A DISSERTATION REPORT ON

TREAUERY MANAGEMENT OF ORISSA STATE CO-OPERATIVE BANK. Submitted for partial fulfillment of the Master of Finance & Control (MFC) under UTKAL University. Session-2006-08 Submitted by:

Debabrata pal
Roll No-13767U064007 Redg. No-2183/2003 ARYA SCHOOL OF MANAGEMENT &INFORMATION TECHNOLOGY. Plot No-320,Patrapara,Bhubaneswar

A PROJECT REPORT ON WORKING CAPITAL MANAGEMENT AT HINDUSTAN AERONAUTICS LIMITED ENGINE DIVISION, KORAPUT Project report submitted to Arya School of Management and Information Technology, Bhubaneswar in partial fulfillment of degree in B.B.A.

Submitted by ALOK KUMAR SWAIN Under the guidance of Mr.S.Mahapatro Manager (Finance) HAL, KORAPUT DIVISION.

ARYA SCHOOL OF MANAGEMENT AND INFORMATION TECHNOLOGY, BHUBANESWAR, ORISSA.

DECLARATION

I do hereby declare that this project is entitled the project report on WORKING CAPITAL MANAGEMENT of HAL, KORAPUT Division. This project report submitted in the outcome of my own efforts in the training which I have undergone as a part of curriculum leading to the award of Bachelor Of Business Administration, ARYA SCHOOL OF MANAGEMENT AND INFORMATION TECHNOLOGY, BHUBANESWAR, under the guidance of Mr.S.Mohapatro, Manager, Finance, HAL, KORAPUT DIVISION. And I also declare that I have fulfilled all the provision of the convenient governing in the plant training.

Date: Place: Bhubaneswar

Signature of the student Alok Kumar Swain

ACKNOWLEDGEMENT

While preparing this report, I have the pleasure to acknowledge the guidance and help rendered by Mr.U.C.Mohanty, senior Manager (account) and Mr.S.Mohapatro Manager (Finance) of HAL (HINDUSTAN AERONAUTICS LIMITED), Engine Division, Koraput. I would like to express my deep sense of gratitude first to Almighty, My family, & then to my guide Mr. Manas Ranjan Pattanik, Advisor Academics, ASMIT, Bhubaneswar not only for his valuable guidance, strong encouragement, suggestion but also immense help during the preparation and submit of dissertation. I am very grateful to my dear Sir Mr. Sainik Som, Dean, Arya School of Management and Information Technology, who has provided me all the facilities and elderly guidance for my this MBA course. I am extremely indebted to Mr. Manmath kumar Nayak, Director, Arya School of Management and Information Technology, Bhubaneswar, for guiding and helping me in my project work. I shall remain ever grateful to Hindustan Aeronautics Limited, since they allowed me graciously to undertake the study in their office at Hindustan Aeronautics Limited, Engine Division, Koraput.

Alok Kumar Swain

CONTENTS
CHAPTER-1 Company profile CHAPTER-2 Introduction Objective of the study Purpose of the study Research methodology
Limitation

CHAPTER-3 Organization structure CHAPTER-4 HR practices CHAPTER-5 Analysis and findings CHAPTER-6 Conclusion Suggestion Annexure

HISTORY OF HAL An agreement was signed in August, 1962 with the Soviet Union for manufacture of MiG-21 E7FL Air craft under license the Aero engine Factory at KORAPUT (ORISSA), the Air frame Factory at Nasik (Maharastra), and the Avionics Factory at Hyderabad (Andhra Pradesh) have been set up to meet this requirement on the name of Aeronautics India Limited which was formed on April 1964 and new company under three name of Hindustan Aeronautics Limited was formed. The government sanction for the first phase of construct of the Aero engine factory at Sunabeda (KORAPUT) was accorded March 1964 and the factory started manufacture of R11F2-Series-III engines for fitment on MIG-21FL Aircraft from 1969 onwards. The first engines of imported category manufactured in December 1968 and various categories of engines were produced during the subsequent years. The first raw material engine was produced in February 1971. The production programmes for the factory also include manufacture of forging and casting required for MiG-Aircraft. To meet the Air force requirement for improved fight interceptor aircraft, an agreement was signed with USSR in August1976 for manufacturing MiG-21BIS Aircraft. The power plant of this aircraft is the R25 turbojet engine. The government approval for setting up capital facilities was accorded in October 1977. The first engine of imported category delivered to HAL Nasik Division in the year 1978-79.The FI raw material engine was delivered during January1983. With signing of the inter governmental agreement for manufacture of MiG 27M Aircraft on 19th March 1982, this Division would be involved in the manufacture of R-29B series of engine from the year 1984-85.

In order to attain self-sufficiency and to avoid difficulties regarding supply of Raw Material & other layout items from USSR, it was decided to provide indigenous supply of spares manufacturing for Overhaul/maintenance of the fleet. The Government approval for undertaking the tax received during 1977-78 and the indigenisation plan was formed to tackle. time frame. HISTORY GROWTH AND OBJECTIVES OF THE EARLY YEARS ARS and first moving spares. Metallic material. Non-metallic material. Ready-made articles. The activities towards these are being progressed as per approved

The origins of the present day Hindustan Aeronautics Limited can be traced to the erstwhile Hindustan Aeronautics Limited, which was set up in December 1940 by a far sign industrialist the late Seth Walchand Hirachand in association with the government of the princely state of Mysore. The company was registered on 23rd December 1940 as private limited company by tie registrar of joint stock companies of Mysore State.

The company commenced its operations with the aim manufacturing the Harlow Trainer, Curtis Haw Fighter the Val Bomber in collaboration with the Inter Continental Aircraft Company USA. The first flight handed over to the government of India in August 1941. Aten seat glider designed by Dr.V Ghatage was also test flown in August 1941. Due to the exigencies of the Second World War management of the company was handed over to USA in September 1942. HAL serves as the principal Overhaul base for the So East Asia Command of the allied fortress, Liberator and Mitch Bombers, Dakota and commando transport Aircraft, PHY Catal Amphibious Aircraft and Piston engines fitted on this Aircraft. After the close of Second World War, the management Hindustan Aircraft limited reverted to the management of India December 1945 and was placed under the administrative control of the Ministry of Industry and Supply. Soon after Independence, the government of India received the policy for manufacture aircraft. A LIC agreement was entered into in 1947 for the manufacture of archival prentice trainer Aircraft. Shortly there after October 1948, a project was sanctioned for design of the HT elementary piston engine trainer aircraft. The first flight assemble from kits, was flown on 30th August 1951 and the HT-2 was aware type certification in January 1953. Dr. V M Ghatage was the chief designer of the HT-2 and the design team comprised young India engineers, mostly drawn fresh from the colleges. THE FIFTIES In March 1950, the government entered into license agreement with De Havilland of UK for the manufacture of Vampire Fighter Aircraft. In August 1956, a major design and development programme was launched for HF-24 (Marut) Transonic Jet Fighter was the Bristol Orpheus engine. Dr. Kurt tank, a renowned German designer responsible for the Fockewulf-190 fighter of world II fame was appointed as director of engineering, leading composite design team of German and Indian engineers. The mass prototype flew on 17th June 1961.

In September 1956, the government entered into license agreements with Follands and Bristol Aero Engine Company of to undertake manufacture of Gant aircraft and Orpheus engines. Another major design and development project sanctioned December 1959 was the HJT-16 (Kiran) basis jet trainer aircraft. The chief designer for the kiran (as also the Pushpak & Krishna was Dr. V M Ghatage. THE SIXTIES Aeronautics India Limited was set up by the government India on 16 August 1963 to under take manufacture of the MiG FL aircraft, for which the government entered into collaboration agreement with the government of USSR in August 1962. Factories were set up at Nasik for manufacture of airframes, at KORAPUT for manufacture of MIG engines and Hyderabad for manufacture of the MIG avionics. The first 21Fl aircraft was produced in July 1966.
th

Aircraft manufacturing depot was established at Kanpur January 1960 as an air force unit for manufacturing of Haw Siddley HS-748 twin turbo prop transport aircraft fitted with Rolls Royce Dart engines. Hindustan Aircraft Limited was dissolved and its assembly merged with those of Aeronautics India Limited on 1st October 1964 to form Hindustan Aeronautics Limited. The Rail Co. factory at Bangalore continued to be a part of Hindustan Aeronautics Limited until January 1965 when it was separated from HAL and merged with Bharat Earth Movers Limited. SEVENTIES On the recommendations of Aeronautics Committee, (1969) separate division for manufacture of Alouette III (Chetak) lama (Cheetah) helicopter was set up at Bangalore in July 1969. Also on the recommendations of Aeronautics Committee, Government decided to set up facilities for manufacturing aircraft instruments and accessories at Lucknow.

The Avionics Design Bureau was formed in 1971 by merger the special project Te-M (SPT) established earlier at Bharat Electronics Limited, with the R&A Department of the Hyderabad Division. A design bureau was set up at Lucknow in 1973, Design and Development of accessories. A relatively MiG Project for design and development of Basant Agriculture Aircraft was undertaken between 1970 and 1974. In April 1979, the Government of India with BAe entered into license agreement for manufacture of the Jaguar aircraft and with Royce-Turbomeca for manufacture of the A dour engines fitted the Jaguar aircraft. THE RECENT YEARS The year 1980-81 was a bad year for the company as there was unprecedented prolonged strike of 77 days of the issue of parity with BHEL. Besides the order book position for division of Bangalore complex and Kanpur division was very unsatisfactory. In March 1982, an agreement was signed with USSR authorities license production of the swing-wing MiG 27M aircraft as a follow on project for the MiG 21 BIS. In August 1982, Government approved the proposal for setting up an advanced systems division at Korwa. A major milestone 1983 was the formulation of a design perspective plan, which envisages design, and development of a portfolio of projects including the basic turbo prop trainer, advanced jet trainer Hindustan Pressurized Light Transport (30-35 Seats) Light component Aircraft etc. in the period 1984 to 1994.

VISION
To make HAL a dynamic, vibrant, value based learning organization with human resources exceptionally skilled, highly motivated and committed to meet the current and future challenges. This will be driven by core values of the company fully embedded in the culture of the organization

MISSION
Enable all those working for HAL to give out their best to ensure there all round growth as well as that of the organization.

STRATEGY
1.To be in total alignment with corporate strategy. 2.Maintain Human Resource of optimum level to meet the objectives and goals of the company. 3.Competence Mapping, Analysis and up gradation of knowledge and skills including Training, Retraining, Multiskilling etc. 4.Create leadership with shared vision at various levels in the organization. 5.Focused development of core competence in High Tech areas. 6.Building cross-functional Teams. 7.Bring company wide awareness of Mission, Values and Organizational goals. 8.Personnel policies on performance based criteria, ensuring growth, rewards ad recognition and motivation.

Focus of Human Resource Policy Competence Building Commitment Motivation Employee Relations Now there are seven Divisions of HAL in India. Divisions are 1. Bangalore Division (Karnataka) Barakpur Division (West Bengal) It is a branch of Bangalore Division. 2. Nasik Division (Maharastra) 3. KORAPUT Division (Orissa) 4. Hyderabad Division (Andhra Pradesh) 5. Lucknow Division (Uttar Pradesh) 6. Kanpur Division (Uttar Pradesh) 7. Korwa Division (Uttar Pradesh) HAL has four main complexes in India. 1. 2. 3. 4. Bangalore complex. MiG complex. Accessories complex. Design complex.

1. (A) (B) (C) (D) (E)

BANGALORE COMPLEX Aircraft Division Engine Division Helicopter Division Forge and Foundry Division Overhaul Division Manufacturing Jaguar Aircrafts Manufacturing Jaguar Engine - Manufacturing Helicopters Manufacturing high precision casting and forgings Overhaul of Jaguar and other Engine

(F) (G)

Space Division common Satellites Servicing Division

Manufacturing of launching of pads and for common services to all Divisions

2.

MiG COMPLEX Manufacturing and overhaul of Airframes. - Manufacturing and Overhaul of MiG engines

(A) Nasik Division (B) Koraput Division 3.

ACCESSORIES COMPLEX Manufacturing of electronics and navigational equipment Manufacturing of passenger Aircraft & gliders.

(A) Hyderabad Division (B) Kanpur Division

(C) Lucknow Division

-Manufacturing of hydraulic pumps, Fuel pumps and Stator generator. -Manufacturing of advanced Navigational equipment.

(D) Korwa Division

4.

DESIGN COMPLEX Bangalore Division Modification of any component or Unit of an engine.

HEAD OFFICE
The head office of HAL is located at Bangalore another at New Delhi under the ministry of defense The recommendation of the review were subsequently approved by the Board OF Directors in SEPTEMBER 1972 and forwarded government who informed the company in MAY 1973 that they might adopt these objectives remain essential uncharged to date except that they have been amplified in 1983 through the medium of MDS dated 14th 1983 emphasizing the following: 1.That our products are the highest quality and reliability. . 2.That our products are fully supported after scale to customers. 3.That capacity utilization is optimized, restoring which is necessary to diversification and export. 4.Greater trust towards indignations of materials and product to improve self-reliance.

GEOGRAPHICAL LOCATION OF HAL KORAPUT DIVISION While installing an industry the entrepreneur has to choose the location properly, considering the pre-requisites like availability of land, labour, power, raw materials and communication facilities. If these factors are taken as unit of measuring rod the company (HAL), KORAPUT DIVISION is located in a very advantageous position. This company is situated at Sunabeda in KORAPUT district, Orissa that is about 130km. From Viziangaram. The river krandi which act as a perennial source for supplying water is flowing from northern side to HAL, KORAPUT DIVISION, and Sunabeda more over the factory is adjacent to the national highway NO-43 linking Vishakhapatnam-Raipur. The nearest railway link is at KORAPUT (16KM. From Sunabeda). An airfield is located at Jeypore, 39km. From Sunabeda. There is a helipad facility at HAL Township and also a proposed for construction of a pre-eminent airfield is under progress. The location of the factory has got many advantages. The hilly area Of KORAPUT district is highly strategic from defense point of view. The defense forest provides the factory from aerial view from the thick angle enemy plane. May this be the location of the plant, supply of power from Orissa Electric Board, which have a separate grid for HAL Harbor are available at cheap rate. The atmosphere of Sunabeda is cold and is less populated and less polluted which is an extra advantage. CORPORATE OBJECTIVES The objectives for which the company is established are out in the memorandum of association of HAL. There are clauses which interlia provide for design, development, manufacture, repair and overhaul of aircraft, engines related materials, components and equipment. The objects wide ranging and include provisions for establishing, maintaining and operating air services and training institutions for pilot engineers.

Manufacture of Missiles and Weapons, to take or otherwise acquire and hold shares in other company having objective altogether or in part similar to those of HAL etc. In April 1971, the board of directors of HAL appointed committee known as review committee of HAL to review the functioning of the company and make its recommendations. Committee formulated a statement of basic objective adoption by HAL, as detailed below:

BASIC OBJECTIVES
To serve as an instrument of the national policy to achieve self-reliance in the design, development and production aircraft and aeronautical equipment to meet the counter changing and growing needs, with special emphasis on millet requirement. In fulfillment of this objectives, the company shall regard its fundamentally responsible for design and development, rely however, upon such relevant facilities as are available in to national institutions, but always holding itself basic a responsible for the growth and furtherance of the counter aeronautics capability. To so conducts its business economically and efficiently it can contribute its due share to the national effort achieving a self-reliant and selfgenerating economy. Towards this end, to develop and maintain an organization which will readily respond to and adopt the changing matrix of soc techno-economic relationship and where in a climate of grow professional competence, selfdiscipline, mutual understand deep commitment and a sense of belonging will be fostered each employee will be encouraged to grow in accordance with potential for the furtherance of the organization.

The recommendations of the review were subsequently approved by the board of Directors in September 1972 and forwarded government, who informed the company in May 1973 that the may adopt these objectives. These objectives remain essential unchanged to date except that they have been amplified in 1983 through the medium of MDs dated 14th 1983 emphasizing the following: That our products are of the highest quality and reliability. That our products are fully supported after sale to customer. That capacity utilization is optimized, restoring which is necessary to diversification and export. Greater thrust towards indigenisation of materials and product to improve self-reliance.

HALS CORE BUSINESS

HALS core business is as follows: 1. 2. 3. 4. 5. Design and development of fixed and rotary wing aircraft, avionics and accessories. Export of Aero structure of leading world aircraft manufacturers for their aircrafts. Manufacturing of structural components for satellites, launch vehicles and missiles. Design consultancy. Design and execution of military/civil updates/modernizations, Manufacture maintenance repairs and overhaul of.

7. 8. 9.

Commercial and transport aircrafts, helicopters, aero engines, industrial and margin gas turbines. Ground support equipments (GSE) Accessories (Mechanical/Electrical/Instrument/flight/control/fuel) High technology casting, forging, fiber composite parts, aircraft transparencies, powered metallurgy.
INDIGENOUS NAMES OF HAL PRODUCTS

SL. No. 1 2 3 4 5 6 7 8 9 10 11 12

AIRCRAFT MIG-21FL MIG-21M/MF MIG-21BIS MIG-23MF MIG-23BN MIG-25 MIG-27M MIG-29 GNAT HF-24 HJT-16 JAGUAR

ENGINE R11-F2 R11-F2S/F2SK R-25 R-29 R-29B R-29B R-29B RD-33 ORPHEUS-701 ORPHEUS-703 VIPER-11 AD OUR MK-803

INDIGENOUS NAME BADAL TRISHUL VIKRAM RAKSHAK VIJAY GARUD BAHADUR VAJ AJEET MARUT KIRAN SHAMSHOR

13 14 15 16 17

MIRAGE-2000 HS-748 (AGRO) ALLOUTEE AN-32 MI-8

M-53 DART-531 ARTOUSTE-IIIB

VAJRA CHITRA CHEETAH (HELICOPTER) SUTLUJ PRATAP

18 19 20

MI HPT-32 SU-30 PISTON ENGINE AN-31F

AKBAR

(CHEETAH)

(CHETAK)

DIVISIONS OF HAL

INTRODUCTION OBJECTIVE OF THE STUDY PURPOSE OF THE STUDY SCOPE OF THE STUDY RESEARCH METHODOLOGY LIMITATION

INTRODUCTION
HAL was formed on 1st October 1964 by the merger of the Hindustan Aircraft limited and Aeronautics India Limited. it has 14 divisions and hal KORAPUT division is dealing with the manufacturing and over hauling of engines. Presently it produces RD33 engines and SU-30 Aircrafts. I deem it is a privilege to do a project in the finance department of HINDUSTAN AERONAUTICS LIMITED KORAPUT DIVISION. The study was undertaken with a view to get insight into a study of current finance scenario of th4e HINDUSTAN AERONAUTICS LIMITEDThe financial accounting information provides a broad insight into the financial and operational efficiency of an organization. In HAL, this system is quite well developed and such an in-depth study. Of the financial information helps me in analyzing HALS financial position.

OBJECTIVE OF THE STUDY

A few studies have already been conducted on various aspects of HAL. In the present duty an attempt is made to analyze the financial statement. Hence the study sets the following objectives before it. 1.To analyze the financial health of the corporation. 2.To analyze the operating efficiency of the corporation. 3.To analyze the financial statement through the different financial techniques like trend analysis, ratio analysis etc. 4.To suggest for improvement of the financial performance of HAL.

PURPOSE OF THE STUDY

The financial accounting information provides a broad insight into the financial and operational efficiency of an organization. In HAL, this system is quite well developed and as such an in-depth study of the financial information can help us in analyzing HALS performance.

SCOPE OF THE STUDY

Keeping the magnitude of the work in the mind, the scope of the study has been determined. It covers at the outset, a description of the role played by the corporation in improving financial strength of the organizational orissa. The study has emphasized financial statement analysis and its application in different enterprise.

RESEARCH METHODOLOGY:
The study was based on both primary and secondary data.

Primary data: It was collected through the discussion with the concerned executives. Secondary data: It was collected through the official records, various publication of the organization, annual report audited financial statements.

LIMITATION:
1. 2. The ongoing audit at the time of project work has put pressure on the time frame. Detailed information about certain parameters could not obtained due to confidentiality.

FOCUS OF HUMAN RESOURCE POLICY Competence building

 Commitment Motivation Employee relations In the backdrop of the above, the focuses of Human Resources Development initiatives at HAL emphasize the following: 1. MAN POWER PLANNING: Out sourcing of low tech and medium tech jobs Fresh induction only in critical / highly specialized areas based on requirements due to increase in workload and super annuation profile. In the workmen cadre, induction will be restricted to direct workmen only. Improving the existing qualification profile by focusing on induction of professionally qualified personnel and diploma holders. Hence focus of recruitment would be to recruit people with a combination of knowledge, skill, experience and attitude in line with the organization requirement through appropriate manpower plan both short term and long-term recruitment programme.

2.

TRAINING AND DEVELOPMENT: Training is one of the most important tools for developing human resource. Hence, identification of training competency profile in terms of Vision, Mission

of the Company would be the strategic point of the training and development strategy of the Company. The following objectives have been set in this regard: To provide training to all employees at regular intervals in a plan period of 5 years. Training to become an integral component of individual professional evolution by: 1. Updating knowledge to avoid obsolescence 2. Enhancing professional creativity 3. Enabling employees to shoulder higher responsibility 4. Creating a business trend and strategic thinking to take up new business challenges (creation of Centre of excellence, etc) The goals of training will be to progressively achieve 7 days training per employee per year with a budget of 2% of annual wage Bill. Keeping in view the organizational requirement and goals and objectives of training, the following have been identified as the key focus areas of training: Technology Tooling Quality Information Technology

Further, to facilitate the development of soft skills (change of mind-set, managerial development etc.) training would be imparted on a continuous basis.

Tie-ups with Centre of Excellence like IITs, NDC, and FIAS France etc. for imparting training would be given prime importance. 3. PERFORMANCE APPRAISAL:

Appraising people for meeting the companys goal would be the prime focus of performance management. The new performance Appraisal System based on work planning and commitment (mutually agreed tasks), self-review and performance analysis, performance review and feedback would ensure that the focus would be on value adding activities rather than on routine activities which bear no relationship with the organizations goals and objectives. Identification of low performers and resultant corrective action through out the company would be given priority. Similarly, faster growth opportunity would be provided to high performers. 4. REWARD SYSTEM

The focus of the reward system in the company is to promote teamwork and cultivate a sense of achievement and excellence in the organization. This is in addition to the existing scheme of reward for an individual who innovatively and creatively makes exemplary contributions in the key thrust areas of the company that would lead to its achieving overall excellence. Coupled with above, scheme like inter divisional competition and profit sharing scheme have been institutionalized in the company for team reward. 5. SCHEME FOR LEARNING AND CERTIFICATION FOR EXECUTIVE: A learning organization is essential for survival in the present era of liberalization, privatization and globalization. Therefore, knowledge is the only core competence of organization knowledge; it is only the employees who can convert knowledge into efficient actions.

In line with the above philosophy, among other initiatives like institutionalizing learning centers in divisions etc., hal has also introduced the scheme for learning and certification for executives as a starting point for building individual knowledge. The scheme inter-alias provides an opportunity for the junior and middle management cadre executives to broaden their perspective by not only learning about all functions and procedures in their respective discipline but also in related areas and overall knowledge about the organization and its environment. So for, approximately, 45%(both for0 & a level) of executives have been certified. It is proposed to expand the coverage of this scheme further, if required, by linking the scheme to some kind of reward mechanism.