REPORT

of the

ORGANIZATIONAL STUDY
at

FEDERAL-MOGUL GOETZE (INDIA)

LIMITED
Yelahanka, Bangalore.

Period

06.07.2015 to 04.08.2015

Submitted by

RAMYA N R
[14YAC11016]

Presidency College
Bangalore 560024
July-August 2015

TABLET OF CONTENTS
Sl. No

Topic

Page number

Introduction

Industry Profile

Company Profile

Finance Department

Manufacture

Purchase

Quality and Customer Satisfaction

Environmental Health and Safety

Human Resource

10

Research and Development

11

Facility Management

12

SWOT Analysis

13

Findings, Suggestions and Conclusions

Bibliography

Chapter: I

Introduction to
ORGANIZATIONAL
STUDY

1.1 ORGANIZATION
An organization is an entity comprising multiple people, such as an institution or
an association, which has a collective goal and is linked to an external environment. The
word organization is derived from the Greek word organon, which means instrument,
tool, and organ.

1.2 ORGANIZATIONAL STUDY

Organizational Studies is the examination of how individuals construct
organizational structures, processes, and practices and how these, in turn, shape social
relations and create institutions that ultimately influence people,
Organizational studies comprise different areas that deal with the different aspects
of the organizations, many of the approaches are functionalist but critical research also
provide alternative frame for understanding in the field.
Organizational studies are the study of individual and group dynamics in an
organizational setting as the nature of organizations themselves.

1.3 OBJECTIVES
The organizational study carried out in Federal-Mogul Goetze (India) Limited
situated in Yelahanka, Bangalore is to achieve the following objectives:

To familiarize with organization structure and its functioning.

To familiarize with the different departments in the Organization and their

functions and activities including documentation.

To understand how the key business processes are carried out in an Organization.

To understand how information is used in an Organization for decision making at

various levels.

To understand the growth and diversification structure.

To understand the performance measurement of employee.

To understand various employee welfare activities, training activities.

To understand the steps taken to increase productivity.

To conduct SWOT analysis.

To relate theory with practice.

1.4 SCOPE
The scope of Organizational Study at Federal-Mogul Goetze (India) Limited aims
at getting accustomed to the business environment of FMGI for a period of four weeks.
The study will be conducted to understand the structure, function and process of various
departments.
Detail study in the field of finance, production, purchase, human resource
marketing, quality management, and sales will be conducted. Key management problems
and suitable recommendations for solving the problems will be added at the end.
The observations will be made carefully and analyzed to represent the current
situation of the company. The data will be collected through primary and secondary
sources.

1.5 REASONS FOR SELECTING THE COMPANY

The reason for selecting Federal-Mogul Goetze (India) Limited for
Organizational Study is that they are the largest manufacturer and sellers of automobile
parts such as piston, piston rings in India.

1.6 PERIOD OF STUDY

The study was held from 06/07/2015 to 04/08/2015.

1.7 METHODOLOGY OF THE STUDY

Both primary and secondary data are used for the project.
Primary data is collected through observation, personal interview discussion with
managers and employees of various departments.
Secondary data is collected through company websites, profile, annual reports,
journals etc.
The data collected is properly analyzed to evaluate and understand the data quality.
After analyses and interpretation of collected data the information is documented
in the form of Organizational Study Report.

1.8 LIMITATIONS OF THE STUDY

The study is limited for a period of four weeks.

 The study is conducted in FMGI Limited, Yelahanka, Bangalore branch and is

limited to this branch only.
In-depth study could not be conducted due to shortage of time.
The findings are limited to the information disclosed by the company.
The findings are not conclusive but only an interpretation.

Chapter II

Industry Profile
AUTOMOBILE

2.1 Introduction
The Indian auto industry is one of the largest in the world with an annual
production of 21.48 million vehicles in FY 2013-14.
The automobile industry accounts for 22 per cent of the country's manufacturing
gross domestic product (GDP).
An expanding middle class, a young population, and an increasing interest of the
companies in exploring the rural markets have made the two wheelers segment (with 80
per cent market share) the leader of the Indian automobile market. The overall passenger
vehicle segment has 14 per cent market share.
India is also a substantial auto exporter, with solid export growth expectations for
the near future. Various initiatives by the Government of India and the major automobile
players in the Indian market are expected to make India a leader in the Two Wheeler and
Four Wheeler market in the world by 2020.

2.2 Market Size

Sales of commercial vehicles in India grew 5.3 per cent to 52,481 units in January
2015 from a year ago, according to Society of Indian Automobile Manufacturers (SIAM).
Sales of cars also grew for a third month in a row to 169,300 units in January 2015,
up 3.14 per cent from the year-ago period.
Car market leader Maruti Suzuki India witnessed 8.6 per cent higher sales at
approximately 118,551 units in February 2015, out of which 107,892 were sold in
domestic market and 10,659 units were exported. Hyundai Motor India Ltd (HMIL)
reported a 2.4 per cent growth in total sales at 47,612 units in February, compared with
46,505 units in the same month last year.
In the two-wheeler segment, Hero MotoCorp, witnessed sales of 484,769 units in
February 2015. TVS Motor Co posted 15 per cent higher sales at 204,565 units against
177,662 units. Bajaj Auto sold a total of 243,000 two and three-wheelers segment.

2.3 Automobile Industry in India

With a scintillating 2.3 million units produced in 2008 the Indian automobile
industry bagged the position of being the ninth largest in the world. Following economic
liberalization, Indian domestic automobile companies like Tata Motors Maruti Suzuki and
Mahindra and Mahindra expanded their production and export operations in and across the
country and since then the industry has only shown signs of growth. The automobile

industry comprises of heavy vehicles (trucks, buses, tempos, and tractors), passenger cars,
and two-wheelers.
The Indian automobile industry seems to come a long way since the first car that
was manufactured in Mumbai in 1898. The automobile sector today is one of the key
sectors of the country contributing majorly to the economy of India. It directly and
indirectly provides employment to over 10 million people in the country. The Indian
automobile industry has a well-established name globally being the second largest two
wheeler market in the world, fourth largest commercial vehicle market in the world, and
eleventh largest passenger car market in the world and expected to become the third
largest automobile market in the world only behind USA and China.
The growth of the Indian middleclass along with the growth of the economy over
the last few years has resulted in a host of global auto giants setting their foot inside the
Indian Territory. Moreover India also provides trained manpower at competitive costs
making the country a manufacturing hub for many foreign automobile companies. India
proves to be a potential market as compared to most of the other countries which are
witnessing stagnation as far as automobile industry growth is concerned.
A recent research conducted by the global consultancy firm Deloitte says that at
least one Indian automobile company will feature among the top six automobile
companies that will dominate the car market by 2020.
The Indian automobile industry proved to be in good shape last year even after the
economic downturn. This was majorly due to the fact of renewed interest shown by global
automobile players like Nissan Motors which consider India to be a potential market.
As far as authorized dealer networks and service stations are concerned Maruti
Suzuki is the most widespread. The other automobile companies are also showing rapid
progression in this field.

2.4 Indian Automobile Export market

India is a very favorable market for small cars; be it production, sales or export.
Since the Indian automobile industry is the largest manufacturer of small cars companies
like Hyundai and Nissan Motors export about 2,40,000 and 2,50,000 annually. India
emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea and
Thailand. The Indian automobile exports registered a 22.30 percent growth in the year
2009. The growth trend was as follows: Two Wheelers- 32.31 percent, Commercial
Vehicle - 19.10 percent and Passenger Cars grew by - 19.10 percent.

2.5 Key Automobile Manufactures in India

Maruti Udyog
General Motors
Ford India Limited
Eicher Motors
Bajaj Auto
Daewoo Motors India
Hero Motors
Hindustan Motors
Hyundai Motors India Limited
Royal Enfield Motors
Telco
TVS Motors

DC Designs
Swaraj Mazda Limited

2.6 Indian Automobile Industry Growth 2009

Gaining from Government stimulus packages, more demands and lower interest
rates on automobile loans the Indian automobile industry witnessed a phenomenal growth
of 26.41 per cent in the year 2009. Segment wise cars posted a growth of 25.10 percent
and two wheelers sales grew by 26 percent. The year 2009 actually turned out to be one of
the best years in the history of the automobile industry in India. If the trend continues the
same way then Indian will soon become the second fastest growing automobile market in
the world only after China.

2.7 Domestic Market Share for 2009 2010

Automobiles

Market Share

Passenger Cars

15.86 %

Commercial Vehicles

4.32 %

Two Wheelers

3.58 %

Two Wheelers

76.23 %

10

16% 4%
4%
76%

Passenger Cars
Commercial Vehicles
Two Wheelers
Two Wheelers

2.8 Government Initiatives

The Government of India encourages foreign investment in the automobile sector
and allows 100 per cent FDI under the automatic route. Excise duty on small cars,
scooters, motorcycles and commercial vehicles was reduced in February last year to 8 per
cent from 12 per cent to boost the Make in India initiative of the Indian government.
Some of the major initiatives taken by the Government of India are:

Under the Union budget of 2015-16, the Government has announced to provide
credit of Rs 850,000 to farmers, which is expected to boost the tractors segment.
The government is aligning to ensure that at least one family member is
economically strong to support the family. This is expected to improve the
sentiments of entry-level two-wheelers.

The Government plans to promote eco-friendly cars in the country i.e. CNG based
vehicle, hybrid vehicle, and electric vehicle and also made mandatory of 5 per cent
ethanol blending in petrol.

The government has formulated a Scheme for Faster Adoption and Manufacturing
of Electric and Hybrid Vehicles in India, under the National Electric Mobility
Mission 2020 to encourage the progressive induction of reliable, affordable and
efficient electric and hybrid vehicles in the country.

The Automobile Mission Plan for the period 20062016, designed by the
government is aimed at accelerating and sustaining growth in this sector. Also, the
well-established Regulatory Framework under the Ministry of Shipping, Road
Transport and Highways, plays a part in providing a boost to this sector.

11

2.9 Road Ahead

India is probably the most competitive country in the world for the automotive
industry. It does not cover 100 per cent of technology or components required to make a
car but it is giving a good 97 per cent, highlighted Mr. VicentCobee, Corporate VicePresident, Nissan Motors Datsun.
The vision of AMP 2006-2016 sees India, to emerge as the destination of choice
in the world for design and manufacture of automobiles and auto components with output
reaching a level of US$ 145 billion; accounting for more than 10 per cent of the GDP and
providing additional employment to 25 million people by 2016.
The Japanese auto maker Maruti Suzuki expects the Indian passenger car market to
reach four million units by 2020, up from 1.8 million units in 2013-14.
Exchange Rate Used: INR 1 = US$ 0.0157 as on April 28, 2015

12

Chapter III

Company Profile

13

3.1 Introduction
Hariprasad Nanda and his younger brother Mr. Yudi Nanda started Escorts at
Lahore in the year 1944. After independence Nanda along with his family came to India.
After reaching both brothers started separate companies which involved trading activities.
Federal Mogul (India) Limited was originally incorporated as Goetze (India)
Private Limited on November 26, 1954, under companies act of 1913.in the year 1961, the
company become deemed public company within the meaning of section 43A of
companies act and a fresh certificate of incorporation was issued by registrar of the
companies, Delhi and Haryana on April17, 1961. The corporate identity number of the
Company is L74899DL1954PLC002452.
JIPL acquired the share holding of escorts limited during 2003. In 2006, FMH
acquired most of the shared of JIPL (Escorts)and therefore the Federal Mogul group,
become majority shareholder.
The company today is controlled by Federal Mogul Corporation USA, through two
entities Federal Mogul Goetze (GmbL) and Federal Mogul Holding Limited.
Persuade to the majority equity shareholding in the company by Federal Mogul
Group in 2006, a resolution was passed on June 16,2006, to change the name from Goetze
(India) Limited to Federal Mogul Goetze (India) Limited. A fresh certificate of
incorporation consequent on change of name of company was issued by register of
companies, NCT, of Delhi and Haryana on August 3, 2006

Table showing change in registered office

Sl.n
o
1

Period

Location
6, Pratap Building, Connught Circle New Delhi-110001

2
3
4
5

Incorporation
-1960
1960-1966
1966-1977
1977-1955
1995-1998

1998-2000

7
8

2000-2003
2003-present

26, Faiz Bazaar, New Delhi-110006

Escorts House, Roshanara Rode, New Delhi-0110007
H2 Connught Circle New Delhi-110001
A36 Mohan Co- operative Industrial Estate , New Delhi110044
A39 Mohan Co- operative Industrial Estate , New Delhi110044
59-B Okhla Industrial Estate phase3 , New Delhi-110020
A26/3 Mohan Co- operative Industrial Estate , New Delhi110044

14

Awards and certificates

Year
1989-1999
1999

2001-2002
2001-2002

2002
2004

2004-2005
2005-2006

2005-2006

Award/ Certificate
Received the best performing supplier award from TATA Cummins
Ltd.,
Plant at Bhiwadi received OHSAS 18001:1999 certificate from TUV
Certification Body for Environmental Management system RWTUV
system GmbL
Escorts Mahle Ltd., received an award of excellence for performance
of quality from Maruthi Udyog Limited
Escorts Mahle Ltd., received an certificate of appreciation from
Kinetic Engineering Limited for supply of quality materials and
meeting schedules.
Received best performance vendor award for casting from Yamaha
Motors India Limited
Plant at Bhiwadi received OHSAS 14001:2004 certificate from TUV
Certification Body for Environmental Management system RWTUV
system GmbL
Received award for QCDDM in machining Category from Honda
Motorcycle & scooter India (Private)Limited
Received a certificate of appreciation from Standard Group of
Companies for supply of components , maintaining quality and
adhering to schedules
Received best supplier performance award from Mahindra &
Mahindra Ltd., in the category proprietary and Electrical

3.2 History

1899

1901
1903
1919
1921
1924
1929

The Federal-Mogul Corporation was founded in 1899 by J. Howard Muzzy

and Edward F. Lyon as the Muzzy-Lyon Company. The partners sold mill
supplies and rubber goods, but they also set up an early subsidiary called the
Mogul Metal Company The pair started developing specialized metals to
meet different bearing needs, and they were pioneers in die-casting
replacement bearings to the right size and shape.
The Mogul Metal Company created a new Babbitt metal called Mogul and
sold it under the Duro and Mogul brand names.
The Muzzy-Lyon company was incorporated and elected its first board of
director
Organizations first stock holders meeting was held
Total employment of Muzzy reached to 500
The company merged with Federal-Bearing and Bushing a manufacturer
of engine bearings and bushings and became Federal-Mogul Corporation.
With a fellowship from the Battelle Memorial Institute, Federal-Mogul
established a research division. The corporations sales reached $4.8 million.

15

1931
1932
1934
1941
1947
1949
1955
1956
1959
1960
1962
1963
1965
1966
1969
1974
1979
1981
late1990
s
1990
2001
2007
2008
2012
2014

Federal Mogul introduced Equi-poise boat

Company developed a new alloy called C-100 which was first new baring
material
Federal Moguls research staff refined C100alloy and released the new C50
alloy. These development revolutionized bearing manufacture and durability
Federal Mogul become worlds largest manufacturer of motorboat
Company opened a new research factory in Anna Arbor Michigan, a total
sales reached $85 million and employment hit 6200
Celebrated 50th anniversary
The company merged with the Bower Roller Bearing Company a producer
of straight and tapered roller bearings and became Federal-Mogul-Bower
Bearings, Inc.
This newly formed entity debuted on the FORTUNE 500 list at number 350
as total sales reached $100 million.
The corporation installed an IBM computer at its Coldwater Service
Headquarters in Coldwater, Michigan.
Business operations were established in Switzerland
Federal-Mogul-Bower opened its first overseas service center in Antwerp,
Belgium.
The companys Arrowhead Division facility expanded to produce
components for the NASA Saturn launch vehicle.
The company merged with Sterling Aluminum Products and changed its
name back to Federal-Mogul Corporation
Federal-Mogul corporate headquarters were relocated from downtown
Detroit to Southfield, Michigan.
The companys sales reached $263.3 million
FMGI celebrated its 75th anniversary as employment claimed to 13,500
NAPA began selling Federal-Mogul parts under its brand
The NASA space shuttle launched with Federal-Moguls Arrowhead parts.
Total company sales reached $833 million, while employment climbed to
15,000.
Federal mogul grew from a $2billons supplier to more than $6 billion
supplier.
Federal Mogul celebrated 100years
The company filed voluntary Chapter 11 and U.K. Administration petitions to
separate its asbestos liabilities from its true operating potential.
Federal Mogul Corporation emerges from chapter 11
Federal-Mogul Corporation lists Class A common stock on NASDAQ.
In September 2012, the company commenced operations as two independent
business segments, each with a chief executive officer reporting to FederalMogul's Board of Directors, known as Federal-Mogul's Power-train Segment
and Federal-Mogul's Vehicle Components Solutions Segment.
In April, Federal-Mogul Corporation announced its intention to implement a
holding company structure, changing the name of the company to FederalMogul Holdings Corporation. Following that announcement, in May Federal-

16

Mogul announced that its Vehicle Components division would be renamed

Federal-Mogul Motor parts.

3.3 Production capacity

Production capacity
Turnover
Net profit(after tax)

Piston rings
Piston
2015(1st quartile)
2015(1st quartile)

54.96 million
13.57 million
$1.8 billion
$140 million

3.4 Objectives of Federal Mogul

To be a market leader in manufacture of piston and piston rings

To increase marketability
Train managers to get the creative chemistry right between best team members
Expose workers environment in which customer use their products
Provide workers with firsthand experience of global best practice
Constantly retain workers in the theory and practice of total quality management
Management information system for proper communication
Computation of routine jobs
Educate employees on safe working and safe environment
To minimize human resource cost
To obtain maximum profit by minimizing production cost

3.5 Mission of Federal Mogul

To be known as best company for returns to shareholders

To increase market share by 30%
To export 25% of the total production every year
To increase the production development by 50% of time
To provide best products will all technical expertise at customer end
To provide the workforce with an environment of team work to continuous
learning and reward for global performance.

3.6 Vision of Federal Mogul

To be the global player on the field of piston and piston rings

Identified best practices to move towards manufacturing excellence
Partnering for success to become world class in automobile sector

17

3.7 Production Range

Figure 3.1 Piston

Figure 3.2 Piston Rings

Figure 3.3 Cylinder liners

Figure 3.4 Light alloy castings

Figure 3.5 Transfer parts

3.8 Plants in India

18

3.8.1 Bhiwadi Plant

The Bhiwadi plant manufactures precision powder metal (sintered) components for
engines, transmissions and lubricating pumps, including valve seat inserts, valve guides,
synchronizer hub, timing pulleys, ge-rotors, lubrication pumps, gears and many other
structural components.
The Bhiwadi plant was one of the first three in India, and one of the first 15 in the
world, to become certified in ISO/TS 16949/OHSAS 18001. The production facility was
planned for specific product ranges, allowing for greater control of processes and final
product quality.

Figure 3.6 Bhiwadi plant

Production capacity:
Valve seat inserts
- 12.0 millions
Valve guides
- 13.0 millions
Structural parts
- 4.5 millions
Products Manufactured:
Valve seat inserts
Valve guides
Synchronizer hubs
Oil pump gears
Crankshaft & camshaft pulleys
Other intricate powder metal components
Plant Manager : Mr. Rakesh Kumar
Factory
: SPL/1240-1244, RIICO
Industrial Area,
Phase-I (Extn.), Ghatal, Bhiwadi-301019,
Deist. - Anwar, Rajasthan, INDIA

3.8.2 Patiala plant

Patiala plant is located in the north of India about 250 km from the capital - New
Delhi. It is connected by road and rail routes. This plant manufactures a wide range of
pistons, piston rings, cylinder liners and light alloy castings

19

Figure 3.7 Patiala Plant

3.8.3 Bangalore plant

The Bangalore production plant is a state-of-the-art facility, producing a wide
range of piston, piston rings and pins. The plant is connected by air, rail and road routes.
Federal-Mogul Goetze India limited ISO/TS-16949 2002 certified company is one of the
leading groups in automotive components industries.
Started operation

: 1972

Area covered

: 53 acres

Certified

: ISO/TS-16949 2002

Annual capacity

Figure 3.7a & b Bangalore Plant

Campus Manager

: Rajesh Sinha

Factory

: Doddaballapur Road, Yelahanka,

Bengaluru-560064

20

3.9 Information Flow Process

Chart 3.1: Information Flow Process

21

Fig 3.8 Location of FMGI plants in India

3.10 Board of Directors and Corporate Leaders

BOARD OF DIRECTORS
Designation
Chairman & Director
Managing Director
Whole Time Director-Legal and Company
Secretary
Director
Director
Director
Director

Name
Mr. K.N. Subramaniam
Mr. Andreas Kolf
Dr. Khalid I. Khan
Mr. Bernhard Motel
Mr. Mukul Gupta
Ms. Janice Ruskey Maiden
Mr. Mahendra Goyal

CORPORATE LEADERS
Managing Director
Director Human Resources
Head - Information Systems
Head AE + R&D
Head Global Purchasing
Head - Original Equip. Sales
Head AM Sales
Head SCM

Mr. Andreas Kolf

Mr. Mrityunjay Nath Sahu
Mr. Narangampuram Sreenivasan
Mr. SGP Naidu
Mr. Ashok Sinha
Mr. Vinod Hans
Mr. Sanjeev Singh
Mr. Alok Manaktala

22

Chief Financial Officer

Mr. Manish Chadha

3.11 Milestones
Year
1954
1957
1958
1960
1968
1977
1982
1985
1989
1990
1992
1994
1996
1997
2001
2003
2004
2004
2006
2007

Place
Incorporated as JV with Goetze Werke
Rings and liner production
Piston production at escorts(automotive division)
(collaboration Mahle)
Cast iron / Forged piston production started
Pins/ rings carrier production started
Piston/ rings production started

Patiala
Patiala

Patiala
Patiala
Bangalor
e
Steel rings / large bore locomotive piston
Bangalor
e
Light allow products
Patiala
Auto thermo piston production
Bangalor
e
Moly coated/ IKA/ chrome oil rings
Patiala
Large bore rings / piston for battle tanks
Bangalor
e
Composite/ pistons/ new rings foundry
Bangalor
e
Escorts (automotive division )hived off into joint venture with M/S Mahle,
Germany
Goetze TP (India )Ltd.- manufacturer of steel rings
Merger of Federal Mogul sintered products Ltd with Goetze (India)Ltd
Merger of escorts piston activities with Goetze(India) Ltd.,
Introduction of chrome ceramic rings
Technical collaboration for pistons with Federal Mogul corporation
Majority stake holding acquisition by Federal Mogul corporation
Name changed Goetze (India) Limited to Federal Mogul Goetze
(India) Limited

3.12 Marketing Networks of FMGI

23

3.13 Organizational Chart of Federal Mogul

24

Chart 3.2: Organizational Chart of Federal Mogul

25

Chapter IV

Departmental Study

26

4.1 Introduction to Finance Department

This is an important ministry within the Government of India. It concerns itself
with taxation, financial legislation, financial institutions, capital markets, centre and state
finances, and the Union Budget. Finance departments are an integral part of an
organization, providing the fuel to keep it moving forward. By communicating, managing
money wisely and staying informed about available opportunities, finance departments can
ensure a steady flow of funds into the organization.
If you have concerns relating to integrity issues that you feel should be brought to
the attention of management, there are several resources available to help you:
1. Contact local management at your site
2. Contact Group and Regional Finance Directors and Controllers
3. Contact Group HR Directors, Regional HR Managers and Functional HR Manager
4. Contact a member of the FLT through the Finance Discussion Board
Federal-Moguls Global Finance team is led by Senior Vice President, Finance, and
is composed of professionals in corporate and operations finance, accounting, financial
reporting, internal audit, investor relations, risk management, corporate tax, and treasury.
Global Finance services the organization in many ways, including the following:

Designs and implements sound internal controls to ensure the safeguarding of

company assets in a cost effective manner.

Delivers and interprets accurate and timely information to internal and external
stakeholders about the organizations financial performance.

Develops, deploys, maintains, enhances and enforces financial policies, procedures

and systems.

Drives the financial functions of the organization in accordance with U.S. GAAP
and local rules and regulations.

Drives the annual budgeting and business planning processes.

Assists the organization in attaining necessary financing.

Advises business leaders on financial matters impacting the organization.

27

Creates and analyzes financial reports and trends to identify strengths and
weaknesses of F-M operations, future business opportunities, and solutions to
business challenges.

4.2 Organizational Chart of Finance Department

Chart 4.1: Organizational Chart of Finance Department

4.3 Objective of Finance Department

1. Wealth Maximization

28

2. Profit Maximization
3. Develop Accurate Budget
Another objective if finance department is to prepare accurate budget which clearly
shows what the company will spend. The departments should clearly show how much
departments can spend on each particular activity. To create an accurate budget, the
finance department must communicate effectively with the heads of other departments
to determine what they need and modify unrealistic objectives.

4. Coordinates with other Departments

Finance department should coordinate the flow of funds with organizations activity
using long range planning while preparing the short term needs the department should
see that the organization has sufficient funds when needed.

5. Procure Fund
The finance department must decide how much debt the organization should have,
keeping in mind its ability to pay off debt. The department must decide which source
of funding will help the organizations need and purpose. Later it must conduct
research the available opportunities and interest.

6. Pay off Debts

Finance departments must pay back their organizations creditors in a timely and
fair manner. This shows creditors the organization can be trusted and has been
managing its funds wisely, making them more likely to continue investing in the
organization

7. Maintain Transparency
Finance department should maintain transparency of its operation to the investor,
clients or other associated with the organization know that they can trust its staff. This
means provide accurate financial information to its stake holders.

Functions

Disbursement of payment to venders

Accounting of receipts
Payment of expenses to employees
Payment of tax, dividend, interest, etc.,
MIS reports

29

 Monthly sales, cumulative sales

Monthly production, cumulative production consumption variance reports
Quality produced statements

4.4 Organizational Chart

30

Chart 4.2: Organizational Chart

4.5 Financing Process of a Company when Purchase is done

31

Chart 4.3: Financing process of a company when purchase is done

4.6 Share Holding Pattern

Foreign institution

74.98

Indian company

25.02

Price per share

Rs10

32

Share Holding in the Share Market

Category

Percentage

Individuals

97.46

Corporate

1.63

Financial institution/ mutual funds / banks / insurance companies

0.15

Non-resident Indians

0.65

Foreign institutions

0.07

Promoters(non-resident companies)

0.01

Others

0.03

Individuals

Percentage

Corporate
0.65
0.07
0.01/ insurance
0.03
1.63 0.15
Financial institution/
mutual
funds
/ banks
companies
Non-resident Indians
Foreign institutions

97.46

Promoters(non-resident companies)
Others

4.7 Accounting Policies

The Accounting Policies Manual has been developed and continues to be updated
to ensure that all Federal-Mogul (F-M) locations are applying consistent and appropriate
accounting treatment to all transactions in accordance with U.S. Generally Accepted
Accounting Principles.

33

4.7.1 Accounting Methodology used:

Accounts are maintained on the fundamental assumption of GOING CONSERN and
ACCRUAL SYSTEM OF ACCOUNTING
Expenses accruing in the financial year which are ascertainable and realizable on
cutoff date are taken into account.
Income accruing in the financial year which are ascertainable and realizable certainty n
a cutoff date are taken into accounts

4.7.2 Accounting for Depreciation

For U.S. GAAP book purposes, all fixed assets (as prescribed in the Fixed Assets
Capitalization Policy) are to be depreciated in accordance with the depreciation
schedule outlined below over the useful life of the asset beginning in the month the
asset is placed into service.

Item

Depreciation Method

Construction in Process
Land
Land Improvements
Building
Building (CIP)
Building Improvements
Machinery & Equipment, new
Machinery & Equipment, used
Warehouse Equipment
Transportation Equipment
Testing Equipment
Furniture & Fixtures
Computer Equipment
Computer Software
ERP Software
Tooling & Dies
Leasehold Improvements

Not Depreciated
Not Depreciated
Straight Line
Straight Line
Not Depreciated
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line

Useful Life
(Years)
N/A
N/A
15
39
N/A
39
12
7
12
5
5
7
5
3
7
3-5
Term of Lease

Straight Line depreciation is calculated by dividing the total cost of an asset by the
number of months the asset will be in use

4.7.3 Accounting for currency transaction:

34

1. Translation Adjustments are an inherent result of the process of translating a

foreign entitys financial statements from the functional currency to US dollars.
Translation adjustments are not included in determining net income for the period
but are disclosed and accumulated in a separate component of consolidated equity
until sale or until complete or substantially complete liquidation of the net
investment in the foreign entity takes place.
2. Transaction gains and losses are a result of the effect of exchange rate changes on
transaction denominated in currencies other than the functional currency. Gains
and losses on those foreign currency transactions are generally included in
determining net income for the period in which exchange rates change unless the
transaction hedges a foreign currency commitment or a net investment in a foreign
entity. Intercompany transactions of a long-term investment nature are considered
part of Federal Moguls net investment and hence do not give rise to gains or
losses.
3. Realized translation gains/losses are to be recorded in account Realized Gains/
Losses. Un-realized gains/losses are to be recorded in account Un-realized
Gains/ Losses.
4. For revenues, expenses, gains and losses in foreign currency are measured and
recognized at the current rate at the time of realization

4.7.4 Accounting for Inventories

1. Perpetual inventory records are to reflect current quantities on hand for all
inventories and are to be used as the basis for determining the valuation of such
inventory. All inventory movements are to be recorded in the perpetual inventory
records.
2. Purchases from other F-M locations are to be recorded as intercompany shipments
by the selling unit and as inventory by the buying unit at the time the goods are
shipped by the selling unit.
3. Goods shipped from the selling entity but not yet received by the buying entity at
period-end are to be recorded by the receiving entity as inventory in transit. This
may be determined in conjunction with the intercompany account confirmation and
reconciliation process.
4. For all purchases from other F-M entities for which the goods have been received
but no invoice has yet arrived as of the end of a reporting period, the receiving
location is to verify the dollar value of the shipment with the shipping location in

35

conjunction with the intercompany account reconciliation process and to record the
agreed upon invoice amount in the applicable intercompany account.
5. Third party purchases are to be recorded in the inventory perpetual records and the
general ledger at standard cost at the time the title has passed to F-M and F-M
bears the risk of loss. Any difference between the actual cost per the invoice and
the standard cost is to be recorded as a purchase price variance. Any goods for
which the risk of ownership has passed, but have not been received are to be
recorded by the receiving location in the general ledger as inventory in transit.
6. All valuation reserves must be recorded within the appropriate legal entity.
7. For all goods received from third parties where an invoice has not been received at
period-end, the goods are to be recorded as inventory in the perpetual records and
an accrual for the estimated cost of such goods is to be recorded in the general
ledger at the end of each reporting period.
8. Raw materials, consumable stores and bought out items are valued at the cost on
weighted average basis; material under trial and work-in- process are valued at cost
or net realizable value whichever is lower. Cost for this purpose includes prime
cost plus appropriate share of manufacturing overheads

4.8. Code of Ethics

Federal-Mogul Corporation has adopted the following Financial Code of Ethics,
which applies to Company Financial Professionals worldwide, to ensure the continuing
integrity of financial reporting and transactions. "Financial Professional" means any
professional employee in the area of finance or outside of the area of finance who has a
significant impact on the financial accounting and reporting of the Company. Specifically,
a Financial Professional includes a professional employee in corporate or operations
finance, accounting, financial reporting, internal audit, investor relations, purchasing, risk
management, corporate tax, and treasury.
The Companys Integrity Policy sets forth the fundamental principles and key
policies and procedures that govern the conduct of all of the Company's directors, officers
and employees. Financial Professionals are required to conduct their personal and
professional affairs in a manner that is consistent with the ethical and professional
standards set forth in the Integrity Policy, as well as this supplemental Financial Code of
Ethics.
All Financial Professionals must:

36

1. Act in an honest and ethical manner and comply with all of the provisions of the
Companys Integrity Policy, including the ethical handling of actual or apparent
conflicts of interest in personal and professional relationships;
2. Act in good faith, responsibly, with due care, competence and diligence, without
misrepresenting material facts
3. Promptly bring to the attention of the Companys Financial Disclosure Review
Committee and to senior management any information concerning
a. significant or material deficiencies or weaknesses in the design or operation
of the Company's internal controls,
b. any fraud, whether or not material, or any actual or apparent conflict of
interest between personal and professional relationships, involving any
member of management or other employee who has a significant role in the
Company's financial reporting, disclosures or internal controls, or
c. Any other matters which could have a material adverse effect on the
Company's ability to record, process, summarize and report financial data.
4. Produce full, fair, accurate, timely and understandable disclosure, in compliance
with applicable accounting standards, in reports and documents that the Company
or any subsidiary files with, or submits to, the U.S. Securities and Exchange
Commission or any applicable regulatory body and in other public
communications made by the Company or any subsidiary;
5. Respect the confidentiality of information by taking all reasonable measures to
protect the confidentiality of non-public information about the Company or any
subsidiary and to prevent the unauthorized disclosure of such information unless
required by applicable law or regulation or legal or regulatory process;
6. Comply with rules and regulations of federal, state, provincial and local
governments, and other relevant private and public regulatory agencies.
7. Financial Professional shall facilitate the work of the Company's independent
public auditors and shall not, directly or indirectly, take any action to fraudulently
influence, coerce, manipulate or mislead the Companys independent public
auditors.

4.9. Internal Audit

The mission of Federal-Mogul Audit Services ("FMAS") is to provide
independent, objective assurance designed to add value and improve the organization's

37

operations. It helps the organization accomplish its objectives by bringing a systematic,

disciplined approach to evaluate and improve the effectiveness of risk management,
control, and governance processes.
The scope of work of the internal auditing department is to determine whether the
organizations network of risk management, control, and governance processes, as
designed and represented by management, is adequate and functioning in a manner to
ensure:

Risks are appropriately identified and managed.

Interaction with the various governance groups occurs as needed.

Significant managerial information is accurate, reliable, and timely.

Employees actions are in compliance with policies and standards.

Resources are acquired economically, used efficiently, and adequately protected.

4.10. Tax
Federal Moguls Corporate Tax function is led by James Zabriskie, Vice President,
Treasury and Tax, and is composed of corporate tax professionals based in the United
States, Germany, the United Kingdom, China, and Mexico.
The mission of Corporate Tax is to collaborate with finance and business
management to optimize the companys tax posture while responding to the complex laws,
regulations, and requirements of federal, state, and other tax jurisdictions.
The essential functions of Corporate Tax include the following:

Develop tax efficient international financing and cash repatriation strategies

Implement tax efficient strategies to comply with transfer pricing laws on a global
basis

Support the Controllers Office in meeting U.S. GAAP reporting requirements

Comply with federal, state, local, and international tax filing obligations

Advise finance and business management on tax matters impacting the

organization

38

Strategically partner with business management in identifying the optimum tax

climate when evaluating decisions involving capital spending, expansions,
acquisitions, and other investments

Rs in lakhs
Total income
Depreciation
Profit before tax
Taxation
Profit after tax
Dividend
Dividend tax

2013
126,832.80
6,613.55
3,035.85
977.29
2,058.56
-

2012
131,370.48
6,193.52
(1,383.93)
215.82
(1,635.74)
-

2011
126,312.25
5,365.89
4,864.01
1117.84
3,746.17
-

2010
102,405.62
4,822.46
4,569.31
1,130.39
3,438.92
-

2009
84,041.87
4,949.23
5,067.48
457.87
4,609.61
-

2008
79,762.07
4634.14
(517.00)
172.23
(689.23)
-

2,058.56

(1,635.74)

3,746.17

3,438.92

4,609.61

(689.23)

Retained
Profit/(Loss)

5,000.00
4,000.00
3,000.00
2,000.00
1,000.00
0.00
1

-1,000.00
-2,000.00

39

40

Chapter V

Manufacture

41

5.1 Departmental Chart

Chart 5.1: Departmental Chart Manufacture

5.2 Products
Federal Mogul (India) Ltd., manufactures the following products

Piston
Piston rings
Cylinder lines
Light metal casting
Sintered products

5.2.1 Piston

Figure 5.1 Piston

42

Piston Products
Piston production consists of two products.
Piston foundry
Piston machine shop
a) Piston Foundry
Piston foundry consists of following functional units:
Pre melting of alingots, chips alloy ingots and returns
Alloy preparation in induction furnace
Bounding alloy preparation and dilution
Casting operation
Fettling of piston banks
Heat treatment of casting

Organization of piston foundry

Chart 5.2 Organization Structure of Piston Foundry

Before aluminum is melted in the furnace, it is pre heated in a furnace for the following
reasons
o
o
o
o
o

Reduces the level of thermal stresses

Minimizing the role of hardening
Reduce the porosity
Reduces hydrogen cracking
Improve micro structure

43

Manufacturing process of piston

Chart 5.3: Piston Manufacturing Process

Machine name - Pre Melting Furnace

Operations performed
inputs raw materials and returns melt ingots in oil fired furnace
add flux rubble dross and ensures approximate temperature in metal before trans
to induction furnace

44

Machining process

Chart 5.4: Piston Manufacturing Process

5.2.2 Piston rings

Figure 5.2: Piston rings

Goetze Piston rings of OEMs and aftermarket in India has state of the art design facilities
for products tooling with CAD/PRO-E/ GLIDE SOFT and bed facilities.
Federal Mogul Goetze India is decided to develop new technologies and continuously
improving its product.

45

Organization of Piston Rings

Chart 5.5: Organizational Structure of Piston Rings

Production capacity : 55million rings per annum

Product range
: 30mm to 300mm diameter
Goetze manufactures a wide range of piston rings for

Bi- wheelers
Tractors
Passenger cars
Commercial vehicles
Locomotive engines
Industrial

Material
designation

Material
specificatio
n

Standard
GOE-13
IKA
KV1
KV4
F14
Steel

K1
K25
K4
K9
K22
K11
KS3

Min.
bending
strength
N/ mm2
350
420
500
1300
1300
650
1850

Modules of
elasticity
N/ mm2

Material type

85000-11500
95000-12500
100000-130000
150000
150000
130000-160000
210000

Non heated grey cast iron

Heat treatment grey cast iron
Heat treatment grey cast iron
Spheroidal graphite
Spheroidal graphite
Carbonic cast iron
Tempered marten site

46

5.2.3 Piston Pins

Figure 5.3: Piston Pins

Piston pins perform reliably under the loads and stresses of their environment and feature:

Strength and rigidity

Durability and a high fatigue threshold

Light weight to keep inertia forces to a minimum

Superior surface finish for good bearing properties within the piston assembly

Cost-effective production

Materials used in Federal-Mogul piston pins include:

AE308 Boron steel for medium- and heavy-duty diesel applications

AE527 Chromium steel for cold-extruded gasoline pins

AE530 1 percent Chromium steel for cold-extruded diesel pins

Piston pin fit and clearance must be carefully optimized and controlled to avoid
noise and excessive axial movement at one extreme, and scuffing at the other. FederalMogul manufactures pins by creating an extruded blank with a finished internal form
rather than machining from solid bar. This process reduces waste and gives a high-quality,
consistent and internal form. Piston pins are case-hardened, which involves carburizing,
heat treatment and tempering to increase wear-resistance, strength and fatigue strength

47

Organization of Piston Pins

Chart 5.6: Organization of Piston Pins

5.2.4 Coating on Running Surface

Figure 5.4: Chrome ceramic plated rings

Chrome ceramic plated rings

Molybdenum filling rings

48

 Plasma filled rings

Semi-inlaid rings
Ferrox filled rings
Chrome plated rings

Features
o Thin rings made from SG iron
o Asymmetric profile rings
o Lower sharp edge rings
o Reverse torsion rings
o Conformable chrome oil rings
o Keystone
o Nipper
o Nitrating
o Drilling hole oil rings
o Interrupted cut
o Narrow land

5.2.5 Cylinder Liners

Federal Mogul Goetze manufactures and dry cylinder liners with horning and sleeves for
bi-wheelers applications for its quality conscious customers.
Applications

Bi-wheelers
Cars
Tractors
Light commercial vehicles
Heavy commercial vehicles
Stationary engines

Production capacity : 0.5 million liner per annum

49

Product range

: 50mm to 120mm internal diameter

Features
Thin-walled
Plateau honed
With or without flanges

5.2.6 Light Metal Casting

Federal Mogul Goetze (India) limited makes a wide variety of light metal casting,
including cylinder blocks; cylinder heads for single cylinder engines; and aluminum crow
handles for motorcycles.

5.2.7 Sintered Metal Products

Federal Mogul Goetze (India) limited (sintered products division) produces a wide
range of sintered metal products for variety of engines and automotive applications such as
value trains, transmission, lubrication pumps and other engine/ structural parts assistance
for Federal Mogul corporation manufacturing facilities and technical centers in U.K ,
France, USA.
Federal Mogul Goetze (India) limited
(sintered products division) supplies many O.E.Ms in
India and abroad.

5.2.8 Transmission Parts

Sintered synchronizer hubs offer attractive cost effective alternative to
conventional hubs and at the same time, meet the ever
increasing performance requirements of automotive
designer, increasing various complicated configurations.
GIL (sintered products division) uses the expertise of
Federal- Mogul sintered products to produce these
complicated parts in India.

5.2.9 Valve Train Parts

Valve seat inserts and valve guides are a special
category of sintered corporation for new generation engines
Federal Mogul Goetze (India) limited (sintered products division) uses latest
technology and processes from Federal Mogul sintered products along with specially
sourced powers to produce world class Valve train parts.

50

5.2.10 Lubrication Pump Parts

Sintered oil pump rotor and gears are among the widest used sintered application in
automotive industry. Goetze India limited (sintered products division) and the international
expertise of Federal Mogul work together to design ge- rotor and manufacture oil pump
rotors.

Figure: Lubrication Pump Parts

51

Chapter VI

Supply Chain Management

52

6.1 Purchasing Management

Purchasing has come to stay as important function of material management and
also in an organization. The movement a buyer plays an order it commits a substantial
portion of finance of the corporation which affects the working capital of the firm. The
basic objective of purchase department is to ensure continuity of supply of raw material,
sub contract items and spare parts and at the same time reduce the cost of finished goods.
Organization of supply chain management

Chart 6.1: organization of supply chain management

Objectives of Purchasing Management

To purchase the required material at minimum possible price by following the

company policies.
To keep department expenses low.
Development of good & new vendors (suppliers).
Development of good relation with the existing suppliers.
Training& development of personal employees in department.

53

To maintain proper & up to date records of all transactions.

Participating in development of new material and products.
To contribute in product improvement.
To take Economic "MAKE OR BUY" decisions.
To avoid Stock- out situations.
To develop policies & procedure.

Principles of Purchasing Management OR (8 R'S)

1. Buying Material at Right QUALITY.
2. In the Right QUANTITY.
3. From the Right SOURCE.
4. At the Right PRICES.
5. Delivered at the Right PLACE in.
6. At the Right TIME.
7. With Right mode of TRANSPORT.
8. With Right CONTRACT.

6.2 Vender Selection Process:

Company has the list of venders with the detail of price and capacity and lead time
taken by the quarterly of the goods supplied by them.
One the goods have reached the EOQ the company will call for the selection of
venders from the standard list maintained by them.

Vender Selection:
The company has around 1600 venders in their purchase list, supplying required
quality to them. The company considers quality as its life blood and is not ready to
compromise on it.
The TQM standard, so compromise in the matter of quality is not possible. The
company is implementing Just In time (JIT) inventory system for some of the material
which is highly expensive. The purchase department has a role play in managing JIT

54

system. The head of purchase department directly deals with JIT items in order to maintain
best control on it.

Venders Rating:
Grade
A
B
C
D

Rating
Very good
Good
Must improve
Poor

Tally marks
95>
80-95
80<
Inconsistent

Purchase department basic objective to ensure continuity of supply of raw material.

The company has around 1650 venders in their list supplying material required by them.
Usually placing the order for purchase of raw materials is taken care by the head office
which is in Delhi.

6.3 Purchasing Process

Purchasing Process includes as usual 10 main stages as follows:
1. Market survey
2. Requisitioning
3. Approving
4. Studying Market
5. Making Purchase Decision
6. Placing Orders
7. Receipting Goods and Services Received
8. Accounting Goods and Services
9. Receiving Invoices and Making Payment
10. Credit note in case of material defect

55

Chapter VII

Quality and Customer

Satisfaction

56

Customer satisfaction is a measure of how products and services supplied by a

company meet or exceed customer expectation. It is driven by the quality of the product or
services, the meeting of delivery expectation, and user friendly business practices.
FMGI are committed to providing products and services that meet or exceed our
customer requirements. The company has achieved this by:
a) Continually improve the Quality Management System,
b) Foster commitment, training & excellence in our people, and
c) Continually improve our products and processes.
Mission of quality and customer satisfaction department
The mission of Power-train's Corporate Quality and Customer Satisfaction
department is to support the business units in implementing the quality policy. The
company will do this by providing effective tools and training and the right talent. And
support the system which is based on best practices and high level requirements for all
business units. The company focuses on proactive approach to problem prevention,
problem solving and read across

Chart 7.1Quality Management Systems

57

Chart of Information Flow Process in Quality and Customer Satisfaction

Department

Chart 7.2 Information Flow Process

Objective of Quality Department

Improve internal and external quality performance

Ensure we follow the quality acceptance criteria
Revisit the acceptance criteria when required
Frequent management review of latest quality challenges
Identify and address chronic quality issues (process design, product design,
training, etc.)
Feedback to specific operators who passed defects forward from their process
Plant-wide communication on acceptable (green) and not acceptable (red)
anomalies/defects
Expand the scope to include processes plant-wide and not focus just on the mold
process

58

Chapter VIII

Environment, Health and

Safety

59

8.1 Environmental Health and Safety

Global Environment, Health and Safety are responsible for:

Developing company Environment, Health and Safety (EHS) standards and

guidelines

Providing EHS technical and compliance support to facilities

Directing and managing EHS due diligence, investigation and remediation projects

Compiling and reporting EHS metrics and sharing of best practices

Conducting facility compliance audits and incident investigations

Coordinating conferences and training events

Providing EHS management system (ISO14001 & OHSAS18001) guidance and

training
Organization of EHS

Chart 8.1: Organization of EHS

8.2 Functions of EHS

Water treatment.

60

Monitoring drinking water quality, noise and lighting and indoor and outdoor air
quality.

Maintaining the health of employees who are working in hazards area.

Hazards waste management.

8.3 Pollution Level and Safety

The following Measures were taken to reduce the Pollution Levels and Safety:

Plantation area developed as Karnal technology for absorption of treated water of

ETP and STP to avoid stagnation of water;
Trees are planted after development of new areas to balance Environment;
Improvement in effluent treatment plant and Sewerage treatment plant to obtain
best results of treated water;
Installation of rain water charging system to increase the ground water level;
piezometer by constructed bore well to check depth of ground water at regular
interval; Air forced cooling system in Ring machine shop to improve inside work
environment temperature; centralized Chlorination system to improve working
environment in Piston foundry; acid proof tiles in Rotary bath area / cooling tower
area / chrome waste storage area; MS Treys below most the machines and
Compressors for secondary containment to avoid land contamination; Wet scrubber
in Moly spray area to Improve emission level; gas leakage detector in LPG bullet
and Chlorine cyl Areas; CCTV on strategic locations and centralized Argon gas
supply to Piston foundry from single vessel installed outside the shop for safety in
place of small cylinders;
Reduction in natural resources to enhance coolant life by recycling of Emulsion
coolant and sound pollution and heat stress in Compressor room by installing
acoustic lined
Screw Compressors;
Transfer of effluent water of Pin plant through overhead pipe to avoid ground
contamination which was earlier through underground channel;
Effluent treated water is being used in lawns through fountains to save fresh water;
RO water system is installed on shop floor areas for drinking water for health of
workmen;
Ambient air quality monitoring, Work zone monitoring, quality of ground water
and treated water is monitored on regular interval;
Modification in Honing machine area in ring m/c shop by shifting Hydraulic power
pack on top with proper treys to counter land contamination due to oil leakages;

61

Automatic chip drying and melting Plant with proper cyclone type wet scrubber to
improve environment parameters;
TPM (Total productive maintenance) activity initiated for keeping better health of
machines;
Implementation of safety on high risk machines like IDA, ADA and Honing m/cs
with safety Guard Interlocking and safety on high risk machines like CNC slotting
Pneumatic presses., Gap sizing m/cs.& Gap grinding m/cs .
Imparting awareness training on Environment and safety;
Certification from TUV of ISO 14001 for Environment and OHSAS -18001 for
Health and safety and maintaining as per Standard;
Light curtains category 1, installed on all 80 Casting m/c and in rough boring m/c
in piston machine shop;
Up-gradation of the electrical power panels;

62

Chapter IX

Human Resource

63

9.1 Organization of HR Department

Chart 9.1 Organization of HR Department

9.2 Personal Management

Personal management in Federal mogul performs lot of functions such as:

Policies

Management
Reports

H
R
Planning

64

Employee
Management

9.3 Key Functions of HRD

9.3.1. Recruitment and Selection
In Federal Mogul Goetze (India) limited the recruitment and selection process is
conducted through following steps;
a. Department head will do man power planning. From there the information will go
to personnel department. Later if required it will be discussed with management
and personal department will take necessary steps for recruitment
b. After identification of manpower the company will send a report to the
employment exchange for notification. The report consists of requirements as per
the qualification and the required number of candidates in prescribed format.
c. Once the proposal is sent to the employment exchange then the company will
processed with future steps like advertisement in paper approaching consultants
etc., usually they approach consultants for recruitment and most of them recruit
employees through Federal Mogul ltd.., both internal and external recruitment are
carried on to recruit the applicant. The management will conduct written test as
well as interview; from these the candidates will be shortlisted and selected.
Head count as on:
Department
Piston plant
Ring plant
FMRT
Total

No. of Employee

9.3.2. Training and Development

The purpose of training and development is to ensure that all employees have
required skills to do their job efficiently and plan for their development keeping in view of
their career aspirations and other future resource requirement of the department.
Annual training calendar, training matrix and monthly training schedule is
presented by training department and is circulated to all the plant managers. The training
department identifies faculty members for in the job training and HODs identifies faculty
members on-the-job training. The identified faculty members prepare course material
with the consent of HODs.

65

Identification of Training Needs:

Training needs may be new training needs or retraining needs. These are identified
once in a year. Department head identify the training needs of their employees through
appraisal system. New employees or employees who are assigned new jobs are given
needed training.
Training needs are identified at three levels
a. Initial level
b. Second level
c. Third level
a. Initial level
The participant is asked to share perception of clarity and usefulness of
training. In case of poor feedback necessary corrective action will be taken by
training department.
b. Second level
The trainees knowledge and their skills that learned from the training
program are observed during the work by the department head and will be sent to
the training department.
c. Third level
Program wise course related of the HODs does evaluation on job
performance twice a year. Training department summarizes the evaluation and
report to the management.
Kinds of Training:
i.
On-the Job Training
ii.
In House Training
iii.
External Training

9.3.3 Promotion and Transfer

9.3.4 Compensation and Salary
Salary is to be treated as confidential information and no communication is to be
done with colleagues and other staff. Salary is paid on 7 th of every month and cut time for
salary closing is 20th of every month.

Compensation Policy

66

The negotiation between union and management is called memorandum of

settlement. The settlement will be as per the agreement for a specified period. Usually the
negotiation will be on wages increment, allowance, leave holiday bonus, incentive,
promotion policy, etc..,

9.3.5 Wages and Salary Administration

Wages and salary administration is calculated on the basis of attendance. Factors
like percentage of bonus. Productivity incentive is taken into consideration. Productivity
incentive is given to the workman category.
Statutory Compliances:
PF
Total contribution
- 24%
Employer
- 12 % (pension-8.33%)
Employee
- 12% (Basic + DA)
Wage limit
- 15000p.m
Gratuity last drawn salary + DA X15/26*no. of years of service (minimum service
5years)
P.T
- 10000 to14999- Rs150; 15000 & above-Rs200
IT
- as per slab

Service Award:
Service awards are an integral component of the employee recognition. The
introduction of service award program is a powerful way to recognize employees for loyal
service.
Many people invest years of their life working for the organization with little
recognition when they reach milestone of service
Milestone of Service
10years
15years
20years
25years
30years
35years

Amount
1250
1500
2500
3500
4500
5500

9.3.6 Leave Policy

Category

A
L

SL

C
L

Encashmen
t

67

Accumulatio
n

Accumulatio
n

LTA

EL
Apprentice
Trainee
Staff &
workers
DTE,GET,MT
W1 TO W3
W4 TO W8
and above

12
15

SL

6
0

No
Yes

0
45

0
0

0
0

Yes

75

30

15
15

6
0
18(7
)
7
7

7
7

No
NO

75
15

14
14

0
3

15

NO

15

14

18

Special Leave, AL (Accident Leave), Comp off (Compensatory off), Maternity

Leave, On Duty (Official)
I.
II.
III.
IV.
V.
VI.

Combination of EL with CL is not allowed but with SL its allowed

EL cannot be availed for more than three times a year( on management desertion
more attempts are allowed )
Accrual on January 1st prorate basis for new joiners after completion of calendar
year (January December)
Minimum limit of 0.5 days is considered to apply for CL while maximum limit is
2days
Minimum limit of 0.5 days is considered to apply for CL while maximum limit is
21days
SL can be availed any number of days in a year depending on the leave balance.

9.3.7 Performance Appraisal

The performance review is done by yearly in the organization every year. Appraisal
period January to December every year.
Increment or promotion in the organization is governed by following factors:
How well an employee performs his/her present job
How potential an employee is for taking their responsibility
Personal attributes, work habits, attitude towards self and others, ability to get
along with team, leadership qualities, personal contribution towards the success of
the company

9.3. Industry Relation

9.3.9 Disciplinary Action
9.3.10 Welfare Measure

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Federal Mogul gives Goetze (India) limited Yelahanka, Bangalore provide many facilities
to its labors. Some of them are:

i.

Canteen with Fresh and Hygienic Food

The canteen at the company is well maintained by personal department and is
running under contractual basis. Employees are provided subsidized food round the
clock. Canteen provides a meeting place for all department workers, thus influence
moral of the workers. Company is bearing 97% of canteen expenses.

ii.

Transport Facility
The company has provided 12 buses for employees to decrease the burden of
transportation. The subsidies charges of Rs45/- per month are bearing deduction
from workers salary.

iii.

Medical Benefits
ESI (Employee Safe Insurance) is covered in those establishment where man
power is ten above with aid of power and twenty above without aid of power.
Employees whose salary is below Rs150000, they will come under ESI scheme.

iv.

Incentive
In order to increase the efficiency and production an incentive scheme covering all
the employees of the company has been introduced. The provision of incentive
scheme, workers get minimum of Rs850/- and a
maximum of Rs1400/- on an average depending on
their dispatch for the month.

v.

Reward for Long Service

Every employee is rewarded for outstanding service
in the establishment. Cash prize of Rs1500/-is awarded for every employee, having
15 years of service. This implies workman to grade up junior managers. A silver
plate is awarded for managerial category with 15years of service.

vi.

Education Scholarship
The company provides with financial benefit to their employee childrens. The
company offers merit scholarship to rank holders for professional studies. Rs6000/per annum is given as scholarship.

Course
Passing class VI- IX
Passing X
Passing XI

Minimum marks
65%
65%
70%

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Amount (Rs)
1000/1475/1525/-

Passing class XII

Graduation

70%
70%

2250/2600/-

a. Eligible employee
Only conformed employees up to WL-3 cadre whos basic +DA does not
exceeds Rs10500 are eligible to apply merit scholarship for their children.
b. Educational scholarship (professional students)
Applicable to all categorists ruler employees (after completion of probation
period)
Amount range from Rs250/- to Rs900/-(based on management approval)

vii.

Retrenchment
The company invited application from permanent employees who attained the age
of 40years and rendered at least 10years of continuous service. An employee who
opts for VRS should be entitled to an extra gratia amount equivalent to three
months salary for each completed year of service (last drawn basic salary +DA).

viii.

Ugadi Sweets

ix.

Ayudha Pooja Sweets

x.

Birthday Sweets

Chapter X

70

Research Department

71

Research and development is one of the most important functional departments.

Research and development is now a days plays a very important role in the business, as a
level of competition, production process and methods are rapidly increasing. It is of
special importance in the field of marketing where companies keep eagle eye on
competitors and customers in order to keep pace with modern trend and analyze the need,
demand and desire of their customers.
Unfortunately, research and development are very difficult to manage, since the
defining feature of research is that the researchers do not know in advance exactly how to
accomplish the desired results. As a result, higher R&D spending does not guarantee more
creativity, higher profit or greater market share.
In Federal Mogul R&D is known as Application and engineering. Some of the
objectives are..,
To develop new copies at minimum time.
Satisfaction of customers
Providing best designs

Organizational Structure

Chart 10.1: Organizational Structure

72

Chapter XI

SWOT Analysis

73

11.1 SWOT Analysis

SWOT analysis (alternatively SWOT matrix) is a structured planning method used
to evaluate the strengths, weaknesses, opportunities and threats involved in a project or in
a business venture. A SWOT analysis can be carried out for a product, place, industry or
person. It involves specifying the objective of the business venture or project and
identifying the internal and external factors that are favorable and unfavorable to achieve
that objective. Some authors credit SWOT to Albert Humphrey, who led a convention at
the Stanford Research Institute

11.2 Strengths

The operating profit of the company is increasing

Positive tangible and intangible attributes, internal to the organization
Functions are within the control of organization
Sales of the company are increasing.
Highly diversified
Diversified geographical presence
Availability of cheap and skilled labor
Profited making and reputed firm
Capable and highly disciplined staff
Producing high quality products, comparable with international standers
Federal Mogul, known the first and foremost as leading global automotive
suppliers, is also a specialist in the train safety on tracks
Provide good frictional stability and highly friction material flexibility

11.3 Weakness

Factors that are within an organizations control that detracts from its ability to
attain the desired goal
The area in which the organization might require improvement
Facing some infrastructure related problems and power supply
Problem of timely availability of imported and indigenous raw materials
Low return on capital employed
Decline in market share in sector
Exchange rate fluctuations may have an adverse impact on the Company
The Company's growth is linked to those of the automobile Industry, which is
cyclical in nature. The demand for automobiles has a significant impact on the
demand and prices of the products manufactured by the Company.

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The company is technical intensive industry and thus faced with a consent
demand for new designs, knowledge of nascent technology to meet market
requirements.

11.4 Opportunities

External attractive factors that represent the reason for organization to exist and
develop.
With coming of MNCs in automobile sector, like DAEWOO, VOLKSWAGON,
BMW, FORD the demand for production has increased the scope of ready market,
also for future expansion in production of existing products and some new
products has increased as they have wide network
High export opportunities
Strategic acquisition and joint venture
Federal-Mogul continues to support the Company with its technical expertise. With
widely recognized brands, superior technology, strong distribution network and a
committed team of employees, the Company is well positioned to take advantage
of the opportunities and withstand the market challenges. The Company strives to
create sustainable profitable growth by using superior technology and maintaining
product quality and offering wide range of products at competitive prices which
will give us a competitive edge in the market. A progressive leadership has given
direction to the establishment.
The company offers pistons, piston rings, cylinder liners, light metal casting,
including cylinder blocks cylinder heads for cylinder engines and aluminum tube
castings and crow handles for motor cycles.
FMGIL engages in the manufacture, supply and distribution of automotive
components for two/ three/ four wheeler automobiles in India.

11.5 Threats

External factors beyond an organizations control which could place the

organization mission or operation at risk
Increase cost of input
Global Economic slowdown
The organization may benefit by having contingent plans to address them if they
should occur.
Classify them by their seriousness and probability of occurrence
There are limited sets of customers in our business, that is, the automobile
manufacturers. Competition is intense, as we compete with suppliers both in the
organized and unorganized segments. Technical edge, Specialization, innovation

75

and networking will determine the success of the Company in this competitive
environment.

Country

Revenue

India

129615.4

Other Companies

18853.98

Sales Revenue
as on 31.03.2015
india
18853.98

other
companies

129615.42

Sales revenue as on 31-03-2015

76

Chapter XII

Conclusions

77

12.1
Every organization to sustain in the industry has to satisfy some of the basic needs
and demands of its employees. Motive and satisfied employees are the source of achieving
organizational goals and objectives.
1. FMGIL has provided itself to be the number one in manufacturing industry. It has
pioneered in many new areas because of its inventory of professional and skilled
employees. And this is possible only by providing good working condition and
welfare facilities to its employees.
2. FMGIL is recognized as the organization with negligible employee turnover, this is
because it gives its employees adequate and fair competition and employees has no
reason to quit the company. This can be supported by the fact that employees in
FMGIL have a service more than 20years (on an average).
3. There is a cordial atmosphere of co-ordination and co-operation between
employees and employers. The flows of communication are flexible and clear
prospects of FMGIL are considered to be the best in the industry the career
development of the employees.
4. The employees are given reasonable autonomy for their job. This make them feel
more responsible and challenging and work hard for achieving it. There exists a
strong bond among the employees, which helps them to work as a team and make
group accomplishments.
5. Though there are some limitations like office layout, seating arrangements and lack
of sereneness among the employees it has sustained in the industry and is
challenging the competition
6. Number of women employees are less
7. FMGIL is striving hard to reduce the limitations by practicing better QWL (Quality
of Work Life) interventions and make it even better place to work. It is the process
of updating and modernizing the working conditions in turn with the private
organization.
8. During the period from January 1, 2014 to March31, 2015, the automobile
component industry recovered in terms of business growth as compared to
previous year. During first half of2014, the automotive industry has provided
mixed signals, as Light Vehicles and Commercial vehicles had a negative growth,
however, strong growth was seen in the two wheeler and three wheeler market
segments.

Finally we can conclude that FMGIL is providing its employees QWL which
influence their performance and productivity.

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12.2 Balance Sheet

79

12.3 Profit and Loss Account

80

12.4 Financial Review of 10 years

81

12.5 Ratios

82

Bibliography

83

Company Profile
Company Website
Company Annual Report
Wikipedia

84