KIRLOSKAR FERROUS INDUSTRIES

CHAPTER-1

INTRODUCTION ABOUT THE INDUSTRY AND ORGANISATION

1.1 INTRODUCTION ABOUT THE IRON AND STEEL INDUSTRY IN INDIA

India has a long and rich history of iron and steel production, dating back to ancient times.
The iron and steel industry in India have developed significantly since independence, and
today it is one of the largest producers of steel in the world. The industry is a key
contributor to the Indian economy, providing direct and indirect employment to millions
of people and generating significant revenue.

The Indian iron and steel industry are divided into two main categories: primary producers
and secondary producers. Primary producers are large integrated steel plants that
manufacture steel from iron ore, while secondary producers are smaller steel mills that use
steel scrap as the primary raw material.

India has abundant reserves of iron ore and coal, the two primary raw materials required
for steel production. The government of India has taken several steps to encourage the
growth of the iron and steel industry in the country, including the nationalization of the
steel industry and the establishment of the Steel Authority of India (SAIL) in 1973.

Today, the iron and steel industry in India is a major contributor to the country's GDP and
is vital to its infrastructure development, construction, and manufacturing sectors. The
industry is also a significant player in the global market, with several Indian steel
companies being among the top producers of steel in the world

The iron and steel industry of India is one of the largest and most significant industries in
the country, contributing significantly to its economy. It is divided into two main
categories, primary and secondary producers, with primary producers being large
integrated steel plants that manufacture steel from iron ore, and secondary producers being
smaller steel mills that use steel scrap as the primary raw material.

India has abundant reserves of iron ore and coal, which are the two primary raw materials
required for steel production. The industry is also a significant player in the global market,
with several Indian steel companies among the top producers of steel in the world.

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Figure no 1.1: Kirloskar Factory, Bevinahalli HOSPET

The steel industry is experiencing one of the longest upswings periods for many years.
Since the beginning of 1987, steel production is riding for almost 29 months with 1988
bringing an increase of western world output to 488 million metric tons of crude steel or
Seymour than users also becoming all the economic growth and country builds stadium for
the 2008 Olympics in Beijing.

These favorable prospects raise hopes that steel makers are into a period of greater
stability. It would seem as if the painful economic adjustment process, which has been
lasting for many years, is nearing completion, and that the adoption of steel capacities,
technologies and management attitudes to the changed patterns of economics growth Tata
are finally starting to bear fruit.

Government policy and the International Monetary System with pegged but adjustable
rates and U.S dollar as a reserve currency has favored this rapid growth. This period is
commonly called the “post- war reconstruction period”. The intensity of steel’s economic
growth was rising by vast rate between 1950-60.

In Western Europe, steel jumped by 30%, in Japan by 58% and in Brazil by 41%. The
effect caused steel consumption to increase by an average of 5.2% by the year 1960. The
industrialized countries expanded their steel use by 4.8% per annum. The developing
nations did so by much as 8.9%.

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Between 1960 and 1970, Western World steel consumption grew by 5.7% a year, with the
industrialized countries expanding their steel usage by 5.6% a year and the developing
countries buy as much as 6.5% a year.

The steel industry has harvested to the bitter of this excessive optimism in the firm of
overextended capacities throughout the world. Like this KFIL steel is not without lots of
company in that regard.

Another important influence on steel intensity is the replacement of steel by other

materials. Calculating that portion of the reduction in the specific consumption of the steel
that is due to use of other materials is extremely difficult.

However, estimates made by the international iron and steel institute would seem to
indicate that for all of the western industrialized countries the rate of substitution of
materials such as plastics, aluminum, glass and timber for steel is presently standing at
between 2 and 5 percent of steel consumption.

Earlier to the government liberalization and de-licensing policies in 1991–92, there were
mainly two pig iron producers in Indian market; the two pig iron producers were TISCO
and SAIL. They used to produce basic grade pig iron which contains less silicon content
conversion to foundry grade pig iron. So when this is used by the foundries they have and
Ferro silicon for the conversion to foundry grade also the available quality of pig iron to
the foundries was very much limited because only of ISCO and SAIL were looking after
all the foundries in India.

After the liberalization and de-licensing policies of government and private sectors
showed keen interest in the pig iron manufacturing units that to in the production of
foundry grade pig iron, TATA group in collaboration with Korf Brazil started supplying
mini blast furnace of 250 cubic meters. When blast furnaces were available, many private
sectors started. Producing pig iron among them Goa and Usha Ispat, SISCO (Southern
Iron and Steel Co. Ltd). Uni Metal, Meco, Lanco, Sathavana, Kirloskar are main. These all
pig iron producers started producing mainly foundry grade pig iron.

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Origin of The Industry

The origin of the modern Indian Steel Industry can be traced back to 1953 when contract
for the construction of an integrated steel works in Rourkela, Orissa was signed between
the India government and the German companies Krupps & Demag. The initial plan was
an annual capacity of 5, 00,000 tones, but this was subsequently raised to a million tonnes.

At a very early stage the former USSR and British consortium also showed an interest in
establishing a modern steel industry in India. This resulted in soviet-aided building of a
steel mill with a capacity of 1 million tons in Bhilai and the British backedconstructi-c11
in Durgapur of a foundry which also has a million tonnes capacity.

Global Scenario of Pig Iron

The demand for international has a sharp raise, the total production of pig iron. Pig Iron is
an intermediary product of smelting iron ore with coke. It has high carbon content ranging
from 3.5% to 4.5%. This makes it very brittle and not useful directly as a material except
for limited applications. The original shape of the moulds used for these ingots.

The pigs were in the form of branches formed in sand, with many individual ingots at right
angles to a central channel. When the metal had cooled and hardened the smaller ingots.

The pigs were simply broken from the much thinner runner (the sow), hence the name pig
iron. As pig iron intended for remolding, the uneven size of the ingots and inclusion of
small amounts of sand was insignificant compared to the ease of casting and of handling.

Present Scenario

India is gifted with large quantity with high ferrous contact, which is crucial raw material
for producing the steel. Hence India is largest procedure of the steel in the world. With the
help of liberalization, globalization of economy in the process, there is as scope for
economic development, which means there will be focus on infrastructure this will lead to
considerable demand for steel. As its main application are in the construction Engineering
and automobile sector, which are the key element in building infrastructure. Steel is
universe intermediate and has very forward linking hence steel industry has become one of
the core sector of the economy.

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Though India being one of the largest producers of steel, it has low per capita consumption
of steel in comparison with other developing and developed countries. As demand for steel
is on the rise we can expect good rise in the consumption.

India is fortunate in having intensive iron ore deposits with estimated at 10.3 Billion which
is more than 1/4th of the world reserves. Further the iron ore content of India is above 60%.
In India the iron ore reserves are mainly found in the states like Orissa, Karnataka, Bihar,
M.P, and Goa, A.P, Rajasthan and some parts of Western Maharashtra. When we think of
steel industry, the first thing that comes on to our mind is pig iron.

Growth of Pig Iron in India

Before liberalization the pig iron industry was monopolized by the integral steel plants to
utilize the liberalization policy initiated by the Government. Decline in the pig iron
production and paved the way of helping the ISP’s be utilize pig iron for making steel to
gain value addition.

The integrated steel plant (ISP) is the major supplier of pig iron. Public sector contributes
up to 90% of the Pig Iron supply. According to the Steel Ministry Report, demand for pig
iron is estimated to increase by 37% over next 8 years.

Steel – a versatile commodity, most widely used metal in the world, forms a core
constituent of all major economies. . Accordingly, Steel Consumption is a derivative of the
growth pattern of its various end-use sectors viz. manufacturing, housing, infrastructure,
automobile etc. that ultimately steer the country’s economy.

Production and prices were determined and regulated by GOI. The steel sector was
deregulated in 1991-92, when controls on capacity and prices were abolished along with
quantitative trade restrictions. Import tariffs were also brought down substantially. In
2000-01, the Indian steel industry operated at finished steel production level of 26.7
million tones with apparent finished steel consumption at 26.9 million tones.
However, with the onset of liberalization, the Indian steel sector witnessed entry of
several domestic private players and large private investments flowed into the sector to
add fresh capacities.

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In 2004-05, the indigenous production of steel was 38.4 million tones along with apparent
finished steel consumption at 33.4 million tones, in the year 2008-09 demand of the steel
will decrease due to the recession.

Today, India produces steel of international standards conforming to almost all grades and
varieties and has been a net exporter for the past few years, which shows the growing
acceptability of its products in the global market, and most importantly it’s increasing
global competitiveness.

India continually posts phenomenal growth records in steel production. In 1992, India
produced 14.33 million tons of finished carbon steels and 1.59 million tons of pig iron.
Furthermore, the steel production capacity of the country has increased rapidly since 1991
- in 2008, India produced nearly 46.575 million tons of finished steels and 4.393 million
tons of pig iron. Both primary and secondary producers contributed their share to this
phenomenal development, while these increases have pushed up the demand for finished
steel at a very stable rate. In 1992, the total consumption of finished steel was 14.84
million tons. In 2008, the total amount of domestic steel consumption was 43.925 million
tons. With the increased demand in the national market, a huge part of the international
market is also served by this industry. The steel industry is believed to have been
operating at around 90 per cent capacity utilization factor in 2004. As per International
Iron and Steel Institute estimates, global steel demand has increased by around 8.8 per
cent. The Indian steel industry is almost 100 years old now. Till 1990, the Indian steel
industry operated under a regulated environment with insulated markets and large-scale
capacities reserved for the public sector.

The steel sector was deregulated in 1991-92, when controls on capacity and prices were
abolished along with quantitative trade restrictions. Import tariffs were also brought down
substantially. In 2000-01, the Indian steel industry operated at finished steel production
level of 26.7 million tons with apparent finished steel consumption at 26.9 million tons.

However, with the onset of liberalization, the Indian steel sector witnessed entry of
several domestic private players and large private investments flowed into the sector to
add fresh capacities. In 2004-05, the indigenous production of steel was38.4 million tons
along with apparent finished steel consumption at 33.4 million tons, in the year 2008-09
demand of the steel was anticipated to decrease due to the recession.

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Today, India produces steel of international standards conforming to almost all grades and
varieties and has been a net exporter for the past few years, which shows the growing
acceptability of its products in the global market, and most importantly it’s increasing
global competitiveness. Steel production in India has increased by a compounded annual
growth rate (CAGR) of 8 percent over the period 2002-03 to 2006-07. Going forward,
growth in India is projected to be higher than the world average, as the per capita
consumption of steel in India, at around 46 kg, is well below the world average (150 kg)
and that of developed countries (400 kg). Indian demand is projected to rise to 200 million
tons by 2015. Given the strong demand scenario, most global steel players are into a
massive capacity expansion mode, either through Brownfield or Greenfield route. By
2012, the steel production capacity in India is expected to touch 124 million tons and 275
million tons by 2020

World Steel Industry

Steel, the recycled material is one of the top products I the manufacturing sector of the
world. The Asian countries have their respective dominance in the production of the steel
all over the world. India being one of the fastest growing economies of the world has been
considered as one of the potential global steel hub internationally. Over the years,
particularly after the adoption of the liberalization policy all over the world, the steel
industry is growing very fast.

Structure of The Indian Steel Industry

The Indian steel industry is a well-established industry, with a long history of producing
high-quality steel products. The industry has a significant contribution to the country's
economy, and it is considered to be one of the largest and most important industries in
India. The structure of the Indian steel industry can be broadly divided into the following
categories:
i. Primary Producers: The primary producers in the Indian steel industry are
companies that are engaged in the production of crude steel. These companies
operate integrated steel plants, which consist of facilities for iron ore mining, coke
making, sintering, blast furnace operations, steel melting, and casting. Some of the
major primary producers in the Indian steel industry include Tata Steel, JSW Steel,
Steel Authority of India Limited (SAIL), and Jindal Steel and Power Limited
(JSPL).

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ii. Secondary Producers: The secondary producers in the Indian steel industry are
companies that produce finished steel products by processing crude steel obtained
from primary producers. These companies operate mini steel plants or re-rolling
mills and are engaged in the production of long and flat products such as bars,
rods, angles, pipes, and tubes. Some of the major secondary producers in the Indian
steel industry include Kamdhenu Limited, Mahindra Sanyo Steel, and Bhushan
Power and Steel Limited.
iii. Ancillary Industries: The ancillary industries in the Indian steel industry are
companies that provide various goods and services to the primary and secondary
producers. These industries include companies engaged in the production of
refractories, bearings, and other steel-related products.
iv. Trade and Distribution: The trade and distribution sector in the Indian steel
industry includes companies that are involved in the trading and distribution of
steel products. These companies act as intermediaries between the producers and
end-users, and they are engaged in the sale and distribution of steel products in
both domestic and international markets.
Role of Iron and Steel Industry in Indian GDP-Consumption: -
The iron and steel industry in India are a key driver of the country's economic growth and
has a significant impact on consumption. The industry plays a critical role in meeting the
demand for steel products in various sectors such as construction, infrastructure, and
manufacturing.
India is one of the largest producers of steel in the world and the domestic demand for
steel products in the country has been steadily increasing over the years. This has been
driven by a number of factors such as rapid urbanization, infrastructure development, and
the growing demand for consumer goods.
The iron and steel industry's contribution to consumption is evident in the fact that steel is
a key input for many industries in India. For example, steel is used in the construction of
buildings, roads, and bridges, as well as in the manufacturing of automobiles, appliances,
and other consumer goods. The industry also supports the development of various sectors
such as power, railways, and defence. In addition to meeting the domestic demand, the
Indian iron and steel industry also exports a significant amount of steel products to other
countries, which further contributes to consumption.

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Role of Iron and Steel Industry in India GDP-Growth in Future: -

According to the data released by the Department for Promotion of Industry and Internal
Trade (DPIIT), between April 2000-September 2022, Indian metallurgical industries
attracted FDI inflows of US$ 17.09 billion.

The iron and steel industry play a crucial role in the Indian economy, contributing
significantly to the country's GDP growth. The industry is a major employer and is an
important source of revenue for the government.

In recent years, the Indian government has taken several steps to support the growth of the
iron and steel industry. This includes measures such as the National Steel Policy 2017,
which aims to increase the production of steel in India to 300 million tonnes by 2030.

The growth of the iron and steel industry is expected to have a positive impact on the
Indian economy in the future. It is expected to drive growth in several other sectors such
as construction, infrastructure, and manufacturing, leading to job creation and increased
investment. The industry is also expected to contribute to India's exports, as it is a major
exporter of steel products.

1.2 INTRODUCTION ABOUT THE ORGANISATION

Kirloskar Ferrous Industries (KFI) is a leading manufacturer and supplier of iron and steel
products in India. The company is part of the Kirloskar Group, a conglomerate with a
diverse range of businesses, including engineering, power generation, and construction.

KFI produces a wide range of iron and steel products, including pig iron, billets, TMT
bars, and ductile iron pipes. These products are used in a variety of industries, including
construction, infrastructure, and automotive.

The company has state-of-the-art manufacturing facilities in Karnataka and Maharashtra,

equipped with advanced technology and equipment. KFI is committed to producing high-
quality products that meet the needs of its customers while maintaining a strong focus on
safety and environmental responsibility.

With a strong reputation for quality and reliability, Kirloskar Ferrous Industries has
established itself as a leader in the Indian iron and steel industry. The company is
committed to continued growth and expansion while maintaining its focus on providing
excellent products and services to its customers.

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CHAPTER-2

ORGANIZATION PROFILE

Kirloskar Ferrous Industries Limited (KFIL) is the youngest company in the Kirloskar
group. The company is the large-scale industry to begin operations in the rural &
industrially backward district of Koppal. In 1991 KFIL was incorporated. It began
manufacturing Foundry Grad Pig Iron in April 1994 and Automotive Castings in April
1995.The company’s Pig Iron & Casting are well known for their quality throughout the
country. Company is for manufacture & selling of pig iron in India. The manufacturing
facilities at the company are of world standard & the market for its automotive castings is
growing steadily.

Figure no 2.1: Kirloskar administrative office, Bevinahalli

The company is located on the banks of Tungabhadra reservoir, near to the rich iron belt
of the Hospet – Bellary range, adjacent to NH –63 connecting Hospet-Hubli passing
through Koppal & Gadag. The plant is 16k.m. from Hospet & Koppal. NH-13 is
connecting Chitradurga & Sholapur passes by the side of the plant. The nearest railway
station is Ginigera, which is 5.0 Km away from the plant.
KFIL operates at two locations. One at Bevinahalli, Koppal District, on the banks of the
Tungabhadra reservoir in Karnataka, which is near to the rich iron ore belt. Another one at
Solapur in Maharashtra came into the fold of KFIL on 1st January, 2007. The industry was
born with unique advantage of having behind the immense accumulated experience of the
group in the field of foundry business, at a time when the de-licensing and liberalization
policies of the government were resulting in rapid growth in automotive and farm
mechanization.

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The plant has two mini blast furnaces of 350MT capacity each, capable of producing
120,000MT/year. This amounts to a total installed capacity of 240,000MT/year (Pig iron).
Castings up to 112,000 MT.
The company has engaged 1,200+ (Hospet plant& Solapur plant) direct employees and
they take contract base workers. A sales turnover of Rs.6991.39 million per annum. The
company is committed to achieve total consumer satisfaction through adoption state-of-
the-art manufacturing technologies & 7 processes with continue improvements.
The company is also committed to improve quality of work life of its employees through
improved work practices. The company is responsible for the coming up of many
ancillaries present, there are around 20 ancillary units spreads over Koppal.
Iron ore is brought from the mine owners in the calibrated from Hospet & Bellary Iron ore
belt within the distance of 50 kms. Coke is mostly imported from China. Other minerals
like Limestone, Dolomite, Manganese ore, Quartz etc., are produced locally. Almost all
foundries and pig iron users in the country are purchaser of pig iron from the company. It
supplies quality castings to all renowned automobile manufacturers like Mahindra &
Mahindra, Maruti Udyog, Escorts, Tafe and Simpson to name few.

2.1 BACKGROUND AND INCEPTION OF THE COMPANY:

The Kirloskar group origins were small but significant. In the year 1903, Sri Laxman Rao
Kashinath Kirloskar opened a bicycle shop in the state Karnataka in south India. From this
modest venture has grown the Kirloskar group of more than 15 manufacturing company
with an annual turnover exceeding 116 million pounds string and engineering field in
India. A Kirloskar product includes pumps, farm machineries, machine tools, diesel
engines, electrical machinery a wide variety forgings electric switch gears and tractors.
The vast Kirloskar group is the result of industrial Vision of Shri L K Kirloskar, many
overseas factories are Located in the West Germany, Philippines, Malaysia and Kenya.
The vast Kirloskar group’s total worldwide export achievement currently these includes
centrifugal pumps to UK machine tools to USA, Canada, West Europe diesel engines to
UK, transformer and pump -sets to Malaysia.

KIRLOSKAR GROUPS

The vision of one man, Shri Laxman Rao Kashinath Kirloskar, which is today the
“Kirloskar Groups”, respected worldwide for engineering excellence, can trace
its beginning to the first casting of a humble plough.

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Kirloskar is 600 Million US Dollar engineering conglomerate driving critical industries.

K-group is a century old pioneers in the areas of specification like power construction and
mining, agriculture, industry and transport, oil and gas and environment protection with a
range of world-class industrial products and turnkey services

KFIL made up of 8 major group companies, who players in major sectors like
manufacturing, oil and gas, power, construction and mining, agriculture, industry and
transport each led by the engineering and managerial talent in India. In addition to
engineering, they are multi-unit, multi-product; multi-location conglomerate is built on the
plinths of Experience, Expertise, Quality, Innovation and Values in the business.

These 8 companies are from the core of Kirloskar group. Each company is a renowned
name in its own area of operation and is respected worldwide for its services and products.

Companies with majority holding

Public listed Companies with minority holdin

Holdin
companies g
under group

Kirloskar Ebara Pumps Kirloskar Toyota

Ltd. Kirloskar Chillers Textile Machinery
Kirloskar Brothers Ltd
Pvt.Ltd. Aban Toyota Kirloskar
Kirloskar Oil Engines Ltd
Construction Pvt.Ltd. Motor Denso
Kirloskar Pneumatic co
Kirloskar Corrocoat Kirloskar Toyota
Ltd
Pvt.Ltd. Kirloskar Gosei Kirloskar
Kirloskar Ferrous
Proprietor Ltd. Steel Logistic Centre
Toyota Kirloskar
Figure no 2.2: Kirloskar Groups of Industries

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 Kirloskar Brother Limited (KBL Established in 1888) incorporated in 1920 is

the acknowledge leader in largest manufacturing and exporter of pumps in India.
 Kirloskar Ferrous Industries Limited (KFIL) 1991
 Kirloskar Middle East FZE (KMEF)1997
 Kirloskar oil Engines Limited (KOEL) incorporated in 1946
 Kirloskar Pneumatic Limited (KPCL)1958
 Kirloskar Proprietary Limited (KPL)1965
 Kirloskar Copeland Limited (KCL)
 Kirloskar Ebara Pumps Limited (KEPL)
 Kirloskar has shaping capable managers at Kirloskar Institute of Advanced
Management Studies (KIMS). It is Kirloskar education centre for
imparting knowledge to the managers of tomorrow.

KIRLOSKAR STORY

It has now been more than a century since the Kirloskar story started. It was started with
an aim of becoming the pioneers in fields in which our country needed innovation. In the
100 years and more its existence as a family and as an organization, they have been
seminal to Indian agricultural and industrial development. They gave India its first iron
plough, pump and engine; inventions that were born from the need of the hour and went
on to become signs of the time. That is why their group history can in many ways be
considered a history of the economic and industrial revolution in India.

All though the passing years the Kirloskar group has had a long & close relationship with
the foundry business with several group units specializing in the manufacture of high
quality ferrous & non-ferrous casting. While Laxmanrao Kirloskar established the group,
his son S. L. Kirloskar played a major role in its rapid growth. S.L.Kirloskar transformed
his vision into a promising and thinking reality, of application of appropriate technology,
customer satisfaction and dauntless integrity. SLK was a global thinker who had the
courage and the confidence in his own country even in the pre-independence era. He often
said, "Economic preparedness (Awareness) is as vital as military preparedness." He
always looked at India as a part of the rest of the world and struggled to make India
globally competitive - that was his spirit of patriotism (Nationalism).

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Kirloskar Ferrous Industries Limited was born with the unique advantage of having been
conceived with ideas accumulated through experience & expertise of the group in the field
of foundry business, at a time when the de-licensing and liberalization policies of the
government came forth in the year 1992 resulting in the rapid growth in automotive and
farm mechanization sectors.

The making of the electrical motor, this was the second of Laxmanrao Kirloskar long
cherished dreams, the first being the making of an engine. This task was brought to
completion by Ravi Kirloskar, his youngest son, in 1946.

KFIL’s state-of-the –art foundry was the answer to the high volume demands of these
sectors which require thin walled castings with very small machining allowance and above
all accurate dimensional accuracies absolutely essential for matching on sophisticated
machining centers in a single pass.

KFIL, the only foundry in Asia with backward integration to liquid metal, has global
capacities to meet high volumes at consistent quality.

THE FOUNDER OF THE COMPANY

LAXMANRAO KIRLOSKAR

Figure no 2.3: The Founder of the Kirloskar Company

KIRLOSKAR FERROUS INDUSTRIES LIMITED (KFIL), BEVINAHALLI.

Kirloskar Ferrous Industries Limited Co. was incorporated on 10th September 1991 as a
Public Limited. Kirloskar Oil Engines Ltd and Shivaji Works Ltd promote the company.
The main objective of the company is to manufacture Pig Iron and ferrous casting. The
company commenced production in 1994 and up an additional blast furnace in 1995.

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Kirloskar Ferrous Industries Limited is located at Bevinahalli of Koppal district. It is

spread over 300 acres of spacious land with lush greenery around. Kirloskar Ferrous
Industry Limited has 2 mini blast furnaces each of 250 M3 working volume, technology
and design of TATA-KORF limited in technical collaboration with Kopf technology
Brazil for extracting pure iron.

Each furnace produces 180000 tonnes of Pig Iron metal/year. The plant manufactures
foundry grade Pig Iron suitable for automobile castings. Raw materials are brought from
Sandur and Donimalai sector near Hospet, abundance of rich iron deposits are available in
the areas. Fluxes such as limestone, dolomite, quartzite and manganese are available in the
nearby surrounding area. Both iron ore and fluxes are easily accessible by road. Coke is
imported from China / Japan which is unloaded at GAO/Chennai/Mumbai port and
brought to the work site by rail or road. Coke is biggest raw material to the company and it
accounts for almost 80% of raw material costs. Kirloskar Ferrous Industries Limited is the
first pig iron manufacturer in India with QS 9000 certification.

2.2 NATURE OF BUSINESS

Kirloskar Ferrous Industries Ltd. (KFIL) is a leading producer of iron castings in India.
The company's primary business is the production and sale of grey iron castings and
ductile iron castings. The company manufactures the Pig Iron in three different grades, by
Calibrated Iron-ore brought from mine owners in the Hospet & Bellary Iron-ore belt
within the distance of 50 kms and grey iron castings.

In addition to producing iron castings, KFIL is also involved in the generation of power
through the use of waste heat generated during the production process. The company has
installed a waste heat recovery system at its Solapur plant, which generates power by
utilizing waste heat from the furnaces.

2.3 VISION, MISSION AND QUALITY POLICY.

 VISION
Be a sustainable growing organization creating value to all stakeholders
 MISSION
To become a 1 Billion USD company by 2030

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 QUALITY POLICY:
KFIL is committed to achieve Total Customer Satisfaction through adoption of state – of –
the – art manufacturing technologies and processes with continuous improvements. KFIL
is also committed to improve Quality of work life of its employees through improved
work practice

 QUALITY OBJECTIVES:
 Customer Satisfaction: Maximization of Customer Satisfaction by consistent supply
of Quality Casting & Pig Iron.
 Supplier Quality Assurance: Provide technical support and guidance to our suppliers
through Quality Assurance Program to ensure highest Quality of purchased materials.
Supplier is a critical link in our Quality System.
 Employee Development: Development and motivation of all employees by providing
necessary training and support to bring out their full potential.
 Product Excellence: Continuously striving for Product Excellence through adherence
to documented work practices, technical and managerial innovation and continuous
improvements. Our endeavor is to push ourselves till our processes and products are
finest in the country and compare with the best in the world.
2.4 WORKFLOW MODEL
Pig iron is the basic input for making iron casting which finds its application in steel
industry & other sectors of the economy. It can also be used in the change mix of the
electrical are furnaces (EAFs) as a partial substitute of melting scrap. Pig iron mainly
classified into tow glades.
 Basic glade (which is used for making steel)
 Foundry glade (which is used of manufacturing casting)
E.g. Glade which is used of manufacturing special steel India’s share in the total global
exports is 4.51% in 1996-97 & the same increased to 7.14% in 1997-98.Global scenario of
pig iron. The demand for pig iron in the international arena has seen sharp rise. The total
production of pig iron to 500 M.T. developed nations accounts for 45% of the total
production. Seeing the potential demand many mills in USA such as NUCOR, NORTH
STAR CASCADE STEEL & MAC STEEL is switching over to pig iron production

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Receive 2D part Receive core Receive moulding Receive melting

drawing & 3D model from customer
raw materials raw materials raw materials

Make pattern equipment’s melting

Core makingSand preparation

Shift to core & mould Molten metal

production Mould making into press pour

Washing, drying
and assembly
Assemble Molten metal
moulds and into mould
cores assembly

Shot blasting Punchout,

fetting, painting and averaging
shakeout chipping decoring

Packaging & dispatch

to customer

Figure no 2.4: Workflow Model at KIRLOSKAR

FERROUS INDUSTRIES

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Usage of The Product in Different Industries.

Table no 2.1: The list of industries where these products are used

PARTICULARS PERCENT
TEXTILES 12%
PUMPS 11%
AUTOMOBILE 26%
PIPES 12%
ENGINES 6%
FANS 3%
AGRICULTURE 10%
OTHERS 20%

The above table represents the basic of products differentiation and the list of industries
where these products used. Chemical composition of the product is the reasons for
production for different kinds of products. Mainly products are differentiated on the basis
of silicon compensation. Company has got different kinds of customer varying between
with high or low range of silicon contents. “Keeping the wheels of progress turning in
every way always that is, how we operate”

2.5 PRODUCTS PROFILE:

The following are the three different grades of pig Iron manufacturing by the company.
They are:
1) Foundry grade pig Iron
2) Spherical Graphite grade
3) Casting
KFIL products are in the beginning of the value chain. The major thrust is to “Drive
down Cost” to retain competitive edge
 Quality

 Cost Figure no 2.5: KFIL Products [PIG IRON]

 Productivity
 Process

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COMPETITORS
As the company has got two kinds of products the competitors of the company are broadly
divided according to their type of procurement. They are as follows

Table no 2.2: Competitors Information

PIG IRON COMPETITORS FOUNDRY COMPETITORS

1.Sesa Goa Industries Ltd. 1. Ashok Iron Works Private. Ltd.

2.Kudharemukha Iron & Ore. 2.DGP Foundry

3.Kalyani Steels Ltd. 3.Nelcast

4.JSW 4.Hinduja Foundries

5.USHA Steels Ltd.

6. Tata Metallic’s.

Infrastructural Facility

 Power: KFIL has the required facilities for getting the required amount of power
like Two steam turbines/ Generators or capacity 3.5 mw each using blast furnaces
gas as fuel. Kirloskar power supply Pvt. Ltd is established adjacent to KFIL and
has the total installed capacity 19.5mw.
 Water: Major requirements of water are being pumped from nearly
Tungabhadra Reservoir by using a Pipeline for almost 7 KMS
 Transportation: There are 8 buses to pick and drop middle level management
employees.
 Medical Centre: Medical Centre is built to cater the medical need of the
employees.
 Canteen: The KFIL has a good canteen facility.
 Furniture: In KFIL every department well equipped furniture & computers.

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2.6 OWNERSHIP PATTERN:

Shareholding Pattern is as follows: -
Table no 2.3: Shareholding Pattern of KFIL
Category Number Percentage of
of Shares Shareholding

Promoters& Promoter companies 7,86,85,182 56.66

(a) Atul Kirloskar (chairman) 9,89,726 0.71
(b) Rahul Kirloskar (vice chairman) 14,25,279 1.03
(c) Alpana Rahul Kirloskar 15,91,229 1.05
(d)Kirloskar ferrous industries 7,06,43,754 50.87
(e) Kirloskar Pneumatic Company ltd 20,00,000 1.44
&14 other promoter groups 20,35,194 1.56
Public (75,006 as of 31/12/22) 6,01,87,512 43.34
Total 13,88,72,694 100.00

2.7 AWARDS & ACHIEVEMENTS

 Awards Mile stones of KFIL

 ISO - 14001 Certificate
 ISO - 9001 Certificate
 KFIL was ranked 1st and awarded with ‘IIF Kaizen Trophy’ in South India
at the IIF Kaizen Competition 2021.
 OHSAS - 18001 Certificates. (Occupational Health and Safety Assessment
Series) by Indian Register Quality System
 CII- EXIM Bank Award for Business Excellence- Platinum Award – 2019
 `Unnatha Suraksha Puraskara’ Award from National Safety Council,
Bangalore - 2019

 Achievements
 KFIL is the first among few in India to adopt state of technology with
CNC controller machines consistent quality of Pig Iron
 KFIL also records the project completion of MBF 1st within 18 months and
2nd MBF in 9 months

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 FASTEST GROWING STEEL COMPANY (SMALL) 1st Place from

Construction World – 2019

2.8 FUTURE GROWTH AND PROSPECTS:

Kirloskar Ferrous Industries (KFIL) is a leading manufacturer of high-quality pig iron and
castings in India. The company operates two manufacturing facilities in the state of
Karnataka and has a capacity of 800,000 tons per annum. Here are some potential factors
that could contribute to the future growth and prospects of KFIL:

 Strong demand for pig iron and castings:

Pig iron and castings are critical raw materials used in a wide range of industries,
including automotive, engineering, and construction. The demand for these products is
expected to remain strong in India, driven by infrastructure development,
urbanization, and industrialization.

 Expansion plans:
KFIL has plans to expand its capacity by setting up a new plant in the state of Andhra
Pradesh, which could significantly increase its production and revenues. The company is
also looking to increase its export volumes to other countries.

 Cost optimization:
KFIL has implemented several cost optimization measures, including the use of alternative
raw materials and energy-efficient technologies, to improve its operational efficiency and
reduce costs.

 Focus on innovation:
KFIL has a strong focus on innovation and technology, and it continually invests in
research and development to improve its products and processes. This focus on innovation
could help the company stay ahead of its competitors and better meet the evolving needs
of its customers.

Installation of sinter plant to utilize the iron ore fines, coke fines & Fluxes fines to
convert the same into sinters to be used as raw material in the manufacture of Liquid
Metal, which will result in reduction in operating costs and increase in productivity;
Installation of 4.5 MW Power plant to utilize excess Blast Furnace Gas is in progress
Establishing Clean Development Mechanism (CDM) for projects like Power Plant III and
Hot Blast Stoves - II.

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CHAPTER – 3

3.1 : MCKINSEY’S 7-S FRAME WORK

INTRODUCTION:

Japanese first introduced this model. The 7-S model is better known as McKinsey’s 7-S.
This is because the two persons who developed this model. Tom peters and Robert
Waterman, have been consultants at Mc Kinsey and company at that time. They published
their 7-S model in their article “Structure is not organization” (1980) and in their books
“The art of Japan management” (1981) and ‘in search of excellent (1982)’.

MCKENSY’S 7-S FRAME WORK CHART:-

Figure no 3.1: McKinsey’s 7S Model

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1. STRUCTURE:
It is the part for specialization and co-ordination. It comprises of the basis organization of
the company, its departments, reporting lines areas of expertise, and responsibility (and
how they inter-relate), and the way in which the parts of a thing are arranged or organized.

Finance departments will acts as major part of every industry. It is the basic necessity to
run each and every single activity of organization. The finances department is treated as
the one of the most significant departments.

a) Overall organization structural –Board of Directors/ Functional heads etc.

b) Sub structure detailing with each functional discipline. Detailed study of various
departments& their functions.

BOARD OF DIRECTORS

1. MR. Atul Kirloskar - (Chairman)

2. MR. Rahul C. Kirloskar - (Vice Chairman)
3. MR. R.V Gumaste - (Managing Director)
4. MR. A.N Alvani - (Non-Independent Non-Executive Director)
5. MR. R. Sampath Kumar - (Independent Non-Executive Director)
6. Mrs. Nalini Venkatesh - (Independent Non-Executive Director)
7. MR. Y.S Bhave – (Independent Non-Executive Director)
8. Mr. M. R. Chhabria- (Non-Independent Non-Executive Director)
9. Mr. M. V. Kotwal- (Independent Non-Executive Director)
10. Mr. V. M. Varma- (Independent Non-Executive Director)
11. Mr. Venkatraman S- (Independent Non-Executive Director)
12. Mr. R. S. Srivatsa- (Executive Director (Finance) and Chief Financial Officer)

The main term of the Organization structure is comprehending all the possible Dimensions
of the organization structure as in developing the ability to focus on these dimensions
which are currently important to the organization’s evaluations- and to be ready to refocus
as a crucial dimensions shift.

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Figure no 3.2: Structure of the Company

Strategies

 Maintaining quality leadership

 On – Time delivery
 Strong dealership network
 Customer orientation
 Customer driven
 Performance tracking of competitors
 Chemical laboratory
 Sand laboratory
 Brinnel Hardness Tester
 Universal tasting machine
 Casting sectioning machine

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PROMOTION

KFIL has appointed numbers of dealers throughout India for its marketing purpose each
dealer will get rs100/- PMT as commission for the pig iron he sells credit notes are given
to these dealers for his commission. Pig iron is also give credit sales as one of the
promotion tools to attract customer credit time depends on areas (less credit period is for
north zone) & order they give.

DISTRIBUTION

KFIL has got distribution network spread all over India inform of dealer ships & also
through company’s employee KFIL has divided its market into 7 zones.

Table no 3.1: Distribution Network of KFIL all over INDIA

Zone A Karnataka(KA) Belgaum, Shimoga, Bangalore.

Zone B AndhraPradesh (AP) Hyderabad, Vijaywada

Zone C Maharashtra(MH) Pune, Mumbai, Nagpur, Solapur

Zone D Gujarat(GU) Ahmadabad, Rajkot, Surat

Zone E Rajasthan(RJ) Jaipur

Zone F Delhi(DE) Delhi, Zadhinoor, Agra

Zone G Tamilnadu (TN) Chennai, Coimbatore, Madurai.

2. STRATEGY:
Strategy refers to the systematic action and allocation of resources to achieve the
companies aim. The integrated vision and direction of the company as well as the manner,
in which it drives, articulate, communicates and implements that vision and direction. It
can also be defined as the choice of direction and action that the company adopts to
achieve its objectives in a competitive situation.

The Strategies adopted by KFIL to achieve low cost along with maintaining the qualities
are as follows:

 By Reducing the coke consumption up to 40%

 By generating small amount of power through the power units within the company.

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 The sand which is generated as waste after manufacture of pig iron is reused in the
casting process.
 KFIL has introduced a casting wing, which is fully controlled and automated by
robots, hence in turn reducing wastage and production efficiency.
 A regular check is kept at every stage of manufacture of the pig iron to insure there
is minimum wastage.
 By adopting improvised techniques of production over time, the ovens which had
been used for heating and molding pig iron have recently been improvised with
better technology, which uses less power, conserves heat energy for a longer time,
as well as makes the heating process faster.

3. SYSTEM:
Systems are formal and informal procedures that govern everyday activity, covering
everything from management information systems, through to the point of contact with the
customer. Finance department is doing enough to properly plan and control the funds.
There is regular program verification.

The Company has a proper and adequate system of controls in order to ensure that all
assets are safeguarded against loss from unauthorized use or disposal. All transactions are
properly checked, verified, recorded and reported correctly. Regular Internal Audit checks
are carried out to ensure that the responsibilities are executed effectively and that proper
and adequate systems are in place.

 Internal control system :

The company has proper and adequate system of controls in order to ensure that all
assets are safeguarded against loss from unauthorized use or disposal. All
transactions are properly checked, verified, recorded and reported correctly.
Regular Internal audit checks are carried out to ensure that the responsibilities are
executed effectively and that proper and adequate systems are in place.
 Inventory control system:
Raw material will be held in the stores for 15 days
only. Finished goods will be held in the stores for 2
days.
Corporate governance contains a set of principles, process and system to be followed by
Directors, Management and all employees of the company for increasing the shareholders’

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value, keeping in view interest of the other stakeholders.

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While adhering to the above, KFIL is committed to integrity, accountability, transparency

and compliance with laws in all dealings with the Government, Customers, Suppliers,
Employees, Other stakeholders.

QUALITY CONTROL

The blast furnace is highly instrumented and is monitored continuously. Times and
temperature are checked and recorded. The chemical content of the iron ores received
form the various mines are checked, and the ore is blended with other iron ore to achieve
the desired charge. Sample are taken from each pour and checked for chemical content and
mechanical properties such as strength and hardness.

MARKETING DEPARTMENT
 MARKETING POLICY
“In the direction of achieving the company’s mission, the marketing team- PIP endeavors
for maximization of sales and realization for the company’s product while meeting the
customer’s requirement to their all-round satisfaction”.

4. SKILL:
It consists of the capabilities and competencies that exist within the company. It is the
talent, craft or accomplishment, naturally acquired or developed through training and
abilities appropriate for a specific job. The employees need to have both specific as well
generic skills. Generic skills mean problem solving skills, decision-making skills,
communication etc. Specific skill like time management, shop floor management, building
teams, leadership and motivation, creativity, advances safety and environment, industrial
safety and environment and training their employees to enhance their knowledge and skill.

At KFIL, training is a continuous process to make their employees to meet the new
challenges and for their career growth. The training needs of managers are identified
through competency mapping, skill matrix and also through PMS. They engage external
Subject Matter Experts, apart from In-house trainers to train their employees.

The training modules includes continual improvement programs like KAIZEN, Six Sigma,
5'S', Systems (TS-16949, EMS, OSHAS etc.) apart from programs on Personality
Development, Leadership development, Behavioral subjects.

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KFIL believe that development of employees is very vital for the success of the
organization in a competitive environment. They involve consultants of repute and
individuals for regular programs to employees on leadership development. The modules
are designed by these consultants and individual faculty members to equip managers with
a broader business perspective and tools and techniques required for various functions and
also to enhance their career prospects.

True to their belief that an employee is an intangible asset, they organize leadership
development programs to their managers at all levels to meet future business competition
and always strive to enhance knowledge and skills of the managerial personnel

5. STAFF:
It refers to the people working in an organization. The company’s people resources and
how they are developed, trained and motivated. The process of staffing includes various
processes like recruitment and selection procedures, training etc.

It refers to how the people are developed, trained, socialized, integrated, motivated and
how the employee’s career is shaped in an organization.

KFIL considers human resource to be an important valuable asset for the organization and
therefore, constantly strives to attract and recruit best talent for the current and future
needs. The Company has taken necessary steps to upgrade the skills of present employees
by conducting various in-house training programs and courses. Further measures for the
safety of the employees are also adopted through training programs on safety and mock
drills. The total number of salaried employees is 1,251.

Technical staff

These are the staffs they are responsible for the work related to technical aspect. In this
company they are appointing well- qualified and experienced persons as technical staff. So
these staff will have good knowledge about the working environment.

Supervisory staff

These are the person who is in charge with supervising the other employees in the
organization. In this company they are employing experienced staff as supervisor. So they
can observe the fellow workers and guide them as per the companies need. The
experienced supervisors are one of the key assists of this company.

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Clerical staff

These assets are responsible for the office work. These people are the backbone of the
company. If they work well, it will be an asset to the company. In this company the
qualified employees are hired for office work. These staffs are working together towards
achieving companies’ objectives

Table no 3.2: Total Number of Employees Working at KFIL, Hospet

Designation No. of
employees
Managing Director 1
Senior Vice President 3
Vice president 4
Associate vice president 1
Senior general manager 10
General manager 10
Deputy General manager 15
Senior manager 20
Managers 33
Deputy managers 55
Senior engineers/officers 78
Engineers/officers 57
Assistant Engineers 34
Assistant officer 21
Assistants 71
Foreman 21
Charge man 97
Operator 312
Co Trainees 61
Apprentices 221
Total 1251

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6. STYLE
This includes the Leadership style of Democratic and the overall operating style of the
organization. Style impacts the norms people follow and how they work and interact with
each other and with customer.

The management training is totally democratic there are no restrictions to any employee to
express his opinion. The company has got open door policy i.e. any level of employee can
meet directly to his superior or managing director without any hesitation.

Strategy refers to the systematic action and allocation of resources to achieve the
companies aim. The integrated vision and direction of the company as well manner, in
which it drives, articulate, communicates and implements that vision and direction. It can
also be defined as the choice of direction ad action that the company adopts to achieve its
objectives in a competitive situation.

7. SHARED VALUES:
It refers to the core or fundamental values that are widely shared in the organization and
serve as guiding principle that are important. These values have great meaning because
they focus attention and provide a broader sense of purpose. Values are things that you
would strive for even if they were demonstrably not profitable. Values act as an
organization’s conscience, providing guidance in time of crisis. The values and beliefs of
the company ultimately, they guide employees towards valued behavior. It refers to the
simple goal statements in determining corporate destiny to fit the concept; most people in
an organization must share these values.
VALUES
 Customer focus.
 Integrity
 Fairness & Partnership Development.
 Mutual Trust & Team Work.
 Agility with Discipline.
 Responsible Corporate Neighbor.

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3.2 : PORTER’S 5 FORCES MODEL

INTRODUCTION:

This model was proposed by Michael E. Porter in 1979. The purpose was to assess and
evaluate the competitive positioning and strengths of business organisations. The model
has three vertical competitive forces (threat of substitute products or services, the threat of
new entrants and the rivalry among the existing firms) and two horizontal forces
(bargaining power of buyers and bargaining power of suppliers).

These forces shape the competition within the industry. The overall industry
competitiveness declines when these forces reduce profitability. Porter found SWOT
Analysis lacking in rigour. Many new companies use the Porter Five Forces Model to
decide whether it is profitable to enter in a particular industry.

Application of this model can help Kirloskar to determine the industry attractiveness and
understand its competitive positioning in the market. The analysis can also make some
strategically wise decisions that could improve the performance of Kirloskar and ensure
long term survival.

Figure no 3.2: MICHAEL E PORTER’S 5 FORCES MODEL

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3.2.1 Threat of New Entrants

Threat of new entrants reflects how new market players impose threats to the existing
market players. If the industry will be profitable and barriers to enter the industry will be
low, which will attract more players and hence, the threat of new entrants will be high.

 Kirloskar Ferrous Industries is an established player in the industry and operates

with economies of scale, which may deter new entrants.

 The iron and steel industry require significant capital investments, advanced
technology, and access to raw materials, making it difficult for new entrants to
compete.

3.2.2 Bargaining power of Suppliers

 The bargaining power of suppliers is relatively high as Kirloskar Ferrous Industries

sources its raw materials, such as iron ore and coal, from a limited number of
suppliers.
 Any disruption in the supply chain or increase in prices of these materials can
significantly impact the company's profitability.
3.2.3 Bargaining power of Buyers

 The bargaining power of buyers is moderate as Kirloskar Ferrous Industries' major

customers include construction and infrastructure companies, automotive
manufacturers, and engineering firms.
 Customers have some bargaining power due to the range of options available to
them, but quality of the product and timely delivery can be critical factors in the
purchasing decision.
3.2.4 Rivalry among the Existing Competitors

 The iron and steel industry in India are highly competitive, and Kirloskar Ferrous
Industries faces competition from established players such as Tata Steel, JSW
Steel, and SAIL.
 The industry is characterized by high fixed costs, and companies operate with
economies of scale. Competition is based on factors such as price, quality,
delivery, and innovation.

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3.2.5 Threat of Substitutes

 The threat of substitute products is low as Kirloskar Ferrous Industries produces

steel and iron products that are widely used in the construction, automotive, and
engineering sectors.
 There are limited substitutes for steel and iron products, making them essential
materials for these industries.

Overall, Kirloskar Ferrous Industries operates in a challenging and competitive

industry, and the company needs to continually innovate and focus on improving
efficiency to maintain its competitive edge.

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CHAPTER – 4
SWOT
ANAYSIS

Figure no 4.1: SWOT Analysis Diagram

STRENGTHS:

The company has some its own strengths and competencies. They are as under:

 It adheres to the delivery at schedule for the customers.

 Located near the sources of iron ore mines.
 It enjoys economics of scale in manufacturing.
 It is well connected by rail and road way.
 Good brand image in the market.
 Market leader in quality.
 It is situated on the bank of river Tungabhadra.
 Availability of rich iron ore from the iron belts of Hospet and Sandur.
 Low power cost in manufacturing since they use their own generated electricity.
 Wide distribution network.
 The company has a good share in the market.

WEAKNESS:

Every company has its own weaknesses like this company also has some as below:

 Total dependence on china for coke.

 High coke consumption due to higher fines and handling costs due to multiple
handling.
 Poor market share in eastern and northern part of the country.
 Company is facing pollution related issues for coke.

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OPPORTUNITIES:
The company has some opportunities in future for its growth. They are mentioned as
under:

 The company has opportunities to tie up with customers.

 Can capitalize an upswing in market demand because of all India presence possible
tie – ups with major foundries in Gujarat market.
 As the company good market edge, it can market 20,000 per month of foundry
grade pig iron every month.
 Growth in Indian foundry capacity.
 Huge land is availability for future expansion.
 Technology in its operation.
 Chance of government restricting the export of iron in future encourage Indian
steel factory.
 Strong financial position makes it possible for the company to adapt new.

THREATS:
 New foundry grade production entry
 Imposition of sales tax and VAT.
 Threats of using substitute products like plastic and fiber.
 Chance of government restricting the export of iron in future encourages Indian
steel factory.
 Iron ore is a major raw material required for production of pig iron. Delay in
starting of the closed mines may force the Company to source the iron ore from
outside the state, thereby increasing the sourcing cost of iron ore and put pressure
on profitability.
 Depreciation of Rupee vis-à-vis US dollar can lead to an increase in price of coke
and in the price of crude oil, resulting in increased input costs, thereby putting
pressure on profitability

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CHAPTER - 5: FINANCAL ANALYSIS

Table no 5.1: BALANCE SHEET FOR THE YEAR 2020, 2021 & 2022
(₹ in Crores)

PARTICULARS As at 31st As at 31st As at 31st

march march march

2020 2021 2022

[A] ASSETS

Non-Current Assets

Property, plant and equipment 852.01 1,010.31 1,158.72

Capital work-in-progress 137.69 149.08 199.13

Intangible assets 2.10 1.51 1.63

Intangible assets under development 6.06 13.14 19.75

Financial assets

(i) Investments 0.50 0.55 489.13

(ii) Loans 10.78 10.50 0.20

(iii) Other financial assets 0.08 0.09 13.64

Other non-current asset 10.94 24.64 99.10

Total Non-Current Assets 1,020.16 1,209.82 1,981.30

Current Assets

Inventories 236.44 284.38 550.42

Financial assets

(i) Trade receivables 292.59 360.72 476.69

(ii) Cash and cash equivalents 6.96 10.07 24.38

(iii) Bank balances other than (ii) above 4.08 5.96 244.71

(iv) Loans 0.69 1.01 195.04

(v) Other financial assets 3.46 0.61 4.86

Current tax assets (net) 20.65 20.33 9.24

Other current assets 34.23 39.67 48.84

Total Current Assets 599.10 722.75 1,554.18

TOTAL ASSETS 1,619.26 1,932.57 3,535.48

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EQUITY AND LIABILITIES

Equity

Equity share capital 68.91 69.17 69.36

Other equity 653.07 930.20 1,266.83

Total Equity 721.98 999.37 1,336.19

Liabilities

Non-Current Liabilities

Financial liabilities

Borrowings 157.73 128.83 446.98

Provisions 2.85 3.55 3.22

Deferred tax liabilities (Net) 114.28 88.44 97.74

Total Non-Current Liabilities 274.86 220.82 547.94

Current Liabilities

Financial liabilities

(i) Borrowings 83.00 85.00 686.09

(ii) Trade payables

- Total outstanding dues of 14.62 19.69 14.54

micro enterprises and small
enterprises
- Total outstanding dues of 360.97 349.56 845.32
creditors other than micro
enterprises and small enterprises
(iii) Other current financial liabilities 145.96 218.15 77.82

Other current liabilities 10.55 31.41 18.71

Provisions 7.32 8.57 8.87

Total Current Liabilities 622.42 712.38 1,651.35

Total Liabilities 897.28 933.20 2,199.29

TOTAL EQUITY AND LIABILITIES 1,619.26 1,932.57 3,535.48

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Table no 5.2 Statement Of Profit And Loss for 2020, 2021 & 2022 (₹ in Crores)

Particulars FY 2020 FY 2021 FY 2022

INCOME

Revenue from operations 2,038.08 1,849.66 3,614.97

Other Income 2.83 15.64 11.29

Total Income 2,040.91 1,865.30 3626.26

EXPENSES

Cost of materials consumed 1,048.79 1,131.40 2,225.49

Purchases of stock-in-trade - - -
Changes in inventories of finished goods, 3.45 1.67 (29.71)
stock-in-trade and work-in-progress
Employee benefits expense 106.62 96.40 133.39

Finance costs 25.16 17.26 27.86

Depreciation and amortization expense 75.98 57.51 87.86
Other expenses 417.72 404.88 638.68
Total expenses 1,677.72 1,709.12 3,083.57
Profit/(Loss) before tax 363.19 156.18 542.69
Tax expenses

(1) Current tax 87.49 28.59 129.08

(2) Short/ (excess) for the earlier years (0.84) (5.68) (0.76)
(3) Deferred tax (25.57) 20.90 8.27
Profit for the year 302.11 112.37 406.10
Other Comprehensive Income

Items that will not be reclassified to profit or

(loss)
Remeasurements of post-employment (1.14) (1.92) 0.68
benefit obligations
Income Tax relating to above 0.28 0.67 (0.17)

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Fair value changes on equity 0.05 - 3.75

Instruments through other
comprehensive income
Income Tax relating to above (0.01) - (0.86)
Other Comprehensive Income for the year, (0.82) (1.25) 3.41
net of tax
Total Comprehensive Income for the 301.29 111.12 409.51
period (Comprising profitand Other
Comprehensive Income for the year)
Earnings per equity share (for continuing
operations)
Basic (₹) 21.89 8.16 29.32
Diluted (₹) 21.82 8.15 29.23

ANALYSIS OF FINANCIAL STATEMENT:

It is a means of converting the mass of data into useful information. Analysis is largely a
study of the relationships among the various financial factors in a business as disclosed by
the financial statement.

RATIO ANALYSIS

Ratio analysis is a powerful & most commonly used tool of analysis and interpretation of
financial statements. It concentrates on the inter-relationship among the Figures appearing
in the financial statements. Ratio analysis helps to analyze the past performance of the
company & to make future projections. It allows various interested parties, like
management, shareholders, potential investors, creditors, government & other analysts to
make an evaluation of the various aspects of company’s performance from their own point
of view and interest.

Ratio analysis is the process of determining and interpreting numerical relationships based
on financial statements. A ratio is a statistical yard stick that provides a measure of the
relationship between variables and Figures.

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5.1 CURRENT RATIO

The Current Ratio measures a company’s ability to pay off its current liabilities (payable
within one year) with its current assets such as cash, accounts receivables, and inventories.
The ratio is an indicator of the firm’s commitment to meet its short-term liabilities.

Current Assets
Current Ratio =
Current Liabilities
Table No.5.3: - Calculation of Current Ratio

Years Current Assets Current Liabilities Ratios

(₹ in Crores) (₹ in Crores) (Percentage)
2019-20 599.10 622.42 0.96
2020-21 722.75 712.38 1.01
2021-22 1554.18 1651.35 0.94

Current Ratio
1.02
1 1.01
0.98
0.96
0.94
0.92 Ratios
0.96
0.94

0.9
2019-20 2020-21 2021-22

Chart no 5.1: - Current Ratio

Interpretation: The ideal norm is 2:1; which means that every one rupee of current
liability is approximately covered by Two rupees of current assets

Analysis: Current Ratio above 2 indicates that the company is not utilizing the assets
properly and less than means they are taking high risk. The company is having current
ratio around 1 for only one year and less in the other two years indicating that the
company is not meeting the ideal norm as required.

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5.2 GROSS PROFIT RATIO (GPR)

Gross Profit Ratio indicates the overall limit within which a business must manage its
operating expenses. It also helps in ascertaining whether the average percentage of make-
up on the goods is maintained. This ratio expresses the relationship between gross profit
and net sales. In simple words, it indicates that the company has efficient management,
low-cost production, and increased sales price.

Gross Profit
Gross Profit Ratio = × 100
Net Sales

Table no 5.4: - Calculation of Gross Profit Ratio

Years Gross Profit Net Sales Ratios

(₹in Crores) (₹ in (Percentage)
Crores)
2019-20 363.19 2,038.08 17.82
2020-21 156.18 1,849.66 8.44
2021-22 542.69 3,614.97 15.01

Gross Profit Ratio

20
17.82
15
15.01
10
8.44 Ratios
5

0
2019-20 2020-21 2021-22

Chart no 5.2: Gross Profit Ratio

Interpretation: This ratio helps measure the company’s efficiency to arrive at a profit
after the production and sales process. The company aims to generate a higher gross profit
margin. A higher ratio indicates that the company is producing more efficiently.

Analysis: In the above Figure it can be seen that the firm has had a downfall in its gross
profit ratio in the 2nd year (F.Y 2020-21) compared to the F.Y 2019-20, which indicates
that the company is not producing efficiently. But in the 3 rd year the ratio has almost
doubled indicating the company’s efficiency to meet required production with low costs.

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5.3 NET PROFIT RATIO (NPR)

Net profit ratio, also known as net profit margin or net profitability ratio, measures a
company’s profitability after taxes. It is a percentage of a company’s profit in a particular
period.

Net Profit
Net Profit Ratio = × 100
Net Sales
Table No 5.5: Calculation of Net Profit Ratio

Years Net Profit Net Sales Ratios

(₹ in Crores) (₹ in Crores) (percentage)
2019-20 302.11 2,038.08 14.82
2020-21 112.37 1,849.66 6.08
2021-22 406.10 3,614.97 11.23

Net Profit Ratio

16
14 14.82
12
10 11.23
8
6 Ratios
4 6.08
2
0

2019-202020-212021-22

Chart no 5.3: Net Profit Ratio

Interpretation: Calculating net profit ratios helps businesses determine if their

ongoing business practices are helping them generate extra revenue against their
investment in production.

Analysis: The firm has faced a decline in its net profit ratio, but it can be seen that it
has gradually increased at a substantial rate. While in the 2nd year the decline of
nearly 60%, but it can be seen that it has been retained by 50% in the post covid
period.

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5.4 FIXED ASSET TURNOVER RATIO

The fixed asset turnover ratio is a financial ratio used to measure a company's efficiency in
using its fixed assets to generate sales. It is calculated by dividing net sales by average
fixed assets and provides insight into the company's asset utilization and efficiency. The
ratio indicates the extent to which the investment in fixed assets has contributed towards
sales

Net sales
Fixed Assets Turnover Ratio =
Net Fixed Assets
Table No 5.6: Calculation of Fixed Assets Turnover Ratio

Years Net Sales Net Fixed Assets Ratios

(₹ in Crores) (₹ in Crores) (percentage)
2019-20 2,038.08 852.01 2.40
2020-21 1,849.66 1,010.31 1.83
2021-22 3,614.97 1,158.72 3.12

Fixed Asset Turnover Ratio

4

3
3.12
2 2.4 Ratios
1.83
1

0
2019-20 2020-21 2021-22

Chart No 5.4: Fixed Asset Turnover Ratio

Interpretation: What constitutes a good fixed asset turnover ratio is difficult to prescribe.
There is no precise percentage or range that can be used to establish if a corporation is
effective at earning revenue from such assets.

Analysis: The company has had a substantial growth in its previous year comparing to the
performance in the other two years a s shown in Figure. It suggests that fixed asset
management is more efficient, resulting in higher returns on asset investments. A high
turnover suggests that assets are being used effectively.

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5.5 OPERATING RATIO

The Operating ratio shows the efficiency of a company’s management by comparing the
total operating expense (OPEX) of a company to net sales. The operating ratio shows how
efficient a company’s management is at keeping costs low while generating revenue or
sales. The smaller the ratio, the more efficient the company is at generating revenue or
sales.

Operating Cost
Operating Ratio = × 100
Net Sales
Table No 5.7: Calculation of Operating ratio

Years Operating Cost Net Sales Ratios

(₹ in Crores) (₹ in Crores) (percentage)
2019-20 222.42 2,038.08 10.91
2020-21 312.38 1,849.66 16.88
2021-22 551.35 3,614.97 15.25

Operating Ratio
20
16.88
15 15.25

10 10.91
Ratios
5

0
2019-20 2020-21 2021-22

Chart No 5.5: Operating Ratio

Interpretation: A higher ratio would indicate that expenses are more than the company’s
ability to generate sufficient revenue and may be considered inefficient. Similarly, a
relatively low ratio would be considered a good sign as the company’s expenses are less
than of its revenue.

Analysis: While the increase in the operating cost and net sales can be seen from 2019 to
2021, the increase in the operating ratio is 60% in 2020 from 2019, but had seen a
downfall of nearly 10% in 2021

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CHAPTER 6

LEARNING EXPERIENCE

EXPERIENCE IN ORGANISATION:

The primary objective of an internship is to gather real life working experience and put
their theoretical knowledge in practice. This was my 1 st real experience to work in a
Kirloskar ferrous industries ltd. I was quite nervous about it. During in 4 weeks of
training I have developed a lot of confidence and courage in this industry.

After going through this internship program lot of exposure to the overall working
environment of the organization and got to know about ‘MANAGEMENT SKILLS’, how
to counter the problem, and how to deal with different cadre of people. Also got a chance
to meet lot of people whose ideas and knowledge motivated to carry on the program.

The experience brought out my strength and also the areas I needed makeup. It added
more confidence to my professional approach built a stronger positive attitude and taught
me how to work in a team as a player.

In fact, the main objective of this training is to help intern (myself) to adapt to different
work conditions, be flexible and creative while working in the organization. I have tried to
fulfill the same in my internship report. I ensure this will help me in becoming better
manager for tomorrow.

Following are the learning experience that I have gained during my project.
The learning experience gained by me during the internship training was very
much practical oriented.
 Mostly all the concepts and theories, which I studied in the class, are
applicable practically.
 The overall study of the organization reveals that the company has
been growing tremendously.
 1 had great time working internship, as it gives insights into the
working environment of an organization.
 The training has exposed me to many factors of an organization and helped
me to gain practical knowledge.

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BIBLIOGRAPHY

PRIMARY DATA SOURCE

 Annual Reports of KFIL

SECONDARY DATA SOURCES

1. BOOKS
 Financial Management, by K Prasanna Chandra, 5th edition.
 Accounting Management for Managers, by John Glynn.

2. WEBLIOGRAPHY
Kirloskar Ferrous Industries.html

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