Professional Documents
Culture Documents
By
Mr. ABHISHEK R.
Dr. PRAVEENA K.
ASSOCIATE PROFESSOR
CERTIFICATE
PRINCIPAL
SCMS SCHOOL OF TECHNOLOGY AND MANAGEMENT
ALUVA, KOCHI, KERALA – 683106
CERTIFICATE
2019.
original work. I further declare that this report on the study is based on
Date: ABHISHEK R.
Last, but not the least I would like to thank my family and friends who
were a source of support and encouragement throughout the completion
of the project.
Abhishek. R
vi
EXECUTIVE SUMMARY
The organizational study at Kajaria Ceramic Limited was conducted from 3 rd April
2018 to 4th May 2018. Scope of the study was limited only to Kajaria Ceramics
Limited, Cochin. Study at KCL was conducted mainly to familiarize with business
organization and its interactive surroundings. For this study data collection was done
using primary and secondary source. The entire study course was divided into three
phases.
First phase dealt with the analysis of the business environment. It included the
PESTEL analysis to analyze the remote external environment of the industry. The
global, Indian as well as regional scenario related to the industry was considered
during the analysis. The competitive environment was also considered while
analyzing the business environment.
Change has always been a constant in the business world. Yet in recent years it has hit
us with an unprecedented speed and intensity. The forces shaping our world today are
immense, complex, surprising and challenging. The long term objectives of analysis
of remote external environment includes profitability, employee development etc.
Second phase deals with overview of the entire organization. Company gives
importance to safety at the work and they also promote environmental friendly
policies. The departmental functions of different departments were analyzed in this
phase.
The study concludes with a SWOT analysis. The SWOT analysis was made in order
to understand the strength weakness, opportunity, threat of the company’s
environment. The company is having a good brand image in the minds of the people.
They give more importance to quality and make no compromise in it. Its strong brand
image, good distribution channel and strong financial support are its strengths. This
industry is a capital intensive one. There is also strong trade union presence.
Improvement in economic condition coupled with increase in tile sale is the major
opportunities for the company. It is threatened by the decrease in availability of
natural clay and sand.
vii
TABLE OF CONTENTS
Chapter No Title Page no.
Acknowledgement vi
1 Introduction 1
3 Organizational Analysis 15
4 53
Observations and Conclusion
54
4.1 Observation
BIBLIOGRAPHY 57
viii
LIST OF TABLE
ix
LIST OF FIGURES
Figures Title Page no.
x
CHAPTER ONE
INTRODUCTION
CHAPTER 1: INTRODUCTION
1.1 Introduction to the Study
An organization is a social arrangement which pursues collective goals, controls its
own performance, and has a boundary separating it from its environment. It is a non-
random arrangement of components or parts interconnected in a manner as to
constitute a system identifiable as a unit. Today’s world need is a corporate world and
it requires a lot of management activities to achieve success, for this purpose in this
competing corporate world of multinationals and industries, industrial revolution has
brought in a lot of corporations competing for preferences and success in the business
world. For the purpose of acquiring practical knowledge of the working and
functioning of a company, I have chosen Kajaria Ceramics Limited , which is the
most successful ceramic/vitrified tile manufacturer in India.
Kajaria Ceramics is the largest manufacturer of ceramic/vitrified tiles in India. It has
an annual aggregate capacity of 68.37 mn. sq. meters, distributed across eight plants -
Sikandrabad in Uttar Pradesh, Gailpur & Malootana in Rajasthan, four plants in
Gujarat and one at Vijayawada in Andhra Pradesh. Kajaria's the manufacturing units
are equipped with cutting edge modern technology. Intense automation, robotic car
application and a zero chance for human error are few reasons for Kajaria Ceramics
Limited to be the number 1 in the industry. Founded 29 years ago, Kajaria Ceramics
has since then grown stronger with its hard work, innovations and patronage from our
discerning customers. The Indian consumers' rapidly growing appetite for style and
aesthetics is the inspiration behind every design of Kajaria Ceramics and its pace to
keep up with the customer and market demands has made Kajaria Ceramics a
synonym for quality, service and innovation - not only in the domestic market but in
the international market too. Kajaria Ceramics has increased its capacity from 1 mn.
sq. mtrs to 68.37 mn. sq. mtrs. in last 29 years and offers more than 2000 options in
ceramic wall & floor tiles, vitrified tiles, designer tiles and much more. These tiles
come in a wide range of colours and textures to complement bathrooms, living rooms,
corridors, study rooms & kitchen, born out of an inspired creativity of those who feel
that rooms should be an extension of the beauty reflected. With an unparalleled
commitment towards quality we have strived to adopt technologies and standards with
the changing times. Be it technology, research, design or quality, Kajaria Ceramics
has set its sight on all these factors adopting new production techniques in order to
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enhance the quality of its products. Due to creativity and design ability of our team,
our design comprises both innovation and exclusivity. Leveraging the two invaluable
assets - the Kajaria Ceramics brand and unparalleled, multi-layer distribution network
- to expand the product bouquet to cater to the growing aspirations of the discerning
Indian customers.
2
1.5 Methodology
Data collection method: The data required for this particular study was
collected from two different sources, which were primary and secondary sources of
data.
1.5.1Primary Data:
The primary data required for the study was collected through two phases.
Phase 1: The required information was collected through observation study at the
Organization for a period of 1 month. Some of the Key people like the HR head and
the Department Head were interviewed based on a frame of questions along with it.
Phase 2. After getting the requisite data, the report preparation as done.
3
CHAPTER TWO
ANALYSIS OF EXTERNAL
ENVIRONMENT OF BUSINESS
CHAPTER 2: ANALYSIS OF EXTERNAL ENVIRONMENT OF
BUSINESS
2.1 Analysis of the Remote External Environment
A company’s remote environment is composed of elements beyond the scope of the
company’s control. Elements of the remote environment includes current and
expected economic, social, ecological, technological and political factors that affects a
firm’s decision making abilities and freedom. It is a proactive exercise to ensure that
changes in the external environment either remote or operating do not take the firm by
surprise. Analysis of the remote business environment helps business strategists to
understand the nature and direction of the current conditions. Remote analysis spots
potential issues and predicts trends.
Change has always been a constant in the business world. Yet in recent years it has hit
us with an unprecedented speed and intensity. The forces shaping our world today are
immense, complex, surprising and challenging. The long term objectives of analysis
of remote external environment includes profitability, employee development etc.
Political Factors:-
Politics can increase Kajaria Ceramics Limited risk factors, because governments
can quickly change business rules that negatively affect Kajaria Ceramics Limited
business. "Political Risk (Kajaria Ceramics Limited)" has a significant impact, so an
analyst should put more weight into it.
This statement will lead to a decrease in profits. Political Risk (Kajaria Ceramics
Limited) is an easy qualitative factor to overcome, so the investment will not have to
spend much time trying to overcome this issue.
Economic Factors:-
The company raise its funds through issue of share, debentures, retained earnings,
public deposits and other long term and short term sources of raising funds.
5
Social Factors:-
Transparent extrapolation between our quality discipline and customer delight, so
that each workman recognizes the inseparable role of quality in every batch of paper.
A continued focus on enhancing manpower productivity to bring it at par with
industry norms. A slew of initiatives and best practices are being implemented in this
direction to meet upcoming global challenges in the post–WTO era.
Redefined the dynamics of the ceramic industry by moving the traditional
transaction based sales system to a relationship-based model.
Technological Factors:-
Annual speed increase of fastest machines in the world is about 50 m/min. When the
ceramic machine is designed for highest speed then the product quality and machine
run ability are also excellent.
All grades have today very high speeds. Upgraded second hand machines are not
viable anymore, because they are always too slow compared to new machines.
Technological change is a term that is used in economics to describe a change in the
set of feasible production possibilities.
Neutral technological change refers to the behavior of technological change in
models. A technological innovation is Hicks neutral, following John Hicks (1932), if
a change in technology does not change the ratio of capital's marginal product to
labour‟s marginal product for a given capital to labour ratio.
A technological innovation is Harrods neutral (following Roy Harrods) if the
technology is labour-augmenting (i.e. helps labour); it is Solow neutral if the
technology is capital augmenting (i.e. helps capital).
Environment Factors:-
The company gives much importance to their corporate social responsibility and the
also have a good recycling and control measures inorder to dispose the waste
materials which are been generated from the activity. The company gives much
priority to all the pollution check measures as stated by the statutory.
Legal Factors:-.
Legal system for business in India is very flexible. The legal segment centers on how
6
the courts influence business activity. Examples of important legal factors include
employment laws, health and safety regulations, discrimination laws and labour law.
The company has got its own unique technique in manufacturing products. Thus in
order to protect these rights the company can go for patent rights and intellectual
property rights.
Mostly people do not frequently change their floor tiles,. The customer prefer for the
quality as most important element while purchasing therefore the customer goes for
the branded products. The buyer would not have a believer in new brand as
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compared to exiting brands. It involves huge capital investment were the
manufacturing should have the knowledge of the production process. It is a low
attractive industry for the producers and also depends on the degree of demand and
growth potential.
Threat of substitutes:
In case of ceramic industry, products has feature of water proofing and easy to clean
which is essential for its uses. This has made it different from other product. There
are no alternatives products for this sector.
In India, there are large number of regional players and their annual turnover is
12,900 crores. There is a huge competition in this sector due to highly attractive
market. It creates pricing competition and a price advantage for the customer. The
customer have no other alternative to the ceramic products .therefore, the customers
have no option apart from these products and there exists a definite demand for this
industry. The access to information, switching costs and awareness are the different
factors that depend affect the bargaining power of customers.
The bargaining power of suppliers is also described as the market of inputs. The
manufacturer has a number of options available for raw material, machinery and
man power. There is also huge pricing competition for the suppliers of raw
materials. It depends on the differentiation inputs, substitute of inputs and strength
of distribution channel.
There is a tough competition from the unorganized market and the regional players.
The Level of advertising expense, powerful competitive strategies and flexibility
through customization, volume and variety are the factors. KCL, making its lead in
the revenue from its core operation activities.
8
2.4 Competitors Analysis:
2.4.1 Somany Ceramics
YEAR EVENTS 1968 - The company was incorporated on 20th January at Calcutta.
It manufactures and deals in glazed tiles and carries on leasing business.
2001 - SPL Ltd., makers of Somany tiles, has launched a new concept in floor and
wall tiles, called the VersaTile brand. -2004-Delists shares from Delhi Stock
Exchange Association Ltd. -2006-SPL Ltd has entered into Joint Venture (JV)
Agreement with Keraben S A with the aim of manufacturing, promoting, distributing
and selling the products within India and other countries. -2007- Company name has
been changed from SPL Ltd to Somany Ceramics Ltd. -2009- Somany Ceramics Ltd
has appointed Mr. Y. K. Alagh as Additional Director on the Board of the Company.
-2010-Somany Ceramics Sub-division/split up the existing each fully paid Equity
Shares of nominal face value of Rs.10/- each into 5 fully paid up Equity Shares of the
nominal face value of Rs. 2/- each -Shri Sandeep Kumar has been appointed as the
Nominee Director on the Board of the Company. -2011-Somany Ceramics Proposed
acquisition of 26% equity stake in M/s Vintage Tiles Private Limited-Somany
Ceramics inaugurates First Somany Studio showroom in Dindigul -Somany Ceramics
inaugurates First Somany Studio showroom in Indore -Somany Ceramics inaugurates
First Somany Global Exclusive showroom in Ahmedabad -Somany Ceramics
inaugurates First Somany Exclusive showroom in Anantnag 2012 -Somany Ceramics
inaugurates Somany Exclusive showroom in Kochi -Somany Ceramics enters into
partnership with Fiandre Group -Somany launches ‘The King of all Slabs’ -Somany
Ceramics inaugurates Somany Studio showroom in Bangalore -Somany Ceramics
inaugurates First SOMANY STUDIO showroom in Gandhidham.
2013 - Board recommended a Dividend @ 60% i.e. Rs. 1.20/- per Equity Share of Rs.
2014 - Somany Ceramics Ltd has appointed Mr. Narayan Anand as an Independent
Additional Director of the company. - Board recommended a Dividend of 75% (Rs.
1.50 per equity shares of Rs. 2/- each) . - Somany Ceramics won spotlight awards for
the year 2014
2/- each. 2016 -Somany Ceramics completes expansion at Kassar plant
9
2.4.2 Johnson Tiles
Johnson Tiles was founded in 1901 as H&R Johnson Ltd., by the Norcros Group in
the United Kingdom. H&R Johnson became a market leader and was famous
throughout the UK for quality product
Throughout the first half of the twentieth century, the Norcros Group expanded the
organisation and developed sister companies in South Africa, Greece and India as
well as offices in Dubai and USA. These companies flourished and the Norcros Group
then had a considerable global presence and buying strength.
Having grown strongly in the Northern Hemisphere, the Norcros Group felt ready to
enter the Australian market thus on 22nd June 1963, Johnson Tiles Australia, trading
as H&R Johnson Australia PTY LTD was born. Two sites were set up – a
manufacturing plant in Mascot, New South Wales and another in Coburg, Victoria.
Both factories produced ceramic tiles and other ceramic goods for over twenty years
and employed more than 600 Australians.
10
2.5 Tile Consumption of Top 10 Country
TABLE 1
Tile Consumption of Top 10 Country in Million Sq Mtr
COUNTRIES
Year 2015 Year 2016
CHINA
5970 6495
INDIA 850 955
BRAZIL 899 792
SPAIN 440 492
VIETNAM 440 485
ITALY 395 416
INDONESIA 370 360
IRAN 300 340
TURKEY 320 330
MEXICO 245 267
Source: https://www.kajariaceramics.com/pdf/AnalystPresentation.pdf
Figure: 1
World production scenario
Source: Ceramic World Review
11
The break down in consumption by geographical area is very similar to that of
production.
Asia accounted for 69% of the world consumption.
Figure: 2
Tile capacity growth
Source: Ceramic World Review
This figure shows tile capacity of the past five years.
Figure: 3
Tile sales growth
Source: Ceramic World Review
12
CHAPTER THREE
ORGANIZATIONAL ANALYSIS
CHAPTER 3: ORGANIZATIONAL ANALYSIS
Both the plants have adopted single firing technology (Monoporosa technology),
which is the most latest, cost efficient and more productive technology. The company
is marketing its products since inception under the name brand name of ‘Kajaria
Ceramics Limited’ which is a well-known brand within the industry in India and
abroad. The company has also been selected as one of the top performing Global
Growth Company from India by World Economic Forum in 1997. Kajaria is the first
ceramic tile company in India and may be 5 th in the world accredited with ISO 9002
14
certification for its quality system. During the year the company has also been
accredited with the “ISO 14001” certification for the Environment Management
System for manufacturing Ceramic Tiles. The company is the No.1 preferred
company for ceramic tiles in India. The company has also been given OHSAS 18001
certificate by M/s. TUV Suddeutschland, Germany. The certificate has been given for
the commitment of the company for fulfilling international standards in Occupational
Health and safety Management System- Specification. Kajaria Ceramics is the first
ceramic tile company in the world to get this certification.
Kajaria Ceramics Limited has an all India network of 600 dealers. Kajaria is selling
80% of its products to the retail consumer and 20% to the projects. Since last year
company has franchised exclusive tile Shoppe & tile galleria on all India bases. It
displays the mock bathroom & kitchen with various combinations of tiles. It helps in
selection of the product/ design for the floor & walls. These also have customer
support staffs, which advise on sizes, combinations & laying techniques.
The company has opened 11 retail European styled showrooms located in various
parts of the country. Kajaria Ceramics has also opened a showroom in Melbourne,
Australia.
The company is the largest exporter of ceramic tiles from India and accounts for 40%
of total exports of ceramic tiles from India. The Company’s exports are mainly to
Australia, Sri Lanka, Bahrain, UAE, Saudi Arabia and Oman. The company has won
7 exports award including the National Export award given in May 2000.
The company has closed the Financial Year 2009-10 with a turnover of Rs 7667.54
million as against the turnover of Rs 6911.99 million in the corresponding financial
year. The turnover is high mainly because of increase in demand in domestic market,
effective cost control measures, better cash management and reduction in the interest
rate. The company has closed the turnover of the 1st quarter of 2009-10 is 1598.8
million which ends on 30th of June.
15
being paid under Section 4A on M.R.P. less abatement. The goods are delivering at
the Factory gate to the Buyer/ on behalf of the Buyer to the transporter. The freight at
actual is paid by the Dealer/Buyer directly to the transporter at destination. In few
cases, the freight at actual is paid by us which is show separately in the Invoice and
realized from the buyer/dealer.
People – Orientation : To enable each employee to achieve his potential, improve his
capabilities, perceive his role and responsibilities and participate and contribute
positively to the growth and success of the company. To invest in human resources
continuously and be alive to their needs.
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3.4 KCL CONTRIBUTION IN INDIA
CORPORATION OFFICE
J-1/B-1 (Extn.), Mohan Co-operative Industrial Estate,
(Opp. Badarpur Thermal Power Station), Mathura Road,
New Delhi – 110 044, India.
Phone: 26946409, Fax: 91-11-26946407, 26949544
Email: newdelhi@kajariaceramics.com
Website: http://www.kajariaceramics.com
Manufacturing Units
KAJARIA CERAMICS LTD.SIKANDRABAD
A-27/28/29, Industrial Area, Sikandrabad, [Distt.] Bulandshahr {UP}
Tel; (05735-222393 / 222819 Fax ;( 05735)-222140
The Company has well defined its internal controls in all areas of its operations. The
Company has an independent internal audit activity, which measures the efficiency,
adequacy and effectiveness of other controls in the organization. A summary of audit
observations are placed before the Audit Committee of the Board of Directors. The
Audit Committee‟s recommendations and directions are noted and action taken
accordingly. The Company has well defined the procedures to execute financial
transactions.
17
The Superbrand is considered a very prestegious award for branding in India, which
the company proudly bagged for tenth consecutive years. The winners have been
identified to be the strongest brands in their respective categories and have been
chosen from more than 700 shortlisted consumer brands. The Superbrand
organization has been tracking the branding phenomenon for over 14 years now. The
criteria for selection of the winning consumer brands include perceived brand image
plus the brand's mindshare, goodwill, consumer loyalty, trust and emotional bonding.
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For implementing of Social Accountability Standards for the Manufacturing of
Ceramic Tiles.
ISO-14001
For implementing an Environmental Management system for the Manufacturing of
Ceramic Tiles.
ISO-22000:2005
For implementing a Food Safety Management System for the Manufacturing of
Ceramic Tiles.
ISO-50001:2011
For Establishing, Implementing, Maintaining and Improving an Energy Management
System for a systematic approach in achieving continual improvement of energy
performance.
19
3.7 QUALITY POLICY
(ISO 9001:2000)
We are committed to excel in all areas of Management to be a leader in the
manufacture of Ceramic Glazed Floor and Wall Tiles by complying with the
requirements of our customers, National and International Standards.
We shall achieve this through continual improvement in our Quality Management
System by increasing the productivity, reducing the costs, updating and up-gradation
of technology, optimum utilization of resources and active involvement of all
employees.
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3.10 SOCIAL ACCOUNTABILITY POLICY (SA)
(SA 8000)
Committed to:
Conformance of national and international standards requirements w.r.t. Social
Responsibility and Accountability.
Improve its social performance continuously to ensure better quality of life.
21
Disc or by campana depending upon the required surface followed by screen printing
and dry powder application as per design requirement.
The Glazed Tiles are automatically loaded in the box car and then transferred to
the track for roller hearth kiln feeding. At the kiln entry tiles are unloaded and fed into
the kiln in pre-determined firing cycle and temperature. The firing temperature is in
the range between 1130 to 1160 Deg.Cent. Depending upon the firing cycle. At the
kiln exit, the fired tiles are loaded in the box car and transferred to the sorting section
for selection. In Sorting Section, tiles are sorted as First, Second and Utility
depending upon the visible faults and packed in corrugated boxes and sent to B.S.R.
for dispatches.
22
and preferable to all type of consumers due to its products availability in wide range
of floor & wall tiles.
23
2014
38,85,420 Warrants were convertible into equity shares by M/s WestBridge Crossover
Fund LLC.
2013
20,00,000 equity shares were issued on preferential basis to M/s WestBridge
CrossOver Fund, LLC.
38,85,420 Convertible Warrants Issued to M/s West bridge Cross over fund LLC.
1995
4,25,000 No. of equity shares allotted to IFCI in terms of exercise of conversion
option under loan agreement.
1994
The company proposed to issue 2,00,000 - 14% Non-Convertible debentures of Rs.
100 each at par to financial institutions/Mutual funds on private placement basis.
54,96,800 No. of equity shares allotted on conversion of Zero Interest Unsecured
each at par were issued on preferential basis to promoters, directors and their friends,
including group companies.
Each debenture of Rs. 70 will be converted into 2 equity shares of Rs. 10 each at a
premium of Rs. 25 per share on expiry of 9 months from the date of allotment or on
1st April, 1994, whichever is earlier.
1991
12,47,696 shares allotted (prem. of Rs. 7 per share; prop. 1 deb: 3.53 shares) in
conversion of deb. (Part 'B').
1989
During August/September, the company offered 3,22,000-14% secured fully
convertible debentures of Rs. 100 each for cash at par. Out of these 3,06,670
debentures of Rs. 100 each were offered on Rights basis to the existing shareholders
in the prop. 5 debentures: 100 Equity shares (all were taken up). Simultaneously,
24
15,330 debentures of Rs. 100 each were offered to the employees and Indian working
directors of the Company on an equitable basis (only 785 debentures were taken up).
Additional 31,455 debentures along with the unsubscribed portion of 14,545
debentures from employees quota were allotted at the discretion of the directors.
As per the terms of issue, part `A' of Rs. 40 of each debenture was converted at par
into four equity shares of Rs. 10 each at the end of six months from the date of
allotment of the debentures. Accordingly 14,13,820 shares were issued. The
remaining part of Rs. 60 was converted into 3.53 number of equity shares of Rs. 10
each at a premium of Rs. 7 per share on 15th December, 1991. 1990 - A further
expansion of installed capacity from 26,000 MT to 40,000 MT was being
implemented.
14,13,820 shares allotted at par in conversion of debentures (Part 'A').
1987
700 shares subscribed for by the signatories to Memorandum of Association.
53,32,700 shares then issued at par of which the following were reserved for
allotment:
23,32,700 shares to promoters, Indian resident directors, etc. (incl. 7,50,000 shares
predominantly by NRIs.
8,00,000 shares on repatriation basis to NRIs and NRI Companies owned
predominantly by NRIs.
Out of the remaining 22,00,000 shares, the following were reserved for preferential
allotment:
2,66,600 shares to employees, Indian working directors, workers of the Company
and employees of the Kajaria Exports Ltd. (only 11,400 shares taken up) and
5,00,000 shares to NRIs on repatriation basis only 39,600 shares taken up). The
25
3.16 POLICY FOR PRESERVATION OF DOCUMENTS OF KAJARIA
CERAMICS LIMITED
PREAMBLE
In pursuance to Regulation 9 of the Securities Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”),
formulates the policy on preservation of the Documents to aid the employees in
handling the Documents efficiently.
The main purpose of the policy is to have a binding framework for the preservation of
documents of the company, as approved by the Board of Directors of the company,
which shall classify them in at least two following categories as follows:
1. Documents whose preservation shall be permanent in nature;
2. Documents with preservation period of not less than eight (8) years after
Completion of the relevant transactions. The Company shall keep documents
specified above in electronic mode.
Objective
Internal Control Process of Kajaria Ceramics Limited is aimed to provide a
reasonable assurance that the Company achieves its objectives in the following
categories:
Reliability of financial reporting
26
Effectiveness and efficiency of operations,
Compliance with applicable laws and regulations
27
Framework
The Board recognises its responsibilities to present a fair, balanced and
understandable assessment of Company’s Position and prospects. The Board has
accountability for reviewing and approving the effectiveness of internal controls
operated by the Company, including financial, operations and compliance controls
and risk management.
The Chairman & Managing Director / Joint Managing Directors of the Company has
the overall responsibility for designing and implementing effective internal control.
More than any other individual, they set the "tone at the top" that affects integrity and
ethics and other factors of a positive control environment and for fulfilling this duty
they provide leadership and direction to Head of Department.
Head of Department, in turn, assign responsibility for establishment of more specific
internal control policies and procedures to personnel responsible for the department
functions.
Every Employee in an organization has the responsibility for internal control to some
extent. All employees produce information used in the internal control system or take
other actions needed to affect control. Also, all personnel are responsible for
communicating to seniors about the problems in operations, non-compliances with the
code of conduct / applicable laws, or other policy violations or illegal actions.
ADDITIONAL MEASURES
1. Audit committee
The audit committee, performs the following functions:
(i) Review and monitor the auditor’s independence and performance, and
effectiveness of audit process;
(ii) Examination of the financial statement and the auditors’ report thereon;
(iii) Approval or any subsequent modification of transactions of the company
with related parties;
(iv) Scrutiny of inter-corporate loans and investments;
(v) Valuation of undertakings or assets of the company, wherever it is
necessary;
(vi) Evaluation of internal financial controls and risk management systems;
(vii) Monitoring the end use of funds raised through public offers and related
matters.
28
Audit Committee is also responsible for monitoring the adequacy of the
internal controls of the Company.
Guiding Principles
KAJARIA recognizes and is always committed towards sustainable development and
inclusive growth. We strive to ensure strong corporate culture which emphasizes on
29
integrating CSR values with business objectives. We also pursue initiatives related to
quality management, environment preservation and social awareness.
Scope of CSR Policy: The policy would pertain to all activities undertaken by the
Company towards fulfilling its corporate social responsibility objectives. The policy
would also ensure compliance with section 135 of the Companies Act, 2013, Schedule
VII of the Companies Act, 2013 and the rules made there under.
Budget: A specific budget is allocated for CSR activities for every financial year
which shall be complying with the legal limits defined in Companies Act 2013 which
presently is two per cent of the average net profits of the company made during the
three immediately preceding financial years.
Budget for expenditure to be incurred on the focused activities to be covered, to
achieve the aforesaid goal, would be decided by the CSR Committee from time to
time.
The Corpus of the CSR activities would include the following amounts :
a) 2% of the average net profits
b) Any income arising therefrom and
c) Surplus arising out of CSR activities
30
The surplus arising out of the CSR activities will not be a part of business profits of
the Company.
CSR Activities
To attain its CSR objectives in a professional and integrated manner, the
company shall:
Promote education, including special education and employment enhancing
vocational skills among less privileged children, by Granting scholarships / School
Fees and Giving school Uniforms, Bags, Shoes, School Books, Transportation
charges to the Less privileged children
Eradicate hunger poverty and malnutrition, Promote Preventive Healthcare, Sanitation
and actively contribute to the socio-economic development by organizing the free
health checkup camps, blood donation camps, sponsoring the medical treatment,
providing blankets to the poor during winters, building/ reconstructing toilets in
Government Schools and providing facilities for safe drinking water in Government
Schools and in other areas.
Ensure the environmental sustainability, ecological balance and conservation of
Natural Resources by recycling & reusing scarce natural resources i.e. water & raw
materials regularly.
Undertake Rural / Slum Area Development Projects
5. At the time of national crisis, as a company it is imperative for us to respond to
emergency situations & disasters by providing timely help to affected victims and
their families by contributing to the Prime Minister National Relief Fund or any other
fund set up by the Central Government.
6. Any other activities as specified in the Schedule VII of the Companies Act 2013
and Amendments thereof.
31
Kajaria Bathware Pvt. Ltd. - Standalone
Gratuity
Free housing
Recreation centres
Drinking water
Sanitation
Protective clothing
Maternity benefits
32
CEO &
3.22 ORGANISATIONAL STRUCTURE MD
DIRECTORS
GENERAL GM
GM SALES (EAST, WEST, GM GM R&D GM HR
MANAGER PRODUCTION FINANCE
NORTH AND SOUTH) OPERATIONS
GM MANAGER
R&D HR MARKETIN
MANAGER MANAGER G
REGIONAL SALES MANAGER
SYSTEM
MANAGER (EAST, WEST, OPERATIONS
MANAGER MARKETING MANAGER
NORTH AND SOUTH)
ASSISTANT MANAGER TAX
ASSISTANT
QUALITY
SCENIOR SALES EXECUTIVE MANAGER
ASSISTAN
ASST. MARKETING MANAGER ACCOUNTS
T
PAYROL L TRAININ
SALES OFFICER ASSISTANT G HEADS SENIOR
EXECUTIVE FACTORY
ASST.
ACCOUNTANT
PRODUCTION
QUALITY PURCHASE MAINTENANCE WAREHOUSING EXECUTIVE MANAGER
CONTROL MANAGER MANAGER MANAGER ASSISTANT
ASSISTANT
Figure: 4
Organizational Structure WORKER
S
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3.23 Different Department in Kajaria Ceramic Ltd.
GM HR
HR MANAGER
ASSISTANT
Figure: 5
Organizational Structure HR Department
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Functions
To keep record of the employees who are benefitted by HRD schemes.
To create necessary infra-structure for HRD activities.
To maintain a record of HRD activities of the organization.
To arrange proper placement for trained employees.
To initiate and support top management for promotion of HRD activities.
To monitor the utilization and effectiveness of HRD training.
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Required qualifications of candidates and
Reporting relationship and co-workers of a particular job.
Determining wages and salaries: HR department is also involved in conducting
market surveys and determining the wages and salaries for different position in an
organization. This decision may be taken in consultation with top management and
the finance department.
Recruitment and selection: One of the most important jobs for HR departments is to
recruit the best people for the organization. This is of crucial importance as the
success of any organization depends on the quality of its workforce. Recruitment is
done on the basis of performance, productivity, quality, education, skills and
experience. It is done when a vacancy arises. Company recruits the employees by
advertising in the newspaper, website of the company and through recommendations
of the employees of the company or their relatives. Qualified employees are called for
the interview after receiving the applications. They select the workers for the plant
with technical qualifications by conducting personnel test and technical test. For
managerial level, company prefers qualified candidates and the interview is conducted
by the manager of the concerned department and the final selection is done by the
HOD.
Induction: In this process, the employee is given an overview of the company. The
general procedures and rules of the organization are described to them. Lower level
employees are given the details of their concerned departments only. Executive level
employees are given detailed description of all the departments.
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and development needs are carried out by this department. Training might include on
the job or off the job training.
Performance appraisal: Once the employees are recruited, the HR department has to
review their performance on a regular basis through proper performance appraisals.
Performance appraisal is the process of obtaining, analyzing and recording
information about the relative worth of an employee. The appraisals are done mainly
on the basis of output, quality of job, efficiency, performance, job knowledge etc. The
focus of the performance appraisal is measuring and improving the actual
performance of the employee and also the future potential of the employee. Its aim is
to measure what an employee does.
On the basis of performance appraisal the HR department will set up an action plan
for each employee. If the employees need any training then they provide that.
Grievance settlement: HR department is the link between the workers and the
management. Company maintains an open door policy were workers can meet the
managing director and discuss their problem. The Managing Director enquires about
the problem, discuss with the heads of the concerned department and solves the
problem.
3.23.2 PRODUCTION DEPARTMENT:
Aims and functions of production department
Production is the functional area responsible for turning inputs into finished
outputs through a series of production processes. The Production Manager is
responsible for making sure that raw materials are provided and made into finished
goods effectively. He or she must make sure that work is carried out smoothly, and
must supervise procedures for making work more efficient and more enjoyable.
Five production sub-fuctions
In a manufacturing company the production function may be split into five sub-
functions:
1. The production and planning department will set standards and targets for each
section of the production process. The quantity and quality of products coming off a
production line will be closely monitored. In businesses focusing on lean production,
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quality will be monitored by all employees at every stage of production, rather than at
the end as is the case for businesses using a quality control approach.
2. The purchasing department will be responsible for providing the materials,
components and equipment required to keep the production process running
smoothly. A vital aspect of this role is ensuring stocks arrive on time and to the right
quality.
3. The stores department will be responsible for stocking all the necessary tools,
spares, raw materials and equipment required to service the manufacturing process.
Where sourcing is unreliable, buffer stocks will need to be kept and the use of
computerised stock control systems helps keep stocks at a minimal but necessary level
for production to continue unhindered.
4. The design and technical support department will be responsible for researching
new products or modifications to existing ones, estimating costs for producing in
different quantities and by using different methods. It will also be responsible for the
design and testing of new product processes and product types, together with the
development of prototypes through to the final product. The technical support
department may also be responsible for work study and suggestions as to how
working practices can be improved.
5. The works department will be concerned with the manufacture of products. This
will include the maintenance of the production line and other necessary repairs. The
works department may also have responsibility for quality control and inspection.
A key aspect of modern production is ensuring quality. The term quality means fitness
for purpose i.e. a product, process or service should do exactly what is expected of it.
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Manufacturing process of Ceramic Tiles
Vibrating
Raw
Weighing Screen and
material
Ball Milling HomoTank
Powder
Horizontal Dry Spray
Storage
Dryer Pressing Dryer
(SILO)
Silk Screen
Glazing Roller Heart Kiln
Printing
Figure: 6
Manufacturing process of Ceramic Tiles
Source: Company Year Book
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Data Management and More: IT teams develop tools to collect, store, manage,
secure and distribute data to employees who need access to the latest information to
make decisions about strategic, financial and operational issues. They store company
information from sources such as customer records, sales data, market research,
financial records, manufacturing and inventory data in a single data center. The team
also sets up links to collect data from retailers, distributors and the supply chain so
that managers can make sales, marketing and production decisions based on the latest
information.
Security: Information security management is now one of the most important IT
functions in an organization. IT teams must protect the IT infrastructure and corporate
data against attacks from viruses, cybercriminals and other threats. Attacks on the
infrastructure can prevent an organization carrying out critical business operations
with a consequent impact on customer service. Data leaks can lead to loss of
confidential corporate and customer data, with the risk of fines by legislators and
damage to the organization’s reputation. While IT teams have put stringent security
policies in place to minimize the risk and impact of security breaches, they face an
increasingly complex IT environment as employees adopt mobile working or use their
personal smart phones and tablet computers to work on corporate data.
Support: To enable employees to make the most effective use of IT resources, the IT
team provides various forms of user support. After installing new software or network
facilities, the team provides training so that employees can quickly make productive
use of the new resources. The team also provides ongoing support to users through a
helpdesk or self-service facilities on the company intranet.
SAP is the ERP that is used by KCL
1. SAP FI Module - FI stands for Financial Accounting
SAP FI module is very robust and covers almost all financial business process
encountered in various industries. It is one of the widely implemented modules in
SAP. Learn more about SAP FI
2. SAP CO Module - CO stands for Controlling
Cost Accounting (CO) module of SAP provides information to managers
decision makers to understand where the company's money is being spent. CO helps
them to optimize business costs.
3. SAP HCM Module - HR stands for Human Resources
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SAP Human Capital Management (HCM) is also called SAP-HR. SAP HCM consists
of sub-modules like Personnel Administration (PA), Organizational Management
(OM), Time, Payroll that help in employee management. Learn more about SAP
HCM
4. SAP MM Module - MM is Materials Management
Materials Management module in SAP consists of several components and sub-
components including Master Data, Purchasing, and Inventory. Learn more
about SAP MM
5. SAP QM Module - QM stands for Quality Management
6. SAP PP Module - PP is Production Planning
SAP PP ( Production Planning) is a SAP module, specially designed for integrating
different department involved in production and manufacturing. It has various
components like Data Center, BOM, Work Center, CRP etc. Learn more about SAP
PP
7. SAP SD Module - SD is Sales and Distribution
SAP Sales and Distribution (SD) is an important module of SAP ERP consisting of
business processes required in selling, shipping, billing of a product. The module is
tightly integrated with SAP MM & SAP PP. Key sub-modules of SAP SD are
Customer and Vendor Master Data, Sales, Delivery, Billing, Pricing and Credit
Management. Learn more about SAP SD
8. SAP BW Module - where BW stands for Business (Data) Warehouse
SAP BI (Business Intelligence) or SAP BW is a leading data warehousing and
reporting tool. It helps convert raw data into information and insights that help
improve business margins. Learn more about SAP BW
9. SAP Basis -
SAP Basis is a set of programs and tools that act as an interface with Database,
Operating system, communication protocols and other SAP modules like FI,HCM,
SD etc. Learn more about SAP Basis
10. SAP ABAP -
ABAP (Advanced Business Application Programming) is the default programming
language for SAP applications. You can also use Java to code in SAP. Learn more
about SAP ABAP
11. SAP CRM - where CRM stands for Customer Relationship Management
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SAP CRM is the Market Leader in Customer Relationship Management Software.
SAP CRM plays a pivotal role in strengthening customer relationships. Learn more
about SAP CRM
VP IT
GENERAL MANAGER
SYSTEM MANAGER
ASSISTANT
Figure: 7
Organizational Structure IT Department
Increasing Sales: Operations also have the major objective of increasing sales. While
your sales team meets clients and sells your product or services, your operations team
sets sales goals and monitors progress. Achieving sales results means having an
excellent product or service and talented and motivated salespeople. Your operation
department sets goals, motivates and manages your sales force, and ensures that
targets and objectives are met. Through the continual monitoring of sales performance
and assisting your sales force in their efforts, your operations team helps to increase
sales.
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People Management: People are the only asset in your company that can increase in
value. Your operations team makes this happen. From hiring the best people, to
training and development, your operations department places the right people in the
right position. They also assist in maintaining excellent people performance and
handle difficult management processes, including termination, when needed.
Managing the results of your other departments, like human resources, marketing and
performance, is also an objective for your operations team.
Products and Services: Deciding on the proper inventory levels and products or
services is another important objective for your operations department. A product mix
that sells and also earns a profit is vital for the success of your company. Keeping the
product in stock, yet not overstocked, is an important goal. Maintaining a high service
level and outstanding customer service also falls under the control of your operations
team. Having the right product at the right price,sold by outstanding people all the
time, is a major and ongoing goal.
VP OPERATIONS
GM OPERATIONS
MANAGER OPERATIONS
Figure: 8
Organizational Structure Operations Department
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3.23.5 Finance Department
44
VP FINANCE
GM FINANCE
ASSISTANT
Figure: 9
Organizational Structure Finance Department
Strategy
The senior member of the marketing department takes responsibility for setting
marketing strategy in line with overall company strategy and objectives. The strategy
may be to increase share in a specific market sector, for example, to enter a new
sector, or to open a new channel of distribution, such as the Internet, to reach a wider
geographical market. The marketing department reaches agreement on strategy with
the board or senior management team before planning campaigns in detail.
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Market Research
Market research is a key responsibility for the marketing department. Research helps
the company identify market opportunities and gain a better understanding of
customer needs. It also helps them understand competitors’ strengths and weaknesses
so they can take action to protect business with existing customers or win business
from weaker competitors. The department can carry out its own research by studying
industry reports, market data on websites, or by contacting customers and prospects to
survey their needs and attitudes. Alternatively, they can brief a market research firm
to carry out the research.
Product Development
The marketing department works with Internal or external product development teams
to develop new products or improve existing ones. The department analyzes sales of
existing products and identifies gaps in the product range where there may be
opportunities for the company. Marketing employees provide development teams with
information on customer needs and preferences to help them identify the features or
improvements to incorporate in new products. Later in the product development
process, the marketing department sets prices and prepares plans to launch the
product.
Communications
Sales Support
Cooperation between the sales and marketing departments can improve sales
performance and speed up business growth. The marketing department can provide
sales teams with high-quality leads by running advertisements that include a reply
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mechanism, such as a coupon or telephone number, or by encouraging visitors to the
company website to register their details in return for a free newsletter or special
report. Marketing also prepares presentations for the sales team and supplies them
with stocks of promotional material to give to customers and prospects.
Events
VP MARKETING
GM MARKETING
MARKETING MANAGERS
SENIOR EXECUTIVES
EXECUTIVES
Figure: 10
Organizational Structure Marketing Department
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3.24 SWOT ANALYSIS OF KCL
STRENGTHS
Low cost Producer of quality tiles. Flexible manufacturing set-up for longer
uniformity of product and comprising to international standards fully adaptation,
absorption of technology.
The KCL plant was the first to use natural gas-the purest fuel that gives extra sheen
on products.
A modern facility with latest machinery like automatic CNC machines and
automatic polishing, the plant is equipped with superior technology manufactures that
avant-garde collection of eco-friendly single lever faucets apart from the normal half
turn and quarter turn faucet.
KCL has been steadfastly growing which is a reflection of its unflinching
commitment towards innovation.
A team of over two hundred technicians across India provide prompt after sales
services to its customers.
R&D-snow white glaze, import substitution of color and raw material.
Well entrenched distribution system.
Extensive supplier industry
Local base for machinery manufacturers.
WEAKNESSES
The ceramic tiles industry is dependent on the growth in the construction and housing
sector. In the Budget 02-03, tiles have been delisted from the SSI category and
accordingly all manufacturers of tiles come in the excise net. To some extent they
have arrived at the competitive level to the organized sector. But due to their
negligible overheads, tax evasion and copies of designs of organized sector that
retains the potential to undercut the organized sector. There is a stiff competition
within the organized sector which is putting pressure on the price also.
• Imports cheaper tiles from china.
• Most of the Indian population is rural does not prefer tiles.
• Existing strong market of mosaic tiles.
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OPPORTUNITIES
Strong distribution network across the country and overseas market. With focus on
retail marketing to build and establish exclusive showrooms across the country and
overseas markets.
Using innovative display and communicating to customers through exhibitions and
trade shows for consistent brand building efforts.
Nurturing and cultivating highly skilled human work force by motivating and
rewarding them.
Introduce interior designing tips which can boost sales.
THREATS
Regional low cost manufacturers are causing problems for KCL.
Government policies keep changing, so KCL should be careful while planning new
implementation.
Increasing competition from organized and unorganized players.
Low priced import from china.
Changing consumer preferences.
Large surplus capacities in the international market.
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CHAPTER FOUR
OBSERVATIONS AND CONCLUSION
CHAPTER 4: OBSERVATIONS AND CONCLUSIONS
4.1 OBSERVATION
The marketing strategies implemented by Kajaria Ceramics Limited has paved the
way their success. Since the manufacturing of ceramics tiles involves a high degree of
manual labour and automation, there is a noticeable trend of movement of
manufacturing from the developed countries to developing countries to reduce
manufacturing costs. The customers are highly satisfied by the after sales services
provided by the company. Marketing executives of the company has a high degree of
pursuing the customers and keeping them satisfied by offering them quality products.
Kajaria Ceramics Limited has more innovative ideas to offer product with new
innovation and is currently on the third rank in its production capacity. Mostly the
customers are not satisfied with the information available in user manual. Yet the
customers have dissatisfaction towards technical assistance.
All the departments of the company are integrated well and their functions are carried
out effectively. The employees of each department are very dedicated in their work
and they perform their duties efficiently. The company has tall organization structure
which contains of multiple levels. Each department consists of several other
managerial staff coming under it. The company also has a well-defined hierarchy. All
the decisions are taken by the management after considering the needs and wants of
their employees. The company encourages volunteerism and tries to make employee
participation.
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4.2 SUGGESTIONS
Kajaria Ceramics Limited have to increase the market share company should spend
moderate amount on advertising through local newspaper and television all across India.
They should also locate the production plant in other parts of India. Kajaria Ceramics
Limited should provide normal tiles which is low in cost in wide range & colors. The
company should dominate the company with more female staffs, and should add sufficient
technical information in other mediums of information like website. So customers can use
alternative way for Information. The Company needs to increase the brand image and
brand preference especially in northeast India where company’s market share is less
compared to other competitors.
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4.3 CONCLUSION
Kajaria Ceramics Limited (KCL) is one of the best ceramic tile companies in India
and in the world. They have a very unique quality products as well as wide variety of
ceramics products with them. Over the past years they are financially well balanced
and stable. . The credit for this improvement goes to efficient management, Long term
vision of the management, team spirit among the employs of the company higher
level of orders in the hands of the company, better realization and better overall
economic condition of the economy with increased emphasis of government on
expansion and strengthening of economic infrastructure.
The Tiles industry is huge and has huge potential for growth. The company should try
and revamp its operations, they should lower the price. It can be done by increase
production, achieve economies of scale and then increase market penetration. The
product is doing reasonably well in most of the market. So they should promote the
product accordingly e.g. free sampling, discounts, prominent hoardings etc.
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BIBLIOGRAPHY
www.kajariaceramics.com
Gupta JB, Fundamentals of Electrical and Electronics, 5th Ed., New Delhi, SP
Harold koontz, HeinszWeihrich., Essentials of Management, 7th Ed., New Delhi, Tata
Kondalkar V. G., Organisational Behaviour, 4th Ed, New Delhi, New Age International
Education, 2007.
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