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Internship Report of Hindustan Aeronautics Limited

CHAPTER I

PROFILE OF THE ORGANIZATION

Hindustan Aeronautics Limited (HAL) came into existence on 1st October

1964. The Company was formed by the merger of Hindustan Aircraft

Limited with Aeronautics India Limited and Aircraft Manufacturing Depot,

Kanpur.

The Company traces its roots to the pioneering efforts of an industrialist

with extraordinary vision, the late ‘ Seth Walchand Hirachand’, who set up

Hindustan Aircraft Limited at Bangalore in association with the erstwhile

princely State of Mysore in December 1940. The Government of India

became a shareholder in March 1941 and took over the Management in

1942.

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Today, HAL has 19 Production Units and 9 Research and Design Centre’s in

7 locations in India. The Company has an impressive product track record –

12 types of aircraft manufactured with in-house R & D and 14 types

produced under license. HAL has manufactured over 3550 aircraft , 3600

engines and overhauled over 8150 aircraft and 27300 engines.

HAL has been successful in numerous R & D programs developed for both

Defence and Civil Aviation sectors. HAL has made substantial progress in

its current projects :

Dhruv, which is Advanced Light Helicopter (ALH)

Tejas – Light Combat Aircraft (LCA)

Intermediate Jet Trainer (IJT)

Various military and civil upgrades.

Dhruv was delivered to the Indian Army, Navy, Air Force and the

Coast Guard in March 2002, in the very first year of its production, a

unique achievement.

HAL has played a significant role for India's space programs by

participating in the manufacture of structures for Satellite Launch Vehicles

like

PSLV (Polar Satellite Launch Vehicle)

GSLV (Geo-synchronous Satellite Launch Vehicle)

IRS (Indian Remote Satellite)

INSAT (Indian National Satellite)

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HAL has formed the following Joint Ventures (JVs) :

BAeHAL Software Limited

Indo-Russian Aviation Limited (IRAL)

Snecma HAL Aerospace Pvt Ltd

SAMTEL HAL Display System Limited

HALBIT Avionics Pvt Ltd

HAL-Edgewood Technologies Pvt Ltd

INFOTECH HAL Ltd

Apart from these seven, other major diversification projects are Industrial

Marine Gas Turbine and Airport Services. Several Co-production and Joint

Ventures with international participation are under consideration.

HAL's supplies / services are mainly to Indian Defence Services, Coast

Guards and Border Security Forces. Transport Aircraft and Helicopters have

also been supplied to Airlines as well as State Governments of India. The

Company has also achieved a foothold in export in more than 30 countries,

having demonstrated its quality and price competitiveness.

HAL has won several International & National Awards for achievements in

R&D, Technology, Managerial Performance, Exports, Energy Conservation,

Quality and Fulfillment of Social Responsibilities.

HAL was awarded the “INTERNATIONAL GOLD MEDAL AWARD”

for Corporate Achievement in Quality and Efficiency at the

International Summit (Global Rating Leaders 2003), London, UK by

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M/s Global Rating, UK in conjunction with the International

Information and Marketing Centre (IIMC).

HAL was presented the International - “ ARCH OF EUROPE ” Award

in Gold Category in recognition for its commitment to Quality,

Leadership, Technology and Innovation.

At the National level, HAL won the "GOLD TROPHY" for excellence

in Public Sector Management, instituted by the Standing Conference of

Public Enterprises (SCOPE).

The Company scaled new heights in the financial year 2006-07 with a

turnover of Rs.7,783.61 Crores.

HISTORY

1940 – 1950

1) Formation of HAL by late walchand on 23rd December 1940

2) First flight of harbor trainer on 17th July 1941

3) Government of India took over HAL and handed over to US Airforce

(September 1942 to December 1946) for repair / overhaul of seal

Aircraft

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4) HAL was placed under ministry of industry and supply in December

1945

5) Design and development of HT – 2 Aircraft elementary piston engine

trainer, theist indigenous project sanctioned in October 1948

1950 – 1960

1) HAL was placed under ministry of defense, government of India on

1st January 1951

2) License agreement signed for manufacture of (VAMPIRE) and GNAT

3) Design of jet Aircraft, the MARUT (MF – 24) started in Augest 1956

4) Jet engine factory setup at Bangalore by 1959

5) Design of PUSHPUK and KRISHIK was under taken and there the

manufacture of production of HS 74BG up.

1970 – 1980

1) Hyderabad and Lucknow division were set up for manufacture of

Helicopter

2) Helicopter and accessories in July 1970 and November 1973

respectively

3) Design and development of BASANT, HP – 32, AJEET TRAINER,

KIRAN MK 1/11 and ALJ were sanctioned.

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1980 – 1990

1) License agreement for MIG – 27 Aircraft concluded in Augest 1982

2) New division of KORWA sanctioned in Augest 1982 manufacture of

advanced system equipment.

Profile of HAL

HAL is India’s only aircraft manufactures and is the foremost

aviation company in southern Asia. Today, the company’s activities range

from the design, repair and overhaul maintenance and field support to,

Military, civil aircraft and helicopters

Aero engines, Industrial and Marine gas turbine engines

Aircraft Accessories system

Aerospace vehicle structure

The Bangalore complex of HAL is the oldest and the largest group of

aircraft and Aero engine factories of the company. The complex has its own

airfield and comprises the engine, Aircraft, Helicopter, Aerospace, overhaul

and foundry and forge division.

It is adequately backed by the design development flight- testing and

evaluation central, wind tunnels, test beds and a central laboratory. Its

insistence on high standards both in manufacture and maintenance help HAL

to grow.

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Company at Glance

Name of organization - M/s. Hindustan Aeronautics Ltd

Address - HAL PB no 1788, Bangalore-17

Year of established - 1941

Name of division - Aircraft division

Constitution - Public sector, wholly owned by

Ministry of Defence

Nature of Creativity - Manufacturing of Aircraft

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CAPITAL STRUCTURE

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EVOLUTION AND GROWTH OF THE COMPANY

The Company's steady organizational growth over the years with

consolidation and enlargement of its operational base by creating

sophisticated facilities for manufacture of aircraft / helicopters, aero engines,

accessories and avionics is illustrated below.

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BUSINESS OBJECTIVE

HAL Objectives

1) To serve as an instrument of the national policy to achieve self

reliance in the design, development of production of aircraft and

Aeronautical equipments to meet the country’s changing and growing

needs with special emphasis on military requirements.

2) To conduct its business economically and efficiently that it can

contribute its due share to the national effort for achieving self

reliance and self generating economy.

3) Towards this end, develop and maintain an organization which will

readily respond to and adopt the changing matrix of socio-techno

economic relationship where in a climate of growing professional

competence, self discipline mutual understanding, deep commitment

and a sense of belonging will be fostered and each employee will

be encouraged to grow in accordance with his potential for

furtherance of organization goals.

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Core business of HAL

1) Design and development of fixed and rotary wing aircraft, and

accessories

2) Design and execution of military/ civil/ modernization updates

3) Manufacture, maintenance, repair and overhaul of

Fighter and trainees aircraft

Commercial and transport aircraft

Helicopter – civil military

Industries and marine gas turbines

Ground support equipment

Manufacture of structure components for satellite and launch vehicle

Maintenance of private aircraft

Servicing of both private and military aircraft

Outsourcing of material manufacture

HAL Mission

“To become a globally competitive aerospace industry while working

as an instrument for achieving self-reliance in design, manufacture and

maintenance of aerospace defense equipment and diversifying to related

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areas, managing the business on commercial lines in a climate of growing

professional competence ".

HAL Core Values

Customer satisfaction

We are dedicated to building a relationship with our customers where

we become partners in fulfilling their mission. We strive to

understand our customers ' needs and to deliver products and services

that fulfill and exceed all their requirements.

Commitment to total quality

We are committed to continuous improvement of all our activities.

We will supply products and services that conform to highest

standards of design, manufacture, reliability, maintainability and fitness

for use as desired by our customers.

Cost and time consciousness

We believe that our success depends on our ability to continually

reduce the cost and shorten the delivery period of our products and

services. We will achieve this by eliminating waste in all activities

and continuously improving all processes in every area of our work.

Innovation and creativity

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We believe in striving for improvement in every activity involved in

our business by pursuing and encouraging risk-taking , experimentation

and learning at all levels within the company with a view to

achieving excellence and competitiveness.

Trust and team spirit

We believe in achieving harmony in work life through mutual trust,

transparency, co-operation, and a sense of belonging. We will strive

for building empowered teams to work towards achieving

organizational goals.

Respect for the individual

We value our people. We will treat each other with dignity and

respect and strive for individual growth and realization of everyone's

full potential.

Integrity

We believe in a commitment to be honest, trust worthy, and fair in all our

dealings. We commit to be loyal and devoted to our organization. We will

practice self discipline and own responsibility for our actions. We will

comply with all requirements so as to ensure that our organization is always

worthy of trust.

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ORGANIZATION STRUCTURE

The HAL division which for all practical purpose was formed as the door

of the erst while HAL, before the formation of HAL it is the pioneer in the

field of aircraft manufacture and i.e. May achievement to its credits to

production and manufacturing crises.

AIRCRAFT DIVISION

> Total man power – 4000

> Offices – 550

> Direct workmen – 2500

> Indirect workmen - 950

Divisions and products

HAL expanded rapidly. Hence it was decided to re-organize the

Bangalore division on a decentralized pattern. The process of decentralization

commenced in mid 1970’s and has been completed by june 1974.

Under HAL there are four complexes and each complex have different

units/division

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Four different complex:-

Bangalore complex

Design complex

MIG complex

Accessories complex

Units / division in Bangalore complex

Aircraft division

Engine division

Airport service centre

Overhaul division

Foundry and forge division

Flight test operation division

Aerospace division

IMGT

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DIVISION OF HAL

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http://www.hal-india.com/accessoriesdivision.asp

http://www.hal-india.com/aerospacedivision.asp

http://www.hal-india.com/aircraftdivisionnasik.asp

http://www.hal-india.com/aircraftdivisionbangalore.asp

http://www.hal-india.com/avionicsdivisionhyderabad.asp

http://www.hal-india.com/avionicsdivisionkorwa.asp

http://www.hal-india.com/enginedivisionbangalore.asp

http://www.hal-india.com/enginedivisionkoraput.asp

http://www.hal-india.com/foundryandforgedivision.asp

http://www.hal-india.com/helicopterdivision.asp

http://www.hal-india.com/imgtdivision.asp

http://www.hal-india.com/overhauldivision.asp

http://www.hal-india.com/transairdivision.asp

http://www.hal-india.com/hptmrodivision.asp


PRODUCT OF HAL

Material Management at HAL

Historically the five M’s of the industries that is man, machine,

money, material and methods. It constitute of more than 60 to 70 percent of

the total cost

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http://www.hal-india.com/AircraftNasik/products.asp

http://www.hal-india.com/AircraftBangalore/products.asp

http://www.hal-india.com/helicopter/products.asp

http://www.hal-india.com/AvionicsHyd/products.asp

http://www.hal-india.com/AvionicsKorwa/products.asp

http://www.hal-india.com/Accessories/products.asp

http://www.hal-india.com/Aerospace/products.asp

http://www.hal-india.com/EngineKoraput/products.asp

http://www.hal-india.com/Enginebangalore/products.asp


Material management is important in term of valuation of the cost of

material consumed by the estimation of valve of material held in stock. In

financial parlance inventory is defined as the such of value of raw material,

fuel, lubricants, spare parts, materials and finished goods stock at any given

point of time.

Objectives of material control

1) Purchasing all the material and shares at the lowest possible price

with requisite quality and reliability of delivery etc

2) Ensuring that no activity, particularly suffers for want of materials and

stores, it should be noted that this requires constant availability of

every items that may needed howsoever small it’s consistent maybe.

Example:- Lubricating oil may cost much less than the main raw

material but from the point of view of uninterrupted production both

have equal important.

3) Minimization of the total cost involved both for acquire stocks from

the price paid to the supplier and for holding them.

4) Determination in quality of materials due to defective or long strong

or from obsolescence, and

5) Making available reliability information about all the items of

materials and stores for proper production planning and to detect

losses and pilfacges.

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Important requirement of materials control system

1) Proper coordination in all department involved viz production

purchasing, receiving, inspection, storage and accounting.

2) Determining purchase procedure to see that purchase are made after

making suitable enquires at the most favorable time to the firm.

3) Use of standard forms for placing the order, receipts of goods

inspection of goods received, authorizing issue of the material etc.

4) Preparation of budgets concerning material and supplies and equipment

to ensure economy in purchasing and use of materials.

5) Operation of a system of internal checks so that all transaction

involving materials, supplies and equipment purchases are properly

approved and checked.

6) Storage of all material and supplies in a well designed location with

proper safeguards.

Material purchase procedure, receiving & inspection

Purchasing of materials

A manufacturing concern consumes a considerable quantity

of raw material and stores. Efficient and economical purchasing of materials,

which generally constitute a major part of total cost. Consistent of

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production is of great important in keeping material cost at the lowest

possible level. This is possible by great care, skill and experience in

purchasing and it would also be able to secure more economical rates.

Duties of purchase department

1) To purchase all materials and supplies on the basis of property authorized

requisition.

2) To decide what to buy where to buy when to buy in what

quantity to buy at what price to buy.

3) To ensure purchase at lower rates with the best buying times.

4) To ensure purchase of requisite quality.

5) To ensure timely deliveries of purchases.

6) To be well informed about market trends, sources of supplies, head

time pre valvent rates and terms.

7) One receipts of invoices that check them with the purchase order

and to ensure that the quantities received and the prices changed and

correct.

8) To have information about average monthly consumption of materials

and their minimum stock level.

9) To maintain a list of firms who failed to deliver materials in time

or of requisite quantity.

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10) To procure a detailed list of obsolete or deteriorated stock.

Study of procedures in material accounts

Material accounts are one of the sections in finance department dealing with accounting for materials. It tracts the material related transaction. The main functions are

Maintenance of the receipt of all the materials heading store

Accounting for the receipt of all materials by various classes and

issues of materials drawn on work order

A conciliation of balance with general ledger

Quantity reconciliation of bin card balances with material ledger

balance

Accounting for inter – divisional transfer of material and its

reconciliation

Maintenance of non – registers for material issued on loan and follow

up for the system

Scrutiny of slow, non – moving and redundant inventories

Classification of material

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From the purpose of control of material stores and space, consumables and tools are classified under two major heads,

1) Storage of items for projects

2) Storage of items for non – project of commercial items

Inputs and reports coming to the material accounts section

1) Material requisition voucher (MR)

It is generated at the user section. It will be routed through

the planning section to stores section. The stores section issues material

to the user section and sends a copy or MR to the computer section

for passing necessary entries for transactions undertaken day to day

basis. This price receiving reports the basis for accounting receipts to

various inventory.

2) Stock re - classification (SR)

In case unit code of the issued material differs from the material

purchased, then a new rational code / material code will be assigned to

the issued material such re – classification is prepared and routed

through computer section to the material accounts by stores through

stock re – classification.

3) Stock verification note (SVN )

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The stock in different stores is physically verified on a periodic

basis and the SVN is prepared. SVN along with the material voucher

routing slip is routed to material accounts through the computer section

along with the routing slip.

Accounting procedures in material accounts

At present the accounting will be done during a period of a

month for the period starting from 17th of month to 16th of succeeding

month however during the month of march the transaction from 17th to 31st

is also included for the purpose of the year end closure of accounts,

In the financial department book keeping is the section which is

responsible for maintaining of books of accounts and all other section, sends

each months journal prepared manually to the book keeping section.

Example:- In the case of material accounts the receipt of material are

accounted through the bills payable section which sends the general journal

vouchers each month giving the consolidated details of the purchase

expended for the preceding month, for issue the material account prepares

the general journal voucher and routes through the costing section. In

certain cases like stock transfer and other transaction the journal will be

send to the book keeping department directly.

Documentation:-

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Material account section receives various documents and

sends the same to the computers data processing system section, for

processing and obtaining necessary accounting output statements. In some

divisions these documents are sent directly to computer for processing where

such documents are received in these, they’re processing and accounting are

detailed below.

1) Receiving reports:- material account section notes down the pricing of

receiving reports on its copies as priced by the b/p section and send

the same to computer or data processing section for processing on day

to day basis. These price - receiving reports from the basis for

accounting receipts to various inventory accounts.

2) Material requisition:- material account section from the stores

department in day to day basis receives the material requisition or

issue voucher, which are serially numbered. The work order or

expenses account references and other particulars noted on the material

requisition or issue vouchers are scrutinized totally and send to

computer or data processing section in bundles for processing and

pricing at weighted average rates.

3) Store credit note:- store credit note in respect of return of excess

material drawn, received from the stores department are scrutinized

and sent through the computer/data processing section for processing

items manufactured on stock orders and credit to the stores is not

priced but quantity records are maintained since the value of these

items are held under work in progress.

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4) Stock transfer or stock re-classification:- stock transfer or stock re-

classification advices received from stores are like wise sent to the

data processing section for processing/ computer data processing section

for processing and pricing at the weighted average rates.

5) Stock verification notes:- stock verification notes received from the

stores department together with the commerce for the averages or

shortages are like wise sent to the computer data processing section

for processing and pricing the same at the weighted average rates

available in the company.

Accounting policies followed by HAL relating to material

accounts

1) Inventory is valued at lower of cost and net realizable value. The cost

of raw material components and stores are assigned by using the

actual weighted average cost formula and those in transits at cost

includes material labour and related production overheads

2) Adjustment is not made for under or over of absorption of cost in

jobs if the extent of under or over absorption in a year does not

0.5% of the net operating expense of the year.

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3) Customs duty where application is loaded to cost of goods and

equipment. When cleared and passed through customs.

4) Semi – perishable welfare and miscellaneous expenses costing

individually Rs 2000 and below are charge to revenue at the time of

issue and those costing above Rs 2000 are written off to revenue in 2

years including the years of issue.

5) Stores declared surplus or unserviceable redundant are charging to

revenue

6) Material issued from main stores are lying unused at the end of the

year is not reckoned as inventory.

7) Saleable or disposable scrap is valued at estimated and realized value.

Qualities of a purchase manager

For efficient purchasing, the purchase manager or the head of the

purchase department must have thorough knowledge and experience

of buying in the particular time of industries. He must be honest

and must not be tempted by offers of personal gain.

He must possess good knowledge of sources of supply and must

know how to avail himself of favorable markets conditions, he must

make a competition supplies with regards to their capacity for

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supplies, terms of delivery, qualities of materials and efficiency of

services.

He should be having a work knowledge of the manufacturing

process and needs of his concern so as to be able to anticipate what

would be required and even he must work in following cooperation

with the production and stores department so as to know their needs.

He must be capable of organizing & managing his department most

efficiently and economically. He must maintain a proper classified

record of all purchase contracts and make a note of all the supplies

actually received against each contract from time to time.

Storing & issuing of materials

After materials have been accepted, the stores department will store

them in appropriate bins and locations and make necessary entries

for quantities in the bins cards. The materials will be ensured from

the stores against proper authorized. The store’s manager plays an

important role in this regard, he is responsible for maintaining in a

manner so that,

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1) Materials received are stored properly in their respective bins with

proper entries in bin cards.

2) Materials are ensured only on proper authorization through material

requisition note (mip) or bill of materials and entered in the bin

cards.

3) Purchase department is informed for purchasing materials as and

when re order level is reached and follow up measures and taken

through purchase department for timely delivery of materials

ordered.

4) Material losses are avoided due to wrong handling (on their reciept

and issue) storing and pilferage., etc.

5) Physical verification of stock as and when ordered by management

is carried out with ease.

6) Management is advised to change stock levels on the basis of past

experience and change in circumstances.

Research and design at HAL

In the year 1951, where the first HT-2 the first indigenously designed

primary trainer made its first fight, it heralded the era of research and

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development as HAL, subsequently HAL and research and development

capability has grown from strength to strength and has been hamessed to

achieve greater heights of self-reliance HAL has 7 research and development

centre’s engaged in the design and development of combat aircraft,

helicopter, aero engines, gas turbines, engine test beds. Aircrafts

communication and navigation system and mechanized system accessories.

Aircraft research and design centre

Growing from a small engineering support group in the earlier

years the aircraft research and development centre of HAL has successfully

aircraft designs to its credit. These products have been used by the IAF and

have stood the testing time.

Comprehensive capabilities in design of aircraft structure both in metal and

advanced composite backed by static and dynamic analysis fatigue and

fracture analysis.

Human Resource Management of HAL

Basically includes activities such as :-

Human resource planning

Job analysis and design

Recruitment and training

Orientation and placement

Training and development

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Performance appraisal and job evaluation

Motivation

Communication

Welfare

Safety and health

Multi facts of industrial relations.

Functions of Human resource management

1) Acquisition

2) Development

3) Motivation

4) Maintenance

Future growth and prospects

Considering the global economic and aviation scenario, the

company intends to expand its activities in civil aviation sectors and aero

widen its export market, the company is healthy with firm orders for SU30,

IJT and ALH, worth 54,605 crore, the company continued to explore

opportunities in export market order worth 370 crore were booked, A major

step towards consolidation in international arena was achieved by entering

into agreement with world aviation major is the following areas

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1) Manufacture of 600 engines for honey well U.S.A

2) Supply of kits for Dorneirs 228, 212 for roug Germany

3) Work packages for Boring U.S.A

Recruitment process in HAL

Written test

Interview

Probationary offer letter

Medical examination

Police verification certificate

Verification of document

No objection certificate

One month on job training

One year probationary period

Final offer

Category and designation

(A) - Helper, Messenger, Waiter

(B) - Mechanic, Technician, Security guard, Clerks, and Typists

(C) - Senior technician, Mechanics

(D) - Highly skilled Technicians

(E) - Master technician

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(S1) – Deputy supervisor

(S2) – Joint supervisor

(S4) – Senior supervisor

Scales of pay

Grades Scale of pay

Grades 1 6550 – 11350

Grades 2 8600 – 14600

Grades 3 10750 – 16750

Grades 4 13000 – 18250

Grades 5 14500 – 18700

Grades 6 16000 – 20800

Grades 7 17500 – 22300

Grades 8 18500 – 23900

Grades 9 20500 – 26500

Grades 10 23750 – 28500

Officer (Executive level)

Category Designation

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Grade 1 Asst engineer, Asst officer

Grade 2 Engineer

Grade 3 Asst manager

Grade 4 manager

Grade 5 Senior manager

Grade 6 Asst general manager

Grade 7 Deputy general manager

Grade 8 General manager

Grade 9 Chief manager

Grade 10 Executive directors

1) Employment

Recruitment

Promotion

Probation

Conduct, discipline, conduct rules, standing offer, service condition

2) Pay and Allowance

Basic pay

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Dearness allowance

House rent allowance

Lunch / meal allowance

Travel allowance

Attendance allowance

3) Employee benefit and facilities

Medical facilities

Transport facilities

Uniform

Worker education scheme

Canteen facilities

Housing facilities

Education facilities

Supply of milk / Vitamin tablets

Service gifts

Employee welfare fund

Sports club

Advance and subsidiaries

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1) House building loans

2) Vehicle loans

3) Computer loans

4) Higher education of childrens

5) Salary advance

Insurance benefit

1) Group insurance

2) Employees provident fund

3) Employee pension scheme

4) Gratuity

5) Death relief fund

Medical facilities

Coverage

Employees who are borne on the regular rolls of the company and

dependent members of their families are covered by one of the following

scheme for their medical treatment,

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1) Employees drawing emoluments is excess of 6500/- pm and also

employees in stations where the ESI scheme is not in force are

covered by the medical assistance scheme of the company

2) Employees drawing emoluments in excess of 6500/- pm and below are

covered under the ESI scheme in stations where the ESI scheme is in

operation

Transport facilities

Employees residing outside the company townships are provided with

transport facilities (company owned or arranged) at subsidized rates, to the

extent possible for commuting between the residence and the place of work.

Uniform facilities

Three sets of uniform material are issued to all employees who are

borne on the regular rolls of the company, gents are issued material for

stitching trousers and shirts and ladies are issued sarees and material for

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stitching. Stitching charge as indicated below are payable for stitching

uniform,

Gents – Rs 200/sets

Ladies – Rs 120/sets for salwar

Rs 50/sets for saree

Further, one woolen sweater / cardigan of maroon colour is issued to regular

employees once in 4years

Workers education scheme

The worker education scheme is in operation in the company in

collaboration with the central board of workers education (CBWE) ministry

of labour, special leave with pay not exceeding 3days for visiting industrial

centers outside are provided to worker trainees and worker teachers. Each

advances and cash grant payable to trainee and teach given below

a) Cash grant payable to work trainees attending unit level classes – Rs

150/-

b) Cash advances payable to:-

work trainees Rs2500/-

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work teacher accompanying the trainees Rs2500/-

Canteen facilities

Canteen have been established at the division / officers as a welfare

measure and is keeping with the statutory requirements under the factories

act for the convenience of employees. These canteen serve coffee, tea,

snacks and meals while items served in the canteens are charged at actual

in division / offices who have opted for payment of canteen allowance as at

11:20, items are issued at subsidized rates at other places.

Housing facilities

Townships have been established at Bangalore, Hyderabad, wasik,

korapur, lucknow and korwa. Township are self contained with facilities

such as schools, hospitals / dispensaries, play grounds, parks, post office,

banks, police stations etc. houses in township are allocated to employees

according to their seniority and their eligibility for a particular type of

quarters as shown below

Category Type of

quarters

Area in square feet

Workmen A 385

Officers in grades I to III B 600

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Officers in grades IV to V C 900

Officers in grades VI and above D 1500

House rent, electricity charges and water charges are to be paid by

employees occupying quarters as prescribed.

Education facilities

The companies has established schools at Bangalore, Hyderabad,

korapur, Kanpur, and korwa divisions for the benefit of the employees

children. The administrator of these schools is vested in the educational

committees constituted for the purpose in the respective division

accommodation furniture and equipment for the schools are provided by the

company to the extent possible.

Supply of milk and vitamin tablets

Employees below grade – 1 who are engaged on hazardous jobs,

according to the opinion of the company medical officers are given 8

packets of milk and / or vitamin tablets every day. The categories of

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employees who should be provided with milk and vitamin tablets are

decided by the general managers concerned.

Employees welfare fund

Employees welfare fund have been established in all the division

with the object of undertaking recreational educational and cultural activities

for the benefit of employees and their family members. The fund is also

meant to encourage self help mutual co – operation and to foster a spirit of

goodwill and better understanding amongst the members. The welfare fund

is managed by a committee consisting of representatives of the management

and the employees.

Sports club

With a view to develop sports talent amongst the employees, sports club

have been established in the complex / division. The company provides play

grounds, accommodations and grants for encouraging sports activities

membership of sports club is open to all employees. Sports grounds and

club buildings are maintained at company’s expense.

Co – operative societies

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Co – operative societies formed by the employees are

functioning in the township with assistance provided by the management,

they run stores for the supply of essential articles of daily use, fair price

shop etc.

HAL Families welfare association

Families welfare associations formed by the wives of the

officers are functioning in the object of looking after the welfare of the

employees and their families and also to assist the dependants of deceased

employees.

HAL Management Academy

HAL Management Academy (HMA) was established by

the corporate management of Hindustan Aeronautics Limited, way back in

August 1969, under the then name of HAL Staff College. It was re-named

HAL Management Academy in June 2001 to reflect its focus on

management development, consultancy and research. HMA has now

completed 35 years of fruitful contribution to the cause of management

education.

Page | 41


Responding to the need amongst practicing managers to constantly refresh

and update their managerial skills, HMA offers a variety of programs in an

open and short duration format. These programs form a part of a larger

focus on Executive education. HMA’s programs prepare practicing managers

to meet the challenges of today’s dynamic business milieu.

These programs provide exposure to the latest development in managerial

practice at a global as well as local level.

HMA’s programs break fresh ground in management thinking as well as

practice. Participants gain insight into both theory as well as application of the

latest in management. Participants are encouraged to apply learning in their

organizational contexts, with a view to formulate strategies for post-program

implementations.

Programs at HMA provide not just individual learning, but also the

opportunity to network with other practicing managers in the area,

providing for active sharing of experience as well as building useful

contacts.

The programs offered are conducted by HMA Faculty, who provide a

unique blend of academic, research as well as consulting skills. In addition,

Page | 42


all participants have access to the vast infrastructure as well as resources of

the institute.

MANAGEMENT DEVELOPMENT PROGRAMS

The Programs conducted at HMA are broadly categorized into

Individual Development

General Management

Functional / Technical Programs

Leadership Programs

Certain programs provide opportunity for experiential learning inside and

outside the classroom. Action oriented learning is imparted through outbound

training in serene settings away from the hustle bustle of the city.

FACULTY

HAL Management Academy has qualified and experienced

full time faculty who have worked for several years in production divisions.

In addition, senior executives from different divisions are also invited as

guest faculty. Apart from this, expert faculty from reputed institutions like

the Indian Institute of Management, the Indian Statistical Institute, the

Administrative Staff College of India, the Indian Institutes of Technology,

Page | 43


the Indian Institute of Science and other well known trainers, consultants are

also invited to handle sessions on specialized topics.

METHODOLOGY

HMA continuously reviews and modernizes its knowledge

delivery systems to add value to the services offered by it. A balanced mix

of training methods are used in the Programs. Interactive learning is

supplemented with case studies, syndicate work, role plays, management

games, computer simulated business experiences, outbound training, book

reviews, panel discussions and project work. All participants are assigned

project work. The knowledge thus gained can be used in their respective work

areas. Outbound training provides them with opportunities for transformation to

become effective leaders and team players.

SOME PROGRAM THEMES

LEAN Management

Visionary Thinking through Strategic Management

Human Resource Management for Competitive Advantage in the

dynamic environment

Page | 44


Personality Development for Corporate Excellence

Integrated Material Management & Supply Chain Management for

Value Addition

Quality Management

Finance Management

Induction and Basic Management Program for new entrants

TOOLS FOR TRAINING

Diagnostics, experience – sharing , action – planning and

learning diary help in enhancing the effectiveness of learning. Diagnostics

exercise enables participants to identify difficulties faced In their work -

place, helps them in analyzing the situation and arriving at remedial

solutions. The Learning Diary helps participants identify key learning points.

Individual and group action plans are the means for transferring learning

from the classroom to the work - place.

AMBIENCE

A sprawling building amidst thick foliage, lush lawns,

pathways and flower beds provide a serene retreat from the distractions of

Page | 45


the bustling metropolis. This ambience has a soothing effect on the minds

of the participants and takes them away from the hectic business scenes to

an idyllic location where they can review their contribution from more

creative perspectives.

Training Halls

HMA has five air – conditioned and acoustically – treated training

halls with seating capacity varying from 15 to 50, with flexible seating

arrangements. Each classroom is equipped with an Overhead projector,

writing board, Public Address System, Digital Light Processing Projector

(DLP), computer with the necessary state – of – the - art software to make

presentations.

Library

A good library with over 12000 books mainly on

management topics, a number of professional journals and an impressive

collection of audio - visual aids supplement classroom learning and

assignments.

Auditorium

An auditorium air – conditioned and acoustically designed with

Page | 46


180 seats is also available for viewing films / videos and conducting

seminars. A well – lit dais is also suitable for cultural Programs by

participants.

Accommodation

Forty fully furnished twin occupancy rooms and five

dormitories provide accommodation for a hundred participants. A neat and

tidy cafeteria within the campus provides nutritious food and caters to the

palate of the participants from all over the country.

Recreation Centre

The recreation centre is equipped with a home - gym, facilities for

indoor and outdoor sports and also a television set, which provide the

participants the much needed relaxation during the off - hours and holidays.

A lot of newspapers and magazines are also available.

Accounting practices of HAL

1) The existing accounts manual was drafted ever two decades ago when

the size and operations of the company were much smaller. The need

for an updated manual for the company has felt.

Page | 47


2) A committer of sri.G.V.Kesava Roa, chief finicial controller (Bangalore

complex) sri.S.R.Metha, chief financial controller (accessories complex),

sri.C.Madhava Roa, form entry financial controller (design bureau),

sri.A.G.Agarwal, formerly financial controller Kanpur division and

sri.V.S.Murthy, chief system audit manager, Hyderabad was constituted

to prepare a year draft after taking into account, inter-alia existing

practices.

3) The first part of the manual viz, master chart of accounts

(codification) was issued in April 1984.

4) This volume family part two of the accounts manual describes in brief

the work carried out in the different branches of accounts department.

It also describes the procedures followed, the documents handled and

the registers and books maintained in the different section of the

accounts department.

5) The manual should be read and followed in conjunction with the

master chart of account’s (codification) (accounts manual part-1) issued

by the corporate office and the accounting policies of the company

(being complied and issued separately).

6) The manual contains a “schedule of authority” listing the powers to

be exercised at various levels of officers of finance and accounts

Page | 48


department. This schedule gives at a glance the levels at which a

particular transaction has to be processed, prepared, checked, passed

and approved. This schedule should be taken as a guideline, and may

be modified to suit the local needs.

7) In views of the importance and need for effective cost control

mechanism in the company, it is considered desirable to have a

separate detailed cost accounts manual. In view of this, it is not

considered appropriate to include in the manual, the procedures and

accounting carried out in the cost account section. Similarly a separate

manual dealing with capital and performance budgeting will also be

issued in due course.

8) Nothing considered in this manual should be held to super side the

various office orders and specific instruction issued from the time to

time and the procedures specifically agreed as a result of special

arrangements with the customers.

Bills payable inland

This section deals with the following service of supplies and services

rendered by inland vendors to the company.

Payment and accounting of advance to suppliers.

Payment and accounting of advance to other vendors.

Page | 49


Payment and accounting of final bills.

Bank dealings with relation to suppliers.

Adjustment and recovery of advances.

Accounting/adjustment of deposit money and security deposit from the

suppliers.

Accounting and pricing of receipt vouchers.

Accounting procedures

Accountancy of services rendered, supplies made are done through

the following accounting registers.

Indigenous purchase journal :- the journal is maintained in the

proforma as indicated at annexure-1. This register is posted on the

basis of receipt vouchers. All (RV’s) receipt vouchers received in the

bills payable section are linked with purchase order, priced and

posted/journalized in the journal. The cost of supplies made are

debited to the relevant inventory/asset heads and credited to the

sundry creditors account.

Service journal :- this register is maintained in the proforma as

created at annexure-2. All service voucher/bills received in the bills

payable section are entered in this register, after these are scrutinized

and passed for payment. The cost of services rendered is debited to

Page | 50


the relevant expense head of accounts and credited to the sundry

creditors.

Imprest journal :- this register is maintained in the proforma as

indicated at annexure-3. The imprest voucher received from various

imprest holders are scrutinized and passed for reimbursement and these

vouchers are entered in the imprest journal by debiting to the various

services/expenses heads and crediting to the imprest holders account.

Advance journal :- this register is maintained in the proforma as

indicated at annexure-4. The accounts rendered for amount of advance

paid to the various officers of purchase /store /maintainence etc for

obtaining supplies, services are entered into this register, the amounts

are debited to the various expenses/inventory accounts and credited to

advance holders account.

Insurance

As per the policy of the company the following types of

insurance are taken to cover various types of risks.

1. Fire insurance:- building, plant and machinery and equipment, work in

progress, stock in trade and stores.

2. Fidelity guarantee of personnel dealing with cash and stores.

Page | 51


3. Goods in transit insurance of inland and overseas.

4. Cash in safe insurance.

5. Motor vehicle insurance.

6. Ground risk insurance to cover aircraft while taxing and on ground.

7. Flight risk insurance of employees travelling by air.

8. Group aviation insurance for test pilots.

The various policies as above are taken as open policies on annual

basis and renewed at the commencement of each financial year for

the purpose of computing the premium payments, declaration of the

estimated values against the policies is made at the commencement of

each financial year and again at such periodical intervals as agreed

with the insurers.

The category of items to be covered for risks and the type of risks to

be covered will be as per the pattern of insurance approved by the

management. The cover of risk against fire is taken on selective basis.

Bills received from the insurance companies for premium are

processed and action taken for its account and payment.

Page | 52


Bills payable foreign

This section deals with the following aspects of supplies and services

rendered by foreign vendors/collaborators to the company.

Payment and accounting of advances to suppliers.

Payment and accounting of services obtained from collaborators and

others.

Payment and accounting of contracted fee (licence fee, TA fees royalty

etc)

Payment and accounting of customs duty, freight bills, agency

commission bill etc.

Payment and accounting of final bills.

Adjustment/recovery of advances.

Accounting and pricing of receipts vouchers.

Opening of letters of credit and dealing with banks for obtaining

foreign exchange release and payments thereby.

Maintenance of commitment registers for budget of purpose.

Maintenance of deferred liabilities accounts.

Page | 53


Cash section

This section is responsible following all receipts and payments

cash / cheques and accounting of the same in the books. The main functions

of this section are:-

Receipt of cash, postal orders cheques book draft etc, issue of official

receipt from the same

Booking of all receipt

Drawing of cash from book to cater for daily needs

Payment of voucher by cheque / cash

Safe custody of cash cheque book. Book guarantees, fixed deposits

receipts and other investment etc

The following are the major accounting registers and subsidiary registers

are maintained in this section, They are

1) Cash book

2) Securities register

3) Money order register

Page | 54


Pay roll section

The pay roll section is looking after the office and pay roll section.

The main function of each section are as follows

Employees gate passes are issued

Maintenance of leave records and feeding of attendance data to

computer with reference to the documents received

Distribution of salaries and wages

Payment and recovery of advance

Recovery of dues from employees

Remittances of amount recovered from employees to various agencies

Accounting of all pay roll transaction

The following major accounting register and subsidiary ledger /

registers are maintained in this section

Leave record ledgers / register

Salaries and wages journal

Travel expenses journal

Leave travel concession expenses journal

Loan registers

Page | 55


Advance registers for

1) Travel advance

2) Leave travel concession advance

3) Salary advance

4) Vehicle advance

5) Cyclone / flood relief loan

6) Special loan

7) Conveyance reimbursement registers

8) Record of attendance

9) Maintenance of leave records separately

10) Feeding of attendance

11) Payment of salaries and wages.

Marketing and Production strategies of HAL

Products of HAL are usually marketed to government to government, so the

customers of HAL are:-

Domestic

Indian Air force

Indian navy

Page | 56


Indian coast guard

Defense research and development organization

Indian space research organization

Bharath electronic limited

National aerospace laboratories

International

Airbus, France

Boeing, USA

BAE system, UK

Dassault aviation, France

Israel Aircraft industries, Israel

Mitsubishi heavy industries, Japan

Royal Air force of oman

Air Mauritius

Airline operators in south Asian countries.

Production plan

Production plan for the year 2010-2011

The production plan for the year 2010-11 has been drawn up to

quantify the details of production and corresponding resources required to

meet the requirements. The production plan covers the following:

I. PHYSICAL TASK :

1. HAWK MK 132 : the production scheduling of twenty two Hawk MK

132 Aircraft.

Page | 57


2. PTA – Lakshya : the month wise plan production of two PTA Lakshya

.

II. RMS ORDERS :

1. Jaguar spares for Indian Air Force :

The month wise action plan as, the estimated value of Jaguar spares

is Rs. 3764.90 Lakhs.

2. Kiran spares to IAF and NAVY :

The month wise action as, the estimated value of Kiran spares is

Rs. 380.81 Lakhs.

3. DORNIER spares for IAF/NAVY/Coastguard :

The month wise action plan as, the estimated value of Dornier

spares is Rs. 937.48 Lakhs.

III. ROTABLE REPAIR TASK :

1. Jaguar Rotable Repair-task for IAF :

The month wise action plan as, the estimated value is Rs. 411.29

Lakhs.

2. Kiran Rotable Repair-task for IAF and NAVY :


Lakhs.

3. Dornier Rotable Repair-task for NAVY :


Lakhs.

Page | 58


4. Mirage Canopy Repair-task for IAF :

The month wise action plan as the estimated value is Rs. 154.83

Lakhs.

IV. INSITU REPAIR TASK :


Lakhs.

V. EXPORT ORDERS :

Aircraft Division has planned to execute the product of the

following export orders during 2010-2011.

1 Airbus –(A320) Doors -240 sets - Airbus, FRANCE.

2 Boeing 777 Up-Lock Box Assy -67 sets - Boeing commercial,

USA.

3 G-150 Fuselage -04 - IAI, ISRAEL.

4 IAI Cargo Doors -04 - IAI, ISRAEL.

5 F-18 Gun Bay Door -07 - Boeing, IDS, USA.

6 F-18 Wire Bundles -21 sets - Boeing, IDS, USA.

7 P81 Weapon Bay Door -01 - Boeing, IDS, USA.

The month wise action plan for these order, The total estimates

cost is Rs. 85.05 Crores.

VI. MUTUALLY AGREED SCHEDULES:

SUPPLYING DIVISION:

Page | 59


OVERHAUL:

a) Jaguar Rotable Repair Task :

The month wise action plan as, The estimation value is Rs. 125

Lakhs.

a. Kiran (Mk I & Mk II) Rotable Repair Task :

The month wise action plan as, The estimation value is Rs.

123.50 Lakhs.

b. MIRAGE Rotable Repair Task :

The month wise action plan is given for Mirage Canopy. The

estimated value is Rs. 247.63 Lakhs.

c. Jaguar spares :

The month wise plan for IDTO spares as, The estimated value

is Rs. 158.29 Lakhs.

d. Kiran spares :

The month wise plan for IDTO spares as the estimated value

is Rs. 51.24 Lakhs.

e. Darin-III :

The month wise plan for IDTO kits for 3 Aircraft sets.

b) TAD KANPUR DIVISION :

a. Dornier Production for CG :

The month wise action plan for Wind shield, Sheet metal

items and landing gear items as, the estimated cost is Rs.

525.05 Lakhs.

Realization of sales depends upon the delivery of aircrafts at

TAD, Kanpur.

Page | 60


b. HPT-32 spares :

Aircraft division has to supply sheet metal items, canopy

glasses, and cover assembly components to TAD, Kanpur.

The month wise action plan as, the estimated value is Rs.

58.27 Lakhs.

c. RUAG EXPORT :

The month wise action plan for sheet metal items . The value

is Rs. 38.15 Lakhs.

d. DORNING LANDING GEAR SERVICING :

The month wise action plan for Dornier Landing Gear

Page | 61


CHAPTER II

VARIOUS DEPARTMENTS

Indirect department

1) Personal and administration

Personal and administration does the work of managing

the human resources ie managing the people at their work and their

relationship with the organization, for any organization to become the

leader is necessary to manage their human resources, identify their

skills, talents and train and develop their knowledge to the

organization specification. The main function of Personal and

administration department are as follows,

1) Recruitment and placement

2) Training orientation and placement

3) Performance appraisal

4) Welfare

5) Trade union

2) Customer service department

All business enterprises in the world over

recognized the important of their sales department and after sales

servicing outlets to maintain the standards of excellence in the eyes of

their customers. The marketing concept adopted is a customers need and

wait oriented by integrated marketing effect generating is a customer

Page | 62


satisfaction as the key to satisfying organization goals. The customer

services department function the above concept keeping in mind,

1) Technical services

2) Spare support

3) Training

3) Finance department

GENERAL MANAGER

ADDITIONAL GENERAL MANAGER

DEPUTY GENERAL MANAGER

CHIEF MANAGER

SENIOR MANAGER

MANAGER

DEPUTY MANAGER

FINANCE OFFICER

ASSISTANT FINANCE OFFICER

EMPLOYEE

Page | 63


The finance department is divided into various

Material Accounts

Cost Accounts

Payroll Accounts

Book Keeping

Bills Payable Inland

Bills Payable Civil Work

Bills Payable Foreign

Bills Receivable

Finance – Audit

4) Internal Material management

Material management is a function, responsible for the

coordination of planning the requirement of material, sourcing and

purchasing, storage, controlling materials in a optimum manner so as to

provide a predetermine service to the customers out a minimum cost,

Material management includes,

Material planning / control

Purchase department

Stores

Outsourcing

Function of stores

Collecting and receiving cell

Page | 64


Collecting of material from go down

Clearance of foreign consignments

Receiving the material and preparing for RR

5) Programme engineering

Programmed engineering consist of production and

centralized scheduling,

Production and scheduling

Provision of control material

6) Method of department

The function of methods engineering department can be

compared to function of brain center of a human body or central

processing unit of a computer, The main objective of methods

engineering department is to determine the most effective and

economical method of producing a component of assembly

Function

To decided the most efficient build sequence possible during process

of sub-assembly, routing assemblies, major assemblies, stage assemblies

Preparing of drawing break down from the drawing received from

design bureau

To ensure availability of plant and machinery suitability for

manufacture of component

Identify requirement of production tools and standard tools

Page | 65


To identify requirements of all types of materials in time to meet

delivery schedules

Flow chart of method department

Page | 66

Receipt of drawing/documentatio

n

Release of JIG and

tools request

Clarification/Querries with

customers

Preparation of process sheets

Identification of parts

Drawing break down

Provisional material summery

Feed back from manufacturing

during FAI

Final material summary


7) Quality engineering

The quality control department shall ensure that compliance

of necessary requirements and obtain approval for manufacture of civil

or military aircraft from the following regulatory bodies and over sea’s

customer.

8) Maintenance department

The maintenance department shall ensure availability of suitable

environment and utilities, such as water compressed air electricity etc to

the extent affect product quality,

Functions

Upkeep for all the plant and machinery

Erection and commissioning of new plant and machinery

Energy monitoring of plant and machinery

Repair / reconditioning of plant and machinery

Water distribution, house keeping

Scrap removal

Civil maintenance

Safety and environment control

9) Management service department

Productivity monitoring

Management information system

Industrial engineering

Reporting on adequacy of resource and machine

Efficient operation and use of all resources

Page | 67


Execution of all manufacturing activities within the division

Overall responsibility for tool planning, design and manufacturing of

tools.

Direct department

1) CNC machine shop

Computer numerically coded machines which are used to turn

raw materials into finished items here machines are controlled by

computer programs, These machines help in efficient, low cost and

good quality of parts and items . HAL is trying to minimise the

human invention in production of parts and items

2) Export assembly

HAL bagged order of 600 doors sets, Each set comprising

2 of Airbus A-320, forward passenger’s door assembly Airbus industry

France in 1990, a sperate assembly, was established in a hanger with

export assembly shop, in 1992 HAL got order for manufacture of 30

sets of 757 over wing exit door, Boeing gave following order for

manufacturing 300 sets, assemblies of Boeing 777 main landing

gearup lock box assembly.

Order for manufacture kit and door assembly for Boeing

737-300SF conversion program from messes Israel aircraft industries.

Page | 68


3) Jaguar structural assembly and jaguar final assembly

These department actually manufacture the aircraft they have

all the equipment and machines etc, The assembly shop has facilities

of well designed assembly jigs, high quality hand tools reverting and

skills in sealest in application and assembly

Function

Work planning and executing all assembly operation

Efficient operation and use of all resource

Contract review for non-export project.

4) Plastic department

This shop is responsible for the supply of all non-metallic

item loaded on the assembly such as canopy, bubbles, for wind shield

the GRP pipes that goon the aircraft and some plastic panels, fitted in

the cock pit area, wood works also form part of the department they

are soft tooling required by the tool room

5) Heat treatment shop

Here the metal sheets are treated with heat to get a

particular hardness, all the machines and equipments provide for

manufacture, The heat treatment shop has modern facilities for

annealing, solution sing, and precipitation hardening of light alloys, in

addition to heat treatment of steel, gas carburizing and nitrating, The

entire furnaces are equipped with temperature controls devices are

recorded.

Page | 69


6) Security department

This department provides the safety to measure to

employees, new rules and regulations are created to protect the

employee from meeting with an accident terms and conditions to be

followed by employee’s when working are given by this department

safety of the employee is taken care of in this department.

7) Transportation

This department provides transportation for employee for

reduced rate, It even provides transportation of school children

working in the company.

8) Canteen

This department provides breakfast, lunch, and dinner to the

employee, there are 2 types of canteen namely, executive canteen and

workers canteen, executive canteen is for officers and worker canteen

is for casual workers, project trainees and all level workers.

Page | 70


CHAPTER III

SWOT ANALYSIS

1) Strengths Strong market share (market leader in the segment).about 70%.

Very diversify product like : Aircraft Rotary Wing Aircraft Upgrade Transport Aircraft Engine & Test Bed Strategic Electronics Aerospace Systems & EquipmentGas Turbine Central Materials and Processes Laboratory & NDT Centre

Continuous innovation in R&D and process innovation.

Constantly innovative production some of the current running project are given below : Su 30 MKI MiG-27 M MiG-21 VARIANTS METALLIC DROP TANKS UNDER CARRIAGE .EJECTION SEAT CANOPY FLEXIBLE RUBBER FUEL TANKS AEROSPACE FASTENERS.

The reputation of HAL being the Defence organization has its importance

and technically and financially renowned among PSUs (Public Sector

undertakings) as Navratna and carries ISO: 14001 company .Quality in the

world/Internal Business Organization.

2) Opportunities In this industry the main opportunity is the increasing concern about

modernization of the civil as well as the defense related air crafts. As our industry is purely state owned so there is almost no competition. Innovation of new products & the expansion of the existing market can be

Page | 71

http://www.hal-india.com/AircraftNasik/products.asp#AF

http://www.hal-india.com/AircraftNasik/products.asp#FRFT

http://www.hal-india.com/AircraftNasik/products.asp#CAN

http://www.hal-india.com/AircraftNasik/products.asp#ES

http://www.hal-india.com/AircraftNasik/products.asp#UC

http://www.hal-india.com/AircraftNasik/products.asp#MDT

http://www.hal-india.com/AircraftNasik/products.asp#MDT

http://www.hal-india.com/AircraftNasik/products.asp#MiG-21VARIANTS

http://www.hal-india.com/AircraftNasik/products.asp#MIG-27M

http://www.hal-india.com/AircraftNasik/products.asp#Su%2030

http://www.hal-india.com/randd/centralmaterials.asp

http://www.hal-india.com/randd/gasturbine.asp

http://www.hal-india.com/randd/aerospacesystem.asp

http://www.hal-india.com/randd/aerospacesystem.asp

http://www.hal-india.com/randd/strategicelectronics.asp

http://www.hal-india.com/randd/engineandtest.asp

http://www.hal-india.com/randd/transportaircraft/transportaircraft.asp

http://www.hal-india.com/randd/transportaircraft/transportaircraft.asp

http://www.hal-india.com/randd/aircraftupgrade.asp

http://www.hal-india.com/randd/rotarywing.asp

http://www.hal-india.com/randd/aircraft.asp


regarded as the best opportunity to be survived & to bring the development.

As H.A.L. has monopoly in the manufacturing and overhauling of aircraft, so it can explore all the advantages related to this field.

Threats

The main threat can be considered as the different foreign aircraft manufacturers are gradually entering the Indian lucrative market because of low cost availability of the skilled labor &other cheap infrastructural aspects. An other big threat is that increasing trend of foreign direct investment in the

domestic air craft production sector. Global contraction of Material Supplies may hamper the growth of aircraft

industry.

Foreign Aircrafts Preferred to Indian Planes which may reduce the demand in case of Indian defense industry.Intense rivalry expected in the recent global tender for warplanes.

HAL has fear to terrorist as it is a defence organisation producing fighter

aircrafts.

Weakness

Rising private participation in defense production The government has been encouraging greater interaction of private players with defense research organizations by allowing them access to research done by their laboratories. Nearly US$275 million (20-25% of the turnover of public-sector defense companies) worth of materials, sub-assemblies and components are obtained by state-owned defense undertakings from the private sector.

Page | 72


Significant factor for success

Current projects

1) Jaguar upgraded Aircraft program

2) Pilot less target Aircraft

3) Light combat Aircraft – “ Tejas”

4) Advanced light Helicopter – “Dhruv”

5) Intermediate jet trainer – “ HJT – 36”

6) Advanced jet trainer – “ Hawk”

Future projects

1) Combat Aircraft trainer

2) Medium multi role combat Aircraft

Page | 73


CHAPTER IV

Financial Performance

Profit and Loss Account

As at 31st March 2010 (Rs. in Lakhs)

Particulars Schedule 31st March 2010 31st March 2009

Page | 74


INCOMEGross SalesLess Excise Duty

Net SalesChanges in WIP/SIT/ScrapOther Income

EXPENDITUREConsumption of Raw Material, Components, etc.Amortisation & Other ChargesSalaries and WagesOther ExpensesInterestDepreciationProvisions

Deduct: Expenditure relating toCapital & Other Accounts

Net Expenditure

Profit for the YearLess :

Provision For Taxation (Net)Provision For Fringe Benefit TaxProvision For Deferred Taxation (Net)

Profit After Tax

Profit Available For Appropriations

APPROPRIATIONSInterim DividendProposed Final DividendTax on Dividend (Interim & Final)

General Reserve

Total of Appropriations

Basic Earnings Per Equity Share (in Rs.)Notes on Accounts

16

23A/B17

18192021226

22A

23

24

1145669.9587.83

1145582.12203378.86195369.61

922180.1678551.89

195405.3578849.72

3.4416599.7342372.21

29995.009353.226687.23

1544330.59

1333962.50

58475.151275487.35

268843.24

74100.00

-1997.89

196741.13

196741.13

46035.45

150705.68

1037338.09268.44

1037069.65143861.41219932.98

1400864.04

763594.5779774.16

254277.6077617.15

29.8714255.4347829.66

1237378.44

70000.801167377.64

233486.40

43990.00888.29

14621.95

173986.16

173986.16

29995.004803.005913.92

133274.24

173986.16

144.39

Schedule `1' to `24' and Accounting Policies attached form part of the Accounts.

Balance sheet

As at 31st March 2010 (Rs. in Lakhs)

Particulars Schedule 31st March 2010 31st March 2009

Page | 75


SOURCES OF FUNDSShareholders' Funds

CapitalReserves and Surplus

Loan FundsSecured LoansUnsecured Loans

Deferred Liabilities (Net)Deferred Tax Liabilities (Net)

APPLICATION OF FUNDSFixed Assets

Gross blockLess : Depreciation

Net BlockCapital Work-in-progress

Special Tools and EquipmentsInvestmentsCurrent Assets, Loans & Advances

InventoriesSundry DebtorsCash and Bank BalancesLoans and Advances

Less: Current liabilities and ProvisionsLiabilitiesProvisions

Net Current AssetsMiscellaneous Expenditure

( To the extent not written-off/adjusted)Gross Carrying AmountLess: Cumulative Amortisation and Impairment Loss

Net Carrying Amount

Notes on Accounts

12

3

44A

56

7

89

10111213

1414

15

12050.00800302.26

293352.99146802.75

146550.2421237.40

1366003.48185803.50

1865763.56507338.40

3488732.30158578.73

267003.5970380.91

812352.26

18.20150528.68

962899.14

167787.64297825.3123065.60

3924908.94

3647311.03277597.91

196622.68962899.14

12050.00649596.58

661646.58

198.53152526.57

814371.68

263809.20131052.81

132756.3921785.93

154542.32301214.53

4402.98

1043118.62184825.71

1974455.79585614.21

3788014.33

3504673.57127199.52

3631873.09156141.24

247821.3449750.73

198070.61814371.68

Schedule `1' to `24' and Accounting Policies attached form part of the Accounts.

Financial highlights

Hindustan Aeronautics Limited (HAL) has achieved sales turnover of Rs.11,457 crores during the Financial Year 2009-10. The profit of the Company (Profit Before Tax) soared to Rs.2,688 crores.

Page | 76


The highlights are given below :

Rupess in crores

Particulars 2008-09 2009-10 Growth over Previous Year

Sales 10373 11457 10.45%VOP 11811 13490 14.22%PBT 2335 2688 15.12%PAT 1740 1967 13.05%Gross Block 2638 2934 11.22%

Sales VOP PBT PAT Gross Block0

2000

4000

6000

8000

10000

12000

14000

16000

2008-092009-10

CHAPTER V

Conclusion

Page | 77


• HAL is listed among top ten public sector units which are running in profit.

Its main customer is IAF; its other customers are ADA and other civil

customers, Navy, Air Force and Coast Guard etc.

• Aviation is one of the most significant influences of our time and it

empowers a nation with technological strength.

• It is a major tool for economic development and has a significant

role in national security and international relations.

• HAL, over the last six decades, has grown progressively into an

integrated Aerospace organization .

• Developments have helped HAL in establishing a competitive edge

among the global aerospace companies.

• The new initiatives in R&D include weapon system integration ( WSI )

on ALH, development of Light Combat Helicopter ( LCH), combat Air

Trainer versions of LCA.

• HAL’s participation in the outsourcing program of global aerospace

companies like Airbus, Boeing, BAE systems, Rolls Royce, etc.

• In HAL budgeting system, the period considered for budgeting is the

financial year from April to March .It lays a comprehensive plan of action

expressed plan of action expressed in financial and physical terms.

Page | 78

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