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Date

Project onEFFECTIVENESS OF TRAINING PROGRAM

OFGRASIM INDUSTRIES LIMITED

Staple Fibre Division

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

Submitted To Submitted ByMR:-GAUTAM MUKERJI SOURABH DAVE

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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 UJJAINProviding 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.

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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 STUDENT

Prof:-Mrs. Harshita Soni Sourabh Dave MITS MITS MBA- III SEM Place: Ujjain

DATE:

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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.

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COMPANY PROFILEGRASIM Industries Limited, a flagship of the Aditya Birla Group, is among India’s 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 FiberIn 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 India’s largest manufacturer of VSF-meeting over 80% of the country’s VSF requirements.

Grasim is also one of the world’s 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.

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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.

CHEMICALSAs 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 IronUnder 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.

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Viscose Staple FibreGrasim 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.

NagdaNagda 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.

HariharThe 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 bleachingprocess 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 CanadaAV Cell supplies dissolving grade pulp to the Group’s VSF units in

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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 materialrequired 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 & DevelopmentGrasim 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

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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. Topenetrate 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 CapacityViscose staple fibre 270,100 tpaRayon grade pulp (Harihar) 70,000 tpa

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FUTURE STRATEGIES OFGRASIM INDUSTRIES (FIBER)

Aditya Birla Group’s Grasim Industries is commercially launched its third generation viscose fiber Excel. The company’s 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 cellulose’s 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 world’s 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.

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COMPETITIVE POSITION

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

1To understand the HR practices followed & Process of Performance 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 DevelopmentThe needs of individual are objectively identified & necessary interventions are planned foridentified 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 staffetc. The programs also cover the identification of resource personnel for conducting developmentprogram, frequency of training and development programs and budget allocation. Training anddevelopment 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. Theinternal training department aims at improving the skill sets relevant to the work profile ofemployees.This includes improving communicationDifferent skillsE-mail programmingOperation systems.The design of the training program can be undertaken only when a clear training objective hasbeen produced. The training objective clears what goal has to be achieved by the end of trainingprogram i.e. what the trainees are expected to be able to do at the end of their training. Trainingobjectives assist trainers to design the training program.IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 34

Training Design-The 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 thataffect training design.Training climate – A good training climate comprises of ambience, tone, feelings, positiveperception for training program, etc.Trainees’ learning style – The learning style, age, experience, educational background of traineesmust 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 intospecific training areas and modules. The trainer prepares the priority list of about what must be

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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 arethen 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 relationshipTraining 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. Themethod 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, etcImprove performancein) Pagelities ) 35IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 36“Training & Development is any attempt to improve current or future employee performance byincreasing an employee’s ability to perform through learning, usually by changing the employee’sattitude 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 employee’s performance deficiency,computed as follows.Training & Development Need = Standard Performance – Actual PerformanceTraining: Training refers to the process of imparting specific skills. An employee undergoingtraining is presumed to have had some formal education. No training program is complete withoutan element of education. Hence we can say that Training is offered to operatives.Development: Development means those learning opportunities designed to help employees togrow. Development is not primarily skills oriented. Instead it provides the general knowledge andattitudes, which will be helpful to employers in higher positions. Efforts towards developmentoften depend on personal drive and ambition. Development activities such as those supplied by

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management development programs are generally voluntary in nature. Development providesknowledge 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 areSkillsEducationDevelopmentEthicsProblem Solving SkillsDecision MakingAttitudinal ChangesIBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 37Importance of Training & DevelopmentHelps remove performance deficiencies in employeesGreater stability, flexibility and capacity for growth in an organizationAccidents, scraps and damages to machinery can be avoidedServes as effective source of recruitmentIt is an investment in HR with a promise of better returns in futureReduces dissatisfaction, absenteeism, complaints and turnover of employeesNeeds of TrainingIndividual levelDiagnosis of present problems and future challengesImprove individual performance or fix up performance deficiencyImprove skills or knowledge or any other problemTo anticipate future skill-needs and prepare employee to handle more challenging tasksTo prepare for possible job transfersTraining given onSafety aspectsBehavorial aspectsTechnical aspectsCommunication skillsIBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 38Identification of Training Needs (Methods)Individual Training Needs Identification1. Performance Appraisals2. Interviews3. Questionnaires4. Attitude Surveys5. Training Progress Feedback6. Work Sampling7. Rating ScalesGroup Level Training !eeds Identification1. Organizational Goals and Objectives2. Personnel / Skills Inventories3. Organizational Climate Indices4. Efficiency Indices

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5. Exit Interviews6. MBO / Work Planning Systems7. Quality Circles8. Customer Satisfaction Survey9. Analysis of Current and Anticipated ChangesBenefits of Training !eeds Identification1. Trainers can be informed about the broader needs in advance2. Trainers Perception Gaps can be reduced between employees and their supervisors3. Trainers can design course inputs closer to the specific needs of the participants4. Diagnosis of causes of performance deficiencies can be done.IBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 39

5. Talent ManagementIt is a holistic and systematic process, across the group. It is built on the work done so far onpeople processes, and has a Talent Identification and Talent Development Strategy for all the 3levels of management i.e. Senior, Middle & Junior Management. This is facilitated byDevelopment Assessment Center followed by Individual Development Plan, enabling plannedsuccession and career management.The talent management process includes HR process forRecruitment,Performance,Compensation,Succession planning,Learning and other capabilities around self-service,AnalyticsIBSAR Navi Mumbai (satishpgoyal@yahoo.co.in) Page 40Reporting.With businesses going global and competition becoming intense, there is mounting pressure onorganizations to deliver more and better than before. Organizations therefore need to be able todevelop and deploy people who can articulate the passion and vision of the organization and maketeams with the energy to perform at much higher levels.Talent management is a key business process and like any business process takes inputs andgenerates output.Talent management is a professional term that gained popularity in the late 1990s. It refers to theprocess of developing and fostering new workers through onboarding, developing and keepingcurrent workers and attracting highly skilled workers to work for your company. Talentmanagement in this context does not refer to the management of entertainers.Companies that are engaged in talent management (human capital management) are strategic and

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deliberate in how they source, attract, select, train, develop, promote, and move employees throughthe organization. This term also incorporates how companies drive performance at the individuallevel (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 havetalent which should be identified and liberated.Talent management decisions are often driven by a set of organizational core competencies as wellas 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 (Rs In Crore)

Particulars FY 2006 FY 2007Debtors Collection Period (D)Opening Book Debts 107..23 94.06Closing Debtors 94.06 127.1Average Debtors 100.65 110.58Sales 1195.85 1333.83Average Sales / Days 3.28 3.65D = Average Debtors Average Sales / Days

100.65 110.58

No. of days 31 Days 30 Days

Particulars FY 2006 FY 2007Creditors Payment Period ( C )Opening Creditors 94.19 89.69Closing Creditors 89.69 104.41Average Creditors 91.94 97..5Purchases 606.83 697.73Average Purchase / Days 1.66 1.91C – Average Creditors Average Purchases

91.94 1.66

97.051.91

No. of Days 55 Days 51 Days

Particulars FY 2006 FY 2007Operating Cycle AnalysisRaw material and Stores storage Period 22 36Work-In-Progress Period (W) 1.1 1.15Finished goods Storage Period (F) 26 11Debtors Collection Period (D) 31 30Creditors Payment Period 55 51Operating Cycle Period (R+W+F+D-C) 25.1 27.15

]

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OPETATING CYCLE ANALYSIS (Rs In Crore)

Particulars FY 2006 FY 2007

I Raw material &Stores storage Period (R)

Opening Balance of Raw Material 29.90 41.72

Closing Balance of Raw Material 41.72 85.24

Average Stock of Raw Material 35.36 63.48

Raw Material Consumed p.a. 581.2 644.8

Average Raw Material Consumed / Days 1.59 1.77

R =Average Stock of Raw Material & stores Average Raw Material Consumed /Days

35.661.59

63.481.77

No. of Days 22 36

Particulars FY 2006 FY 2007II Work-In- Progress (W)

Opening Balance of W-I-P 2.46 2.67Closing Balance of W-I-P 2.67 3.24Average W-I-p Inventory 2.57 2.96Cost of Production 858.87 940.42Average Cost of Production 2.35 2.58R =Average W-I-P Inventory Average Cost of Production /Days

2.562.35

2..962.58

No. of Days 1.1 1.15

Particulars FY 2006 FY 2007III Finished Goods Storage Period (F)

Operating Balance of Finished Goods 93.36 36.83Closing Balance of Finished Goods 36.83 19.55Average Finished Goods 65.10 28.19Cost of Sales 915.50 972.56Average Cost of Goods Sales /Days 2.51 2.66R =Average Finished Goods Average Cost of Good Sold /Days

65.102.51

28.192.66

No. of Days (F) 26 11

COST SHEET FY 2006 (Rs. In crore)

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Particulars Quantity (MT)

Rs /T Amount

(A) Cost of Production1. Raw Material Consumed(a) Pulp Cost(b) Caustic Soda(c) Sulphur(d) Other Raw Material

133262 72254 52529

2998615480 5672

399.59111.85 29.79 39.95

Total 2508045 50238 581.20

2. Employee Cost Less :-VRS

81.63 -2.46

Total 79.173. Manufacturing Cost(a) Stores & Spares(b) Power & Fuel(c) Packing Material Consumed(d) Others Manufacturing Expenses

34.08127.09 5.81 11.57

Total Manufacturing Expenses 178.52 4. Administrative &other Expenses

(Exclusive Selling Expenses) 19.68

Total Cost of Productions (1+2+3+4) 858.57

(B) Cost of Good Sold1. Cost of Production

2. Decrease / Increase in Stock858.57 40.21

Cost of Good Sold 898.78

(C) Cost of Sales1. Cost of Good Sold2. Selling Expenses

858.57 16.72

Total Cost of Sales 915.50(D) Net Sales Realization Net Sales 1195.50

Other Income 19.39

Net Sales Realization 1214.89

(E) Operating ProfitLess :-VRS

299.74 -2.46

(F) PBIDT 297.28 Less :- Interest -35.42 (G) PBDT 261.86 Less :-Depreciation -29.18 (H) PBT 232.68

COST SHEET FY 2007 (Rs. In crore)

Particulars Quantity (MT)

Rs /T Amount

(A) Cost of Production

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2. Raw Material Consumed(a) Pulp Cost(b) Caustic Soda(c) Sulphur(d) Other Raw Material

135672 73478 52886

3296216720 4824

447.20122.85 25.51 49.27 3.53

Total 262036 54486 648.36

2. Employee Cost Less :-VRS

91.63-2.93

Total 88.204. Manufacturing Cost(a) Stores & Spares(b) Power & Fuel(c) Packing Material Consumed(d) Others Manufacturing Expenses

33.88 6.33125.8711.47

Total Manufacturing Expenses 176.75 4. Administrative &other Expenses

(Exclusive Selling Expenses) 27.11

Total Cost of Productions (1+2+3+4) 940.42

(B) Cost of Good Sold1. Cost of Production

2. Decrease / Increase in Stock940.42 11.70

Cost of Good Sold 952.12

(C) Cost of Sales1. Cost of Good Sold2. Selling Expenses

952.12 20.44

Total Cost of Sales 972.56 (D) Net Sales Realization Net Sales 1333.14 Other Income 9.31

Net Sales Realization 1342.45

(E) Operating Profit (C-B) Less :-VRS

370.58 2.93

(F) PBIDT 367.65 Less :- Interest 44.11 (G) PBDT 323.54 Less :-Depreciation 33.12 (H) PBT 290.42

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CURRENT ASSETS Rs in croreS.No. CURRENT ASSETS FY2006 FY2007

1 I

INVENTOARYRaw Materials (include stores &other items used in the process of mfg.)

(a) Imported (b) Indigenous

26.615.09

-85.24

II Finished Goods 36.86 19.55 III By Products 1.81 7.3

IV Process Stock 2.67 3.24

V West 20.21 0.388

VI Store Spare Part, Packing Material 17.86 7.4Total Inventory 101.12 123.26

2 Sundry Debtors 94.06 127.10

3 Cash and Bank Balance

4 Loan and Advance

Unsecured Loans Advance Receivable

1.2325.09

1.4130.70

Total Loan and Advances 26.32 32.115 Outstanding Expenses 0.40 1.37

TOTAL CURRENT ASSETS 222.00 283.96

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CURRENT LIABILITIES Rs In CroreCURRENT LIABILITIES FY2006 FY2007

Sundry Creditors Purchases Raw Material Packing, Fuel Accrued Expenses Statutory Liabilities Other creditors

36.0543.776.343.55

25.1170.94.673.67

Total Creditors 89.71 104.35 Security and Other Deposit 4.00 1.60

Advance From Customers 7.57 7.00

Interest Accrued but not due for payment 3.19 5.39

CURRENT LIABILITIES 104.47 118.34 Less:- Provision for Current 0.04 0.04

TOTAL CURRENT LIABILITIES

104.43 118.30

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RATIOSS.No Particulars FY2006 FY2007

LIQUIDITY RATIOS1 Current Ratioi Current Assets 222.00 283.96

ii Current Liabilities 104.43 118.30

Current Ratio (i/ii) 2.15 2.40

2 Acid Test Ratioi Current Assets 222.375 283.18

ii Inventory 101.12 125.26

iii Prepaid Expenses 0.77 0.96

iv Current Liabilities 104.46 118.46

Acid Test Ratio [i – (ii +iii) / iv] 1.15 1.06

ACTIVITY RATIOS FY2006 FY2007

1 Inventory Turnover Ratio

i Gross Turnover 1913 2294.6

ii Average Inventory 104.43 118.30

Inventory Turnover Ratio (i / ii) 16.07 20.45

2 Average Collection Period

i Average Receivables 100.65 110.57

ii Total Sales 1192.46 1338.32

Average Collection Period (i * 365 / ii) 31 Days 30 Days

3 Receivables Turnover Ratio

Total Sales 1192.46 1338.32

Average Receivables 110.57 100.65

Receivables Turnover Ratio (i / ii) 10.78 13.29

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ACTIVITY RATIOS FY2006 FY2007

4 Payable Turnover Ratio

i Total Purchases 606.83 697.73

ii Average Payable 91.94 97.05

Payable Turnover Ratio ( i /ii ) 6.60 7.18

5 Average Payable Period

i Total Purchases 606.83 697.73

ii Average Payable 91.94 97.05

Average Payable Period (i *365/ii) 55 Days 51 Days

6 Working Capital Turnover Ratio

i Net Sales 1192.46 1338.32

ii Net Working Capital 115.98 162.72

Working Capital Turnover Ratio (i / ii) 10.20 8.22

7 Current Assets Turnover Ratio

i Cost of Good Sold 898.78 952.12

ii Current Assets 220.37 281.18

Current Assets Turnover Ratio (i / ii) 4.07 3.39

8 Fixed Assets Turnover Ratio

i Net Sales 1192.46 1338.32

ii Net Fixed Assets 200.51 257..27

Fixed Assets Turnover Ratio (i / ii) 5.94 5.20

9 Total Assets Turnover Ratio

i Net Sales 1192.46 1338.32

ii Total Assets 421.63 541.20

Total Assets Turnover Ratio (i / ii) 2.83 2.47

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VARIOUS DEPARTMENTS IN V.S.F DIVISION

SAP Production Accounts QualityInformation & ControlTechnology Finance

Research &Development

Human Resource

Marketing Purchases Administration Engineering

Services

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Waste(MUDA)

Elimination

Information system,

technology and cash flow

Equipment effectiveness

JIT and stock reduction

Work environment

(ss)

High performance teams:BENCH MARKEDINNOVATIONSRELIABLELEARNINGADAPTABLEWCM: CREATING VALUE

Quality first:SQM and best

practices

Customer driven:

internal and externalLiaison and

understanding

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ANALYSIS OF DATA

0

2

4

6

8

10

Pulp Caustic soda Cs2 Sulphuricacid

Steam

RAW MATERIAL FOR PRODUCTION OF 1-TONE FIBER

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STRUCTURAL RATIOS

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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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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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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.

(c) Indonesia PT Indo Bharat Rayon PT Elegant Textile Industry PT Sunrise Bumi Textiles PT Indo Liberty Textiles PT Indo Raya Kimias

(d) Egypt Alexandria Carbon Black Company S.A.E Alexandria Fiber Company S.A.E (e) China

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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

(g) Australia Aditya Birla Minerals Ltd.

(h) Laos

Birla Laos Pulp and Paper Plant (I) North and South America, Europe and Novelis Inc.

(g) 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 welfare-driven 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 DevelopmentFor 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 PhilosophyThey 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 triple-bottom 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 MECHANISMOver 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-

World’s 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)

Threat of re-opening of small competitors operations.

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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.

2. Referring to Books Books were also referred to have understanding of working capital management and ratio analysis.

3. Referring to DocumentsAfter 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.

4. 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.

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. Pandey, I.M. Financial Management. New Delhi:-Vikas Publishing House, 2000.

2. Through Internet on website WWW.ADITYABIRL.COM3. Working Capital Management (IGNOU Study Material). New

Delhi: Dee Kay printers, 1995.4. Accounting and Finance for Managers (IGNOU Study Material).

New Delhi: M/s Gita Offset, Printers, 1995.5. Annual Reports of Grasim Industries Ltd.

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