Pragati sharma

A

SUMMER TRAINING

&

PROJECT REPORT

ON
“HUMAN RESOURCE AUDITING ”
FOR

AARTI INDUSTRIES LIMITED

In the partial fulfillment of the requirement for M.B.A
(Full Time)

Submitted By

SHARMA PRAGATI SUSHIL
(M.B.A.) DIV A
ROLL NO 50

Submitted To

PROF. JAYSHRI TAYLOR (Internal Guide)
MR. KIRIT SASHTRI (External Guide)

G.I.D.C. RAJJU SHROFF ROFEL INSTITUTE OF MANAGEMENT
STUDIES, GRIMS, Vapi

AFFILIATED WITH
VEER NARMADA SOUTH GUJARAT UNIVERSITY, SURAT
ACADEMIC YEAR 2007-08


DECLARATION
I, SHARMA PRAGATI SUSHIL hereby declare that the report on summer
training and project work entitled “HUMAN RESOURCE AUDITING”
submitted to ‘GIDC Rajju Shroff Rofel Institute of Management Studies” is a
result of my own work and my gratitude to other work publications if any, have
been duly acknowledged.

PLACE: VAPI
DATE: SHARMA PRAGATI

PRAGATI SHARMA


ACKNOWLEDGEMENT
“Turning aspirations into realities is easier when quality people are support of
ones efforts”

I greatly concede the help provided by the company and the people working for
providing the much valuable information and also extend my thanks for the support
throughout the project report.

I am also thankful and acknowledge my depth gratitude to my teachers and the
director of GRIMS Dr. S.S.SHAH for his constant encouragement and direction in the
completion of this project report. I am obliged to him and express gratitude to him
for giving me a great opportunity for the preparation of the project report.

I would like to express my heartful of gratefulness to Mr. Kirit Shastri for having
given me this opportunity to do a project in this esteemed organization.

I am also thankful and concede my depth of gratitude to my professor guide
Mrs Jayshri Taylor for her constant encouragement and supervision in the
completion of this training and the project.

PRAGATI SHARMA

PRAGATI SHARMA


CERTIFICATE

This is to certify that Ms. PRAGATI SHARMA has satisfactorily completed the work
entitled, “SUMMER TRAINING PROJECT” specialization topic “HUMAN RESOURCE
AUDITING”. Based on the declaration made by the candidate and my association as a
guide for carrying out this work, I recommended this project report for evaluation as a
part of the MBA Programme of Veer Narmad South Gujarat University.

Date: 09/08/2007

Place: Vapi ___________________
(Guided By: JAYSHRI TAYLOR)

__________________
(Director)
Dr. R. S. shah

PRAGATI SHARMA


EXECUTIVE SUMMARY
The summer training report contains the detail of employees of AIL about their
living status and other problem faced by there in there day to day life.

Than what is CSR a small idea about that by theoretical as well as from
companies point of view.
The report starts with introduction of the Indian Chemical Industry with the
history of the AARTI INDUSTRIES LIMITES. The goals, mission and vision are also
added.

Than what is CSR a small idea about that by theoretical as well as from
companies point of view.

The finance department is covered every necessary information. The marketing
department of the company was in Mumbai so we were not able to get complete
information about the marketing department of the company.

The production department has in it all the production details with the
production process and the ETP plant which is situated in the company and owned
by the company.

The specialization project undertaken was in accordance to the Human
Resource Department of the organization to know the working of the department in
organization.

PRAGATI SHARMA


The Human Resource Auditing was basically done to know the working,
systems policies and the procedures that are prevailing in the department of the
organization.

The methodology adopted for the completion of the project was to approach
the Human Resource manager with a set of questionnaire.

The data gathered shows that the AARTI INDUSTRIES LIMITED is having a
good human resource department.

The report contains the introduction of the Auditing. What does Audit
contains? Why should Auditing be conducted?

The analysis is done with the help of the questions asked and the response
from the Human Resource Manager of the AIL.

Then the findings are being shown. Lastly the suggestions are given to the
company after the interpretation of the response of the Human Resource Manager.

PRAGATI SHARMA


INDEX
PART 1 (ALL DEPARTMENT)

SR. NO TOPIC PAGE NO

1 THE STRUCTURE OF THE CHEMICAL 1-2
INDUSTRY

2 AARTI INDUSTRIES LIMITED 3-15
 CORPORATE INFORMATION 3-5
 INTRODUCTION 6-10
 THE COMPETITIVE ADVANTAGE OF 11
AARTI INDUSTREIS LIMITED

3 HUMAN RESOURCE DEPARTMENT 16-60
 RECRUITMENT 19-24

 SELECTION 25-27

 PROMOTION AND TRANSFER 28-30

 TRAINING AND DEVELOPMENT 31-32

 REMUNERATION 33-38

 PERFORMANCE APPRAISAL 42-45

 MEDICLAIM POLICY 48-49

 SOCIAL RESPONSIBILITY 50-60

o (CSR) 56-60

PRAGATI SHARMA


4 FINANCE DEPARTMENT 61-81

 STRUCTURE OF FINANCE DEPARTMENT 65

 BALANCE SHEET 70

 PROFIT & LOSS A/C 71

 RATIO ANALYSIS 72-76

 SHAREHOLDING PATTERN 77-78

 CHARTS 79-81

5 MARKETING DEPARTMENT 82-122

 STRUCTURE OF MARKETING 87
DEPARTMENT
 THE HOLISTIC MARKETING APPROACH 88-90
SR. NO TOPIC PAGE NO

 THE MARKETING MIX 94-114
o PRODUCT 95-103
o PRICE 104-107
o PLACE 108-113
o PROMOTION 114
 PACKAING, LABELLING, WARRANTIES 115-120
AND GUARANTEES.
 THE DISTRIBUTION CHANNEL 121
 MODE OF TRANSPORTATION 122

6 DESPATCH DEPARTMENT 123-125

PRAGATI SHARMA


7 PRODUCTION DEPARTMENT 126-
 PLANT LAYOUT 128-129
 PRODUCTION PROCESS 130-133
 PRODUCTS 134-142
 QUALITY CONTROL 143-147

8 RESEARCH & DEVELOPMENT DEPARTMENT 148-149

9 STORES DEPARTMENT 150

10 PLANT UTILITY DEPARTMENT 151-153

11 HEALTH AND SAFETY 154-156
 AARTI HEALTH CARE 155-156
 SAFETY DEPARTMENT 157-165
 SHE POLICY 166-168

12 PROCESS OF HANDLING HAZARIOUS CHEMS 169-170

13 MAINTENANCE DEPARTMENT 171-172

14 EFFLUENT TREATMENT PLANT 173-177

15 SWOT ANALYSIS 178-179

16 ANNEXURE

17 BIBLIOGRAPHY

AARTI
PRAGATI SHARMA


INDUSTRIES
LIMITED

THE RIGHT CHEMESTRY FOR
A BRIGHTER TOMORROW

THE STRUCTURE OF THE CHEMICAL INDUSTRY

PRAGATI SHARMA


In tune with the fast changing economic environment in the country, the Indian
chemical industry too is on a steady growth path. Indian chemical industries has a
strong and diversified base encompassing many areas such as organic and
inorganic chemicals, plastic, fibers, dye stuffs, paints, pesticides, insecticides,
speciality chemicals, drugs and pharmaceuticals. The growth in this sector has
constantly been increasing than the average growth rate of the manufacturing
sector in India.

The chemical industry is sometimes referred to as the "keystone" industry
because of the way the rest of the manufacturing sector relies on chemicals.
Chemicals are nearly a $1.5 trillion global enterprise, and the U.S. chemical industry
is the world's largest producer. The chemical industry is also the second largest
consumer of energy in manufacturing and spends over $5 billion annually on
pollution abatement. Chemical industry has 21% of total energy consumption.

The Indian economy is firmly on the path of the steady growth. Even during the
last decade when the other countries were in the grip of the massive slowdown,
India continued to enjoy a comfortable position. This recent spurt in the growth is
propelled by radical reforms such as the removal of the restrictions on foreign
investment and industrial delicensing. With substantial increase in the domestic
Gross Domestic Product (GDP) rate; the growth is also translated into increasing
the demand in the domestic sector in various chemicals. Simultaneously the
chemicals sector also shows growth in export.

THE INDIAN CHEMICAL INDUSTRY SIZE US $ 28 BILLION

Knowledge
18%
Basic
Speciality 57%
25%

 Chemical Industry is an important constituent of the Indian economy.
 Its size is estimated at around US $ 28 billion approx, which is equivalent
to about 7% of India’s GDP.

PRAGATI SHARMA


 In terms of volume, it is 12th largest in the world, and 3rd largest in Asia.
 Within India, it constitutes about 15% of manufacturing capacity and 20%
of the Excise revenue to the Government of India.
 Chemical industry has weight age of about 13% in the index of industrial
production.
 The global chemical industry is valued at about US $ 1.7 trillion. Of
which, India’s chemical sector accounts for just 2%.

{The Indian chemical industry is the 12th largest in the World and 3rd largest in
Asia. The Indian chemical industry constitutes 12.5% of the country’s industrial
production and 15%of the manufacturing capacity of India. Also the chemical
industry constitutes 6.7% to India’s GDP.}

India’s Chemical Industry Export

 India’s chemical exports have recorded growth rate of 9%.
 For the year 2001-02, the chemical industry accounted for more than
16.20% of the total Indian exports.
 For the year 2001-2002 exports of all chemicals and allied products were
US $ 4684 million.

PRAGATI SHARMA


CORPORATE INFORMATION

∗ Name of the Company :

∗ Type of Company:
Public Limited

∗ Established Year :
1984

∗ Size of Company:
Large Scale

∗ Plants :

 Plot no. 801,801/23,
802,803/1-2-3, GIDC,
Phase 3, Vapi-396195

 Plot no. 902, GIDC ESTATE,
PHASE 2, VAPI-396195,
DIST: VALSAD, GUJARAT.

 Plot no. 752-753-754
SARIGAM, TAL: UMARGOAN,
DIST: VALSAD, GUJARAT

 Plot no.758/1, 758/2,
GIDC ESTATE JHAGADIA,
DIST: BHARUCH, GUJARAT

 Plot no. K-18, MIDC,
TARAPUR,
DIST: THANE, MAHARASHTRA.

PRAGATI SHARMA


 Plot no. E-50, MIDC,
TARAPUR,
DIST: THANE,

∗ REGISTERED OFFICE: Plot no.801, 801/23
GIDC ESTATE, PHASE-3,
VAPI-396195, VALSAD

∗ CORPORATE OFFICE : Udyog Kshetra,
2nd floor, L.B.S.Marg,
Mulund-Goregaon Link Road,
Mulund (W), Mumbai-400 080

Man-Power Force

∗ Board of Directors
Chandrakant V. Gogri Chairman
Rajendra V. Gogri Vice-Chairman & Managing Director
Shantilal T. Shah Vice-Chairman

∗ Independent Directors :
Ramdas M. Gandhi
Laxmichand K. Jain
Vijay H. Patil
Haresh K. Chheda

∗ Whole-time Directors :
Parimal H. Desai
Manoj M. Chheda
Rashesh C.Gogri
Hetal Gogri Gala
Kirit R. Mehta

PRAGATI SHARMA


∗ Company Secretary
Mohan P. Sonar

∗ Auditors
M/s. Parikh Joshi & Kothare,
49/2341, M.H.B.Colony,
Gandhi Nagar, Bandra (East), Mumbai-400 051

∗ Registar & Transfer Agent :

 Sharpro Services (India) Pvt.Ltd.,
Satam Estate, 3rd floor, above Bank of Baroda,
Cardinal Gracious Road, Chakala,
Andheri (E), Mumbai-400 099

∗ Bankers:

 Bank of Baroda
 Union Bank of India
 State Bank of India
 ABN Amro Bank
 Standard Chartered Bank
 HDFC Bank Ltd.
 Export-Import Bank of India
 IDBI Bank Ltd.
 City Bank N.A.
 UTI Bank Ltd.
 ICICI BANK LTD

PRAGATI SHARMA


PRAGATI SHARMA



In the business world, the only constant is change. Paradigms are remodelled,
visions and business strategies modified, and technologies upgraded in response
to the needs and challenges of a changing world. In other words, organizations have
to change to survive, to remain competitive and to succeed. AARTI
INDUSTRIES LIMITED (AIL) is a dynamic organization, continuously
investing in innovative products and processes, as well as cleaner technologies, to
meet shareholder aspirations and societal expectations.

AARTI was started in the year 1984. The first unit of AARTI group,
ALCHEMIE LABORATORIES, commenced commercial production of DIMETHYL
SULPHATE (DMS) in the year 1975. Today, AARTI has acquired world-class
expertise in the development and manufacturing of basic bulk chemicals, dyes &
pigment intermediates, pharmaceuticals & agrochemicals along with their
intermediates, rubber chemicals, surfactant intermediates and speciality chemicals.
AARTI is amongst the largest producers of Benzene based basic and intermediate
chemicals in India

At AIL, they believe that the pursuit of corporate goals and commitment to
social responsibilities have to go hand in hand. So, while the AIL are one of the
largest producers of benzene-based intermediates in India and are ranked among
the top five producers in the world, the AIL is also an organization alive to their
responsibilities as a good corporate citizen. The people at AIL believe that high
standards of business conduct are integral to earning the trust and respect of
stakeholders and therefore have zero tolerance towards unethical behaviour or
corruption in any of their business dealings.

PRAGATI SHARMA


AIL is a multi-product, multi-location company manufacturing over 125
products at global-scale. AARTI has manufacturing sites at Gujarat, India (Vapi,
Sarigam & Jhagadia) and at Maharashtra, India (Tarapur & Dombivli). The Tarapur
facility of AIL’s API division.

AARTI has attained a total turnover of US $ 189 million in the year April 2003-
March 2004 with flagship companies AARTI INDUSTRIES LIMITED (AIL) &
AARTI DRUGS LIMITED (ADL) listed on Stock Exchanges. AARTI has a
Subsidiary AARTI HEALTHCARE LIMITED (AHCL), which is engaged in
manufacturing of Active pharma ingredients ranging from Ace Inhibitors,
Broncodialators to Steroids.Recognizing the importance of research, AARTI has
established three full-fledged DSIR (Dept. of Scientific & Industrial Research)-
Government of India recognized R & D centers, which carry innovative product and
process development work.

AARTI INDUSTRIES LTD. is an ISO 9002/GMP certified organization and a
flagship company of the USD 259 million strong Aarti Group. AARTI has the
privilege of catering to the requirements of leading manufacturers of dyes,
pigments, pharmaceuticals, agrochemicals and rubber chemicals in countries such
as USA, UK, Germany, Spain, Italy, Switzerland, Belgium, Japan, Korea, China,
Russia, etc. AARTI also has representatives in USA & a subsidiary company in UK
to provide better services to its Export Customer.

For the people at AIL, sustainable growth is not an end-point, but an ongoing
process and a life-time commitment. The dedication of AARTI INDUSTRIES
LIMITED to the principles of sustainability is best encapsulated in their
company's motto - "The right chemistry for a better tomorrow". A better tomorrow
for our children and future generation.

PRAGATI SHARMA


AIL will always be a socially responsible company. The company AIL always
value the active involvement of their people their mission of achieving sustainable
growth. The company also thanks all of their shareholders, customers, business
partners, as also the media, financial institutions, industrial associations, NGOs,
government organizations, neighbouring industries and local communities for
placing their trust in the company i.e. The AARTI INDUSTRIES LIMITED and
being a part of this exciting journey of sustainable growth. At AIL, a sharp focus on
the three main constituents of the "Triple Bottom Line"- economy, society, and
environment – guides their activities towards greater sustainability. AARTI
INDUSTRIES commitment to corporate social responsibility is corroborated by
the company’s emphasis on creating a performance-based ambience for their
people, their respect for human rights and labour welfare, their commitment to high
ethical standards, their initiatives in the areas of health, education and environment
preservation, and their endeavors to create value for the company’s stakeholders.

Over the last two decades, we have acquired world-class expertise in the
development and manufacturing of basic bulk chemicals, dyes & pigment
intermediates, pharmaceuticals & agrochemicals along with their intermediates,
rubber chemicals, surfactant intermediates and speciality chemicals. AIL’s API
division, Aarti Healthcare, makes high-value lifestyle APIs which are used in
manufacturing cardiovascular, antiasthmatic, anti-cancer, anti-thalassaemic, anti-
hypertensive and anti-depressant drugs Exports account for over 40% of our total
sales. At present, AIL export to more than 40 countries worldwide including USA,
UK, Germany, Spain, Italy, Switzerland, Belgium, Japan, Korea, China and Russia.
Over 60% of AIL’s exports are to developed countries, with more than 40% going
to the EU.

PRAGATI SHARMA


GOALS
AARTI group is strategically placed to exploit growth opportunities in the
Chemical Industry. In view of its technical expertise and broad base satisfied
clientele in India and abroad, AARTI is looking for global partners and strategic
alliances in areas of mutual interest viz.

o Development of International markets for AARTI's products.
o Toll manufacturing.
o Transfer of Technology / Technical know-how.

VISION STATEMENT
We will be a world-class organization that enhanced value to our customers
and other shareholders by

o Caring for employee to work as motivated terms in open and learning
environment.
o Setting challenge new standards of performance.
o Focusing on total quality, innovation and responsible care towards the
environment.

PRAGATI SHARMA


MISSION STATEMENT
We are in the problem of manufacture and supply of crop production and

specialty chemicals worldwide providing solutions to optimize farm productivity for

the Indian farmer through out innovate and cost effective product to provide the

customer, better value of money.

♦ Exceed the expectations of our valuable customer for quality of products

and services.

♦ Strive to make continuous important and bring excellence in productivity,

safety, environment and hygiene in all the area of operation.

♦ Emphasize on appropriate training to all the employees and be open to all

their suggestions through team participation.

♦ Strive to make AARTI INDUSTRIES LIMITED of a world-class

organization.

THE COMPETITIVE ADVANTAGE OF AARTI INDUSTREIS
LIMITED

PRAGATI SHARMA


• The AARTI INDUSTRIES LIMITED (AIL) considers that their R&D

is quite good which helps the industry in gaining the advantage

compared to their competitors.

• The people in the AIL’s R&D department keep on doing the research

work continuously which helps them in gaining more advantage than that

of their competitors i.e. reduction of the cost or increasing the quality of

the product that are to be served to theirs customers.

POSITION OF AARTI INDUSTRIES LIMITED (AIL)

The manufacturing units of the AIL are of global scale and are mostly in the

States of Gujarat and Maharashtra. Both the units are ISO / GMP certified. The plants

are highly incorporated along with Cost-Efficient Manufacturing Process and Low

capital investment and manufacturing more than 100 products. The AARTI

INDUSTRIES LIMITED is ranked amongst top 5 Global manufacturers for their

key product and their continuous R&D support and process improvement is the key

for Company to remain competitive globally.

PRAGATI SHARMA


SOME KEY FACTS ABOUT AIL

• AARTI INDUSTRIES LIMITED is one of the largest producers of

benzene-based basic and intermediate chemicals in India and among the top

five globally.

• AARTI INDUSTRIES LIMITED one of the top three producers of

Dimethyl Sulphate in the world.

• The AARTI INDUSTRIES LIMITED has a fully backward integrated plant

for Dimethyl Sulphate, i.e., starting from Sulphur and Methanol.

• AIL Rs.500 crore company manufacturing Organic chemical and

Intermediates for Vapi unit.

• AIL derives about 90 per cent of its revenues from specialty and basic

chemicals.

• Through its backward integration manufacturing, AARTI INDUSTRIES

LIMITED acquires the competitive advantage with respect to the availability

of raw materials and reduced cost.

PRAGATI SHARMA


• AIL has the largest installed capacity of chloro-benzene (ONBC and PNBC)

domestically.

• The company is adding more fluorine based products in its portfolio.

• The company has in recent times been focusing on specialty chemicals and

pharmaceuticals.

• AARTI INDUSTRIES LIMITED doubled its sales turnover in the last

four years from Rs 345 crores in 2001-2002 to Rs 786 crores in 2005-2006

whereas exports increased more than three times during that period from Rs

101 crores in 2001-2002 to Rs 342 crores in 2005-2006.

• AARTI INDUSTRIES LIMITED carries out custom synthesis activities

and undertakes contract research & manufacturing.

• AARTI INDUSTRIES LIMITED was been presented the star exporter

award for 2004-05 by "The Gujarat Dyestuffs Manufacturers' Association" for

earning the highest foreign exchange from direct export of self-manufactured

dyes & dyes intermediates. This was one of a biggest reward to the AARTI

INDUSTRIES LIMITED for their efficient effort.

PRAGATI SHARMA


General Rules and Regulation

These are the rules and regulations that the employees of AARTI
INDUSTRIES LIMITED have to pursue stringently and the employees do follow
all these rules and regulations happily for the betterment of their lives as well as the
company.

♦ The Employees cannot bring any kind of unnecessary resources like
matchboxes or cigarette, alcohol, tobacco, etc.
♦ The employee after entering the premises of the AIL should always put on
his identity card with him.
♦ During functioning hours the employees should not meander any where,
devoid of their work and wasting the time.
♦ While entering and departing out of the AARTI’s premises each and
every employee should make an entry by means of purchasing card from
the security office at the main gate of the AIL.
♦ Any employee of AIL should not remain missing or absent without former
informing to his department head and P & A. Dept. unless and until the
explanation of absent is bad health or any urgency that might have
occurred.
♦ Every employee should be dressed in uniform that has been provided to
them by the company while entering the premises of the AIL with the
safety shoes, apron and safety helmet as per pre instructed to them.

PRAGATI SHARMA


Company’s shared value:
o Global capacities
o Customer Satisfaction
o Quality and logistics
o Continuous cost control
o High value addiction
o Diversified product range
o Loyal work force
o In-house recognized R & D Centers.

PRAGATI SHARMA


ORGANIZATION CHART
Chairman

Junior Director

Vice President
Mkt. Manager Director Work Personal Manager Excise Officer

Dep. Gen. Manager Prod. Manager Personal Assistant G. M.

Mkt. Officer Maint. Dept. Production Dept. Q.C. Dept. Dispatch Dept. Safety Dept. Security Dept. DGM Official A/c

DGM Organic Div. Acid Div. DGM Dispatch Officer G. M. Security Off. Fin. Exe A/c Asst.

Jun. Exe. GM GM Sen. Chemist Dispatch Assist. Safety Off. Security Asst.

Technician DGM DGM Chemist Safety Asst. Supervisor

Sen. Manager Sen. Manager Lab Assistant Engineer Security Guard Gun Man

Manager Manager Supervisor

SDM SDM Worker

Dep. Manager Dep. Manager

Worker Worker

PRAGATI SHARMA


HUMAN RESOURCE DEPARTMENT

Human Resource Management is that management which is related with
decisions relating to planning organizing, directing and controlling of the
procurement, development, compensation, integration, maintenance and
separations of human resources to the end that individual, organization and
sociality objectives are accomplished. And the same is done in the AIL. The
objective of the AARTI INDUSTRIES LIMITED is the maintenance of those
relationships on the basis of which organization can get maximum personal
contribution from employees.

As we all know that work of the Human Resource Department is of acquiring,
retaining and maintaining the manpower. The same is in the case of the AARTI
INDUSRTRIES LIMITED the organization tries its best to procure maintain and
retain their employees in their organization.

The Human Resource is important to any labour or capital intensive industries.
So they should place an important position to an industry. The AARTI
INDUSTRIES LIMITED regular undertakes the training activities and other HR
initiatives. As the AIL does work for the societies, it also thinks about its
employees. The company has also continued its scheme for assistance to
employees with a view to ensure that their basic housing needs are fulfilled. The
company has been continuously focusing. On people and processes those to
encourage and realize their full potential through continuous on job learning and
through other HRD initiatives coordinal and harmonious relation with employees
continued to prevail through the year under assess.

PRAGATI SHARMA


As it is aptly said that Human Resource is an asset for any organization for the
success of any organization human resource play a significant role. If any
company’s Human Resource is not up to the mark or efficient then it affects the
performance of an organization.

Each and every department is linked with another department. One department
forms a stair for the other department in the same way the Human Resource play a
vital role in each and every department whether it is finance department, marketing
department, production/operation department, R & D department or any other. The
manpower must be efficiently employed to get an effective result.

Functions of Human Resource Manager:

The following are main function of human resource manger in AARTI
INDUSTRIES LIMITED:

∗ Application and control of company rules and organization policy.

∗ Recruitment of manpower intended by HOD and approved by management

and top head.

∗ Employee and trainees induction programmed arrangement.

∗ Development of trainees by training and approvals

∗ Transport arrangement for required by employees, guests & customer.

∗ Booking and reservation as required by employees / guests.

PRAGATI SHARMA


∗ Safety of company material and employees.

∗ Maintenance of first aid material.

∗ Canteen administration

∗ Assistance of meeting and conference

∗ Company occasions arrangements like annual day, Picnic.

∗ Labor welfare activities as decided by management.

∗ Arrangement of uniform, shoes, seasonal wear, safety equipment.

∗ House keeping of company premises.

∗ Casual labor arrangement

∗ Building maintenance and office maintenance

∗ Public relation activities.

∗ Salary wages and perks administration works and recorded keeping.

∗ Telecom related activities

∗ Appraisal assistant of employee for increments , training, promotions

∗ Factory Act related activities

∗ Stationary planning and arrangement.

PRAGATI SHARMA


RECRUITMENT

Recruitment in simple terms is searching for capable applicants for the job.

Recruitment is attracting and obtaining the eligible candidates so that the right

people are selected for the job.

Recruiting of the individuals or the recruitment process is one of the most vital

and complicated part of an organization. If any error is made in the recruitment

process, then in a straight way it could be seen in the work performance of the

employees and the profits of the company as a single mistake will have an effect on

the result of the organization. As AARTI INDUSTRIES LIMITED is producing

some of the hazardous chemical so for them man power recruitment process is

hard-hitting job.

Recruitment is the generating of the application of applicants for specific

position through many of the sources from them the three common sources are the

advertisement, state employee exchange agencies or a private employment.

According to AARTI INDUSTRIES LIMITED they formulate a selection

policy, due consideration is to be given to organizational requirement as well as

technical and professional dimension of selection procedure adopted by AARTI

INDUSTRIES LIMITED and that it is tailor made to meet its particular needs.

PRAGATI SHARMA


The thoroughness of the procedure depends upon three factors.

 Nature of selection.

 Policy of the company.

 The length of the probability period or trial period.

The company has also continued their schemes for assistance to employees

with a view to ensure that there basic housing needs are fulfilled. The company has

been continuously focusing. So they should place an important position to

industries. The AIL company regular undertakes the training activities and other

Human Resource initiatives. The Human Resource is important not only to any labor

intensive but to the capital intensive industries also. On people and processes

those to encourage and realize their full potential through continuous on job

learning and through other HRD initiative cordial and harmonious relation with

employee continued to prevail through the year under review.

Human Resource plays a vital role in each and every department whether it is

finance department, marketing department, production/operation department, R&D

department or any other. In an organization the manpower must be efficiently used

to make out the best from them. Human Resource is asset for any organization for

the success of any organization. Human Resource plays an important role. If any

company’s Human Resource is not a standard or not efficient then it affects the

performance of an organization.

PRAGATI SHARMA


Source of Recruitment :

The sources that are used for the recruitment purpose in AARTI
INDUSTRIES LIMITED are as follows:

• Internal sources

∗ Transfer
∗ Promotion

• External sources

∗ Advertisement
∗ Educational institution
∗ Labor contractors
∗ Recruitment agencies.

PRAGATI SHARMA


RECRUITMENT PROCEDURE:-
NEWSPAPER
APPLICATION

RECEIVING
APPLICATION

SORTING
OUT
APPLICATION

WRITTEN TEST

INTERVIEW

SORT TEST

FINALIZE

INTERVIEW

II INTERVIEW

OFFER LETTER

OFFER
LETTER
JOINING THE
ORGANIZATION
JOINING THE
ORGANIZATION
APPOINTMENT
LETTER
APPOINTMENT
LETTER

PRAGATI SHARMA


THE RECRUITMENT PROCESS

The process of recruitment can be explained as under:

NEWSPAPER APPLICATION:

Very firstly the AIL gives the advertisement in the newspaper so that the
applicants are attracted towards the advertisement and they apply in the company
for the required post. In that newspaper advertisement the AIL gives the required
qualification for the post. So that the applicants who are that qualified and capable
only they apply for the job.

RECEIVING APPLICATION:

After the advertisement placed in the newspapers the AIL receives the
application forms of those candidates who are willing for the job.

SORTING OUT APPLICATIONS:

After the applications being received by the AIL, they do the work of sorting
out the applications. A panel is selected and those people in the panel do the work
of sorting the received applications and then according to those panel members the
candidates who are capable to go a step further i.e. for the interview are being
selecte.

Before the interview the AIL goes for a test for the candidates which is a
written test in which the candidates are given a questionnaire in which the AIL ask
few questions which has to be answered in a written form. After the test the answers
are gone through and then the candidates whose answers are found to be
interesting are further being called out for the interview.

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INTERVIEW:

Then the interview is held. Some employees of the AIL from the executive level
are being selected so that those people carry out the interview without any
biasness. In the interview the employees of the AIL carries on with the question
answer sessions. By this interview the panel gets a clear picture of which people are
competent for the job and can go for the further process of the recruitment.

FINALIZE:

Finally the applicant who is found to be competent enough by the panel is
being finalized after the finalization the employee is asked to go under a physical
checkup under the doctors and submit the report in the AIL.

OFFER OR APPOINTMENT LETTER:

After all the procedures are completed and a clear chit given by the doctors the
employees are being given an offer or an appointment letter to join the organization
the candidate.

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SELECTION PROCEDURE

APPLICATION
FORM

INTERVIEW

PHYSICAL
EXAMINATION

REFERENCE

FINAL APPROVAL

EMPLOYMENT

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THE SELECTION PROCESS
The selection is the process of making a choice or deciding on individuals from
among many. The selection process is of selecting a well deserving, capable and
competent candidate for the given job. The selection can be from within the
organization as well as fresh candidate. If the filling of the job is to be done
internally or from within the organization then it can be done by the promotion and
transfers of the employees but if the filling of the job is via externally then it can be
done through the recruitment and the selection procedure of the organization.

APPLICATION FORM:

The application form is given to the candidates and that the candidates are
asked to fill them. The AIL is very much careful while going on with the selection
process. The AIL not only selects the people from the external source but also
from the internal source.

INTERVIEW:

The AARTI INDUSTRIES LIMITED after the receiving of the application
form from the candidates the company goes for the interview. In the interview the
AARTI INDUSTRIES LIMITED top level management sees to it that the
process is carried out very properly and that the candidates are selected on the
basis of their experience, compatibility, competence, and qualifications. The AIL
keeps in mind that the candidates selected are experienced and that this is the most
important criteria the AIL look at before selecting any of the candidates for their
company.

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PHYSICAL EXAMINATION:

The company after going on with the interview process some slot of candidates
are selected and also that the selected candidates are being asked to go for the
physical checkup as the physical checkup may help the AIL to know whether the
candidates are completely healthy or not. The candidates are asked to submit a
report of their fitness in the organization and then the further decisions are being
taken by the organization. As the physical checkup may help the AIL to avoid
future problems.

REFERENCE CHECK:

After the company carries out with the physical checkup of the selected
employees, the company cross checks the reference. For a company reference
check is one of the important criteria while selecting the candidate or while giving
the employment to the applicant.

FINAL APPROVAL:

After the reference check is been completed the next step is to give approval to
that candidate who has completely satisfied the AARTI INDUSTRIES LIMITED
requirement of an employee.

EMPLOYMENT:

After the company has completed all their procedures now is the time to give
the employment to the candidates who are selected by the organization for their
company.

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PROMOTION AND TRANSFER

PROMOTION
AARTI INDUSTRIES LIMITED gives progression to its employees with
enhanced pay, position and employment responsibility all the way through
encouragement by promoting them as per the responsibility and the work done by
the employees as one of the best way of expressing the employees excellent work is
by promotion or by increasing the employee’s remunerations.

PROMOTION CRITERIA
The AARTI INDUSTRIES LIMITED has a promotion policy that, the
promotion to the employees is given on the basis of seniority. AARTI
INDUSTRIES LIMITED has resolute to give promotion after every two years of
the working period of the employees. If an employee is not satisfied of the post he
has, the employee is then sent back to his position for the duration of his promotion
period. As per their resolution the AIL gives promotion to its employees by the way
of their seniority which is 40% and out of 60%, 20% by the way of personal interview
and 40% by performance appraisal so that none of the employees feel that they are
been deceived by the company authority and the well deserved employee is being
given the promotion.

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PROMOTION POLICY

AARTI INDUSTRIES LIMITED has espoused the promotion policy as per
the seniority as well as on the merit basis of the employees. The seniority of
employee is regarded grade wise as per character residence period on the particular
grade. Also the work done by the employees are given significance by the AIL.

TRANSFERS

As we all know that transfer is a cross shifting the employee as per the demand
or a requirement of the employee, causing a movement of an employee from his/her
one job, section, department shift, plant or position to another at some or another
place with that particular departmental salary status and responsibility, etc.

The Aarti Industries Limited follows a well define transfer policy to
avoid any grievances among the employees.

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• Periodic Transfer
In the AARTI INDUSTRIES LIMITED periodic type of transfers is mainly
for those departments whose regional areas and sales department are located
abroad or out the country. For that reason the marketing department is the only
department which has the periodic transfer present in it.

The AARTI INDUSTRIES LIMITED has a policy according to that policy
the marketing personals are transferred every four year, so they can come back to
the native state. There are no frequent transfers that exist n the company and they
are avoided in company as the AIL are being concerned of the adverse effects of
transfer on heir employees which is seen in the work of the employees.

• Internal Transfer
The internal and the departmental transfer are mostly avoided in the AARTI
INDUSTRIES LIMITED.

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TRAINING AND DEVELOPMENT
Training in AARTI INDUSTRIES LIMITED is given to those people who
are newly employed in the company so as to make them familiar with the industry
and the working condition prevailing in the company.

The trainings that exist in AIL:-

o Induction training
o Health and safety
o Discipline
o TQM
o ISO 9000
o Management development
o To increase productivity.
o To improve quality.

Induction training:
The induction training is given to those of the new employees to make them
familiar with the company as well as the working of the organization.

Discipline:
The discipline refers to the rules and the regulations that prevail in the AARTI
INDUSTRIES LIMITED. As the employees enter in the organization they are
thought and made aware with those rules and regulations so that the employees do
not violate those rules and that the discipline is maintained in the organization
properly.

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Health and safety:
The health and safety of the employees is of the utmost importance for the
company and for that purpose the AIL gives the employees the instruction for their
safety and the compulsory usage of the things which are used for the safety
purpose e.g. gumboots, caps etc. so that the accidents are avoided and health and
safety of people are more concentrated by the organization. So for that reason the
organization motivates the employees for the occupational health, safety and
environment, safety policy, philosophy, accident prevention techniques, safety
procedure etc.

The safety department conducts in plant safety training program on regular
basis.

• Chemical emergency, prevention preparedness and response.
• Importance and use of safety equipment (Explosive, oxygen, CL-2, HCN,
Monitors, SCBA, ESA, Fire Gas Tight Suit, First Aid-Box)

Total Quality Management: (improving quality)
Total Quality Management (TQM). The quality being the most important part of
the product and it’s selling so for that reason the employees are thought of the
quality management so that they understand the actual and good quality products
and they make a quality product. As the quality gives the clear picture of the
organization the AIL also believes in giving the bet quality products to their
employees.

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REMUNERATION
The remuneration that the AARTI INDUSTRIES LIMITED provides to
each of the employees is as follows

 Salary:
The Board of Directors is to be provided with the Salary of Rs.85, 000/- per
month with power to make an annual increment area under discussion to a
maximum amount of Rs.1, 50,000/-per month in respect of salary and privilege up
to 100% of salary.

 Commission:
In accumulation to the salary, the whole-time Directors of the AARTI
INDUSTRIES LIMITED shall also be entitled to be paid share in comprehensive
commission calculated at the rate of 1% of not profit of company computed under
section 349 of the companies act, 1956 payable to all company share of such
commission shall be payable after the annual accounts are adopted by the
shareholders.

 Perquisites:
Apart from the salary and commission regularly paid, the whole-time
Director shall be permitted with the allowances:

o House rent allowance of Rs.15000/-per month.
o Bonus/ex-gratis: Rs.85000/-per annum.
o Compensation of Medical Expenses and/or Medical Insurance
premiums for self and family members as per company’s policy.
o Personal Accident Insurance as Per Company’s policy.

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The power of modifying any issue i.e. increase or decrease the amount of the
salary or any other and amount of perquisites to be provided by the company
subject to a maximum ceiling of 100% of the salary of the whole-time Director will be
in the hand of the Board of Directors, Whole-time Director shall also be entitled to
following perquisites which shall not include in the computation of the ceiling on
remuneration specified here in:

o Contribution to Provident fund. Contributions to super annulations fund or
annuity fund as per the rules of the company. These will not be included in
the computation of the ceiling on perquisites to the extent these either
singly or put together are not taxable under the Income Tax, 1961.
o Gratuity payable at rate not beyond half a month’s salary for each
completed year of service end.
o Encashment of leave at the end of the tenure.
o Provision of car for business of the company and telephone at residence
shall not be treated as perquisites. Use of car for personal purpose and
personal long distance calls on telephone shall be billed by the company.

 The Salary Payments
Salary is usually paid in the first week of every month. Salary officer prepare
covers with the name and personal code No., of employees and the pay slip along
with cash or cheque as per grade.

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• Mode of payment in cash or Bank Transfer

 Staff- Cash option or Bank Transfer

 Officer- Usually Bank Transfer.

• The structure of the wages and the salaries

The Human Resource Department also deals with wages and salary system.
For the AIL the happiness and contentment of the employee’s is the main concern,
which is reflected by the health wage and salary structure design in the company.
The AARTI INDUSTRIES LIMITED pursues the minimum wage rate policy
that is fixed by the Government.

The salaries are also determined by the minimum wage rate policy which is
set by the government.

• The Salary Diminution

The time office keeps the documentation of staff employees reporting at duty
i.e. the time of entering and the time of leaving. If employees report late on job, in
that case the company cuts the salary of that particular employee. The salary
diminution rules as per the minutes that are delayed by the employee in reporting
themselves to their respective departments are as follows:

o If late by 16 min to 35 min = Pay of half hrs
o If late by 35 min to 45 min = Pay of 45 min
o If late by 46 min to 60 min = Pay of 1 hrs
o If late by 2 hrs. to 3 hrs = Pay of half days

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• Enlightenment :-
o For the purpose of this agreement, “Family” means the spouse, the
dependent children and dependent parents, if any, of the whole-time
Director.
o No sitting fee shall be payable to him for attending the meeting of the
Board of Directors or committee thereof.
o The other terms and condition of the agreement are such as are
customarily contained in agreement of similar nature.

• The Compensation Packages

The compensation package includes:

Basic + Dearness Allowance + other financial pays like cash canteen
subsidies, washing allowance, shift allowance, contribution of provident fund,
gratuity, medical charges, personal pays, inconvenience allowance, chemical,
and hazardous allowance, etc.

• Shift and Working Hours

Timing at AARTI INDUSTRIES LIMITED the shifts are as follows:

 General shift 8:00 am to 5:00 pm on all working days.

 Lunch time is from 12:00pm to 1:00 pm and 1:00 pm to 2:00 pm.

 There are total 3 shifts in the company i.e. morning, evening, and night.

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(Production of AARTI INDUSTRIES LIMITED goes on non stop i.e. continue
round the clock.)

• The Industrial Act.

The Industrial Acts that is applicable by Human Resource in the AARTI

INDUSTRIES LIMITED is as follows.

o Factory’s Act, 1948,

o Industrial dispute Act, 1947,

o Minimum Wages Act, 1948,

o Employees provident funds and miscellaneous Act, 1942,

o Payment of Bonus Act,1965,

o Payment of gratitude Act, 1972,

o Payment of wages Act, 1936,

o The Worker men’s compensation Act,1923,

o Apprentice Act,

o The employees State Insurance Act, 1948,

o Contract Labor Act,

o Payment of Gujarat labor welfare fund.

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FACILITIES PROVIDED TO THE WORKERS:
The workers in the AARTI INDUSTRIES LIMITED are considered as an

important part of the company and so the company sees that they provide their

workers with the sufficient amenities for the betterment of the workers of their

company.

 Alter the work method so that there is a reduction in any of the possibilities

for straight handling of hazardous materials.

 Provide prospect to the workers to talk among them while they are working

so that they can develop a healthy working relations among them.

 Ensure the availability of a qualified person for the proper treatment the

workers and first aid equipment with all necessary ointments and medicines

for each kind of infection that may be caused in a chemical industry.

 Performing of a regular fitness examination of the workers to notice whether

they are in shape and able-bodied without any illness and if any worker

found in such condition then provide them with ready contact treatment by a

physician or a nurse.

 The company also tries to avoid the work of the workers which is in

separation or in a remote area of the unit so as to avoid any kind of mishap.

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SCHEMES
The schemes provided by AARTI INDUSTRIES LIMITED to their
employees:

EDUCATION SCHEME

The Scheme decided by the AARTI INDUSTRIES LIMITED for the
Scholarship for education to the children of all their employees. This scheme is for
those children who have top score in their academic year. The scheme decides
scholarship to the children on the basis of their merit.

The applicability of the scheme is that the scheme will be applicable to all
employees of the company and their children studying in STD. 5th to 12th. This will be
free from any biasness from the AARTI’s side. And the deserving child will be
getting the benefits of the scholarship scheme.

After the submission of the concluding result by the children of their academic
year to the specified personnel of AARTI the decisions will be taken. The results
will be clustered as per the academic standard & the child who has topped will be
sponsored for next year school fees. The approximate budget amount already set
and given to the child will be Rs.32000 /-P.A. (Eight students every year x4000/-fees
of each.)

VOLUNTARY RETIREMENT SCHEME

The Human Resource Department has also implemented a special type of
policy for the employees named as Voluntary Retirement scheme. Under this
scheme, if an employee is above 40 years of age and retire voluntary. He will be
entitled to get the minimum 4 month salary excluding the benefit for the remaining
years. And not many but only two employees have gone for this scheme.

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MILK SCHEME

At present AARTI INDUSTRIES LIMITED is giving milk coupons to all of
its employees except some service department that are excluded from the scheme.
Along with the milk coupons, AIL is giving tea allowance to all of its employees @
Rs.4/- per attend.

FUNERAL SCHEME

The scheme is such that Rs. 2500/- to be given to all the employees on behalf of
the society and AARTI INDUSTRIES LIMITED on expiry of any of the
dependent family member. Company will compensate the amount to society. This is
a small way to show the gratitude and the company’s concern towards the
employee and their family.

WELFARE SCHEMES FOR EMPLOYEES

The AARTI INDUSTRIES LIMITED also provides some welfare schemes

for their employees so that they can help their employees in some or the other

ways.

∗ Med claim of employees,
∗ Personal accident,
∗ Employees D-link insurances scheme,
∗ Group gratuity scheme,
∗ School admission,
∗ Housing admission,

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∗ Cycle loans,
∗ L.I.C through salary.

PERFORMANCE APPRAISAL

Performance Appraisal is the procedure of evaluating employee’s performance

of their employment in terms of their requirement for purpose of administration

including placement selection for promotion need for training, providing financial

rewards, etc. No firm has a choice as to whether it should or should not appraise

their employees. Just as training is required to be endowed after recruitment of the

employees, performance appraisal is also to be expected.

In AARTI INDUSTRIES LIMITED, Confidential Method is used for

performance appraisal of an employee. For the performance appraisal of the

employee, the superior or head of the department prepares questionnaires, which is

to be filled by their subordinates. In this report the employee describes his

strength, weakness, attitude to work, intelligence, attendance work efficiency, etc.

With the help of this report, the top level can get the complete idea regarding the

employee and his performance in the company. He can take decision regarding

promotion, financial rewards, increments, etc. with the help of the information in the

report. Whatever is the relation of the superior- subordinate they both have to asses

each others performance with complete purity and without any biasness. The

assessment of the executive done by their subordinates and that of the

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subordinates or the non-executive done by their executives will be again assessed

by the superiors.

OBJECTIVE OF PERFORMANCE APPRAISAL

The objective of performance appraisal of the AARTI INDUSTRIES
LIMITED is as follows

o To determine increments and provide a reliable guide for promotion and
transfer to positive of greater responsibility.
o To suggest ways of improving the employees performance when he is not
found to be up to the mark during the review period.
o To maintain individual as well as group development by informing the
employee of his performance standard.

There are two types of appraisal program in the company.

o Form A for the executive and
o Form B for the non- executive

There is no such procedure of the appraisal but the employees are assessed
every at the end of every year. At the end of the year the performance appraisal
program is conducted to know the performance of the employees over whole period
under review. This review states that which employees who are efficient in their
work and needs promotion and that the employees who are incompetent and who
needs training to become effective in the work done by them.

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SELF-APPRAISAL
(To be filled by Appraises)
? What are the responsibilities of your job?

? What do you consider the key areas of your present job?

? In your view what are the major contributions/improvement made by you to

the organization during the period under review

? What are the areas where you could not achieve your desire goal? What were

the reasons?

? What would you consider as your important achievement, Contribution or

improvements in the next 3 month, 6 months & one year?

? What will be the action plan do you decided to achieve the target?

? In order to achieve the specified targets that help do you need from the

organization?

? Are there any intimate problems (Personal or Organizational) which are likely

to come in your way in achieving the enhanced target?

? What co-ordination problems have you faced with your colleagues, other

department, etc. in the organization? Your suggestions to improve the same.

? What steps you have taken to improve the performance of your from

donates? What do your propose to do in the next 3 to 6 months?

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? What training you had in last 12 months?

? Do you have any suggestion for improvement in our organization?

? Are you satisfied with your job, working condition and organization?

? Do you think you need any training, Please specify?

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LEAVE STRUCTURE
The leave structures of AARTI INDUSTRIES LIMITED are as follows.

 PAID HOLIDAY :

The employees are permitted to take 8 holidays in a year which are considered
to be the paid holidays, which are declared by the management in the month of
January.

 WEEKLY OFF :

If an employee is working in a different branch then for them the weekly off is
on Sunday. This is for the Vapi branch and other branches also except for an
employee who is working at the head office (Mumbai), the weekly off for them is on
Saturday and Sunday.

 SICK LEAVE :

As per previously decided by the AARTI INDUSTRIES LIMITED for the
employees 9 days sick leave per annum are on hand and that it is credited on 1st
January every year during the first year of employment, however this leave benefit
will be available on pro-rate basis accumulated. Sick leave can be at the time of
retirement and death of personals only which can be up to a maximum of 72 days.

 PRIVILEGE LEAVE :

Privilege leave is available @ 30 days per calendar years, which is credited @
2.5 leave per month for new management staff, @ 2.5 leave per month ID credited
after completion of one month.

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 CASUAL LEAVE:

Also the casual leaves are decided by the AARTI INDUSTRIES LIMITED
9 days casual leave per annum is available per and it is credited every year on 1st
Jan during the first year of employment, however this leaves benefit will be
available on pro-rate basis. Since casual leave benefit cannot be carried to the
next year, at the end of the calendar year the outstanding leave balance will
automatically be encased and included in the salary of the subsequent month.

 SPECIAL LEAVE:

The managing director under exceptional circumstances will have the prudence
to grant any additional leave, termed as special leave to individuals. Such leave
will normally be leave without pay, except it is for the benefit of the company.

 OTHER LEAVES:

The other leaves are as follows they are the Maternity leave, leave after
resignation compensatory leave unauthorized absence etc.

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MEDICLAIM POLICY
The AARTI INDUSTRIES LIMITED is among those fine companies for
whom their employees mean a lot to them. The company always notices that all the
facilities are properly made available to their employees or not. The AIL not only
cares for their employees but also for their family.

 The scheme is such that the reimbursement of hospitalization expenses of
the family member i.e. spouse children and dependent parents of the
employee will be given the medclaim policy according to the policy of the
AARTI INDUSTRIES LIMITED.
 The eligibility of this scheme is for all those who are voluntarily interested in
this scheme and also for the permanent employees of the company who are
not covered under ESIC scheme of AARTI INDUSTRIES LIMITED.
 The contribution for this scheme is monthly deduction of Rs. 20 per family
member and per month from the salary of the employees and the same
amount is to be contributed to the company.
 The conditions on this policy are as follows:

• Employee should notify the name and relation of the employee with the
family member for which medical scheme is to be applied.
• All types of hospitalization expenses (i.e. medicine, expenses excluding
food and convenience) are eligible for reimbursement.
• The proof of hospitalization should be cross checked i.e. the
hospitalization and medications bills only.
• Reimbursement claim should be supported with doctor’s report and
hospitalization and medications statement or bills only.

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• The reimbursement or the Payment of entire amount alleged for the
parents mediclaim and any other will be paid after necessary enquiry
and confirmation of matter and documents.
• The working of the department is that five members committee would
be formed among the employee for the scheme with sanction of
majority, for one year.

 Out of the members of committee two personals are authorized to pay the
sum as per official mode. These members are having all the powers of
scrutinizing the matters and checking of documents before giving the
payment to employees.
 All the contribution collected from employees as well as from company on
monthly basis is to be deposited in society in a separate bank account
maintained for the purpose. All the claims should be settled out of the funds
in decided bank account.
 Nature of expenses and diseases should be modified as per consideration
of facts with the prior effects of six months from the date of amendments
done.
 All the payments should be paid through cheque after authorization of all
the committee members.
 Before finalizing the draft of the scheme, the scheme should be approved by
the senior HRD personal of the company.

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SOCIAL RESPONSIBILITY

AIL, Vapi seeks to fulfill its responsibility towards society through its CSR
activities which mainly cover the areas of health, education, housing, social &
cultural needs and disaster relief and can be broadly categorized into:

• Labour & staff welfare
• Community welfare

LABOUR & STAFF WELFARE

At AIL, the people believe in fostering an environment that promotes
innovation, rewards performance and provides opportunities to people for growth.
In addition, the company has a range of initiatives in place for attracting and
retaining a high performance work force. The AIL believes in taking care of its
people beyond the agreed terms. Some of their employee welfare programs are as
follows:

Medi-claim insurance policies for all of the employees of AARTI
INDUSTRTIES LIMITED have been obtained covering even hospitalization. The
expenditure on this account has been round about Rs.7, 00,000 per annum.

Recognizing the need for proper housing for all, the Company has disbursed
housing loans to the tune of Rs.1 Crore for its junior staff. These loans are partly
non-repayable and partly interest-free, with long repayment schedules. This has
helped many of the AIL employees to build houses for their families. As of
September 30, 2006, outstanding housing loan dues amounted to Rs 76, 15,540.

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Over the last three years, the AARTI INDUSTRIES LIMITED has
contributed around Rs 28, 00,000 to the Aarti Employees Co-operative Fund. AIL
provides monetary incentives to their employees to motivate them to opt for birth
control and also to cast their vote during local, Vidhan Sabha and Lok Sabha
elections.

The Company also provides employees with:

• Uniforms, safety shoes, rainy shoes, and raincoats;
• Tea allowance, food allowance, and milk allowance;
• Cycle and vehicle loans;
• Marriage gifts, loans for pooja and festivals;
• Financial assistance to cover disaster relief, funeral expenses,
• and medical expenses including hospitalization for those not
• Covered under the ESIS scheme.

EMPLOYEE WELFARE EXPENSES
Period Labour Welfare taff Welfare Total
Amount
PERIOD LABOUR STAFF TOTAL
WELFARE WELFARE AMOUNT

2004 - 05 Rs 2415729 Rs 917578 Rs 3333307

2005 - 06 Rs 2758586 Rs 547001 Rs 3305587

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COMMUNITY WELFARE
The AARTI INDUSTRIES LIMITED has adopted a village in Gujarat
inhabited by Other Backward Castes (OBCs) and another village in Kutch for
rehabilitating earthquake affected people.

The aim of AIL is to extend their support to a variety of recipients so that as
many as possible can benefit from the company’s financial contributions.

COMMUNITY WELFARE EXPENSES

Total donations in 2004 05: Rs 6,133,438

Total donations in 2005 06: Rs 13,023,500

From the scores of organizations the AIL have donated funds to, a few are
mentioned below:

EDUCATION AND RESEARCH RELATED:

• Ashadham Seva Mandal
• Hirji Bhojraj & Sons K.V.O. Jain Chhatralaya
• Adivasi Education and Charitable Trust
• Mumbai University Institute of Chemical Technology
• Association for Research in Homeopathy
• Rural Agro Research & Development Society

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HEALTHCARE RELATED

• Vishwas Hospital Trust
• Shushrusha Charitable Trust
• Bidada Sarvodaya Trust
• Tibetan Medical and Astro Institute
• Hira-Mongi Navneet Hospital, Mulund
• Parakh Hospital, Ghatkopar

SOCIAL WORK AND CULTURAL ACTIVITIES RELATED

• Kalgad Sarvodaya Trust
• Shri Wagad Sarvodaya Trust
• Dhanvallabh Charitable Trust
• Shri Vardhman Seva Sangh
• Geetai Mission
• Rovadan Trust
• People's Trust
• Child Relief and You (CRY) (working for underprivileged children)
• Kutch Mahila Vikas Sanghatan (involved with social empowerment of
women)
• Shri Mulund K.V.O. Samaj
• Gandhi Labour Foundation
• Lion's Club of Mulund
• Giant's Group of Mandvi - Kutch
• Gramin Vikas Samiti (involved with rural development)

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• Gram Swaraj Samiti (involved with rural development)

• Kutch Yuvak Sangh (working for the development of rural youth)
• Ankleshwar Industrial Development Society
• Vapi Punjabi Charitable Foundation

DISASTER RELIEF WORK RELATED

• The Prime Minister's National Relief Fund (Tsunami relief)
• The Gujarat Chief Minister's Relief Fund
• Bhojay Sarvodaya Trust (Earthquake relief in Kashmir)
• Kutch Navnirman Abhiyaan (Rehabilitation of earthquake affected people
in Kutch)

The village in KUTCH adopted by AARTI INDUSTRIES
LIMITED

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SUPPORTING ECONOMIC AND INDUSTRIAL
DEVELOPMENT IN VAPI

At AIL, Vapi, they believe in actively co-operating with neighboring industries
to address common concerns and solve Business-related problems. The Director of
AIL, Mr. Kirit Mehta, is the President of the Vapi Industries Association
(VIA). He leads the association and takes the necessary initiative for getting basic
common facilities for the members. He also handles the task of making
representations to various bodies for problems related to roads, water supply,
electricity, pollution control, etc. that obstruct the smooth conducting of business.
Mr. Mehta is well respected for his contributions towards the development of the
chemical industries in Vapi.

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CORPORATE SOCIAL RESPONSIBILITY POLICY
(CSR)
At AIL, the Corporate Sustainability Department, consisting of a team of senior
management headed by the company’s Managing Director, monitors the company’s
CSR & sustainability strategies and their implementation. The department meets
regularly to review compliance with the company's CSR policy across the different
units and to take informed decisions on related key issues.

CORPORATE GOVERNANCE

At AIL, integrity, transparency and social responsibility form the core of their
corporate behaviour and characterize the way in which they interact with all those
who have a stake in the company’s success and with the world at large. For AIL,
corporate governance is not a discipline imposed by a Regulator, but something
that stems from the culture of an organization. The principles of corporate
governance guide the company’s Board of Directors, management and the AIL’s
people to create long term sustainable value for their stakeholders.

AIL's Board of Directors consists of a team of technocrats, engineers and
management graduates having rich experience of more than two decades in the
Industry. AIL’s 12-member Board of Directors has both Executive and Non-
executive Directors. The board also comprises of an environment consultant, a
solicitor, an advocate and a chartered accountant as Independent Directors.

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The AIL has two Board committees - the Audit Committee and the
Shareholders Grievance Committee. The Board has laid down a Code of Conduct
(posted on our website (www.aartigroup.com) for all the directors and senior
management of the company.

AIL's Corporate Governance framework ensures:

• Sound corporate practices based on integrity, transparency,
accountability, fairness and professionalism - values that are important
for sustained growth, increased efficiency and stakeholder confidence.
• Timely flow of information to the Board and its committees.
• A sound system of internal control and supervision of business
operations.
• Commitment to good HR policies
• Independent verification of the Company's financial, and CSR &
sustainability reporting
• Timely disclosure of information to all our stakeholders
• Compliance with applicable laws, guidelines and regulations

The people at AARTI INDUSTRIES LIMITED commit themselves to
Corporate Social Responsibility (CSR) by conducting their business activities
ethically through a fair and balanced approach, and by being socially responsible
and responding to legal, social & ethical issues arising from their commercial
activities.

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The people therefore pledge to work towards continual progress in the
following areas:

• Respecting their organization's philosophy and striving to be recognized
as a good and esteemed corporate citizen.

• Complying with legal requirements, wherever they operate.

• Developing and supplying useful & safe products and improving the
quality of their products and services to be able to contribute to the
progress of society.

• Conducting business transactions based on fair and free competition.

• Striving to make their workplace vibrant to become an employer of choice
and focusing on acquiring advanced professional skills & expertise in their
field of responsibility.

• Protecting the environment, optimizing resource consumption and
ensuring the safety of their people.

• Supporting human rights, and actively communicating with the company’s
stakeholders to understand and respect their interests, thus serving and
contributing to their development.

• Achieving sustained growth and profitability.

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At AIL, the people shall strive to promote CSR activities to maintain a balanced
approach towards economic goals, safety, quality, the environment and the
interests of society, through an effective monitoring of the company’s performance
on key issues covered by the CSR programme.

AARTI INDUSTRIES believe that these initiatives will help them achieve
sustainable development and be recognized as a responsible corporate citizen,
consequently enabling our company to emerge as a modern and global company.

STRATEGY FOR CSR
AARTI INDUSTRY has few strategies for embedding CSR & its
sustainability into their business activities. The AIL’s strategies for integrating
CSR & sustainability into their management processes and day to day activities are
based on our core values and the principles of the UN Global Compact. The
company people are aware that by making CSR & sustainability an integral part of
their business strategy they will be able to protect the quality of the company’s
business activities, their decision-making processes and their capacity to create
value for their own company and also their valuable stakeholders.

To reach out to AARTI INDUSTRY LIMITED employees, customers and
communities and show their concern for the environment, the AIL:

• Emphasize that CSR is a shared responsibility for every member of the
AIL family.

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• Reward creativity and leadership skills and provide ample opportunities
for personal & professional growth.

• Promote team spirit and learning of new skills.
• Uphold human rights and the dignity of every employee.
• Act promptly on matters related to the health and safety of their people.
• Reduce operational costs through energy efficiency, recycling and
innovative use of by-products.
• Focus on reducing our environmental footprint and greenhouse gas
emissions.
• Invest in new technologies and produce innovative & sustainable
products.
• React proactively to customer needs.
• Customize solutions to meet customer requirements.
• Improve our financial performance to ensure better returns.
• Conduct business with transparency and share vital information with
stakeholders.
• Encourage our employees to actively participate in community
development activities.
• Respect the rights and needs of the communities we operate in.

At AIL; they believe that these strategies will strengthen their platform for
growth.

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FINANCE DEPARTMENT

 INTRODUCTION
“Financial Management is concern with the efficient use of an important
economic resource, namely, Capital funds.”

 SCOPE FINANCE DEPARTMENT
In AARTI INDUSTRIES LIMITED the Finance Department deals with the
problems of rising funds and there effective utilization in the business. Various
decisions regarding:

• Acquisition of assets.
• Specific form of assets where money to be invested.

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• Composition of its liabilities.

Liabilities are covered under the scope of Finance Department. The three
functions covered all most all finance functions of an organization. And effect the
three major decisions they are:-

o Investment Division
o Finance Division
o Dividend Division

 FINANCIAL FUNCTION
 Find the cheapest source of finance.
 Effective utilization of money.
 Capital is raised through issue of shares, debentures; interoperate
deposits, financial, institutions, commercial papers, etc.
 Negotiations with suppliers.

 RESPONSIBILITIES OF FINANCE MANAGER

 He keeps all the data related to finance and sees that the funds
organization is utilized in the most efficient manner.

 He is the most important person in shaping the future of the company
and has a vital role in decision of the allocation of capital.

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 Nowadays finance manager solves important management problem

and his role is becoming pervasive and significant.

 FUNCTIONS OF FINANCE DEPARTMENT AT AIL

 Overhead payment like salary, wages etc.

 Cash management.

 Calculation of interest payment.

 Preparing bank reconciliation statement

 Payment like PF, income tax.

 Maintaining accounting record.

In AARTI INDUSTRIES LIMITED Procure finance from the following
Banks and finance Institutions:

 BANK OF BARODA
 UNION BANK OF INDIA
 STATE BANK OF INDIA
 ICICI. ETC

∗ Basis Of Acquiring Loans

Banks and institutions give loans on basis of net – worth. (Net – Worth =
Capital + Net Reserve)
ESP = profit / No. Of Shares (Earning Per Shares)
Current Ratio
Dept – Equity Ratio

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∗ Dividend Of Shares

 Board Of director decides the percentage of dividend.

 Percentage of dividend depends on profit.

 Dividend is not an expense but profit distribution.

∗ Short term sources

I. Internal

 Depreciation funds

 Provision for taxation

 Accrued expenses

II. External

 Bank credit

 Managing director or directors

When a company is going to prepare any new project the company has to
consider the following aspects.

¤ cost of project
¤ Means of finance
¤ Financial highlights
¤ Product and capacity
 Sources of funds
 Use of funds

¤ Projected performance

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¤ Existing term loan commitments
¤ Existing W.C. facilities
¤ Proposed financial assets
¤ Introduction of product
¤ Company background
¤ Technical aspects
¤ Industry description
¤ Product description and demand supply position.

STRUCTURE:-

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CHAIRMAN

MANAGING
DIRECTOR

VICE
PRESIDNT

GENERAL
MANAGER

DEPUTY ACCOUNT
GENERAL OFFICER/
MANAGER CASHER

FINANCE ACCOUNT
EXECUTIVE ASSISTANT

AARTI INDUSTRIES LIMITED had declared an interim dividend of 15%.
The directors of AIL now recommend a final dividend of 21% for the year ended 31st

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march 2002. Total dividend for the year would thus be 36 % and the total dividend
payment would be Rs. 418 lakhs subject to declaration of final dividend at Annual
General Meeting.

 ACCOUNTING DIVISION:
The books to be maintained in AARTI INDUSTRIES LIMITED are as
follows:
∗ Sales accounting
∗ Purchasing accounting
∗ Bank Transition
∗ Cash Transition
∗ Debit notes
∗ Journal voucher

From the above all books, the only description of some books are given below.

 RESPONSIBILITY OF FINANCE MANAGER

∗ He keeps all the data related to finance and sees that the funds organization
is utilized in the most efficient manner.
∗ He is the most important person in shaping the future of the company and
has a vital role in decision of the allocation of capital.
∗ Nowadays finance manager solves important management problem and his
role becoming pervasive and significant.

 SALES ACCOUNTING

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Following is the sales procedure prevailing at the AARTI INDUSTRIES
LIMITED.

Marketing department gets purchase order through negotiation.

a. Indent is sent the dispatch section. Indent consist of terms of
payment, party’s name, details regarding the goods rate, excise, sales
tax transaction, credit period discount (if applicable).
b. Dispatch section contract finish goods, stores so that they can supply
the necessary material.
c. Finished goods stores communication with excise department and
they carry on their necessary procedure.
d. Preparation of sales registers, ledger account, trail balance, etc. Sale
keeps management information system (MIS).

MIS contains information relating to receivable and sales-product wise and
quantity wise.

 PURCHASE ACCOUNTING:

Flow and documents in purchase accounting is as follows:

Step 1
 To receive all invoice from purchase department.
 To receive all M.R.N. from stores department.
 To receive all purchase order from purchase department.

Step 2
 To match this document with each with each other.

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 To attach copy of P.O and MRN with invoices.

Step3
 To process the invoice after comparing the same with MRN and PO.
 To forward the document to senior manager for management check.

Step 4
 Executive to hire second check to ensure correctness and accuracy.
 To put his/her initials on the rubber stamp at the place market for the
purpose.
 To forward the document to senior manager for management check.

Step 5
 Senior manager to check the document from various angles to ensure
total control.
 To put his/her initials on the rubber stamp at the place marked for the
purpose.
 To forward the document to account assistant for data entry.

 Note:-
Dispatch section on receiving the purchase order co-order with production
department so that the production can be on line with the demand of the
products.

 BANK TRANSACTION OPERATION OF BANK ACCOUNT:-
AARTI’s major bankers are:
∗ Bank of Baroda,

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∗ Punjab national bank,
∗ Dena bank.

Performs:
 Maintenance of current account
 Maintenance of cash credit account over draft facility.
 Preparation of BRS (bank reconciliation statement) every month.

 CASH BOOK
Performs:
 Petty cash book which petty cashier operates.
 Main cash book which dose main cashier operator.

 Note:
According to the income tax act if the amount exceeds, rupees twenty
thousand then it must be paid by cheque.

OTHER INFORMATION:

 Corporate dividend tax means tax on dividend payable by the corporate.
 Percentage of transfer to general reserve is based on criteria decided by
company’s Act.
 Deferred liability means liability, which is to be paid at later stage.
 Rate of department according to income tax is different than that of
company act.
 Department not the actual expense but hidden profit.

Balance sheet of AARTI INDUSTRIES LIMITED
As on 31st march 2005.

Liabilities Amounts Assets Amounts
SHAREHOLDERS’ FIXED ASSETS

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FUND
Gross Block
Share capital 364047120 3772152761
Less: Depreciation
Equity share warrants 18456460 1476802108

Reserves and Surplus 2004085241 =Net Block 2295350653
Capital Work in progress 279752107
LOAN FUNDS
Secured loans 2883205497 INVESMENT 247421512
Unsecured loans 120956656
CURRENT ASSEST,
DEFERRED TAX LOANS AND ADVANCES
LIABILITY 260207942 4282512765
LESS:
CURRENTLIABILITIES
AND PROVISIONS
1469337743

Net Working Capital 2813175022

MISCELLANEOUS
EXPENDITURE
(To the extent not written off or
adjusted)
Pre-operative Expenses NIL
Deferred Revenue Expenditure 15259622

TOTAL 5650958916 TOTAL 5650958916

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Profit & Loss Account for the year ended 31 st
March, 2006

INCOME
Income from operation 7,861,750,467
other income 47,810,802
Increase in inventory 220,512,506

TOTAL 8,130,073,775

EXPENDITURE
Manufacturing Expenses 5,765,521,854
Purchase of Goods Traded In 601,311,395
Office and administration Expenses 86,832,124
Selling and Distribution Expenses 518,133,693
Interest and financial Charges 204,004,164
Non-Operating Expenses and losses 16,244,538

TOTAL 7,192,047,768

Profit Before Depreciation 938,026,007
Less: Depreciation 221,869,002
Profit Before Tax 716,157,005
Less:Provision for taxation(including fringe benefit tax) 162,300,000
Profit After Tax 553,857,005
Less: Provision for Deffered Tax 63,213,480
Profit After deffered Tax 490,643,525
Add: Balance of Profit and Loss Account Brought Forward 1,537,363,110
Add: Provision for Diminution in the value of Investments-
Quoted NIL
Less: Prior Years' adjustment for others 18,520,032
2,009,486,603
less:Transfer to General Resereve 50,000,000
1,959,486,603
Less:Dividend 61,888,011
Less:Dividend 50,966,597
Less:Proposed Dividend 29,123,770
Less:Tax On Dividend 19,912,468

Balance Carried Forward To Balance Sheet 1,797,595,757

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