1 Date

Project on EFFECTIVENESS OF TRAINING PROGRAM OF GRASIM INDUSTRIES LIMITED Staple Fibre Division

MHAKAL INSTITUE OF TECHONOLGY & SCIENCE UJJAIN BATCH (2008-10)

Submitted To
MR:-GAUTAM MUKERJI

Submitted By
SOURABH DAVE

ACKNOWLEDGEMENTS

I would like to thank MR:-GAUTAM MUKERJI (General Manager-HRD) for granting me permission to do my training in HRD DEPERTMENT. MISS RIDI for their valuable time and constant encouragement which help us carry out our project and complete it successfully. I would like to thank Mr NAYAN, , these all member were help me during my training. all member are very supporting they always help in my learning during in training. I learn many thing in GRASIM. Last but definitely not the list, would like express gratitude towards for MHAKAL INSTITUE OF TECHONOLGY & SCIENCE UJJAIN Providing us with a platform that enabled to work on such Summer Training in GRASIM that training and my Master of Business Administration after complete my education. That will give me a good platform to start my career in industry.

DECLEARATION
I am Sourabh Dave here by declare that the present summer project titled EFFECTIVENESS OF TRAINING PROGRAM is based on work learn in GRASIM INDUSTRY and which thing I learn in my college and indebtedness to other work. I have been duly acknowledged at relevant places.

PROJECT GUIDE Prof:-Mrs. Harshita Soni MITS MBA- III SEM Place: Ujjain DATE:

STUDENT Sourabh Dave MITS

EXECUTIVE SUMMARY
Books are the treasures of knowledge and a theoretical base is pivotal for understanding the realities of practical field. But, at the same time, practical knowledge is crucial for having an insight into the implementation of theory in corporate world. With the privilege of an opportunity provided to us by Grasim Industry, for the fulfillment of our purpose "bridging the gap between theory and practical", we undertook one month summer training at HRD department of Staple Fiber Division of Grasim Industries Ltd. Nagda. During this TWO-month training, we conducted a study of project, about
EFFECTIVENESS OF TRAINING PROGRAM

Under the project EFFECTIVENESS OF TRAINING PROGRAM, first of all we were provided with the annual report of two years to analyze, so that we could get acquainted with the terms relating to the staple fiber business, financial condition depicted by Balance Sheet and Profit and Loss Account of the company, figure relating to import and export etc. We were given the proposed cash budget and capital expenditure budget after taking in to account assumption relating to credit period allowed, credit period received etc., for all the department of V.S.F. Using the financial statement, we then conducted a compare analysis of ratio of two years, and on this basis of these, interpreted the financial position of company. We also determined the working capital operating cycle for the company, in which we made of accounts payable period, inventory period and cash cycle.

COMPANY PROFILE
GRASIM Industries Limited, a flagship of the Aditya Birla Group, is among Indias ten largest companies in the private sector in India in terms of assets and sales. Grasim was incorporated on 25 August 1947 in Madhya Pradesh before 10 days the country got its Independence. At that time India was dependent on developed nation for its requirement of many consumer goods and textile were one of the important ones. Foreign Exchange earned from export of basic Raw Material was being used to import value add consumer goods. GRASIM therefore took decision of setting up a Rayon waving unit at GWALIAR in the year1948 based on imported Rayon. The unit started production of Rayon fabrics in 1950.In the Cellulose Fibre business Company has 21% Share in global market In addition to spun dyed fibers Company has significantly enhanced special Fiber portfolio covering all generation of man made Cellulose Fibre. It intent is to equally significant producer of fibre for non-woven application. Company So Company has embarked Brownfield expansion in India, Thailand, Indonesia, and China, and a Greenfield project at Egypt. In India a 63875 TPA capacity expansion is coming up at GRASIM Staple Fibre plant in Kharach (Gujarat).Alongside the process of obtaining regulatory approvals for a TPA Brownfield expansion at Harihar (Karnataka). Viscose Staple Fiber In 1954 the company ventured into the production of VSF (viscose staple fibre), a man made fiber used in textiles production. Since then Grasim has continued to be Indias largest manufacturer of VSF-meeting over 80% of the countrys VSF requirements. Grasim is also one of the worlds lowest cost producers of VSF due to its vertically integrated operations, producing most of its requirements of two principal raw materials caustic soda and rayon grade pulp. For the year 1998-99, vsf accounted for over 30% of Grasim turnover.

CEMENT DIVISION Grasim is third largest producer of Grey cement in India (installed capacity of 11.33 million MTPA) and is also South Asia's largest producer of White Cement (installed capacity of 0.36 million MTPA). In 1998-99 Grasim consolidated its cement business by acquiring the cement operations of Group Company Indian Rayon and by taking up strategic stakes in two other companies. The consolidation and the resultant economies of scale, improved logistic and operational synergies have strengthened the company's position. The company's national presence coupled with strong regional brands will allow it to improve utilization of its existing cement assets. CHEMICALS As a backward integration chemical division was commissioned in Nagda (M.P.) on 12th of Oct. 1972 to manufacture Caustic Soda, Chlorine and its allied products. Initially a 100 TPD capacity plant was established with De Nora, Italy's technology based on the mercury cell process and there after in 1989 capacity was further enhanced to 350 TPD with two independent cell houses. For gainful utilization of chlorine, as largest merchant mercury cell process and there after in 1989 capacity was further enhanced on 350 TPD with two independent cell houses. For gainful utilization of chlorine, as largest merchant seller, the unit has expanded its operation by forward integration in to production of SBP, PAC and CSA. Textiles The business with which Grasim commenced operations - the Company's main product is suiting fabric made from different blends of polyester, wool, viscose and silk. Its key brands Grasim Gwalior and Graviera are household names. Sponge Iron Under the diversification programme, the company has commissioned a Gas based Sponge Iron Plant at Raigarh District in Maharashtra having a capacity of 9, 00,000 MT per annum. This is a 100% import substitute project. Production of Sponge Iron during the year under review reached 5, 59,567 MT as compared to 6, 63,998 MT achieved in the previous year. In order to ensure full capacity utilization and meet contingencies up to 26% shortfall in the availability of natural gas, the plant has been upgraded to enable use of Naphtha as an alternate fuel.

Viscose Staple Fibre Grasim is India's pioneer in Viscose Staple Fibre (VSF), a manmade, biodegradable fibre with characteristics akin to cotton. As an extremely versatile and easily bendable fibre, VSF is widely used in apparel, home textiles, dress material, knitted wear and non-woven applications. GRASIM Fiber Plant with an aggregate capacity of 270,100 TPA. The division's continuous efforts towards developing new applications and superior quality VSF in terms of feel, comfort, fashion and hygiene have paid rich dividends. Grasim has earned prestigious awards for its innovative range of textures and blends. Its zinc-free process to make viscose staple fibre has been patented. Nagda Nagda is its largest unit producing a wide range of VSF to suit customer requirements in terms of length, denier and colour and also second and third generation fibres like Modal, Excel and Solvent Spun fibres, respectively. Nagda is also the largest producer of spun-dyed specialty fibre in the world. Harihar The Harihar unit houses facility for manufacture of both VSF and rayon grade pulp, the basic raw material for VSF. The company's Rayon Grade plant was the first in India to use totally indigenous wood resources with in-house technology for producing rayon pulp with an innovative oxygen bleaching process to reduce the use of chlorine. Kharach The VSF plant at Kharach, set up in 1996, employs the most modern technology giving it a competitive edge in the export market. Joint Ventures (JV) Grasim has the following overseas joint ventures: AV Cell and AV Nackawic in Canada AV Cell supplies dissolving grade pulp to the Groups VSF units in

India, Thailand and Indonesia. AV Nackawic is being converted to DGP facility to meet the captive pulp requirement.

Birla Lao Pulp & Plantation Limited in Laos To further strengthen the backward integration in pulp, Birla Lao has been formed as a JV with other associate companies for raising captive plantations at Laos. This will provide a low cost source for wood to meet future requirements of a green field pulp plant in due course of time. Birla Jingwei Fibres Company Limited in China The JV with Hubei Jingwei Chemical Fiber Company Ltd. was formed in 2006 for manufacturing VSF. Currently, this plant has a capacity to produce 33,000 tpa. This spread and scale of operations make the Group's VSF operations very cost competitive. Moreover, vertical integration into plantation, manufacturing of rayon grade pulp and horizontal integration into production of principal raw material required for VSF production, namely, caustic soda, intermediate inputs namely CS2, sulphuric acid along with captive power and steam generation facilities, further enhance its competitive edge. Research & Development Grasim has established a very strong R&D base covering different stages of the value chain. Grasim Forest Research Institute, Harihar is involved in R&D of forestry. Birla Research Institute for Applied Sciences (BRI), Nagda is involved in the development of different generations of cellulosic fibres. Textile Research Application Development Centre (TRADC) at Kharach, an NABL accredited Lab, is involved in addressing research and development related to downstream

textile value chain comprising various fibres, yarns, processing, garments, etc. With the capability to offer the entire range of cellulosic fibre under the umbrella brand of Birla Cellulose, Grasim has positioned itself as a dependable supplier of cellulosic fibres for Feel, Comfort & Fashion across global markets. To penetrate into niche market segments and to grow further, the division has ventured into the production of high performance viscose fibres aptly named Viscose Plus, High Wet Modulus Fibres (Modal) and new generation Solvent Spun Fibres and Birla Excel. The company has chalked out expansion plans, which will increase the capacity by 95,000 tpa, including capacity for producing specialty fibre. Grasim is also the largest producer of Sodium Sulphate, a byproduct of VSF manufacture. This chemical is widely used in the paper and pulp, detergent, glass and textile industries. Capacities at a glance Division Viscose staple fibre Rayon grade pulp (Harihar) Capacity 270,100 tpa 70,000 tpa

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FUTURE STRATEGIES OF GRASIM INDUSTRIES (FIBER)

Aditya Birla Groups Grasim Industries is commercially launched its third generation viscose fiber Excel. The companys main viscose fiber plant at Nagda in Madhya Pradesh has taken up trial production of the new generation textile fiber intended to cater to the high-end fabrics application. initially, the plant is likely to produce 10-12 tones of excel fiber per day. Premium fiber The new fiber, after its viscose and model ranges, will be positioned as the premium cellulose fiber that would be used for manufacturing of high end apparels such as shirting or denim fabrics that are expected to carry higher fabric strength and the bouncy look Mr Kaul and other top official of Grasim Industry were in Tirupur where the Birla celluloses fabric design studio was inaugurated- the first one to be set up in south. The design studio, which will have varied viscose /model fiber based fabric and garment sample, will serve as a resource center for the Tirupur knitwear exporters. Since Grasim is already working with several apparel brands and also fashion designers, the sample displayed at the design studio can be easily identified as the latest fashion trends for the benefit of buyers, Research Center In order to aid the domestic textile industries competitiveness Birla Cellulose has set up its own textile research and applicant development centre at Kharach near Surat at a cost of 35 crore. This centre support Indian brands to perfect its product manufacturer to achieve global standard.

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ADITYA BIRLA GROUP A BRIEF PROFILE The Aditya Birla Group is India's first truly multinational corporation. Global in vision, rooted in values, the Group is driven by a performance ethic pegged on value creation for its multiple stakeholders. A US$ 24 billion conglomerate, with a market capitalization of US$ 23 billion, it is anchored by an extraordinary force of 100,000 employees belonging to over 25 different nationalities. Over 50 per cent of its revenues flow from its operations across the world. The Group's products and services offer distinctive customer solutions. Its 85 state-of-the-art manufacturing units and sect oral services span India, Thailand, Laos, Indonesia, Philippines, Egypt, Canada, Australia, China, USA, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland, Malaysia and Japan. A premium conglomerate, the Aditya Birla Group is a dominant player in all of the sectors in which it operates. Among these are viscose staple fiber, metals, cement, and viscose filament yarn, branded apparel, carbon black, chemicals, fertilizers, insulators, financial services, telecom, BPO and IT services. Globally the group is: :: :: :: :: :: :: The worlds largest aluminum rolling company One of the biggest producers of primary aluminum in Asia No.1 in viscose staple fiber The third largest producer of insulators The fourth largest producer of carbon black The eleventh largest cement producer

:: The best energy efficient fertilizer plant :: Among the world's top 15 and among India's top three BPO companies

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STAPLE FIBER DIVISION, NAGDA

The focus on Staple Fiber Division, Nagda is necessitated out of the fact that my summer training was held at this place. V.S.F. production commences at Nagda (M.P.) in 1954 near Ujjain city. It is situated on a 150-acre site and is the largest in the world. The company has its three plants located in India at Nagda in M.P. as SFD, Kharach in Gujarat as Birla Cellulose and Harihar in Karnataka as Grasilene Division with a combined installed capacity of 220,775 tones per annum and two plants located abroad at Thailand as TRC and IBR in Indonesia. Nagda is only the largest producer of spun dyed and specialty fiber in world. Branded as 'Birla Viscose', it is positioned as a distinct and premium viscose staple fiber in global market. A favorable change in bled ratio, positioning V.S.F. at the premium end of the fiber market as 'Fiber for Feel, Fashion and Comfort' are other step to take this business forward. Grasim is also India's largest producer of Sodium Sulphate a by - product of V.S.F. manufacture. This chemical is widely used in paper and pulp, detergent glass and textile industries. The Harihar unit produces Rayon Grade Pulp, the basic raw material for V.S.F. production and V.S.F. The V.S.F. plant at Kharach, set up in 1997, employs the largest state of the art technology, giving it a competitive edge in export market.

COMPETITIVE POSITION

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As far as competition to V.S.F. is concerned, presently there is no other producer of V.S.F. in India. As such, in the same product line, there is no competition to V.S.F. But the competition to V.S.F. comes from Polyester and Cotton, which are textile fibers and act as substitute to V.S.F. The competition further gets accentuated because of the fact that Polyester and Cotton are relatively cheaper. MARKET SHARE Grasim India's pioneer in viscose staple fiber, a man made, and extremely versatile fiber with characteristics akin to cotton is easily blended with other fabric. Today, Grasim is India's largest and lowest cost manufacturer of V.S.F. - meeting over 90% of the country's requirement and enjoying around 24% market share worldwide. The V.S.F. business globally accounts for 11% of the group's turnover. Mission To improve overall operating efficiency through continuous improvement and innovative cost reduction. To strive for excellence in all spheres through WCM practices. To assure safe and environment friendly operations. To institutionalize internal and external customer delight. To focus on value adding HR practices

QUALITY POLICY Grasim Industries Limited, Nagda is committed to manufacture quality products to the satisfaction of its customers. The company aims at continuous improvement of technology for higher productivity, cost effectiveness and consistent quality of products. This achieved by: 1. Dedicated efforts to build quality in the activities performed at all levels in the company. 2. Adoption of quality management systems standards. 3. Continuous improvements through participate management and human resource development.

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PROJECT OBJECTIVE
As we know the whole function of HR department depends upon the HR Practices of the organization. The HR management is done according to the HR Practices of the company. Which things to be done and which things should not be done depend upon this only. It also helps the organization to achieve the target of the organization. The HR policies of the organization have been mentioned in the HR Practices. All the rules & regulations for the employees have been also mentioned in this. All the welfare of the employees processes is also mentioned in this. So the study of the HR Practices means basically the brief study of all HR functions in the organization. I believe the HR Practices is a vital part of an organization, which helps the organization to achieve the goal of the organization. All companies are having their HR Practices but the company who is having the best, is the most successful company among its competitors. So the company can get success within its competitors by applying best, effective HR Practices.

The main objective of the project is

1 o understand the HR practices followed & Process of Performance T Appraisal 2 To know what are the uses of HR practices for any organization. How these HR Practices help any organization to know its stand in The market and to be competitive by implementing good HR Practices for their employees 3 To understand how the organization would achieve its goals by implementing good HR Practices. 4 To understand the work culture of the organization.

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3. Training and Development

The needs of individual are objectively identified & necessary interventions are planned for identified groups, which get rolled out in a phased manner through training calendar. The training and development program is charted out to cover the number of trainees, existing staff etc. The programs also cover the identification of resource personnel for conducting development program, frequency of training and development programs and budget allocation. Training and development programs can also be designed depending upon job requirement and analysis. Selection of trainees is also facilitated by job analysis. The company has a strong focus on manpower training according to their requirements. The internal training department aims at improving the skill sets relevant to the work profile of employees. This includes improving communication Different skills E-mail programming Operation systems. The design of the training program can be undertaken only when a clear training objective has been produced. The training objective clears what goal has to be achieved by the end of training program i.e. what the trainees are expected to be able to do at the end of their training. Training objectives assist trainers to design the training program. IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 34

Training DesignThe trainer Before starting a training program, a trainer analyzes his technical, interpersonal, judgmental skills in order to deliver quality content to trainers. The trainees A good training design requires close scrutiny of the trainees and their profiles. Age, experience, needs and expectations of the trainees are some of the important factors that affect training design. Training climate A good training climate comprises of ambience, tone, feelings, positive perception for training program, etc. Trainees learning style The learning style, age, experience, educational background of trainees must be kept in mind in order to get the right pitch to the design of the program. Training strategies Once the training objective has been identified, the trainer translates it into

18 specific training areas and modules. The trainer prepares the priority list of about what must be included, what could be included. Training topics After formulating a strategy, trainer decides upon the content to be delivered. Trainers break the content into headings, topics and ad modules. These topics and modules are then classified into information, knowledge, skills, and attitudes. Sequence the contents Contents are then sequenced in a following manner: From simple to complex Topics are arranged in terms of their relative importance From known to unknown From specific to general Dependent relationship Training tactics Once the objectives and the strategy of the training program becomes clear, trainer comes in the position to select most appropriate tactics or methods or techniques. The method selection depends on the following factors: IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in Trainees background Time allocated Style preference of trainer Level of competence of trainer Availability of facilities and resources, etc Improve performance in) Page lities ) 35 IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 36 Training & Development is any attempt to improve current or future employee performance by increasing an employees ability to perform through learning, usually by changing the employees attitude or increasing his or her skills and knowledge. MEA!I!G OF TRAI!I!G & DEVELOPME!T ACCORDI!G TO UTCL: The need for Training and Development is determined by the employees performance deficiency, computed as follows. Training & Development Need = Standard Performance Actual Performance Training: Training refers to the process of imparting specific skills. An employee undergoing training is presumed to have had some formal education. No training program is complete without an element of education. Hence we can say that Training is offered to operatives. Development: Development means those learning opportunities designed to help employees to grow. Development is not primarily skills oriented. Instead it provides the general knowledge and attitudes, which will be helpful to employers in higher positions. Efforts towards development

19 often depend on personal drive and ambition. Development activities such as those supplied by management development programs are generally voluntary in nature. Development provides knowledge about business environment, management principles and techniques, human relations, specific industry analysis and the like is useful for better management of a company. The Training Inputs are Skills Education Development Ethics Problem Solving Skills Decision Making Attitudinal Changes IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 37

Importance of Training & Development

Helps remove performance deficiencies in employees Greater stability, flexibility and capacity for growth in an organization Accidents, scraps and damages to machinery can be avoided Serves as effective source of recruitment It is an investment in HR with a promise of better returns in future Reduces dissatisfaction, absenteeism, complaints and turnover of employees

Needs of Training
Individual level Diagnosis of present problems and future challenges Improve individual performance or fix up performance deficiency Improve skills or knowledge or any other problem To anticipate future skill-needs and prepare employee to handle more challenging tasks To prepare for possible job transfers

Training given on
Safety aspects Behavorial aspects Technical aspects Communication skills IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 38

Identification of Training Needs (Methods)

Individual Training Needs Identification 1. Performance Appraisals 2. Interviews 3. Questionnaires 4. Attitude Surveys 5. Training Progress Feedback 6. Work Sampling 7. Rating Scales

Group Level Training !eeds Identification

20 1. Organizational Goals and Objectives 2. Personnel / Skills Inventories 3. Organizational Climate Indices 4. Efficiency Indices 5. Exit Interviews 6. MBO / Work Planning Systems 7. Quality Circles 8. Customer Satisfaction Survey 9. Analysis of Current and Anticipated Changes

Benefits of Training !eeds Identification

1. Trainers can be informed about the broader needs in advance 2. Trainers Perception Gaps can be reduced between employees and their supervisors 3. Trainers can design course inputs closer to the specific needs of the participants 4. Diagnosis of causes of performance deficiencies can be done. IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 39

5. Talent Management
It is a holistic and systematic process, across the group. It is built on the work done so far on people processes, and has a Talent Identification and Talent Development Strategy for all the 3 levels of management i.e. Senior, Middle & Junior Management. This is facilitated by Development Assessment Center followed by Individual Development Plan, enabling planned succession and career management. The talent management process includes HR process for Recruitment, Performance, Compensation, Succession planning, Learning and other capabilities around self-service, Analytics IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 40 Reporting. With businesses going global and competition becoming intense, there is mounting pressure on organizations to deliver more and better than before. Organizations therefore need to be able to develop and deploy people who can articulate the passion and vision of the organization and make teams with the energy to perform at much higher levels. Talent management is a key business process and like any business process takes inputs and generates output. Talent management is a professional term that gained popularity in the late 1990s. It refers to the process of developing and fostering new workers through onboarding, developing and keeping

21 current workers and attracting highly skilled workers to work for your company. Talent management in this context does not refer to the management of entertainers. Companies that are engaged in talent management (human capital management) are strategic and deliberate in how they source, attract, select, train, develop, promote, and move employees through the organization. This term also incorporates how companies drive performance at the individual level (performance management). The term talent management means different things to different people. To some it is about the management of high-worth individuals or the talented. To others it is about how talent is managed generally - i.e. on the assumption that all people have talent which should be identified and liberated. Talent management decisions are often driven by a set of organizational core competencies as well as position-specific competencies. The competency set may include knowledge, skills, experience, and personal traits (demonstrated through defined behaviors) IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 41

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OPERATING CYCLE PERIOD

Particulars Debtors Collection Period (D) Opening Book Debts Closing Debtors Average Debtors Sales Average Sales / Days D = Average Debtors Average Sales / Days No. of days

(Rs In Crore)

FY 2006 FY 2007 107..23 94.06 100.65 1195.85 3.28 100.65 31 Days 94.06 127.1 110.58 1333.83 3.65 110.58 30 Days

Particulars Creditors Payment Period ( C ) Opening Creditors Closing Creditors Average Creditors Purchases Average Purchase / Days C Average Creditors Average Purchases No. of Days

FY 2006 FY 2007 94.19 89.69 91.94 606.83 1.66 91.94 1.66 55 Days 89.69 104.41 97..5 697.73 1.91 97.05 1.91 51 Days

Particulars Operating Cycle Analysis Raw material and Stores storage Period Work-In-Progress Period (W) Finished goods Storage Period (F) Debtors Collection Period (D) Creditors Payment Period Operating Cycle Period (R+W+F+D-C)

FY 2006 22 1.1 26 31 55 25.1

FY 2007 36 1.15 11 30 51 27.15

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OPETATING CYCLE ANALYSIS

I Particulars Raw material &Stores storage Period (R) Opening Balance of Raw Material Closing Balance of Raw Material Average Stock of Raw Material Raw Material Consumed p.a. Average Raw Material Consumed / Days R =Average Stock of Raw Material & stores Average Raw Material Consumed /Days No. of Days

(Rs In Crore)

FY 2006 FY 2007 29.90 41.72 35.36 581.2 1.59 35.66 1.59 22 41.72 85.24 63.48 644.8 1.77 63.48 1.77 36

Particulars I I Work-In- Progress (W) Opening Balance of W-I-P Closing Balance of W-I-P Average W-I-p Inventory Cost of Production Average Cost of Production R =Average W-I-P Inventory Average Cost of Production /Days No. of Days Particulars II I Finished Goods Storage Period (F) Operating Balance of Finished Goods Closing Balance of Finished Goods Average Finished Goods Cost of Sales Average Cost of Goods Sales /Days R =Average Finished Goods Average Cost of Good Sold /Days No. of Days (F)

FY 2006 2.46 2.67 2.57 858.87 2.35 2.56 2.35 1.1 FY 2006 93.36 36.83 65.10 915.50 2.51 65.10 2.51 26

FY 2007

2.67 3.24 2.96 940.42 2.58 2..96 2.58 1.15 FY 2007

36.83 19.55 28.19 972.56 2.66 28.19 2.66 11

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COST SHEET
Particulars (A) Cost of Production 1. Raw Material Consumed (a) Pulp Cost (b) Caustic Soda (c) Sulphur (d) Other Raw Material Total 2. Employee Cost Less :-VRS Total 3. Manufacturing Cost (a) Stores & Spares (b) Power & Fuel (c) Packing Material Consumed (d) Others Manufacturing Expenses Total Manufacturing Expenses 4. Administrative &other Expenses (Exclusive Selling Expenses) Total Cost of Productions (1+2+3+4) (B) Cost of Good Sold 1. Cost of Production 2. Decrease / Increase in Stock Cost of Good Sold (C) Cost of Sales 1. Cost of Good Sold 2. Selling Expenses Total Cost of Sales (D) Net Sales Realization Net Sales Other Income Net Sales Realization (E) Operating Profit Less :-VRS (F) PBIDT Less :- Interest (G) PBDT Less :-Depreciation (H) PBT

FY 2006 (Rs. In crore) Quantity Rs /T Amount (MT)

133262 72254 52529 2508045

29986 15480 5672 50238

399.59 111.85 29.79 39.95 581.20 81.63 -2.46 79.17 34.08 127.09 5.81 11.57 178.52 19.68 858.57 858.57 40.21 898.78 858.57 16.72 915.50 1195.50 19.39 1214.89 299.74 -2.46 297.28 -35.42 261.86 -29.18 232.68

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COST SHEET
Particulars (A) Cost of Production 2. Raw Material Consumed (a) Pulp Cost (b) Caustic Soda (c) Sulphur (d) Other Raw Material Total 2. Employee Cost Less :-VRS Total 4. Manufacturing Cost (a) Stores & Spares (b) Power & Fuel (c) Packing Material Consumed (d) Others Manufacturing Expenses Total Manufacturing Expenses 4. Administrative &other Expenses (Exclusive Selling Expenses) Total Cost of Productions (1+2+3+4) (B) Cost of Good Sold 1. Cost of Production 2. Decrease / Increase in Stock Cost of Good Sold (C) Cost of Sales 1. Cost of Good Sold 2. Selling Expenses Total Cost of Sales (D) Net Sales Realization Net Sales Other Income Net Sales Realization (E) Operating Profit (C-B) Less :-VRS (F) PBIDT Less :- Interest (G) PBDT Less :-Depreciation (H) PBT

FY 2007 (Rs. In crore) Quantity Rs /T Amount (MT)

135672 73478 52886 262036

32962 16720 4824 54486

447.20 122.85 25.51 49.27 3.53 648.36 91.63 -2.93 88.20 33.88 6.33 125.87 11.47 176.75 27.11 940.42 940.42 11.70 952.12 952.12 20.44 972.56 1333.14 9.31 1342.45 370.58 2.93 367.65 44.11 323.54 33.12 290.42

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CURRENT ASSETS
S.No. CURRENT ASSETS 1 I INVENTOARY Raw Materials (include stores &other items used in the process of mfg.) (a) Imported (b) Indigenous Finished Goods By Products Process Stock West Store Spare Part, Packing Material Total Inventory Sundry Debtors Cash and Bank Balance Loan and Advance Unsecured Loans Advance Receivable Total Loan and Advances Outstanding Expenses

Rs in crore

FY2006 FY200

26.6 15.09 36.86 1.81 2.67 20.21 17.86 101.12 94.06

85.24 19.55 7.3 3.24 0.388

II III IV V VI 2 3 4

7.4 123.26 127.10

1.23 25.09 26.32 0.40 222.00

1.41 30.70 32.11 1.37

TOTAL CURRENT ASSETS

283.96

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CURRENT LIABILITIES
CURRENT LIABILITIES Sundry Creditors Purchases Raw Material Packing, Fuel Accrued Expenses Statutory Liabilities Other creditors Total Creditors Security and Other Deposit Advance From Customers Interest Accrued but not due for payment CURRENT LIABILITIES Less:- Provision for Current TOTAL CURRENT LIABILITIES

Rs In Crore FY2006 36.05 43.77 6.34 3.55 89.71 4.00 7.57 3.19 104.47 0.04 104.43

FY2007 25.11 70.9 4.67 3.67 104.35 1.60 7.00 5.39 118.34 0.04 118.30

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RATIOS
S.No 1 i ii Particulars FY2006 FY2007

LIQUIDITY RATIOS
Current Ratio Current Assets Current Liabilities Current Ratio (i/ii) Acid Test Ratio Current Assets Inventory Prepaid Expenses Current Liabilities Acid Test Ratio [i (ii +iii) / iv] 222.00 104.43 2.15 283.96 118.30 2.40

2 i ii iii iv

222.375 101.12 0.77 104.46 1.15 FY2006 1913 104.43 16.07

283.18 125.26 0.96 118.46 1.06 FY2007 2294.6 118.30 20.45

ACTIVITY RATIOS
1 i ii Inventory Turnover Ratio Gross Turnover Average Inventory Inventory Turnover Ratio (i / ii) 2 i ii Average Collection Period Average Receivables Total Sales Average Collection Period (i * 365 / ii)

100.65 1192.46 31 Days

110.57 1338.32 30 Days

Receivables Turnover Ratio Total Sales Average Receivables Receivables Turnover Ratio (i / ii) 1192.46 110.57 10.78 1338.32 100.65 13.29

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ACTIVITY RATIOS
4 i ii Payable Turnover Ratio Total Purchases Average Payable Payable Turnover Ratio ( i /ii ) Average Payable Period Total Purchases Average Payable Average Payable Period (i *365/ii) Working Capital Turnover Ratio Net Sales Net Working Capital Working Capital Turnover Ratio (i / ii) 7 i ii Current Assets Turnover Ratio Cost of Good Sold Current Assets Current Assets Turnover Ratio (i / ii) 8 i ii Fixed Assets Turnover Ratio Net Sales Net Fixed Assets Fixed Assets Turnover Ratio (i / ii) 9 i ii Total Assets Turnover Ratio Net Sales Total Assets Total Assets Turnover Ratio (i / ii)

FY2006 606.83 91.94 6.60

FY2007 697.73 97.05 7.18

5 i ii

606.83 91.94 55 Days

697.73 97.05 51 Days

6 i ii

1192.46 115.98 10.20

1338.32 162.72 8.22

898.78 220.37 4.07

952.12 281.18 3.39

1192.46 200.51 5.94

1338.32 257..27 5.20

1192.46 421.63 2.83

1338.32 541.20 2.47

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VARIOUS DEPARTMENTS IN V.S.F DIVISION

SAP Information Technology

Production

Accounts & Finance

Quality Control

Research
&Development Human Resource Marketing Administration Purchases Engineering Services

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Work environment (ss) Waste (MUDA) Elimination

JIT and stock reduction

High performance teams: Information system, technology and cash flow

BENCH MARKED INNOVATIONS RELIABLE LEARNING ADAPTABLE

Equipment effectiveness

WCM: CREATING VALUE Customer driven: internal and external

Liaison and understanding

Quality first: SQM and best practices

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ANALYSIS OF DATA

R A W M A T E R IA L F O R P R O D U C T IO N O F 1 -T O N E F IB E R
10 8 6 4 2 0
P u lp C a u sti c so d a C s2 S u l p h u r i c S te a m a c id

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Comperision Between Liquidity Ratio

2.5 2 1.5 1 0.5 0 Current Ratio Acid Test Ratio 2006 2007

Assets Turnover Ratio

6 5 4 3 2 1 0 Current Assets Fixed Assets Total Assets 2006 2007

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STRUCTURAL RATIOS

25 20.63 20

15 11.94 10 6.29 5 3.64 1.9 1.72 3.85 10.77 2006 2007

0 Current Asset to Cash to Current Total Asset Asset Receivables to Current Asset Inventory to Current Asset

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TURNOVER RATIO
25 20 15 10 5 0 Inventory Working Capital Recevable Payable 2006 2007

Average Period
60 50 40 30 20 10 0

2006 2007

Payable Period

Collection Period

Unit in Days

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Production Comperission

800000 700000 600000 500000 400000 300000 200000 100000 0

Viscose Stapel Fiber Grey Cement White Cement Sponge Iron

2003-04 2004-05 2005-06 2006-07

Tones

Note :- Grey Cement 1=100 in that Graph i consider 1unit Of Grey Cement 100

unit due to long data in Grey Cement

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Turnover Analysis
800000 700000 600000 500000 400000 300000 200000 100000 0
Viscose Staple Fiber Grey Cement White Cement Sponge Iron

2003- 2004- 2005- 200604 05 06 07 Tonnes

Note :- Grey Cement 1=100 in that Graph i consider 1unit Of Grey Cement 100

unit due to long data in Grey Cement

Net Sales Comparision

15000 10000 5000 0 2003-04 2004-05 2005-06 2006-07 Tonnes

Net Sales

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Group companies
::Grasim Industries Ltd. :: Hindalco Industries Ltd. ::Aditya Birla Nuvo Ltd. ::Ultra Tech Cement Ltd.
1.

Indian companies PSI Data Systems Ltd. Aditya Birla Minacs Worldwide Limited Essel Mining & Industries Ltd. Idea Cellular Ltd. Aditya Birla Insulators Ltd. Aditya Birla Retail Limited Bihar Caustic and Chemical Ltd.

2 International Companies (a) Thailand Thai Rayon Ltd. Indo Thai Synthetics Ltd. Thai Acrylic Fiber Ltd. Thai Carbon Black Ltd. Aditya Birla Chemical (Thailand) Ltd. Thai Peroxide Ltd. (b) Philippines Indo Phil Textile Mills Ltd. Indo Phil Cotton Mills Ltd. Indo Phil Acrylic Mfg. Corp Ltd. Pan Century Surfactants Inc Ltd. Indonesia PT Indo Bharat Rayon PT Elegant Textile Industry PT Sunrise Bumi Textiles PT Indo Liberty Textiles PT Indo Raya Kimias Egypt Alexandria Carbon Black Company S.A.E Alexandria Fiber Company S.A.E China

(c)

(d)

(e)

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Liaoning Birla Carbon Birla Jingwei Fibres Company Limited Aditya Birla Grasun Chemicals (Fangchenggang) Ltd.s (f) Canada AV Cell Inc AV Nackawic Inc Australia Aditya Birla Minerals Ltd. Laos

(g)

(h)
(I) (g)

Birla Laos Pulp and Paper Plant

North and South America, Europe and Novelis Inc. Joint ventures Birla Sun Life Insurance Birla Sun Life Asset Management Company Ltd Birla Sun Life Distribution Company Ltd. Tanfac Industries Ltd.

GROWING WITH PUBLIC AND ENVIRONMENT

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On he social front, a value-bases caring corporate citizen, the Aditya Birla group inherently believes in trusteeship concepts of management. A part of the group's profits are ploughed back into meaning full welfaredriven initiatives that make a qualitative difference to the lives of marginalized people. Carried out under the aegis of the Aditya Birla center for community initiatives and rural development, it is spearheaded by Mrs. Rajshree Birla. The Aditya Birla Center for Community Initiatives and Rural Development For nearly 50 years now, the Aditya Birla Group have been and continue to be involved in meaningful, welfare driven initiatives that distinctly impact the quality of life of the weaker section of the society, surrounding hundred's of villages in proximity to our plants spread all over India. Village that are among the poorest. Our works is carried out under the aegis of "The Aditya Birla Center for Community Initiatives and Rural Development" - the apex body responsible for development projects, spearheaded by Mrs. Rajshree Birla, who is the chairperson of the center. Corporate Social Responsibility Philosophy They believe in trusteeship concept of management, simply put, in the context of management Simply put in the context of social responsibility it entails plugging part of the profits in to programmers, which results in the larger good society, Our legendry leader the late Shri Aditya Vikram Birla ingrained the concept of sustainable live hood into it, in the year 2000. Mr. Kumar Mangalam Birla, Our Chairman, spawned the concept of the triplebottom line accountability, which entail factoring three key aspects economics success, environmental accountability and social responsibility, for ensuring sustainable success. In a holistic way, the interests of the entire group's stakeholders have been textured into the group's fabric. Thus the group takes its social responsibility very seriously, far transcending mere chequebook philanthropy; corporate social responsibility is accorded as much importance as a business project, There fore, the group's social vision forms an integral part of the business vision of its group companies. Each company has an ongoing one year plan and a 3-year rolling plan, presented at annual planning and

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budgeting meet. All projects are assessed under the agreed strategy, periodically monitored, measured against targets and budgets, with their finding shared through out the group. Birla's Vision "To actively contribute to the social and economical development of the communities in which we operate. In so doing build a better, sustainable way of life for the weaker section of the society and raise the country's human development index". Mrs. Rajshree Birla

PROJECTION IDENTIFICATION MECHANISM

Over three decades ago, Milton Friedman, the Nobel Prize winner, said: "There is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits." Prior to him, in the early 1920s, John Keynes had said: "The business of business is to do better business and transfer its benefits to its consumers and stockholders." Economic debates are increasingly influenced by societal issues, such as health, education, and livelihood. For us in the Aditya Birla Group, CSR is very much a part of the overall business portfolio. All our group's community work is carried out under the banner of The Aditya Birla Centre for Community Initiatives and Rural Development, which I am privileged to lead. It is anchored by our corporate communications team and we have 150 people working exclusively for our social projects. We work in around 3,700 villages and reach out to approximately two million people every year. Of these, more than 60% live below the poverty line. Their first need is to have access to water. Second, agriculture and other means of sustainable livelihood. Third, health, and then, education. These have, therefore, become the areas of our focus. Though I must confess we are giving education an enormous thrust, because we feel it is only through education that we can help them surmount their problems. Annually, as a group, we spend approximately Rs 65 crore on our social projects. This includes the running of 33 schools in the interiors and 16 hospitals. Let me share with you what we have learnt.

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First, in all our teams, we have inculcated a strong commitment to listening to the communities. So, all projects are planned in a participatory manner, in consultation with the community, assessing their basic needs, prioritizing these and then working on the project plan. Implementation becomes the responsibility of the community and the team. The projects are constantly monitored and village meetings are held to get feedback. Design real solutions for real people this has been our second insight. Sometimes we have found projects are designed for the 'feel-good factor,' which is really of little benefit to the people. The ground realities are very different. For instance, when polio immunization camps were conducted in the villages, people from the deep interiors could not bring their children, because they simply could not walk 15 km to the camp. So we have begun arranging for vans and even bullock carts to bring the children to the medical camps. This year, out of the five lakh children we helped immunize against polio, nearly three lakh had to be brought from their huts to the camp. Likewise in the mother-and-child care project, where we are espousing planned families. At our unit in Jagdishpur, we have set up 24 outreach clinics. These clinics are serviced by lady doctors who provide ante-natal, post-natal and child care. Because we offer a bouquet of real solutions, our team has been able to convince 18,000 women, belonging to four blocks, to go in for planned families. Our third learning is that willingness to correct mid-course is critical as well. Nine years ago, when we first set up our centre and collectively measured what our 60 units were engaged in, we found there was no cohesiveness. Each unit did a project in an ad hoc manner. Through the centre, we knit all the units and spelt out clear focus areas. As a consequence today, all our units work in five key areas. First, healthcare, inclusive of mother and child care. Second, education. Third, self-reliance through the engine of sustainable livelihood, including agriculture and women empowerment. Fourth, infrastructure support. And fifth, espousing social causes. Our fourth insight is that creating an inclusive feeling is extremely essential. When we began our project with Habitat for Humanity, which aims basically to build houses for the rural poor, we ensured that villagers contributed significantly to their own houses. In the houses built by Habitat For Humanity with us, the villagers provide their land and their sweat equity another term for labor and get an interest-free loan of Rs 15,000. This has to be repaid in 15 years. Through this inclusiveness,

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SWOT ANALYSIS
STRENGTHS Worlds largest producer of V.S.F Leader in ready to wear branded apparel Cost effective Sound infrastructure Various manufacturing locations enable GRASIM to reach out major chunk of market. WEAKNESSES Customers and market driven (orientation) process is slow Market area/coverage, sometimes disturbed by small producers OPPORTUNITIES Global expansion Continuous innovations, for example, ice touch fabric in 2002 In India , the group is single largest producer of viscose filament yarn Demand for V.S.F is ever increasing because of its hygroscopic nature which is ideal for tropical countries like India. THREATS Competition in domestic as well as global market, company is facing competition with natural synthetic fibers like cotton, polyester, acrylic etc. Scarcity of raw material , that is , wood pulp ( eucalyptus and bamboo trees)

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Threat of re-opening of small competitors operations.

RECOMMENDATIONS
Viscose and Grasim have long been synonymous. The overbearing presence of Grasim Industries Ltd. in the staple fiber market has long been acknowledged by the textile industry. Structural health of working capital of the company is improving continuously. Based on my analysis and observation, following areas requires attentions. * Company's raw material storage period can further be reduced as it blocks funds and company has to incur extra carrying cost. * Stores and spared inventory holding time is also long which can be controlled through proper planning and vigilance. * Introduction of B-to -B, E-Commerce for exchange of documents with supplies, clients and partners. B-to-B speed up the workflow in the organization. A complete B-to-B transaction almost eliminates the cost involved in paperwork and painting as a entire procedure is in electronic format with due B-to-B the company can save considerably in achieving. In case of Export/Import, EDI (Electronic Data Interchange) can be effective tool for transfer of data, invoice and to make payments, till will not only reduce the lead time and inventory holding period, even cost will fail. Introduction of e-commerce will not only make company competitive but also reduce inventory holding period and extra cost.

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RESEARCH METHODOLOGY
1. Preliminary Discussion Preliminary discussions were held with members of Materials management Department, Sales Dept. and Finance Dept. to understand the accounting of creditors, debtors, assets, expenses and inventory control, and cash flow procedure. The basic idea was to get acquainted with the full procedure of accounting of various assets and liabilities affecting balance sheet and CMA report. Referring to Books Books were also referred to have understanding of working capital management and ratio analysis. Referring to Documents After all these learning and understanding, documents were referred to namely balance sheet, CMA report. For better understanding, invoices, journal vouchers, letter of credit, bank guarantee and MIS reports were studies. Data collection For this study, secondary data are used available from various documents. The following documents have assisted in the project : Annual Report of the company. Annual compilation registers comprising detailed description of profit and loss accounts and balance sheets of SFD Nagda. Quarterly Balance Sheets and P&L Accounts.

2.

3.

4.

5.

Preparation of CMA Report. Finally on the basis of preliminary discussions and referring to documents. CMA statements were prepared and final reports were analyzed through ratio analysis. Definitive views about the entire gamut of working capital management were formed. The various issues connected with working capital management were understood.

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LIMITATIONS
The Study had a few limitations, which are as follows: 1. The main constraint was that of time. Since orientation and projects were held simultaneously, the resources were divided both in terms of energy and time. This coupled with approaching deadlines put pressure on this project. As a result in-depth study was not possible. 2. As working capital management is a vast area for better understanding the working capital management process at Grasim required long discussions with the project guide, which were not possible due to his busy schedule. 3. Limited study material on working capital management was available.

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BIBLIOGRAPHY 1. 2. 3. 4. 5. Pandey, I.M. Financial Management. New Delhi:-Vikas Publishing House, 2000. Through Internet on website WWW.ADITYABIRL.COM Working Capital Management (IGNOU Study Material). New Delhi: Dee Kay printers, 1995. Accounting and Finance for Managers (IGNOU Study Material). New Delhi: M/s Gita Offset, Printers, 1995. Annual Reports of Grasim Industries Ltd.

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