upon shall be board to deposit with the sellers as advance
against that contract.
All contracts shall be deemed to have been made and be consumed and take effect as
contracts a wholly to be fulfilled in Madurai as all proceedings of whatever nature arising
out of any contract shall be instituted or taken only in courts having jurisdiction at
Madurai.

3.5.7.2.2 Export Sales (Head & Formalities):

1. Direct Export Can do against foreign L.O.C [General Currency ($)].
2. Swift payment prior to export.

3.5.7.2.2.1 Formalities to be followed:

Stage I:

Import Export code

Export registration certificate issued by Foreign Trade Office

Documents required for obtaining Export Registration certificate:

1. Copy of the Overseas Buyers contract
2. Copy of L.O.C duly certified by the banker
3. Registration application duly filled and signed
4. Copy of Import Export code
5. Copy of List of Board of Directors/Memorandum of Association

36

Stage II: Documents to be filled with respective CUSTOMS to get clearance for Export:
1. Invoice
2. Packing list
3. Copy of Overseas Buyers contract
4. Copy of L.O.C
5. Original registration certificate
6. Export scheme under wage Export are to be made also must be specified.
7. Incentives given to the export on F.O.B value declared in the shipping Bill.
8. Insurance policy
9. Yarn test report
10. Certificate of G.S.P (Generalize System of Preference) Form A
3.5.7.2.2.2 Procedures:
1. Sampling
2. Approve of Samples
3. Execution of Export sales/Overseas Buyers contract
4. Opening of L.O.C
5. Pre-Shipment (Filling of shipping bill/Customs clearance)
6. Movement of container (Central Excise Scaling)
7. Post-Shipment (Export duty)
8. Realization of Export proceeds
9. Availment of post export benefits, i.e., Drawback scheme
3.5.7.2.2.3 Benefits of Export:
GHCL Ltd enjoys more benefits in export transactions than the local market.
It is exempted from the export duty.
There is a license called SIL (Special Import License) through which the company can
import the capital goods without duty. Its valid for 18 months. If it is not enough, it can
be extended for the next one year.

37

Duty Entitlement Exception Certificate (DEEC) is issued by Director General of Foreign

Trade. It is given for polyester yarn and cotton yarn. Through this the company can
export the yarn without duty against the obligations or policy. Duty drawback is there.
And can also import raw materials against export obligation.
Duty Entitlement Passbook Scheme (DEPS) is a scheme through which the debit and
credit entities can be made. During pre-shipment period special shipping bill should be
produced and got clearance. As the clearance is made the passbook is given.
Export Promotion Capital Goods (EPCG) scheme through hand machine at the
concession rate of duty against export obligation.
3.5.7.2.3 Merchant Export (Third Party Export):
Export can be made through a trader/merchant is called as Merchant Export. Importer is
one who buys directly from producers for re-packaging and re-selling under its own brand.
3.5.7.2.3.1 Statutory Tools:

Inspector of Factories & Labour

Electricity Board

Textile Commissioner

Textile Committee

Tamil Nadu Sales Tax Department

Central Excise Department

Customs Department

Director General of Foreign Trade

3.5.7.2.3.2 Contract:
There are three types of contract:
CNF, CIF & FOB
CNF (Cost and Freight) method.

The buyer is taking the charge of insurance.

The seller does not have any insurance risk.

38

CIF (Cost Insurance Freight) method.

The seller or exporter takes the insurance risk.

Importer is free from the insurance cost.

FOB (Freight ON Board) method.

The importer or buyer takes all the risks.

3.5.7.2.3.3 Opening of Letter of Credit:

The buyer has to open letter of credit while accepting the terms and conditions of the
contract sent by the company.
Letter of credit is like a promise letter. The customer and the exporter do not have any
face contact. So this letter is very important for both parties. Letter of credit contains the
terms and conditions.
3.5.7.2.3.4 Terms and Conditions:
Letter of credit should be established for negotiation in any bank in India.
Shipment will be from any port of India.
Letter of credit should be transferred and tolerance of plus or minus 10% in quantity
value should be accepted.
Third party documents should be accepted.

39

3.6 HUMAN RESOURCE DEPARTMENT

3.6.1 About the Department:
Human Resource Management is more prominent in textile industry. The continuous
turnover of the employees not only affects production operation but also it affects the quality of
the production. The quality objective of management is to provide high quality material at lesser
rate. To attain this objective, the management insists the employee retention continually. The
absenteeism and labor turnover are the prominent factor, and are highlighted by the human
resource management which has to be given much consideration for the smooth functioning of
production operation.
In business, the value of HR function has its impact on higher productivity, enhanced quality,
better customer service, good industrial relations and lower cost which are having influence on
the profitability of organizations. In the present day, HR is viewed as an investment that can lead
to further gains. Such practices can shape the mind of the workers emotionally, which is
important fundamentally to drive bottom line success in a company.
3.6.2 Objective of HR Department

To enhance the working relationship between employers and employees, between groups
of employees.

To recruit skilled workers and dismiss unsuitable workers.

To provide adequate opportunities to employees to advance and exercise their capabilities

at most.

To control employee turnover and work on employee engagement.

3.6.3 Recruitment

Working Labour :
Minimum Qualification: 8th & above
Well-experienced in handling machineries
Both genders

40

Highly qualified candidates with any graduation holding knowledge about the business.

Experienced Candidates.

3.6.4 Recruitment Process:

Resume Screening

Personal Interviews

3.6.5 Employee Engagement

It is the level of commitment and involvement an employee has towards their

organization and its values.

And the extent that an employee believes in the mission, purpose and values of an
organization demonstrates the commitment through their actions as an employee and
their attitude towards the employer and customers.

Employee engagement is high when the statements and conversations held reflect a
natural enthusiasm for the company, its employees and the products or services provided.

3.6.6 Factors determining Employee Engagement

Career development

Opportunities for personal development

Effective management of talent

Leadership

Clarity of company values

respectful treatment of employees

companys standards of ethical behavior

Performance appraisal

Pay and Benefits

Health and Safety

Job Satisfaction:

41

Family Friendliness

Co-operation

Communication

Empowerment

Equal Opportunities and Fair Treatment

3.6.7 Salary/ wages:

Daily wages extending upto Rs.350 for Men and Rs. 240 for Women.

3.6.8 Other Compensation:

Meals in Canteen for Rs.4

Free transport via Vans.

Free masks and attire.

3.6.9 Pension and Gratuity:

It is provided by the employer after their retirement period.
1. By diverting 12% of pay from employees share contribution to p.f.
2. 1.17% of subscribe salary shall be paid by the government as government contribution.
3.6.10 Bonus:
Usually 8.33% of bonus is given to the workers of the factory.
3.6.11 ESI (Employee State Insurance):
There are two contribution period of the year. One commences on 1st April ends on 30th
September. The other commences on 1st October and ends on 31st March of the following year.

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ESI contribution comprising of: Employees tariff 4.75% + Employees tariff 1.75% which
is payable on or before 21st on the month.
3.6.12 Contribution of HRM
1. Helping the organization to search its goal.
2. Employing the skills and the activities of the workforce efficiently.
3.1. Providing the organization with well trained and well-motivated employee.
4. Increasing to the fullest the employees job satisfaction.
5. Developing and maintaining quality of work life
6. Communication
7. Helping to other department and function

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3.7 ACCOUNTS DEPARTMENT

3.7.1 About the Department:
The Accounts Dept. records all business transactional setoff books. They are responsible
for the preservation of various accounting records, receipts and voucher. This dept. takes care of
preparing Profit & Loss A/c and Balance sheet of the company. In fact, the managerial decision
can be scientifically taken with the help of various accounting information.
3.7.2 Accounting Books:
GHCL keeps the following accounting books for A/c maintenance:

Cash Book

Bank Book

General Journal Voucher

Purchase Journal

Debit Note (Day Book)

Credit Note (Day Book)

Stores Ledger

General Ledger

Trial Balance

Profit and Loss A/c

Balance Sheet

3.7.3 Business Plan of GHCL Ltd

At a time when soda ash business is growing at a sluggish pace, chemicals major GHCL
Limited planed to increase its revenues from non-chemical business, i.e. home textiles. The
company is exploring new overseas markets including South America and China for increasing
the reach of its home textile products.

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The company has chalked out plans to increase revenue share of home textiles business
from the current 35-40 per cent to around 50 per cent of the total turnover in the next financial
year 2014-15.

3.7.4 Bankers of the Company

Andhra Bank

Bank of India

Bank of Maharashtra

Canara Bank

Exim Bank

IDBI Bank Ltd.

Jammu & Kashmir Bank Ltd.

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Tamil Nadu Mercantile Bank Ltd.

Union Bank of India

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Chapter 4
PERSONAL LEARNINGS

I had a detailed study on the business practices followed in the textile division of the
company at Sree Meenakshi Mills, cotton yarn production unit at Paravai, Madurai.

The company mainly concentrates in production of cotton yarns, spinning cotton and
also exporting the finished goods.

GHCL is known for their good organization value and also for their CSR activities.

The company has various functional areas like Production, Maintenance, Computer,
Electrical, Marketing, Human Resource, Accounts Departments.

They have a modernized infrastructure and technology. They strictly follow their
quality policy and objective. Textile division has several machinery equipments for the
manufacturing process. Some are Contamination Clearing System(CCS), Yarn
Conditioning Plant(YCP), Centralized Testing Lab(CTL).

The maintenance department takes much care in keeping the plant machineries in
standard working condition.

Marketing department is fully engaged in the selling of the company products. They
have various functions and look after the sales activities like Consignment Sales, Direct
Sales: within Tamil Nadu & outside Tamil Nadu and Merchant Export

HR department works towards building strong relationship between employee and

employers. They recruit skilled workers and provide adequate opportunity to employees
to advance at most.

Accounts department records all the business transactions in their accounts books.
Some of them are Journal, Ledger, Debit Note (Day Book), Cash Book, Trial Balance,
Profit and Loss A/c, Balance Sheet Bank Book, Credit Note (Day Book).

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REFERENCE:
1. www.ghclindia.com/

2. www.ghclindia.com/textile/textile.htm/

3.

ghcl.indiabizsource.com/