HAL PART - A

AVIATION INDUSTRY:

HISTORY:

The field of Aviation has been investigated for millennium but modern Aviation began with the first powered flight on 16th December 1903 by the ‘WRIGHT BROTHERS’. From there on, Aviation has grown to be one of the most existing, diverse and fast growing field of today.

From the hot air balloons of 18th century to the first maned machine to the moon on Apollo 11 to the new and exiting air craft being developed by the companies like Boeing, Airbus and Bombardier, aero space has come a long way over a century.

Way back centuries, people started thinking of ways to fly in the Greek legend, Icarus and his father Daedal ,built wings of features and wax and flew out with a person, Icarus flew close to the Sun, the wax melted and he fell in the Sea and drowned .

One of the earliest Scientist to aeronautics was LEANARDO DA VINCI. Leonardo Studied flights of birds in developing engineers schematics for some of the earliest flying machines in the last 15th century A.D; these schematics failed as practical aircraft.

The Aerospace and Defense industry was struggling to maintain profitability even before Sep 2001, and fears of further terrorism, the conflicts in Afghanistan and Iraq, and a weak economy combined to devastate the commercial aerospace industry over the ensuring years.

On the other hand the wars in Afghanistan and Iraq bolstered the coffers of many defense companies; belt tightening may be on the way.

The mother of all defense deals occurred in 2001 When Lockheed beat out Boeing for the $200 Billion joint strike fighter contract, the largest defense contract ever. Spread out almost 30 years, it may be the last deal for drones (as evidence in Afghanistan with the use of general atomics predator) it expected to continue supplanting the need for the more expensive manned aircraft and making it unnecessary to risk pilots lives in combat. In the interim, the soaring costs in Iraq have also put a damper on some other major projects. In 2004 the US army cancelled the planned $40 billion apache reconnaissance Helicopter program; early in 2005 there was talk of scaling back the F/A-22 Raptor program and of reducing the number of c-130J aircraft on order. A desire to be smart, fast, and mobile has replaced the “more and bigger” doctrine of the cold war.

To the end several companies including Lockheed Martin, Northrop Grumman and General Dynamics have invested in hardware and software companies that focus on Government Customers.

The top defence contractors are Lockheed Martin, Boeing Northrop Grumman, and BAE systems, Raytheon, GENERAL Dynamics, and EADS. On the commercial side, airlines- by far the biggest customers in the sector have lost Billions since 2001.

By way of illustration, the top nine airlines lost$10 billion in 2002, almost $6 billion in 2003, and about $4 billion in 2004 and both UAL (the parent of United Airlines) and US AIRWAYS have filed for bankruptcy protection.

As mentioned previously, September 11 and subsequent travel fears dealt a devastating blow to a commercial aircraft market that was already reeling from a market slow down.

That market, which accounts for about 40% of aerospace and defence industry spending, is divided in to our segments: -

Ø Large Commercial Aircraft (planes of 100 seats and more)

Ø Maintenance repair and Overhaul (MRO), HAL Aircraft division

Ø Jet engines and business

Ø Regional aircraft (less than 100 seats)

In 2001, Boeing and Airbus, the world’s only large commercial aircraft market, saw market plummet by 45% and 28% respectively.

Airbus recently surpassed Boeing in orders, but the formers 2002 deliver dropped 7% from 2001.Boeing meanwhile experienced a staggering 28% decline in deliveries from 2001.

AS a result of the drastic fall-off in business, Boeing cut about 30000 jobs or roughly30% of it commercial aircraft workforce in 2002.

Aircraft orders picked up in 2003 and 2004 as Boeing an airbus continued to duke it out for airline orders. Boeing is working on its long-range, fuel-efficient, mid-sized, 7E7 Dream Liner (due in 2008), 550-passenger behemoth. Airbus then upped the ante by announcing that it would build the A530 (due in 2010) to compete directly with Boeing 7E7.

The Maintenance repairs and overhauls (MRO), jet engine, and business and regional aircraft markets have suffered right along with airlines and large commercial aircraft makers. The biggest regional aircraft makers are Bombardier, Gulf Stream and Textron’s Cessna Unit., GE Aircraft Engines, Rolls Royse, and Pratt and Whitney are the three largest jet engine makers. The space market is made up of two primary segments; satellite and rocket manufacturing and launch services. The major players include Boeing, Lockheed Martin, Northrop, Grumman, Alcatel Space, Astrium, and Orbital Science. Expectations for the long-term profitability of the space market continue to outstrip the short-term realities, but companies continue to invest in this.

Even before the terrorist attacks, Boeing for example, was placing more emphasis onMarket in its strategic thinking, and proposed a sweeping overhaul of the world’s air traffic control system.

The main activity of the division is manufacturing of fighter aircrafts like Jaguar, Hawk, Lakshya and landing gears for Dornier Aircraft and exports project like manufacture ofBoeing and airbus doors. It also manufactures materials for Indian Aerospace organizationsuch as ISRO, DRDO &NAL etc…

INTRODUCTION:

Aviation is one of the most significant technological influences of our times and empowers the nation with strength.

It is a major tool for Economic development and has significant role in National security and International RELATION. India has been fortunate to have started Aeronautics related activities in 1940 with the establishment of HAL.

The aviation industry globally has many players. U.S Aircraft major players are:

1.Lockheed Martin is at the top of the list followed by

2. Boeing (U.S),

3.North Rop Grumman (U.S),

4. BAe Systems (U.K) and

5. Raytheon (U.S) are the top five dominated U.S aero space and defense majors.

The aviation industry comprises companies producing air craft, guided missiles, aircraft engines, space vehicles, propulsion units and reduced parts. Aircraft overhaul, rebuilding and parts are also included.

The aviation industry in India includes State owned entities and also number of Private players. The ministry of civil aviation governs the aviation industry.

Hindustan Aeronautics, ranked 34th among the global league of top 50 aerospace companies moving up since last years rank of 45.

In 2004 - 2005, the India share of the global aviation industry was US $36 Billion.

Aviation Industry in India is one of the fastest growing aviation industries in the world, with the liberalization of the India aviation sector;

Aviation industry in India has undergone a rapid transformation. From being primarily a government owned industry, the India Aviation Industry is now dominated by privately owned full service air lines and low cost carriers.

Aviation Industry supplies services to the India are:

1. Indian Defense Services.

2. Coast Guards.

3. Border Security Forces.

Transport Aircraft and Helicopters have also been supplied to Airlines as well as State Governments of India.

LEADING PLAYERS IN AERONAUTICS INDUSTRY:

Top aviation companies in India

Air Charter Services Pvt Ltd: Air Charters India: Air India: Aviation India: Indian Airlines: Deccan Aviation Ltd.: Jet Airways: Kingfisher Airlines: Paramount airways:

Private airlines account for around 75% share of the domestic aviation market.

Hindustan Aeronautics Limited (HAL)

Hindustan Aeronautics Limited (HAL) came into existence on 1st October 1964.  The Company was formed by the merger of Hindustan Aircraft Limited with Aeronautics India Limited and Aircraft Manufacturing Depot, Kanpur.

The Company traces its roots to the pioneering efforts of an industrialist with extraordinary vision, the late Seth Walchand Hirachand, who set up Hindustan Aircraft Limited at Bangalore in association with the erstwhile princely State of Mysore in December 1940, with the object of establishing an aviation industry that can manufacture, assemble and Overhaul aircraft under license.

The Government of India became a shareholder in March 1941 and took over the Management in 1942.

For six decades, HAL has spread its wings to cover various activities in the areas of design and development, Manufacture and Maintenance of advanced fighters, piston and jet engines trainer’s commercial aircraft, helicopters and associated Aero engines, aircraft systems, equipment and avionics

Today, HAL has 19 Production Units and 9 Research and Design Centers in 7 locations in India. The Company has an impressive product track record - 12 types of aircraft manufactured with in-house R & D and 14 types produced under license. HAL has manufactured over 3550 aircraft, 3600 engines and overhauled over 8150 aircraft and 27300 engines.

HAL has been successful in numerous R & D programs developed for both Defense and Civil Aviation sectors. HAL has made substantial progress in its current projects:

Dhruv, which is Advanced Light Helicopter (ALH) Tejas - Light Combat Aircraft (LCA)

Intermediate Jet Trainer (IJT)

Various military and civil upgrades.

Dhruv was delivered to the Indian Army, Navy, Air Force and the Coast Guard in March 2002, in the very first year of its production, a unique achievement.

HAL has played a significant role for India's space programs by participating in the manufacture of structures for Satellite Launch Vehicles like

PSLV (Polar Satellite Launch Vehicle) GSLV (Geo-synchronous Satellite Launch Vehicle)

IRS (Indian Remote Satellite)

INSAT (Indian National Satellite)

HAL has formed the following Joint Ventures (JVs) :

BAeHAL Software Limited Indo-Russian Aviation Limited (IRAL)

Snecma HAL Aerospace Pvt Ltd

SAMTEL HAL Display System Limited

HALBIT Avionics Pvt Ltd

HAL-Edgewood Technologies Pvt Ltd

INFOTECH HAL Ltd

 Apart from these seven, other major diversification projects are Industrial Marine Gas Turbine and Airport Services. Several Co-production and Joint Ventures with international participation are under consideration.

HAL's supplies / services are mainly to Indian Defense Services, Coast Guards and Border Security Forces. Transport Aircraft and Helicopters have also been supplied to Airlines as well as State Governments of India. The Company has also achieved a foothold in export in more than 30 countries, having demonstrated its quality and price competitiveness.

HAL is India’s only Aircraft manufacturer and is the foremost aviation company in the southern region.

Today the companies activities range from the design, repair and Overall the maintenance and field support to:

1. Military, civil aircraft and Helicopters.2. Aero engines, industrial and marine gas turbine engines.

3. Aircraft accessories, system and avionics.

4. Aerospace vehicles structure.

The Bangalore complex of HAL is the oldest and the largest group of aircraft and engines factories of the company. The complex has its own airfield and comprises the engine, aircraft, helicopter division, over all foundry and forge divisions.

The first helicopter type to be built at HAL Bangalore was the ALOUETTE ILL, later names CHETAK.

From past 20 years, HAL’s Helicopter division produced 336 CHETAK‘s AND 246 CHEETAH helicopters and more than 200 Helicopters of both the types for the Indian Air force , Navy, Army and coast Guards.

HISTORY & INCEPTION OF HAL:

Production line of the HAL Dhruv at Bangalore

Hindustan Aeronautics Limited (HAL) is a premier aerospace company

under Ministry of Defense, Government of India, with its corporate office Bangalore.

HAL was established as Hindustan Aircraft in Bangalore in 1940

by Walchand Hirachand to produce military aircraft for the Royal Indian Air Force. The

initiative was actively encouraged by the Kingdom of Mysore, especially by the Diwan,

Sir Mirza Ismail and it also had financial help from the Indian Government. The organization

and equipment for the factory at Bangalore was set up by William D. Pawley of the

Intercontinental Aircraft Corporation of New York, who was an exporter of American aircraft

to the region. Pawley managed to obtain a large number of machine-tools and equipment

from the United States.

The British Government bought a one-third stake in the company by

April 194, as it believed this to be a strategic imperative. Later in April 1942, it bought out

the stakes of Walchand Hirachand himself and other promoters so that it can act freely.

The decision by United Kingdom was primarily motivated to boost British military hardware

supplies in Asia to counter the increasing threat posed by Imperial Japan during Second

World War. However, the Mysore Kingdom refused to sell its stake in the company but

yielded the management control over to the British Government. Thus, within 2 years of

establishment, it was nationalized.

Hindustan Aeronautics Limited (HAL) became an entity on 1st

October 1964 with the merger of Hindustan Aircraft Limited, a Bangalore-based private

enterprise with Aeronautics India Limited and the Aircraft Manufacturing Depot, Kanpur.

Adopting the slogan "Asia's Premier Aerospace Complex," India's aerospace and defence

major, Hindustan Aeronautics Limited (HAL), continues to take large strides in the sector

with every passing year. After India gained independence in 1947, the management of the

company was passed over to the Government of India and was renamed as Hindustan

Aeronautics Limited (HAL). Though HAL was not used actively for developing newer

models of fighter jets, the company has played a crucial role in modernization of the Indian

Air Force. In 1957 company started manufacturing Jet engines (Orpheus) under license

from Rolls-Royce at new factory located in Bangalore.

During the 1980s, HAL's operations saw a rapid increase which resulted in the development of new indigenous aircraft such as HAL Tejas and HAL Dhruv. HAL also developed an advanced version of the MiG-21, known as MiG-21 Bison, which increased its life-span by more than 20 years. HAL has also obtained several multi-million dollar contracts from leading international aerospace firms such as Airbus, Boeing and Honeywell to manufacture aircraft spare parts and engines.

On the 2 April 1942 the government announced that the company had been nationalised when it had bought out the stakes of Walchand Hirachand and other promoters so that it can act freely. The Mysore Kingdom refused to sell its stake in the company but yielded the management control over to the Indian Government. The company has been making steady growth in financial terms over the years. The company enjoys the highest credit rating by CRISIL and ICRA for short term and long-term debt Programs.

Hindustan Aeronautics Limited (HAL) has achieved sales turnover of Rs.11, 457 crores during the Financial Year 2009-10.

The profit of the Company (Profit before Tax) soared to Rs.2, 688 crores.

The highlights are given below:

                                                                           Rupees in Crores

Particulars 2008-09 2009-10 Growth over Previous Year

Sales 10373 11457 10.45%

VOP 11811 13490 14.22%

Profit before tax 2335 2688 15.12%

Profit after tax 1740 1967 13.05%

Gross Block 2638 2934 11.22%

ORGANISATIONAL GROWTH OF HAL:

The Company's steady organizational growth over the years with consolidation and enlargement of its operational base by creating sophisticated facilities for manufacture of aircraft / helicopters, aero engines, accessories and avionics is illustrated in next page:

ORGANIZATIONAL STRUCTURE:

THE COMPANY AUTHORITY BASED STRUCTURE

DEFENCE MINISTER

SECRETARIAT

CHAIRMAN

BOARD OF DIRECTORS

MANAGING DIRECTOR (DC)

MANAGING DIRECTOR (BC)

MANAGING DIRECTOR

(ACCESSORIES COMPLEX)

MANAGING DIRECTOR

(MIG COMPLEX)

EXECUTIVE DIRECTOR

GENERAL MANAGER

ADDITIONAL GENERAL MANAGER

DEPUTY GENERAL MANAGER

CHIEF MANAGER

SENIOR MANAGER

MANAGER

DEPUTY MANAGER

ENGINEER/OFFICER

ASST.ENGINEER

CHIEF SUPERVISOR

SENIOR ASST. SUPERVISOR

ASST. SUPERVISOR

WORKERS

NATURE OF THE BUSINESS – HAL

Design and development of fixed and rotary wing aircraft, avionics and accessories.

Design and exhibition of military as civil updates and modernization. Manufacture , maintenance , repair of :

Fighter and trainer aircraft. Commercial and transport aircraft. Helicopter – civil and military. Industrial and marine gas turbines. Avionics. Accessories (Mechanical/Electronic). High technology casting, aircraft transparencies. Ground support equipment. Export of aero structure to leading world aircraft manufacturers for satellite

and launch vehicle. Software development for aero space applications.

VISION:

“To make HAL a dynamic, vibrant, value – based learning organization with human resource exceptionally skilled, highly motivated to meet the current and future challenges, this will be driven by core values of the company fully embedded in the culture of the organization”.

OUR MISSION:

“To become a globally competitive aerospace industry while working as an instrument for

achieving self-reliance in design, manufacture and maintenance of aerospace defense

equipment and diversifying to related areas, managing the business on commercial lines in

a climate of growing professional competence".

QUALITY POLICY:

Aircraft division’s quality policy is “To manufacture and supply aeronautical products to meet the customer’s requirements and to continuously improve quality in all products, processes and services to ensure customer satisfaction”.

Quality objectives of company are:

1) Understanding and satisfying customer needs.2) To design and approve standard in all direct and support activities.3) Implementation of process control in all spheres of activities.4) Operation of company wide continuous programs.

5) Develop Human resource through training and involvement and motivation.

OUR VALUES:

CUSTOMER SATISFACTIONWe are dedicated to building a relationship with our customers where we become partners in fulfilling their mission. We strive to understand our customers ' needs and to deliver products and services that fulfill and exceed all their requirements.

COMMITMENT TO TOTAL QUALITYWe are committed to continuous improvement of all our activities. We will supply products and services that conform to highest standards of design, manufacture, reliability, maintainability and fitness for use as desired by our customers. 

COST AND TIME CONSCIOUSNESSWe believe that our success depends on our ability to continually reduce the cost and shorten the delivery period of our products and services. We will achieve this by eliminating waste in all activities and continuously improving all processes in every area of our work. 

INNOVATION AND CREATIVITYWe believe in striving for improvement in every activity involved in our business by pursuing and encouraging risk-taking, experimentation and learning at all levels within the company with a view toachieving excellence and competitiveness. 

TRUST AND TEAM SPIRITWe believe in achieving harmony in work life through mutual trust, transparency, co-operation, and a sense of belonging. We will strive for building empowered teams to work towards achieving Organizational goals. 

RESPECT FOR THE INDIVIDUALWe value our people. We will treat each other with dignity and respect and strive for individual growth and realization of everyone's full potential. 

INTEGRITY

CREDIT RATING :

The Company continued to maintain the highest credit rating of both, short-term as well as long-term debt programmers, for Rs.450/-crores each from the Investment Information & Credit Rating Agency (ICRA) and Credit Rating Information Services of India Limited (CRISIL). Although yours is a ‘Zero-Debt’ Company, it has been availing Cash Credit facility from the Bankers to meet its short-term requirements from time to time. This credit rating has enabled the Company to source funds at the best possible rates, thereby improving the profitability.

The cash and bank balances, including short-term deposits at the end of the year under review stood at Rs. 18657.64 crore against Rs. 19744.56 crores of the previous years. The Company scaled new heights in the financial year 2006-07 with a turnover of Rs.7, 783.61 Crores.

Definition : Key result area

“Key results areas or KRA’s referred to general areas of output or outcomes for which department’s roll is responsible”.“KRA in simple terms may be defined as primary responsibilities of an individual, the core area which each person is accountable.

Importance of KRA’s

1) Set goals and objectives.2) Prioritize their activities, therefore improve their time and work

management.3) Make value added decisions.4) Clarify roles of department or individual.5) Focus on results rather than activities.6) Communicate their roles, purposes to others.

Types of KRA’s

1) Training KRA’s.2) Management KRA’s.3) Purchasing KRA’s.4) R & D KRA’s.5) Administration KRA’s.6) Finance KRA’s.7) Human resource KRA’s.8) Manufacturing KRA’s.9) Marketing KRA’s.10) Sales KRA’s.

OBJECTIVES OF THE ORGANIZATION:

§ Adherence to design specification and laid down procedures in all activities.

§ Continual improvement in all processes based on previous and customer feed back.

§ To empower the employees through and encouraging in quality circle/ small ground activities and suggestion scheme.

§ To up keep and improve the infra structure to meet the requirements of process, people and environment.

§ To ensure optimum utilization of resource and reduction of waste.

Following are the names of the various customers both in National & international level:

International Customers Domestic Customers

Airbus Industries, France APPH Bolton, UK BAE Systems, UK Chelton, UK Coast Guard, Mauritius Corporate Air, Philippines Cosmic Air, Nepal Dassault Aviation, France Dowty Aerospace Hydraulics,

UK EADS, France ELTA, Israel Gorkha Airlines, Nepal Hampson, UK Honeywell International, USA Island Aviation Services,

Maldives Israel Aircraft Industries, Israel Messier Dowty Ltd., UK Mistubishi Heavy Industries,

Japan MOOG, USA Namibian Air Force, Namibia Peruvian Air Force , Peru Rolls Royce Plc, UK Royal Air Force, Oman Royal Malaysian Air Force,

Malaysia Royal Nepal Army, Nepal Royal Thai Air Force, Thailand Smiths Industries, UK Snecma, France Strongfield Technologies, UK The Boeing Aircraft Company,

USA Transworld Aviation, UAE Vietnam Air Force, Vietnam

Air India Air Sahara Airports Authority of India Bharat Electronics Border Security Force Coal India Defence Research &

Development Organisation Govt. of Andhra Pradesh Govt. of Jammu & Kashmir Govt. of Karnataka Govt. of Maharashtra Govt. of Rajasthan Govt. of Uttar Pradesh Govt. of West Bengal Indian Air force Indian Airlines Indian Army Indian Coast Guard Indian Navy Indian Space Research

Organisation Jet Airways Kudremukh Iron ore

Company ltd. NALCO Oil & Natural Gas

Corporation Ltd. Ordnance Factories Reliance Industries United Breweries

Today, HAL has 19 Production Units and 9 Research and Design Centers in 7 locations in India. The Company has an impressive product track record - 12 types of aircraft manufactured with in-house R & D and 14 types produced under license. HAL has manufactured over 3550 aircraft, 3600 engines and overhauled over 8150 aircraft and 27300 engines.

HAL has been successful in numerous R & D programs developed for both Defense and Civil Aviation sectors.

AREA OF OPERATION:

HAL operates both domestically and Internationally:

DOMESTIC AREA: Indian Air Force Indian Navy Indian coast guard Defense Research & Development organization Indian Space Research organization Bharat Electronic Limited National Aerospace Laboratories

INTERNATIONAL AREA: Air bus, France Boeing, USA BAe system, UK Danault Aviation, France Israel Aircraft Industries, Israel Mitsubishi Heavy Industries, Japan Royal Air force of OMAN Air Mauritius Airline Operations in South Asian Countries.

HAL’s major exports during the year included A – 320 passenger doors to airbus, HAL Aircraft division 777 uplock equipment to Russia, Spares and services to Nepal, Malaysia, Thailand, Zimbabwe, Mauritius and Oman.HAL has also initiated measures to identify and establish strategic alliances and joint ventures with global aerospace companies who provide cutting edge technologies help in upgrading the skill/quality levels in addition to opening export markets.

The company is also having its operation all over the world its liaison offices are situated in countries like

o LONDON

o FRANCE

o GERMANY

o ISREAL

It also has customers like BAE (UK), IAI (ISREAL), BOEING (USA), AIRBUS (FRANCE)and other different countries.

The Hindustan aeronautics Limited (HAL) evolved into a vertically integrated aeronauticscomplex and the large of its kind in Asia.

Today HAL has 19 production unit and 9 research and design centers spread over at:

• Bangalore

• Nasik

• Koraput

• Kanpur

• Lucknow

• Korwa

• Hyderabad

• Barrack pure

Further, several co-production and joint ventures with international participation are under consideration, aiming to enhance business and upgrade technology.

OWNERSHIP PATTERN :

The Government of India (GOI) became one of the shareholders of Hindustan Aircraft Limited in March 1941 and took over the management in 1942. HAL in its present form as a Public Sector Undertaking (PSB) under the Ministry of Defense and fully owned by HAL Aircraft division GOI, came into existence on October 1, 1964, when Aeronautics India Limited and Aircraft manufacturing Depot were merged with Hindustan Aircraft Limited.

HAL is the largest PSU under the Department of defense Production, GOI and has been declared as a Mini Ratna (category – 1) company.

HAL has blossomed into a major player in the Global Aviation Arena and is today one among the elite “NAVARATHNA COMPANIES”.

HAL was initially set up as HINDUSTHAN AERONAUTICS LIMITED @ Bangalore in association with THE ERSTWHILE PRINCELY STATE OF MYSORE in December-1940. The Government of India became a shareholder in March-1941 and took over the Management in 1942. HAL in its present forms as the Public Sector Undertaking (PSU) under the Ministry of Defense and Gully owned by Government of India came into existence on October-1st – 1964, when Aeronautics India Limited and Aircraft Manufacturing depot were merged with HAL. Thus, HAL is purely a public enterprise but in recent years the government has been encouraging greater interaction of private players with Defense Research Organizations by allowing them access to research done by their Laboratories.

Nearly US $ 275 Million worth of material, sub-assemblies and components are obtained by State-owned Defense Undertakings by the Private Sector.

COMPETITORS INFORMATION:

The Aerospace Market is highly competitive with the State owned, HAL being the largest Indian Aircraft manufacture. Competition is likely to intensify with greater Private Sector and Foreign participation. The Government too has set up its role in promoting the industry.

The company does not have any competitors in Domestic Market, for its Aircraft because it requires huge sum of money & vast area of land for establishing a company and it also involves huge risk which the private parties would not like to take. And the engine division manufactures Aircraft purely for countries defense purpose. So its main customer is IAF (Indian Air force).

The company is having few competitors of its export projects like; Boeing &Airbus does from countries like China and Pakistan.

INFRASTRUCTURAL FACILITIES:

A. SECURITY DEPARTMENT:

Security department provides the safety measures to employees. New rules and regulations are created to protect to protect the employees from meeting with an accident.Terms and conditions are to be followed by the employees while performing the job. Safety of employees is taken care of by this department.

B. TRAINING HALLS:

HAL has 5 air conditioned training halls with seating capacity varying from 15-50, with flexible seating arrangements. Each classroom is equipped with an overhead projector, writing board, public address system, digital light processing projector (DLP) computer, with the necessary state- of the art software to make presentations.

C. LIBRARY:

A good library with over 12,000 books mainly on Management topics, a number of professional journals and an impressive collection of Audio-Visual Aids supplement classroom learning and assignments.

D. AUDITORIUM:

An air-conditioned auditorium designed with 180 seats is also available for viewing films/videos and conducting seminars. A well facilitated Dias is also available for cultural programs of participants.

E. ACCOMODATION:

Fully furnished 40 twin occupancy rooms and 5 dormitories provide accommodation for a 100 participants. A neat and tidy cafeteria within the campus. A very pleasant and calm place to live and nearness to mother nature- parks, an absolute healthy atmosphere to live in.

F. RECREATION CENTRE:

Recreation centre is equipped with a home-gym, facilities for indoor and outdoor sports and also a television set, which provides the participants much needed relaxation and entertainment during the office hours and holidays. Many magazines and newspapers are also available.

G. CANTEEN FACILITIES:

Canteen has been established at every division as a necessity and welfare measure and in keeping the statutory requirements under the Factories Act for the convenience of employees. This canteen serves coffee, tea, snacks, meals etc.

H. TRANSPORT FACILITIES:

Employees residing outside the company township are provided with transport facilities (company owned) at subsidized rates, to the extent possible for commuting between the residence and place of work.

I. EDUCATIONAL FACILITIES :

Company has established schools at Bangalore, Hyderabad, Koraput, Nasik, Lucknow, Kanpur and Korwa districts for the benefit of the employee’s children. The administrations of these schools are vested with the educational committees constituted for the purpose of the education in respective divisions.

J. AMBULANCE ROOM

This department is one of the safety measures. This department is to help the employees. Medicines are provided and available 24hours.

AWARDS & ACHIEVEMENTS

MoU Excellence Award

The Prime Minister, Dr. Manmohan Singh presenting the MoU Excellence Award 2006-07 for “Industrial Sector” to the Officiating CMD of Hindustan Aeronautics Ltd., Shri Sanjeev Sahi on behalf of the Hindustan Aeronautics Ltd., at the presentation ceremony of the MoU Excellence Awards and SCOPE Awards for the year 2006-07 and 2007-08 for Excellence and Outstanding Contribution to Public Sector Management, in New Delhi on October15, 2009.

HAL WINS BOEING’S 2009 SUPPLIER OF THE YEAR AWARD:

Bangalore-based HAL has been awarded the newly-constituted ‘The Alliance Award’ in recognition of its “unique capabilities and services that are instrumental to a new Boeing product”.

 HAL was awarded the “INTERNATIONAL GOLD MEDAL AWARD” for Corporate Achievement in Quality and Efficiency at the International Summit (Global Rating Leaders 2003) - London, UK by M/s Global Rating-UK in conjunction with the International Information and Marketing Centre (IIMC). 

HAL was presented the International - “ARCH OF EUROPE” Award in Gold Category in recognition for its commitment to Quality, Leadership, Technology and Innovation. 

At the National level, HAL won the "GOLD TROPHY" for excellence in Public Sector Management, instituted by the Standing Conference of Public Enterprises (SCOPE).

HAL has bagged the ‘WORLD QUALITY COMMITMENT INTERNATIONAL PLATINUM STAR AWARD’ from business initiative directions (bid) Spain, during the 21st World quality commitment (WQC) convention held at Paris recently.

The year 2005 started with an excellent beginning and the centre has been awarded the “GOLDEN PEACOCK AWARD FOR INNIVATIVE PRODUCT – 2004” by the institute of IOD New Delhi.

HAL is conferred with the “NAVRATHNA“ status on 22nd June 2007.

HAL has received Raksha Mantri’s Awards for excellence for the year 2006-07 under the following categories:

o Best division/Factory Award – Transport – Aircraft division, Kanpur.

o Group/individual Award – Design effort - transport Aircraft division, Kanpur for the development of Intelligence Welfare Aircraft.

Gargi Huttenes-Albertus Green Foundry Award of the year 2008-2009 by the Institute of Indian Foundry men to Foundry & Forge Division. The award was presented on 5th February, 2010 at Ahmedabad.

Supplier of the year 2009 by Boeing based on their evaluation criteria for suppliers.

International Diamond Star Award for Quality in the realm of customer satisfaction, leadership, innovation and technology as established in QC 100 TQM Model to the Foundry & Forge Division during 23rd World Commitment Convention of Business Initiative Direction held at Paris in September 2009.

SIGNIFICANT ACHIEVEMENTS :

The following are the significant achievements of the Company:-

• The Company produced Su-30MKI, Hawk, DO-228 aircraft ALH and Cheetal helicopters along with their engines and accessories for the Indian Defence Services.

• The ALH in the new configuration (Mk.III) with high powered Shakti engine was produced for the Indian Air Force (IAF) and new systems like EO Pod, EW Suite / Integrated Self Protection System, Active Vibration Control System, etc were produced for the military utility operations. The ALH in the civil version was also produced for the Border Security Force (BSF).

• The Company carried out overhaul on 203 aircraft / helicopters and 497 engines encompassing 13 types of aircraft and 15 types of engines.

• Production of the Intermediate Jet Trainer (IJT) crossed a major milestone with the first Limited Series Production aircraft undergoing flight tests on 4th January 2010.

• Technology absorption was successfully completed for the production of Hawk, an Advanced Jet Trainer from the raw material stage.

IAF flies homegrown Tejas fighter jet 

BANGALORE: India on 10TH JANUARY 2011, Monday joined the select club of countries making a fighter jet from scratch when Indian Air Force flew for the first time the lightweight indigenous multi-role Light Combat Aircraft...

HAL TEJAS:

The HAL Tejas (Sanskrit: Tejas mean "Radiant"   is a lightweight multirole jet fighter being developed by India. It is a tailless, compound delta wing design powered by a single engine. It came from the Light Combat Aircraft (LCA) programme, which was begun in the 1980s to replace India's ageing MiG-21 fighters. Later the LCA was officially named "Tejas" by then Prime Minister Atal Bihari Vajpayee.

The IAF is reported to have a requirement for 200 single-seat and 20 two-seat conversion trainers, while the Indian Navy may order up to 40 single-seaters to replace its Sea Harrier FRS.51 and Harrier T.60. During its sea level flight trials off Goa, Tejas notched a speed of over 1,350 km per hour, thus becoming the second supersonic fighter manufactured indigenously by Hindustan Aeronautics Limited after the HAL Marut. The first squadron of Tejas aircraft was cleared to entered service 10th January 2011.

WORK FLOW MODEL:

Work Flow model means the process occurring in the organization to convert raw

material into finished goods to meet the organizational goals and needs.

In HAL Aircraft Division the work flow model is as follows:Request by the customer along with the material

Stores department

Quality inspection approval

Design of production plan by methods engg department as per chart received from the customer

Issue of Route cards for production by M.E.D specifying the details, issue number Process and material batch number etc. to welding shop

CNC Inspection- customer clearance

Process shop for further production

Assembling

Final inspection

Packing and Dispatch to customers

NEW INITIATIVES AND FUTURE OUTLOOK:

The Defence industry in India is experiencing significant and progressive change with huge opportunities for growth. The Order Book position of your Company is around Rs. 80,000 crore as on date.

The Company has challenging times ahead with delivery commitments with respect to major manufacturing projects like the Su-30 MKI, Hawk, IJT, LCA, ALH and Do-228.Your Company has geared up to enhance the capacity required to meet the commitments. The number of aircraft to be produced in the coming years will be higher, almost double, compared with the last couple of years. This requires concerted efforts to streamline the sources and achieve the desired level of productivity.

FUTURE GROWTH PLAN OF HAL:

1) Physical task:

Hawk Mk 132. Pta-lakshya.

2) RMS orders:

Jaguar spares for IAF. Kiran spares to IAF & Navy. Dornier spares to IAF & Navy.

3) Export orders:

Airbus. Boeing. Cargo doors. Gun bay doors. Wire bundle. Weapon bay door.

• Presently engaged in manufacture of Adour MK 871, Adour MK 811, and Garrett TPE

• 331-5, Artouste IIIB & PTAE engines.

• Also undertakes repair and overhaul of TM 333-2B2, Adour MK 811, Adour MK 804E,

• Garrett, Dart, Gnome, Orpheous, Artouste IIIB.

•Taken up new TPE 331-12 engine programme for export.

The McKinsey 7S Framework:

While some models of organizational effectiveness go in and out of fashion, one that has persisted is the McKinsey 7S framework.

Developed in the early 1980s by Tom Peters and Robert Waterman, two consultants working at the McKinsey & Company consulting firm, the basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful. They published their 7-s Model in their articulate “structure Is Not Organization” (1980 and in their books. “The art of Japanese Management” (1981) and “In Search of Excellence” (1982). The most notable exception, which might be the cause of its enormous popularity, has been the book “In search of excellence” by Tom Peters and Robert Waterman (1982), where they emphasize the lesson to be derived from America’s best run companies. Paradoxically, it is interesting to observe that the best compliment that can be made to an American firm is that it resembles a Japanese company. MC.Kinsey’s 7S model reflects upon the frame work used to evaluate the best managerial companies.

The 7S model can be used in a wide variety of situations where an alignment perspective is useful for:

Improve the performance of a company. Examine the likely effects of future changes within a company. Align departments and processes during a merger or acquisition. Determine how best to implement a proposed strategy.

The Seven Elements:

The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:

Hard Elements Soft ElementsStrategy

Structure Systems

Shared ValuesSkillsStyleStaff

"Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.

"Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful. Those seven elements are distinguished in so called hard S’s and soft S’s. The hard elements are feasible and easy to identify. They can be found in strategy statements, corporate plans, organizational charts and other documentation.

STRATEGY:

The concept of Strategy includes Mission, Purpose, Goals, Objectives and major action plans and Policies. To become Globally Competitive Aerospace Co while working as an Instrument for achieving Self-reliance in Design, manufacturing & maintenance of Aerospace Defenses equipment & diversifying to related areas managing the business on commercial lives in a climate of growing Professional competence.

1. To tap International Market for Civil Military Aerospace Application.2. To become one stop hub (single centre) for all Defenses Aircraft and

Helicopter requirements.3. Private or Public Partnership in Civil and Defenses Production of

aircraft.4. Maintain enough resources at optimum level to meet objectives and

goals of the company.5. Cultivate leadership with shared vision at various levels in the

organization.6. Be competent in Design, Analysis & up gradation of knowledge & skills,

training, retaining.

COMPANY’S HRD STRATEGY:

A. Promotion and Career planning.

B. Training Programmes.

C. Improving Quality of Life.

D. Formation of HRD Cells.

STRUCTURE:

The Design of organization structure is a deciding task to the Management of an organization. It is the Skeleton of the whole organization depicting the formal relationship among various position and activities.

Structure of HAL’s Aircraft division-

DGM-Finance

Employees

Assistant accounts officer

Senior manager-Finance

Accounts officer

Manager-Finance

Deputy Manager

HAL Aircraft has a vertical structure. The hierarchy relationship with a number of levels from top to bottom. Authority flows downward. It is pyramid shaped, which implies Centralized Authority at the top, departmental job hierarchy in the middle and intense division of labor at the bottom.This type of structure provides a clear and well-defined work setting to its employees.The following are various departments of HAL which is helpful to run the company systematically and smoothly perform the organizational goals and objectives:

o Production.o Finance.o Human Resource & Administration.o Marketing.o Purchase Department.o Research & Development.o Material Management.o Product Design.o Industrial Engineering & Management services.o Stores department.

SYSTEM:

System refers to the rules, regulation and production concept both formal ad informal that complement the organization structure.The organization follows the informal and legal procedure in taking the orders from the customers. For the regular interaction with sub-ordinates and line persons, the company people go for both formal and informal interaction.

SHARED VALUES:

There are 7 principles that comprise the shared values process.

The Management should share these values with employees. This sharing lead to greater productivity, Quality, job satisfaction and products.

The organization is committed to these values to guide company and employees in all their activities:

1. CUSTOMER SATISFACTION:

The company is dedicated to build a relationship with the customers where it becomes a partner in fulfilling their mission. The company strives to understand the customer’s needs and to deliver products and services that fulfill and exceed all their requirements.

2. COMMITMENT TO TOTAL QUALITY:

The company is committed to continuous improvement of all the activities. The company will supply products and services that conform to highest

standards of design, manufacture, reliability, maintainability and fitness for use as desired by the customers.

3. COST AND TIME CONSCIOUSENESS:

The company believes that its success depends on its ability to continually reduce the cost and shorten the delivery period of the products and services. The company will achieve this by elimination waste in all activities and continuously improving all processes in every area of the

4. INNOVATION AND CREATIVITY:

The company believes in striving for improvement in every activity involved in the business by pursuing and encouraging risk taking, experimentation and learning at all levels within the company, with a view to achieving excellence and competitiveness.

5. TRUST AND TEAM SPIRIT:

The company believes in achieving harmony in work life through mutual trust, transparency, co-operation and sense of belonging. The company will strive for building empowered teams to work towards achieving organizational goals.

6. RESPECT FOR THE INDIVIDUAL:

The company values its employees. The company will treat each other with dignity and respect and strive for individual growth and realization of every ones real potential.

STAFF:

Staffing is the process of acquiring human resource for the organization and assuming that they have the potential to contribute to the achievement of the organization goals.

The following is the various categories & designations of staff in HAL:

CATEGORY DESIGNATION

A Helper, messenger, waiter B Mechanic, technician, security guard, clerks

& typist C senior technician, electrical welder,

mechanics

D Highly skilled technician E Master skilled technician, senior

administration, assistant Accountant

S1 Departmental supervisor

S2 Joint supervisor S3 Supervisor S4 senior supervisor

OFFICERS (EXECUTIVE LEVEL):

CATEGORY DESIGNATION GRADE 1 Assistant engineer,

assistant officer GRADE 2 Engineers GRADE 3 Assistant managers GRADE 4 Managers GRADE 5 Senior Managers GRADE 6 Assistant General

Managers GRADE 7 Deputy General

Managers GRADE 8 General Managers GRADE 9 Chief General

Managers GRADE 10 Executive directors

GRADE 1-5 is considered to be lower management.GRADE 6-10 is considered to be middle management.

SKILLS:

Skills refer to crucial strengths or capabilities of an organization. Among one of the objectives of the organization is “continuous improvement in knowledge, skill and competence”.

According to company’s mission, vision, objectives, strategies and policies, following are identified necessary to improve the Employee’s skills. Skill mainly in HAL is quality, technology and innovative employees being drivers by technology possess and should require technical skills like:

Executives: ENGINEERING.

Non Executives: ITI and Diploma.

MAN POWER PLANNING:

Focus on the requirement would be necessary to recruit people with the combination of knowledge, skill, experience and attitude in line with organizational requirement through appropriate man power plan both short term and long term Recruitment Programmers.

TRAINING & DEVELOPMENT:

Identification of Training competency requirement in terms of mission, vision of the company would be the strategic point of the Training & development strategy of the company.

The following objectives have been set in this regard:

1. To provide Training to all Employees at regular interval in a plan period of 5 years.

2. Training to become an integral component of individual professional evolution by:

Updating knowledge to avoid obsolescence Enhancing Professional creativity Enabling employees to take up higher responsibility. To create a business and strategic thinking to take new business challenges.

PERFORMANCE APPRAISAL:

Identification of time scale performance and resultant corrective action out the company would be given priority. Similarly, faster career growth opportunity would be provided to high performance.

REWARD SYSTEM:

Focus of the system in the company would be to promote teamwork and culture, achievement and excellence in the organization. Coupled with above like “INTER DIVISIONAL COMPETITION” etc has been institutionalized in the company for the team reward.

SCHEME FOR LEARNING AND CERTIFICATION FOR EXECUTIVES.

HAL has also introduced the scheme for learning and certification for the Executives as a starting point for building individual knowledge. The scheme inter-alia provides opportunity for the Junior and Middle Management executives to broaden perspective by not only learning about all functions and also the procedures in their respective discipline but also in related areas and overall knowledge about the organization and its environment.

STYLE:

Style is nothing but an organization culture, development of which is continuous and improving each year. The employee shares a common way of thinking and behaving in an organization. They give due respect to women. Employees are very professional in their dealings. The Managers go for achievement of organizational goal, motivation to sub-ordinate and quality of the work. The culture followed in HAL is open culture where

The superior acts on the criticisms. Superior listens to complaints. Superior follows up an employee opinion.

The style of functioning of HAL is PARTICIPATIVE.

Top management consists of Chairman, Board of Directors, Managing Directors, General Manager, & Assistant General Manager, Deputy General Manager.

2. Middle level consists of Deputy Manager, Manager, Senior departmental and sectional heads.

3. Lower level consists of Junior Officers, Supervisors and Employees.

The management activities flow from top to bottom and it is authoritative organization where everyone is not given individual freedom to put rules and regulations. It has to act according to the ministry of defence.

SWOT ANALYSIS :

A scan of the internal and external environment is an important part of the strategic planning

process. Environment factors internal to the firm usually can be classified as strength (S) or

weaknesses (W), and that external to the firm can be classified as opportunities (O) or Threats

(T). Such an analysis of the strategic environment is referred to as SWOT analysis.

The SWOT analysis provides information that is helpful in matching the firm’s resources and

capabilities to the competitive environment in which it operates. As such, it is instrumental in

strategy formulation and selection. The following diagram shows how a SWOT analysis fits in to

an environment scan:

TOP MGT

MIDDLE MANAGEMENT

LOWER LEVEL MANAGEMENT

SWOT Analysis Framework:

STRENGTHS:

Enjoys monopoly Enjoys budgetary support and orders Only supplier for maintenance of Aircrafts. Biggest overhaul centre in the East. More than 50 yrs old, it has achieved expertise in technology. Biggest R&D Unit and also foundry and forge unit. High skilled laborers.

WEAKNESS:

All major decisions are taken by the Government. Since it is Public sector Retrenchment is not easy. Higher inventory cost. Delays in decisions due to procedures and Authority. Focus on large Institutional customers only. Highly dependent on Government sector. Lacks Efficiency (Productivity), major working people are above

age 45.

OPPORTUNITIES:

Export Orders towards A320 Airbus Doors, Boeing Doors and Spares parts-Jaguar.

Increasing demands for small and medium range equipments.

Environmental Scan

Internal Analysis External Analysis

Strengths Weaknesses Opportunities Threats

Expected to get more orders in future, due to competitive prices. HAL can compete in the global market. Develop good vendors for detail parts and assemblies Increasing outsourcing efforts for details and sub assemblies. Started additional work on PSLV/GSLV structures. Facility for thermal painting is being established at the division. Development and fabrication of structures for GSLV MK III prog.

THREATS: Overhaul of Aircraft and light maintenance open to Private. Permitting Private sector for manufacturing and supplying Defense

requirements. Liberalization Policy of Government of India. New Economic Policy and signing of WTO Agreement by the

Government. Change in Technology of information with more features. Is facing competition with the international market because of

licenses. Licenses agreement has restricted the company to enter into

business with other countries. Depends on other countries for raw materials. Changing foreign policy also affects the industry. Sole customers may go for outsourcing. Delays in placing order.

HINDUSTAN AERONAUTICS LIMITED:

SOURCES OF FUNDSSHARE HOLDERS FUNDSHead Office Control Account 1 -128984.47 -118759.95Reserves And Surplus 2 11245.75 9347.01

-117738.72 -109412.94

LOAN FUNDS 3Secured Loans 1453.51 190.76Unsecured Loans 0.00 0.00

1453.51 0.00

Deferred Liabilities (Net) 4Deferred Tax Liabilities 4A 0.00 0.00

-116285.21 -109222.18

APPLICATION OF FUNDSFIXED ASSETSGross Block 5 9551.84 9290.02Less : Depreciation 6 7860.27 7617.92Net Block 1691.57 1672.10Capital WIP 7 1755.58 671.26

3447.15 2343.36Special Tools & Equip.. 8 24793.75 10694.96

Investments 9 0.00 0.00Deferred Tax assets 9A 0.00 0.00

CURRENT ASSETS AND LOANS AND ADVANCESInventories 10 129747.15 81116.17

BALANCE SHEET SCH 31 st MARCH 2008 31 st

MARCH‘07

Sundry debtors 11 8743.47 9121.19

Cash and Bank Balances 12 15.24 28.34

Loans and Advances 13 25754.54 140019.30

164260.40 230285.00Less: Current Liabilities 14 322376.47 370699.77

provisions 14 10297.89 6417.37

332674.36 377117.14

Net Current Assets -168413.96 -146832.14

INTANGIBLE ASSETSGross Carrying Amount 15 25124.64 25039.29

Less: CumulativeAmortization and Impairment Loss

1236.79 467.65

Net Carrying Amount 23887.85 24571.64

-116285.21 -109222.18

CHAIRMAN

GENERAL MANAGER

ADDITIONAL GM

(FINANCE