Chapter 1
Chapter 1
Chapter 1
CHAPTER 1
INTRODUCTION
1.1 INTRODUCTION
An organization is a group which has a common goal. An organization is defined by the elements that are part of its communication, its autonomy, and its rules of action compared to outside events. An organization structure is a basic framework in which manager works where he makes decisions, allocate resources, and direct activities of others to attain goals. An organization study helps to familiarize with business organization and to relate theory with practice. This enables the students to understand about key business process and to gain knowledge about various departments. So after the organisation study the student will have a very clear picture of the functioning and the methods adopted in the organisation and will help the trainee in knowing a lot about the basic functioning of the organization. This study will be helpful not only for the student but also anyone goes through it. This report will give a clear picture about the organisation.
1.2
1. 2. 3.
To familiarize the students with a business organization to relate theory with practice. To study an organizational structure and its functioning. To understand the different departments in the organization and their functions and activities including documentation.
4. 5. 6. 7.
To know the key business processes are carried out in an organization. To study the flow of information in the decision making process at various levels. To conduct a SWOT analysis of the organization. To understand the financial performance of the company by doing financial analysis
Primary data
1. Direct Interview with Department heads, managerial staffs, and workers of departments. 2. Direct Observation of the plant. 3. Plant visit various
Secondary data
1. Annual reports 2. Department manuals and Journals 3. Web information
1.4 LIMITATIONS
1. As it is a government firm, certain data and documents are considered to be confidential which are not available. 2. 3. The time was limited for a deep study and analysis of the organization. Since the officials were busy with their routine engagement it was rather difficult to spare their time for detailed discussion. 4. 5. The personal interviews may be affected by personal bias. At the time of this organisation study more managers and engineers are long leave for foreign assignment.
2.1 STEEL INDUSTRY IN INDIA - PAST, PRESENT AND FUTURE 5 School of Management and Business Studies, M.G University, Kottayam
The history of steel-making in India can be traced back to 400 BC when the Greek emperors used to recruit Indian archers for their army who used arrows tipped with steel. Many more evidences are there of Indians perfect knowledge of steel-making long before the advent of Christ. Archaeological finds in Mesopotamia and Egypt testify to the fact that use of iron and steel was known to mankind for more than six thousand years and that some of the best products were made in India. Among the widely-known relics is the Iron Pillar near Qutab Minar in Delhi. The pillar, built between 350 and 380 AD, did not rust so far an engineering marvel that baffles the scientists even today. Yet another engineering feat is the famous Sun Temple at Konark in Orissa, built around 1200 AD, where steel structural were used for the first time in the world. These were the halcyon days when India flourished in all directions and when its prosperity was a matter of envy for the foreigners. But as ill luck would have it, Indias prosperity gave way to poverty after the advent of the foreign rule. Indias indigenous industry languished because of a deliberate policy of the colonial rulers to make the country only a supplier of raw materials. Steel Role plays a vital role in the development of any modern economy. The per capita consumption of steel is generally accepted as a yardstick to measure the level of socioeconomic development and living standards of the people. As such, no developing country can afford to ignore the steel industry.
2.1.1 Steel
Steel is an alloy made by combining iron and another element, usually carbon. When carbon is used, its content in the steel is between 0.2% and 2.1% by weight, depending on the grade. Other alloying elements sometimes used are manganese, chromium, vanadium and tungsten. Carbon and other elements act as a hardening agent, preventing dislocations in the iron atom crystal lattice from sliding past one another. Varying the amount of alloying elements and the Form of their presence in the steel (solute elements, precipitated phase) controls qualities such as the hardness, ductility, and tensile strength of the resulting steel. Steel with increased carbon content can be made harder and stronger than iron, but such steel is also less ductile than iron.
Alloys with a higher than 2.1% carbon content are known as cast iron because of their lower melting point and good castability. Steel is also distinguishable from wrought iron, which can contain a small amount of carbon, but it is included in the form of slag inclusions. Two distinguishing factors are steel's increased rust resistance and better weldability. Though steel had been produced by various inefficient methods long before the Renaissance, its use became more common after more efficient production methods were devised in the 17th century. With the invention of the Bessemer process in the mid-19th century, steel became an inexpensive mass-produced material. Further refinements in the process, such as basic oxygen steelmaking (BOS), lowered the cost of production while increasing the quality of the metal. Today, steel is one of the most common materials in the world, with more than 1.3 billion tons produced annually. It is a major component in buildings, infrastructure, tools, ships, automobiles, machines, appliances, and weapons. Modern steel is generally identified by various grades defined by assorted standards organizations
120,000 tonnes of pig iron. The TISCO plant at Sakchi (renamed Jamshedpur) in Bihar, started pig iron production in December 1908 and rolled out its first steel the following year. TISCO had expanded its production capacity to one million tonnes ingot by the time the country achieved freedom. The Tatas, as Gandhiji said, represented the "spirit of adventure" and Jamsetji Tata, in the words of Jawaharlal Nehru," laid the foundation of heavy industries in India". The British rulers disfavoured this and other attempts to start indigenous industry. It was chiefly with the help of American experts that the Tatas started their industry. Its childhood was precarious but the war of 1914-18 gave it a fillip. Again it languished and was in danger of passing into the hands of British debenture holders. But nationalist pressure saved it. In 1918, soon after the war, Indian Iron and Steel Company (IISCO) was formed. The then Mysore government also decided to start an iron works at Bhadravati. While IISCO started producing pig iron at Burnpur in 1922, the Mysore Iron and Steel Works took about 18 years to start its plant. Meanwhile, the Bengal Iron Works went into liquidation and merged with IISCO. The Steel Corporation of Bengal (SCOB) formed in 1937, started making steel in its Asansol plant. Later in 1953, SCOB merged with IISCO. Prime Minister Nehru firmly believed that "no country can be politically and economically independent unless it is highly industrialised and has developed its resources to the utmost". Nehrus ideas about Indias development were broadly incorporated in free Indias first Industrial Policy Resolution adopted by the Constituents Assembly in 1948. The resolution officially accepted the principle of mixed economy. Industries were divided into four categories. In the first category were strategic industries which were made the monopoly of the Government. In the second category were six industries which included, among others, coal, iron and steel. It was decided that new units would be started exclusively by the government in the public sector without disturbing the existing ones in the private sector. Eighteen industries, including heavy castings and forgings of iron and steel, Ferro alloys and tool steel were covered by the third category and the rest of the industries by the fourth. In sum, the government committed itself to the development of basic steel industry while the private sector was to benefit through the establishment of downstream units which would use pig iron, billets, blooms and flat products to be made by the public sector steel plants.
In keeping with the spirit of the resolution the Government decided to start a chain of steel plants all over the country in the public sector. The first such plant was set up at Rourkela in Orissa. The second came up at Bhilai in Madhya Pradesh. It was followed by a third at Durgapur in West Bengal. Each of these three plants had an initial production capacity of one million tonne ingot. Durgapur was followed by a steel plant at Bokaro in Bihar. The onward march of Indian steel did not stop at Bokaro. The fifth public sector steel plant was set up at Visakhapatnam in Andhra Pradesh. As a matter of fact, the country was dotted with steel and steel-related plants in public and private sectors, like Alloy Steel Plant, Salem Steel Plant, Kalinga Iron Works, Malavika Steel Ltd., Jindal Vijaynagar Steel Ltd., to name only a few. About the same time TISCO launched its two-million-tonne expansion programme. The Governments Industrial Policy had undergone changes once in 1956 and then in 1991. The resolution modified in 1956 brought changes in the category pattern and listed more industries for the public sector than did the earlier one, though it was not harsher towards the private enterprise. In the new industrial policy announced in 1991 iron and steel industry, among others, was included in the list of industries reserved for the public sector and exempted from the provision of compulsory licensing. With effect from May 24, 1992 iron and steel industry was included in the list of high priority industry for automatic approval for foreign equity up to 51% (now 74%). Export-import regime for iron and steel has also undergone major liberalisation. The freight equalisation scheme was withdrawn removing freight disadvantage to States located near steel plants. The new policy has already borne fruit. The finished steel production in India has gone up from mere 1.1 million tonnes in 1951 to 23.37 million tonnes in 1997-98 despite overall economic slow-down in the country. It has been estimated that the demand for finished steel in 2001-02 would touch 38.68 million tonnes and the projected availability of 38.01 tonnes is almost adequate to meet the domestic demand along with export of six million tonnes. Similarly, by 2006-07, the final year of the tenth plan, the demand for finished steel would be around 48.80 million tonnes, providing adequate surplus for meeting the projected export potential of nine million tonnes. However, there is hardly any scope for complacence over the fact that India continues to be the 10th largest steel producer in the world. In 1997 Indias per capita steel consumption was only 22 kg which was much below the world average of about 126 kgs. Even if the domestic
demand grows up from 34.5 million tonnes to 100 million tonnes in 2025 the industry is unlikely to catch up with the production in the developed countries. The redeeming feature is the cost competitiveness of Indian steel in the global market. According to World Steel Dynamics, the total cost of steel production in the USA is $510 per metric tonne while in Japan it is $550, in Germany $557, in Canada $493 and in India it is $497. This is because of high material cost due to high excise and import duties. Reduction of cost on these accounts will make Indian steel more competitive in the world market. Indian steel can reasonably expect a good market in the neighbouring countries now that the Asian economy is looking up. In conclusion, it can be said with a certain measure of confidence that Indias iron and steel industry which had a glorious past and has an uncertain present may now look forward to a bright future. The modern iron and steel industry in India owes its origin to the grand vision and perseverance of Jamsetji Nusserwanji Tata. The Tata Iron and Steel Company Limited (Tata Steel) was registered in Bombay on 26th August 1907. The construction of the steel plant was then taken up in earnest with the first stake being driven in February 1908. R.G. Wells, an American with steel plant construction experience took over as the General Manager in 1909. Success came when the first blast furnace was blown-in on 2nd December 1911, and the first ingot rolled on 16th February 1912. The company was originally constructed for a capacity of 160,000 tonnes of pig iron, 100,000 tonnes of ingot steel, 70,000 tonnes of rails, beams and shapes, and 20,000 tonnes of bars, hoops and rods. The plant essentially consisted of a battery of 180 non-recovery coke ovens and 30 by-product ovens with a sulphuric acid plant, two blast furnaces (each of 350 tonnes per day capacity), one 300 tonne hot metal mixer, four open hearth furnaces of 50 tonne capacity each, one steam engine driven 40-inch reversing blooming mill, one 28-inch reversing combination rail and structural mill with re-heating furnaces, and one 16- inch and two 10-inch rolling mills. Besides, the steel works had a power house, auxiliary facilities and a well-equipped laboratory. The cost of the plant as erected came to around Rs.23 million
The backbone of developed economies was laid on the strength and inherent uses of steel. The various uses of steel which in turn is a measure of adaptability of steel can be judged from the following characteristics of steel : - Hot and cold formable - Weldable - Suitable mach inability - Hard, tough and wear resistant - Corrosion resistant - Heat resistant and resistance to deformation at high temperatures. Steel compared to other materials of its type has low production costs. The energy required for extracting iron from ore is about 25 % of what is needed for extracting aluminium. Steel
is environment friendly as it can be recycled. 5.6 % of element iron is present in earth's crust, representing a secure raw material base. Steel production is 20 times higher as compared to production of all non-ferrous metals put together.
The steel industry has developed new technologies and has strived hard to make the world's strongest and most versatile material even better. There are altogether about 2000 grades of steel developed of which 1500 grades are high grade steels. There is still immense potential for developing new grades of steel with varying properties .The large number of grades gives steel the characteristic of a basic production material Steel has enjoyed an important position in our lives and will continue to do so in the years to come. However, the degree to which it maintains its dominant position will depend on if steel can exploit its potential by developing new higher grades and adaptable grades . This can be achieved by refining the structure and applying alloying techniques and thus furthering its utility value. We will have to find out ways to use steel and be ready to face a stiff competition from Aluminium in the future.
Towards the end of the last century, growth of steel production was in the developing countries such as China, Brazil and India, as well as newly developed South Korea. Steel production and consumption grew steadily in China in the initial years but later it picked up momentum and the closing years of the century saw it racing ahead of the rest of the world. China produced 220.1 million tonnes in 2003, 272.2 million tonnes in 2004 and 349.36 million tonnes in 2005. That is much above the production in 2005 of Japan at 112.47 million tonnes, the USA at 93.90 million tonnes and Russia at 66.15 million tonnes. For details of country-wise steel production see Steel production by country.
The government is backing the industry through favourable industrial reforms, while the private sector is supporting it with investments worth billions of dollars.
Even in the tough times of economic slowdown, the industry succeeded to sustain its positive growth momentum on the strong fundamentals of domestic demand from construction, automobile and infrastructure sectors.
With an impressive track record, the country has become a reputed name in the world steel industry. Global steel giants from all over the world have shown interest in the industry because of its phenomenal performance. For instance - the crude steel production in India registered a moderate year-on-year growth of 2.7% in 2009 and reached 56.6 Million Metric Tons. On the other side, some Asian countries such as Japan and South Korea saw significant decline in their production levels. This further signifies the resilience and strength of the Indian steel industry against external risk factors.
The global economic slowdown hampered the growth curve of various steel intensive industries such as construction in 2009 and its impact also fell on steel demand. However, the government proactive incentive plans to boost economic growth by injecting funds in various industries like construction, infrastructure automobile and power will help the steel industry to again achieve its previous growth trajectory.
Steel consumption in India is expected to grow significantly in coming years since per capita finished steel consumption is far less from its regional counterparts. In 2008, per capita finished steel consumption stood at an estimated volume of around 44 Kg, which represents tremendous growth potential for coming years According to our new research report, Indian Steel Industry Outlook to 2012, strong domestic demand and increased infrastructure spending by the government has been driving the steel industry in the time of recession.
Thus, despite slowdown, steel output surged 3.4% in the first quarter of fiscal 2009-10 in comparison of the first quarter of fiscal policy. A number of government initiatives and growing domestic demand are driving the Indian steel industry in tough economic time, said RNCOS new research report, Indian Steel Industry Outlook to 2012. Steel demand in India is expected to rise at least 5% in the current fiscal year despite slump in the global demand.
Steel has the highest strength to weight ratio of any building material. Provides consistent material quality; because it is produced in strict accordance with national standards, there is no regional variance in quality.
Simplified foundation construction. Provides for straight walls, square corners, and allows doors to open and close properly.
Fire resistant, does not burn and will not contribute fuel to the spread of fire. Inorganic; it will not rot, split, crack or creep. No twisting or warping. Fire parapets can be eliminated. Easily disassembled for repairs/alterations/relocation Vandal resistant. Produces less scrap and waste (2% for steel vs. 15-20% for wood). Scrap is 100% recyclable. Slower aging process with less maintenance. Enhanced resale value
Each year, the North American steel industry recycles millions of tons of steel scrap from recycled cans, appliances, automobiles, and construction materials. This scrap is re-melted to produce new steel. 64% of all steel products are recycled--more than any other material in the U.S. including glass, paper, plastic and aluminium combined. Steel recycling programs reduce the solid waste stream resulting in saved landfill space, and help to conserve our natural resources.
Steel recycling saves the energy equivalent of electrical power for about one-fifth of U.S. households or about 18 million homes for one year. Every ton of steel recycled saves 2,500 pound of iron ore, 1,400 pounds of steel, and 120 pounds of limestone. All steel framing contains a minimum of 25% recycled steel.
equipment and turnkey civil and structural works for process engineering units and industrial projects. This unit is fully equipped with all requite machinery and equipment such as Plate Bending machine, Press Brake, MIG and TIG Welding sets , Radial Drilling Machine, Precision Lathe, Plasma Cutting Set etc. for production of Heavy and Medium type Structures and Equipment. The unit is manned by Highly Qualified and experienced personnel on shop floor and departments like Design, Engineering, Production, Marketing etc. Each Department is headed by professionally qualified and experienced Managers.
Total Land Available at SFU Total area covered by workshop Total Plinth Area of Office Total Plinth Area of Stores Total Manpower Strength
The clients include major Public Sector Undertakings like, Heavy Engineering Corporation Limited, Bharat Heavy Electricals Limited, Indian Rare Earths Limited, Southern Railway , ISRO/VSSC, Indian Railway Construction Corporation and Private sector like Aluminium Industries Limited, Carborandum Universal limited and State Government organizations like State Sports Council, Kerala Minerals & Metals limited etc.
3.4.2 Mission
To supply high quality steel products, providing related services and solutions to a worldwide client base while utilizing innovative technologies within an environment of motivated employees focused on continuous improvement, highest business standards, work ethics and sustained return on investment to our shareholders.
i. Engineering Graduates in Executive position ii. Diploma (Engg.) holders in Supervisory position iii. Post Graduates &Graduates in Administrative position iv. Junior Officer v. Skilled, Semiskilled & unskilled Manpower Total
3 3 1 4 34 45
Buckau Wolf India Limited, Pune. International Airport, Chennai. Kerala State Electricity Board. Kerala Minerals and Metals Limited. Travancore Titanium Products Limited, Thiruvananthapuram. Kerala State Industrials Enterprises. Kerala State Public Works Department. Kochi Refineries. National Thermal Power Corporation. Hindustan Latex Limited, Thiruvananthapuram. Hindustan Organic Chemicals, Cochin. Indian Railway Construction, Mumbai. Southern Railway. Four Engineering Limited, Bangalore. Vikram Sarabhai Space Centre, Thiruvananthapuram. HMT Limited, Kalamassery.
ORGANIZATION CHART
SENIOR MANAGER
HRD
FINANCE
manager
manager
PRODUCTION & PLANNING
Project department
Assistant manager
DESIGN
MARKETING
ACCONTS OFFICER
ASSISTANT ENGINEER
PROJECTS
manager
departme nt
manager
ASSISTANT MANAGER
Draughtsman
Assistant manager
STORES
ASSISTANT ENGINEER
17 18 19
structural work
Karnataka Newsprint Mfg.Co.Ltd, structural work Bangalore Tamilnadu cements Corporation limited structural work
20 21
22 23 24 25 26 27
Bharat Earth Movers Limited Karnataka Electricity Board BHEL, Bangalore National Thermal Powers Corporation Tamilnadu Telecommunication Ltd. Chennai Rail coach factory, hussinpur
Structural work Structural work Structural work Structural work Industrial building, machine structural work
Total *
85.49
114.81
126.69
*Note: Total cost is calculated in Rs/Kg Taxes & Duties extra as applicable Contribution @ 10% for structural works & @ 25 % for storage tanks & Pressure Vessels / Equipments
Description Heavy duty radial drilling machine Double ended heavy duty pedestal grinder Air cooled welding transformers Portable Gas Cutting Machine (Pug) Heavy duty precision lathe Gas cutting sets Plate bending machine Guillotine shearing machine Portable drilling machine Straight and angle grinders portable type Combined punching and shearing machine Profile cutting machine Electric welding generators Lathe with length of bed 2.7m Power hacksaw
Nos
01 01 04 02 01 04 01 01 02 04 01 01 02 01 01
Capacity
30mm in MS
600 Ams
9 centre 6 Be
Steel industries Kerala limited (steel fabrication unit) 16. 17. 18. 19. 20.
Press brake Escort mobile crane Chain pulley blocks EOT crane Radial drilling machine RM-65(HMT)
01 01 01 01 01
01 02 03 04 05 06 07 08 09
10
Electric welding generator Air cooled welding transformer Straight portable grinder Angle portable grinder Gas cutting set Portable gas cutting machine Escort mobile crane Electric winch Hand operated winch Chain pulley blocks
03 05 02 03 04 02 01 01 01 06
8 Ton 3 Ton
1 to 3 Ton
07. Warehouse Building 08. Design , Fabrication & Erection Of Calibration Unit
Kollam
24.00
heated in a closed furnace. It is the process of shaping, refining, and improving the mechanical properties of metals and its controlled plastic deformation under impact or pressure. The technology has its beginning in the realisation of the fact that metal could change their shape and contour when worked at a high temperature. With the development of iron and steel making and invention and emergence of a variety of metals, this craftsmanship of the black smith has become a widely applied technology. Steel Industries Kerala Limited (SFU) is one of the leading steel fabrication and project Erection Company in Kerala. Production department of SILK SFU is more concentrated on steel fabrication product for multipurpose usage. SILK (SFU) produces the products in there shop and also in work sites. 30% of works are done in shops and balance is done in the work site itself. The company quote a price bid for the purpose of taking orders and according to the need of the customers company fabricate steel for final usage.
Assistant engineer
Manufacturing process
The marketing department quote bid for tenders and collect orders and collect orders from customers. After that they design the product according to the need of the customers or customer itself provides the design. The manufacturing process is started after getting the design of the product from design department. According to the design the production manager and supervisor will give instructions to workers. The steel fabrication process is done in sites and shop. In sites normally large scale works are done because of transportation problems. For doing site works the company will appoint subcontractors through tender process.
For the purpose of conversion of these different shaped raw materials in to an output form, the company uses different kind of machineries in the plant. They are;
Machinery
Usage
Rolling machine
Hering machine
Press break
Welding machine
For welding the steel. (a transformer is also used for welding purpose)
Lath machine
Bench grinder
The raw materials are purchased by the purchasing department according to the requirement of production department and production orders. The purchased raw materials are stored within the production plant itself. Because the movement of large quantity of steel is very difficult.
It contains all receipt of goods and it is send to all departments for planning and accounting purpose. The store department also maintains an up-to-date list of raw materials like angle, channel, beam, plate etc. D. BIN card Bin card is used for the purpose of entering all receivings and outgoings of items or raw materials within the company.
PURCHASE POLICY
All purchase shall be made by purchase department only. For materials to purchase material indent is forward against each project. Other items except capital goods required by various departments are initiated to store who prepare purchase indents and it is to be forward it to purchase department with full specification. For capital goods are identified in various departments are sent to after getting approval from section head. The source of materials is selected by checking the samples collected from different suppliers. Acceptance of samples can do as per the recommendations from quality assurance department. If samples are qualified the criteria the suppliers can be included in the list of qualified suppliers. They are identifying as only ability to provide bulk of materials of the company.
X-ray test
Chemical test
Strength test
This test is done for identification of the strength of the steel. I.e. carbon content
These all test are done according to the special requirement of customers.
8. 9. 10.
Encourages achievement through incentives Discourages inefficiency through punitive actions Optimum utilization of production facilities
In short it ensures uninterrupted flow of production as per orders in hand. The intimation for procuring raw materials, deciding the shifts, the required manpower, storage and transportation are handled by this section. Following is the order of production planning; Order placing designing & drawing materials purchasing conversion
of raw materials in to output The company deals with steel fabrication works, according to the contract the company purchase raw materials. So there is no need to keep any special quantity of raw material in the store. Such as minimum stock, maximum stock, reorder level of stock etc.
SILK (SFU) has executed a number of prestigious projects, inside and outside Kerala.
DEPUTY GENERAL MANAGER
MARKETING MANAGER
ASSISTANT MANAGER
Advertisement
The marketing department of SILK provide some cat logs, souvenirs, brushers etc to municipalities, Panchayath etc for the purpose of collecting orders and sometimes they provide advertisements in news papers for tender purpose and for making sub contractors. For making canteen and security contract also the company provide advertisements in news papers. Through that more than one company or agency come with bid and the company can select suitable or profitable bids. In SILK (SFU) there is no need for any other advertisements about the product. Because they produce products according to the bid or contract and it is done for a specified customer. SILK (SFU) publish time to time notice for proclaim any new intervention of the company.
Locating customers
The company produce products according to the bid or specific need of customers. So there are no such locating customers for SILK (SFU). But SILK can have some specific customers.; The main customers of SILK SFU are; KMML TTP Municipalities Panchayath KSEB IRCON Railway (lines) Agriculture department Irrigation department.
The company will give more consideration for quoting the works of the above listed companies.
Sub contracting
Outside works of SILK (SFU) plant are done through appointing sub contractors. The works are in the form of mechanical or electrical, erection works and civil works. Mainly erection works are done by sub contractors. The company can have a list of sub contractors, who done works for SILK previously or sub contractors have good track record. At the time of considering sub contractors the company check the details of them. Such details are; Financial capacity of sub contractors Tools with them Local contractor or not etc. For allowing the work to a sub contractor, there are some procedures. They are;
ENQUIRY
The company will give an advertisement or inform through mail to sub contractors about the work. It includes scope of the work, completion time of the work, design etc.
TENDER COMMITTEE
SILK (SFU) can have a tender committee, it include a member from finance department, project department, and a project head. Before this committee all sub contractors will submit their closed bid. And this committee will open all these bids and call two of them (sub contractors) who quoted lowest price and it is for making further negotiation in the tender price. After that the committee will allot the work for the lowest price quoted sub contractor. After receiving approval letter from the tender committee the unit head will approve the subcontracting agreement.
WORK ORDER
After receiving approval from the unit head, the committee will made an agreement with subcontractors. It includes;
Payment condition Special conditions Testing conditions Completion period of work Payment period etc After signing the contract will be executed. The general conditions regarding subcontracting are as follows;
skilled/semiskilled/unskilled Workers for the execution of work under the contract and shall take all safety precautions and follow the safety regulations of the companys clients/their consultants and instructions in this regard from the Companys Site Engineer. 02. The contractor should ensure that their workers are available at site with all the required Tools, equipments and consumables, etc. in sufficient quantities to start work at site well in Advance with a view to complete the entire work within the specified completion period. 03. The contractor shall further confirm to all the laws governing employment and safety of labour, minimum wages, etc. and shall be liable for any claim or obligations thereof. 04. The contractor shall be responsible for payment on all claims of damages, compensation to expense payable as a result of any accident or injury sustained by the labour employed by them during the execution of this contract which they are liable to pay as per the rules, law of order of the Government or the decision of the court or tribunal. The expenses if any
incurred by the company on the above account shall be recoverable from the contractor by the company. 05. The contractor shall be responsible for the payment to the workers towards provident fund benefits, etc. and will be responsible for maintenance of the statutory records in respect thereof. Any losses or damage caused to the company due to the non compliance of the statutory regulations shall be to the account of the contractor.
06. The contractor will have to maintain muster roll and wage register as per the statutory Requirements and as per the instructions of the Engineer-in-charge. Contractors bills will be settled only after the Engineer-in-charge after verifications of the muster rolls and wage register is satisfied regarding disbursement of payment due to the workers. 07. The contractor shall be liable to take contract/labour license or any other permission require from the statutory authorities to employ contract labour for carrying out the work and the proof in thereof shall be submitted to the company before taking up the works. 08. The dimensions, elevations and other details shown in the companys drawings does not relieve the contractor from making alterations, modifications, additions, deletions in fabricated pipes to ensure proper alignment and grouting in the actual site conditions and according to the instructions of the Site-Engineer 09. Damage if any caused by the contractor to the companys/third partys equipments during the work execution has to be rectified /replaced by the contrac6tor at his own costs and risks. 10. If the progress of the quality of work is not satisfactory, the company shall have the right to terminate the contract without any notice and arrange the work at the risk and cost of the contractor. The loss due to the delay/slow progress of work and also due to the alternate
arrangement made by the company for executing the work shall be recovered from the contractor. 11. The rates quoted shall remain firm during the period of the contract. The rates are
inclusive of all taxes and duties. 12. The contractor shall not without the previous approval of the company, execute any
power of attorney in respect of any matter touching this contract and the company shall not be bound by any such power of attorney executed by the contractor without its approval. It shall be entirely within the discretion of the company whether to grant such approval or to refuse it or to revoke an approval once again. 13. Any other works required for the satisfactory completion of this work shall be carried
out by the contractor without any extra cost. 14. No sub-contracting of any work at site is allowed without prior permission of the
company.
15. Safe custody of materials issued for this work is the responsibility of the contractor. 16. In case of any disputes, actions, proceedings arising out of this contract, the jurisdiction of Courts will be at Alleppey and the courts at Alleppey only will have the jurisdiction to have and decide such actions and proceedings. 17. The contractor should make arrangements for putting up necessary temporary shed for Keeping materials, tools, tackles etc. The contractor should provide a covered area as per the requirements of Engineer-in-charge. 18. The contractor or his authorized representative shall be available at site to control the
labour to disburse the labour payment in time and to arrange consumables as per requirement. 19. Complete work will be subject to inspection by companys clients/consultants during the process of erection, concreting and rectifications/modifications suggested shall be carried out without any extra cost. 20. Leading, lifting, stacking etc. at site of materials, fabricated items will be the
responsibility of the contractor and no payment will be made by the company for this. 21. All tools, tackles and consumables if required for the purpose of erection of this contract shall be of best quality and according to the specification approved by the companys Engineers/Consultants. 22. Idle wages will not be given by the company under any circumstances. 23. Welders employed for the job have to undergo qualifying tests conducted by the
company client/consultants and only qualified welders shall be used for the job. 24. Proper Group Insurance cover/ESI for the workmen employed in the job shall be
arranged by the contractor and proof shall be shown to SILK Personnel Department. If the contractor fails to arrange ESI/Insurance, company will arrange the same and the expenses incurred will be deducted from the contractors bills. 25. Repairing, re-welding, finishing of all welded joints as per requirements of the Engineerin charge shall be carried out by the contractor. 26. Electricity at site will be provided if available. If Electricity charges are deducted by the Client from SILKs bills, the same will be recovered from contractors bill.
27. The quantities indicated in the tender schedule are tentative and billing shall be done as per the actual quantities accepted by our clients. 28. Statutory deductions such as ESI, IT etc. as applicable will be made from the
contractors bills. 29. The contractor should keep record of materials issued by the company and the balance materials, if any should be returned to the company, If the contractor fails to return excess quantities of materials issued, the cost of such materials will be recovered from the contractor at the rate fixed by the company. 30. Any other works required for the satisfactory completion of the work shall be carried out by the contractor as per the approved rates. 31. The work done should be guaranteed against defects in workmanship for a period of
months from the date of completion of the work and acceptance. 32. Retention @ 5% will be deducted from the contractors bill. The retention amount will be released after guarantee period
M.BOOK M.book stands for measurement book. In this book the completion of site work will be noted for making payment and to know about work measurement. According to the work completion the project department will pass the bill and it is also recorded in measurement book. The payment is made through finance department after authorisation by project head and unit head.
PAYMENT COLLECTION
According to the work completion the company will collect cash from customer. The payment conditions are specified in the contract itself. each stage of payment are listed in it. After completion of the work company can invoice it.
Competitors
In this sector the company havent many competitors. But in government sector itself one company is there, i.e. KMML and in private sector; KCP Chennai KP Pathros Private construction companies like sanna, bambino etc.
Assistant engineer
Clerk
The activities of HRD are recruitment, selection, welfare activities, fixation, and payment of salaries, and wages of employees. It is concerned with people at work and relationship at all levels of the organisation to secure the effective use of personal. Its functions are following;
Employment function
These functions include recruitment, section, induction, training, welfare activities and payment of remuneration, promotion and training. Recruitment of worker made through advertisement in news paper. Clerks are recruited through public service commission. The minimum qualification for executives is diploma in engineering. The selection is conducting tests and interviews. After selection employees are placed on various jobs.
Recruitment procedure
Corporate public and administration department as per the delegation of power issued from time to time will do recruitment.
Through PSC in respect of post exclusively reserved for PSC Candidates who meet the prescribed specification.
Manpower Budget
The concerned department head will inform the concerned chief executive about vacancies. The actual recruitment of personal for each month shall also be sent to the corporate and administrative department will take further action for filling up the post.
Training
SILK multi Unit Company having different units in different parts of Kerala, transfer of employee from one unit to another unit becomes necessary. In order to equip employees to work in different units, a continuous induction training programmes is essential; these are classroom training and induction training.
Welfare function
Human resource department is responsible for conducting various welfare activities and for provided employee services. This includes the canteen, which works in at the working time. Canteen is run private parties on contract. A welfare fund has been constituted and loan are provided from this fund to the employee or their family on various occasions like marriage, death etc. Thus HRD department is concerned with the people at work and their relationship within an enterprise. Its purpose is to establish and maintain sound personal relation at all levels of the organisation and to secure effective use of personal. Efforts for the maintain of peaceful industrial relation are also undertaken by this department.
Welfare fund
The membership of welfare fund is open to all in voluntary bases. The main objective of fund is; This fund shall be utilized for welfare of members and their families. Financial assistance / loans to meet contingencies lie death, illness and marriage of family members, education facilities. Channelize co-operation of employees for the common good. Benefits
Retirement benefits
A member who has contributed continuously for a period of 3 years shall be paid Rs 500/years at the time of superannuation, registration or retirement.
COMPENSATION
Steel Industries Kerala Ltd is a public sector company; the Govt forces a specific salary structure by which remuneration is extended to employees. The employees are graded according to their skill. The main compensation of Steel Industries Kerala Ltd is given below;
Salary
Basic salary Any workers holding any post in the company has time scale pay and it fixed as per the company rule from time to time. The worker is eligible to have a scale on promotion or seniority or wage-revision. Increment It considered only on compensation of one year. The management sanctions the increment. It is the sole authority of management to with held delay or refuses the increment because of the power vested in management.
Allowance
The main allowances that are extended to employees in steel fabrication unit are as follows;
*D A (Dearness Allowance)
All permanent workers are eligible for dearness allowance as per company rules. DA is paid on divided manner. This is calculated as per Govt economic status rules. *HRA (House Rent Allowance) The workman shall be paid 15% of their basic pay as HRA. The workman eligible for 15% of HRA the workman should incur a minimum expenditure of 25% of his basic pay towards house rent every month and should produce the rent receipt every year or whenever the company demands to staying in own house rental value certificate will be fixed by the committee constituted by the company. If the workers failed to submit the receipt in time, he will lose his benefits. As per government rules; House rent Allowance: House rent allowance are allowed at the following rates Salary less than Rs 2500 is eligible to get HRA of Rs 145 Salary less than Rs 3000 is eligible to get HRA of Rs 165 Salary above Rs 3000 is eligible to get HRA of Rs 185 Uniform Allowance: Rs 525 is allotted for uniform once in two years.
Spectacles: Spectacles are provided to workers in plating shop. Footwear allowance: Workers of welding shop, galvanizing, mechanical maintenance shop are allotted Rs 425 in every two years. Risk allowance: When an employee met with an accident during employment he is eligible for disablement compensation is paid as per rules of workmen compensation Act.
*Travel allowance
Travelling allowance is given to the employees for official journey ranging from 20km to any other destination in India. The amounts of allowance are given according to their official position and the travelling distance.
Provident fund
According to employees Provident funds Act 1952; the employees of the company are entitled to contribute a certain percentage of the salary to this fund. All permanent employees are bound to join employee provident fund. The employee should contribute 12%of his basic salary towards P F. The first portion goes to P.F and next portion goes to P.F pension at the time of retirement. The following are the other benefits given to the employee joining in EPF; Family pension scheme of P.F pension scheme
Gratuity
All employees with long period of services are entitled gratuity on retirement due to superannuation or physical disability. The gratuity is calculated per existing rules of the company.
BONUS
Bonus is paid in accordance with the guidelines issued by the government from time to time. An employee whose salary is less than Rs 2500 per month is eligible to get bonus. 8.33% of the total salary is the minimum bonus to be paid. Ex-gratia payment depends upon the profit of the company.
Promotion criteria
Promotion shall be based on the following criteria; A. Seniority of the employees B. Performance of the employees C. Discipline of the employees
TRADE UNIONS
Trade unions are voluntary association of workers which is formed for collective bargaining, job security and to have discussion with management like long term agreement. There are two prominent trade unions in the SILK (SFU). They are; INTUC CITU
OBJECTIVES OF DEPARTMENT
1. 2. 3. 4. 5. 6. Control the accident hazards Promote safety consciousness among employees Communicate to top management regarding safety aspects Securities is entrusted with the responsibilities of continuous watchfulness To care of the factory and its premises from intruders Clearance to goods carried out of factory
2. Maintaining liquidity 3. Allocation of profit and calculation of tax 4. Cash collection and payments 5. Accounting 6. Financial planning etc
Accounts Officer
Accounts officer
COSTING SYSTEM
SILK does not follow any kind of costing system. In this unit of SILK every project or job is done separately. But the finance department didnt follow any kind of costing method. It is one of the drawbacks of SILK (SFU) at Cherthala. Due to this the company doesnt know separate profit or loss from a particular work. The company know only about the annual profit or loss.
Depending upon these factors the revenue budgets are prepared. According to the budget the officials are acting, other than that there is no such budgetary control actions are taken place.
CALCULATION OF DEPRECIATION
For calculating depreciation of machineries, SILK (SFU) use Straight Line method. According to this method the depreciation is calculated every year. The depreciation rates for different machineries are as follows; ITEM Factory building RATE OF DEPRECIATION 3.34% (fixed rate as per company law board[CLB]) Plant and machinery Computer and peripherals 5.15% 100% and 16.21
3.34%
Electrical installations
5.15%
AUDITING PROCESS
In SILK (SFU), mainly three kind of auditing are done. They are; a) Internal audit The company itself appoints an auditor for the purpose of checking errors in the books and accounts. b) Statutory audit This is the compulsory audit to be done according to the companies act. They will appoint an auditor and check the accuracy of accounts. c) AG Audit AG audit stands for Accountant General Audit. This audit is directly done by the accountant generals office at Trivandrum. There are two kind of audit in AG audit. They are; Financial audit checking the accuracy of books and accounts. Policy audit in this audit they check whether the company is working according to the rules of government.
Rs. In lakhs
421.14
2006-07
2007-08
2008-09
2009-10
2010-11
Manager
Assistant manager
Assistant engineer
Assistant engineer
CHAPTER 4 ANALYSIS
STEEL INDUSTRIALS KERALA LIMITED, STEEL FABRICATION UNIT BALANCE SHEET ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2011
Liabilities
Amount
Assets
Amount
Share capital
63,82,070.12 6,67,75,501.16
Secured loan
Miscellaneous expenditure
46,62,676.65
Unsecured loan Current liabilities& provisions Corporate office SFU SBU(B) SBU(A) FUO
1,65,00,000.00 5,59,65,663.56
GEW Project engineering and export division Trading division Profit for the year Total
Trading division
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2011
INCOME INCOME Sales Transfer to Capital Account Other Income Accretion / Depletion to Stock TOTAL RS 383,68,182.06 73,950 1,34,15,587.00
5,18,57,719.06
EXPENDITURE EXPENDITURE Raw Materials Consumed Trade Purchase Production Expense Selling Expenses Payment & Provisions for Employees Administrative & General Exp. Finance Charges Depreciation TOTAL Net Profit for Year RS 1,29,33,933.96 2,02,43,480.15 1,71,640.20 1,40,55,472.73 32,10,136.30 9,23,129.78 1,89,136.07 5,17,26,929.19 1,30,789.87
STEEL INDUSTRIALS KERALA LIMITED, STEEL FABRICATION UNIT BALANCE SHEET ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010
Amount -
Amount 6,568,756.19
5,223,794.50
Investments
Secured loans
7,135,150.97
80,705,762.71
Unsecured loans
3,500,000.00
90,280.29
Previous period
4,572,396.36
Total
91,937,195.55 Total
91,937,195.55
=1.0744
=1.0744:1 4.1.3 Reserve to share Capital ratio 2011 Reserve to share Capital ratio = reserve/share capital =5223794.50/0 = 5223794.50 : 0 2010 Reserve to share Capital ratio = reserve/share capital =5223794.50/0 = 5223794.50 : 0
It has all features required for high-performance business Management that include remote access, audit and compliance services as well as an integrated support centre & security Management All solutions are focused on delivering peace of mind to the clients It is a complete product that helps in retaining original simplicity yet offering evolved capabilities like payroll, statutory processes, excise and others With ideal combination of built in function, control & customizability it permits business owners & their associates to do more.
Powerful remote capabilities that boost collaboration Easy to find qualified personnel Easy to customize Low cost of ownership through Tally Integrator, Quick Implementation and Support Centre.
5.2 AutoCAD
AutoCAD is software which is used for design purpose. SILK adopted AutoCAD in 2004. BENEFITS OF USING AUTOCAD
1- Quickly create designs 2- Needs less storage Space 3- Improved quality over hand drafting 4- Can be customized to suit the individuals needs 5- Drawing modification is very easy 6- Can Draw to the actual scale and can be scaled during printing 7- Helps in preparation of Plan as well as 3 Dimensional Models and helps in product walkthrough
SWOT ANALISIS
6.1 Strength
a) Solid growth in production and turnover during the last two years. b) Existence of well experienced executives and employees. c) A fully government of Kerala undertaking is a major industrial conglomerate in the state of Kerala. d) The client includes major public sector undertakings, heavy engineering corporations.
6.2 Weakness
a) Lack of top level executives for some department (HRD & Finance) b) There is no alternative arrangement for power failure. c) Energy loss and excess power consumption due to use age of old aged machineries. d) Lack of effective control on various projects due to preparation of cost accounting. e) The production cost is very high due to the current change in excise duty, sales tax etc. f) New workers are very less in number.
g) The average production is low h) Employees are long leave for foreign assignment. i) Breakdown of existing machineries
6.3 Opportunities
a) Holding of 26 acres of freehold land b) Near to NH 47 and easy access of railway facilities
6.4 Threats
a) Scarcity of power generation in Kerala b) Price hike in steel row materials c) Non appointment of fresh staff / employees d) Absenteeism Causes of Absenteeism Personal work Health problems Nature of job
e) Trade union Organizational politics has an adverse effect on the organization. It damages or images the organization.
7.1 FINDINGS
1. The product of the company is building storage tanks (MS) bridge etc. 2. The company buy the materials from steel market especially Ernakulum, Trichy, Coimbatore, vishakapattanam etc. 3. The company provides certain recreation facilities to its employees. 4. The company provide canteen facility 5. The company give awards to students who got high marks in SSLC 6. They provide safety measures to workers like glows, mouth covering, shoes, cotton glows, leather glows, safety goggles, welding helmet, welding shield, paper mask etc .
CHAPTER 8
LEARNING EXPERIENCE
LEARNING EXPERIENCE
I have got a very good experience from the Company. Conducted my Organization Study in Steel Industries Kerala Limited for the period of one month from May 2nd 2012 to June 1st 2012. It helps to get a practical knowledge of the functioning of different departments and the information flow occurring in an Organization. Also to understand the day-to-day functioning of the Organization. Everyone in the Company was very cooperative in giving information required for the completion of the study. Although they are busy with their works, all find time to spend some time for giving necessary information and explaining its functioning in detail. I have to report to Senior Manager P.K Haridas and he was very much cooperative and helped a lot to collect various information. While visiting the Production Plant for giving guidance, my guide allotted Mr. Vijayan. He helped me a lot by explaining all the Production Process in very much detail. Had a close look for all the Production related activities. Within the limited time of one month period I have got an overall idea of the various functions of an Organization and also familiarize with a business Organization to relate theory with practice.
CHAPTER 9 CONCLUSION
CONCLUSION
The steel fabrication unit at Cherthala commenced commercial production in 1980. The annual prediction capacity of the steel fabrication unit is 500 MT of structural items. Different departments are present and leaded by qualified experienced managers. Since then the company has been maintain it very good will and reputation. The industrial visit and the study conducted for the preparation of this organisation study immensely helped me to make out the practical significance of theories taught in classroom for different management areas. The study as a whole has revealed that this plant set up under government sector is not growing progressively and that it has not a bright future. The finding of the study emphasizes and justifies the coexistence of public sector and private sector undertakings in our nation. The insufficient orders from the part of governments and less amount of financial investment and workers absendism, increased cost of raw materials, less amount of production etc will be badly affect the company. So these things must be overcome. Then the progress of the company will be increased. The organisational study of SILK (SFU) at Cherthala unit has been beneficial for me in all aspects. It helps to familiarise with the practical side of the organisation functions. It provides over all idea about different streams of management mainly personal, marketing, finance, and production etc of the organisation.
BIBLIOGRAPHY
Direct Enquiry from the Management Staff www.steelindustry.com www.google.com company books and records