18

REAL ESTATE INDUSTRY AN OVERVIEW

The Indian real estate sector has witnessed a revolution, driven by the booming economy,
favorable demographics and liberalized foreign direct investment (FDI) regime. Growing at a
scorching, 35 per cent the realty sector is estimated to be worth US$ 15 billion and anticipated
to grow at the rate of 30 per cent annually over the next decade, attracting foreign investments
worth US$ 30 billion, with a number of IT parks and residential townships being constructed
across-India.
The second largest employing sector in India (including construction and facilities management),
real estate is linked to about 250 ancillary industries like cement, brick and steel through
backward and forward linkages. Consequently, a unit increase in expenditure in this sector has a
multiplier effect and the capacity to generate income as high as five times.
ALL-ROUND DEVELOPMENT
Rising income levels of a growing middle class along with increase in nuclear families, low
interest rates, modern attitudes to home ownership (the average age of a new homeowner in
2006 was 32 years compared with 45 years a decade ago) and a change of attitude amongst the
young working population from that of 'save and buy' to 'buy and repay' have all combined to
boost real state demand.



19

According to 'Real state Skyline of India 2007-08', a study by research firm, Indices Analytics,
there will be demand for over 24.3 million new dwellings for self-living in urban India alone by
2015. Consequently, this segment is likely to throw huge investment opportunities. In fact, an
estimated US$ 25 billion investment will be required over the next five years in urban housing,
says a report by Merrill Lynch.
Simultaneously, the rapid growth of the Indian economy has had a cascading effect on demand
for commercial property to help meet the needs of business, such as modern offices,
warehouses, hotels and retail shopping centers. Growth in commercial office space requirement
is led by the burgeoning outsourcing and information technology (IT) industry and organized
retail. For example, IT and ITES alone is estimated to require 150 million sqft across urban India
by 2010. Similarly, the organized retail industry is likely to require an additional 220 million sqft
by 2010.
Going Global
Simultaneously, many Indian realtors are making a name for themselves in the international
market through significant investments in foreign markets.
Prudential Real Estate Investors has acquired Round Hill Capital Partners Kabushiki
Kaisha, a Japanese asset management firm.
Embassy Group has inked a deal with the Serbian government to construct a US$ 600
million IT park in Serbia.
Parsvnath Developers has tied up with the Al-Hasan Group in Oman.
Puravankara Group is doing a project in Sri Lanka - a high-end residential complex,
comprising 100 villas.
20

The Hiranandanis are constructing 5000 5-star hotel rooms, which will come up
between Abu Dhabi and Dubai.
Ansals API tied up with Malaysia's UEM Group to form a joint venture company, Ansal
API-UEM Contracts Pvt Ltd, which plans to bid for government projects in Malaysia.
Kolkata's South City Projects is working on two projects in Dubai.

Government Initiatives
The Government has introduced many progressive reform measures to unlock the potential of
the sector and also meet increasing demand levels.
100 per cent FDI allowed in realty projects through the automatic route.
In case of integrated townships, the minimum area to be developed has been brought
down to 25 acres from 100 acres.
Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA) repealed by increasingly larger
number of states.
Enactment of Special Economic Zones Act.
Minimum capital investment for wholly-owned subsidiaries and joint ventures stands at
US$ 10 million and US$ 5 million, respectively.
Full repatriation of original investment after three years.
51 per cent FDI allowed in single brand retail outlets and 100 per cent in cash and carry
through the automatic route.

21

Road Ahead
With the economy surging ahead, the demand for all segments of the real estate sector is likely
to continue to grow. The Indian real estate industry is likely to grow from US$ 12 billion in 2005
to US$ 90 billion in by 2015.
Given the boom in residential housing, IT, ITeS, organised retail and hospitality industries, this
industry is likely to see increased investment activity. Foreign direct investment alone might see
a close to six-fold jump to US$ 30 billion over the next 10 years.
22

3.2 ORGANISATIONAL STRUCTURE
An organization structure is mostly hierarchical concepts of subordination of entities
that collaborate and contribute to serve our common aim. Organizations are a variant of
clustered entities. The structure of an organization is usually set up in many styles,
department on their objectives and ambience.
3.2.1 CORPORATE STRUCTURE
The structure of an organization will determine the modes in which it shall operate and
will perform. Organization in a formal sense refers to a collectively of persons engaged in
pursuing specified objectives. It is referent to as the social system encompassing all
formal relations. In operations sense organization can be considered as consisting of
dimensions of work among people and coordination of their activities towards some
common objectives.
The day to day management of the company is entrusted to the Chairman and Managing
Director and he is assisted by Functional Directors and other officers of the company.
The Chairman and Managing Director, Functional Director and other officers exercise
their decision making powers as per the delegation of powers approved by the Board of
Directors.
The corporate layout helps to define all the areas of responsibility within the company.
The accounting department is understood to handle all financial matters, such as paying
the bills of the company and also issuing invoices for services rendered. The Marketing
department works to ensure there are efforts to market the goods and services produced to
the consumer market. Provisions for executive, managerial, and administrative matters
are also normally accounted for in a corporate structure, so that everyone in the
organization knows where a given issue should be addressed.




23

Finance Department


















Source:Company Records
Fig 3.1:Corporate Structure





Personnel and Administration Department
and Administration Department


Materials Department
Engineering and Design Department
Calibration Department
EDP Department
Marketing Department
Research and Development Department
Planning Department
Production Department
Managing
Director
24

3.2.2 BUISNESS AND DEPARTMENTAL STRUCTURE
KELTRONs history is a saga of innovation in electronics. From being a pioneer in 1973,
to the role of a trend-setter today, Keltron has been the catalysis for the development of
electronics industry in Gods own country- Kerala. Within five years of its inception,
Keltron had set up a production centre in every district of the State. More than 5,000
people were engaged directly or indirectly by Keltron for the manufacture of electronic
goods. The model of a State-owned electronics corporation was so successful that several
other States in India followed suit - launching their own Electronics Corporations.
3.2.2.1 PERSONNEL DEPARTMENT
The Personnel Department aims at ensuring a steady source of Human Resource who can
contribute to the successful enterprise. The department deals with the management of
human resource. The very existence of an undertaking depends upon the competent,co-
operative and dedicated performance of the personnel.Personnel functions of the
company consists of several Managerial and Operative Functions. The Managerial
Functions are Planning, Organizing, Directing and Controlling of Human Beings. The
Operative functions relate to ensuring right people for the right jobs at the right time.
These functions include Procurement,Development, Compensation and Maintenance of
employees. KCCL has a very efficient Personnel and Administration Department.
Manager is the staff Officer in the Organization. He gives advice to the Deputy
Administration Officer. Assistant Personnel officer gives direction to the Security
Officer. The Security Guards are under the control of Security Officer. There are two
assistants under Assistant Personnel Officer. For meeting the requirements of employees,
management must decide beforehand as to what type of men is to be recruited and in
what number they are required. The first problem is solved by Job Analysis and the
second problem is tackled through Man Power Planning.


25

Organizational Structure Of Personnel And Administration
Department
















Source:Company Records
Fig 3.2:Personnel and Administration Department






Senior Manager(Hod)
Senior Personnel Officer
Personnel Officer
Administrative Officer
Clerical Staff
Security Security
Clerical Staff
26

3.2.2.2 FINANCE DEPARTMENT
There exist an indispensible relationship between finance from production, marketing and
other functions. Almost all the business activities, directly and indirectly, involve
acquisition and use of fund. Recruitment and promotion of employees in production is
clearly a responsibility of the production department; but it requires payment of wages,
salaries and other benefits, and thus involves finance. Thus finance can be termed as the
life blood of any enterprise . Sales forecasting comes under the purview of marketing, but
it requires outlay of cash and therefore affects financial resources. A firm perform finance
functions simultaneously and continuously in the normal course of the business. They do
not occur in a sequence.













Source:Company Records
Fig 3.3:Finance Department Structure


HEAD OF THE DEPARTMENT
GENERAL
ACCOUNTANT
SALES
ACCOUNTANT
COSTING
ACCOUNTANT
PERSONAL
SECRETARY
OFFICER IN
CHARGE



CASHIER ACCOUNT ASSISTANT
27

3.2.2.3 MARKETING DEPARTMENT
At KCCL the marketing department act as a guide, and lead the company's other
departments in developing, producing, fulfilling, and servicing for their customers.
Communication is vital and the marketing department typically has a better
understanding of the market and customer needs. The goals and guidelines set by the
marketing are in line with the mission and vision of the company. The upper management
is also involved in and endorses co-operation by all departments in the following and
implementing the plan and integration a consistent message into all communication
channel.












Source:Company Records
Fig3.4:Marketing Department Structure



HOD (MARKETING DEPARTMENT)
MARKETING EXECUTIVES
CLERICAL STAFFS
28

3.2.2.4 MATERIALS DEPARTMENT
Stores and materials are the most important department in an industry. This department
facilitates the smooth functioning of production. Materials contribute to the quality of the
end product.The main objective of this department is to procure raw
materials/components/consumables as per procurement plans based on production
requirement schedule. This department services the raw materials till it is issued for
manufacturing.


















Source:Company Records
Fig 3.5:Materials Department Structure
MATERIALS DEPARTMENT
STENO
DEPUTY MANAGER
PURCHASE STORES
ASST.
PURCHASE
ASST.
PURCHASER
RAW MATERIAL FINISHED
GOODS
ALL IMPORTS ALL
INDEGENEOUS
PURCHASE
ASSISTANTS
PURCHSE
ASSISTANTS
HELPER HELPER
STORE OFFICER STORE OFFICER
ASSISTANT
SESSION OFFICER
ASSISTANT
SESSION
OFFICER
29

3.2.2.5 RESEARCH AND DEVELOPMENT DEPARTMENT
R&D department plays a crucial role in electronic industry. Innovation and quality
control are major concerns of this department. If the company has to survive in the
present highly competitive market, research and development has to come out with
innovative product and constant upgradation of technology. KCCL allocates 05%-1% of
turnover for R&D purposes. Research is going in the development of technology by
reducing the size of the component per with the Japanese product. The department is
trying for the vertical integration of the manufacturing process.













Source:Company Records
Fig 3.6:Research and Development Structure



HOD (R&D)
SIC PRODUCT
DEVELOPMENT
SIC ELECTROLYTIC
DEVELOPMENT
SENIOR TYPIST
TECHNICIAN
APPRENTICE
TECHNICIAN
APPRENTICE
30

3.2.2.6 PLANT ENGINEERING DEPARTMENT

In KCCL, Plant Engineering Department is mainly concerned with the maintenance of
equipment in the different departments (production).Maintenance is that function
manufacturing management of that is concerned with the day to day problem of keeping
the physical plant in good operating condition. The main function of plant department is
for maintenance of machine and also proving controlled environment for production
activities.














Source:Company Records
Fig3.7:Plant Engineering Department Structure


HOD
ASST.MANAGER
SHIFT ENGINEER
ASST. ENGINEER
TECHNICIANS
31

HEAD OF THE DEPARTMENT
3.2.2.7 PRODUCT PLANNING DEPARTMENT

Planning is "Task number one "of Keltron. It is the determination of a course of action to
achieve a desired result. Planning department is the most basis of all other department.
Since it involves deciding of future course of action. To plan is to look ahead and chart
out the future course of operation."FIRST PLAN YOUR WORK,AND THEN WORK
YOUR PLAN" Is the main policy of planning department. Planning is the process of
thinking through and making explicit the strategy, action and relationships necessary to
accomplish necessary to accomplish an overall objectives or purpose.













Source:Company Records
Fig 3.8:Product Planning Department Structure



OFFICER IN CHARGE
TYPIST/ASISTANT ASSISTANT ASSISTANT TYPIST/ASSISTAN
T
32

3.2.2.8 CALIBRATION DEPARTMENT
Calibration is the operation of determining the values of the errors of measuring devices
to traceable standards. It can be defined as measurements that are made using a variety of
instruments ranging from simple to extremely sophisticated. This department ensures that
all the measuring instruments are giving valid and useful data.














Source:Company Records
Fig 3.9:Caliberation Department Structure





HOD
OIC/SIC
TECHNICIAN TECHNICIAN
33

3.2.2.9 DATA PROCESSING DEPARTMENT
Computer has now become an essential part of organized information processing because
of the technology and volume of data to be processed and the need for getting processed
information quickly. Information processing is a major societal activity and computer
data processing has helped in areas like finance, marketing, HR etc.In KCCL, the EDP
department was started in 1988 with self entered computer. In 1994, the company
installed Local Area Network (LAN) with IS terminals. The management plan is to install
a separate system to each department by connecting it to central EDP unit.This
department acts as a supporting departments to all the other departments. Through the
EDP department the company has achieved lots of new facilities and hence has saved
time to a great extent. This was made possible with the help of new and improved
methods, keeping records of all the required items and so on. The software was
developed in the company itself, a Disk Operating System is adopted.











Source:Company Records
Fig 3.10:EDP Department Structure

HOD
COMPUTER OPERATIONS
OPERATORS
OPERATORS OPERATORS
34

3.2.2.10 PRODUCTION DEPARTMENT
Production is the process of conversion of a set of input into a specified set of output.ie
transformation of a range of inputs into required output having the requisite quantity
level. The set of inter related management activities which are involved in manufacturing
certain product is called Production Management. The main aim of the business system is
to produce the end products either in the form of goods or services economically,
utilizing the available resources, and thus satisfying the customer needs. Production is the
back bone of any industry. Keltron tries to fulfill its duty by high quality products by
producing effectively and efficiently at low cost so as to provide its customer maximum
satisfaction. The demand for the capacitors won't be the same through the year. It may be
different monthly schedules. The work order is issued to meet the specific demand for the
customer. A batch production order is issued for keeping the goods in stores or when a
number of customers order for the same product.












Source:Company Records
Fig 3.11:Production Department Structure
HEAD OF THE DEAPRTMENT
OFFICER IN CHARGE
ASSISTANT ASSITANT
35

3.3 FUNCTIONAL ANALYSIS
A department is a work group combined for performing certain functions of similar
nature. Keltron Component Complex Limited is a production and services oriented
organization composed of different departments depends other departments for its
operation. All the departments are controlled by Joint General Manager (JGM), who is
the unit chief of the organization.
3.3.1 PERSONNEL DEPARTMENT
KCCL has a very efficient Personnel and Administration Department. Manager is the
staff Officer in the Organization. He gives advice to the Deputy Administration Officer.
Assistant Personnel officer gives direction to the Security Officer. The Security Guards
are under the control of Security Officer. There are two assistants under Assistant
Personnel Officer.
Manpower
The total manpower of the company 500 is given as split up into category wise as
follows:
Total Permanent employees: 315
Apprentices : 130
Contract workers : 55 and other casual workers (daily wage @ 250/day)
The range of experience of all the employees is from 12-25 years.
The key technical personnel are trained by foreign collaborators or suppliers
of the machinery.
Administration Of Standing Orders
In KCCL, Standing Orders Act, 1946 is applicable to workmen in the industrial
employment. This Standing Order defines Company Management, workmen, workmen
36

trainee, workmen's classification, address and other particulars, probation, seniority,
temporary appointment, transfer, resignation, salary, leave etc.
Functions of Personnel Department
The main functions performed by the Personnel and Administration Department in
KCCL are as follows:
Man Power Planning
Recruitment and Placement of employees.
Co-Ordination and Training of employees
Keeping Personnel Record of employees
Arrange in-house and external training to employees
Time Keeping
Performance Appraisal
Promotion of employees
Wage Administration
Administration of Standing Orders and adopting welfare measures.
Manpower Planning
For meeting the requirements of employees, management must decide beforehand as to
what type of men is to be recruited and in what number they are required. The first
problem is solved by Job Analysis and the second problem is tackled through Man Power
Planning. Manpower Planning is the systematic and continuing process of analyzing
organizations. Workforce requirements under changing conditions and developing
personnel policies appropriate to the long term effectiveness of the
organization.Therefore, a proper and systematic manpower program requires proper
forecasting and planning for future. It should consider developing manpower
requirements for the whole organization, to create and evaluate the manpower inventory
and to develop required talents among the employees selected for promotions.

37

Recruitments And Placements
Recruitment is the process of searching for prospective employees and stimulating
them to apply for jobs in the organization. Placement is the process of assigning the
selected candidate with the most suitable jobs in terms of job requirements.As KCCL is a
Government Company, recruitment of candidates is done through employment exchange.
For executive posts the company approaches professional and employment exchange,
Trivandrum and local employment exchanges.As and when a vacancy arises, Personnel
and Administration Department notifies it to employment exchanges. For executive posts
the company approaches professional employment exchanges, Trivandrum local
employment exchanges.Then the personnel department publishes vacancies in leading
newspapers. After receiving the applications from the candidates, the department goes for
scrutinizing them. The company calls the selected candidates for interview. For this the
company has a Selection Board, represented by concerned departmental head, a nominee
of the Government of Kerala and the Personnel Manager. This board conducts interviews
and selects suitable candidates. Then the company gives appointment order to the
selected candidate along with terms and conditions for appointment. If the person is
willing to abide by the terms and conditions he is directed to sign and return one of the
copies of the Order.
Training
Training is the act of increasing the knowledge and skill of an employee for doing
a particular job. The purpose of training is to bring about improvement in the
performance of work. It includes the learning of such techniques as are required for the
better performance of work. It includes the learning of such techniques as are required for
the better performance of definite task.In KCCL, internal as well as external training is
given to employees. Fresh hands will be selected as trainees for a period of one year. For
existing employees, it is conducting refresher training by way of lectures, work
educational classes, external training etc.


38

Induction Or Orientation Training
There are two phases of Induction training program. The first phase is generally
conducted by the Personnel Department. It is concerned with giving the new employees
friendly welcome, explaining the matters concerned with the Company's background,
products, health and welfare plans etc. The Head of the Department under whom he has
to work conducts the second phase of induction program. The employees are given
information regarding production, work rules, working conditions.On first appointment,
employees are initially given on- the-job training. Due to technological developments and
improved techniques of management and production the training initially given will
become out of date and arises the need to give new training. For this regional Worker's
Training Education Center Officers come to KCCL.All the details regarding the training
given to employees are recorded in KCCL for future reference. Details such as name of
employees, date of birth, qualification, type of training, department in which he is
working, joining date, training period etc are recorded.
Performance Appraisal
Performance appraisal is the systematic evaluation of an individual's performance
in the job and his potential for development. Appraisal is the evaluation of work quality.
It is the systematic and objective way of judging the relative work or ability of an
employee in performing his job. Ordinarily the evaluation is done by immediate
supervisors. So it is a technique used to know the work of an employee qualitatively and
quantitatively on- the-job in comparison with other employees. It is one of the oldest and
usual practices of management.
In KCCL at the end of training period the trainees are observed according to his
performance during the training period. The Personnel Department provides
performances forms for self appraisal, executive appraisal and annual performance
appraisal. Self appraisal form is for self assessment of the employees. The other two are
filled by the concerned department supervisors. Depending upon the performance of the
trainee the personnel department decides whether the probation period is to be extended
39

or not. On the basis of his performance during the probation period, the department then
decides about the regular placements of the employee.
Time Keeping
Every employee is given a separate card with specific number having four digits. The
workers, employees, supervisors or executive have different serial number. A master role
is kept by the organization. Electronic punching system in KCCL is used to record the
time of entry and exist of each employee. Maximum half an hour late is permitted to
every employee. In the record half late coming is not allowed.
Working Hours
In KCCL Ltd, there are 3 shifts of works. The production process starts on Monday and
ends on Saturday.
The three shift timing are:
General shift is from - 8:30am to 4:30 pm
The first shift - 7:00am to 3:00 pm
The second shift - 3:00pm to 11:00pm
The third shift - 11:00 pm to 7:00 am
Wages And Salaries
In KCCL Ltd, three categories of employee are there i.e. Executives,
Supervisors and Workman. A Senior worker will get a total salary around Rs.12000 per
month. While a newly inducted workmen will get a minimum remuneration of Rs. 7000
per month. Similarly supervisor category will get a salary of around 14000 per month.
The junior executive will get Rs. 16000 per month and the Senior Executive will get Rs.
25,000 pm. The DA pattern of workmen is different from those in executive and
supervisor category. The DA for workmen is based on the consumer price index at All
India level. The DA of executives and supervisors will be based on Kerala Government
Norms.
40

Medical Re-Imbursement
All employee are eligible for medical reimbursement scheme. This scheme also extends
to family members wholly depended on the employee. The amount of the benefits is
given on the basis of service of employees.
Group Insurance Scheme
The group insurance scheme is applicable for every employees working in the
organization.
Provident Fund
Provident fund is the fund that provides for future. This fund is created by the amount
deducted from the salary of the employee every month to which the management adds its
own share at a certain rate. When the employee retires from his service, receives the full
amount standing in the credit of his fund which includes periodical interest added.
Bonus
In KCCL, yearly bonus is given to employees at a minimum rate of 8.33 on salary up to
Rs 3500 per month.The salary includes Basic Pay and Dearness Allowances. Festival
allowances should be given to employees at the time of festival, marriage allowances,
home loan, vehicle loan are also provided. Salary is either given directly to employees or
deposited in the bank as per the instructions.
Welfare Activities
In KCCL, the employees are provided with the following welfare measures.
Washing facility, bathroom and toilet facility
Facility for sitting, canteen facility.
Facility for drying clothes



41

Trade Unions
Trade unions are the organizational effort of workers in order to secure their individual
interest. There are four trade unions operating in KCCL. They are:
INTUC (Indian National Trade Union Congress)
CITU (Center of Indian Trade union)
KEO (Keltron Employee Organization)
DKEU (Democratic Keltron Employee Union)
Grievance Handling
If an employee have any grievance regarding any matter, he can approach his immediate
supervisor. The employee can simultaneously hand over a written complaint to the HOD.
If the employee is still not satisfied with the actions taken by the supervisor or HOD with
respect to the grievance, he has the right to approach the MD regarding the matter,
through proper channel. Or he can file a written complaint to the chairman of the
company.
Discipline
All workers are covered by the Standing Orders. Misconduct in violation of the Standing
Orders, under which he is covered, disciplinary action will be taken.In the initial stage a
department level enquiry is carried out. Based on the report of the HOD, the employee is
issued with a memo, he should prove why disciplinary action should not be taken against
him. This information should reach the management within time by the employee.
If the reply submitted by the employee is not convincing, a Memo of charges is
issued against him specifying relevant clauses of misconduct, simultaneously the MD can
order an enquiry appointing an officer to investigate the case. On receipt of the report
MD will decide the punishment to be awarded according to the findings.Apart from the
workman, the executives of the company are bound by the Conduct, Appeal and
Discipline rules 1986 of the company.Disciplinary action will be taken against the
Executives, who are also in line with the proceedings under Standing Orders.
42

Career Planning
There is a promotion policy applicable to workmen and non-workman. The future
promotions of the employee are guided by the provisions of the promotion policy. For
Promotion, Performance and Attendance of the employee will be closely monitored.
There is a proportion between workmen and executives for considering promotion from
workmen to executives. In the case of executives majority of the case are vacancy
limited.
3.3.2 FINANCE DEPARTMENT
There exist an indispensible relationship between finance from production, marketing and
other functions. Almost all the business activities, directly and indirectly, involve
acquisition and use of fund. Recruitment and promotion of employees in production is
clearly a responsibility of the production department; but it requires payment of wages,
salaries and other benefits, and thus involves finance. Thus finance can be termed as the
life blood of any enterprise. Sales forecasting comes under the purview of marketing, but
it requires outlay of cash and therefore affects financial resources. A firm perform finance
functions simultaneously and continuously in the normal course of the business. They do
not occur in a sequence.
Functions Of The Finance Department
Preparation and maintenance of accounts, documents and records.
Recording of bank transactions like cash withdrawals ,maintains details of
check payments etc.
Maintenance of commercial accounts, income tax etc.
Payment of company bills like telephone, electricity and monthly returns of
professional tax, sales tax and CST and VAT.
Preparation of budgets for the future.
Evaluation of audit
Fixed assets registers maintenance.
Salary preparation.
43

Key Financial Activities

1)Financial analysis, Planning and control.
Assessing the financial performance and condition of the firm.
Forecasting and planning the financial structure
To ensure that the actions of the manager are according to the goals of the
firm.
2)Management of the Firms Asset Structure
Managing the liquid resources.
Debt and dividend policy.
Determine the capital budget.
Negotiating and developing relation with various suppliers.
Establishing on the basis of current asset value SBI-KANNUR and
CATHOLIC SYRIAN BANK gives cash credit facility to Keltron.

Role Of Finance Manager
The role of Finance Manager in the company is an important one. The function of the
finance manager is not confined to the management and making of the accounts but it
also plays a major role in dividend decisions, capital budgeting decisions, capital
structure outlay of the firm, decision related to the merger and acquisitions, and all the
investment decisions of the firm. Thus the finance manager plays an important role in any
business enterprise. Formulating budget estimates in support of program objectives;
presenting and justifying budget requests; development of plans for allocating resources;
monitoring program execution; reviewing and analyzing funding documents; conducting
comparative analyses to examine trends; reviewing budget policy and statutes to ensure
compliance.Reviewing and interpreting accounting and financial management policy,
procedures, standards and statutes to ensure compliance; monitoring and examining
44

accounts, specific appropriations or financial records for account status and reporting
requirements.
ALLOCATION OF FUNDS TO VARIOUS DEPARTMENTS
As per the demand for the production orders from the clients, the finance
department will allocate funds to the various departments. When a need occurs for any
department, it is sanctioned by the finance department.
BUDGETING METHOD
Budget for the succeeding year is prepared and presented by the Board Of
Directors during the month of March and April, as soon as the budget from the
Government of India has been published. It is prepared by the finance department on the
basis of the sales projection provided by the marketing department. Raw materials
requirements are estimated on the basis of the comparison with the previous year's
figures.
CONTROL SYSTEM
The company has well defined and laid out rules and procedures for all
transactions. The Company's internal control system comprises audit and compliance by
an in-house Internal Audit Division supplemented with internal audit checks The
transactions are internally audited by an outside firm of chartered accountants. The
internal auditors independently evaluate the adequacy of the internal controls and
concurrently audit the majority of the transactions in value terms. Apart from normal
audits by CAG,Statutory Audit and transaction audit is also carried out by them.
DIVIDEND
The company has regularly paid dividend to its shareholders since 1985-1986.The last
time it paid dividend of 10% in the year 1993-94.Since then it is not able to pay dividend.


45

FUTURE PLANS
The company has already submitted proposals to the Government of Kerala in the
form of projects for enhancement of the product range and capacity for the manufacturer
of high CV value capacitors and also for modernization/upgradation of the Ageing &
Testing facilities. The company expects a substantial increase in production, turnover and
profitability after the receipt of approval and funding for these projects from the
Government.
3.3.3 MARKETING DEPARTMENT
At KCCL the marketing department act as a guide, and lead the company's other
departments in developing, producing, fulfilling, and servicing for their customers.
Communication is vital and the marketing department typically has a better
understanding of the market and customer needs. The goals and guidelines set by the
marketing are in line with the mission and vision of the company. The upper management
is also involved in and endorses co-operation by all departments in the following and
implementing the plan and integration a consistent message into all communication
channel.
ROLE OF MARKETING MANAGER
Acceptance of customer complaints and suggestion.
Creation of Order Files.
Evaluating customer's satisfaction
Forecasting the market trends.
Fixing adequate price for the products.
Conducting Marketing Research.
FUTURE PLANS
Online customer feedback systems are going to be installed soon.
Marketing Research are planned to conduct soon.

46

3.3.4 MATERIALS DEPARTMENT
Stores and materials are the most important department in an industry. This department
facilitates the smooth functioning of production. Materials contribute to the quality of the
end product. Such being the importance of the materials it is desirable, for an industrial
establishment to have a centralized authority vested with the responsibility of planning,
procuring, preserving, handling, usage and other related aspects. The main objective of
this department is to procure raw materials/components/consumables as per procurement
plans based on production requirement schedule. They also procure indirect
parts/products/consumables or service needed for all other process. This department
services the raw materials till it is issued for manufacturing. In KCCL, the purchase
department and the stores department under the material department.
FUNCTIONS
Identification of the requirements.
Selection of proper source of supply.
Deciding on quality and quantity.
Selecting the supplier.
Placing purchase order.
Arranging transportation of materials and goods.
Receiving the goods and materials and sending them to the stores.
Accept the goods after getting quality approval.

3.3.5 RESEARCH AND DEVELOPMENT DEPARTMENT
R&D department plays a crucial role in electronic industry. Innovation and quality
control are major concerns of this department. If the company has to survive in the
present highly competitive market, research and development has to come out with
innovative product and constant upgradation of technology. KCCL allocates 05%-1% of
turnover for R&D purposes. Research is going in the development of technology by
reducing the size of the component per with the Japanese product. The department is
trying for the vertical integration of the manufacturing process.
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3.3.6 PLANT ENGINEERING DEPARTMENT

In KCCL, Plant Engineering Department is mainly concerned with the maintenance of
equipment in the different departments (production).Maintenance is that function
manufacturing management of that is concerned with the day to day problem of keeping
the physical plant in good operating condition. The main function of plant department is
for maintenance of machine and also proving controlled environment for production
activities.
The maintenance work includes:
Mechanical Work
Electrical Work
Electronics Work
Civil Works
Civil works are usually given for contract work since the company does not have
sufficient engineers for that:
There are mainly 2 types of maintenance namely:
Preventive maintenance.
Break down maintenance.
In preventive maintenance, the maintenance activity undertaken before the machine or
equipment failed. In KCCL, the preventive maintenance service is done as per a regular
time table (usually in a specified time period).
In breakdown maintenance, it is done if the machine could not produce quality products
as per the specifications or if the machine is broken down.
Different toy books are maintained for different machines. Reward is maintained and it is
submitted to the HOD of the concerned department for verification.


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3.3.7 PRODUCT PLANNING DEPARTMENT

Planning is "Task number one "of Keltron. It is the determination of a course of action to
achieve a desired result. Planning department is the most basis of all other department.
Since it involves deciding of future course of action.

OBJECTIVES
Maximize the available resources and ensure optimum productivity and profits.
To reduce wastage of resources.
Crises management and to avoid mistakes.
Inventory requirements should not be overstocked.
No unnecessary storage of finished goods.
The work order prepared is analyzed and the pending work order list should be
given.
In KCCL, planning is done in departments like materials, Production, purchase
department, Marketing department etc. It has direct link between these departments.
Marketing department will prepare an annual budget based on demand, trend, prices
existing in the market. By using this, the planning department prepares the usual yearly
production plan. This plan is send to MD for consent, to commence production. Besides
yearly production plan,3 months production plan and monthly production plan are
prepared depending upon the requirements of the market. The prepared plan will be then
forwarded to the materials department, production department checks and make sure that
the plant is capable of producing concerned product upon the need specified. The
materials department checks the availability of raw materials in the stores. If it is not
available, the purchase department will make arrangements for purchasing the materials
and after the materials arrived, special work order is given for production departments.


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3.3.8 CALIBERATION DEPARTMENT
Calibration is the operation of determining the values of the errors of measuring devices
to traceable standards. It can be defined as measurements that are made using a variety of
instruments ranging from simple to extremely sophisticated. This department ensures
that all the measuring instruments are giving valid and useful data.

ELEMENTS IN CALIBRATION DEPARTMENT
Adequacy of standard.
Calibration Standards.
Traceability.
Recall system.
Calibration Report.
Labeling Practice.
Calibration intervals and adjustment techniques
Environmental Conditions.
Outside calibration sources.

3.3.9 DATA PROCESSING DEPARTMENT
In KCCL, the EDP department was started in 1988 with self entered computer. In 1994,
the company installed Local Area Network (LAN) with IS terminals. The management
plan is to install a separate system to each department by connecting it to central EDP
unit.This department acts as a supporting departments to all the other departments.
Through the EDP department the company has achieved lots of new facilities and hence
has saved time to a great extent. This was made possible with the help of new and
improved methods, keeping records of all the required items and so on. The software was
developed in the company itself, a Disk Operating System is adopted.

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3.3.10 PRODUCTION DEPARTMENT
Production is the process of conversion of a set of input into a specified set of output.ie
transformation of a range of inputs into required output having the requisite quantity
level. The set of inter related management activities which are involved in manufacturing
certain product is called Production Management. The main aim of the business system is
to produce the end products either in the form of goods or services economically,
utilizing the available resources, and thus satisfying the customer needs. Production is the
back bone of any industry. Keltron tries to fulfill its duty by high quality products by
producing effectively and efficiently at low cost so as to provide its customer maximum
satisfaction. The demand for the capacitors won't be the same through the year. It may be
different monthly schedules. The work order is issued to meet the specific demand for the
customer. A batch production order is issued for keeping the goods in stores or when a
number of customers order for the same product

FACTORS OF PRODUCTION IN KCCL
The main raw materials used for the production of Aluminum Electrolytic Capacitors are:
Etched aluminum foils 30-60 microns thick.
Formed aluminum foils and anodized etched aluminum foils 50-90 microns.
Condenser paper
Aluminum Cans
Lead Tabs
Electrolytes
Rubber Bungs
Glue
PVC heat shrinkable sleeve
Aluminum and copper plated wire.


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MANUFACTURING PROCESS
1.STITCHING AND WINDING
Stitching is the process by which, a thin needle are stitched to the anode and cathode foil.
Aluminum foil of 40m to 110m has both anode and cathode foil. Here in Keltron
Aluminum Oxide is sent for etching and forming. The etched and formed aluminum foil
is found either with cello tape or Glue. Every process is done automatically. Both the
aluminum and the paper are winded together. This is done so that the paper can sink in
the chemical and the electrolyte is formed. The paper used here is tissue type. This is later
taken into tank and chemical is fitted from there. All this is done in an air conditioned
room so as to avoid contamination and also to maintain the temperature level within the
plant.
2.ROLLING
While rolling, the anode foil are separated with a special thick paper and rolled according
to the specification for different capacitor. The length and breadth of the foils to be rolled
will be different and this defines the character of the capacitor; i.e. for higher volt and
higher temperature capacitors the foil will be broader and longer than that of the low volt
and temperature capacitors.
3.IMPREGNATION
The rolled up form will not have any value or specification. For this stitched and rolled
capacitors are kept in solutions which is called electrolyte. This process of keeping the
capacitors dipped in the electrolyte is to get the desired value. The time required for
impregnation defines the voltage of the capacitors it will take at least two hours.
4.SEALING
After impregnation, the above semi finished goods are send for sealing and sealing. The
impregnated capacitor will be manually put into an aluminum can with one end open.
This open will be closed using a rubber bunk. The rubber bunk will be having two tiny
pores through which the terminal come out. The entire process is called sealing.
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5.SLEEVING-HOT SRINKING AND ASSEMBLING
After sealing, the capacitors are send for hot shrinking. The printed color sleeve is rolled
over the capacitors and pressure is given over it along with temperature, so that the sleeve
remains stuck over and round the can of the capacitor.
6.AGENING AND TESTING
Ageing is the process through which electric voltage is given to the capacitor. Then it is
tested to see whether it is working properly and has the right voltage and there is no short.
The sealed coil goes for ageing and then it is tested. If the capacitor is good it is sent for
quality assurance. If it is tested bad then if re-ageing is possible, then re-ageing is done
and it is tested. If it cannot be re-aged it is rejected. Ageing and testing can be done
automatically and manually. Manually the capacitors are put in a trolley and loaded and
voltage is passed. Then it is tested.
7.QUALITY CONTROL
After the testing of capacitors, it is send to the quality assurance department. So it can be
checked for proper functioning in order to get 100% satisfaction from customer.
8.PACKING
Only passed items are packed into multiples of hundreds and send to finished goods
store. It may be packed according to customer requirements like bulk pack in.
9.STORE
The finished capacitor is then sent to the store, some where it is sold to dealers on the
first come first serve basis. i.e. FIFO method.




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Source:Company Records
Fig3.3.12: Manufacturing Process

STITCHING AND WINDING
ROLLING
IMPERGNATION
SEALING
SLEEVING
AGEING AND TESTING
QUALITY CONTROL
PACKING
STORE
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3.4 ORGANIZATIONAL ANALYSIS

3.4.1 KEY RESOURCES
The growth and success of the company is because of the quality policies they are
following,
To achieve a high standard of personal and corporate excellence through
continuous improvement HRD and employee participation.
To give utmost importance to satisfy and environment protection.
To market products and services of the company globally on strength of quality,
cost and delivery.
3.4.2. SWOT Analysis
The SWOT analysis provides information that is helpful in matching the firms resources
and capabilities to the competitive environment in which it operates.
STRENGTHS
Experience and Expertise of the workforce
Better Customer Service
Good infrastructure
Superior quality products
On time delivery of products
Reputation of the organization
KCCL is Government owned firm. It enjoys privileges from the Government.
Brand image
Fully and semi automated production system.
Highly satisfied customers
Good labor relations
Production of internationally quality products
ISO 9001-2008 certified company.
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Attitude and commitment of the employees was found to be excellent.
Easy road access.
WEAKNESS
The company is running at full capacity.
High price compared to other brands
Influence from the Governments and other political parties
There is high dependability on the import of raw materials
Very old machineries
Lack of advertisements and other sales promotion activities
Lack of market research information.
Employees are hard working but not innovative.
The company's website has little information regarding the various functional
areas/departments.
Lack of finance.


OPPORTUNITIES
The industryis in electronic field, diversification of products opens opportunities
for the organizations.
Few competitors.
New product development.
Company is capable of exports.
Day today expanding markets.
Availability of workers.
Expansion of production capacities.
High demand for the products.
Emerging technologies.

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THREATS
High cost of production.
Political influence.
Emergence of modern technologies which cannot be attained by KCCL.
Globalization.
80% of the raw materials are imported.
Hike in transportation cost.
Changing market trends.


















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CHAPTER 4
OBSERVATION AND CONCLUSION














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4.1 OBSERVATIONS

The following are the important findings on the basis of this study.

Keltron produces high quality products but comparatively charges high price than
its competitors.
The presence of good industrial relation with the local unions and there is greater
cooperation between management and employees.
As Keltron is a Govt. undertaking company political influence is more which
affects its functioning.
A good co-ordination exists between different departments.
Wage system is fair and the workers are happy with their wages.
In sufficient allocation of funds for promotional activities.
Globalization has a bad effect on the company.
Keltron do not produces any environmental problems.
As Keltron imports raw materials, import cost is high and it leads to loss in the
sales price is not able to cover the loss.
Most of the products are produced as per the order.
Company website has few information regarding the various functional areas and
departments.
The Organization believes that its strength is highly qualified employees and
maintains good relationship with employees.
KCCL provides more safety to the workers.
The factory and premises are maintained very neat and clean.
The company is having good infrastructure.
The current data processing system in Keltron needs updation.



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4.2 SUGGESTIONS
The organization should continue good industrial relation with the local unions and co-
operation between management and employees. It will reduce the industrial dispute in
the organization and increase the productivity.
New areas for application of capacitors have to be explored.
Company may face severe competition in the market from foreign companies, so
company should start to export and also to produce the products at the cheapest rates.
The company should allocate sufficient funds for the promotional activities.
The plant is running at full capacity which leads to high wear and tear and
maintenance cost, so company should take better alternative strategy, the company
should go for expansion strategy.
The company can increase the productivity by replacing the old machinery.
It is better for the company to develop new software which can be connected to the
web so that the customers can directly make orders (E-Commerce).
Reduction of cost is necessary for the company in order to lead in the competitive
market.
The company should try to sell its product at competitive price.
It will be better if the company add additional in the website so that the customers and
other stake holders get more knowledge about the company.









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4.3 CONCLUSION
Keltron Component Complex Limited (KCCL) is the only company in Kannur
district which produces Aluminum Electrolytic Capacitors. The company has high
reputation and goodwill with 37 years back in history.
Through this Organizational Study, I got a good idea about the history and profile
of "KELTRON" to enlarge my idea in the business world. Also a good insight about the
working of the organization has been received.
The organization has a wide range of products and goods and after sales service.
The organization ensures 100 % quality in all of its products. I was also very happy to do
a study in such an organization, because the study discloses the problems faced by an
Organization. It also reveals how the company is striving to prosper from the ashes. The
study also reveals the problems faced by most public sector undertakings.














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BIBLIOGRAPHY