Project Report

Project Report
On
On
A member of Lalbhai Group
(
(
Aromatics Division
Aromatics Division
)
)
ON
The Impact of Currency AppreciatingOn the
export business
(3
rd
SEMESTER), 2007-08
SUBMITED TO; SUBMITED BY ;
DR. R.S. SHAH SREEJITH M.NAIR
ROLLNO= 38
DI= B

!

DECLARATION

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2
CERTIFICATE
I hereby, certify that this project report entitled Summer Training &
Training Need Identification submitted to Veer Narmad South Gujarat
University, Surat in Partial fulfillment of the requirement for the deree of
!aster of "usiness #dministration $!%"%#%& embodies the result of the
bonafied 'or( carried out by S)**+I,- !% N#I)%
I find the 'or( complete and of sufficiently hih standard to 'arrant its
presentation for the e.amination%
I further certified that 'or( has been carried out under my uidance%
/ate0 12 3 14 3 15


666666666666666666666
/r% )% S% Shah
$/irector&
3
Acknowledgement Acknowledgement
I am -ery grateful to "r( Ashutosh /ani. "r( ( "( 1ihani an+ I am -ery grateful to "r( Ashutosh /ani. "r( ( "( 1ihani an+
Atul Lt+( 2ho ha-e gi-en me this great opportunity to explore the Atul Lt+( 2ho ha-e gi-en me this great opportunity to explore the
sub,ect The Impact of Appreciating In+ian $upee On sub,ect The Impact of Appreciating In+ian $upee On
Company3s %rofitability& in +epth4 by pro-i+ing platform Company3s %rofitability& in +epth4 by pro-i+ing platform
through this ummer %ro,ect( through this ummer %ro,ect(
I express my special gratitu+e to "r( 'ha-al shah. "r( ( "( I express my special gratitu+e to "r( 'ha-al shah. "r( ( "(
1ihani . "r "u5eshbhai. "rs An,ana an+ "r Ni5hil. 2ho inspite 1ihani . "r "u5eshbhai. "rs An,ana an+ "r Ni5hil. 2ho inspite
of their pressing +uties an+ responsibilities ha-e sho2n genuine of their pressing +uties an+ responsibilities ha-e sho2n genuine
interest in pro-i+ing necessary gui+ance regar+ing concept clarity interest in pro-i+ing necessary gui+ance regar+ing concept clarity
of the pro,ect an+ ren+ere+ support at all stages of the stu+y( of the pro,ect an+ ren+ere+ support at all stages of the stu+y(
They al2ays assure+ me that 2ith Atul Lt+( pro,ect 2oul+ be a They al2ays assure+ me that 2ith Atul Lt+( pro,ect 2oul+ be a
goo+ learning experience for future( goo+ learning experience for future(
I 2oul+ li5e to than5s respecte+ $ofel institute of "anagement I 2oul+ li5e to than5s respecte+ $ofel institute of "anagement
stu+ies *api for gi-ing us this opportunity to gain some practical stu+ies *api for gi-ing us this opportunity to gain some practical
5no2le+ge in the area in 2hich 2e 2ill be pursuing our career( 5no2le+ge in the area in 2hich 2e 2ill be pursuing our career(
6urthermore. I 2oul+ also li5e to than5s respecte+ %rof(%an5a, 6urthermore. I 2oul+ also li5e to than5s respecte+ %rof(%an5a,
%atel. my Institute Gui+e 2ho supporte+ me a lot in this pro,ect %atel. my Institute Gui+e 2ho supporte+ me a lot in this pro,ect
by a+-ising me ho2 to prepare the report( by a+-ising me ho2 to prepare the report(
Last but not the least4 I than5 the entire team at the Atul Lt+( for Last but not the least4 I than5 the entire team at the Atul Lt+( for
their excellent cooperation an+ priceless information they ha-e their excellent cooperation an+ priceless information they ha-e
al2ays pro-i+e+( al2ays pro-i+e+(
8
E9E:UTIE SUMMARY E9E:UTIE SUMMARY
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(&"$r4r$"(&) "#$ 5.r(/%' d$4.r"3$&".- 0%&,"(/&' %&d$r".2$& (& "#$ (&"$r4r$"(&) "#$ 5.r(/%' d$4.r"3$&".- 0%&,"(/&' %&d$r".2$& (& "#$
ATUL AROMATI: DIISION , .&d "/ '"%d+ "#$ 1/r2(&) /0 "#$'$ ATUL AROMATI: DIISION , .&d "/ '"%d+ "#$ 1/r2(&) /0 "#$'$
d$4.r"3$&". d$4.r"3$&".
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"#$ r('2 . "#$ r('2 .
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TA1L# O6 CONT#NT
$(
NO
TO%IC %AG#(
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%A$T 8 7
G#N#$AL IN6O$"ATION
"IION *IION TAT#"#NT
1OA$' O6 'I$#CTO$
O*#$*I#9 O6 C0#"ICAL
IN'!T$:
1AC;G$O!N' O6 T0#
CO"%AN:
IN6$AT$!CT!$# O6 AT!L
A$O"ATIC 'I*IION
1AC;G$O!N'
7
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'#%A$T"#NTC
0!"AN $#O!$C#
'#%A$T"#NT
%$O'!CTION
'#%A$T"#NT
"A$;#TING
'#%A$T"#NT
6INANC# '#%A$T"#NT
D!ALIT: CONT$OL
'#%A$T"#NT
7?8=@
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@B8AE
=( %A$T F <
The Impact of Appreciating
In+ia $upee on Company3s
#xport 1usiness 4
#G%LANATION ON
C!$$#NC:
A%%$#CIATION
6ACTO$ IN*OL*#'
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7
A member of Lalbhai Group
Our "ission
Our "ission
e are a c!emical compan" committed to creating wealt! #or e are a c!emical compan" committed to creating wealt! #or
all o$r stake!olders% all o$r stake!olders%
e will strive #or leaders!ip in o$r c!osen prod$cts and markets e will strive #or leaders!ip in o$r c!osen prod$cts and markets
&" providing !ig! '$alit" prod$cts and services to o$r &" providing !ig! '$alit" prod$cts and services to o$r
c$stomers% e will seek pro#ita&le growt! &" innovative c$stomers% e will seek pro#ita&le growt! &" innovative
application o# science and tec!nolog"% application o# science and tec!nolog"%
e will p$rs$e e(cellence in all t!at we $ndertake and take steps e will p$rs$e e(cellence in all t!at we $ndertake and take steps
to contin$o$sl" improve% to contin$o$sl" improve%
e will take responsi&le care o# t!e environment aro$nd $s and e will take responsi&le care o# t!e environment aro$nd $s and
improve t!e '$alit" o# li#e in t!e comm$nities we operate in%) improve t!e '$alit" o# li#e in t!e comm$nities we operate in%)
8
1oar+ of 'irectors
,he "oard of /irectors of #tul 7td consists of eminent industrialists and
professionals 'ho8s 9hairman is #rvind 7albhai% Sunil S 7albhai is the !/
: 9*;, Samve 7albhai is the !/ and +adish 7 Shah is the *.ecutive
/irector%
1oar+ of 'irectors
Name tatus Occupation
!r # N 7albhai Non<e.ecutive 9hairman 9hairman, #rvind
!ills 7td
!r S S 7albhai !anain /irector : 9*;
!r + 7 Shah *.ecutive /irector
!r N N =adia Independent Non<
e.ecutive /irector
9hairman
"ombay /yein
: !anufacturin
9o 7td
!r G S Patel Independent Non<
e.ecutive /irector
>ormer 9hairman
Unit ,rust of India
/r S S "aijal Independent Non<
e.ecutive /irector
>ormer 9hairman
: 9*; I9I
9ompanies in
India
!r " S !ehta Independent Non<
e.ecutive /irector
Partner "ansi S
!ehta : 9o
!r - S Shah Independent Non<
e.ecutive /irector
>ormer 9hairman
: !anain
/irector Indian
Petrochemicals
9orporation 7td
!r S # 7albhai
!anain /irector
!r S ! /atta Independent Non<
e.ecutive /irector
>ormer 9hairman
-industan 7ever
7td
!r ? #parajithan Independent Non<
A
e.ecutive /irector
!r ) # Shah $#lternate
/irector&
Independent Non<
e.ecutive /irector
Sr Partner of !@s
9ra'ford "ayley
: 9o%, !umbai
!0
Chemical In+ustry Outloo5
,he Indian 9hemical Industry has ro'n at a 9#G) of 4A durin
the period from B11C to B11D% ,he industry in India is framented
'ith fe' lare companies% ,here are over E,E11 chemical
manufacturers : capacity utiliFation of Indian plants is lo'er at
51A, 'hen compared to that of 9hina and +apan 'here it is hiher
at 4D<21A%
,he sector is a cyclical, capital<intensive 'here pricin po'er of the
players is under constant threat% Several bilateral >ree ,rade
#reements $>,#s& 'ith various #S*#N countries have been
concluded or are under neotiations% ,hese are aimed at phasin
out trade barriers to create a reime of free trade and this may
increase the pricin pressure on the Indian 9hemical Industry%
,he bul( chemicals business sement continues to be cyclic in
nature% -o'ever, the automobile and electronic sectors are
'itnessin ro'th and this affords an opportunity for the ne'er
intermediariesG business sement and Indian epo.y mar(et is also
ro'in rapidly%
,he (ey success factors pertainin to the industry are economies of
scale, product quality and reliability and development of ne'
products and application processes%
!!
Chemicals Industry
,he Indian 9hemical Industry has ro'n at a 9#G) of 4A durin
the period from B11C to B11D% ,he industry in India is framented
'ith fe' lare companies% ,here are over E,E11 chemical
manufacturers : capacity utilisation of Indian plants is lo'er at
51A, 'hen compared to that of ?orea and +apan 'here it is hiher
at 4D<21A% !ajor international companies such as "#S>, /o'
9hemical, "ayer and /u Pont have operations in India%
,he sector is a cyclical, capital<intensive sector 'here pricin
po'er of the players is under constant threat% Several bilateral >ree
,rade #reements $>,#s& 'ith various #SI#N countries have been
concluded or are under neotiations% ,hese are aimed at phasin
out trade barriers to create a reime of free trade and this may
increase the pricin pressure on the Indian 9hemical Industry%
,he bul( chemicals business sement continues to be cyclic in
nature% -o'ever, the automobile and electronic sectors are
'itnessin ro'th and this affords an opportunity for the ne'er
intermediariesG business sement and Indian epo.y mar(et is also
ro'in rapidly%
!2
Industry Analysis
,he 9hemical industry constitutes an important sement of the chemical
industry in India% ,he Indian 9hemical industry is today totally self<
sufficient 'ith a majority of its inputs manufactured locally% India is
currently producin all varieties of synthetic 9hemicals and intermediates
and has a small presence in the natural 9hemical% ,he subcontinent has
emered as a lobal supplier of 9hemicals and dye intermediates,
particularly for reactive, acid, vat and direct dyes% ,he mar(et for
9hemical is dependent on te.tiles, in particular demand for polyester and
cotton determine the demand for certain types of 9hemicals% ,he te.tile
industry is currently buoyant and the mar(et is ro'in steadily% ,here is a
shift in the usae of polyester and polyester blended fabrics and as a
result demand for disperse dyes are at a pea(%
Market Size and Major Players
,he mar(et siFe of the Indian 9hemical industry is IN)CHC billion includin
the e.ports of IN)DB billion in B11H<1D% ,he e.ports doubled from IN)BE
billion B111<1Gl to IN)DB billion in B11H<1D% "y B1C1, the e.ports are
e.pected to reach IN)CBC billion% India currently produces CI1,111 tonnes
and 5DA of the production is e.ported to CD countries li(e0 the US#,
Germany, Netherlands, Italy, U?, Spain, ,ur(ey, S'itFerland, Indonesia,
?orea, -on ?on, ,hailand, Sinapore, +apan and ,ai'an% ,he per
capita consumption in India is very lo' D1m compared to the 'orld
averae of H11 m% ,e.tile, cotton and polyester consume more dye
compared to the other fabrics and in turn, the ro'th of disperse, direct
and reactive dyes is e.pected to increase due to the usae of these
intermediates in cotton and polyester% "y B1C1, the contribution of India in
the lobal 9hemical mar(et is e.pected to reach 4<C1A 'ith an increase
of B1A per annum% ,he major players in the oraniFed sector are #tul
Products, +aysynth /yechem, !ehmani ;ranics, 9olorte., Sudarshan
9hemicals, 9olour 9hem, 9iba Speciality, "#S>, 9lariant India, I/I and
!3
!etrochem% ,he Indian companies account for EA of the 'orld dye
production%
Cometiti!e Ad!antages
J 7abour0 India has trained manaerial : plant personnel 'ith
entrepreneurship s(ills includin five decades of e.perience in the
industry%
J )a' material0 ,houh the cost of the ra' materials is D1A of the
production cost, but the e.istence of all the ra' materials is located in
pro.imity at plant locations li(e !aharashtra and Gujarat% #n additional
cost<effective factor benefit is the reduction of import duties that 'ould
decrease the ra' material cost%
J C11A >/I permission and the matured chemical *nineerin industry
that is attractin most of the !N9s 'ith the benefit of producin lo' end
products
"ortunities
9onstant technoloy up radation to provide value added products0
,echnoloy is the (ey to manufacturin and the Indian industry is
framented 'ith very fe' players handlin the oraniFed sector that
is e.pected to ro'%
*nhanced quality of products at reduced prices0 ,he Indian
manufacturers have to concentrate on the quality of products at
competitive prices in order to compete 'ith leadin countries li(e
9hina, +apan, Indonesia and -on?on% ,he developed countries
production share in the mar(et has reduced from EDA to D1A and
is e.pected to further reduce in the future% ,he adoption of
technoloy 'ill increase the quality of products and production%
!8
Improve economies of scale0 /ue to five decades of e.pertise in
the 9hemicals industry, players operatin in the field must adopt
economies of scale to compete 'ith other countries%
C% Product and service differentiation
B% /evelop 'orld class Infrastructure
I% International trade procedures to be implemented
H% "uild Indian brand imae overseas
/eveloped countries are loo(in at outsourcin dyes from
developin countries due to more and more production facilities are
bein shifted to #sian countries li(e India and 9hina%
!?
#ackground of the Comany
#tul 7imited, incorporated in the year C2H5 by !r% ?asturbhai 7albhai in
technical collaboration 'ith #merican 9yanamid of US#, is enaed in
manufacturin of 9hemicals, aro chemicals, intermediates, polymers,
G#romatics, Pharmaceuticals, bul( drus and specialty chemicals% It is one
of the oldest chemical company in the country% ,he plant of #7 is located
at #tul in an area of CBHI acres% #t present, the company is manufacturin
more than I11 products 'hich are mainly used in various industries viF%
ariculture, frarance : flavours, tyre, te.tiles, paper, Pharmaceuticals,
aerospace, construction, paints etc% ,he 9ompany has mainly si. activities
viF% #rochemicals, #romatics, "ul( 9hemicals : Intermediates, 9olours,
Pharmaceuticals : Intermediates, and Polymers, functionin
independently as profit centers%
!@
#usiness Model and Cometiti!e Analysis
#tul 7td% is a pioneer in the 9hemicals industry and has over five decades
of e.perience in the chemicals industry, 'hich has helped the company to
sustain itself throuh several business cycles% ,he 9ompany has focused
on ):/ in order to develop ne' products and applications and has
diversified its product portfolio a'ay from 9hemicals over the years%
9hemicals no' contribute only IIA to the turnover of the company% ,he
company is no' in the process of movin up the value chain in each of its
business lines%
,he company has acquired technoloy for manufacturin phosene<based
arochemicals 'here the marins are hih% It plans to focus on
formulations in arochemicals 'here the marins are even better% It has
commenced manufacturin 9hemicals 'ith hiher marins includin vat,
reactive and disperse dyes% ,he 9ompany has interated facilities 'ith in<
house eneration of po'er, 'hich enables it to reduce its cost of
production%
It has built its brand name throuh consistent quality of products, reliable
delivery schedules, ood technical service support and post sales service%
It has set up a 'ide mar(etin net'or( and has set up subsidiaries in
forein countries in order to e.port to those countries% ,he company is
'ell placed in terms of technoloy as it has absorbed the technoloy from
the 'orld leaders throuh its joint ventures%
!7
$inancial Analysis
,he net sales of the company have ro'n at a 9#G) of around CC % over
the last three years, 'ith e.ports ro'in at a 9#G) of around CIA over
the same period% #fter a do'nturn in performance in B11I<1H, the
company has sho'n consistency in its performance and is li(ely to
maintain the improvement trend in the comin years% ,he 9ompany has
sho'n sinificant improvement in operatin profit durin >K1E mainly
driven by improved performance of #romatics and "ul( 9hemicals and
intermediates division mainly due to ro'th in volume and better
efficiencies% ,he performance of Polymers improved due to introduction of
value added products% -o'ever, the profitability of #rochemicals and
9olours division sho'ed decline mainly due to hih costs and pressure on
sellin prices respectively%
#s per first 2 months financial for >K15, the operatin marins of the
company are in line 'ith the estimates as 'ell as the industry averae and
are li(ely to follo' the same trend%
%isks and Mitigates
,he 9ompany is in the business of 9hemicals% Prices of some of
these chemicals are cyclical and remain lo' for lon periods% ,he
9ompany constantly (eeps ta(in up improvement projects to
mitiate the impact of such movements in prices%
*.ports, 'hich constitute more than D1A of the companyGs turnover
has the inherent ris( of fluctuations in the e.chane rates%
9ompany is reneotiatin 'ith its overseas buyers based in *urope
for future sales to be billed in *uro instead of US/% ,he company is
also hedin its US/ by cross currency s'aps to reduce further
losses on account of )upee appreciation%
!8
Product ;bsolescence ,he company has established a state<of<
the<art ):/ center and is proressively increasin its ):/ budet%
,he company throuh product diversifications and increased
dependence on ):/ proposes to mitiate the product
obsolescence ris(% ,he company had already introduced various
ne' products in the mar(et and is in the process of e.pandin the
capacities of those products and introducin some more
specialiFed products%
Management Analysis
,he company is manaed by a team of professionals headed by !r% Sunil
S 7albhai, 'ho is the !anain /irector : 9*; of the company% !r% Sunil
7albhai has been associated 'ith the chemical industry for over t'o
decades and has uided the company throuh the structural chanes that
the chemical industry has underone durin this period% ,he senior
manaement includes four Presidents holdin professional derees in
chemical enineerin% ,hey have been able to proactively chane the
product mi. of the company over years and have been able to sustain the
ro'th of the company durin the lean periods that the chemical industry
has passed throuh durin the last decade% ,he company has
successfully absorbed technical (no'<ho' throuh its various joint
ventures and has been able to carry on the respective businesses
profitably even after the overseas partners sold their sta(e to #7 and have
e.ited these +Vs%
,he senior manaement has initiated a number of steps to improve
profitability% ,he company has started manufacturin Vat dyes, 'here the
marins are hiher than the other types of dyes li(e aFo and sulphur dyes%
,he company introduced various ne' products viF% )esorcinol, //S,
/apsone, etc to reduce its dependence on the colours division 'hich 'as
earlier major contributor to the turnover of the company%
!A
Infrastructure at Atul
#tul 7td has made sinificant contributions to the development of
infrastructure in #tul and nearby villaes% ,he 9ompany has already built
over C111 houses, B schools, a medical centre, a sports comple., an open
air theatre and a community centre%
#tul 7td is self<sufficient in its requirement of electricity achieved throuh
three state<of<the<art captive po'er plants% ,he 9ompany is also in the
process of rene'in its fifty year 'ater areement 'ith the overnment of
Gujarat%
Cati!e Po&er 'eneration
#tul 9omple. is self sufficient in meetin continuous and uninterrupted
steam demand for all its chemical manufacturin processes and it also
meets more than 2DA of electricity demand for its housin colonies% #t
#tul 9omple., there are three captive po'er plants consistin of coal@oil
fired boilers and turbo enerator sets havin capacity ranin from B !=
to C4 !=% ;ver and above this, diesel enerator sets have been installed
so as to facilitate the start up from total blac( out% #ll boilers and po'er
20
eneration sets have been desined to meet the strinent pollution norms
as fi.ed by Gujarat Pollution 9ontrol "oard%
(ffluent Treatment
,he industrial effluent is fully treated in a 'ell<desined state of art effluent
treatment plant% ,he industrial effluent is dischared throuh a H (m
underround pipeline for ultimate disposal into the estuarine Fone of river
Par% ,he domestic effluent is treated and disposed off in a Septic ,an( @
Soa( Pit system%
/evelopment efforts to minimiFe the eneration or to recycle @ reuse the
effluent are a continuous process at #tul 7imited% ;nly after e.haustin all
these options, the 'aste'ater is ta(en to Central Effluent Treatment Plant
$9*,P&% ,his 9*,P desined by /eremont $India& 7td%, has a capacity to
treat 20,000 m3/day%
#tul has developed a site for disposal of solid 'astes by land fillin% ,he
site 'as selected on the basis of a technical *nvironment Impact
#ssessment $*I#& study done by National Productivity 9ouncil $NP9&%
NP9 also has iven the detailed desin of the site% ;n the basis of this
technical *I# and the desin, site for ,S/> 'as approved by the state
level committee and Gujarat Pollution 9ontrol "oard%Snapshot of >acilities
,he dimensions of the infrastructure facilities at #tul 7tdGs manufacturin
sites at #tul and #n(lesh'ar are iven belo'%
'escription
!nits of
"easurement
Atul
ite
An5lesh2ar
ite
7and #rea #cres CBD1 II
*ffluent /rainae System ?ilometres ED GI/9
drainae
system
*ffluent ,reatment Plants 9ubic
!etres@/ay
I1111 BD11
Incinerators Numbers H NI7
9aptive Po'er Plant $installed !ea'atts B2 B%H
2!
capacity&
*lectricity 9onsumption !illion
Units@!onth
CI C
Steam Generation $installed
capacity&
!etric ,on@hour BC5 IB
=ater Storae 9ubic !etres B
million
CHD1
-ousin -ouses CC11 IE
%esearch & )e!eloment

,he primary thrust of #tul8s )esearch : /evelopment efforts is to develop
products and processes that are efficient, safe and environmentally
friendlyL and 'hich cater to demands of lobal and domestic customers%
Process and product improvement are also (ey activities of the ):/
roup% In order to respond quic(ly to mar(et demands, every business unit
$#rochemicals, #romatics, "ul( 9hemicals and Intermediates, 9olors,
Pharmaceutical Intermediates, and Polymers& has its o'n )esearch :
/evelopment team% ,he central )esearch : /evelopment roup provides
common facilities li(e pilot plant, certain analytical instruments, technical
library etc%
;ur entire )esearch : /evelopment team consists of /octorates and
Graduates% =e subscribe to several Indian and international journals and
maaFines% =e are 'ell equipped 'ith analytical instruments such as
-P,79, G9!S, /S9, atomic absorption spectrophotometer, -P79 and
G9% =e have established lin(s 'ith certain 9SI) laboratories li(e II9,,
-yderabadL N97, PuneL and 9S!9)I, "havnaar 'ith the primary
purpose of technoloy transfer and sponsored research prorammes%
/urin B11H<1D, the )esearch : /evelopment team developed
appro.imately 51 processes and the 9ompany commercialiFed M H1
processes% 9lose to I1 processes 'ere improved 'ith respect to ra'
material and utility usae, batch cycle time and 'aste reduction% Several
ne' methods of analysis $=et 9hemistry, -P79, G9& 'ere developed%
22
Aromatic )i!ision
#romatics the erst'hile Gujarat #romatics 7td%, a company under financial
stress, 'as ta(en over by #7 in C24D and 'as formed as aromatics
division of #7% It is one of the larest manufacturers of 9resols and their
derivatives in India% ,hese products are used in the manufacture of
flavors, frarances, cosmetics $sunscreen lotions&, bul( drus and
antio.idants% ,he Para<cresol capacity at #7 is C1,111 tpa and the
company is plannin to increase it to CD,111 tpa% ,he 'orld requirement
for Para<cresols and its derivatives is D1,111 tpa and #7 already has B1A
share of it% #romatics /ivision is one of the 'orld8s larest manufacturers
of Para anisic aldehyde, Para cresol and Para anisic alcohol, supplyin its
products to diverse industries, includin cosmetics, flavours and
frarances, bul( drus, dye intermediatesL and plant and animal micro<
nutrients%
,he /ivisionGs manufacturin site is located at #n(lesh'ar in Gujarat,
about ID1 (m north of !umbai%
#romatics has strenthened its lobal competitiveness throuh process
innovation and has developed ne' tools to aue customers8 needs%
,hrouh collaborations 'ith universities and research institutes, the
/ivision ets access to ne' (no'lede and technoloy constantly%
# brief summary of various products and their respective applications is as
follo's0
23
Product% Group #pplication
Fp<9resol, o<9resol #ntio.idants, #rochemicals, "ul( drus,
)esins
p<9residine /ye intermediates
p<#nisic aldehyde, p<#nisyl
alcohol
"ul( drus, 9osmetics
p<#nisyl acetate, p<9resyl
acetate
*lectroplatin
p<9resyl methyl ether >lavour : >rarances
p<!etho.yacetophenone
!ananese sulfate #rochemicalsm, #nimal feed
!ananese carbonate 9eramics
Sodium Sulfite Paper
28
2?
*uman %esource )eartment
In the modern 'orld, it is not possible for an e.istence of any business
oraniFation 'ithout personnel department% Personnel department 'or(s
li(e a -eart in the body of oraniFation%N It is the most important area of
any business oraniFation% Personnel manaement is an art of ettin
thin 'or( done throuh other people% In any firm, 'e can find the priority
of personnel department% Personnel department is an internal part of an
oraniFation% Personnel manaement enerally deals 'ith plannin,
oraniFation, directin and controllin the function of producin,
maintainin development and utiliFin 'or( force of the business
enterprise to help for achievement of the objectives%
,he manaement of man is very important in any oraniFation%
!anaement means to et 'or( done throuh the people personnel
manaement totally covers this definition because enterprise runs by the
people as it is rihtin says that manae your men, men 'ill manae your
'or(% !en are a heart of unit and ma(e oraniFation livin% ,he success of
unit mainly depends on the personnel functionin in the oraniFation%
It is very important branch of (no'lede most of the proressive
oraniFation havin separate department appointin the e.pert as a
personnel manaer% ,he success of any oraniFation depends upon
'or(ers and therefore it is considered as mind your men and men 'ill the
other entire thin%
;btainin involves such activities as recruitment selection, manpo'er,
plannin 'hile maintainin involves performance appraisal, employee8s
rievance, employees status factor 'ith respect to 'aes, hours, 'or(in
conditions and relation amon labour and manaer%
2@
"+jecti!es
,o manae the personnel effectively
,o ensure motivated and committed 'or(force for the
oraniFation
,o maintain harmonious relation bet'een the employee and the
oraniFation
,o provide effective services to other departments, etc%
,o provide trainin : development to enhance promotional,
behavioral and human s(ills%
"%'AN"'%AM "$ P(%S"NA, )(PA%TM(NT
27
M-P-./,.A%NI
01-P *%2
S-S- .".,(
0'-M2
T%N & )(1,"P
M"NIS*A
SIN'*
0Performance
araisal 2
SI% AS*IT"S*
0%(C%/ITM(NT &
S(,(CTI"N2
SAN3A4 S"NI
0*% MANA'(% A(%"MATIC )I1ISI"N2
3A4(S* PAT(,
0ASST MN' *%2
%akesh Chauhan
0,A"/% 5(,$A%(2

TIM( .((PIN' "$$IC( 0T."2
#,U7 7,/% -as a very effective time (eepin system% ,he ,?; is situated
at the main ate of the company and is responsible for maintainin the
!uster )oll ovary department and for every shift% ,he ,?; consists of
three staff members, t'o for attendance recordin and one for special
purpose%
,he attendance recordin system $#)S& is fully computeriFed, 'here each
permanent employee is iven Punch 9ard, 'hich needs to be punched
'hile% In 9omin and ;ut oinN by each and every staff 'or(ers, staff
members and manaement members e.cept the manain director% ,he
card is detailed 'ith employee name, date of joinin, employee number,
blood roup and a code for punchin% >or the attendance of temporary
and trainee 'or(ers the company has attendance ta(in card 'hich is
operated manually%
,he special purpose activity includes record of P>, distribution of uniform,
shoes, etc% Superannuation, Gratulty and clearance form%
The T." maintains !arious records like6
7evel )ecord
Promotion )ecord
)eistration : )ecruitment )ecord
;vertime )ecord
*mployee history )ecord
#bsenteeism )ecord
*arly Goin and 7ate 9omin )eport
Positive@neative )eport
#ll types of forms li(e advance Salary leave ,ravel #llo'ance,
!edical 7oans etc%
28
Ad!antages of Attendance %ecording System6
#s the system is fully computeriFed, the chances of mista(es are less or
nil as compared to manual 'or(% Serves as a basis of fi.in 'aes and
salaries% -ih rate of absenteeism on the part of 'or(ers can be (no'n at
the correct time and reported to concerned department%
*/MAN %(S"/%C( P,ANNIN'6 0*%P2
B!anpo'er plannin is process of determinin and ensurin that the
oraniFation 'ill have an adequate number of qualified personnel.C
T*( C"MPAN4 $",,"5S T5" APP%"C*(S "$ *%P
072 To )o&n Aroach 8
In case of ,op /o'n #pproach the ,op !anaement ma(es the study of
-uman )esource Plannin mostly for the e.pansion of business% ;ver
here uncertainty for the business li(e retirement, old ae, ill heath etc of
the employees are predicted before hand and plannin reardin
manpo'er is done%
Such plans can be
<Short ,erm0 for ne.t B years
<!edium ,erm0 bet'een B to D year
<7on ,erm0 more than D year8s

092 #ottom / Aroach8
;ver here the lo'er level people ives feedbac( to the top level% ,he
lo'er level discusses 'ith the top level reardin the manpo'er plans and
the top level tries to fill up the vacancies% "oth this method re used in
#,U7 7,/, but the "ottom up #pproach is iven more importance than the
,op /o'n%
2A
P(%$"%MANC( APP%AISA,
Performance appraisal is the process of evaluatin the employee8s
performance on the jobs in the terms of the requirements of the job%
#,U7 7,/ oes for an effective performance #ppraisal system, as this is
the time to remind that only hard 'or( 'ithout achievin correspondin
results cannot improve the balance sheet of the company, nor can it
contribute to'ards the company8s
GUI/*7IN*S suested for the success of revie' meetin $meetin
conducted before performance appraisal Proramme&L
>i. the meetin in advance
9reate a rela.ed friendly atmosphere
"e prepared to listen, appraise also has a point of vie'
#void interruption and arumentsL have patience
?eep contents of meetin 9onfidential
/o not promise any promotion, financial incentives or any re'ards
,he riht frame'or( to the 'hole process of appraisal is the corrective
implementation of Performance !anaement System $P!S& and the
Individual /evelopment !eetins $I/!8s& the company uses both
traditional as 'ell as the modern methods of #ppraisin%
30
7- T%A)ITI"NA, M(T*")
$orced distri+ution method
,he ratin provides by the #ppraiser to the #ppraise is based on the major
contribution and the appraiser% In the company, the barin is on the major
contribution and the quality of the same% ,he appraiser 'hile ratin the
same
,he appraiser 'hile ratin uses the follo'in ratin criteria0
$ATING IN'ICATO$

In results do not meet the oals at all and are belo' acceptable standards
$Improvement needed&
S results fall slihtly belo' basic oals, but not are in unacceptable
cateory, scope for hiher $satisfactory& contribution
G results meet required achievements levels and on fe' occasions even
e.ceed them%
$Good& VG results fully meet and at several times e.ceed sets oals and
that appraise had
,o counter difficulties in $very ood& achievin the oals@actions
* In eneral, results consistently far e.ceed oals in spite of difficult
environmental factors, the $e.cellent& appraise al'ays operates at hih
performance level%
B& C%ITICA, INCI)(NTS
,he 9ompany uses critical incidents !ethod 'here the 'or(ers
performance is appraised in terms of some events that occur in the
3!
performance of the )ate8s job% "ut is missed out in the appraisal form%
,he appraiser (eeps a records and increments%
MANA'(M(NT #4 "#3(CTI1( M(T*")
>or appraisin the -ih ;fficials, the company uses the !"; technique%
;ver here, the manaement first sets the overall objectives of the
company and later they communicate those oals to the ;fficials% ,hen a
ood amount of /iscussion ta(es place bet'een the manaement and the
;fficials reardin the ;bjective setup before and also the 'ays and
methods of measurin employees%
,his discussion leads to adoption of either the received or the same or
completely chaned objectives, 'ith the 'ill of both the parties% ,his is
+oint Goal Settin bet'een the !anaer and the Subordinate% 7astly, the
employees 'ould try to achieve their objectives 'ithin the iven period
and also feedbac( to the maner about their Goal Proress% ,his method
minimiFed the *.ternal control and ma.imiFes Internal !otivation%
Performance #ppraisal leads to,
C% Grade chane%
B% !onetary re'ard and even%
I% /ouble increments%
T%AININ' T" S(C/%IT4 STA$$
,he =or(ers in the security : >ire /epartment are trained throuh =et
and /ry /emonstration% ;ver here, =et ,rainin means trainin throuh
practical application by the >ire ;fficer% =here /ry demonstration is done
throuh verbal instruction 'ithout operatin the equipment8s%
,he Security /epartments !ajor #chievement in this company is that so
far no bi accident has come up in the company8s history%
32
CANT((N A)MINST%ATI"N
7abor 9ontractors are Private authorities 'ho brin labor on temporary
basis% ,hey are iven a P%>% code and insurance Policy if they brin 2 or
belo' 2 employees% "ut license is needed for brinin more than 2
employees% If a contractor brins more than 2 employees 'ithout any
license, he 'ould be chared penalty or terminated%
*ven thouh the 9ontractor #dministration CBA is contributed by the
employee and otherCBA by the 9ontractor 'hich is reimbursed y the
company later% ,he 9ontractors are benefited as they et BDA of the
'ae from the company as commission, from 'hich C1A is profit and CDA
is the 7abor liability%
'(N(%A, S(%1IC(S
It includes0<

C% Postal Services
B% ,ic(et )eservation
I% )eception etc
H% 9ourier Services%
C","N4 MAINT(NANC(
-ousin >acility is iven to all the permanent employees of the company
on the basis of their position in the oraniFation% ,he rates of the -ouses
are provided at a subsidiFed amount and the usually deducted from the
Salary of the employees% ,he !ajor >acilities in this 9olony are
recreational facilities for families and library% Schools, par(s etc for
children%
33
INT(%NA, C/ST"%M(% SATIS$ACTI"N
#ccordin to #,U7 7,/ employees are the first customer of the company,
and if they are satisfied, everythin 'ill o on the riht path% If the
employees are not satisfied% It 'ill adversely affect the productively%
Internal customers refer to the employees of the company% #,U7 7,/
ives more emphasis on internal 9ustomer Satisfaction% It is the >irst
9ompany in South Gujarat, 'ho loo(s after this concept% ,he personnel
department ives a form to the employees for their feedbac( 'ith respect
to,
C% +ob Satisfaction
B% =or(in 9ondition
I% -ousin >acilities
H% =aes : Salary $timin of payment&
D% ;ther >acilities li(e Par(in, 9anteen, !edical, Safely etc%
>orm the above form, if the employees of the company are dissatisfied,
then the Personnel manaer personally meets that particular employee
and discuss reardin the matter% If he finds that his point needs to be
ta(en into consideration, then further action may be ta(en%
IN)/ST%IA, %(,ATI"NS
Industrial relation continues to be harmonies 'ith the company sharpenin
its focus on productivity and discipline% ,he name of the sinle ,rade
Union Prevailin in this company is the 9ibatul ?amhar sanh%N ,his
Union al'ays ives constructive ideas to the manaement 'henever they
need for% "ut sometimes they resist to ideas suested by the 9ompany
'hen they are aainst the 'or(er interest%
38
In this company it is enerally observed that the problems and rievances
are solved throuh mutual understandin% ,here are no sinle day stri(e
observed in the 9ompany since its first day%
5(,$A%( ACTI1ITI(S
/niform & shoes, #,U7 7,/ provided to its employees every year% >or
the fire and security department employees fire proof uniforms are iven%
9ompany provides different types of Shoes to its 'or(ers and office staff,
for the protection of 'or(ers feet aainst haFardous and flammable
chemicals%
Tra!eling: In #,U7 7,/, the transport and travelin section is 'or(in
under he personnel /epartment, ,he function of this department are as
under 0<
,ransport facilities li(e )ail : #ir boo(in, -otel "oo(in, ,ransport
>acility, Guest -ouse #ccommodation, 7unch and /inner #rranement for
the visitors and uest, ,ransportation of oods 'ithin the >actory
Premises, *merency ,ransport facility in case of disaster or accident
either in the factory premises or in the colonies, It also includes 9anteen
#dministration, !edical >acility, -ousin, 7oc(ers etc as e.plained above%
3?
%(C%/ITM(NT
)ecruitment is the process of searchin for prospective employees and
stimulatin them to apply for the job in the oraniFationN%
C"MPAN4;S S"/%C(S "$ %(C%/ITM(NT
INT(%NA, S"/%C(S
< ,ransfer%
< Promotion%
(<T(%NA, S"/%C(S
< 9ampus )ecruitment%
< Placement 9onsultant%
< *mployment *.chane%
< 7abor 9ontractors%
< #dvertisin #encies%
INT(%NA, S"/%C(S
,he 9ompany ives more emphasis on the Internal Sources rather than
*.ternal% It believes in the policy of >irst Preference to *.istin
*mployeesN, so as to motivate the employees and reduce the cost% ,he
t'o sources of Internal )ecruitment used by the company are <,ransfer 3
,ransfer involves the shiftin of an employee from one job to another, one
department to another or one shift to another%
T%ANS$(% P",IC4
#s the 9ompany has t'o units #,U7 7,/ PPSI,* and #,U7 7,/ at *ast,
so transfer is a ood source of fillin vacancies 'ith employees from
overstaff units@departments@shifts to another% Promotions 3 ,he 9ompany
3@
believes in promotion as the best source, but it is a bit riid% It believes in
!erit basis promotion rather than seniority% "ut 'hen the seniors are
really capable as compared to the ne' employee, the senior *mployee is
iven the first chance of promotion%
P%"M"TI"N P",IC4
,he 9ompany encouraes automatic promotion at all the levels of the
;raniFation, but under certain circumstances% =henever a particular
employee remains in a particular rade for a state period of time, he is
promoted to a job of hiher rade% Promotion other than the rade
promotion ta(es place only 'hen a hiher level post is vacant% ,o fill up
the vacancies form 'ithin the 9ompany as far as possible $only eliible
employees&, on basis of Performance #ppraisal System% In certain cases
'hen a particular employee has some outstandin s(ills 'hich is required
for hiher level post is to be promoted%
(<T(%NA, S"/%C(S
Camus %ecruitment
,he main *.ternal Source of )ecruitment for this company is throuh
*ducational Institutions% #ccordin to them this source not only brins
ne' blood in the ;raniFation, but also innovative ideas, technical
(no'lede and fresh talents% ,he students are first ta(en as !anaement
trainees and later they are rouped into H, accordin to their performance%
< Permanent at job < *.tended Promotion%
< Probation < ,erminated%
< Placement 9onsultants%
>or )ecruitin technical, Professional and !anaerial Personnel, the
9ompany oes for Placement% Placement 9onsultant are privatiFed and
37
saves the 9ompany8s time in receivin and screenin of applications%
,here are many Placement 9onsultants for this company% ;ne of them is
S*#)9- 9onsultant%
(MP,"4M(NT (<C*AN'(
*mployment *.chane8s run by the Government is rearded as a ood
source of recruitment for Uns(illed and S(illed ;perative jobs% ,he
company has compulsion to ive notification of vacancies to this
e.chane% ,hus the *mployment *.chane brins the *mployer in
contact 'ith the job see(er, but the 9ompany need not compulsorily
provide that job to the employee, 'ho is been sent by the *mployment
*.chane%
,A#"% C"NT%ACT"%
,he company finds a 7abor 9ontractor, 'ho brins 'or(er on temporary
basis% ,he norms and procedure reardin labor 9ontractor are to be
follo'ed by the 9ontractor as mentioned in the 9ontract #dministration%
$#s above&
A)1(%TISIN' A'(NC4
=hen the 9ompany is unable to et suitable 9andidates from the above
Sources, it oes for #dvertisin #ency% ,he company ives last
preference to this source because it brins in flood of response and many
a times from quite unsuitable candidates%
N;,*0 ,he pattern of Intervie' remains the same for all the employees,
but a sliht chane ta(es place dependin upon the type of job% In case of
-iher 7evel +obs, before ivin the #ppointment 7etter the Intervie'ee is
ta(en to the !anain /irector and if the !anain /irector finds the
9andidate suitable, he is appointed or else is discarded% In case of
,echnical >ield, the 9andidate is first intervie'ed by the personnel
38
!anaer and later by the 9oncerned /epartment -ead to chec( his
technical (no'lede%
IN)/CTI"N
#fter an employee is selected for this 9ompany, he is induced by ivin a
friendly 'elcome Induction is done accordin to the IS; 211C policy% #
staff member form the Personnel /epartment or the personnel manaer
himself ta(es the ne' employee to the 9oncerned department and
introduce him to his ne' environment $)ule and )eulations% Superiors,
>ello' *mployees etc&
5A'( & SA,A%4 ST%/CT/%(
=aes and salary system is also manaed by this /epartment% ,he
*mployees satisfaction is the top priority of the company, 'hich is
reflected by the -ealthy 'ae and Salary structure desined over here%
,he company follo's the !inimum =ae )ate Policy, fi.ed by the
Government% "ut in practical use they pay more than the rate fi.ed in the
above policy% It includes the follo'in concepts%
Shifts and =or(in -ours 3 ,imin at #,U7 7,/ $#*);!#,I9 /IVISI;N&
for General Shift is 4011 hrs to C5011 hrs on all 'or(in days% 7unch time
is from CB011 to CI011 hrs% ,here are no shifts for !anaement 9adre%
"ut as the 9ompany oes for )ound the 9loc( Production,
,here are three other shifts for 'or(ersL
,ea!e Structure
5eekly off 3 In an *mployee is at the ;ffice, the =ee(ly ;ff is on
Sunday% If at "ranch ;ffice, the =ee(ly ;ff is on Saturday and Sunday%
3A
Paid *oliday 3 ,he *mployee are entitled to 4 paid -olidays durin the
9alendar Kear, 'hich the !anaement declares in the month of +anuary%
Pri!ilege lea!e = Privilee 7eave is available O I1 days per 9alendar
Kear 'hich is credited O B%D per month is credited after completion of one
month%
Sick ,ea!e 3 2 days sic( leaves are available per annum and credited on
C +anuary every year% /urin the first year of *mployment, ho'ever this
leave benefit 'ill be available on pro<rata basis%
#ccumulated Sic( 7eave can be encased at the time of retirement and
death only, 'hich can be upto a ma.imum 5B days%
Casual ,ea!e < 2 days 9asual leave is available per annum and credited
on C
st
+an every Kear% /urin the first year of *mployment, ho'ever this
leave benefit 'ill be available on pro<rate basis% Since casual leave
benefit cannot be carried to the ne.t year, at the end of the 9alendar Kear
the outstandin 7eave balance 'ill automatically be encased and included
in the salary of the subsequent month%
Secial ,ea!e 8 the !anain director under e.ceptional circumstance
'ill have the discretion to rant any additional leave, termed as Special
7eave to Individual% Such 7eave 'ill normally believe 'ithout pay, unless it
is for the benefit of the company%
"ther lea!es = !aternity leave, leave after )esination, 9ompensatory
leave, UnauthoriFed #bsence etc%
(mloyee Turno!er and A+senteeism %ate 3
80
,he *mployee ,urnover )ate in #,U7 7,/ $#eromatic division& is around
IA% ,he #bsenteeism rate is around BA% !ost of the employees remain
absent because of some Social or Physical )easons%
T%AINNIN' P%"C(SS68
Tyes of Training
,he company oes for house trainin for both e.ternal and internal
trainin% ,he company mostly prepares to o for off the job $e.ternal
trainin&% In house trainin includes trainin by supervision, 'hereas
7ectures and Seminars are the part of *.ternal ,rainin%
,rainin Policy 0 < 5 man days of trainin and development proramme
of all the employee is compulsory
,rainin Process 0 < ,he ,rainin Need Identification process is carried
out in ;ctober and November every year%
,rainin 9alendar 0< ,he ,rainin 9alendar is prepared at the end of
the year%
Nomination0< ,he names, trainin details and time schedules for each
and every employee is nominated by his immediate superior% *ach
department head is very much familiar 'ith the strenth and 'ea(nesses
of the *mployee of his office department% #s a result he is the best person
to suest the names of trainee%
8!
,rainin Proram0< ;ver here the planned trainin prorams are
actually bein implemented in the company
>eed bac(0< >eed bac( about the proram is iven by the ,rainee to the
personal department by fillin up Puestionnaire 'hich ives us the idea
'hether the trainin proram 'as e.cellent, ood, averae, satisfactory,
or poor%
*valuation0< ,he concerned department head evaluates the
performance of the ,rainees in terms of effective or not effective% ,he
9ompany Surveys into each and every department% ,he departmental
heads has to ive details reardin increasin the jobs of each employee
and if needed they need to be trained reardin increasin productivity
and s(ill%

82
83
88
INT%")/CTI"N

Production is the creation of the oods : services% !ajor emphasis is on
the creation of oods% !anufacturin production is the systematic step<by<
step conversation of ra' materials throuh creation of form utility in oods%
Producin oods is an interact : comple. process Goods on the shelves,
ready to sell do not just happened they are the end results of much careful
thouht : plannin% ,he job of production manaement is to 'eave
toether those factors $man, material, and machinery& for those sole
purposes of economical delivery of quality oods to customer%
Production manaement deals 'ith decision<ma(in )elated to production
processes, so that resultin oods or services is produced accordin to
the e.pectations, in the amount end by the cost% Production manaement
is associated 'ith t'o broad areas of activity, the desin : control of the
product systemN%
,hus in a broader sense production manaement concerned 'ith co<
ordination of manaement men, material, method, machine : money in
manufacturin oods% In a narro' sense it means plannin, schedulin :
controllin the flo' of materials to a plant%
=here as in #tul #eromatic division the production process is underta(en
very carefully as they produce chemicals 'hich has to meet the e.act
confiuration 'hich the customers need as the slihtest variation in the
combination 'ould brin a reater chane in the final product 'hich 'ould
not match the standards of the customer requirements so the production
or the manufacturin process at #tul is underta(en 'ith e.tra caution %
,he production site of #,U7 $#eromatic division& is at GI/9 #n(lesh'ar,
the plant 'or( BH hours in shift it has been employed 'ith more than BD1
8?
'or(ers totalin both the employees the permanent employees and also
the daily contract 'or(ers%
,he major demand or the challenin mar(et for #,U7 $aeromatic division&
Is the forin mar(et, >rom the total sale of aeromatc division atul the 51A
is from the e.port business%, as the company enjoys monopoly production
in the India there are no competitiors in the domestic mar(et
,he major competitiors in the forin mar(et are the manufacturers from
9hina , as they are able to produce the same product at cheaper rate
sometime s due to the various factors li(e Political influence, cost of ra'
material , etc%
8@
P%")/CT P%"$I,(68
.ey Products
Name
Para 9resol 22A
Para #nisic #ldehyde
Para #nisyl #lcohol
Para 9residine
;rtho 9resol
Para 9resyl !ethyl *ther
Inorganics
Name
!ananese Sulphate Po'der
Sodium Sulphite
7iquid Sulphur /io.ide
P%")/CTI"N P%"C(SS 68
,he #,U7 $#eromatic division& has to mainly offer in the mar(et, the major
of use of the product are #roma products, /rus, /yes intermediate,
#ntio.idents, manufacturin of soaps etc%
87
Perfumery 'rades
Name
Para #nisic #ldehyde
Para #nisyl #lcohol
Para 9resyl !ethyl *ther
Para 9resol
PA%A C%(S", >>
Para cresol plant is the main plant in this division as it not only covers the
major part of their sales percentae compared to the other products ,he
capacity of the plant is CC111 !t@tones and 211 !t@tones also serves as
the major ra' material for the other products li(e Para cresidine and 'hich
is also used as the ra' material for the production of Para #nisic
#ldehyde and Para #nisic #cid %
PA%A ANISIC A,)(*4)(
,he plant of P## also have the latest technoloy of the plant of the
production process the capacity of the plant is D11 !t@tones per month%
PA%A ANISIC ACI)
/urin the process of production of para anisic aldehyde durin the
'ashin process the 'aste is e.tracted from P## and 'hen the 'aste is
treated by the distillatation process than the Para anisic acid is obtained
throuh the process%
PA%A C%(SI)IN(
,he plant present at #tul for P9 has the capacity of HD !t% tones per
month, its eneally used for manufacturin of /yes %
"%T*" C%(S",
;9 is enerally obtained by the cresol mi.ture , by the process of
decoloriFin of the orthophenol obtained throuh the floronation process
and the product obtained is ortho cresol %
88
MAN'AN(S( S/,P*AT( P"5)(%
S")I/M S/,P*IT(
,I?/I) S/,P*/% )I"<I)(
,hese are the bi products 'hich are obtained 'hile the production process
of the various chemicals stated above%

T*( P%")/CTI"N P%"C(SS C*A%T AS P(% T*(
P%"C(SS T*( P%")/CTS A%( AS $",,"5S68
PA%A C%(S", >> AN) "%T*"C%(S",
8A
PA%A ANISIC A,)(*4)( & PA%A ANISIC ACI)
?0
%A5MAT(%IA,
T",/(N(:S"@:S"9:
AC(TIC ACI)
S/,P*"NATI"N #4
CA/STIC S")A
$/SI"N P%"C(SS
S(P%ATI"N P%"C(SS
#I8P%")/CT
S")I/M S/,P*AT(
ACI'6ICATION
'ITILLATION
C$#OL "IGT!$#
#%#$ATION
O$T0O C$#OL %A$A C$#OL8HH
#I8P%")/CT
MA'N(SI/M S/,P*AT(
PA%A C%(SI)IN(
?!
$A9 "AT#$IAL
%A$A C$#:L "#T0:L #T0#$
"#T0ILATION
OGI'ATION
9A0ING
1I F%$O'!CT 1:
CA!TIC 9A0
AN' 1: 'ITILATION
%!$# %A$A ANIIC ACI'
'ITILATION %$OC#
%A$A ANIIC AL'#0:'#
?2
NIT%ATI"N
M(TIA,ATI"N

%()/CTI"N
)ISTI,ATI"N
PA%A C%(SI)IN(
?3
INT%")/CTI"N
,he mar(etin has chaned reater in the present day 'orld% ,he
mar(etin has developed many activities to satisfy the needs 'ants of a
roup of customers% *nterin into BC
st
century% !ar(etin has become one
of the important criteria for a company product or services to sell in state,
national and international level% #fter 'orld 'ar B
nd
, the development in the
field of science and technoloy, social and political, economical and other
relative reions have chaned tremendously and brouht ne' dimensions
in mar(etin% So as mar(etin ained momentum in the development of
ne' mar(ets and ne' avenues of sellin a 'ide rane of oods and
services that has chaned and development to meet the consumer need
at riht time%
!ar(etin is a set of human activities directed, facilitatin and
consummatin e.chane% It is chane of products and the transaction is to
satisfy that human needs and 'ants% -uman effort, >inance, !anaement
constitutes the primary sources in mar(etin% ,he mar(etin mi. coverin
products, price, promotion and distribution $place& strateies 'ill be
implemented to accomplish the object of customer satisfaction and
profitability%
?8
$/NCTI"NS
,here are t'o types of function in sales and mar(etin department%
%"/TIN( $/NCTI"N
- )eceivin inquiry from the customer%
- Sendin quotation to the customer%
- )eceivin order from the customer%
- 9oncern production department for special requirement%
- Prepare schedule for the production department%
- ,his department has a job of preparin invoices, ban( letter, side
draft, credit note, sales certificate etc%
- ,hey consult the customer and as( about the Q98 from% If out side of
state%
- ,hey (eep in touch continuously 'ith their sales representative or
arent%
- /ispatchin oods to customer%
- )eceivin payments and maintain payment details%
- ,hey prepare advertisement about the product and ive it into the
different business media%
- ,hey send reminder to the customer%
SP(CI$IC $/NCTI"N
,his department ives suestion to ma(e improvement in systems to the
manaement 'henever required% ,hey perform personnel follo' up to
production department for preparin order in time% ,hey understand the
special requirement of the customers and try their level best to satisfy
them% ,hey established personnel contacts 'ith their customers as 'ell as
aents% ,hey al'ays try to provide letter service to the customer%
??
P%IC(IN'
Price is the only element in the mar(etin mi. that creates sale revenue,
the other elements are cost% 9ompany is usin the most commonly used
stratey and i%e% the s(immin pricin stratey% ,he company is also usin
differential price stratey that involves ao% Indifferenciatin it8s price arose
different mar(et sement% ,he company sets its price from the iven
points%
- Selectin the pricin objective%
- /eterminin demand%
- *stimatin cost%
- #nalyFin competitions costs prices and offers%
- Selectin price method%
- Selectin the final price%
- Impact of lobal mar(et%

MA%.(TIN' %(S(A%C*
In the 'orlds of Phillip ?otler mar(etin research is a systematic problem
analysis model buildin feat findin for the purpose of improve decision
mar(in and control in the mar(etin of oods and services% #s the
company is enaed in the 9heamical business it needs the mar(et
research% ,hey are usin the produces, 'hich covers the follo'in
points%
- Problem formulation
- /ata collection
- !ar(etin sample
- /ata evaluation
- Interpretin data
- )eport preparation
?@
,he main object behind this is that it finds out for company% =here are his
customersR =hat they 'illin to pay for itR 'hat is the Impact and use of
technoloyR ,hey are researchin leaps it8s use in reducin and
minimiFin all mar(etin costs particularly sellin advertisin and
distribution cost%
)"C/M(NTS
- Inquiry letter
- Puotation
- ;rder
- Schedule
- ,ransport receipt
- Invoice
- "an( letter
- Q98 form
- Side draft
- Payment /etails
- 9ircular
- #dvertisement
IN?/I%4 ,(TT(%
,he purpose of inquiry for buyer is to find out the cheapest and best
source of purchase of oods required% Inquiry contains products, name,
price, quality, quantity, discount rate, delivery period and other terms and
conditions% Inquiry received by this department is (ept in inquiry reister%
?/"TATI"N
,he main purpose of the quotation is to ive ideas to customer about the
under mentioned matters%
?7
- !ode and terms of payment%
- Place and time of delivery%
- !ethod of transport%
- 9hanes of sales ta., octroi, freiht and insurance%
- Pac(in and for'ardin chanes%
Puotation sined by the proprietor in chare%
"%)(%
9ustomer sends orders either throuh phone, fa., *<media or throuh
letter% ;rder received by this department is records in order reister
,here are three types of order0
- Ne' order
- )epeated order
- )eular order
SC*()/,(
,his department transfers information about the order to the production
department in schedule% ,hey also indicate the time limit for the production
department% ,he manaer of the company sins schedule%
T%ANSP"%T %(C(IPT
,he transport corporation prepares transport receipt% ,he t'o copy of this
receipt are prepared
$C& 9onsinee copy, 'hich is, sends to the customer 'ith oods%
$B& 9onsinor copy, 'hich is (ept in record of this department%
?8
IN1"IC(
Invoice is prepared at the time of dispatchin of oods% ,his department
prepares three copies of invoice% ;riinal copy is sent to the customer%
Second copy is for transport% ,hird is for e.cise records%
#AN. ,(TT(%
,his department to the ban( drafts ban( letters% ,he mode of payment is
described in it% ,ransport receipt : invoice is attached 'ith the ban( letter%
A C $"%M
9N >orm is a overnment<approved form for reistration of customers
firm% If customer has 9N >orm he bound to pay HA as a Sales ta. : in
other situation he has to pay sales ta. as per the product%
SI)( )%A$T
,he sales : mar(etin department : sends prepare side draft to the
customer% #fter acceptance from customer, it is valid up to the mentioned
time% It means customer is bound to pay to ban( after this time limit%
PA4M(NT )(TAI,S
In payments details this is a record of incomin payment for particular time
period% In payment details customer8s name, mode of payment received,
amount of payment : customer8s account number are mentioned%
?A
CI%C/,A%
9ircular is mainly send to the customer for mar(etin purpose% 9ircular
contains the information about the ne' chanes made by the company or
by the overnment%
A)1(%TIS(M(NT
,he main purpose of advertisement is providin information to the
customer : improves the sale% It ives the brief idea about the company :
product, 'hich is very much helpful in competitive mar(et% #dvertisement
is published into the different media at the particular time limit%
C"MM/NICAT"N
,he mar(etin communication process has five major competent i%e%
sender, messae, receiver, response and feedbac(% ,he sender is itself
the -i<tech% =hich sends messae throuh advertisement% ,his
advertisement reaches the messae to the receiver or audience about the
product by buyin the -i<tech% ,his is than feedbac( to the company%
@0
@!

INT%")/CTI"N
>inance plays a major role in determinin the position of a company% #
person not trained in finance manaement of a company may face N
number of problems 'hich may affect the day to day functionin of his
company% # person not havin (no'lede of finance my not be able to the
e.act suitable return on his investment, account and finance 'al( parallel
but as compare to account finance is a 'aste subject%
# person trained in >inance is able to ta(e financial decision 'isely and
quic(ly 'hich ives better return on investment and have a better chance
to survive and compete% # business house must necessary (eep a
systematic record of 'hat happens from day to day, so that it can (no'
'here it stands : 'here it 'ill o in future% # systematic record of the daily
invents of a business leadin to presentation of a complete financial
picture is (no'n as accountin%

>inancial account includes tradin account, profit : loss account and
balance sheets% ,radin account is a part of profit : loss account% It
indicates the earnin capacity of the enterprise% "alance sheet indicates
financial position of the enterprise% In broad sense financial accountin
system refers to0
)ecordin of transaction in journal or its subsidiary boo(s%
,o post them leder and data store in to computer%
,o prepare final account%
,he financial picture mostly have t'o parts, one sho'in ho' much profit
has been earn or loss suffered and other so'in assets : liabilities and a
proprietor8s interest in the firm% # firm constantly enters into transaction
'ith out siders% # transaction may be defined as an action : reaction
havin monitory implication of one firm in relation to another firm%
@2
In other 'ords accountin defined as, ,he #rt of recordin, classifyin :
summariFin in a manner and it terms of money transaction and events
'hich are, in part at least, of a financial character : interpretin the result
thereofN%
$/NCTI"N
>unctions of accountin department are as under0
%"/TIN( $/NCTI"NS
,his department e.amines the challan in respect of payment% ,his
department handles the income ta. and sales ta. cases% ,his department
collects the vouchers from the various departments% ,hey note the entries
in the sales return boo( on the basis of credit note : the entire of stoc(
reister% ,his department ma(es castin and postin from sales return
reister to leder% ,hey fill up the sales and income ta. return per month%
,hey chec(ed 'hether the income ta. department has iven a correct
order for payment of ta. in advance% ,his department handles the all
transaction 'ith ban(% ,hey prepare the dayboo(, leder, trial balance,
manufacturin and profit : loss account and the final balance sheet%
SP(CI$IC $/NCTI"N
,his department submits monthly report to G%!% ,his department ma(es
necessary recommendation for chane in system and in procedure to the
manaement% ,hey ensure that the funds are raised economically and
used in the most efficient manner% 9ommunicatin the result% #ccountin
is to communicate the result obtained from arranin of data to interested
parties li(e proprietors% Protectin proprietors of the business% #ccountin
has to desin such a system of accountin as 'ill protect its assets from
an unjustified and un'anted use% 9ompany said nothin 'rite about its
finance company% So that I can8t 'rite about finance department%
@3
"rgaonogram of $inance )eartment

@8
%resi+ent
('r 0ariharan)
G" 6inance
"anager
(Costing)
((" 1ehani)
"anager
(Accounts)
("('( Gupta)
$aghu 'esai
(hea+ accounts)
Antana "atha
(+ata entry)
Chetan /oshi
(+ata entry)
0 (" (hah
(asst)
Asho5 "o+i
(Asst)
@?
INT%")/CTI"N
,he Puality 9ontrol department at #,U7 $#eromatic /ivision&, is at
#n(lesh'ar production site 'here they have to chec( and certify the
various aspects in the chemical produced and also verify the chemicals
'hich are brouht into the plant as the ra' materials % !r% V%?%Srivastav
$P9 dept manaer&, !r% Sharad /esai $asst manaer&, !r% ?%"%Prajapati
$chemist& these are some of the person 'ho are responsible for the quality
chec( activity in #tul #romatic division ,hese process are done accordin
to the IS; standards 'hich can be e.plained in steps as the Puality chec(
process are mainly done bet'een these three process %
%a& material check6
#ll the ra' material enterin into the #romatic plant are been chec(ed
randomly from their lot siFes before they are allo'ed to be stored % ,he
ra' materials chec(ed are if accordin to the specification 'hich are
required by the company then they allo' them to enter the plant or let
them store it or else they are been send bac( to the suppliers%
In8rocess check 6
#s #romatic plants should produce the chemicals in e.act specification
required by the customers so before very lot is been produced their
contents are been chec(ed before the ne.t batch is been processed so
that their products can meet the e.act requirement %
@@
)isatch rocess6
,he oods before they are been dispatch to the customers are been
verified once aain that the dispatch oods are the same oods 'hich are
meetin the requirement of the customers and are if chec(ed o( then a
Certificate of Analysis is attached to the vouchers throuh 'hich the
customers could (no' the oods are of e.act specification as they
ordered%
Some of the eBeriments &hich is undertaken for the ?uality check
are : 'AS C"M"T"'%AP4 SP(CI$ICATI"N its for urity: *4P(%
P(%$"%MANC( ,I?/I) C"M"T"'%AP*: /,T%A 1I",(T testing:
,"1I #A,, testing: &eight +alance : melting oint etc-
@7
@8
The Imact of Areciating India %uee on
Comany;s (Bort #usiness
@A
,he #ppreciation of )upee8s value for international trade is a major
concern for the #tul limited $#romatic /ivision&, as the percentae of
e.port revenue is more than D1A in the total sales%
%s in crores
4ear
9CCD 9CCE
,otal sales CID%1H CE5%4D
*.port amount 54%ID
A ECF
CCB%E2
A GCF
5hat is Currency AreciationH
9urrency #ppreciation means that the iven currency has become more
value 'ith respect to another currency% >or e.ample if the rupee
appreciates it means that rupee has become more valuable in relation to
dollar% In case of appreciation a Sdo'n'ardS movement ta(es place% *0
>or instance if the rupee moves do'n'ards from D1 per dollar to H1 per
dollar then rupee is said to appreciate%
$ACT"%S A$$(CTIN' C/%%(NC4 APP%(CIATI"N6
- - *TI! P;7I9K% *TI! P;7I9K%
- - !*)9#N/IS* ,)#/* "#7#N9*% !*)9#N/IS* ,)#/* "#7#N9*%
- - >;)IGN ,)#/* P;7I9K B11H<B112% >;)IGN ,)#/* P;7I9K B11H<B112%
- - !;N*,#)K P;7I9K% !;N*,#)K P;7I9K%
< >;)IGN INV*S,!*N,% < >;)IGN INV*S,!*N,%
70
, , hese factors are e.plained in detail as follo's 0 hese factors are e.plained in detail as follo's 0
7- (<IM P",IC4 6 7- (<IM P",IC4 6
The rincial o+jecti!es of this Policy are6
,o facilitate sustained ro'th in e.ports to attain a share of atleast CA of
lobal merchandise trade% ,o stimulate sustained economic ro'th by
providin access to essential ra' materials, intermediates, components,
consumables and capital oods required for aumentin production and
providin services% ,o enhance the technoloical strenth and efficiency
of Indian ariculture, industry and services, thereby improvin their
competitive strenth 'hile eneratin ne' employment opportunities, and
to encourae the attainment of internationally accepted standards of
quality% ,o provide consumers 'ith ood quality oods and services at
internationally competitive prices 'hile at the same time creatin a level
playin field for the domestic producers%
9- M(%CAN)IS( T%A)( #A,ANC( 6 9- M(%CAN)IS( T%A)( #A,ANC( 6
!erchandise trade balance 0
$irst: is trade in oods, i%e%, the merchandise trade balance, 'hich is a
very lare neative numberL 'e import much more than 'e e.port
Second: is the trade in services 3 soft'are, I,*S, travel : tourism 3 and
here 'e have a siFeable surplus%
Third: is remittance from Indians 'ho live overseas, 'hich enerates an
enormous surplus%
$ourth: are dividend and interest payments, 'here 'e pay out more than
'e receive%
7!
@- $"%I'N T%A)( #A,ANC(6 @- $"%I'N T%A)( #A,ANC(6
-ihlihts of forin trade policy for B11H<B112 are as follo's0 -ihlihts of forin trade policy for B11H<B112 are as follo's0
@-7 %(M"1A, "$ (<P"%T C(SS @-7 %(M"1A, "$ (<P"%T C(SS
,he /epartment of 9ommerce has ta(en a consistent stand from a policy ,he /epartment of 9ommerce has ta(en a consistent stand from a policy
perspective that ta.es and duties should not be e.ported% ,he cess levied perspective that ta.es and duties should not be e.ported% ,he cess levied
under the different 9ommodity "oard #cts is a ta. on e.ports, 'hich is a under the different 9ommodity "oard #cts is a ta. on e.ports, 'hich is a
handicap and a major irritant to our e.porters and erodes the handicap and a major irritant to our e.porters and erodes the
competitiveness of Indian ariculture e.ports% /epartment of 9ommerce competitiveness of Indian ariculture e.ports% /epartment of 9ommerce
proposes to abolish cess on e.port of all aricultural and plantation proposes to abolish cess on e.port of all aricultural and plantation
commodities levied under various 9ommodity "oard #cts% commodities levied under various 9ommodity "oard #cts%
I%B I%B (<P"%T P%"M"TI"N CAPITA, '"")S SC*(M( (<P"%T P%"M"TI"N CAPITA, '"")S SC*(M(
a% >or providin a thrust to the #ricultural sector, concessional duty a% >or providin a thrust to the #ricultural sector, concessional duty
imports made by aro units under the *P9G Scheme shall be allo'ed to imports made by aro units under the *P9G Scheme shall be allo'ed to
fulfill the e.port obliation over a loner period of time 'ith a reduced fulfill the e.port obliation over a loner period of time 'ith a reduced
e.port obliation i%e% E times the duty saved over a CB year period instead e.port obliation i%e% E times the duty saved over a CB year period instead
of the normal 'indo' of 4 times the duty saved in 4 years% of the normal 'indo' of 4 times the duty saved in 4 years%
b% ,o promote capacity e.pansion and quality up<radation in the SSI b% ,o promote capacity e.pansion and quality up<radation in the SSI
sector, import of capital oods at DA 9ustoms duty shall no' be allo'ed sector, import of capital oods at DA 9ustoms duty shall no' be allo'ed
subject to a fulfillment of an e.port obliation equivalent to E times the subject to a fulfillment of an e.port obliation equivalent to E times the
duty saved on capital oods imported under the *P9G Scheme over a duty saved on capital oods imported under the *P9G Scheme over a
period of 4 years% $#t present the e.port obliation under the *P9G period of 4 years% $#t present the e.port obliation under the *P9G
Scheme is 4 times the duty saved and reducin the e.port obliation for Scheme is 4 times the duty saved and reducin the e.port obliation for
small manufacturin units to E times shall provide an impetus to industries small manufacturin units to E times shall provide an impetus to industries
to modernise their plant and machinery 'hich 'ill enhance our overall to modernise their plant and machinery 'hich 'ill enhance our overall
e.port competitiveness in the medium term&% e.port competitiveness in the medium term&%
72
c% ,o create modern infrastructure in the retail sector, concessional duty c% ,o create modern infrastructure in the retail sector, concessional duty
benefits under *P9G scheme shall be e.tended for import of capital benefits under *P9G scheme shall be e.tended for import of capital
oods required by retailers havin a minimum covered shoppin area of oods required by retailers havin a minimum covered shoppin area of
C111 sq metres% ,he retailer shall fulfill the e.port obliation under the C111 sq metres% ,he retailer shall fulfill the e.port obliation under the
Scheme from payments received aainst Gcounter salesG in free forein Scheme from payments received aainst Gcounter salesG in free forein
e.chane throuh ban(in channels as per )"I uidelines% e.chane throuh ban(in channels as per )"I uidelines%
d% =ith a vie' to accelerate e.ports under the Scheme and to incentivise d% =ith a vie' to accelerate e.ports under the Scheme and to incentivise
fast trac( companies, firms ma(in 5D A or more of the e.ports under the fast trac( companies, firms ma(in 5D A or more of the e.ports under the
*P9G Scheme $includin averae level of e.ports& in half or less than half *P9G Scheme $includin averae level of e.ports& in half or less than half
the oriinal e.port obliation period, shall be freed from the balance e.port the oriinal e.port obliation period, shall be freed from the balance e.port
obliation% obliation%
e% Payment received in )upees for the Port -andlin services are counted e% Payment received in )upees for the Port -andlin services are counted
for e.port obliation dischare under the *P9G Scheme% ,his facility is for e.port obliation dischare under the *P9G Scheme% ,his facility is
no' bein e.tended to include minor ports includin I9/s and 9ontainer no' bein e.tended to include minor ports includin I9/s and 9ontainer
>reiht Stations $9>S& also% ,his 'ill enable aumentation of the facilities >reiht Stations $9>S& also% ,his 'ill enable aumentation of the facilities
available at the secondary ports 'ith modern equipment and thereby available at the secondary ports 'ith modern equipment and thereby
reduce caro handlin turnaround time and related transaction costs% reduce caro handlin turnaround time and related transaction costs%
f% ,he present requirement of submittin an Installation 9ertificate for f% ,he present requirement of submittin an Installation 9ertificate for
machinery imported under *P9G Scheme 'ill no' not be required for machinery imported under *P9G Scheme 'ill no' not be required for
units 'hich are not reistered 'ith 9entral *.cise% In lieu of a 9entral units 'hich are not reistered 'ith 9entral *.cise% In lieu of a 9entral
*.cise 9ertificate, a 9hartered *nineer 9ertificate 'ill no' suffice% >irms *.cise 9ertificate, a 9hartered *nineer 9ertificate 'ill no' suffice% >irms
importin spares under *P9G shall also be required to submit a importin spares under *P9G shall also be required to submit a
9hartered *nineer certificate only instead of a certificate from 9entral 9hartered *nineer certificate only instead of a certificate from 9entral
*.cise authorities% *.cise authorities%
% ,he facility of clubbin of *P9G licences has been further liberaliFed % ,he facility of clubbin of *P9G licences has been further liberaliFed
and restrictive conditions relatin to same licensin year and same and restrictive conditions relatin to same licensin year and same
products@services have been deleted% -enceforth, all *P9G licences products@services have been deleted% -enceforth, all *P9G licences
issued under the same 9ustoms Notification can be clubbed% ,his 'ill issued under the same 9ustoms Notification can be clubbed% ,his 'ill
considerably reduce paper'or( both for the e.porter and the licensin considerably reduce paper'or( both for the e.porter and the licensin
authorities and lead to easier monitorin% authorities and lead to easier monitorin%
73
@-@ S(%1IC( (<P"%TS @-@ S(%1IC( (<P"%TS
a% ,o enable the Service providers to uprade the infrastructure in their a% ,o enable the Service providers to uprade the infrastructure in their
associate companies, the oods imported under the GServed from IndiaG associate companies, the oods imported under the GServed from IndiaG
Scheme shall be transferable 'ithin the Group companies and manaed Scheme shall be transferable 'ithin the Group companies and manaed
hotels subject to #ctual User condition% hotels subject to #ctual User condition%
b% #t present, -otels : )estaurants are required to submit a 9hartered b% #t present, -otels : )estaurants are required to submit a 9hartered
#ccountant certificate that the entire duty benefits availed under the #ccountant certificate that the entire duty benefits availed under the
GServed from IndiaG Scheme have been passed on to the consumer% >rom GServed from IndiaG Scheme have been passed on to the consumer% >rom
no' on, only a declaration 'ill be submitted by the -otels : )estaurants no' on, only a declaration 'ill be submitted by the -otels : )estaurants
that the duty benefits shall be passed on to the consumer and no 9# that the duty benefits shall be passed on to the consumer and no 9#
certificate 'ill be required to be submitted% certificate 'ill be required to be submitted%
@-I PAC.A'( $"% MA%IN( S(CT"% @-I PAC.A'( $"% MA%IN( S(CT"%
a% /uty free import of specified specialiFed inputs@chemicals and flavorin a% /uty free import of specified specialiFed inputs@chemicals and flavorin
oils as per a defined list shall be allo'ed to the e.tent of CA of >;" value oils as per a defined list shall be allo'ed to the e.tent of CA of >;" value
of precedin financial years e.port% Use of these special inredients for of precedin financial years e.port% Use of these special inredients for
seafood processin 'ill enable us to achieve a hiher value addition and seafood processin 'ill enable us to achieve a hiher value addition and
enter ne' e.port mar(ets% enter ne' e.port mar(ets%
b% ,o encourae the e.istin mechaniFed vessels and deep sea tra'lers b% ,o encourae the e.istin mechaniFed vessels and deep sea tra'lers
to adopt modern technoloy for scientific e.ploitation of our marine to adopt modern technoloy for scientific e.ploitation of our marine
resources in an eco<friendly manner and boost marine sector e.ports, it is resources in an eco<friendly manner and boost marine sector e.ports, it is
proposed to allo' import of monofilament lon line system for tuna fishin proposed to allo' import of monofilament lon line system for tuna fishin
at a concessional rate of duty% at a concessional rate of duty%
c% ,he present system of disposal of 'aste of perishable commodities li(e c% ,he present system of disposal of 'aste of perishable commodities li(e
seafood after inspection by a customs official is very cumbersome and seafood after inspection by a customs official is very cumbersome and
leads to development of unhyienic conditions% ,o overcome this, a self leads to development of unhyienic conditions% ,o overcome this, a self
78
removal procedure for clearance of 'aste shall be applicable, subject to removal procedure for clearance of 'aste shall be applicable, subject to
prescribed 'astae norms% prescribed 'astae norms%
@-D A)1ANC( ,IC(NSIN' SC*(M( @-D A)1ANC( ,IC(NSIN' SC*(M(
a% No safeuard and antidumpin duty shall be levied on inputs under a% No safeuard and antidumpin duty shall be levied on inputs under
#dvance 7icence for deemed e.port supplies made to I9" projects% =ith #dvance 7icence for deemed e.port supplies made to I9" projects% =ith
this different cateories of #dvance licences i%e% advance licence for this different cateories of #dvance licences i%e% advance licence for
physical e.port, advance licence for intermediate supplies and advance physical e.port, advance licence for intermediate supplies and advance
licence for deemed e.ports have been mered into a sinle cateory for licence for deemed e.ports have been mered into a sinle cateory for
procedural facilitation and easier monitorin% procedural facilitation and easier monitorin%
b% ,he scope of #dvance 7icence for #nnual requirement has been b% ,he scope of #dvance 7icence for #nnual requirement has been
e.tended to all cateories of e.porters havin past e.port performance% e.tended to all cateories of e.porters havin past e.port performance%
*arlier, the option 'as limited to Status -olders only% ,he earlier limit of *arlier, the option 'as limited to Status -olders only% ,he earlier limit of
obtainin #dvance 7icence for #nnual requirement has also been obtainin #dvance 7icence for #nnual requirement has also been
enhanced to I11A of >;"@>;) value of e.ports made in the previous enhanced to I11A of >;"@>;) value of e.ports made in the previous
year from B11A% year from B11A%
c% 9lubbin of advance licences for e.port reulariFation purpose has c% 9lubbin of advance licences for e.port reulariFation purpose has
been allo'ed even for licences pertainin to C22B<25 period% been allo'ed even for licences pertainin to C22B<25 period%
d% Units reistered under "I>) shall be allo'ed e.port obliation d% Units reistered under "I>) shall be allo'ed e.port obliation
e.tension as per the rehabilitation pac(ae or a period upto five years e.tension as per the rehabilitation pac(ae or a period upto five years
rec(oned from the date of issuance of the advance licence, 'hichever is rec(oned from the date of issuance of the advance licence, 'hichever is
hiher% hiher%
e% ,ransfer of /uty >ree material imported or procured under #dvance e% ,ransfer of /uty >ree material imported or procured under #dvance
7icence from one unit of the company to another unit of the same 7icence from one unit of the company to another unit of the same
company to be allo'ed 'ith prior intimation to the jurisdictional central company to be allo'ed 'ith prior intimation to the jurisdictional central
e.cise authority% *arlier prior permission of the jurisdictional central e.cise e.cise authority% *arlier prior permission of the jurisdictional central e.cise
authority 'as required% authority 'as required%
7?
f% In cases the "an( Guarantee@7U, has been redeemed under the f% In cases the "an( Guarantee@7U, has been redeemed under the
#dvance licence, the 7icensee may be allo'ed to et duty free inputs #dvance licence, the 7icensee may be allo'ed to et duty free inputs
processed from any manufacturer under actual user condition subject to processed from any manufacturer under actual user condition subject to
central e.cise procedures relatin to job 'or(% central e.cise procedures relatin to job 'or(%
% )emoval of requirement of #); for ta(in supplies from % )emoval of requirement of #); for ta(in supplies from
*;U@*-,P@S,P@",P units and allo'in direct debit of the advance *;U@*-,P@S,P@",P units and allo'in direct debit of the advance
licence by the "ond ;fficer of these units% # detailed procedure in this licence by the "ond ;fficer of these units% # detailed procedure in this
reard shall be prescribed by the 9"*9% reard shall be prescribed by the 9"*9%
@-E (<P"%T "%I(NT() /NITS @-E (<P"%T "%I(NT() /NITS
a% /uty free spares up to DA of the value of 9apital Goods imported for a% /uty free spares up to DA of the value of 9apital Goods imported for
e.cavation purposes in the Granite sector 'ill be allo'ed to be removed to e.cavation purposes in the Granite sector 'ill be allo'ed to be removed to
the quarries% the quarries%
b% ,he de<bondin procedure for *;Us has been simplified% # self< b% ,he de<bondin procedure for *;Us has been simplified% # self<
assessment procedure alon 'ith time bound disposal of applications of assessment procedure alon 'ith time bound disposal of applications of
such e.itin *;Us 'ill be put in place% such e.itin *;Us 'ill be put in place%
c% 9apital Goods 'ill be allo'ed to be transferred or iven on loan basis to c% 9apital Goods 'ill be allo'ed to be transferred or iven on loan basis to
other units under intimation to both *.cise and /evelopment other units under intimation to both *.cise and /evelopment
9ommissioner% 9ommissioner%
d% ,ransfer of samples to other *;Us on returnable basis 'ithin a period d% ,ransfer of samples to other *;Us on returnable basis 'ithin a period
of I1 days to be allo'ed% of I1 days to be allo'ed%
e% *;Us to be permitted to claim I, e.emption in respect of income on e% *;Us to be permitted to claim I, e.emption in respect of income on
e.port proceeds realised 'ithin a period of CB months from date of e.port% e.port proceeds realised 'ithin a period of CB months from date of e.port%
7@
I- M"N(TA%4 P",IC4 6 I- M"N(TA%4 P",IC4 6
!onetary policy is the process by 'hich the overnment, central ban(, or !onetary policy is the process by 'hich the overnment, central ban(, or
monetary authority manaes the money supply to achieve specific oalsU monetary authority manaes the money supply to achieve specific oalsU
such as constrainin inflation or deflation, maintainin an e.chane rate, such as constrainin inflation or deflation, maintainin an e.chane rate,
achievin full employment or economic ro'th% $Usually the oal of achievin full employment or economic ro'th% $Usually the oal of
monetary policy is to accommodate economic ro'th in an environment of monetary policy is to accommodate economic ro'th in an environment of
stable prices%& !onetary policy can involve chanin certain interest rates, stable prices%& !onetary policy can involve chanin certain interest rates,
either directly or indirectly throuh open mar(et operations, settin reserve either directly or indirectly throuh open mar(et operations, settin reserve
requirements, actin as a last<resort lender $i%e% discount 'indo' lendin&, requirements, actin as a last<resort lender $i%e% discount 'indo' lendin&,
or tradin in forein e.chane mar(ets% or tradin in forein e.chane mar(ets%
!onetary policy is enerally referred to as either bein an e.pansionary !onetary policy is enerally referred to as either bein an e.pansionary
policy, or a contractionary policy, 'here an e.pansionary policy increases policy, or a contractionary policy, 'here an e.pansionary policy increases
the total supply of money in the economy, and a contractionary policy the total supply of money in the economy, and a contractionary policy
decreases the total money supply% *.pansionary policy is traditionally decreases the total money supply% *.pansionary policy is traditionally
used to combat unemployment in a recession by lo'erin interest rates, used to combat unemployment in a recession by lo'erin interest rates,
'hile contractionary policy has the oal of raisin interest rates to combat 'hile contractionary policy has the oal of raisin interest rates to combat
inflation $or cool an other'ise overheated economy&% !onetary policy inflation $or cool an other'ise overheated economy&% !onetary policy
should be contrasted 'ith fiscal policy, 'hich refers to overnment should be contrasted 'ith fiscal policy, 'hich refers to overnment
borro'in, spendin and ta.ation% It is important for policyma(ers to ma(e borro'in, spendin and ta.ation% It is important for policyma(ers to ma(e
credible announcements reardin their monetary policies% If private credible announcements reardin their monetary policies% If private
aents $consumers and firms& believe that policyma(ers are committed to aents $consumers and firms& believe that policyma(ers are committed to
lo'erin inflation, they 'ill anticipate future prices to be lo'er than lo'erin inflation, they 'ill anticipate future prices to be lo'er than
other'ise $ho' those e.pectations are formed is an entirely different other'ise $ho' those e.pectations are formed is an entirely different
matterL compare for instance rational e.pectations 'ith adaptive matterL compare for instance rational e.pectations 'ith adaptive
e.pectations&% If an employee e.pects prices to be hih in the future, he or e.pectations&% If an employee e.pects prices to be hih in the future, he or
she 'ill dra' up a 'ae contract 'ith a hih 'ae to match these prices% she 'ill dra' up a 'ae contract 'ith a hih 'ae to match these prices%
-ence, the e.pectation of lo'er 'aes is reflected in 'ae<settin -ence, the e.pectation of lo'er 'aes is reflected in 'ae<settin
behaviour bet'een employees and employers $lo'er 'aes since prices behaviour bet'een employees and employers $lo'er 'aes since prices
are e.pected to be lo'er& and since 'aes are in fact lo'er there is no are e.pected to be lo'er& and since 'aes are in fact lo'er there is no
demand pull inflation because employees are receivin a smaller 'ae demand pull inflation because employees are receivin a smaller 'ae
and there is no cost push inflation because employers are payin out less and there is no cost push inflation because employers are payin out less
77
in 'aes% -o'ever, to achieve this lo' level of inflation, policyma(ers in 'aes% -o'ever, to achieve this lo' level of inflation, policyma(ers
must have credible announcements, that is, private aents must believe must have credible announcements, that is, private aents must believe
that these announcements 'ill reflect actual future policy% If an that these announcements 'ill reflect actual future policy% If an
announcement about lo'<level inflation tarets is made but not believed announcement about lo'<level inflation tarets is made but not believed
by private aents, 'ae<settin 'ill anticipate hih<level inflation and so by private aents, 'ae<settin 'ill anticipate hih<level inflation and so
'aes 'ill be hiher and inflation 'ill rise% # hih 'ae 'ill increase a 'aes 'ill be hiher and inflation 'ill rise% # hih 'ae 'ill increase a
consumerGs demand $demand pull inflation& and a firmGs costs $cost push consumerGs demand $demand pull inflation& and a firmGs costs $cost push
inflation&, so inflation rises% -ence, if a policyma(erGs announcements inflation&, so inflation rises% -ence, if a policyma(erGs announcements
reardin monetary policy are not credible, policy 'ill not have the desired reardin monetary policy are not credible, policy 'ill not have the desired
effect% effect%
-o'ever, if policyma(ers believe that private aents anticipate lo' -o'ever, if policyma(ers believe that private aents anticipate lo'
inflation, they have an incentive to adopt an e.pansionist monetary policy inflation, they have an incentive to adopt an e.pansionist monetary policy
$'here the marinal benefit of increasin economic output out'eihs the $'here the marinal benefit of increasin economic output out'eihs the
marinal cost of inflation&% -o'ever, assumin private aents have rational marinal cost of inflation&% -o'ever, assumin private aents have rational
e.pectations, they (no' that policyma(ers have this incentive% -ence, e.pectations, they (no' that policyma(ers have this incentive% -ence,
private aents (no' that if they anticipate lo' inflation, an e.pansionist private aents (no' that if they anticipate lo' inflation, an e.pansionist
policy 'ill be adopted that causes a rise in inflation% ,herefore, $unless policy 'ill be adopted that causes a rise in inflation% ,herefore, $unless
policyma(ers can ma(e their announcement of lo' inflation credible&, policyma(ers can ma(e their announcement of lo' inflation credible&,
private aents e.pect hih inflation% ,his anticipation is fulfilled throuh private aents e.pect hih inflation% ,his anticipation is fulfilled throuh
adaptive e.pectation $'ae<settin behaviour& and so there is hiher adaptive e.pectation $'ae<settin behaviour& and so there is hiher
inflation $'ithout the benefit of increased output&% -ence, unless credible inflation $'ithout the benefit of increased output&% -ence, unless credible
announcements can be made, e.pansionary monetary policy 'ill fail% announcements can be made, e.pansionary monetary policy 'ill fail%
#nnouncements can be made credible in various 'ays% ;ne is to establish #nnouncements can be made credible in various 'ays% ;ne is to establish
an independent central ban( 'ith lo' inflation tarets $but no output an independent central ban( 'ith lo' inflation tarets $but no output
tarets&% -ence, private aents (no' that inflation 'ill be lo' because it is tarets&% -ence, private aents (no' that inflation 'ill be lo' because it is
set by an independent body% 9entral ban(s can be iven incentives to set by an independent body% 9entral ban(s can be iven incentives to
meet their tarets $for e.ample, larer budets, a 'ae bonus for the head meet their tarets $for e.ample, larer budets, a 'ae bonus for the head
of the ban(& in order to increase their reputation and sinal a stron of the ban(& in order to increase their reputation and sinal a stron
commitment to a policy oal% )eputation is an important element in commitment to a policy oal% )eputation is an important element in
monetary policy implementation% "ut the idea of reputation should not be monetary policy implementation% "ut the idea of reputation should not be
78
confused 'ith commitment% =hile a central ban( miht have a favorable confused 'ith commitment% =hile a central ban( miht have a favorable
reputation due to ood performance in conductin monetary policy, the reputation due to ood performance in conductin monetary policy, the
same central ban( miht not have chosen any particular form of same central ban( miht not have chosen any particular form of
commitment $such as taretin a certain rane for inflation&% )eputation commitment $such as taretin a certain rane for inflation&% )eputation
plays a crucial role in determinin ho' much 'ould mar(ets believe the plays a crucial role in determinin ho' much 'ould mar(ets believe the
announcement of a particular commitment to a policy oal but both announcement of a particular commitment to a policy oal but both
concepts should not be assimilated% #lso, note that under rational concepts should not be assimilated% #lso, note that under rational
e.pectations, it is not necessary for the policyma(er to have established e.pectations, it is not necessary for the policyma(er to have established
its reputation throuh past policy its reputation throuh past policy
7A
The Trend of Currency Areciation Through a The Trend of Currency Areciation Through a
Chart Chart 0 0
,his raph sho's that Indian currency is appreciated in these recent
years from B11C at the e.chane rate of H5%DH to the recent e.chane
rate of H1%2D in B115%
5*AT IS (<C*AN'( %AT(H
80
,he e.chane rate $also (no'n as the forein<e.chane rate& is the rate
bet'een t'o currency specifies ho' much one currency is 'orth in terms
of the otherN%
*.ample0
CV W H1%2D )upees
Ceuro W DD%12 )upees
Ceuro W C%I4 V
$luctuations in eBchange rates
# mar(et based e.chane rate 'ill chane 'henever the values of either
of the t'o component currencies chane% # currency 'ill tend to become
more valuable 'henever demand for it is reater than the available supply%
It 'ill become less valuable 'henever demand is less than available
supply $this does not mean people no loner 'ant money, it just means
they prefer holdin their 'ealth in some other form, possibly another
currency&% Increased demand for a currency is due to either an increased
transaction demand for money, or an increased speculative demand for
money% ,he transaction demand for money is hihly correlated to the
countryGs level of business activity, ross domestic product $G/P&, and
employment levels% ,he more people there are out of 'or(, the less the
public as a 'hole 'ill spend on oods and services% 9entral ban(s
typically have little difficulty adjustin the available money supply to
accommodate chanes in the demand for money due to business
transactions% ,he speculative demand for money is much harder for a
central ban( to accommodate but they try to do this by adjustin interest
rates% #n investor may choose to buy a currency if the return $that is the
interest rate& is hih enouh% ,he hiher a countryGs interest rates, the
reater the demand for that currency% It has been arued that currency
speculation can undermine real economic ro'th, in particular since lare
currency speculators may deliberately create do'n'ard pressure on a
currency in order to force that central ban( to sell their currency to (eep it
stable $once this happens, the speculator can buy the currency bac( from
8!
the ban( at a lo'er price, close out their position, and thereby ta(e a
profit&%
T4P(S "$ (<C*AN'( %AT(6
$ree or egged6
If a currency is free<floatin, its e.chane rate is allo'ed to vary aainst
that of other currencies and is determined by the mar(et forces of supply
and demand% *.chane rates for such currencies are li(ely to chane
almost constantly as quoted on financial mar(ets, mainly by ban(s, around
the 'orld% # movable or adjustable pe system is a system of fi.ed
e.chane rates, but 'ith a provision for the devaluation of a currency% >or
e.ample, bet'een C22H and B11D, the 9hinese yuan renminbi $9NK, X&
'as peed to the United States dollar at X4%B5E4 to VC% ,he 9hinese
'ere not the only country to do thisL from the end of =orld =ar II until
C251, =estern *uropean countries all maintained fi.ed e.chane rates
'ith the US dollar based on the "retton =oods system%
Nominal and %eal (Bchange %ates6
,he nominal e.chane rate is the rate at 'hich an oraniFation can
trade the currency of one country for the currency of another%
,he real e.chane rate $)*)& is an important concept in economics,
thouh it is quite difficult to rasp concretely% It is defined by the
model0 )*) W e$PY@P&, 'here GeG is the e.chane rate, as the number
of home currency units per forein currency unitL 'here P is the price
level of the home countryL and 'here PY is the forein price level%
Unfortunately, this compact and simple model for )*) calculations is only
a theoretical ideal% In practical usae, there are many forein currencies
and price level values to ta(e into consideration% 9orrespondinly, the
82
model calculations become increasinly more comple.% >urthermore, the
model is based on purchasin po'er parity $PPP&, 'hich implies a
constant )*)% ,he empirical determination of a constant )*) value could
never be realised, due to limitations on data collection% PPP 'ould imply
that the )*) is the rate at 'hich an oraniFation can trade oods and
services of one economy $e%% country& for those of another% >or e.ample,
if the price of a ood increases C1A in the U?, and the +apanese currency
simultaneously appreciates C1A aainst the U? currency, then the price of
the ood remains constant for someone in +apan% ,he people in the U?,
ho'ever, 'ould still have to deal 'ith the C1A increase in domestic prices%
It is also 'orth mentionin that overnment<enacted tariffs can affect the
actual rate of e.chane, helpin to reduce price pressures%
83
*o& does Indian ruee areciation is affecting the
eBort +usiness of AT/, A%"MATIC )I1ISI"N in
t&o different &ays H
7- T*( (<P"%T(% 5"/,) ,"SS *IS
C"MP(TITI1(N(SS IN $"%I'N MA%.(T-
If this is the annual assumed sales of #romatic division in the four major
products they deal in them, in this diaram the H products eBort sales
88
are sho'n and the amount of dollors they have earned throuh this
sales are been sho'ed%
CA,C/,ATI"NS6
=hen 'e convert the /;77;)S 'e ot from the e.port sales of all the
product accordin to the previous year e.chane rate,
AT 7J K II-L> IN%
,hen by addin the total sales 'e et
HDD122%5D
Z 2E1E5%14
Z I4H44%ED
Z EIDB2%2B
<<<<<<<<<<<<<<<<<<<
W E:D@:7LD-I J
!U7,IP7KING I, =I,- ,-* *T9-#NG* )#,* =* G*,L
KE:D@:7LI-IJ M II-L>IN% K 9:>@:97:I>@ 8888888888888888888888072
N;= =-*N =* 9#79U7#,* ,-* S#!* #!;UN, ;> S#7*S =I,-
,-* P)*S*N, *T9-#NG* )#,* "*,=**N /;777;)S #N/ )UP**
#SSUN!ING ,-#, ,-* S#7*S =;U7/ N;, 9-#NG* ,-IS K*#)%
5( '(T K E:D@:7LI-IJ M IC->D IN% 0P%(S(NT (<C*AN'( 2
K 9:EG:IG:>I9 IN% 888888888888888888888888888888888888888888888888888092
S; "K SU",)#9,ING 072 & 092 =* G*,
8?
K 9D:G@:DCC IN% ,"SS IN T*( T%ANSACTI"N
,-IS IS ,-* I!P#9, ;N ,-* *TP;), S#7*S "K APP%(CIATI"N
"$ %/P(( #4 @->7 IN%
9- IMPACT "$ %/P(( APP%(CIATI"N "N )"M(STIC
#/4(%S-
/ue to )upee appreciation there has been a reater advantae to the
/omestic buyers of the product P#)# 9)*S;7 'hich is one of the main
product in 'hich #,U7$#*);!#,I9 /IVISI;N& manufacture and deals %
,he product P#)# 9)*S;7 also adds a reater share in companies
profits due to the rupee appreciation the imports have been more cheaper
or the domestic buyers for the same product
7ast year the total IMP"%TS of PA%A C%(S", 'as around EC7-EE
metric tones at a cost of D@@>@-DLJ: ,he fiure as 'e can see is more
than our e.ports of the same product thouh 'e are the monopoly
producers of P#)# 9)*S;7 in India, 'hich is a reat deal for our
9ompetitors%
8@
S/''(STI"N $"% T*( C"MPANI(S %IS.6
7- I> =* S** ,-* ;> P#)# #NISI9 #7/*-K/* IS I442@<)S P)I9*
P*) ?G% S; I> =-* 9;NV*), ,-* IN/I#N )UP** =I,- ,-*
9U))*N, *T-#NG* )#,* ;> US /;77;)S #N/ *U); =* G*,,
7.' K @LL> IN%
7.' K GC-D> (/%" 0AT %AT( DD-C> N%I K 7 (/%"2
7 .' K >I->E J 0AT %AT( IC->D IN% K 7J2
"U, I> =* S#7* IN *U); ,-#N #99;)/ING ,; ,-* *T9-#NG*
)#,* "*,=**N *U); #N/ US V, IS
(/%" K 7-@> J
S" GC-D> (/%" IS /,TIMAT(,4 >L-79 J
9- =-* 9;U7/ IN9)*#S* ,-* )#,* ;> P);/U9, #99;)/ING7K
S; ,-#, ,-* 7;SS 9#N "* "#7#N9*/ ,; )*/U9* ,-* 7;SS
=-* 9;U7/ IN9)*S#S* ,-* P)I9* ;> ,-* P);/U9,
#99;)/ING7K S; /*9)*#S* ,-* 7;SS*S%
87
,IMITATI"N
I,S N;, *#SK ,; 9;NVI*N9* ,-* "UK*) ,; ,)#/* IN
*U); INS,*#/ ;> /;77#) %
,-* G;V*)N!*N, P;7I9K IS N;, IN >#V;U) >;) ,-*
*TP;,*)S IN IN/I#
)"I IS N;, #"7* ,; 9;N,);7 ,-* #PP)*9I#,I;N #N/ I,
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