FINAL Prject

ORGANISATION STUDY KIOCL
EXECUTIVE SUMMARY
India has a long heritage of iron and steel manufacturing. The journey
started in ancient times and through the ages this evolved and matured in to
a vibrant and modern industry at par with the best in the World. At the
present juncture, the industry has successfully made the transition form a
controlled to a market-driven economic environment. The future of this
Industry in its past and its present.
KIOCL was found by late P.Sampath Yeager in 1913, Geologist

of Mysore State. The organization named after Kudremukh, meaning
horse’s face in Kannada, is a prominent 1882 meter high peak in the
Western Ghats. KIOCL, a government of India Enterprise, is the Asia’s
largest Mining (Iron ore concentrate and pulverization) complex and is India’s
largest 100% Export Oriented Unit. KICOL is known for its high quality Iron
ore concentrate and Iron Oxide Pellets.
The country’s prestigious 100% export unit oriented unit (EOU) and
Mini Ruthann Company, Kudremukh Iron Company Limited was incorporated
on 2nd April 1976. KIOCL has its engaged in the business of manufacturing
and exporting high quality Iron oxide pellets and supply of pig iron for
domestic market. KIOCL Limited is a public sector company where 99%of the
company’s shares are owned by the central government of India.
An organization study was conducted to know the structure and

various key functional areas that are in operational position of KIOCL
Limited using the study was conducted based on the information
available from both primary and secondary data. Findings, suggestions and
conclusion drawn bases on the analysis of the various departments of KIOCL
Limited.
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1. INTRODUCTION
1.1Indian steel industry
India has a long heritage of Iron and steel making. The journey started in ancient times
and through the ages this evolved and matured into a vibrant and modern industry at par
with the best in the world. The Iron and steel company (TISCO), started under the aegis
of nationalistic pride during the colonial period.
The steel sector was one of the primary vehicles of economic development in
independent India. India is endowed with essential raw materials such as Iron ore and
coal. The industry has widespread forward and backward linkages with the rest of the
economy. The founding factors of India’s Five Year Plants treated this as apriority sector
and the industry rose to commanding heights of the economy through large-scale
capacity creation in the public sector. Since then it has passed through various phases of
changing domestic and external of the changing. It has survived well its impressive array
of achievements.
In the initial of economic planning the state stepped in as a regular and a guide to
reconcile the interests of the producers and consumers of this vital economic input. It
also protected the industry from the vagaries of the international market. The change
came in the last decade of the 20th century with the liberalization of the Indian iron and
steel industry. The environment of globalization and competitive market orientation
combined well with the formidable legacy of a rich experience in the art cod craft of
steel making acquired over four decades of controlled growth. The industry responded
magnificently to the opportunities provided by the new policy regime the private sector
led the resurgence from the front.
The decade following the deregulation of the Indian steel sector saw the largest additions
to capacity. The new entrepreneurs also showed extreme pragmatism and foresight in the
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Selection of technology. As a result, the Indian steel industry today can boast of some of
than largest in the state of-the art technologies in use globally. The post-deregulation
India iron and steel industry adopted mordent technologies and varied product
categories. In these years the both in the public and the private sectors saw impressive
gains market. The quantum jump in export from India bears industry with to that.
Globalization has led to manifold expansion in the marketing opportunities for the Indian
production and India has emerged as an exporter of steel. Production for export has
become an integral part of the profit-maximizing and loss-minimizing business
calculation of the Indian corporate. The production can now source their inputs, both
physical and financial, from the least cost source beyond the boundaries of the national
economy.
The performance of the Indian steel industry during the last decade, though spectacular,
has not been altogether smooth. The euphoric developments in the first few deregulation
years were cut short when deceleration set in from the autumn of 1997. The external
global environment worsened progressively under pressure from a series of financial
meltdowns in various parts of the world while our domestic economy also stagnated.
Prices started falling continuously even as the world steel industry strained under
conditions of extreme oversupply and cut thought competations.The domestic market
also dwindled on the back of slow growth in construction and other firms of capital
formation/investment. Most warring threat posed by notional national interest which
misses used WTO .Non tariff barriers imposed on the Indian exporter of steel bear a
maple witness to this predication. There has been some respite in the last few months
with some firming up of domestic and international prices. Prices have risen as a result
of improved demand conditions at home and abroad and also because of some realization
of capacities across the globe, though on a limited scale.
The industry now looks ahead with a resolve and determination. Deregulation endows
the producers with the freedom to take their own business decisions, but at the same
time, it devolves a great deal of responsibilities. These include the responsibility to
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Maintain quality standards to remain cost and pries efficient and, above all, to meet the
consumers demand as best as possible. Globalization has its opportunities and danger.
Reaping the benefits of a globalize market calls for at most vigilance from the entire
stake-holders- the producers, the consumers and the state. The industry must be able to
capitalize on the opportunities and mitigate the dangerous of synchronized global down
turns. This must be done in association with the consumers and the state machinery.
At the present juncture, one can say that the industry has successfully made the
transaction from a controlled to a market-driven economic environment. The future of
this industry is grounded in its past and its present. Now, there are signs of revival both
in the domestic and international steel market. Steel prices and demand have gone up as
a result of increased spending on construction and consumer durable both at home and in
south East Asia, Japan, the USA and some parts of Euro zones. There has been some cut
on back capacity word-wide and this has helped in restoring the supply-demand balance
to some extent.
The Indian producers have been alert enough detect cases of violation of their trading
rights within and outside their national boundaries. The industry helped by the official
machinery has moved the available international bodies to see the redresses. It is also
constantly striving to better its performance in every sector. As a result, the Indian steel
industry has grown not only in competence but also in confidence. It looks ahead with a
resolve to carry the journey which started 100 years ago towards a pinnacle of greater
glory success.
An effort has been made to analyze various departments of KIOCL Limited, theoretical
perspective, industrial analysis, company profile made us to understand in-depth about
the organization, based up on the above factors SWOT analysis and findings and
suggestion are drawn.
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An overview of KIOCL Limited
The Country’s prestigious 100% export oriented unit and Mini RathnaCompany, KIOCL
Ltd was incorporated on 2nd April 1976. Has its Polarization Complex and Pig Iron
Complex at Mangalore, coastal city of Karnataka, is engaged in the business of
manufacturing and exporting high quality Iron Oxide Pellets and supply of pig iron for
domestic market. An ISO-9001: 2000, ISO-14001: 1996 certified Company also
compliant with OHSAS: 18001:1999 certification for Occupational Hazards and Safety
Management System, headquartered at Bangalore.
KIOCL Limited’s Iron Oxide pellets conform to international standards which makes
them ideal for hi-tech steel plants anywhere in the world. KIOCL Limited’s products are
now exported to china, Japan, Iran and Taiwan in the international market besides
catering to a number of consumers in the domestic market such as ISPAT Industries,
Vikram ISPAT and jindal vijayanagar Steel Limited.
The company is a government of India undertaking-around 99%of production of the

company are held by the government of India and balance 1%is held by the financial
institutions, mutual funds, insurance companies, employees and the general public. There
are 10 directors comprising CMD, 3 whole time Directors, 2 Government nominees and
4 part time non-official Directors. All the Directors, of the company are appointed by the
Government of India. The company has about seven department which includes
production and projects, commercial, Finance and Accounts, vigilance, Personnel and
Administration, Technical Services and HRD. The entire department has a small wing
functioning at Bangalore Head office.
1.2OBJECTIVES OF THE STUDY
1. To get corporate world exposure.
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2. In-depth analysis of various key functional areas of the KIOCL
3. To understand the difference between the theoretical perspective and practical

functioning organization.
4. To know the financial position of the KIOCL.
5. To understand the organization structure and co-ordination, co-operation among

the various department.
6. To assess the organizational strength, weakness, opportunity and threats(SWOT)

of the KIOCL
1.3 SCOPE OF THE STUDY
The study is conducted to evaluate the performance and market positioning of KIOCL
Limited (Kudremukh Iron Ore Company Limited) in order to better scope to the
investors, shareholders and the management about the rating of KIOCL Limited and its
performance in the current market situation. Hence “Organizational study was conducted
to analyze through the entire organization, its departments, their responsibilities,
financial factors of KIOCL Limited and to indirectly help the investors, Government,
employees, creditors and other stakeholders in financial forecasting and Planning also in
decision making.
1.4METHODOLOGY OF THE STUDY
Methodology deals with the how the researcher has collected the various information for
preparing this report, this report consist of much of secondary data and some part of
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information has been brought through primary data. The primary data comprises of
interaction with the departmental heads, senior officers and employees of KIOCL.
Secondary data were collected namely company manual, broacher, internet, company
web-site, magazine and financial report collected through 34th Annual report of the
KIOCL Limited.
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1.5 LIMITATION OF THE RESEARCH
1. The study was confined to KIOCL only.
2. Time was restricted to four weeks, therefore extensive information were not
collected.
3. The cost incurred to prepare this report was very limited.
4. Some the information were not revealed, they kept confident this was another
limitation for this report.
5. The focus was not confine to a particular problem of the organization, covering
various key functional areas was very difficult.
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2. PROFILE’S
2.1 Industrial profile
INDUSTRY STRUCTURE
The industry classification based on product on product categories (and the major
producers) can be divided into the following:
Iron ore-National Mineral Development Corporation (NMDC), Kudremukh Iron
ore. SAIL and Tata Steel have their captive iron ore mines.
Pig Iron- KIOCL, Seas goa and Usha ISpat. Apart from them there are many
mini blast furnace (MBF) pig iron producers and even integrated steel plants like SAIL
and RINL produce a significant amount of pig iron.
Sponge Iron-Essay steel, spat Industries, vicar is pat (a division of Grasim) are
the major production of gas based sponge iron.
Flat steel products – steel, Essay steel, Spat Industries and Tindal Vijaynagar
(JVSL) are the producers of hot rolled coil (HRC), Spat Industries, Tindal group of
companies, Utter Steel and Bhutan Steel are the big production of cold rolled coils/sheets
(CRC)and galvanized sheets(GP/GC).
Alloy Steel products –Mukund, Mahindra,Ugine(musk) and Kalians Carpenter

are some of the largest producers of alloy steel in the country which is primarily used in
automotive and engineering applications.
Based on the roots of production, the industry (and major products) can be
classified into the following categories.
Integrated Producers – SAIL, RINL, Tata steel and JVSL are the largest
primary steel producers.
Secondary Products – Essay Steel, Spat industries and Lloyds are the largest
producers of steel through the secondary routine.
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DURING ANCIENT PERIOD
The history of iron and steel making in India goes back by several centuries. It dates to
480 BC when archers in India used arrows tipped with steel. The iron pillar of Dear near
Indore in Madhya Pradesh dates back to about 321 AD, the iron pillar of Kebab Miner
near Delhi dates back to about 400 AD and the iron beams of Sun temple of Knar in
Orissa dates back to 13th century. These pillars are a testimony to ancient India's
expertise in the making of steel.
MILESTONES
The Indian steel industry has come a long way since its humble beginnings. The takeover
of the British steel giant Corus steel by KIOCL Steel and the acquisition of Arcelor by
Mattel Steel herald a new beginning for the Indian steel industry.
These events signify the fact that the Indian steel industry has acquired a global identity
and are today extremely competitive globally. Some of the prominent steel producers
today are Pasco, Tata Steel, Essay, Ispat, Sail and Rink.
Future trends
1. It has to be said that the global recession has affected the Indian steel
2. Industry especially stainless steel, but the steel industry is trying to offset the
3. Negative effect of the recession by focusing on transportation and
4. Construction projects which are usually funded by the government.
5. India is the only country globally to record a positive overall growth in crude
6. Steel production at 1.01 per cent for the period January -March 2009.
7. It is estimated that India's steel consumption will grow at nearly 16%
8. Annually till 2012.
9. The National Steel Policy has forecasted the demand for steel would reach
10. 110 million tons by 2019-2020.
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KEY FACTS ABOUT INDIA'S STEEL INDUSTRY
Steel demand in India rose more than 8% in 2009, buoyed by the government's focus on
infrastructure and revival in the automobile and consumer goods sectors of Asia's third-
largest economy. With strong growth predicted for the auto and housing sectors in 2010,
steel demand is set to grow in double digits.
Global steel production, however, fell 8% last year as demand from key industries shrank
amid the economic downturn. Following are some key facts about India's steel industry,
which is witnessing growth rates second only to China.
India's iron and steel industry contributes about 2% of gross domestic product, or about
USD 20 billion to the country's USD 1 trillion economy.
India is now the fifth-largest producer of steel in the world, behind China, Japan, Russia
and the United States. It produced 55.1 million tones of the alloy in 2009, but is still only
a tenth the size of China, the No.1 steel producing country.
State-run Steel Authority of India is the largest producer, with capacity of 13.8 million
tones. Tata Steel, the world's No. 8 steelmaker, has capacity in India of 7 million tones,
while JSW Steel is third with annual capacity of about 6.9 million tonnes.About half of
India's steel industry comprises a large number of makers of higher-end re-rolled steel
with less than one million tones of capacity each.
India's steel producing capacity is likely to touch 120.62 million tones by 2011/12,
according to the federal steel ministry. Based on planned projects, capacity could go up
to 293 million tones by 2020.Regional governments have signed 222 memorandums of
understanding for planned capacity of 276 million tones.
India has immense scope for increasing consumption of steel. Current per capita
consumption is around 40 kg, compared with 100 kg in Brazil, 250 kg in China and a
global average of 198 kg. Steel demand is expected to raise 5-6 percent annually until
2019-20.
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India's growing status as a global small-car hub is drawing global steel makers,
especially Japanese firms, to the country. World No. 2 steelmaker Nippon Steel is in
talks with Tata Steel for an automotive steel joint venture, JFE Steel has tied-up with
India's JSW Steel, while Sumitomo Metal Industries Ltd is considering a JV with Bhutan
Steel.
Indian steel companies have been among the best performing stocks in 2009, widely
outperforming the benchmark stock index. Shares of Tata Steel, SAIL and JSW Steel
rose between 2-4 times during the year, compared with the 81 percent rise in the main
BSE index
Sector structure / Market size
The steel industry in India has been moving from strength to strength and according to
the Annual Report 2009-10 by the Ministry of Steel, India has emerged as the fifth
largest producer of steel in the world and is likely to become the second largest producer
of crude steel by 2015-16.Recently, Steel Minister, Mr. Virbhadra Singh said that India
will become the world's second-largest steel producer by 2012, more than doubling its
capacity to 124 million tones (MT) as part of the push being given to assist overall
infrastructure development.
Production
Steel production rose 4.2 per cent to reach 60 MT in 2009-2010, according to the
Ministry of Steel. The National Steel Policy 2005 had projected an annual steel
consumption growth of 7 per cent based on GDP growth rate of 7-7.5 per cent and
production of 110 MT of crude steel by 2019-2020. Nonetheless, with the current rate of
Ongoing Greenfield and Brownfield projects, the Ministry of Steel has projected that
these growth trends are likely to be exceeded and it is envisaged that in the next five
years demand will grow at higher annual average growth rate of over 10 per cent as
compared to around 7 per cent growth achieved between 1991-92 and 2005-06.
Moreover, according to the ministry, the crude steel production capacity in the
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Country by 2011-12 will be nearly 124 MT. According to the Ministry of Steel, 222
memorandum of understanding (Mouse) have been signed with various states for
planned capacity of around 276 MT. Major investment plans are in Orissa, Jharkhand,
Chhattisgarh, West Bengal, Karnataka, Gujarat and Maharashtra. According to the
Annual Report 2009-10 by the Ministry of Steel, domestic crude steel production grew at
a compounded annual growth rate of 8.6 per cent during 2004-05 and 2008-09.
Consumption
India's steel consumption rose 8 per cent in the year ended March 2010, over the same
period a year ago on account of improved demand from sectors like automobile,
infrastructure and housing. The country’s steel consumption increased to 56.3 MT in the
12 months to March 2010 from 52.3 MT in the previous year, as per the Ministry of
Steel.
Investments
A host of steel companies have lined up major investment proposals. Furthermore, with
an expanding consumer market, the Indian steel industry is likely to receive huge
domestic and foreign investments. The domestic steel sector has attracted a staggering
investment of about US$ 238 billion, according to the Minister of State for Steel; Mr. A.
Said Prathap.This consists of nearly 222 Mouse signed between the investors and various
state governments mostly in the states of Orissa, Jharkhand, Chhattisgarh and West
Bengal.
 SAIL is planning to set up a 12-million tone plant in Jharkhand. In December,

India’s largest engineering conglomerate Larsen & Toubro
 (L&T) and state-owned Nuclear Power Corporation of India Limited
 (NPCIL) formed a US$ 373.2 million joint venture for specialized steel and
 Forging products.
 Stainless eel manufacturer and exporter, Vern Industries, is setting up a US$
171.8 million stainless steel-cum-alloy steel plant at Reheat, Jodhpur.
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 Tata Steel has entered into a joint venture with Japan’s Nippon Steel for
• Production and sales of automotive cold-rolled flat products at
Jamshedpur.
• The JV is expected to invest US$ 400 million to set up an automobile
• Venture in India.
 Steel major, JSW Steel has earmarked a cape of US$ 1.6 billion for
2010-11 and plans to increase capacity of its Bellary plant in Karnataka from 7
MT to 10 MT by end of 2010-11.
Government Initiative
As per the Press Information Bureau, during 2009, the government took a number of
fiscal and administrative steps to contain steel prices. Central value added tax
(CENVAT) on steel items was reduced from 14 per cent to 10 per cent with effect from
February 2009.Moreover, in the Union Budget 2010-11, the government has allocated
US$ 37.4 billion to the infrastructure sector and has increased the allocation for road
transport by 13 per cent to US$ 4.3 billion which will further promote the steel industry
EXCELLENT TRACK RECORD OF PERFORMANCE
KIOCL’s performance record has been consistently good year after year and counted
among the top ten Plus, conferred with MOU AWARD for the year 1999-2000 and
2000-01 for achieving “Excellent” rating in achieving MOU targets for these years.
The Company has been conferred with Awards for achievements in different fields like
environmental conservation and rational utilization of natural resources, Export, best
performance, excellent organization, Energy conservation, pollution control, etc.
a. The KIOCL bagged the prestigious CAPEXIL Special Export Award

instituted by CAPEXIL, in recognition of outstanding export performance of Iron
Ore Concentrate & Iron Oxide Pellets for the year 2005-06.
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b. Export Excellence Award 2005-06 in Mineral and Mineral based Products

sector, instituted by Federation of Karnataka Chambers of Commerce & Industry
for the year 2005-06.
c. FIMI Environment Award for outstanding achievement in Environment
Management System for the year 2004-05.
d. Ispat Rajasthan Shield Sampan in recognition of remarkable progress in
the field of Progressive use of Official language Hindi and its implementations.
Corporate Social Responsibility
KIOCL has supported efforts to save critically endangered plant species in the
Kudremukh National Park and the Western Ghats, which would otherwise, be threatened
with extinction. These steps outline our strong commitment to preserving the ecology
and environment of the area of our operations. Several studies are conducted on impact
of mining on Ecology and Environment by reputed organizations in this field.
KIOCL sincerely believe that every socially responsible corporate has to give back to
society what it takes from it. With this as guiding principle, the Company tried, in its
own way to see that the surrounding areas also benefit with the Company’s growth. Over
the last several years, the company has taken up a number of Community Development
Projects, in close association with the intended beneficiary groups, aimed at creating for
the community, socially useful assets as part of social obligations, all aimed at
improvement of the living conditions of the populace in nearby areas. The Company
is also conducting free medical checkup camps regularly around the project area in
association with the like-minded organizations. KIOCL is also associated with Akshya
Patra Foundation in their mid day Meal Scheme for distribution of hot and nutritious
Meal cooked in hygienic condition to the students studying in various schools in
Karnataka.
Future Initiatives
Against the backdrop of solid performance record and financial strength, Company has
embarked on a plan for diversifying its operations: in the long term, considering
possibilities to venture beyond the State of Karnataka, in search of Iron Ore Deposits,
EWCM/SGB/VTP 15
which can be gainfully exploited by leveraging on the expertise available with the
Company.
A joint venture with M/s.Steel Authority of India Ltd to exploit the Iron Ore Deposits at
Basra, Alta and Tallish in Orissa is in progress. Alongside, efforts are on to tie up
alternate sources of iron ore to sustain Pellet Plant operations in future and efforts are on
to get a mining lease in Karnataka.
The Company has completed all preliminary works to set up Ductile Iron Spun Pipe
Plant at Mangalore. And it will become a reality in another couple of years. In short,
KIOCL goal is to be a responsible and responsive Public Sector Undertaking and strive
for excellence, both in economic as also in the social indices of performance.
2.2 Company profile
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ORIGIN OF KIOCL
India abounds in Iron of hematite and magnetite deposits. The know and proven reserves
are so enormous and of such good quality, that they meet the entire requirement of
Indian Steel Industry and also offers vast scope for export.
The bed rock of rich iron deposits in the Aioli Gaugamela range of Western Ghats
principally magnetite was found by late P.Sampath Iyenger in 1913, Geologist of the
then Mysore State, is a prominent 1882 meter high peak in the Western Ghats.
At the Aioli Gaugamela range of Western Ghats extensive and detailed exploration had
been carried out by National Mineral Development Corporation in the year 1965, and it
was found to be one of the largest deposits of iron in the world.
No importance was attached to Kudremukh Ore deposits low grade iron content of 33%
and below as against Hematite ore. Consequent to the development in techniques for
beneficiation of solids in slurry from, through pellets and a virtual revolution in the
transport system of solids in slurry from, pipeline with safety and environment
Kudremukh Iron Ore gained importance, the project revived following negotiations with
the Indo Iranian Joint commission in January, 1974 and in 1976 KIOCL, was
incorporated with the assistance of Government of Iron.
The agreement signed with The National Iranian Steel Industries Company for sale and
purchase of 150 concentrate from Kudremukh over a period of 20 years commencing
from 1980 at the rate of 7.5 million tones per annum. But Iron failed of India came to its
rescue and the company completed the project in time without cost and time overrun,
there by KIOCL became a public sector Mining Organization.
The mine and plant facilities was commissioned in 1980 and the 1st shipment of
concentrate was dispatched in 1981.Aspartof diversification, a pulverization plant with a
capacity of 3 million tones per year was commissioned in 1987 for production of high
grade pellets for export.
The present scope of mining includes only the weathered ore, raw material has an iron
content of 38% which is beneficiated to produce concentrate of 67%of iron.
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Government of Karnataka has granted KIOCL 4605 hectors of land in 1976 as Mining
Lease out, of which 900 hectors are used as mining area.
KIOCL OVER THE YEARS
KIOCL, a government of India Enterprise, is the Asia’s largest Mining (Iron ore
concentrate and Pulverization) complex and is India’s largest 100% Export Oriented
Unit.
KIOCL is known for its high quality Iron ore concentrate and Iron Oxide pellets.
It carries out its mining related activities in Kudremukh, pulverization process in

Mangalore, C&F imports in Chennai, has an office for purpose of liaison with the
governmental agencies and is corporate is located in Bangalore.
The mining methods proposed for Kudremukh are similar to big open cast mines
elsewhere in the world, the mine equipment proposed for Kudremukh are the largest and
most sophisticated ones. It is considered to be the safest mines in the country.
The company’s annual production is in the order of 5-6 million tones and turnover is in
the range of Rs.700 corers.
The company signs a MOU with the Ministry of Steel, Government of India every year
and its performance is therefore related to the MOU targets and in this regard KIOCL
has been able to achieve an excellent grade successively.
Based on the overall performance, the company has been conferred the status of STAR
TRADING HOUS and a MINI RATHNA COMPANY.
Today KIOCL, with 28 years of pragmatic growth and trust is capitalizing on its
expertise and experience.
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KIOCL STATISTICS
Kudremukh height 800 meters
Kudremukh lease area 4605 hectors
Project cost (estimated ) 546.80 cores
Project cost (actual ) 490 .57 cores
Authorized capital 675.00 cores
Length of Slurry pipeline 87 Km
Length of pipeline tunnel 1.6 Km
KIOCL at a glance
Kudremukh Deposit investigated by late. Sam path Integer in 1913
Ore investigation by NMDC 1963-65
Govt. of India and Iraq signed the sale contract 4.11.75
KIOCL established 2.4.76
Concentrator established 22.8.80
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First Slurry dispatched 23.8.80
First shipment of concentrate 2288 tones to Mondovi pellets Goa Feb 81
First export of concentrate to Rumania(Trail) June 81
First shipment of concentrate to Rumania Oct 81
First commercial export of concentrate to Rumania 5.11.81
Pellet Plant commissioned April 87
First shipment of pellet to Hungary (Trail) 2.9.86
First pellet shipment (sale) to Hungary and china Sep 87
Table showing investment surplus of KIOCL:
(Rs in ‘000)
Year Net profit Sales Ratio
2006-07 1000794 18724832 -
2007-08 2534491 20040293 0.12
2008-09 2407030 20942536 0.11
2009-10 2232345 24382182 0.09
Graph showing investment surplus of KIOCL:
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Netprofit
2006-07
2009-10 12%
27%
2007-08
31%
2008-09
30%
Table Showing fixed assets of KIOCL:
(Rs in ‘000)
Year Net profit Equity Ratio
capital
2006-07 1000794 6629815 0
2007-08 2534491 6629815 0.38
2008-09 2407030 6629815 0.36
2009-10 2232345 6629815 0.34
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Graph Showing fixed assets of KPCL:
0.4
0.35
Values 0.3
0.25
0.2
0.15
0.1
0.05
0
2006-07 2007-08 2008-09 2009-10
Years
Ratio
Table No.01 showing Reserves and Surplus of KIOCL:

(In ‘000)
Year 2006-07 2007-08 2008-09 2009-10
Reserves & 8492886 10894781 13152225 13754757
surplus
Trend 100 128.28 154.86 161.95
Growth rate 0 28.28 +20.72 +4.58
(%)
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180
160
140
120
Percentage
100
80
60
40
20
0
-20
years
Trend
Growth rate(%)
VISSION AND MISSION
KIOCL’s mission is to emerge as a world class mining company, which the highest
international standards of quality, productivity, and technological excellence. Ensuring
the best development of human resource and optimum satisfaction of stakeholders.
OBJECTIVES OF KIOCL
*To maximize profits and to generate an optimum return on investment to the

stakeholders.
*To improve productivity and economize costs ensuring internal resources to finance
capital expenditure.
*To optimize utilization of the mine reserves through appropriate internal resources to
finance capital expenditure.
*To implement projects on schedule without cost or time overruns.

EWCM/SGB/VTP 23
*To enhance stake holders satisfaction as a tool for improving export performance and to
diversify into other markets for the company’s products.
*To provide higher standards of mine safety in conformity with OHAS 18001:1999
standard, to accord high priority for environmental protection and to take requisite
measure for pollution control.
*To strive for constant improvement in product quality through R&D maintain QMS and
EMS as per ISO 9001:2000and ISO 14000
*To attempt the usage of iron ore fines from outside sources in pellet making with
necessary modifications and make it economically viable depending upon the need.
*To explore the possibility of obtaining alternate mine sites in the state of Karnataka and
other places.
*Its endeavor is to achieve excellence rating (in terms of performance) for the year
2003-04.
QUALITY POLICY OF KIOCL
KIOCL, a 100% Export Oriented Unit produces Quality Iron Ore Concentrate and
pellets. Introduce and maintain an effective quality assurance system aimed at total
quality management.
Our commitment to accord high priority to Human Resource Development to enhance

the employee’s investment in quality management system.
Company’s policy as a global supplier is to ensure, that supplies adhere to contractual

specification and satisfy the customers.
EWCM/SGB/VTP 24
Long term plans to strive for high standard of safety, ecology, environmental protection
and to fulfill its obligation to the society.
The Quality objectives of the company:
*Maximum production with minimum deviation from specification and delivery in time.
*Better feedback from customers and reduction in customer complaint.
*To be competitive with other suppliers.
*Provide safe working environment to people and protection to property.
*To develop employees to realize their full potential through team work.
*Material inputs to be as per standards applicable.
*control of pollution and improvement in Ecology and Environment.
*Quality Management System to conform to ISO 9002 standard.
*Emergence of continuous improvement in all spheres of leading to total Quality

Management.
AWARDS AND ACCOLADES
The company is recipient of the following awards
*KIOCL was one among the public Sector Companies, which was conferred with an
MOU award by the department of public Enterprise, Government of India for excellence
in the achievement of MOU target.
EWCM/SGB/VTP 25
*For Financial and Operational strength of KIOCL, it was conferred a Certificate of

Merit for “Enterprise Excellence” in Mining Industry Group.
*Karnataka Chamber and Industry, Mangalore conferred “Export Award” in recognition

for securing the 1st place for iron export performance.
*Indo German “Green teach Environment excellence Award” by Green teach

Foundation, New Delhi in recognition of company’s achievements in the field of
Environment Management and Pollution control.
*CAPEXIL Special Export Award” in recognition of outstanding export achievement.
*India Gandhi Memorial Award to company and Mr. LB Leaguer for excellent
performance.
2.3PRODUCT PROFILE
Kudremukh produces high grade iron ore concentrate which is ideal for use as sinter
feed and for pelletisation. The concentrate is being used in the steel plants in China and
Japan for sintering and in Iran and China as a blend in pellet feed. The outstanding
feature of Kudremukh ore is that it is very low in alumina, sculpture, phosphorous,
vanadium and other deleterious elements.
Magnetite content of the ore has an added advantage in that it requires relatively less
energy for sintering and pelletisation when compared with other types of iron ore.
Pellets Similarly, Kudremukh pellets have excellent chemical, physical and reduction
properties and are ideal feed for blast furnaces and direct reduction plants.
Kudremukh blast furnace grade pellets have been used in blast furnaces of steel mills in
Australia, China, Japan, Taiwan, Turkey and a host of other countries. Our pellets have
also been used in steel plants of Hungary, Yugoslavia, USA, West Germany, Poland,
zechoslovakia, and Indonesia and in some of the direct reduction plants in India. In all an
excellent material for steel production in blast furnaces and direct reduction plants.
EWCM/SGB/VTP 26
PRODUCT SPECIFICATION
Chemical Concentrate Pellets Pig Iron

Properties
BF DRI
Fe 67% 65.50% 66.50% -

Foe 13% 0.5 0.50% -
Silica 4.50% 4.50% 2.75% 1.75%-2.25%
Alumina 0.50% 0.60% 0.50% -
Sulphur 0.05% 0.03% 0.02% 0.02%-0.04%
Phosphorous 0.03% 0.03% 0.03% 0.04%-0.10%
Tio2 0.15% 0.15% 0.15% -
Other metals 0.20% 0.20% 0.20% -
Combined 1.5% - - -
EWCM/SGB/VTP 27
Water
Moisture 9% 4% (Oct to May) -

6% (June to Sept)
Basicity - 0.4% 0.4% -
Manganese - - - 0.30%-0.80%
PRODUCT OF KIOCL
KIOCL is engaged in the production of iron ore concentrate (IOC) and iron oxide
pellets (IOP) and is ascertained as the premier of
IOC and IOP.
KIOCL’s concentrate is highly regarded for their low alumina, sculpture and
exottherties and pelletization.
Pellets produced at the Mangalore plant have excellent chemical, physical, and reduction
properties and are ideal feed Blast Furnace and Direct Regulation plant.
KIOCL’s IOC and IOP confirm the International standards making them ideal for hitch
steel plants anywhere in the world.
KIOCL’s products are the choice of the quality conscious in the countries like Australia,
Japan, China, Turkey, Taiwan, Iron, Yugoslavia, and Romania. The pellets are also used
in Iraq, Malaysia, France, and Indonesia Qatar for direct reduction and earned a proud
reputation of being a reliable supplier of quality iron ore to customers’ world wide.
KIOCL operates in the International Iron Ore market which is highly competitive and
volatile.
EWCM/SGB/VTP 28
The demand for iron ore is derived demand, linked to the fortunes of steel industry,
which in turn depends on the steel consumption pattern as steel plants and iron ore
factories across the world use IOC and IOP as key materials for the processing.
OBJECTIVES
1. To enhance stakeholders satisfaction as a tool for improving performance and

to diversify into other markets for the company's products.
2. To accord high priority for environmental protection and to take requisite
measures for pollution control.
3. To achieve high international standards of quality and productivity by
adopting latest technological measures, to strive for constant improvement in
product quality through R&D, to maintain quality management systems and
Environmental standards as per ISO 9001:2002 and ISO 14000.
4. To accord priority it Human Resource developments through an integrated
HRD plan including necessary training/re-training and skill up gradation for
deployment of surplus manpower. Alternatively, to make efforts for
downsizing the surplus manpower at Kudremukh Site.
5. To obtain alternate mine sites in state of Karnataka/other places in India.
6. To Venture into new business avenues.
7. To tie up for the requirement of Iron Ore with other parties also apart from
NMDC.
Short Term Plans
EWCM/SGB/VTP 29
1. Development of infrastructure at Mangalore facilities for receipt, unloading,

handling, blending, storage and grinding of Hematite Ore sourced from different
agencies.
2. Modification of the existing flow sheet for usage of different types of Ore.
3. Up gradation of filtration system.
4. Mechanization of un-loading system at Mangalore port for receipt and handling
of raw materials received through ships.
5. Pulverized coal dust injection system in Blast Furnace unit.
Long Term Plans
1. 3 Lake tone capacity Coke Oven Plant at Mangalore

2. Permanent Railway siding at Mangalore for handling raw materials received
through Railways.
3. Up gradation of Pellet Plant capacity from 3.5 to 4.3 Million Tones
4. Ductile Iron and spun Pipe Project
5. ECO-tourism
Expansion and Diversification Measures
1. Development of Basra Iron Ore Deposits in Orissa

2. Mining operations at Chiria/Jharkhand/Taldi areas
3. Taking over of Kalinga Iron Works, Orissa
EWCM/SGB/VTP 30
ORGANISTIONAL CHART
EWCM/SGB/VTP 31
EWCM/SGB/VTP 32
3 THEORITICAL BACK GROUND
Finance is the science of funds management. The general areas of finance are business
finance, personal finance, and public finance. Finance includes saving money and
often includes lending money. The field of finance deals with the concepts of time,
money, and risk and how they are interrelated. It also deals with how money is spent and
budgeted.
The main techniques of the financial management
Finance is used by individuals (personal finance), by governments (public finance), by

businesses (corporate finance) and by a wide variety of other organizations,
including schools and non-profit organizations. In general, the goals of each of the
above activities are achieved through the use of appropriate financial instruments
and methodologies, with consideration to their institutional setting.
Finance is one of the most important aspects of business management. Without proper
financial planning a new enterprise is unlikely to be successful. Managing money (a
liquid asset) is essential to ensure a secure future, both for an individual and for an
organization.
In corporate finance, a company's capital structure is the mix of financing methods it

uses to raise funds. One method is debt financing, which includes bank loans and bond
sales.
Human resource management
EWCM/SGB/VTP 33
Human resource management (HRM) is the strategic and coherent approach to the
management of an organization's most valued assets - the people working there who
individually and collectively contribute to the achievement of the objectives of the
business.[1] The terms "human resource management" and "human resources" (HR) have
largely replaced the term "personnel management" as a description of the processes
involved in managing people in organizations. In simple words, HRM means employing
people, developing their capacities, utilizing, maintaining and compensating their
services in tune with the job and organizational requirement.
Features
Its features include:
• Organizational management
• Personnel administration
• Manpower management
• Industrial management
But these traditional expressions are becoming less common for the theoretical
discipline. Sometimes even employee and industrial relations are confusingly listed as
Synonyms, although these normally refer to the relationship between management and
workers and the behavior of workers in companies.
The theoretical discipline is based primarily on the assumption that employees are
individuals with varying goals and needs, and as such should not be thought of as basic
business resources, such as trucks and filing cabinets.
Production management
EWCM/SGB/VTP 34
Production management is an organizational lifecycle function within a company dealing

with the planning or forecasting or marketing of a product or products at all stages of the
product lifecycle.
Production management (inbound focused) and product marketing (outbound focused)

are different yet complementary efforts with the objective of maximizing sales revenues,
market share, and profit margins. The role of product management spans many activities
from strategic to tactical and varies based on the organizational structure of the company.
Product management can be a function separate on its own and a member of marketing
or engineering.
Purchase management
EWCM/SGB/VTP 35
Is the management of purchasing process, and related aspects in an organization?

Because of production companies purchase nowadays about 70% of their turnover, and
[1]
service companies purchase approximately 40% of their turnover , purchasing
management is one of the most critical areas in the entire organization and needs
intensive management.
Commercial management
Commercial management within an organization is applied at both policy and

transactional levels. Commercial policies relate to the rules or practices that define how
EWCM/SGB/VTP 36
business will be conducted and the standard terms under which external relationships
will be conducted. Many of these policies are reflected in the terms of any contract in
which the organization engages. At a transactional level, commercial management is
applied through the oversight of trading relationships to ensure their compliance with
business goals or policies and to understand or manage the financial and risk
implications of any variations.
4 KEY FUNCATINAL AREAS
Departmentation
EWCM/SGB/VTP 37
Departmentation refers to the process of grouping the activities of the organization. It

refers to the establishment of a distant unit or sub-unit of an organization over which a
manager has authority for performance of specialization of work and large scale business
expansion.
IMPORTANCE OF DEPARTMENTATION:
*it helps in easy fixation of responsibility.
*it facilitates communication, coordination and control, which contribute to the

organizational success.
BASIS OF DEPARTMENTATION:
FUNCTION-WISE DEPARTMENTATION: it is a method of grouping the activities

of the organization on the basis of similarity of functions. It involves grouping of
activities of an enterprise into major functional departments like production, purchase,
commercial etc.
Product-wise Departmetation: under this method, a separate department is created for

each major product.
TERRITORY-wise Departmetation: In this method, activities are grouped area-wise.
Process-wise Departmentation: it is a method of grouping the organization on the basis

of different processes in loved in the production of the final product.
Customer –wise Deparmentation: Hear the enterprise is divided into departmental on

the basis of customer it serves.
DEPARTMENTATION IN KIOCL:
Departmentation in KIOCL:
EWCM/SGB/VTP 38
In KIOCL, departmental are grouped functionally, the various departments in

kudremukh are:
4.1 Purchase department
4.2 Inspection & progress department
4.3 Commercial department
4.4 finance Department
4.5 Personnel department
4.6 HRD department
4.7administration department
4.8Law & vigilance department
4.9 Technical Services department
4.10 Rajbhasha department
4.1PURCHASE DEPARTMENT
There are 37 employees in the purchase department.
EWCM/SGB/VTP 39
The objective of purchase department is to procure materials allied services of

Indigenous and offshore origin, ensuring the following essentials
*Right quality i.e. as specified by the indenter
*Right quantity i.e. as per the requirement confirmed by the indenter
*Right price and right time i.e. within the delivery requirement of the indenter
*Right source i.e. based on the established vendor’s list.
The functions of purchase department are
*Processes the indents received
*Examines justification for the materials or service indented
*Place purchase order for the supply of various items like raw materials, Capital
equipments, components, spares, consumables amid allied services against the
requirements of user or concerned departments.
The purchase Department has codified procedure to be followed
*Procedure for placement of order for indigenous and offshore supplies and allied
Services.
*Procedure for post order follow up for supplies
*Procedure for performance evaluation of vendors
4.2INSPECTION & PROGRESS DEPARTMENT
There are 10 employees in the I&P Department
EWCM/SGB/VTP 40
The objectives of the I&P Department: are to ensure that the items being procured are
conforming to ordered specification and being supplied as per the order deliveries.
The functions of the I&P Department are
*To inspect equipment or spares procured through purchase order or contracts for quality
and quantity as per specification or drawings laid down in purchase order or contracts.
*To monitor the progress of order or contracts for such equipment and spare s so that
these are delivered as per order or contract deliveries. The capacity of the firms under
consideration for registration will also be assessed along with purchase department.
The activities in the I&P Department are carried out in the following manner
*Direct Inspection of Equipment or spares to ensure that the equipment or spares

order have the specified quality, which is done by sending samples if any, to lab (only to
approved labs located in Mumbai, Bangalore, Delhi and few items are tested in IDLR
approved laboratories) and decide up on dispatch after receiving the Test certificate.
*Expediting action are taken as a routine by sending letters to firms during last week of
the month for order due during next month. All purchase order with inspection clause
and without inspection clause are filed separately and are retained in the department for a
certain period.
*During the inspection visits to firms, the position of other orders will be checked;
the details of orders pending will be taken out.
4.3COMMERCIAL DEPARTMENT
The Marketing wing of KIOCL is the commercial Department.
There are 8 employees in the commercial Department.
EWCM/SGB/VTP 41
The objectives of the commercial Department are
*To supply right quality of material to various markets with delivery schedulers in line
with production unites and there by satisfy customers.
*Obtain the best possible price and contractual terms and conditions under the prevailing
market conditions to optimize the net sale realization while being competitive with other
suppliers.
*To satisfy customers by supplying right quantity of material with right with right
quality confirming to contractual commitments at the right time.
*Effective planning of shipments for minimization of delays in loading, berthing and

sailing of vessels.
*Enhance customer satisfaction to achieve their delight and maintain effective CRM
(Customer Relationship and Management).
*Develop customers for repeat orders and creation of future demand for the Products
through reliability and professionalism.
*Obtain better feedback from customer and strive for reduction in customer complaints.
*Develop responsive problem solving system and speedy and prompt redresses of
customer complaint.
*Build and maintain QMS to conform to ISO 9002.
The functions of the commercial department are
*contract finalization: procedure has been formulated for this purpose and all contracts
are approved by the CMD (chairman cum Managing Director of (KIOCL).
*contract execution: contracts concluded for sale of IOC and IOP are usually spot (one
or two cargoes), annual or long term (2yrs and above).
EWCM/SGB/VTP 42
4.4 FINANCE DEPARTMENT
There are 19 employees in the finance department.
The functions of the finance department are
*To determine the financial required meeting the company’s operating programmed.
EWCM/SGB/VTP 43
*Financial forecasting
*Establish and maintain a system of financial control.
*formulate program to provide most effective CVP analysis.
*Analyze the financial result of all operations and reporting to management.
*purchase, pricing policies, accounting matters, auditing.
*Placing of order for proprietary items.
*settling of claims and bills.
*wage structure fixation.
*Long term corporate plans having financial aspect.
The company calls an annual turnover of over Rs.720 core per year and is contributing to
fore around 150 million US dollar per annum to the National exchequer.
Internal control system: The Company has a regular of conducting internal audit by
External agency and internal audit system is commensurate with the growing size and
nature of the business of the company.
Interim Reporting: The quarterly and half yearly financial results in the Performa as per
the listing agreement are published in newspapers and are also posted on the Website of
the company. The company’s shares are quoted at its face value of rs.10 In Begs, its
stock code is (KIO) The Company’s shares are not traded on a large Scale frequently; its
performance cannot be compared to broad based indices such As BES, Sense etc.
EWCM/SGB/VTP 44
4.5PERSONNEL DEPARTMENT
The personal department deals specifically with Manpower Planning, Recruitment,

Selection, Induction, Orientation, Utilization and Maintaining an effective Work force
that will aid in accomplishment of the Firm’s objectives.
EWCM/SGB/VTP 45
The strength of the company is around 2300 employees, their knowledge; skill and
attitude are upgraded to suit the changing requirements of the company.
KIOCL’s promotion programmed is based on the procedure set out in the promotion
policy which consists of length of service, vacancy of promotion place, annual
confidential report, and interview.
Employee benefits in KIOCL includes statutory and non statutory benefits (i.e. it
offers benefits such as provident fund, Gratuity, Educational, Medical, Housing,
Canteen, Recreation etc.), are provided as foster loyalty and act as a security base for
the workers and is considered as an important phase of Industrial Relations.
Trade Unions are Unions registered under the trade union Act 1926, formed by the
Workers of the organization for betterment of their amenities. There is there Registered
Trade Union operation in KIOCL. Industrial relation has been excellent and there has
been no production loss due to any industrial relation problems and neither was there any
lock outs declared by the company.
4.6HRD DEPARTMENT
There are 5 employees in the HRD department.
The objectives of the HRD Department are
EWCM/SGB/VTP 46
*Enabling the HOD’s and employees for the implementation of the quality policy,
Environment policy and OHAS policy in the company, through training in-house
And external programmers.
*To achieve MOU target to trained man days in respect to executives.
*To fulfill training needs identified by HOD’s.
*To provide exposure to executive on latest development by nominating them to
seminars, conferences etc.
*Introduce training programmer on topics which are relevant to the company.
The functions of the HRD Department are
*Identify the areas of HRD.
*Assess the needs of training depending on the type of activity to be discharged by the
employees in the company.
*Planning and scheduling of training activities with objective that over a period of 2to3
years, all the employees would be exposed to appropriate training and Subsequent
retraining.
*preparing retraining.
*Identifying faculty for training programmed and organizing the programmed.
4.7ADMINISTRATION DEPARTMENT
The function of the Administration department are
*For house keeping and maintenance of administration, building, hospitals, Residents of

expatriates.
EWCM/SGB/VTP 47
*For implementing the suggestion of official language implementation committee.
*To arrange, to receive incoming and official documents, letters, telegrams etc. and to
distribute the same to the addressee.
*To assess the requirements of communication facility such as local telephones, Telex,
@ Kudremukh, arrange to install or discontinue the same and to get the Facilities
manned and maintenance.
*To be in-change of the administration pool of vehicles and arrange to provide transport
service to outstation trips and local trips, to get the vehicles repaired, Maintained and to
make necessary statutory payments in respect of all the vehicles at Kudremukh.
*To make travel arrangements such as booking air tickets, such in helicopter for visiting
officials, visitors.
4.8LAW AND VIGILANCE DEPARTMENT
Law Department: Arbitration Tribunal is a from chosen by the party to a contract for
resolving the dispute if any. The activities under by them are
*It provides arbitration for every contract except service.
EWCM/SGB/VTP 48
*It advices to company on legal issues like purchase or any other draft agreement,
Digital issues, if necessary it drafts legal document.
Thus, the role of the Law Department in Kudremukh is to advice on all legal Matters
and keeps the management intact with to the latest development in the field of law.
Vigilance Department: In every Government enterprise, the Government appointee

Chief Vigilance Officer. There are 3 types of Vigilance viz. preventive, Detective and
punitive. The presence of it prevents the misuse of one’s official authority and
corruption.
4.9TECHNICAL SERVICE DEPARTMENT
There are 4 employees in the Technical services Department.
The objectives of the Technical Services Department are
EWCM/SGB/VTP 49
*Assist R&D activities for product quality improvement, technology up gradation,

energy conservation, waste reduction and resource conservation.
*Provide technical service with respect to expansion, modification and capital repair jobs
to the existing plant facilities.
*Project management and finalization of various contracts for the new project.
*Provide management information with regarded to various projects. Review and

updating of Departmental Quality Manual (DQM) for continual Improvement in line
with ISO 9001 requirement and other statutory agencies with regard to the projects/plant
facilities.
The functional of the Technical Services Department are
*Evaluation of contractors for issue of bids to ensure that the right agencies are
selected for the job in hand through tenders, a formal quotation (could be open, limited)
covers selection of agencies for issue of bids for construction works.
*Award of work/placement of order: on approval from management, award of work

will be intimation to the successful bidder which will include information such as
estimated value, advance payable, nominated officer.
*Award of work to consultants: based on requirement, consultant is selected

considering nature of job, design or design engineering, background of consultant.
4.10RAJYBHASHA DEPARTMENT
The company follows the directives issued from time to by the department of Official
Language, Ministry of Home Affairs, ministry of Steel, Government of India for the
progressive use of Official Language (Hindi) and the company takes efforts towards
EWCM/SGB/VTP 50
implementation of Official Language by providing Hindi training to employees,

conducts Hindi workshops etc.
And the result was a Rajbhasha Rolling Shield and a Certificate were given to the
company as one among the Top Ten Company’s.
4. SWOT ANALYSIS OF KIOCL LIMITED
STRENTGHS WEAKNESS
EWCM/SGB/VTP 51
* Strong image world wide .Expertise in *No captive Iron Ore mine
handling hematite ore through wet grinding
system at pellet plant. * Lower value addition due to bought out ore
and higher cost of logistics. Main activity of
*100%EOUstatus. pallet making is not considered as value
addition, resulting our claim for mine clubbed
*shore based pellet plant with captive berth,
with sale of Iron Ore by the mine owners.
with automatic ship loading system.
* Non availability of required quantity of Iron

*Expertise in mining, beneficiation &
Ore. This restricts Company entering into sales
pelletisation
contracts with assured quality.
*A Mini blast furnace facility, a lone PSU unit

* Applied Mining Leases are under litigation.
which produces foundry grade pig iron
* Unscientific mining.
*captive power plant
*Low productivity.
* Skilled man power.
*Availability of Iron Ore.

*A Government of India Enterprise under the
ministry of Steel. *Failure in adaptation of new technology.
*KIOCL Limited is basically a 100% Export *The company is dealing with only iron
Oriented Unit and Mini Retina Company and concentrate and pellets as of now. There is no
was conferred with “Ispat Rajbhasha” awarded diversification into other products.
by Ministry of Steel.
*KIOCL is concentrating more on the plant
*It is a Star Trading Quality with ISO 9001, and resources at Kudremukh.
14001 and OHSAS 18001 company
THREATS
OPPORTUNITIES
EWCM/SGB/VTP 52
* Utilization of mechanical ship loading * Global economic crisis.

system.
* Delay in getting new mining leases.
*Expansion of mining activities with available
Infrastructure – Dependence on railways for
co competence.
allotment of ranks of movement of raw
* Value addition namely producing Ductile material.
Iron Spun pipes at BF unit.
* Sourcing of water from Laky Dam.
* Venturing into new business areas namely –
* Delay in withdrawing from Kudremukh in
Coke Oven Plant, Setting up of integrated steel
view of Supreme Court Order.
Plant.
* Migration of trained man power.

*Unexplored markets.
*china becoming next exporter.

*Growing domestic demand.
*Dumping by competitors and protectionism

*Exports.
from West.
*Utilization of the resources.
*NGO’s and environment protectionists.
*Utilizing the by products of this process as a
*There are new players in the steel industry
raw material for another product.
which are giving good competition to the
*The company has taken over Kalong Iron company and consider being threat to KIOCL.
works in Orissa.
*The company is finding it difficult to get a
*KIOCL has also undertaken mining operation long term renewal of mining lease
at Jharkhand, Cherie/Tilde areas
*As the future is uncertain it is lowering the
*KIOCL has got lease hold area for the employee morale.
purpose of mining the hematite reserves.
EWCM/SGB/VTP 53
6.1 FINDINGS
1. It was found from the study that the co-ordination and co-operation among
the departments is very good.
2. It was found that the KIOCL has better production capacity compare to other
competitors.
3. It was found that the KIOCL has not advance technology compare to the
similar organization.
4. It was observed that the company running short of skilled and un-skilled this
is hindrencing low production.
5. It was observed that the company doesn’t have good transportation facilities
to the laborers.
6. The company doesn’t have fair operating costs.
7. The company depends on the leased vehicles for the transportation of the
goods.
8. The company has only a single source of electricity.
9. The management & administration is in the hands of the state government.
10. There is no any proper connection of communication b/w Bangalore,
Mangalore, & chickmagalore.
6.2SUGGESTIONS
EWCM/SGB/VTP 54
* It was found from the study that the co-ordination and co-operation among the
departments is very good.
*The operating costs of the KIOCL should be decreased.
*The firm should adopt the latest technology for quick production process.
*The company should adopt modern marketing concepts for advertising & promotions.
*The firm must conduct monthly workshop & meetings to the employees to improve
their skills
*Since the firm has adopted the lease vehicles for all transportations they must own some
vehicles and lease those vehicles for a short time and for their own use...
*Management should take efforts to improve the cash receivables.
*Management should take effort to reduce the cost of goods sold.
*The management should spend on imparting training and development of the

employees.
*Management should take efforts to reduce the operating expenses.
*Management should take efforts to capture more of the untapped domestic markets.
*company should take efforts on exploring new potential areas of business.
*Adaptation of new technology to reduce the operating expenses and other costs.
*company should find ways of extracting iron ore without causing much damage to the
environment.
6.3CONCLUSION
EWCM/SGB/VTP 55
In this project, we investigate India’s iron and steel sector from various
angles. We develop economic as well as engineering indicators for
productivity growth, technical change and energy consumption that
allow us to investigate savings potentials in specific energy use as well
as carbon dioxide emissions. We discuss our findings within a broader
context of structural and policy changes in the sector. The economic
analysis shows that productivity has been decreasing over time.
The decline in productivity was caused largely by government

protection regarding
prices and distribution of steel and by inefficiencies in integrated steel

plants that were reserved to the public sector. With liberalization of
the iron and steel industry productivity increased substantially to
positive growth rates.
We further introduce cost effective and low cost potentials for

reducing energy consumption as well as carbon emissions. In
comparing Indian energy consumption to best practice energy
consumption we show that energy savings of about 50% could be
achieved. However, the implementation of initiatives towards energy
efficiency is being hampered by barriers both of general and process
specific nature occurring at the macro and micro level of the economy.
The analysis reveals that energy policies in general and price based
policies in particular are efficacious for overcoming these barriers in
giving proper incentives and correcting distorted
prices. Through the removal of subsidies energy prices would come to

reflect their true costs, while environmental taxes could be imposed to
internalize the external costs (including environmental costs) of
energy consumption. In the short term, energy price increases would
push less productive and inefficient mostly smaller units out of the
market resulting in overall sectoral efficiency and productivity
improvement. In order to improve energy use and thus carbon
emissions on a long run basis, substantial additional investments in
energy efficiency technologies for existing and new plants have to be
made. Therefore, sectoral policies should be devoted to the promotion
of such investments. An optimal policy strategy would consist of a mix
of regulatory
and price based incentives within a set political and economic

framework.
EWCM/SGB/VTP 56
BIBLIOGRAPHY
1) Human Resource Management -K. Ashwathappa/Himalaya

Publication House/4 edition
2) Production & Operation Management -K. Ashwthappa

/Himalaya Publication House/ 5 editions
3) Accounting for management-Dr. Jawaharlal/Himalaya Publication

House/4edition
4) Marketing Management-Rajesh Saxena, TMH/3 edition
5) Basic Financial Management-Khan and Jain/TMH/3 edition
4) Company Manuals-2010
5) Quality Assurance Manual of 2009
6) Catalogues
7) Website: www.kmohan.com
19/07/2010 @ 10.30 am
21/07/2010 @ 7.45 pm
www.google.com/recent trends in garment industry
30-07-2010 @ 11 am
EWCM/SGB/VTP 57
Appendices & annexure
EWCM/SGB/VTP 58
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010
Schedule Year ended

Year ended
No. 31-03-2010
31-03-2009
Rupees in Lakhs
INCOME
Gross sales - Pellets 79,226.23

99,409.52
- Pig Iron 20,045.90

23,488.19
99,272.13
122,897.71
Less: Excise duty 6,767.23

6,607.30
: Freight on sales 456.46

333.48
Net sales 92,048.44

115,956.93
Other income 9 10,337.86

14,481.79
Accretion to stock 10 (11,127.40)

11,775.95
TOTAL: ‘A’ 91,258.90

142,214.67
EXPENDITURE
Raw materials 63,975.98

86,913.97
Stores and spares 3,393.76

4,965.93
Consumbles &additives 4,652.27

3,530.18
EWCM/SGB/VTP 59
Employees benefits 11 12,410.91

12,925.36
Power and Fuel 10,997.65

15,198.92
Other expenses 12 6,347.11

4,384.81
Port charges 2,944.26

8,066.56
Demurrage on exports 1.21

3.79
Depreciation 3,080.74
3,119.97
Interest 13 -
2.17
Expenditure written off 1,868.31

1,226.66
TOTAL: ‘B’ 109,672.20

140,338.32
P/t before Extra-ordinary
Items,
Adjustments& Tax (‘A’-‘B’) (18,413.30)

1,876.35
Extra-items 14 1,105.70
-
P/t before prior tax (19,519.00)

1,876.35
Net adjustments 15 23.98

541.65
PROFIT BEFORE TAX (19,495.02)

2,418.00
Less: Taxes - Current tax - 225.00
EWCM/SGB/VTP 60
Deferred tax (1,349.28)

(1,930.49)
Fringe benefit tax - 56.74
Prior period tax (419.02) 1,865.66
(1,768.30)
(216.91)
PROFIT AFTER TAX (17,726.72)

2,201.09
Less: Appropriations:
Proposed Dividend - 634.51
Tax on Proposed Dividend - 107.84
General Reserve (17,726.72) 1,458.74
(17,726.72)
2,201.09
BALANCE SHEET AS AT 31ST MARCH 2010
Schedule As at
As at
No. 31-03-2010
31-03-2009
Ru
pees in Lakhs
Sources of Funds
Shareholders’ Fund
EWCM/SGB/VTP 61
Share Capital 1 63,451.38

63,451.38
Reserves and Surplus 2 130,622.83

148,349.55
TOTAL 194,074.21
211,800.93
Application of Funds
Fixed Assets 3
Gross Block 150,312.43 150,264.12
Less: Deprection 118,087.75 115,057.27
Net Block 32,224.68

35,206.85
Capital Work-in-Progress 4 1,908.58

1,342.16
Deferred Tax Assets 5 1,504.05

154.77
Current Assets, Loans
And Advances 6
Inventories 22,485.03 64,703.96
Sundry Debtors 3,660.54 813.23
Cash and Bank Balance 139,348.39 119,986.61
Loans and Advances 15,014.10 11,139.56
180,508.06 196,643.36
Less: Current Liabilities
And Provision 7
Current Liabilities 14,518.30 12,537.69
Provisions 8,836.18 10,235.17
EWCM/SGB/VTP 62
23,354.48 22,772.86
Net Current Assets 157,153.58

173,870.50
Miscellaneous
Expenditure 8 1,283.32
1,226.65
TOTAL 194,074.21
211,800.93
EWCM/SGB/VTP 63
EWCM/SGB/VTP 64
EWCM/SGB/VTP 65
Pig iron
IRON PELLET ORE
EWCM/SGB/VTP 66
REFINED IRON PELLET
EWCM/SGB/VTP 67
EWCM/SGB/VTP 68
EWCM/SGB/VTP 69
EWCM/SGB/VTP 70
EWCM/SGB/VTP 71
EWCM/SGB/VTP 72
EWCM/SGB/VTP 73

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ORGANISATION STUDY KIOCL

KIOCL was found by late P.Sampath Yeager in 1913, Geologist

An organization study was conducted to know the structure and

1.1Indian steel industry

An overview of KIOCL Limited

The company is a government of India undertaking-around 99%of production of the

1.2OBJECTIVES OF THE STUDY

1. To get corporate world exposure.

2. In-depth analysis of various key functional areas of the KIOCL

3. To understand the difference between the theoretical perspective and practical

4. To know the financial position of the KIOCL.

5. To understand the organization structure and co-ordination, co-operation among

6. To assess the organizational strength, weakness, opportunity and threats(SWOT)

1.3 SCOPE OF THE STUDY

1.4METHODOLOGY OF THE STUDY

1.5 LIMITATION OF THE RESEARCH

1. The study was confined to KIOCL only.

3. The cost incurred to prepare this report was very limited.

2.1 Industrial profile

Alloy Steel products –Mukund, Mahindra,Ugine(musk) and Kalians Carpenter

DURING ANCIENT PERIOD

KEY FACTS ABOUT INDIA'S STEEL INDUSTRY

Sector structure / Market size

 SAIL is planning to set up a 12-million tone plant in Jharkhand. In December,

EXCELLENT TRACK RECORD OF PERFORMANCE

a. The KIOCL bagged the prestigious CAPEXIL Special Export Award

b. Export Excellence Award 2005-06 in Mineral and Mineral based Products

Corporate Social Responsibility

2.2 Company profile

KIOCL OVER THE YEARS

It carries out its mining related activities in Kudremukh, pulverization process in

Kudremukh height 800 meters

Kudremukh lease area 4605 hectors

Project cost (estimated ) 546.80 cores

Project cost (actual ) 490 .57 cores

Authorized capital 675.00 cores

Length of Slurry pipeline 87 Km

Length of pipeline tunnel 1.6 Km

Kudremukh Deposit investigated by late. Sam path Integer in 1913

Ore investigation by NMDC 1963-65

Govt. of India and Iraq signed the sale contract 4.11.75

KIOCL established 2.4.76

Concentrator established 22.8.80

First Slurry dispatched 23.8.80

First shipment of concentrate 2288 tones to Mondovi pellets Goa Feb 81

First export of concentrate to Rumania(Trail) June 81

First shipment of concentrate to Rumania Oct 81

First commercial export of concentrate to Rumania 5.11.81

Pellet Plant commissioned April 87

First shipment of pellet to Hungary (Trail) 2.9.86

First pellet shipment (sale) to Hungary and china Sep 87

Table showing investment surplus of KIOCL:

Graph showing investment surplus of KIOCL:

Table Showing fixed assets of KIOCL:

Graph Showing fixed assets of KPCL:

Table No.01 showing Reserves and Surplus of KIOCL:

VISSION AND MISSION

*To maximize profits and to generate an optimum return on investment to the

*To implement projects on schedule without cost or time overruns.

QUALITY POLICY OF KIOCL

Our commitment to accord high priority to Human Resource Development to enhance

Company’s policy as a global supplier is to ensure, that supplies adhere to contractual