TABLE OF CONTENT

CHAPTER TITLE PAGE NO:

1 INTRODUCTION

1.1 INTRODUCTION 1

1.2 INDUSTRY PROFILE 3

1.3 COMPANY PROFILE 7

2 2.1 ORGANISATION STRUCTURE 15

2.2 DESCRIPTION OF DRPARTMENTAL FUNCTIONS 17

2.1.1 PERSONAL AND ADMINISTRATIVE DEPARTMENT 17

2.1.2 PRODUCTION DEPARTMENT 20

2.1.3 COMMERCIAL DEPARTMENT 27

2.1.4 FINANCE AND ACCOUNTS DEPARTMENT 29

2.1.5 RESEARCH AND DEVELOPMENT DEPARTMENT 33

2.1.6 QUALITY CONTROL DEPARTMENT 36

2.1.7 MARKETING DEPARTMENT 38

2.1.8 MAINTENANCE DEPARTMENT 42

2.1.9 PROJECT DEPARTMENT 44

3 3.1 PROJECT PRIFILE 46

3.2 MARKET POTENTIAL 47

3.3 FINANCIAL PERFORMANCE 47

SWOT ANALYSIS

SUMMARY AND CONCLUSION

5.1 FINDINGS 53

5.2 SUGGESTIONS 53

5.3 CONCLUSION 5 4

LIST OF TABLES

TABLE NO: TITLE PAGE NO:

1 Major companies producing kaolin 6

2 Working pattern of the company 10

3 Employees list 10

4 Forms of clay 22

5 List of products 46

6 Profitability ratios 47

7 Turnover ratios 48

8 SWOT summary of EICL 51

LIST OF CHARTS

CHART NO: TITLE PAGE NO:

1 Organizational chart of EICL 16

2 Personal and administrative department char 17

3 Production department chart 20

4 Production process 45

5 Various process in plant 1 & plant 26

6 Commercial department chart 28

7 Finance and accounts department chart 29

8 Research and development department chart 34

9 Quality control department chart 36

10 Marketing department chart 38

11 Maintenance department chart 42

12 Project department chart 45

CHAPTER – 1

1.1 INTRODUCTION

The early history of the industry is, as would be expected, very much concerned with the

discovery and production of china clays for use in ceramics. The story, though, starts thousand of

year ago and thousands of miles way

China, the pure white porcelain used by the Chinese, was discovered many thousands of

years ago and has always been a much-prized material. Despite many attempts to find sources

elsewhere, it remained elusive until a few deposits were found in some parts of Europe and in

America early eighteenth century.

As more potteries made use of porcelain, so the demand grew and by the early nineteenth

century the kaolin industry has become highly successful, with many of the potters owning rights

to mine the materials for themselves. In addition, by the middle of the nineteenth century, china

clay was increasingly being used as a raw material by the developing paper industry

OBJECTIVE OF THE STUDY

To fulfill the requirement of the curriculam.

To study about the history of the organization, its vision and mission.

To understand the organizational hierarchy.

To study how each department function

To know about the history of the organization, its vision and mission

To know about the products and production process

1

SCOPE OF THE STUDY

The organization study is intended to learn about the working of the organization, its

policies and administrative procedures. The study provides a chance to understand how theory is

applied in practice by interactions with various department in organization. Thus the corporate

knowledge and strategies will become familiar.

LIMITATIONS OF THE STUDY

Since the study is conducted at Veli, Thiruvanathapuram, it lacks the detailed information

regarding, the mining centre at Thonnakkal. The conclusion and interference are drawn on the

basis of data received from personal interviews and it may not be accurate. No set of rules have

been followed in collecting the information. Sampling is not possible in this study financial

statements conditions are generally ignored

1.2 INDUSTRY PROFILE

The early history of the industry is, as would be expected very much concerned with the

discovery and production of China clays for use in ceramics. The story, though, starts thousands

of years ago and thousands of miles away.

China clay, the pure white porcelain used by the Chinese, was discovered many

thousands of years ago and has always been a much-prized material. Despite many attempts to

find sources elsewhere, it remained elusive until a few deposits were found in some parts of

Europe and in America early in the eighteenth century.

As more potteries made use of porcelain, so the demand grew and by the early nineteenth

century the kaolin industry had become highly successful, with many of the Potters owning

2

rights to mine the material for themselves. In addition, by the middle of the nineteenth century,

China clay was increasingly being used as a raw material by the developing paper industry.

Early in the twentieth century, the industry was made up of some seventy or so individual

producers, each competing on price with little regard for marketing or standards. There was

almost no capital investment or product development and overproduction was great, wages were

low and working conditions were poor.

KAOLIN

Kaolin is a clay mineral more correctly known as kaolinite. It is also called China clay.

Kaolin is made up of individual crystals that from units termed “booklets” of stacked sheets.

Kaolin is a soft mineral, white in color when is purely fair. China clay is naturally hydrated

Aluminum Silicate. It is one of the most abundant clay on Earth’s crust. A large variety of China

clay is mined all over India.

Kaolinite is one of the most common minerals; it is mined, as kaolin, in Brazil, France,

Britian, Germany, India, Australia, Japan, China, and the southeastern U.S. states of Gergia,

Florida and to a lesser extent, South Carolina. Due to its extremely fine nature (finer than silt), it

is mixed with water and transported in tanks as liquid slurry. It is used in ceramics, medicine,

bricks, coated paper, as a food additive, in toothpaste, as a light diffusing material in white

incandescent light bulbs, and in cosmetics. A recent use is a specially formulated spray applied to

fruits, vegetables, and other vegetarian to repel or deter insect damage.

3

INDUSTRIAL APPLICATIONS

China Clay is the heart of several industries like potteries, tiles, ceramics, glass and others.

1. Paints

4. Elecrical Industry

USES OF KAOLIN IN FUTURE

Some of the uses listed below are already commonplace while others are innovative and in

the developing stage.

1. Plastic film, Video and audio tapes, where clays are used as antiblocking agents.

2. Laundary products, Washing powders and detergents.

3. Decorative concrete, Mortras and renders.

4. Mark-resistant polypropylene for automotive use thermoset mouldings for baths and

shower trays.

Clay is used in wide varieties of paints like distemper, cement

primer, wood primer, emulsion paint, texture coating, spray

plaster, putties, fillers and undercoats.

It It is used in varieties of papers, cardboards, hardboards

and others.

is used to filler in combination with other to impart strength and

smoothness.

2. Paper

3. Plastic

It is used to for electrical insulation, high voltage insulation

compounds electrical wires, EPDN rubber and others

5. Cosmetic & Soap

China Clay is used in toothpaste, cosmetic and soap industry

4

5. Lightweigt concrete water treatment sysens

6. Biotechnology, Ability of lightweight high-strength cermic materials to support micro –

organisms.

MAJOR COMPANIES PRODUCING CHINA CLAY

Ashapura Minecham Ltd

Imerys Minerals. Ltd, U.K

Tiele Kaolin Company, U.S.A

Goonvean Ltd, U.K

Longyan Jindal Minerals Development Co.Ltd.

Tolsa Group

KAOLIN IN INDIA

In India the production of kaolin is about 2,00,000 metric tons. India is a major producer

of kaolin in Asia. India is a not a good consumer of kaolin. The kaolin import to India is less

compared to other to other Asian countries.

Table : 1

Major Companies Producing Kaolin

Companies Areas of Activity

Alchem Impex 6olkata, IND Bentonite, Graphite Powder, kaolin

Kerala Ceramics LTD Kundara, IND Proclainware, kaolin

Birla Minerals & Chemicals kote, INDBentonite, Kaolin, Organophillic clays

1.3 COMPANY PROFILE

English Indian clays Limited, established in 1966, operated China Clay mine in the

southernmost state of India, in lush green Kerala. The Company’s clay mining and refining

operations center around Trivandrum where the processing plant producers several grades of

refined kaolin (China clay-both Spray Dried and Rotary dried), Metakaolin and Calcined and

Ultramarine industries. The plant capacity is 190,000 metric tons per annum and is the biggest in

South East Asia.

EICL has been set up Application Laboratories that focuses on specific industry

requirements to develop suitable grade of products and provides application support to customers

to achieve best results from its products.

HISTORY OF THE ORGANIZATION

EICL, a company incorporated in India, was part of the erstwhile Thaper group. The company

was incorporated in 1963 in technical and financial collaboration with English China clay Ltd.

U.K the pioneer and then world leader in processing. This collaboration with ECC ceased in the

year 1992.

EICL has two key divisions, viz, Clay and starch divisions. The clay division, having three

manufacturing locations in Kerala, specialize in mining and processing of high and kaolins.

Both the divisions of EICL have grown to be market leaders in their respective fields. This

growth has been chiefly driven by prudent investment in world class

R&D facilities for research in Kaolin and enabling these business to be specialized solution

provides for various applications spanning diverse industries

5

VISION OF ECIL

“To be a leader in processed China clay market I Asia and to be an employer of choice, fostering

a culture that values dedication, respect, and continuous improvement”.

MISSION OF ECIL

“To provide consistently high quality products and materials to our customes in a safe, timely

and efficient manner, at the lowest possible cost and to grow with them and ensure the growth

and development of employees of the Company in order to achieve the objectives of the

organization and the career goals of the employees”.

CORPORATE PROFILE

CHAIRMAN : Mr. KARAN THAPAR

DIRECTORS : Mr.B.M. THAPAR

Mr. SOM NATH DUA

Mr. SURESH KUMAR TOSHNIWAL

Mr. JAINENDER KUMAR JAIN

Mr. VIJAY RAI

BANKERS : ICICI Bank limited

UTI Bank limited

Oriental Bank of Commerce

State Bank of India

State bank of Indore

SHARES OF LISTING : Bombay Stock Exchange

6

7

REGISTERED OFFICE : TC-79/34, Veli, Thiruvananthapuram-21. KeralHEAD

OFFICE : N-75, Connaught Circus, New Delhi-11

It is a 24 hr working company. The working time is divided in to three shifts.

Table : 2

Working pattern of the Company

A Shift 6 a.m to 2 p.m

B Shift 2 p.m to 10 p.m

C Shift 10 pm. To 6 a.m

(Annual report of EICL)

There are total 361 employees working in ECIL

Table:3

Employee list

Catogory Numbers

Officers & Staff 94

Workers (at veli plant and mine) 93

Emloyees at SPD 46

Apprentices & trainees 28

Total 361

(Annual report of EICL)

8

CHAPTER-II

ORGANIZATION STRUCTURE

2.1 Organization structure

Departmentalization means, dividing the large and complex Organization into smaller

flexible administrative units. It is the organization wide division of work and to various

manageable units or department. It shows the horizontal differentiation as in an Organization. It

is the grouping of the activities and employees into the department. It is a method of arranging of

the activities to facilitate the accomplishment of the Organization objectives. Detailed and well

defined policies and procedures which each department has to follow during its different

operations have been laid down by the company. Under ISO, all the procedures are highly

standardized and separate manuals are issued to all departments.

EICL-DEPARTEMENTS

Personnel and administration

Production

Commercial

Finance & Accounts

Research & Development

Quality Control

Marketing

Maintenance

Project

9

Chart 1

ORGANIZATIONAL CHART OF EICL

VP-W Vice President Works

GM-SPD General Manager Specialty Products Division

GM-O General Manager Operations

SM-HRA Senior Manager Human Resources and Administration

DGM-C Deputy General Manager Commercial

GM-M General Manager Marketing

SM-R & D Senior Manager Research and Development

SM- F & A Senior Manager Finance and Accounts

SM-Proj Senior Manager Project

M-Tech Manager Technical

CHAIRMAN

EXECUTIVEDIRECTOR

VP-W

GM-DPD GM-O SM-HRA DGM-C DGM-M GM-M

Q C in Charge

SM-R & D SM-F & A SM-PROJ M-Tech

10

Chart 2

2.1.1 PERSONAL AND ADMINISTRATIVE DEPARTMENT

SENIOR MANAGER HR & A

ASSISTANTMANAGER P &

A

JUNIOREXECUTIVE

HRA

PERSONAL SECRETARY toEXECUTIVE DIRECTOR

JUNIOREXECUTIVE

IR

SECURITY INCHARGE

SENIORASSISTNT

P & A

SENIORSUPERVISOR

P & A

SECRITY ONCONTRACT

BASIS

DRIVER/PEONS

11

Policies and practices

The policies and practices of P&A departments are in line with also 9001:2000 and

also conform to the provisions laid down in various acts, some of which include:

Trade Unions Act 1926

Industrial Disputes Act 1946

Industrial Employment Standing Orders act 1947

Workmen’s Compensation act 1923

Mines Act 1952

Factories Act 1948

Employees State Insurance Act 1948

Payment of Wages Act 1936

Employees provident Fund’s Act 1952

The personal department of the company performs both Human resources development

(HRD) and Administrative Functions.

HRD functions

HRD functions cover the following functions:

Selection and placement of employees

Performance rating of trainees/probationary and confirmed employees

Training need assessment

Training and development programme

Welfare activities

12

Joining formalities

The copy of signed joining letter should be given by the candidates. After this the

certificate is verified to check the eligibility. Then a duty joining report is made by the

candidates in which all the details about the certificate and other things given to the organization

by the candidates are mentioned. This is kept as the personal file of the employee for future

reference. Thus every employee of EICL has personal file.

After the joining of the employee an induction program is conduct by P&A

department. Induction program may be for 3 or 4 days or may extend to one week. After the

induction program a report is submitted by the employee. This report is discussed wit HOD. It is

also reviewed by the vice president. If the vice president thinks that the induction program is

sufficient then the employee can join the work.

Training & development

Training is given frequently by the P&A department to the workers, staff and

officers. The department uses internal and external support for training employee. Annual

training program is conducted for workers, staff and officers. Every year the performance of the

last year is reviewed and plans for future is also made.

Performance appraisal Performance appraisal for workers is done in every quarter. The

workers are given a form in which 15 attributes like quality of work, quality of life etc. This is

verified by the HOD and the employee is given appraisal. There are three grades of employee’s

workers, staff and officers. The workers are on a long term settlement of for years with the

company. The company and employees come to an agreement about the salary, welfare activities

and incentives for fore years.

13

Chart 3

2.1.1 PRODUCTION DEPARTEMENT

GM-OPERATIONS

SM-OPERATIONS

M-M M.PDTM.ENGG M-EXPORTS

AM.PDTAM.ENGG AM.ELECT

EX.PDT

M.TRAINEE(JR.EX.GRAD

E

JR.EX.ENGG

PLANT

WORKERS

SIC/ENG

JR.EX.PDT

SR.S.PDT

MAINT.WORKERS

[ELECT]

A.S.ELECT

MAINT.WORKERS

JR.S.ENGG

14

Trade Unions

Thiruvananthapuram district clay welfare union(CITU)

Thiruvananthapuram district employees union(AICTU)

EIC Workers congress(INTUC-I)

EIC ?Factory employees union(UTUC0

Thiruvananthapuram district clay general employees union(AITUC)

EIC Mazdoor sangh(BMS)

EIC Technical employees council

PRODUCTION DEPARTMENT

INTRODUCTION

The Production department is the core of the company. The production process

takes place in various plants. Plants refer to the buildings used in connection with the

manufacturing, processing, labeling and storage of calcinated and hydrous clay. EICL has four

plants, first 3 plants a Veli and fourth plant at thonnakkal.

In Plant 1 the product is dried using rotary drier, which operates at high

temperature. Plant 2 is a spray drier which does direct drying. In plant 2, a spray drier called

Atomizer is used for obtaining products in the granular form. Both the plants are used for

producing hydrous clay..plants 3 has been shut down and Plant 4 at Thnnakkal is used for the

production of calcined clay.

Table: 4

15

Form of clay

Type of Clay produced Available Forms Plants

Hydrous Clay

(With Water Content)

Lamp, Powder,Spray dried I & II

Calcined Clay(Without water

Content)

Spray Dried,

Powder

IV

[Annual report]

Process

The various processes involved in the productions of hydrous and calcined at EICL re as follows:

1) Mining

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

excavators. The mined clay is loaded in tipper Lorries and transported to the plant, where they

are graded on color in a year.

2) Matrix Analysis

It mainly deals with analyzing and grading the clay matrix based on color.

Generally matrix is found in 3 colors- white, grey and pink. White color indicates pure clay.

Grayish tint indicates the presence of graphite and a pink color denotes iron (ferric) content. This

is done with the help of process control lab which decides the blend of grades that go into the

production process according to customer requirements.

3) Matrix Blending 16

The different grades of clay matrix are mixed in appropriate proportions as per

process control lab to obtain raw materials of desired characteristics according to customer

requirements.

The process control lab is responsible for deciding the quality of the matrix

coming from the mines. This is done with the help of the quality control department. It also

decides the blend of grades that go un to the production process according to the requirements of

the customers. This is based on the type of product to be produced on the particular day. It also

keeps an eye on the quality of the product during various stages of productions.

4) Blunger Operations

Here water is added to raw materials (clay matrix) to form the slurry. The clay

matrix in bulk form is fed to the machine called Bungler with addition of water to form the

required amount of slurry.

5) Classification

It is the process of separating the higher grid particles from he slurry. Through

this processes, 25 to 10 percent of sand gets removed.

6) Hydro cyclone Process

This is a two stage process. In the first stage the slurry after classification is

passed on to a 14” Hydro cyclone, where there is a primary vortex formation by which the

residue moves downwards to the nozzle and the secondary vortex moves the product upwards

and in the secondary stage passes in to the 3” Hydro cyclone where he remaining sand gets

removed. The first stage removes heavier sand particles and the second stage removes the

23

17

smaller grit particles. After removing the grit particles and other impurities the refined product in

the form of slurry is stored in storage tanks.

7) Bleaching

It is the process of separating the impurities like iron particles by subjecting the

refined to chemical separations. It’s chemically treating the refined impurities. Bleaching agent

used Hydrosulphite. Hydrosulphite bleaching of clay removes iron impurities and allows clay to

be bleached to perfect whiteness. Sodium Hydrosulphite transforms trivalent iron to bivalent

which, on subsequent acid treatment (by adding sulphuric acid which reduces the pH value to

2.5), dissolves and removes iron from the clay. To neutralize the acid content of the slurry and to

prevent iron from revamping. Corbonate and soda ash is added to the slurry and the bleached

slurry and the bleached slurry is then collected in a holding tank. Having refined the clay, it is

moved on to the final process i.e. drying.

8) Drying

Drying refers to converting the slurry which contains 65 percent water in to final

products in the form of solid (lumps 7 powder) through the following operations.

9) Screening

The bleached slurry (containing 12 percent salts) is subject to screening through

which graphite and other foreign materials are screened off and then pumped and assed through a

filter cloth.

10) Filter pressing

18

Here, a hydraulic filter is used to drain off the excess water. On passing through

the filter cloth, the slurry gets converted to cake from with 65 percent salts and 35 percent water.

The cake is collected and it is sliced using a cutter. Here on, the drying process varies depending

on the plant in which it is carried out. Plant 1 makes use of indirect drying through a rotary drier

and 2 does direct drying by means of a spray drier.

Chart: 4

PRODUCTION PROCESS

MINING

TRANSPORTATION

UNLOADING AS MICROHEAPS AS PER GRADE

MATRIX ANALYSIS

MATRIX BLENDNG

BLUNGER OPERATIONS

3” HYDROCYCLONE

CLASSIFIER OPERATIONS

STROAGE TANKS

14” HYDROCYCLONE

BLEACHING

OPERATION

BLEACHED STORAGE TANKS

PLANT 1 PLANT 2

19

Chart 5

Various

Processes in Plant 1 and Plant 2

DISPATCH TO

LUMP SILO

PLANT 1

SCREENING

OPERATION

FILTER PRESSING

OPERATION

PADDLE MIXTUREOPERATOIN

INDIRICT ROTARY DRINGOPERATION

MILLINGOPERATIO

N

DIRECTDISPATCH

ORDER SILO

BAGGINGMACHINE &

DISPATCH

PLANT 2

SCREENING

OPERATION

FORCED FILTRATIONFILTER PRESS

KNEEDINGOPERATION

STORAGE INVISCOCITY TANK

FEED PUMP

AUTOMATION

DRY POWDER TO STORAGE SILOS

50 KG BAGGING

MACHINE

1 TON JUMBO

BAGGING

DISPATCH

TRUNK

DISPATCH

TRUNK

20

2.1.3 COMMERCIAL DEPARTEMENT

The commercial department is concerned with purchasing and storing of

materials in English Indian clays ltd. The commercial department in EICL is responsible for the

procurements of raw materials, chemicals, spares and packing materials, vendor development of

imported materials.

Functions

Purchase of raw materials, chemicals, machines, machine parts, electrical iterms, spares

and other packing materials.

Develop new vendors for supply

Vendor evaluations and vendor assessment

Import of spares items and capital goods

To procure raw materials from own resources and also from other vendors

Purchase indent fulfillment

Inviting quotation for selecting vendors

Issue of work orders to other contractors like purchase orders etc.

Classification

Purchase department

Store department

1) Purchase department

21

The work of purchase department starts when it receives formal request from the

Storage Manager for purchasing certain materials. This request is known as Purchase

Requisition. On receipt of purchase requisition the purchase department places the necessary

order as Purchase order.

2) Stores department

Store department stores purchased materials, parts of equipment, chemicals etc,

the stores department keeps various records like receipt register, indent book, receipt bookstore,

and issue slip, etc. two plants are there over he firm, for both of those plants the company is

having one stores department.

Chart 6

ORGANIZATION STRUCTURE-COMMERCIAL DEPARTMENT

DGM-COMMERCIAL

MANAGER-COMMERCIAL

COMMERCIAL

EXECUTIVE-COMMERCIAL

EXECUTIVE-STORES

SENIOR SUPERVISOR

COMMERCIAL

JUNIOR ASSISTNT-

COMMERCIAL/TRAINEE

JUNIORSUPERVISOR-STORES

STORE BOY

22

Chart 7

FINANCE AND ACCOUNTS DEPARTMENTS

The finance and accounts department is responsible for the financial functions

and activities of the company and for the administration of the company’s fiscal policy. The

activities include budget preparation, monitoring the income and expenditure, MIS reporting

audits, tax administration updating the shareholders on the financial health of the company,

Maintaining accounting records, preparations of financial statements and ledger administration.

Activities

The main activities of the department includes

4.5.1 Budgeting

Sr.Mgr F & A

Account officer Jr.EXE system EXE- Accounts

Sr.ASSt

F & AASST

23

Individual budgets are prepared by the concerned departments and master budget

is prepared by t

he finance department. Budget is normally prepared 3 months in advance and has to be approved

by the chairman.

4.5.2 Financial Accounting

EICL has in-house accounting software and has standardized on chipper as their

development platform. The database used is FoxPro. Financial department maintains separate

ledgers for the three plants in EICL. The ledger for first plant is known as manufacturing ledger.

This includes office expenses and normal administration expenses. Ledger for the second plant is

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

4.5.3 Cost Accounting/MIS preparations

The EICL has installed MIS for better operation. It is maintained by the finance

department. It is prepared on the second of every month. This include various financial

statements like profitability statements, cost sheets, profitability statements for mines, store

trend, drawing power trend, debtors, age-wise analysis, cash flow and fund flow statements and

ratio analysis.

4.5.4 Audit Compliance

Both internal and statutory audits are conducted. Internal audit is done once in 6

months by varma and Varma. Statutory audit is done on a quarterly basis by M/S price water

house, Charted Accountants, Delhi.

24

The payroll prepared by the HR departments has to get approval from the finance

department has to get approval from the finance department before disbursing it.

The other functions include statutory compliances and fund management.

4.5.5 Ratio analysis

Analyzing financial statements, “is a process of evaluating relationship between

component parts of financial statements to obtain a better understanding of a firm’s position and

performance”. Ratio Analysis is one of the most used techniques of financial analysis. Financial

ratios can be used to analyze trends and to compare the firm’s financials to those of other firms.

Ratio analysis is used a tool for analyzing and interpreting the financial statements

of EICL. Its financial performance is studied through the calculation of different financial ratios

such as liquidity, profitability, and solvency ratios. Financial ratios can be classified according to

the information they provide.Following types of ratios are frequently used.

(i) Liquidity ratios.

(ii) Profitability ratios.

(iii) Activity ratios

a) Liquidity Ratios

The importance of adequate liquidity in the sense of the ability of a firm to meet

current/short-term obligations.

Current Ratio

It is the most common and popular measure of studying the liquidity of a firm.

30

25

Quick Ratio

It is also called the Acid Test Ratio or Liquid Ratio. This ratio establishes

the relationship between quick/liquid current assets and the current liabilities. Quick assets

mean current asset including stock.

The standard ratio is 2:1, but the EICL has maintained it at the ratio 1:1 this means the

current assets are used properly during the study period.

c) Profitability Ratios

Profitability is an indications of the efficiency with which the operations of the

business are carried on. Poor operational performance may indicate poor sales and hence poor

profits. A lower profitability may arise due to the lack of control over the expenses.

Profitability ratios can be determined on the basis of either sales or investments.

The profitability ratio in relation to sales is (a) profit margin (gross and net).

(b) Expenses ratio or operating ratio. Profitability in relation to investments in measured by (a)

return or assets, (b) return on capital employed, and (c) Return on shareholders’ equity.

i) Profit Margin

The profit margin, as a profitability ratio, measures the relationship between profit

and sales. As the profit may be gross or net, there are two type of profit margin; Gross profit

margin and Net profit margin.

ii) Gross Profit Margin

This is also known as gross margin. It is calculated by dividing gross profit by sales.

26

iii) Net Profit Margin

This ratio is also known as profit margin. This measures the relationship between

net profit and sales of a firm.

iv) Return on Capital Employed

The return on the capital employed is used as a measure of success of a business

in realizing these objectives. This ratio is also known as Return on investment. It is an overall

profitability ratio. It indicates the percentage of return on the capital employed in the business

and it can be used to show the efficiency of the business as a whole.

d) Turnover Ratios

The turnover ratios indicates the efficiency with which the capital employed is

rotated in the business.

The overall profitability of the business depends on two factors:

The rate of return on capital employed, and

The turnover, i.e., the speed at which the capital employed in the business rotates. Higher

the rate of rotations, the greater will be the profitability.

Turnover ratio indicates the number of times the capital has been rotated in the

process of doing business.

i) Fixed Assets Turnover Ratio

This ratio indicates the extends to which the investments in fixed assets contribute

towards sales. When compared with the previous period, it indicates whether the

27

investments in fixed assets have been judicious or not. It is given by (Sles0/(Fixed

Assts).

ii) Debtors Turnover Ratio

This ratio indicates the relationship between net credit sales and trade debtors. It shows

the rate at which cash is generated by the turnover of debtors. It is computed as follows:

2.1.5 RESEARCH AND DEVELOPMENT DEPARTMENT

EICL has a well-equipped R&D center that is recognized by the Department of Science

and Technology. It was started in 1992 with the view to provide technical advice to the

customers and to offer technical assistance including testing services to other department of

EICL. Its in-house research and development unit is known for stringent quality control and

developing tailor made products for the customer’s requirements.

The company has regular samples of various minerals taken at various stages of the

production process to analyze complete mineralogical and chemical composition by their

component team of R&D experts, enables them to recommend right products to the customers

and develop customized minerals if required.

Functions

Develop new product

Provide support to other departments

Provide application support to customers

Internal testing for each industry

28

Chart 8

Organization structure of R & D

HEAD OF THE

DEPARTMENT

PAPER

TECHNOLIGIST

RESEARCH OFFCER ASSISTANT MANAGER R & D

SKILLED WORKERS

RESEARCH CHIMIST

EXECUTIVE

SKILLED WORKERS

ECECUTIVE

RESEARCH CHEMIST

SKILLED WORKERS

RESEARCH CHIMIST

29

New Product Development

The R&D department has developed varieties of grades of clays of which the

important are the following:

Hydrous clay

Surface treated clay

Calcinated clay

Specialty clay

Process of Developing a New Product

Collect the feedback from the customer visiting them personally. The feedback is

about the needs of the customer needs of a product.

Translate the needs into a product specification.

Identify the various resources like the raw materials, technology etc. This is also

known as resources identification.

Laboratory Sample preparation as per the specification

Application test and if this is a success, pilot plant trial is made

First a small sample is given to the customer and then bulk quantity is supplied.

Plant trial at customer site.

Future plan of Action

Commercialization of Specialty Clays in new industries.

Development of delaminated clay.

Optimization of super-gloss quality to replace imported clay in paper coating

Develop cheaper and suitable process chemicals for reducing the cost of production

Chart 9

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2.1.6 QUAITY CONTROL DEPARTMENT

Quality Control department chart

Quality is the most important factor, which decides the ultimate fate of the firm and so it

has a very important role to perform in he organization. The Quality Control department in

QUALITY CONTROLIn CHARGE

[JUNIOR EXECUTIVEGRADE]

TECHNICALASSISTANT [JUNIORASSISTANT GRADE]

SHIFT CHEMIST[JUNORSUPERVISOR

GRADE]

LAB ATTENDANT[WORKERS]

31

EICL assures quality of its products till it reaches the hands of the customer. This adds to the

company’s reputation and goodwill. Quality control department takes samples from the plants to

check the following properties:

Quality

Grit

Brightness

Moisture

Viscosity, etc.

Functions

Checks the standard and quality of raw materials(clay) from mines and on its

delivery.

Assure proper processes in the production of raw materials

Checks the quality of finished product also. Quality of product and temperature of

the plant will be checked in each hour of production.

Great care is taken to maintain quality during packing and dispatching. Quality of

finished product is measured by taking 50g as sample from every 20n bags.

Objectives 32

Assurance of the quality of incoming raw materials.

Assurance of quality at various stages of production process.

Assurance of the quality of the end product and its packing

Quality Control

Quality control starts from mining process. The matrix is checked whether it

meets the stipulated quality. A sample from every load undergoes quarterisation process. The

matrix which does not meet the required standards is stored in stock yards. From stock yards it

goes from production process. Quality is checked during the production process. Samples are

taken at one hour interval and the quality is checked in the process control lab. If any fault comes

during the production process the quality control department suggests corrective measures. The

end product also undergoes quality checks. After inspection the product go to silos for

packaging. EICL maintains quality till it reaches the customer.

Quality Certification

The company has been certified to ISO 9002:1994 since 1996 and has now been

upgraded to ISO 9001:2000.

2.1.7 MARKETING DEPARTMENT

Organization chart of Marketing Department

DGM-MARKETING

CALCINED CLAY

MANAGER

MARKETING

HYDROUS CLAY EXPORTS

ASSISTANT MANAGER

EXPOPRTS

NORTH SOUTH WEST EAST SALES

ASSISTANTMANAGER

MARKETTING

EXECUTIVE MARKETTING EXECUTIVE

SALES

EXECUTIVESENIOR

ASSISTANT

JUNIOREXECUTIVE

JUNIORASSISTANT

JUNIORSUPERVISOR

SALES

33

Marketing Department

33

At EICL, the marketing department acts as a guide and lead the company’s

other departments in developing, producing, fulfilling, and servicing products and services for

their customers. Communication is vital and the marketing department typically has a better

understanding of the market and customer need. He goals and guidelines set by the marketing

department are in line with the vision and mission of the company. The top management is also

involved in and endorses cooperation by all departments in following and implementing the plan

and integrating a consistent message into all communication channels. At EICL there is a system

of preparing the Material Complaint Repot (MCR). MCR is a report prepared by the

marketing department which consists of customer complaints about the product. This will be

circulated among all the departments to know what the complaint about the product was. After

detecting the mistake, the complaint will be rectified with immediate effect.

Functions

Identify prospective customers

Conduct market survey and market research

Source orders and execute them as per delivery schedules agreed upon

Service the existing customers-servicing involves

Meeting customer’s schedules involves

Keeping track of customers’ stores and purchase department

Provide application support to customers in coordination with EICLR&D center and QC

department.

Attend and settle customer complaints 34

Analyze customer complaints and take preventive action against recurrence of similar

complaints

Market research

Marketing research is the systematic design, collection, analysis, and reporting of

data and findings relevant to a specific marketing situation facing the company. At EICL, the

head of department of marketing department conducts market research. Marketing department

also maintains a good Market Information Systems. It uses internet for collecting information,

interacting with customers, etc. The department goes in for product analysis and competition

analysis. Product analysis is required to find out customer’s preferences for the product.

Competition analysis is done to study the recent or proposed production, sales and pricing

policies of the competitors.

Agents

Agents are appointed by EICL because it is not possible for the company to cater

to the needs of all the customers who are situated at various cities which are far from their

branches. After satisfying the conditions, the appointed agent enters into an agreement with the

company which is signed both by agent as well as the Vice president and the marketing manager

of the company.

Agents are appointed as per the recommendation made by the branch office to the

management. Criteria for appointment of an agent are the following:

An agent should have a business in the potential area are in the particular industry.

The person to be appointed as the agent should be financially strong35

The agent should have sufficient technical knowledge to deal with the customer

problems.

The agent should have sufficient market as well as office infrastructure like fax,

Telephone, warehouse etc.

The person who is appointed as agent should have good contacts in the industry.

Element of Marketing Mix

a) Product

Marketing department ensure that the product is of the same grade as specified

by the customers. Currently, 35 grades of clay are available, each with 2 main specifications-

brightness and fineness content from 60-100 percent.

b) Price

The prices are based on what is affordable in the market. The pricing decisions are

taken by the marketing department after studying the market conditions and also comparing the

competitor’s price.

c) Place

The department bags orders from the customers and delivers finished produces on

time. Two major Indian ports of Cochin & Tuticorin are 200km from the works. Frequent

connections to all the major ports in the word are available from these ports.

Promotion

36

Since the company goes for Industrial marketing, the marketing department

concentrates on direct marketing as a means of promotion. It ensures that the company is well

represented in all seminars and trade exhibitions related with the industry. This includes

sponsoring 1-day programs, distribution of pamphlets, introduction of new products at

conferences etc. EICL has marketing offices in Mumbai and Delhi and has marketing agents in

Mauritius, South Africa, GCC, Yemen, Sri Lanka, Indonesia, Philippines, Jordan and New

Zealand.

e)Packaging

Packaging is done in laminated High Density Poly Ethylene (HDPE) bags. ECIL

products are generally packed in 50kg HDPE or Jumbo bags. They are also packed in 75kg or 60

kg bags as per the requirements of the customer

2.1.8 MAINTANANCE DEPARTMENT

Chart 10

Organisation Structure Department

HOD

Sr. Manager Operation

Manager Engineer

Executive

Staff

Workers

Assistant Manager

37

Maintenance department is a service department. The maintenance

department is responsible for the maintenance and modification of machinery. The main duty of

the department is to ensure that all the machines are available in proper working condition

throughout the year there by ensuring high quality production. The department has to align the

machines in a proper way and has to inspect them daily before the work starts and even during

the work. Maintenance department does maintenance for lot of equipments. The main

equipments that come under the maintenance perspective are:

Centrifugal pumps for transferring the clay slurry

Screens to remove oversized particles

Filter presses for the removal of water

Dryers for drying

2.1.9 PROJECT DEPARTMENT

The project department in EICL was started in the year 2001. The department is headed by

a chief project manager who directly reports to the COO. The rest of the staff in the department

has been on deputation from other departments. They have successfully accomplished the

following tasks.

1. Commissioning of a water treatment plant

2. Duplication of the rotary drier

3. Commissioning of calcined clay plant at Thonnakkal

4. Implementation of a sand treatment plant

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Chart 11

Chart of project department

]

Functions

1. Planning and budgeting of the projects

2. Control finalization

Overall coordination and monitoring of projects

3. Assuring quality of the equipments

4. Getting sanctions from the government

SENIOR MANAGERPROJECTS

ASSISTANTMANGER

CIVIL

ASSISTANTMANAGERPROJECTS

CIVIL ENGINEER

ON CONTRACT

PROJECTENGINEER ON

CONTRACT

CIVILSUPERVISOR ON

CONTRACT

ELECTRICALSUPERVISOR

ONCONTRACT

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CHAPTER – III

PRODUCT PROFILE

3.1 PRODUCT PROFILE

Table : 5

List of products

Type Grade

Industry

Very Fine Coating Clays Super coat Paper

Fine Coating Clays Hi gloss Paper

Normal Coating/Paint Grade Clays BCK Paint/paper/printing Ink

Coating/Filler Grades KCG Paper/Rubber

Rubber Grades KCG (Spray dried)

Rubber

Fiberglass Grades Fiberlin Fiber glass

Very Fine Calcined Clays Himafine Fiber glass/ paper Coating/paint/printer Inks

Fine Cacined Clays Himacot Fiber glass/Rubber/Soaps

Normal Coating/paint Grade Calcined Clay

Himatex Paper Coating/paint/printer Inks

Coarse Calcined Clay Himapol Paint/Ready Mix Concrete/PVC Compounding

Cement Grade Calcined Clay Himacem

Himablue

Ready Mix Concrete Cement/Ultramarine

3.2 MARKET POTENTIAL

Market demands sometimes impact the kaolin industry adversely. For example,

the majority of paper manufacturers use high speed blade coaters. To improve the efficiency and

throughout rates of these machines, as manufacturers are constantly seeking to increase operating

speeds. This places a demand on the kaolin industry to provide kaolin products with rheological

properties compatible with higher machine speeds. Since there is no technology for lowering the

viscosity of kaolin , archeology can only be improved by blending ores, which has its economic

and inherent limitations. Controlling rheological properties by blending crude ores or finished

products is costly because it requires additional systems, labor and energy. In addition, the

producer must operate and maintain more than one mine.

Businesses that sell into highly competitive markets, where profits are constantly

squeezed, do not generally produce technological innovations although still suffering from low

margins and thin profits, kaolin producers have been innovative, gaining better control of their

costs and improving product quality while creatively responding to market demands with high

brightness products. They have developed technologies for the production of affordably priced

high quality products and are taking long term optimistic view of the market place.

INTERPRETATION

The Gross profit ratio shows a decreasing tendency it started with 34.75% in

2002 and ends at 23.02% in 2006. From the annual statement it is clear that the gross profit and

the net sales has increased but the gross profit ratio has decreased this in due to increase in cost

of goods sold without any increase in Selling Price.

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The Net profit ratio shows a steady increase from 6.23% in 2002 to9% in 2005

this is due to the increase in net profit and sales due to high demand of the product by producing

high quality product. In EICL, the profit margin is low but EICL has a higher rate of return on

investments due to higher inventory turnover.

From the table it is clear that the Return on Capital Employed has increased

from 21.14% in2002 to 24.57% in 2006. This shows that the management is more efficient in

using the funds available.

Interpretation

In ECIL, the collection period is 45 days; it implies that debts are collected in 45

dat. Thus it is indicative of the efficiency of trade credit management. In EICL the turnover ratio

is higher and the average collection period is shorter, this means the better credit management

and the better the liquidity of debtors.

In EICL, the stock kept at very low during the study period. Not only the stock holing has below,

the Inventory Turnover Ratios have also been very low (ie. Not more than 30-35 days over the

year), indicate that EICL is in a position to sell the finished goods as quick as possible because of

high demand for the product.

The company as a whole registered a sales growth of 5 present with a turnover of

Rs.148.58 crore. This is primarily on account to dividend income.

During the current financial year the company made strategic investment in the equity

shares of Crompton Greaves Ltd with the approval of Securities and Exchange Board of

India. This segment earned revenue of Rs.208.38 lacks during 2004-05 as against

Rs.28.83 lacks in the previous year.

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CHAPTER IV

42

4.1 SWOT ANALYSIS

SWOT stands for strength ,Weaknesses, Opportunities and Threats of an organization.

The basic assumption of a SWOT analysis is that organization Must align Internal activates

With realities to be successful . SWOT analysis calls for Matching of capabilities and of

compact the threats to the business

Strength and Weaknesses are essentially internal to the organization and relate to

matters concerning resources and programmes within the company whereas Opportunities

and Threats

are external factors confronting a company such as new technologies , comtition etc.

The four factors can be described as follows

Strength : What an organization can do

Weakness : What an organization cannot do

Opportunities : Potential favorable condition for an organization

Threats : Potential unfavorable conditions for an organizationHere an attempt has been

made to assimilate the various Factors that have a positive and negative influence on the

performance of EICL. The strengths, Weaknesses , opportunities and threats of the company are

summarized as follows

Table : 8

Swot summary of EICL

STRENGTHS WEAKNESSES

An experience of about 40 years

Availability of rich mineral resource

Experiences and expertise of workforce

No waste products

Loyal workforce

Cordial relationship betweenWorkers and office staff.

Presence of 7 trade unions the Company

The Website of the company

Gives a vague idea regarding

The information of EICL.

They have to keep large inventorie

Because of the lack of supporting

Industries.

OPPORTUNITIES THREATS

Very few competitors.

Expansion of the market of the sand

New product development .

Export potential of the company.

Raw material availability last only

For 25 years (Assumption)

Innovation or entry of any

Alternative material to china clay

Entry of foreign competitors .

Societal criticism blaming pollution

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[Annual report of EICL]

CHAPTER –V

44

SUMMARY AND CONCLUTION

SUMMARY

EICL focuses on specific industry requirements to develop suitable grade of products

and provides application support to customers to achieve best result s from its products .It can

be more explained through the findings , suggestions of EICL . They are as follows ;

5.I FINDINGS

English Indian clays ltd is one the major manufactures of china clay

EICL enjoys 80 percent market share in India

In EICL ,all the ratios shows the healthy note ,ie ., the study period .The current

ratio , Quick ratio Was in a better position and at the standard level.

Good service provided for the customers.

5.2 SUGGESTIONS

New areas for application of china clay to be found out

The company should give due care to environmental and societal concerns

The company should start e-business.

website of the company needs to be updated with relevant details .about the

company

The company should develop new strategies for to attract more customers

5.3CONCLUTION

The organization study conducted at EICL enabled me to get hand-on experience of the

overall functioning of the company and to translate academic knowledge into practical

experience.

The visits to various departments were very informative and added to my awareness

about the organizational atmosphere. Face to face interviews with EICL officials helped to

understand the vital role played by each department and their functioning.

The clay industries are very important in providing needed employment in many areas.

As a clay mining, manufacturing, and processing unit, the company’s ability to sustain a steady

and time bound supply schedule coupled with its constant striving for excellence has given it

that extra edge over all its competitors in the field.

With its rich reserves, hi-technology, vast experience of its motivated employees and

deep commitment to quality, EICL is all set to take a place of pride in the twenty first century as

the preferred sources for the best companies in the business.

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