A PROJECT REPORT

On

A Study of Factory Act in ITC

Submitted in partial fulfillment of the requirement for the award of degree

Of

Master of Business Administration

OF

MTU

MahaMaya Technical University

ITC Ghaziabad
SESSION 2013

Submitted by:

Pushpinder Kaur
Under the guidancee of:

Mr.Sandesh Bhardwaj

Company Mentor
 DECLARATION

I, undersigned, solemnly declare that the report of the project work entitled “To
identify the compliance level of Factories Act, 1948 in International Tobacco
Company Ltd, Ghaziabad and to determine its relation to work performance”, is
based on mine work carried out during the course of our study under the
supervision of Mr. Sandesh Bhardwaj, Deputy Manager, Personnel & Welfare. I
assert that the statements made and conclusions drawn are an outcome of the
project work. I further declare that to the best of my knowledge and belief that the
project report does not contain any part of any work which has been earlier
published or submitted anywhere.

(Signature of the Candidate)

Pushpinder Kaur

MahamayaTechnical Univercity
 CERTIFICATE BY SUPERVISOR

This is to certify that the project report entitled “To identify the compliance level
of Factories Act, 1948 in International Tobacco Company Ltd, Ghaziabad and to
determine its relation to work performance.” is carried out by Pushpinder kaur
student of Management Studies, Mahamaya Technical University under my
supervision as a part of the award of Degree in Master of Business Administration,
Mahamaya Technical University, Noida.

To the best of my knowledge the report is the outcome of the candidate’s

individual effort. I wish all the success to the candidate.

(Signature)

Name: Mr. Sandesh Bhardwaj

Designation:Deputy Manager

Personnel and Welfare

International Tobacco Company Ltd

 ACKNOWLEDGEMENT

First and foremost, I thank almighty for keeping me hale and healthy for successful
completion of the project. I express my respectful and sincere gratitude to student
of Management Studies, MTU for keeping a paper of minor project in our course
curriculum. Next I would like to thank International Tobacco Company Ltd,
Ghaziabad for assigning a project to me and accepting me as a summer intern. I
would also like to thank Mr. Sandesh Bhardwaj, Deputy Manager, Personnel and
Welfare for imparting his immense knowledge and guidance and thus offering a
wide scope for research. This topic helped me in understanding the process of
research in depth and also made me aware about the welfare requirements and
welfare facilities provided to the employees. I am also taking the pleasure to
express my sincere thanks to all the members of the Personnel department of the
organization.

I would also like to thank the respondents of the questionnaire for giving their
valuable time.

Finally I would like to acknowledge my family & friends for their understanding
and supports in completing this project, without their help there would be many
difficulties in doing this project.
 Table of content

Declaration

Certificate by Guide

Acknowledgement

Chapter Title

I. GENERAL OBSERVATION

1. Tobacco industry

(a)Size of market

(b)Latest developments

2. International Tobacco Company Ltd

(a)Introduction of Company

(b)History

(c)About Godfrey Phillips India

(d)K.K Modi group

(e)Philip Morris

(f)Vision and Values

(g)The Management

(h)Production Facilities

(i)Code of business conduct

 (j)International Division

(k)Corporate Social Responsibility

(l)Achievement and Awards

3. Major competitors

(a)ITC

(b)Golden Tobacco Ltd

(c)VST Industries Ltd

4. SWOT analysis

(a)Strengths

(b)Weaknesses

(c)Opportunities

(d)Threats

II DETAILS OF THE WORKING

 Factories Act 1948;

 Minimum Wages Act 1948;

 Payment of Wages Act 1936;

 Payment of Gratuity Act 1972;

 Payment of Bonus Act 1965

2. Organization Chart
III STUDY

1. Abstract

2. Introduction

3. Literature Review

4. Research Methodology

(a) Problem Statement

(b) Objectives of the Research

(c) Design of the Study

(d) Type of Research Design

(e) Instrumentation

(f) Statistical Tools

(g) Sources of Data

(h) Limitation of Study

5. Results and Discussion

(a) Analysis of Results

(b) Conclusion

(c) Recommendation

6. References

7. Bibliography

8. Appendix
 GENERAL
OBSERVATIONS
 Tobacco Industry

Tobacco Industry in India contributes in a unique manner to several important

facets of the Indian Economy, covering revenue, export, employment, and GDP
growth. The Tobacco industry in India mainly covers manufacturing of cigarette,
bidi, cigar and cheroot, hookah, snuff and other chewing Tobacco like zarda,
gutkha and other pan masala.

Cigarette Industry in India is essentially capital intensive in nature. The growth of

cigarette industry both in domestic and international market represents a big
revenue opportunity for the economy. But the burden of Tobacco tax has
increasingly shifted to cigarette with the removal of duty on raw Tobacco since
1979, resulting in discriminatory rates of duty compared to other tobacco products.

Size of market:
India's share in world cigarette production has remained at around 1.7% whereas
India's exports of around 2.8 billion sticks of cigarette per year accounts for less
than 1% of the world export of cigarette. There is significant opportunity for
cigarette industry to extent and consolidate its position in international market due
to withdrawal/reduction of agricultural subsidy and escalating cost in the
traditional cigarette exporting countries.

India is exporting tobacco today to 80 nations which is over all the continents in
the world. At present the Indian Tobacco Industry is providing livelihood to more
that 25 million people in the country. From the total tobacco items exported from
India, the unmanufactured tobacco shares around 80 % to 85 % of the total exports
while the manufactured tobacco products hold around nearly 20 % to 25 %. In the
unmanufactured tobacco exports, Flue Cured Virginia tobacco accounts nearly 75
% to 80 % export. The other varieties are- Burley, HDBRG, Natu, DWFC, Top
leaf and Jutty are also exported which are used in making cigarettes. Non cigarette
tobacco exported worldwide is Lalchopadia, Judi, and Rustica are used for
chewing and making bidis. Around 8 % to 10 % non- cigarette tobacco is exported
in throughout the world. According to the international trends, non cigarette
tobaccos are the dominating item in the national export. According to the current
situation in the international tobacco market India is proved to emerge out as the
favorable market for the Indian tobacco export. The prices of Brazilian export have
almost equalized the most expensive American tobacco cost. Zimbabwean farm
prices have also seen an upward trend. There are several advantages which can be
put forth for favoring the Indian tobacco. Like low unit production cost, average
export prices of tobacco in India, which are found more competitive than that of
the pricesofBrazil,USA,Zimbabwe

Latest developments

 India is the second- largest producer of tobacco after China in the World.
However, it holds a meagre 0.7 % share of the $30-billion global trade in
tobacco.

 Cigarettes account for 85 %of the country's total tobacco exports.

 Of the total tobacco produced in the country, around 48. 5% is consumed in

the form of chewing tobacco, 38 % as bidis, and 14 % as cigarettes.

 The per capita consumption of cigarettes in India is a tenth of the world

average.

 In the recent past, the consumption of tobacco has been reduced by anti-
tobacco drives and the ban of consumption in public areas.

 The biggest player in this industry is ITC with a market share of 72%.
 International Tobacco Company Ltd.

Introduction of Company:
International Tobacco Co. Ltd. Meerut Road, Ghaziabad (U.P.) is the subsidiary of
Godfrey Phillips India .The success of Godfrey Phillips India is the result of the
Company’s commitment to innovations, enhanced operational efficiencies and
adoption of internationally acclaimed business processes. Driven to excel, innovate
and win, it intend to emerge as one of the most respected Company in the tobacco
industry.

As the second largest player in the Indian cigarette industry, with annual turnover
exceeds INR 1800 crores (approx. US $369.6 million). Having some of the most
popular cigarette brands in the country like four square, Red and White, Jaisalmer,
Cavenders and Tipper, over the years it also set its own benchmarks in innovation
with revolutionary brands like Stellar, the first slim cigarette and I-gen, the first
euro-norm cigarette in India.

Products are distributed over an extensive India wide network of more than 500
distributors and 800,000 retail outlets. With the Corporate Office in Delhi, the
Company has offices all across India in over 8 locations.

Godfrey Phillips India has two major stakeholders, one of India's leading industrial
houses - the K. K. Modi Group and one of the world's largest tobacco companies,
Philip Morris. Philip Morris’ stake in the joint venture to around 25%, and the
K.K. Modi Group the single-largest shareholder in the listed firm with a 47%
stake. GPI the Company also enjoys a strong backing of over 12,000 shareholders.
 History
In 1936, the Godfrey Phillips India was originally established and developed by
Godfrey Philips Ltd., London, a publicly owned cigarette and tobacco
manufacturer incorporated in U.K. with extensive international operation. The
company manufactures and sells cigarettes, smoking tobacco and cigars- The
brands manufactured and marketed by the Company are Black & White Kingsize
Filter, Four Square Kingsize Filter, Four Square Regular Filter, Cavanders Navy
Cut Regular, Red & White, Anand, Leader, Cavanders Filter and Capital. In
addition, the Company manufactures and sells Vergin Gold and Philip's Gold
Cigarette tobacco.

In 1967 the Company made an arrangement with International Tobacco Co. who
opened a factory in Northern India to manufacture on the Company's behalf. Upon
the merger of D. Macropolo & Co. Ltd., with the company, International Tobacco
Co. Ltd. became a subsidiary of the company. The Mumbai High Court approved a
scheme of Amalgamation of International Tobacco Company Ltd., with the
company. A Scheme of Amalgamation of D. Macropolo & Co. Ltd., with the
Company was approved by the Mumbai High Court on 30th June, with
retrospective effect from the close of business on 30th June, 1969.

About Godfrey Phillips India

Godfrey Phillips India, one of the renowned companies of India, is into diversified
businesses of tea, tobacco and pan masala.

Incorporated in 1936, Godfrey Phillips India with an annual turnover of over Rs

3,400 crores (2011-12) has two major stakeholders, the K.K. Modi Group and
Philip Morris. It has manufacturing facilities at Ghaziabad, U.P; Mumbai,
Maharashtra and Rabale, Navi Mumbai, Maharashtra.
The Company manufactures some of the most popular cigarette brands in the
country like FS1, Four Square, Red and White, Cavanders, Tipper and North Pole.
Godfrey Phillips India passion for delivering a product to suit every consumer
segment of the country, Godfrey Phillips India concerted efforts in Tea City has
led to successful Symphony and Super Cup launch. The Company has forayed into
the highly competitive confectionary segment with Fundamint and Funda Goli
using their extensive distribution launch to have a pan India reach. Godfrey
Phillips India has also recently launched Pan Vilas pan masala which has already
shown great potential with positive outcomes.

Godfrey Phillips India has also spread its footprint into the international markets.
Today, the International Division collaborates with some of the top players in the
international tobacco industry to assist them in marketing their products and
providing various professional and expert services including contract
manufacturing, cut tobacco, smoke analysis and various other consultancy
services. Many countries from the Middle East to West Africa, South East Africa,
South East Asia, East Europe, Australia, South America and Central America have
been added to the portfolio. The International Division also exports Bulk and
Specialty Teas to Germany, USA, Japan, UAE, Kazakhstan

K. K. Modi Group
The K. K. Modi Group is part of a US $ 2.4 billion Modi Enterprises that was
founded by Rai Bahadur Gujarmal Modi in 1933. The Group spans a
diverse range of businesses which include agro-chemicals, tobacco, tea and
beverages, education, entertainment, direct selling, network marketing and
gourmet restaurants. These businesses further include steel, sugar, textiles,
chemicals, tyres, computers, copiers, cosmetics, telecommunications,
entertainment, homecare, pharmaceuticals and on line lottery.

Philip Morris
Altria Group Inc is the parent Company of Philip Morris International, Philip
Morris USA and Philip Morris Capital Corporation. Altria Group owns 100% of
the outstanding stock of Philip Morris USA, Philip Morris International and Philip
Morris Capital Corporation.

Philip Morris, the owner of some of the world's most respected brands including
Marlboro, is one of the largest shareholders in Godfrey Phillips India and has an
agreement with the Company to provide technological services and assistance in
all areas of business.

In 1968 Philip Morris International Finance Corporation, a wholly owned

subsidiary of Philip Morris Inc., U.S.A. acquired full ownership of Godfrey
Phillips Ltd., London, U.K., which was the Holding Company of Godfrey Phillips
India Ltd.

Philip Morris Inc. joined hands with the K. K. Modi Group in 1979.

Vision and Values

Vision
To become a leading tobacco player in India and beyond.

Godfrey Phillips India empowers its entire people to think and act radically, stretch
relentlessly and generate path breaking ideas and strategies to propel the Company.
This helps to create and build powerful brands with unmatched service and world
class processes.

Godfrey Phillips India will rapidly grow shareholder value and achieve a
commanding presence nationally while gaining a significant presence in global
markets. Godfrey Phillips India will be amongst the most respected companies in
India and in the tobacco industry worldwide.

Values
 Passion for winning.

 Innovation through Entrepreneurship.

 Winning trust internally and externally.

 Global mindset.
  Socially responsible corporate citizen.

The Management
Godfrey Phillips India is a Company committed to innovation and continuous
improvement which can be seen in the Company employees; from the top
management to the factory level.

Godfrey Phillips India’s management represents the optimum mix of

professionalism, knowledge and experience. They are the guardians to the
Company, and protectors of the shareholder’s interest.

Production Facilities
Godfrey Phillips India has built an enduring reputation in India and abroad due to
its commitment to quality and ecologically sound practices. Production systems are
state of the art and blend globally recognized practices such as TQM, Haichi- Ban,
5S and Kaizen with internal value systems. Both production facilities follow an
enriched culture imbibed by the adoption of the Six Sigma program. Embarked
upon 5 years ago, the program has helped to undertake a considerable number of
Six Sigma Projects in order to inculcate quantum improvements year after year.

Each of the manufacturing facilities at Ghaziabad, U.P; Mumbai, Maharashtra and

Rabale, Navi Mumbai, Maharashtra are recognized not only for their superior
production capabilities, but also for the adoption of environment friendly
processes.

Ghaziabad facility is the first cigarette manufacturing unit in India and second in
the world to have has been accredited with a Social Accountability (SA)
8000:2001 certification. It is equipped with state of the art equipment and
processes, which provides it with the necessary edge over competitors. Industry
accreditations such as the ISO 9001: 2000 and ISO 14000 are further proof of the
impeccable delivery systems and processes used at our facilities.

Commitment towards environment management is evidenced by the ISO

14001:2004 (Environment Management System) certification, which has been
awarded to both Ghaziabad and Mumbai facilities. These two facilities are also
certified OHSAS 18001:2007, which evidences the commitment towards
Occupational Health and Safety. Mumbai factory has been recertified with the ISO
9001:2008.

Commitment to environment has been appreciated with the Ghaziabad factory

being awarded the ‘Greentech Foundation Gold Award’ in 2009, 2010 and 2011
for its Outstanding Achievement in Environment Management. Mumbai factory
was awarded the 2010 Greentech Silver award as a commendation of its efforts in
outstanding achievements and excellence in safety management.

Code of Business Conduct

Preamble
In terms of the revised Clause 49 of the Listing Agreement with the Stock
Exchanges, the Board of Directors are required to lay down a code of conduct for
all its Board members as well as senior management one level below the executive
directors including all functional heads ( a list of present directors and senior
management is attached). This code of conduct has accordingly been approved by
the Board of Directors by a resolution passed by circulation which will be effective
from 1st January, 2006 and the same shall be uploaded on Company’s website for
information of general public.

Applicability
This code is applicable to the Board Members and Senior Management who are
members of its core management team one level below the executive directors
including all functional heads (hereinafter collectively referred to as
“Employee(s)”). All employees must read and understand this code and ensure to
abide by it in their day-to-day activities. \

Values and Expected Behaviors

i. Passion for winning

 Constantly thrive in bettering the competition in every field.

 Have a positive attitude, and restlessly seek and capture new opportunities.
 ii. Innovation through learning and entrepreneurship

 Be a world class innovative organization by continually developing and

successfully launching new brands.

 Encourage risk taking and learning, and create conditions for empowerment
with accountability.

iii. Winning trust internally and externally

 Build enduring relationships with all stakeholders including employees,

shareholders and trade/alliance partners, and honor all commitments.

 Encourage transparent and fair systems and policies.

iv. Global mindset

 Constantly benchmark in all areas against the best globally, and strive to
exceed those benchmarks.

 Develop opportunities through a global network of distributors and alliances.

v. Socially responsible corporate citizen

 Ensure the compliance of all applicable laws and the highest standards of
corporate governance.

 Support and encourage employees to actively participate in identified social

and environmental concerns.

In addition to the above values and expected behaviors, the business will be
conducted in such a manner that it ensures the following:-

1) Safety in Workplace

The safety of people in the workplace is a primary concern of the Company. Each
must comply with all applicable health and safety policies. It maintains compliance
with all applicable laws to help maintain secure and healthy work surroundings.
The employees will also ensure that there is no sexual harassment at the work
place and in case any allegation is made, it is immediately dealt with in accordance
with the guidelines laid down by the Supreme Court.
2) Conflicts of Interest

Each one has a responsibility to the Company, including stockholders. Although

this duty does not prevent from engaging in personal transactions and investments,
it does demand to avoid situations where a conflict of interest might occur or
appear to occur.

All employees must avoid situations involving actual or potential conflict of

interest. Personal involvement with a competitor, supplier, or subordinate
employee of the Company, which impairs an employee’s ability to exercise good
judgement on behalf of the Company, creates an actual or potential conflict of
interest.

3) Protecting the Company’s Confidential Information

The Company’s confidential information is a valuable asset. This information is

the property of the Company and may be protected by patent, trademark, copyright
and trade secret laws. All confidential information must be used for Company
business purposes only. Every employee, agent and contractor must safeguard it.
This responsibility includes not disclosing the Company’s confidential information
such as information regarding the Company services or business over the internet.
One is also responsible for properly labeling any and all documentation shared
with or correspondence sent to the Company’s Legal Department or outside
counsel as “Strictly Confidential”. This responsibility includes the safeguarding,
securing and proper disposal of confidential information in accordance with the
Company’s policy on maintaining and managing records. This obligation extends
to confidential information of third parties, which the Company’s has rightfully
received under Non-Disclosure Agreements.

Obligations under Securities Laws “Insider” Trading

In the normal course of business, officers, directors, employees, agents, contractors

and consultants of the Company may come into possession of significant, price
sensitive information. This information is the property of the Company.
1) Use of Company Assets

All are perceived as Trustees of Company’s properties, funds and other assets and
thus owe duty to each stakeholder, as their agent, for protecting the Company’s
assets. Therefore, all must safeguard and protect the company’s assets against any
misappropriation, loss, damage, theft, etc. by putting in place proper internal
control systems and procedures and effectively insuring the same against any
probable fire, burglary, fidelity and any other risk.

2) Maintaining and Managing Records

The purpose of this policy is to set forth and convey the Company’s business and
legal requirements in managing records, including all recorded information
regardless of medium or characteristics. Records include paper documents, CDs,
computer hard disks, e-mail, floppy disks, microfiche, microfilm or all other
media. The Company is required by applicable laws, rules and regulations to retain
certain records and to follow specific guidelines in managing its records. Civil and
criminal penalties for failure to comply with such guidelines can be severe for
employees, agents, contractors and the Company, and failure to comply with such
guidelines may subject the employee, agent or contractor to disciplinary action, up
to and including termination of employment or business relationship.

3) Conduct ourselves in a manner that reflects credit to the company

All of are expected to conduct themselves, both on and off-duty, in a manner that
reflects credit to the Company. The sum total of one’s personal attitude and
behavior has a bearing on the standing of the Company and the way in which it is
perceived within the organization and by the public at large.

4) Equal opportunity Employer

The Company expects each employee to ensure that only meritocracy is rewarded
in the Company and that there is no discrimination based on sex, religion, creed,
colors or origin.
Compliance with the Code

As employees of Company, we will uphold and promote the principles of this

code

The future of the organization depends on both technical and ethical excellence.
Not only is it important for employees to adhere to the principles expressed in this
Code, each employee should encourage and support adherence by other
employees.

Treat violation of this code as inconsistent association with the organization

Adherence of professionals to a code of ethics is largely a voluntary matter.

However, if any of us do not follow this code by engaging in professional
misconduct, the matter would be reviewed by the Board and its decision shall be
final. The Company reserves the right to take appropriate action against the guilty
employee.

Interpretation of Code

Any question or interpretation under this Code of Business Conduct will be

handled by the Board or any person/committee authorized by the Board of
Directors of the Company and their decision shall be final and binding on all
concerned.

Continual updation of code

This code is subject to continuous review and updation in line with any changes in
law, changes in Company’s philosophy, vision, business plans or otherwise as may
be deemed necessary by the Board.

International Division
Striving towards it vision to become a leading tobacco player in India and beyond,
Godfrey Phillips India has forayed into international markets with successful new
business ventures.
Corporate Social Responsibility
The World Business Council for Sustainable Development defines CSR as "…the
continuing commitment by business to behave ethically and contribute to
economic development while improving the quality of life of the workforce and
their families as well as of the local community and society at large.”

Godfrey Phillips India not only recognize the importance of being a responsible
corporate citizen but its identity as a cigarette manufacturing Company and success
in it imposes even a greater responsibility to take it further.

Achievement & Award

 Godfrey Phillips India, Guldhar Factory won Gold Award at 12th Greentech
Safety Award, in 2011 and 2012

 Godfrey Phillips India Guldhar Factory was awarded the ‘Greentech

Foundation Gold Award’ in 2009, 2010 and 2011 for Outstanding
Achievement in Environment Management. These awards are the most
coveted awards in the corporate world for outstanding achievements in the
field of Environment Management.

 Won Golden Peacock Award 2007 for excellence in Product Innovation

category for Four Square.

 Tipper won Golden Peacock Award for the best product innovation in the
year 2003 and then again in 2006 for innovative product and service. It has
also won the Silver medal at the Monde Selection Brussels, World Selection
of Quality 2006.

 The Guldhar factory won The 'Greentech Environment Excellence Awards'

and Greentech Safety Awards', in the year 2006. These awards are the most
coveted awards in corporate world for outstanding achievements in the field
of environment management.

 The pack design of Jaisalmer, the premium King Size cigarette of the
Company, won the coveted PFFCA (Paper, Film & Foil Converters
 Association) Star Award, felicitating the pack for its excellence in design,
development and creativity in packaging.

 North Pole has also won the Golden Peacock award for innovative
packaging in 2005.

Major competitors
 ITC

 Golden Tobacco Ltd

 VST industries Ltd

1) ITC
Within cigarettes, ITC plans to leverage on its technology and provide consumers
with less harmful cigarettes. As a result, the company is expected aggressively to
push mid tar and low tar cigarettes towards consumers.

Company Background

 ITC Ltd was incorporated on 24 August 1910, under the name of Imperial
Tobacco Company of India Ltd. It was renamed ITC Ltd on 18 September
2001. The company’s Packaging and Printing Business Division was started
as part of its backward integration strategy for the tobacco business, and has
since become one of India’s most successful packaging houses.

 In 1985, ITC Ltd started its first overseas venture in Nepal – Surya Tobacco
Company – as an Indo-Nepal and British joint venture. In August 2002,
Surya Tobacco Company became a subsidiary of ITC Ltd and its name was
changed to Surya Nepal Private Limited (Surya Nepal).

 ITC Ltd has a diversified portfolio, with a presence in cigarettes, hotels,

paperboard and speciality papers, packaging, agri-business, packaged food
 and confectionery, information technology, branded apparel, personal care,
greetings cards, safety matches and other fast-moving consumer goods.

 ITC Ltd employs more than 22,000 people, spread over 60 locations in
India, and is ranked among the “World’s Most Reputable Companies” by
Forbes magazine.

Production

ITC has four main factories, at Bangalore, Munger, Saharanpur and Kolkata. All
four facilities offer cutting-edge technology, with a strong emphasis on quality of
production, quality control and efficiency. In recognition of their very high
standards of production, the facilities have received several domestic awards, as
well as the five-star Health and Safety Rating from the British Safety Council. This
rating greatly helps in export, and is recognition of ITC globally competitive
standards.

Competitive Positioning

 In 2008, ITC Ltd continued to command the lion’s share of cigarettes in

India, with a 60% volume share. The company rides on the success of some
of its famous brands, including Wills and Gold Flake. It has brands across all
price segments and in all tar levels. This enables it to cater to different
consumer groups.

 ITC Ltd’s volume share fell slightly in 2008. Following the government’s
drastic increase in the excise duty on unfiltered cigarettes, the company shut
down production of its unfiltered cigarettes, which had become unprofitable.
This caused consumers to shift to other brands. Unfiltered cigarettes
previously accounted for approximately 20% of ITC Ltd’s volume sales.

 ITC Ltd’s biggest strengths are its brands and its distribution network. In
high tar cigarettes, Capstan, Bristol, Wills and Gold Flake are extremely
popular. In mid tar cigarettes, the company carries brand extensions such as
Gold Flake Light, Wills Classic Milds and Benson & Hedges Lights. In low
 tar cigarettes, its famous brands include Silk Cut Lights, Classic Ultra Mild
and Rothmans Special Mild. The company’s distribution is also considered
world class, with it being able to reach nearly two million retailers.
Compared to this, its competitors Godfrey Phillips India Ltd and VST
Industries Ltd are able to reach one million retailers.

2) Golden Tobacco Ltd

Golden Tobacco Ltd is expected to focus more on brand building over the forecast
period. This will involve carrying out more awareness campaigns for its brands in
order to maintain its sales. Aside from promoting its flagship brands, Panama and
Chancellor, the company is also expected to focus on its new brand, Diet Blue, and
develop other healthier tobacco products.

Company Background

 Golden Tobacco Ltd was set up in 1930 as a private company in Mumbai by

Narsee Monjee, a leading businessman. In 1970 it went public, and in 1979
it was acquired by the diversified corporate Dalmia Group. Dalmia Group
holds approximately 36% of the company’s shares, with the balance owned
by the general public and other financial institutions.

 In September 2008, the company name was changed from GTC Industries
Ltd to Golden Tobacco Ltd, when its retail and tobacco businesses were de-
merged. The new name better reflects the company’s line of business.

Production

 Golden Tobacco Ltd has a manufacturing facility at Vadodara, Gujarat for

processing tobacco, and in Mumbai for the manufacture and packaging of
cigarettes. The sophisticated manufacturing technique has made the
Vadodara unit comparable with any leading tobacco processing company.
This is evident in the quality and taste of the cut tobacco.

 The Mumbai unit has a fully automated area, equipped to optimise the
overall effectiveness of its equipment. The use of GD X2 packers and shrink
 tunnels efficiently creates superior quality, hinge lid packs. Designed by
some of the most experienced engineers in the industry, the link-ups and
CFC closures eliminate the chance of manual handling of the cigarettes at
any stage of production.

 In keeping with its strategy of providing quality cigarettes to its national and
international customers, Golden Tobacco Ltd’s Vadodara factory has
implemented ISO 9001:2000. The factory is known for its good
housekeeping and waste control techniques.

 Golden Tobacco Ltd has its own fully equipped printing press to produce all
its packaging material under one roof. The press is equipped with Gravure
and off-set printing machines, along with letterpress, punching and pasting
machines.

 Golden Tobacco Ltd has a modern research and development centre,

recognized by the Indian Government and Department of Science and
Technology. The company continuously strives to innovate, as well as to
improve the quality of its products. The research and development wing has
developed its own process to expand cut rolled stems, enabling production
of lower-density cigarettes, resulting in a lowering of the tar content.

 Golden Tobacco Ltd has a well-established Tobacco Purchase Division at

Guntur in Andhra Pradesh, a major Virginia tobacco growing state in India.
This division ensures the procurement and processing of the correct quality
of tobacco for its domestic and international markets.

Competitive Positioning

 In 2008, Golden Tobacco Ltd was the third-ranked cigarettes player in India,
holding an 11% volume share. The company is exceptionally strong in
economy and mid-priced cigarettes. It competes mainly by brand building,
as its distribution network is less developed than that of ITC Ltd or Godfrey
Phillips India Ltd. Brands such as Chancellor and Panama enjoy a strong
brand recall in India and are considered to be heritage brands. Given that it
cannot compete head on with ITC Ltd or Godfrey Phillips India Ltd in terms
 of distribution, Golden Tobacco Ltd relies on providing extremely attractive
margins to retailers, to promote its new launches.

 Golden Tobacco Ltd has a long, rich heritage of innovation. The results
achieved include the launch of the first low tar nicotine cigarette, the launch
of the first Indian cigarette designed especially for women (Ms brand), the
introduction of the first Soft Cup in India, the launch of the first Brown
Filter King cigarette in India and the development of the first Indian Kretek-
type clove cigarette. Its Low Tabac low-nicotine cigarette claims to contain
up to 50% less tobacco; substituted by organic materials, compared with
conventional cigarettes.

 Golden Tobacco Ltd is among the top cigarette exporters in India, and has
special export products in addition to cigarettes. These include “flavored
little cigars” in various flavors (Cherry, Vanilla, Chocolate, Menthol, Mild,
Peach, Raspberry, Strawberry and Sour Apple), as well as variants such as
Just Black Tip cigars (cigars with tips), which are also available in various
flavors (Mild, Grape, Cherry, Raspberry and Rum). Another popular
exported brand of cigars is the Lips cigar (100mm sticks with sweetened
tips, available as individually wrapped plastic tubes to retain freshness).
Popular pack sizes are 10 units or 50 units, and popular flavors are Cherry,
Chocolate, Rum, Peach and Sour Apple.

 Golden Tobacco Ltd also manufactures slim cigarettes and RYO tobacco.
Just Black is the leading “little cigars” brand for export, and is also available
as a smoking tobacco brand produced from high-quality Virginia, Aromatic
Burley and flavor-rich Oriental tobacco.

 In 2008, Golden Tobacco Ltd launched a new brand, Diet Blue cigarettes, in
king size/regular. The new product is claimed to be made from superior
patented technology and is positioned as less damaging than regular
cigarettes, as it does not contain any carcinogenic substance. Diet Blue uses
the Ecotine blend, which is low in nicotine, tar and tobacco specific
nitrosamines.
3) VST Industries Ltd

In light of the recent downturn in Indian cigarettes, VST Industries Ltd aims to
consolidate its position in the economy price band. It also plans to expand beyond
South India, which has traditionally been its stronghold. Filtered cigarettes will be
a key focus area, as the company looks to expand its product portfolio.
Additionally, it will try to strengthen its distribution network, which has always
been weaker than that of ITC Ltd or Godfrey Phillips India Ltd.

Company Background

 VST Industries Ltd is a strong player in economy cigarettes and focuses on

South India.

 VST Industries Ltd is an affiliate of British American Tobacco Plc, which

holds a 31.7% stake.

 Although the major chunk of its revenue comes from the sale of cigarettes,
VST Industries Ltd also sells unmanufactured and cut tobacco.

 With effect from 1 April 2006, Hallmark Tobacco Company, the wholly-
owned subsidiary of VST Industries Ltd, amalgamated with another wholly-
owned subsidiary, VST Distribution, Storage & Leasing Company.

Production by Factory

VST Industries Ltd’s manufacturing facility is located in Secunderabad, Andhra

Pradesh. The company works to improve manufacturing standards in order to
provide higher-quality products. In line with this, the processing lines have been
modernized by introducing a Hauni KT2 Stem Cutter to improve filling values and
reduce tobacco wastage. The secondary manufacturing department has also been
modernized by incorporating new auto-feed systems on individual making
machines, in order to ensure consistency of product. The company is dependent on
ITC Ltd for the supply of tobacco.
Competitive Positioning
 VST Industries Ltd’s major brands include Charminar, Charminar Special
Filter, Charms Mini Kings, Charms Virginia Filter, XL Filter and Shaan.
The company’s products are targeted at the lower end of the tobacco market
and have dominance in the small-sized (less than 60mm) micro-segment.

 VST Industries Ltd is famous for its unfiltered cigarettes, which enjoy a
loyal following among consumers in South India. Priced cheaply, such
brands are aimed at consumers who wish to upgrade from beedis or
smokeless tobacco to cigarettes. In spite of its strong brands, the company
loses out due to lack of distribution reach, which is extremely limited
compared to bigger players such as ITC Ltd. Furthermore, VST Industries
Ltd is weak in other regions, such as West India and North India.

 In a bid to bring improve its business efficiency, further alignment of

business processes is being undertaken, and VST Industries Ltd plans to
move into an upgraded version of Enterprise Resource Planning. Company-
wide integration greatly improves stocks and cost management, thus
enabling the company to be more price-competitive. Since VST Industries
Ltd is focused in economy cigarettes, such competitiveness will be of
considerable help in maintaining its volume share.

SWOT Analysis
Strengths
The organization has some major strength that gives it a competitive advantage
over its rivals:

1) Strong Financial Performance:

It is the second largest player in the Indian Cigarette industry, with annual turnover
of INR 1800 crores (approx. US $369.6 million)
2) Commitment to quality and ecologically sound practices:

Production systems blend globally recognized practices such as TQM, Haichi-

Ban, 5S and Kaizen with internal value systems. Production facilities follow an
enriched culture imbibed by the adoption of the Six Sigma program.

3) Environmental friendly processes:

Manufacturing facilities are imbibed with environmental friendly processes.

Ghaziabad unit adopt the use of environment friendly measures such as recycling
water, rainwater harvesting and using solar power systems, amongst various other
initiatives.

4) Social Accountability (SA) 8000:2001 certification:

Ghaziabad facility is the first cigarette manufacturing unit in India and second in
the world to have has been accredited with a Social Accountability (SA)
8000:2001 certification. It is equipped with state of the art equipment and
processes, which provides it with the necessary edge over competitors. Industry
accreditations such as the ISO 9001: 2000 and ISO 14000 are further proof of the
impeccable delivery systems and processes used at our facilities.

5) Efficient delivery systems:

Industry accreditations such as the ISO 9001: 2000 and ISO 14000 are proof of the
impeccable delivery systems and processes used at the unit.

6) Commitment towards Environment management and Occupational Health

and Safety:

Commitment towards environment management is evidenced by the ISO

14001:2004 (Environment Management System) certification, which has been
awarded to Ghaziabad and Mumbai facilities. These two facilities are also certified
OHSAS 18001:2007, which evidences commitment towards Occupational Health
and Safety.

7) Comprehensive Research and Design capabilities:

Godfrey Phillips India considers R&D capabilities as a vital component of business

strategy that equips with a long term edge over others. R&D facilities employ
some of India’s best scientists, cigarette designers, blenders and flavourists, and
has the distinction of being an ISO 17025 certified facility. It is the first laboratory
in the Indian tobacco industry to be accredited with such a certification. R&D
facilities have also been recognized by the Department of Science & Technology,
the apex body governing affairs related to Science and Technology in India.
Located alongside the production facilities, R&D function extends its
competencies to manufacture in order to create the best blends for the domestic as
well as the international markets.

8) Social responsibility:

Godfrey Phillips India not only recognize the importance of being a responsible
corporate citizen but its identity as a cigarette manufacturing Company and success
in it imposes even a greater responsibility take it further. Being cognizant of this
fact, it strive to be active and committed participants in enhancing the community
it work, live and do business in.

Besides strong internal responsible marketing policies that govern all actions, it has
undertaken several initiatives like Godfrey Phillips Bravery Awards, Blood
Donation Drive, Women Empowerment projects, Godfrey Phillips WHITE,
various GAP (Good Agricultural Practices) and support programs for tobacco
farmers, environmental management besides many philanthropic and charitable
gestures which is a part of the Company culture.

9) Distribution channel:

The leading distribution channel for cigarettes in India remains

newsagents/tobacconists/kiosks, also colloquially known as paan shops. Paan
shops are commonly located at every street corner in all major Indian cities and
towns, thereby making them extremely accessible to consumers. They often remain
open late at night, allowing consumers to purchase cigarettes after dinner.
However, the greatest convenience offered is that they allow consumers to
purchase cigarettes by the stick. This is especially beneficial to low-income
smokers, who are unable to afford a whole pack of cigarettes in a single purchase.
In 2008, newsagents/tobacconists/kiosks accounted for 69% of cigarettes volume
sales.

Weaknesses:
1) Dependency upon tobacco business:

International Tobacco Company Ltd is largely known for cigarette manufacturing

and thus is largely dependent on tobacco for its revenue.

2) Unsustainable prices:

Among cigarette companies, ITC has a pan-India presence and sustainable pricing
power. ITC's brands Navy Cut, Wills Classic and Gold Flake occupy the premium
segment imparting it higher pricing power. On the other hand, International
Tobacco Company Ltd is hiking cigarette prices to pass on the higher burden being
imposed by the government in the form of taxes.

Opportunities:
1) Other business options:

Godfrey Phillips India recognizes this need and, besides our renowned cigarette
brands, have diversified into-Chewing Masala Tea Retail Confectionary Guldhar
Factory can undertake one or more of these business options and broaden its
horizon.

2) Dynamic business environment:

It understands the importance of innovation in a dynamic business environment,

where technology and processes can easily become redundant. TPM processes like
Six Sigma, Kaizen, 5S, and Haichi ban have been successfully incorporated in
value system to improve the quality and efficiency of our work place. This
perseverance towards quality has infused sales, marketing, and distribution
channels with new life and led to the creation of a motivated, dynamic, work force
geared to take on any kind of challenge.
3) Leveraging its brand equity:

International tobacco company ltd’s products & services are of high quality. If it
enter into any business or launch any product, consumer know its ITC’s product,
consumers shall trust these to be of good quality. Its brand equity would make it
successful in most sectors.

4) New Government laws:

New manufacturing licenses for cigarette are no longer issued by the government.
This along with a ban on foreign direct investments (FDI) shields the industry from
any new competition.

Threats
1) Vulnerable to legislative issues:

International Tobacco Company Ltd is focused on tobacco. This makes the

company exceptionally vulnerable to legislative issues, such as smoking bans and
excise duty hikes.

2) Hike in excise duty:

With an increase in excise duty, people will switch from cigarettes to beedis and
smokeless tobacco. Excise duty on cigarettes is more than 50% of its selling price.
The cigarette industry is subject to frequent revision in excise duty as well as
differential VAT rates in various states. Of the total tobacco consumption in India,
cigarettes accounts for only very proportion. The remainder is in the form of beedis
and smokeless tobacco, including khaini, gutka and zarda.
1. Primary Manufacturing Division (PMD)
Primary manufacturing division (PMD) is responsible for processing of the
tobacco received from the leaf division at Guntur to make it suitable to be used in
the cigarettes to be manufactured. A tobacco plant consist of two major parts i.e.
lamina & stem. These are separated at the leaf division at Guntur, packed into CBB
boxes coded to identify the grade of lamina or stem and transported to the reliance
godown at Guldhar. The processing of the lamina and stem takes place in two
separate lines which are then mixed together in a ratio dependent on the type of
blend being processed. The lamina to stem ratio is usually close to 4:1. The process
overview for the lamina line is shown in the figure below.

Lamina CBB CBB Vertical DCCC

from RGT Unpacker Cutter

Rotation Sieve Air Classifier Silo

Cutter Complex

Mixing Mixing with Top Flavoring

Dryer
stem line

CTS

Figure : PMD process overview

The lamina as obtained in CBB from Guntur unit is fed into CBB unpacker unit
where the outer CBB pack is removed and the lamina is transferred into vertical
cutters with the help of conveyor belts. Further the cut lamina is transferred to the
DCCC unit where the moisture in the lamina is increased from a 10% to 21%. Also
humectants are added in this stage to improve the moisture holding capacity of
tobacco. These humectants give cigarettes their sweet taste. After the DCC the
tobacco is moved into the silos where bulking and blending of the tobacco takes
place. The silo consists of moving conveyors to spread the tobacco uniformly and
provide for blending of various grades of tobacco. Further air classifier is used to
remove unconditioned lamina which is heavier and in form of heap. After this the
conditioned lamina is passed through a quarter inch sieve complex to separate
tobacco particles less than a quarter inch in diameter so that they do not get
converted into dust in the rotating cutter. Remaining tobacco is passed through the
rotating cutter where the bigger particles are converted into smaller tobacco
particle which is mixed with the quarter inch tobacco particles separated from the
sieve complex. The cutter has a speed of 28 cpi for regular size cigarettes. The
processed tobacco is than passed through dryer unit and further mixed with
conditioned stem in the ration fed into the PLC. This is then sent for top flavoring
and the stored in the CTS unit.

The production incentive in PMD is based on the target production. If the target
production is reached the worker is given a 100% variable pay and if it is not
reached the incentive keeps decreasing. The tobacco dust in the unit is collected in
CDU units and the other is dumped in to an earth pit.

The major risk of infestation in tobacco is from weevils. For prevention traps are
set up at various locations all over the PMD. The traps are tablets that have food
and sex scent which attract both male and female weevil.

Cigarette Making Department (CMD)

The cigarette making department (CMD) is involved in manufacturing of cigarette
sticks from processed tobacco obtained from PMD. CMD team is headed Mr.
Shailendra Singh who has 3 shift managers and a department electrician who looks
after all the maintenance related work.
The making and packing department are collectively known as Secondary
manufacturing department (SMD). There are two SMD areas one is the old SMD
area and the other one is the new one. The layout of machines is such that all the
making machines are at the centre of the shop floor and all the packing machines
are arranged at the two sides. This helps in maintaining a proper flow of material in
different areas.

The tobacco from CTS is fed into conveyors near the CTS area which in turn are
linked to the pneumatic feeds of particular making machines.

The man power allocation in CMD is done with the help of Heichban boards where
each process associate has a cue as well as machines and various brands also have
a cue. The board displays the brand with which a making machine is booked and
also the allocation of process associates to various stations. The cues for process
associates have two different colors signifying absence or presence of the person.

The various utilities involved in cigarette manufacturing include HVAC system, air
compressors, Vacuum systems etc. The NTM’s used are cigarette paper, filters,
GD- gum and cork tipping paper.

Cigarette Packing Department (CPD)

The CPD department is headed by Mr. N.k kukreja. The packing process basically
consists of majorly three processes packet formation, BOPP winding and bundling.
The layout of packing machines is such that the centre part of the floor consists of
making machines and packing machines are kept besides them. The manpower
allocation in CPD department is also carried out using Heichban principle. The
production incentive in CPD is based on the target productions for particular
machines.

The hinge lid type packaging machines in CPD are of three types GDX2S,
GDX300, GDX6 & Focke with speeds of 3200cpm, 3300cpm and 6000cpm
respectively. The shell & slide type packaging machines are Duplex & HLP. Each
bundle of cigarette is stamped with a code to identify:

1. Factory: 1 for Andheri and2 for Guldhar

2. M/C number
 3. Shift: A,B,C

4. Date

5. Time

The utilities involved for cigarette packing are vacuum, air compressors & HVAC
system. The NTM’s involved are blanks, BOPP, TOR, inner frame, foil and gum.

2. Quality Assurance
The quality assurance department deals with the material quality which may be the
processed tobacco quality, the NTM quality or cigarette/ packet quality. This is
based on the design of experimentation proposed by Taguchi.

3. Accounts/IT

The total manpower in the factory is 343 which include factory associates (code:
S), Process associates (code: D) and Management Staff (Code: G). The salary for
the employees is handled through PNB accounts. The salary process is carried out
on 27th and 28th of each month where employee attendance and other related things
are checked which is followed by the salary transfer on 28th of the month. On
30/31st the bank credits the amount into the accounts which can then be withdrawn
on 1st onwards.

All the AMC related work has been outsourced to Wipro. The internet connection
has two lines one is the primary line which has been leased from BSNL and has a
speed of 2 mbps. The other one is a secondary line leased from Bharti and it also
has a speed of 2 mbps.

4. Purchase
The purchase department is headed by Mr. Sachin Sharma. This department is
responsible for acquiring all kinds of NTMs, spares and other machineries required
for the process. The vendors for various materials are selected by Head-office
based on quality and cost parameters.
5. Projects/Utilities/ Stores
This department is headed overall by Mr.S K Tiwari. The projects are handled by
Mr. Mritunjay Tiwari and under him the various department wise project in charge.
The projects start usually with the budget making process which starts in January
or February. There are three kinds of projects capital expenditure (CAPEX)
projects, FME projects which are special maintenance projects which are carried
one time only and conversion or consumable projects. An energy budget is also
allocated at the start of the year. The electricity budget is fixed and variable cost
which arise due to utilities and production respectively. Also there is cost budget
for High speed diesel (HSD) and furnace oil (FO).

There are a number of major projects that are being carried out which include
complete automation, building a new warehouse (ASRS system), firing boilers
using PNG, ETPP expansion process etc.

The utilities are handled by Mr. Naveen. There are a total of 2 DG sets which run
on high speed diesel (HSD) and are synchronized with online UPS system so that
no downtime occurs due to electricity cuts. There are 2 nos of multiple stage air
compressors with a capacity of 913 cfm each. The air from these compressors is
supplied at 6.2 bar pressure. Another air compressor provides air for cleaning
purposes at 3.7 bar pressure as well.

The vacuum system consists of mazda and WV60 pumps which provide vacuum to
max making and packing machines respectively. The mazda vacuum pumps are
WV100 type and four in number while there are only two WV60 pump.

6. Corporate Engineering/Projects
The department is headed by Mr. Vivek Sood. This department has varied roles in
the organization. The department acts as the gateway between corporate office and
the production unit. It is also responsible for new projects being undertaken by the
organization like new production facilities, new engineering systems etc. Currently
the projects being undertaken include new chewing tobacco plant and beedi
automation project.
 Organization Chart

Following represents organization chart of the International Tobacco Company

Ltd.

Mr. Sharad Aggarwal

Sr. Vice President ( Mfg.)

Mr. R K Mr. Vinay Mr. Sachin

Gupta Sharma Mr. S.K.
Sharma
Tiwari
DGM DGM (6 Sr. Manager
(Prod) sigma) Sr.Manager
(Purch.)
(Engg
andUtil.)
Mr. Alok Mr. Sandesh
Kumar Bhardwaj
Mr. Sachin
Sr. Manager Sharma Dy. Manager (Pers.)
(QA)
Sr. Manager
(Purch.)
 Study Abstract

The present study was under taken with a task in mind to unearth the strengths and
weakness of the welfare measures in International Tobacco Company Ltd,
Ghaziabad. Since organizations exist to achieve goals. The degree of success that
individual employee have in reaching their individuals goals is important in
determining organizational effectiveness. The assessment of how successful
employees have been at meeting their individual goals, therefore, becomes a
critical part of Human Resource Management. This leads us to the topic
of “Employees Welfare Measures” or Compliance of Factories Act, 1948.

This project aims at knowing ³Welfare System´. In this project the work
atmosphere and the welfare measures provided by the organization has been
studied. It also aim at finding out the impact of welfare measures on the work
performance of the employees. This survey is done within the organization. The
sample size is 30. The data was collected both from the primary sources and the
secondary sources.. The persons met are all employees of the concern. Collections
of data were analyzed and tabulated in a sequential manner and the interpretations .
The conclusion and suggestions are also given in this report for the improvement
of this system in the organization.
 Introduction

The law relating to the regulation of labor employed in factories in India was
embodied in the Factories Act, 1934.It was amended several times but its general
framework remained unchanged. Application of this Act revealed a number of
defects and weaknesses which hamper effective administration. In the meanwhile
the rapid industrialization and urbanization without any planning resulted in
insanitary and crowded living. The quest for making quick profits, unmindful of its
social consequences caused the work to be excessive; even the children of tender
ages were required to work for more than 12 hours a day. All this necessitated
passing of the Factories Act, 1948 aiming at protecting human beings from being
subjected to unduly long hours of bodily strain or manual labor. The Act provides
that employees should work in healthy and sanitary conditions so far as the
manufacturing process will allow and that precautions should be taken for their
safety and prevention of accidents.

The Factories Act is meant to provide protection to the workers from being
exploited by the greedy business establishments and it also provides for the
improvement of working conditions within the factory premises. Hence, a
beneficial construction should be given and the provisions of the Act should be so
construed/ interpreted so as to achieve its object, i.e., the welfare of the workers
and their protection from exploitation and unhygienic working conditions in the
factory premises; Ravi Shankar Sharma v. State of Rajasthan, AIR 1993 Raj 117.
 Knowledge of Law provisions …
LABOUR LAWS

 Employees Provident Fund Act 1952;

 Factories Act 1948;

 Minimum Wages Act 1948;

 Payment of Wages Act 1936;

 Payment of Gratuity Act 1972;

 Payment of Bonus Act 1965;

 FACTORIES ACT, 1948

 Regarded as one of the Noble and a Comprehensive

 Labour Legislation which is inforce in our country.

 Covers all the aspects relating to workers employed in factories.

 Central legislation enforced by the state government;

 In force since 1.4.1949

 Social legislation

 120 provisions spread-over under 11 chapters

 Act empowers state to make rules to enlarge the scope and objectives of
the Act.

 Accordingly KFR 1969 is in force since 10.4.1969

 Rules are also amended from time to time

 Extends to the whole of India

 Applicable to the premises, which comes under the definition “Factory”

 APPLICABILITY OF THE ACT

At any place wherein manufacturing process is carried on with or without the aid
of power or is so ordinarily carried on, not with standing that:

 The number of persons employed therein is less than ten, if working with the
aid of power and less than twenty if working without the aid of power, or

 The persons working therein are not employed by the owner thereof but are
working with the permission of, or under agreement with, such owner.

 Limited jurisdiction – applies to “Factories”

 Premises where 10 and more workers;

 Manufacturing process, Power

 Premises where 20 and more workers;

 Manufacturing process; No power

 Act empower state government to declare all or any of the provisions of the
act to apply to any place with an objective to secure safety, health and
welfare or workmen even though the workers strength is less than the above
cited conditions.

1. Training of hides,

2. Electroplating,

3. Manufacturing of specific chemical substances,

4. Manufacturing of asbestos,

5. Storing and handling of chemical substances as listed under schedule 1 of MAH

(K) Rules, 1994.
 OBJECTIVES

 The Act has been enacted primarily with the object of protecting workers
employed in factories against industrial and occupational hazards.

 For that purpose, it seeks to impose upon the owner or the occupier certain
obligations to protect the workers and to secure for them employment in
conditions conductive to their health and safety.

 To secure safety of the person ;

 To secure health of the persons from hazardous occupation/processes;

 To ensure protection from hazardous equipment;

 To ensure sound working environment ;

 To ensure welfare of the persons ;

 To protect the environment .

 Main points

 Health

 Safety

 Welfare

 Working Hours Of Adults

 Annual Leave With wages

 Secures - Safety

- Health

- Welfare

Regulates - Working Hours

Ensures - Annual leaves with wages

Provides - Additional protection from hazardous processes

- Additional protection to women workmen

- Prohibition of employment of children

 HEALTH

 Cleanliness

 Disposal of wastes and effluents

 Ventilation and temperature ( reasonable condition of comfort)

 Dust and fume

 Artificial humidification

 Overcrowding

 Lighting (at the place of work / at the place of movement)

 Drinking water

 Latrines and urinals

 Spittoons
 SAFETY
 Fencing of machinery (transmission machinery / dangerous rotating
parts)

 Work on or near machinery in motion

 Employment of young persons on dangerous machines.

 Striking gear and devices for cutting off power

 Self-acting machines

 Casing of new machinery

 Prohibition of employment of women and children near cotton-openers

 Hoists and lifts

 Lifting machines, chains, ropes and lifting tackles

 Revolving machinery

 Pressure plant

 Floors, stairs and means of access

 Pits, sumps openings in floors, etc

 Excessive weights

 Protection of eyes.

 Precautions against dangerous fumes, gases

 Precautions regarding the use of portable electric light.

 Explosive or inflammable dust, gas, etc

 Precautions in case of fire

 Power to require specifications of defective parts or tests of stability

 Safety of buildings and machinery

 Maintenance of buildings

 Safety Officers

 Power to make rules to supplement this chapter.

WELFARE

 Washing facilities

 Facilities for storing and drying clothing

 Facilities for sitting

 First-aid appliances

 Canteens

 Shelters, rest rooms and lunch rooms

 Creches

 Welfare officers

 Power to make rules to supplement this Chapter

 WORKING HOURS FOR ADULTS

 Weekly hours

 Weekly holidays

 Compensatory holidays

 Daily hours

 Intervals for rest

 Spread over

 Night shifts

 Prohibition of overlapping shifts

 Extra wages for overtime

 Restriction on double employment

 Notice of periods of work for adults

 Register of adult workers

 Hours of work to correspond with notice under section 61 and register under
section 62.

 Power to make exempting rules

 Power to make exempting orders

 Further restrictions on employment of women

 ANNUAL LEAVE FOR WAGES

 Application of Chapter

 Annual leave with wages

 Wages during leave period

 Payment in advance in certain cases

 Mode of recovery of unpaid wages

 Power to make rules

 Power to exempt factories

PROVISIONS IN THE ACT, CORRESPONDING TO

STRENGTH OF THE WORKERS
• Crèche

• Restroom / shelters and lunch room

• Cooled drinking water

• Canteen

• Ambulance room – Doctor, Nurse and Dresser cum compounder

• Welfare officer

• Lady welfare officer

• Safety officer\

• Occupational health centre – Industries\

•
 FACTORIES ACT – WOMEN WORKERS

• Prohibits the employment of women from 7 pm to 6 am.

• Prohibits overtime work

• Act permits the Government to notify the factories to employ women

workers up to 10pm with conditions

• Government has notified 15 categories of factories under 2 notifications;

• The conditions are

• Written consent

• Free transport upto their residence

• 9 hours of rest after completion of work to the fresh period

of work in the following day

• No overtime work

Act bars employment of women workers from 10 am to 5 pm totally.

• Act bars employment of women to clean, lubricate any part of the equipment

• Act bars employment of women workers in hazardous processes.

FACTORIES ACT – CHILD LABOUR

• Bars the employment of persons below the age of 14

• Act permits the employment of child and adolescent to work in factories

subject to condition of obtaining certificate of fitness from the certifying
surgeon.

Child – more than 14 and less 15;

Adolescent – more than 15 and less than 18

• Working hour for child is four and half hour per day

• Double employment of child is prohibited

• Working hours for adolescent is as that of adult.

• Act bears employment of child and young persons on dangerous machines –

power press, hydraulic, presses, milling machine, guillotine machine

• Act bars employment of child and adolescent on dangerous manufacturing

processes

HEALTH AND SAFETY POLICY

Occupier should lay down a detailed policy with respect to the health and
safety of the workers employed. The Health and Safety Policy should show

• The intentions and commitment of the management to provide SHE

• Organisational set up to bring out the policy effective

• Arrangement for involving the workers

• Intention of taking account of SHE performance in considering their career

advancement

• Fixing responsibility on contractors

• Providing resume of SHE performance in their annual report

• State intention of integration of SHE in selection of machineries, selection of

personnel, etc., and the expectation from the employees.
 ACCIDENT, DANGEROUS OCCURRENCES AND
DISEASES

• Requires reporting to the Inspector

• Investigated within one month

• To find out causes

• Any violations requires legal action

ACCIDENT
 Unplanned, unexpected event

• Never happens but they are caused

• Unsafe Act and unsafe conditions

• 98% of the accident can be prevented

WHY ACCIDENT SHOULD BE PREVENTED

• Accidents are proving very costly

• Influence very predominantly on the quality and the cost of

materials manufactured.
 STATISTICS OF THE STATE
1. Total No. of Factories registered : 10,300

2. Total No. of beneficiaries : Around 10 Lakhs

3. Industries involving hazardous processes : 800

4. MAH Units : 75

5. Head Office : Bangalore

6. Divisional Offices : 20 Districts

7. Accidents (Fatal) : Average 30 to 50

8. Non-fatal accidents : Average 3500 to 4000

9. No. of enforcing Officers : 30

 PENALTY

• No minimum fine is fixed

• Maximum fine fixed is Rs.1,00,000/- or two years imprisonment or both.

• In case of fatal accident if the contraventions are noticed from Chapter IV -

Rs. 25,000/- minimum

• In case of serious accident Rs. 5,000/-

• Any contraventions under chapter IVA – penal provisions are very

stringent.

• IS IT REQUIRED?

To thrive, industry is required to produce

 • High quality of goods

• Goods with less cost

• Many parameters influence this;

• Safe and healthy environment is also one amongst the

parameters.

INSPECTING STAFF

• Act empowers state Government to appoint persons as inspectors who

possess the prescribed qualifications along with local limits.

• Act has prescribed the duties and powers of the inspectors

• Deputy commissioner of the District

• Government can notify persons as inspectors - Notification

FOCUSSED AREAS
• Notifiable diseases

• Special provisions relating to hazardous processes

• Accidents and dangerous occurrences

• Statutory notices, registers

• Right of workers

• Obligation of workers

• Penalties and procedures

 OCCUPIERS RESPONSIBILITY
• Approval of building plan and the machinery layout

• Application of registration and grant of license

• Renewal of factory license

• At a time renewal for 3 years

• Obliged to comply with the applicable provisions of the Act

• Most importantly he is required to ensure SHE management at the site

without any compromise.

RESPONSIBILITIES OF THE MANAGER

Manager is a person appointed by the occupier for the purpose of the Act.

He is a person responsible to the occupier for working of the factory for the
purpose of the Act.

Specific duties :

• Responsible to maintain all the statute registers

• Responsible for submission of returns, accident reports, returns,

etc.

• Responsible to submit notice regarding working on Sunday,

over time works, etc.

• He is jointly responsible with the occupier in implementing the

applicable provisions of the Act.
 PAYMENT OF GRATUITY ACT,1972
 Section 1
Extent and Application

 It extends to the whole of India

OBJECTIVE OF THE ACT

The objective of the act is to provide for a scheme for the payment of
gratuity to employees engaged in factories, mines, oilfields,
plantations, ports, railway companies, shops or other establishments
and for matters connected therewith or incidental thereto

APPLICABILITY OF THE ACT

The act is applicable to :

 Every factory, mine, oilfield, plantation, port and railway company.

 Every shop or establishment within the meaning of any law for the time
being in force in relation to shops and establishments in a state, in which ten
or more persons are employed on any day of the preceding twelve months.

Other establishments or class of establishments, in which ten or more

employees are employed or were employed, on any day of the preceding
twelve months, as the central government may notify.

Definitions
Section2
S.2 (e) "employee" means any person employed to do any skilled, semi-
skilled, or unskilled, manual, supervisory, technical or clerical work it does
not include an apprentice

S.2 (s) "wages" includes dearness allowance but does not include any bonus,
commission, house rent allowance, overtime wages and any other allowance
  Gratuity shall be payable to an employee on the termination of his
employment after he has rendered continuous service for more than five
years,-

 (a)on his superannuation, or

 (b)on his retirement of resignation, or

 (c)on his death or disablement due to accident or disease:

Section: 4

Gratuity when payable ?

Gratuity shall be payable to an employee
 Who has rendered continuous service for not less than 05 years

 on the termination of his employment -

 on his superannuation, or

 on his retirement or

 resignation, or

 on his death or disablement due to accident or disease:

Note:-

 The completion of continuous service of five years shall not be necessary

where the termination of the employment of any employee is due to death
or disablement:

How to calculate the Amount of Gratuity

 Monthly rated employee :

At the rate of 15 days wages based on the rate of wages last drawn by
the employee concerned:

Formula:-last drawn wages X 15 days X No. of completed year of service

 26

 piece-rated employee, daily wages :

On the average of the total wages received by him for a period of
three months immediately preceding the termination of his employment
excluding overtime wages

 seasonal establishment

At the rate of seven days wages for each season.

 Maximum Limit Rs.10,00,000/-

 Higher benefits can be paid if the employer so desires.

EMPLOYEE PROVIDENT FUND ACT 1952

 EPFA applies to establishments and factory employing 20 or more persons.

 Employee drawing salary upto Rs.6,500/- per month has to become member
of the provident fund.

 EPFA in provident fund scheme provides wherein 12% is contributed by

both the employee and the employer with administration charge of 1.5%.

 In Pension/Superannuation fund scheme a part of the contribution to the

provident fund (8.33%) is diverted to this scheme.

 The Deposit Linked Insurance Fund Scheme is for providing Life Insurance
benefits. The employer contributes 0.5% and 0.01% towards administrative
cost of the basic wages.
 OBJECTIVE OF THE ACT

The Objective of the Act is to provide for the institution of provident funds,
pension fund and deposit linked insurance fund for employees in factories
and other establishments.

APPLICABILITY OF THE ACT

 Every establishment which is a factory engaged in any industry specified in
Schedule I and in which twenty or more persons are employed.

 Any Establishment employing twenty or more persons or class of such

establishments which the central government may by notification in the
official gazette specify in this behalf.

 Any other establishment employing less than twenty persons, if the central
government extent the applicability by way of notification in the official
Gazette.

Where an establishment Consists of different departments or has branches,

whether situate in the same place or in different places, all such departments
or branches shall be treated as parts of the same establishments

FOR NEW ENTRANTS

 An employee is eligible for membership from the day he joins the covered
establishment.

 If the employee’s emoluments exceed Rs. 6,500/- per month, he has the
option to join the Scheme's) with the consent of employer.

 Declare previous employment details, if any, in Form No. 11 to the

employer.
 On becoming a member of the Schemes file details in Form No. 2 ( family
particulars/ nominations) through the employer.

 Rate of contribution payable by a member shall be @ 12% of his

emoluments.

 A member can contribute statutorily over and above the prescribed rate.

 FOR EXISTING MEMBERS:

 Enrolment:

 Any change in the family status, such as, -

 marriage of the member.

 additions / deletion in the family.

 Legal adoption of the children.

 Change of nominee, is to be filed in Form No. 2 through the

employer.

 In the event the member is holding a Scheme Certificate (under EPS, 95), he
should surrender the same to the concerned EPFO office, through his
employer.

 A member is entitled to various benefits & facilities such as withdrawals,

advances, pensions, death insurance etc.

EMPLOYEE STATFF INSURANCE ACT,1948

 The contribution under this Act of an employee comprises of contribution
payable by the employer and the employee.

 Presently every insured employee and his employer have to pay the
Employees State Insurance Corporation at the rate of 1.75% and 4.75%
respectively of the wage of the employee.
 Under the Act, the employer is liable to pay compensation to workmen
incapacitated due to an accident arising out and in the course of
employment.

OBJECTIVE OF THE ACT

 The objective of the act is to provide for certain benefits to employees in

case of sickness, maternity and “employment injury” and to provide for
certain other matters in relation there to.

 The Act is applicable to all factories including factories belonging to the

Government other than seasonal factories.

 ESI is applicable to the employee drawing salary of less than 10,000/- in a

month.

Contribution:
Employer: 4.75 % of salary.
Employee: 1.75% of salary

 Benefit Covered

 Sickness Benefit

 Maternity Benefit

 Disablement Benefit

 Presumption as to accident arising in course of employment

 Accidents happening while acting in breach of regulations, etc.

 Accidents happening while travelling in employer's transport

 51D. Accidents happening while meeting emergency

 Dependants' benefit
 APPLICABILITY OF THE ACT

 The Act is applicable to all factories including factories belonging to

the Government other than seasonal factories.

 ESI is applicable to the employee drawing salary of less than 10,000/-

in a month.

 THE INDUSTRIAL DISPUTES ACT, 1947 (IDA)

 IDA - is an Act to make provision and settlement of Industrial Disputes

with the objective to maintain industrial peace and economic justice.

 IDA categories employees into workman and non-workman.

 Section 2 (s) of IDA defines workman.

 “Workman” means any person employed in any industry to carry out

manual, skilled and unskilled, technical, operational, clerical or
supervisory work for hire or reward.

 The definition specifically excludes – persons employed in managerial

or administrative capacity and also those persons (otherwise falling
within the definition of workman)

Payment Of Wages Act

Applicability of Act
 Factory industrial Establishment
 Tramway service or motor transport service engaged in carrying passengers or
good or both by road for hire or reward.
 Air transport service Dock, Wharf or Jetty
 Inland vessel, mechanically propelled
 Mine, quarry or oil-field Plantation
 Workshop or other establishment etc.
Object of the Act
To regulate the payment of wages of certain classes of employed persons

Wages to be paid in current coins or currency notes

All wages shall be paid in current coins or currency notes or in both.

After obtaining the authorization, either by cheque or by crediting the wages in

employee’s bank Account Sec. 6

Time of payment of wages

The wages of every person employed be paid. When less than 1000 persons are
employed shall be paid before the expiry of the 7th day of the following month.
When more than 1000 workers, before the expiry of the 10th day of the following
month. Sec. 5

Deduction for absence from duties for unauthorised absence

Absence for whole or any part of the day –If ten or more persons absent without
reasonable cause, deduction of wages upto 8 days. Sec. 9

Deduction made from wages

Deductions such as, fine, deduction for amenities and services supplied by the
employer, advances paid, over payment of wages, loan, granted for house-building
or other purposes, income tax payable, in pursuance of the order of the Court, PF
contributions, cooperative societies, premium for Life Insurance, contribution to
any fund constituted by employer or a trade union, recovery of losses, ESI
contributions etc. Sec. 7

Coverage of Employees
Drawing average wage upto Rs.6500 pm as amended w.e.f. 6.9.05.
Fines as prescribed by
Not to imposed unless the employer is given an opportunity to show cause

To record in the registerSec.8

Deductions for service rendered

When accommodation amenity or service has been accepted by the
employee.Sec.11

MINIMUM WAGES ACT, 1948

Object of the Act

To provide for fixing minimum rates of wages in certain employments.

Fixation of Minimum Rates of Wages

 The appropriate government to fix minimum rates of wages. The employees
employed in para 1 or B of Schedule either at 2 or either part of notification u/s
27.
 To make review at such intervals not exceeding five years the minimum rates or
so fixed and revised the minimum rates.

Government can also fix Minimum Wages for

 Time work
 Piece work at piece rate
 Piece work for the purpose of securing to such employees on a time work basis
 Overtime work done by employees for piece worker time rate workers. Sec. 3

Payment of Minimum Rates of Wages

Employer to pay to every employee eagated in schedule employment at a rate not
less than minimum rates of wages as fixed by Notification by not making
deduction other than prescribed Sec.12
Composition of Committee
Representation of employer and employee in schedule employer in equal number and
independent persons not exceeding 1/3rd or its total number one such person to be appointed
by the Chairman.

Sec. 9
Procedure for fixing and revising Minimum Rates of Wages
Appointing Committee issue of Notification etc.

Sec. 5

Fixing Hours for Normal Working

 Shall constitute a normal working day inclusive of one or more specified
intervals.
 To provide for a day of rest in every period of seven days with remuneration.
 To provide for payment for work on a day of rest at a rate not less than the
overtime rate.. Sec. 13

Minimum Rates of Wages

Such as Basic rates of wages etc. Variable DA and Value of other concessions etc.
Sec. 4

Overtime5To be fiIed by the hour, by the day or by such a longer wage-period

works on any day in excess of the number of hours constituting normal working
day.
Payment for every hour or for part of an hour so worked in excess at the overtime rate
double of the ordinary rate of (1½ times or for agriculture labour) Sec. 5

Wages of workers who works for less than normal working days
Save as otherwise hereinafter provided, be entitled to receive wages in respect of work done
by him on that day as if he had worked for a full normal working day.Sec.15
Where an employee does two or more classes of work to each of which a different minimum
rate of wages is applicable, wages at not less than the minimum rate in respect of each such
class Sec. 16

Maintenance of registers and records

 Register of Fines – Form I Rule 21(4)
 Annual Returns – Form III Rule 21 (4-A)
 Register for Overtime – Form IV Rule 25
 Register of Wages–Form X, Wages slip–Form XI, Muster Roll–Form V Rule 26
 Representation of register – for three year Rule 26-A

Sec. 18
Minmum time rate wages for piece work
Not less than minimum rates wages as fixed .

Sec. 17

Claims by employees
 To be filed by before authority constituted under the Act within 6 months.
 Compensation upto 10 times on under or non-payment of wages Sec. 16
Act not applicable to certain employees of LIC, General Insurance, Dock Yards,
Red Cross, Universities & Educational Institutions, Chambers of Commerce,
Social Welfare Institutions, Building Contractors, etc. etc. Sec.32

PAYMENT OF BONUS ACT, 1965 & THE RULES

Maintenance of Registers and Records etc.

 A register showing the computation of the allocable surplus referred to in clause
(4) of section 2, in form A.
 A register showing the set-on and set-off of the allocable surplus, under section
15, in form B
 A register showing the details of the amount of bonus due to each of the
employees, the deductions under section 17 and 18 and the amount actually
disbursed, in form C.Sec.26, Rule 4
Establishment
Establishment includes Departments, undertakings and branches, etc,

Computation of available surplus

Income tax and direct taxes as payable. Depreciation as per section 32 of Income
Tax Act. Development rebate, investment or development allowance. Sec.5

Components of Bonus
Salary or wages includes dearness allowance but no other allowances e.g. over-
time, house rent, incentive or commission.Sec.2(21)

Separate establishment
If profit and loss accounts are prepared and maintained in respect of any such
department or undertaking or branch, then such department or undertaking or
branch is treated as a separate establishment.Sec.3

Computation of gross profit

For banking company, as per First Schedule, Others, as per second ScheduleSec.4

Disqualification & Deduction of Bonus

On dismissal of an employee for

 Fraud; or
 riotous or violent behaviour while on the premises of the establishment; or
 theft, misappropriation or sabotage of any property of the establishment or
 Misconduct of causing financial loss to the Employer to the extent that bonus can
be deducted for that year.Secs. 9 & 18.

Eligible Employees
Employees drawing wages upto Rs.3500 per month or less.
For calculation purposes Rs.2500 per month maximum will be taken even if
an employee is drawing upto Rs.3500 per month.Sec.12
Note: The proposal to enhance the existing ceiling of Rs.3500 is under active
consideration by the Govt.

Payment of Minimum Bonus

8.33% of the salary or Rs.100 (on completion of 5 years after 1st Accounting year
even if there is no profit)Sec.10 Sec. 8

Eligibility of Bonus
An employee will be entitled only when he has worked for 30 working days in that
year.Sec. 8

Time Limit for Payment of Bonus

Within 8 months from the close of accounting year. Sec. 19

Applicability of Act
Every factory where in 10 or more persons are employed with the aid of power or

An establishment in which 20 or more persons are employed without the aid of

power on any day during an accounting year

Literature Review
A)Overview:

Sheoran (2013) in his paper titled “Implementation of Factories Act, 1948 in

Haryana- A comparative study of three industries” focuses on the importance of
Factories Act as it incorporates safety, health and welfare aspects. The First
Factories Act was passed in 1881 for those industries, which employed 100 or
more workers. Amendments to this Act were made in 1890, making it applicable to
the undertakings having 50 or more workers as per the recommendations of the
Bombay Factories Commission, 1890. After independence legislations like the
Employees State Insurance Act, 1948; the Factories Act, 1948; Minimum Wages
Act, 1948; Industries Act, 1951; the Employees Provident Fund, Family Pension
Fund and Deposit Linked Insurance Fund Act, 1952; Maternity Benefit Act, 1961;
the Payment of Bonus Act, 1965; the Payment of Gratuity Act, 1972 etc. were
passed. However, the Factories Act, 1948 is considered more important because it
incorporates safety, health and welfare measures for workers. The universe of the
study consists of three industrial undertakings namely National Fertilizers Ltd.,
Panipat, SPL Ltd., Bahadurgarh and Cooperative Sugar Mill, Karnal in Haryana.

Research methodology:
This study intends to examine the implementation of the Factories Act, 1948 in the
universe of its study i.e. National Fertilizers Ltd., Panipat, SPL Ltd., Bahadurgarh
and Cooperative Sugar Mill, Karnal in Haryana. For this purpose, the relevant
information has been collected from primary sources and supplemented by
secondary sources wherever necessary. Interview schedules have been worked out
to elicit factual information from the workers, trade unions, management and the
district inspectorates a Purposive sample of 50 workers, five respondents of
management, five representatives of trade union of each undertaking and a total of
five representatives of inspectorate staff has been drawn. Informal dialogues have
been held to ascertain the reliability of information so gathered. However, the
study confines itself strictly to the three units only.

Key Findings:
It can be said that the level of awareness of workers is the highest in case of safety
provisions followed by provisions for good health and the lowest in case of welfare
provisions. It is seen that the highest number of aware workers are in NFL because
they are better educated, paid and placed than others. As far as the implementation
of these provisions is concerned, safety provisions are implemented with great
success rate followed by health provisions and welfare provisions. It means the
implementation of various provisions is related to awareness of those provisions.
On the whole, it can be said that implementation of the Act is not much effective
and administrative machinery and the staff for implementing the Act are also
inadequate.

It can also be said that trade unions have little role in the effective implementation
of the Act’ is also accepted.

Key Learnings:
The role of local language communication is essential for generating awareness
among workers and manuals, handouts, pamphlets, etc. should be frequently
distributed among employees. The relationship between non statutory welfare
provisions with quality of work life is direct. The Government must consider the
disparity in wages and working conditions in the concerns of workers.

B)Overview:

Bhati and Kumar M. (2013), in their paper “Provision of welfare under Factories
Act & its impact on Employee Satisfaction” highlighted the satisfaction level of
employees with regard to welfare provisions in engineering industry as set by
Factories Act, 1948. They identified different welfare provisions to be given to
employees under Factory Act 1948 and conducted research on employee
satisfaction towards welfare facilities under the Act. This includes the study of 50
employees from each of the company i.e. Jyoti CNC, Rajoo Engineering, Steel
Cast, Atul auto & Amul industries making a total sample size of 250 employees.
The impact of welfare provisions on employee satisfaction was measured and
difference in terms of employee satisfaction towards welfare provision was
determined. This study can be implied in any of the industry as a tool for
identifying the employee tendency & belief towards the welfare provisions. One
can know the requirement of the workers in terms of different non financial
motivational tools by implying this study. It is also useful for identifying the
factors which leads to employee satisfaction so that company can use those factors
as retention tool for retaining employees in the organization.
Research methodology:
For research the entire Engineering industry of Saurashtra region was taken as
population of the

study and five engineering companies i.e. Jyoti CNC, Rajoo Engineering, Steel
Cast, Atul Auto & Amul industries are selected by judgmental sampling. From the
above five companies sample size of 50 employees from each of the company is
taken. Therefore 250 is total sample size of the study by simple random sampling.
The data is collected using primary data collection tool questionnaire. Correlation
& One Way ANNOVA is also used for objective analysis. The test is conducted at
5% level of significance.

Key Findings:
From the study it can be suggested that the provisions provided to the employees
in each industry should always be made more beneficiary for their welfare. So, for
this each industry should appoint the welfare officer who can take better care for
the welfare facility of the employees in an industry. From this study it was also
found out that the employees have positive attitude towards their industry for the
welfare provisions

Key Learnings:
The different welfare provisions provided to the employees working in an
organization under Factories Act 1948 are having positive relation with the
employee satisfaction. The reason behind this result is that these are the factors that
lead to satisfaction & if they are not present can sometimes lead to dissatisfaction
i.e. on basis of Herzberg’s theory of motivation.

C)Overview:

Poonam Salaria and Sumit Salaria (2013) in their paper “Employee welfare
measures in Auto Sector” presented the facilities entitled by Auto Sector
Companies and employees satisfaction with the facilities provided. Employee
welfare means anything done for the comfort and improvement, Intellectual or
social, of the employees over and above the wages paid which is not a necessity of
the industry. Organizations provide welfare facilities to their employees to keep
their motivation levels high. The employee welfare schemes can be classified into
two categories viz. Statutory and non-statutory welfare schemes. The statutory
schemes are those schemes that are compulsory to provide by an organization as
compliance to the laws governing employee health and safety. The non statutory
schemes differ from organization to organization and from industry to industry.
The basic purpose of employee’s welfare is to enrich the life of employees and
keep them happy and contended. Non-statutory benefits are the result of
employer’s generosity, enlightenment and philanthropic feelings. It is one of many
ways for people to feel heard, cared for, to be informed and to be involved. It is
equally important to ensure that leaders and employees at all levels of the
organization are aligned to the culture of the organization, and living it.

Through the study relationship between employee’s welfare and industrial relation
is also established

Research methodology:
Auto companies in NCR (National Capital Region) are taken as population of the
study. The study is based on random sampling and four auto companies i.e. New
Holland Fiat (India) Pvt.ltd. HONDA SIEL, Yamaha, JCB are selected randomly.
Descriptive research design concerning with describing the perception of each
individuals or narrating factors on welfare measures is used. The major purpose of
descriptive research is description of the state of affairs as it exists at present.

The primary data was collected from the respondents i.e. employees and secondary
data was collected from the past records and websites. Research instrument is
questionnaire. Types of questions are close ended questions, dichotomous
questions and multiple–choice question. Percentage analysis is done to find out the
response of the respondents

Key Findings:
Auto sector companies provide welfare facilities to their employees to keep their
motivation levels high. Welfare services may broadly be classified into two
categories (1) intramural activities (2) extramural activities. Nowadays maximum
companies give their employees a voluntary welfare and recreational facilities.
This research studies the welfare measures provided to the employees, satisfaction
and awareness about the welfare. Employees in auto sector are highly satisfied
with the intramural welfare measures and few are dissatisfied with the extramural
welfare measures. Perception of the employees on the total welfare measures is
satisfied very fewer employees are dissatisfied.

Key Learnings:
Employee’s welfare is an essential part of social welfare. This study enables
employees to have a richer and more satisfying life.

Research Methodology

Problem statement
Welfare provisions of Factories Act 1948 are important as far as the nature of the
work in tobacco industries is concerned. It may happen that the compliance level
of Factories Act, 1948 vary from company to company. It is also assumed that the
welfare facilities provided to the employees somehow affects their work
performance. So this study aims at studying the compliance level of Factories Act,
1948 in International Tobacco Company Ltd and to determine how it relates to the
performance of the employees.

Objectives of the Research

i. To examine the implementation of the Factories Act, 1948.

ii. To evaluate the adequacy of various provisions of the Act.

iii. To study the effectiveness of management in implementing the Act.

iv. To identify whether any relation exists between welfare activities and work
performance.

Design of the study

The key phases of the training needs assessment were:

Phase I: Gather Preliminary Data

Phase II: Plan

Phase III: Perform Training Requirements Analysis

Phase IV: Analyze Data

Phase V: Prepare report

Type of research design

Descriptive research is used to conduct this study.

Sample

The evaluation of the compliance of Factories Act, 1948 was conducted during
May of 2013. The sample size selected was 30.

Sampling Technique:

Random Sampling was used for conducting the research. The sample for the study
consists of the following departments of International Tobacco Company Ltd:

 Primary Manufacturing Division

 Cigarette Making Department

 Cigarette Packing Department

 Quality Assurance

 Accounts/IT

 Purchase
  Projects/Utilities/Stores

 Corporate engineering/Projects

Instrumentation
The data collection is done through questionnaire, observations and personal
interviews during May of 2013.

Identical questionnaires were used to assess the welfare activities of the

organization. A questionnaire was developed consisting of most of the aspects of
the Factories Act, 1948. Questions were framed so that they could be answered

easily. The number of questions was limited so that it could be completed in five
minutes or so. Participation was anonymous and strictly voluntary. A copy of the
questionnaire can be found in the appendix.

Statistical Tools
Pie charts,

Column charts,

Doughnuts used.

Sources of Data
The data can be categorized in primary and secondary data as shown
below:

Primary Data

Questionnaires

Observations

Personal interviews

Secondary Data

Records of company, our books and magazines have been taken into
account.
Limitation of Study
The study may be limited due to:

 In today’s fact paced environment, welfare requirements of an individual can

change so rapidly that data collected during a time frame, can become
outdated fairly quickly.

 The sample size was small.Even though there will be a concentrated effort to
get the questionnaire into the hands of maximum volunteers, thereguarantee
that the individuals will actually receive and complete the questionnaire
  Results and Discussions
Analysis of Results

On the basis of data collected, following outcome is achieved

25

20

15

Very Dissatisfied
10 Dissatisfied
Somewhat Satisfied
Satisfied
5 Very Satisfied

 Above graph demonstrates that a large proportion of employees are very

satisfied with temperature control in the company premises, sitting
arrangement and drinking water facility.

 Cleanliness in the company is also viewed by employees as satisfactory.

 Considerable number of employees is also satisfied with the canteen services
and the spittoon facility being offered by the company.

 Although a large proportion of employees are also satisfied with the rest
room & lunch room facilities and first-aid facilities, still some employees
find there is a room for improvement in these two.

Sufficient light
Very Dissatisfied Dissatisfied Somewhat Satisfied Satisfied Very satisfied

3%
7%

20%

70%

 70 percent of the employees are very satisfied and 20 percent of the

employees are satisfied with the amount of light being provided at work
station.
25

20

15 Very dissatisfied
Dissatisfied
Somewhat satisfied
10 Satisfied
Very satisfied

0
Working hours Conveyance Overtime Leave policy
allowance allowance

 All employees are either very satisfied or satisfied with the working hours of
the organization.

 There is quite a variety of responses for conveyance allowance. Majority of

employees are only somewhat satisfied with the conveyance allowance
being offered. There are considerable numbers of employees who are
dissatisfied or very dissatisfied with the conveyance allowance.

 Maximum proportion of employees finds overtime allowance to be

satisfactory.

 Leave policy of the company is also satisfactory according to the employees.

None of the employee is dissatisfied with the leave policy.
 100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Yes No

 Organization ensures following features and all employees agrees with them:

 Separate washrooms for male and females

 Providing weekly off to the employees

 Providing maternity leave to female employees

 Employing a welfare officer

 Company will help to meet personal goals

Very dissatisfied
20%
Very Satisfied
30%

Dissatisfied
6%

Somewhat Satisfied
17%

Satisfied
27%

 When asked whether employees think that working in the company will help
them to meet their personal goals; majority of employees were positive in
their outlook. 20 percent of the employees are very dissatisfied and 6 percent
are dissatisfied.
 Working condition hinders best performance

Very Satisfied
25%
Very dissatified
36%

Satisfied
17%
Somewhat
Satisfied
17% Dissatisfied
5%

 More than 50 percent of the employees are very satisfied, satisfied or

somewhat satisfied on the above statement that working condition
somewhere prohibits them to give their best performance.

Welfare activities helps to be dedicated

Very dissatisfied
20% Dissatisfied
Very Satisfied 3%
44%
Somewhat Satisfied
10%

Satisfied
23%
 44 percent of the employees are very satisfied with the statement that
welfare activities help them to be dedicated towards their work. 23 percent
of the employees are satisfied and 10 percent are somewhat satisfied leaving
behind a very small proportion of employees who are against this view.

complaints can lead to repercussions

Very Satisfied
17%

Satisfied
10%

Very dissatisfied
Somewhat Satisfied
67%
6%
Dissatisfied
0%

 Majority of the employees i.e., 67 percent do not believe that any complaint
towards any of the flaws of the welfare activities would lead management to
take negative decisions towards them.
 Working condition causes fatigue which
affects work performance
Very Satisfied
10%

Satisfied
20% Very dissatisfied
47%

Somewhat
Satisfied
23%

Dissatisfied
0%

 There is a wide variety of response for the above statement. More than 50
percent of the employees find that that working condition causes fatigue
which ultimately leads to an effect on their work performance.

Salary compliment job

Very
dissatisfied
13%
Very satisfied
30% Dissatisfied
17%

Somewhat satisfied
Satisfied
27%
13%
 70 percent of the employees agreed to the statement that the salary offered to
them is equivalent to their work done. Rest 30 percent find that salary
offered to them is not in accordance with their job skills and requirements.

Recognition is given to good work

Very dissatisfied
10%

Dissatisfied
10%

Somewhat satisfied
7%
Very satisfied
53%
Satisfied
20%

 Majority of the employees are of the view that company rewards them in one
way or the other for the good work done. 53 percent of the employees are
very satisfied with the above statement and rest 27 percent is either satisfied
or somewhat satisfied.
 overall ratings of welfare activities
Poor
3%

Very good
17%

Adequate
33%

Good
47%

 Approximately 97 percent of the employees rated the welfare activities

offered to them positively. 17 percent of the employees find them to be very
good, 47 percent of the employees rated them as good and 33 percent find
them to be adequate.
 Welfare activities affect work performance
Yes To some extent NO

23%

10%
67%

 Majority of the employees view that welfare activities in one way or the
another affects their work performance. Only 23 percent of the employees
find that welfare activities are not related in any way to their work
performance
 Conclusion

 The objective to check the compliance level of Factories Act, 1948 is

accomplished. It is found that the company follows all the measures and
provisions being mentioned in the Factories Act. As employers are required
to provide welfare activities to workers under the Act, it would be right to
interpret that International Tobacco Company Ltd is working on the
guidelines mentioned under the legislation and provide the workers with all
the activities the Factories Act suggests.

 The organization checks the guidelines to determine the nature of activities

to be implemented.

For example- As the number of workers in the company is more than 500,
company had employed a welfare officer but as the number of female
workers is less than thirty in the organization, there is no provision of
creche.

 Although the employees are very optimistic towards the welfare activities
being offered by the organization, but it can be said that there is some scope
of improvement in some areas.

For example- Some employees find that rest room facility and first- aid
facility are not adequate. Similarly, many are not satisfied with the
conveyance allowance offered to them.

 Most of the employees are highly benefitted by the welfare measures of the
company.

 Employees show positive attitude towards the organization. This can be

understood by the fact that employees believe that serving the organization
will help them to fulfill their personal goals and desires and moreover they
strongly object that complaints done by them for any flaw in the welfare
activity will lead to a negative decision by management for them.


 Recommendation

On the basis of the study carried out, following recommendations can be made:

 The number of spittoons provided at the workplace is not sufficient, so the

company has to increase the number of spittoons which ultimately helps to
keep the environment clean.

 The management has to take necessary steps to improvise the rest room
facility.

 Adequate number of medical facilities should be provided for the

employees. It is one of the most important requirements of the employees
and can help to satisfy the employees.

 The management should constitute a team to rework on the conveyance

allowance offered to the employees. The team can decide if any further
improvement or modification is required or not.

 The number of toilets should be increased to some more.

 Working conditions can be improvised to eliminate all sorts of boredom and

fatigue created.

According to “Talent management and Rewards study” for 2012 by global

professional services company Towers Watson, 36 % organizations
acknowledge employees often experience excessive work pressure. The
survey covered 1,605 employers globally and 89 employers in India.

 The management team can further decide whether any change in the salary
structure is required or not.
 References

Rao V S P. 2007. Human Resource Management Text and Cases .Excel Books.

Kumar H.L.2009. Practical guide to Factories Act. Universal law publishing co.

Kothari .C.R. 2005. Research Methodology, Methods and Techniques. New age
international publisher.

Gupta C.B. 2011. Human Resource Management. Sultan Chand & Sons

http://dtd.dacnet.nic.in/economy.htm

http://www.differencebetween.net/language/difference-between-bibliography-and-
references/

http://www4.caes.hku.hk/acadgrammar/general/argue/citation/subtopics/sec7refsvs
bibl.htm

http://www.monash.edu.au/lls/OffCampus/Improve/11.5.html

http://www.monash.edu.au/lls/OffCampus/Improve/11.5.html

http://www.scribd.com/doc/61589385/Project-on-EMPLOYEES-WELFARE-
MEASURES

http://www.ilo.org/dyn/natlex/docs/WEBTEXT/32063/64873/E87IND01.htm

http://www.mba-mentor.com

http://vizdom.hubpages.com

http://wiki.answers.com

http://www.educationobserver.com

http://studyvalue.com/_management_sciences/_h
 Bibliography

Garg A.K. 2013. Business statistics. Swati Prakashan

http://economics.missouri.edu/working-papers/2006/wp0602_mueser_jeon.pdf

http://www.employabilityinscotland.com/sites/default/files/articles/5395/Performa
nce%2520Measures%2520for%2520Welfare%2520to%2520Work%2520Program
mes_843_1033.pdf

http://jms.nonolympictimes.org/Articles/6.pdf

http://www.indianmba.com/Faculty_Column/FC992/fc992.html

http://seminarprojects.com/Thread-welfare-measures-under-the-factories-act-1948

http://jupapadoc.startlogic.com/compresearch/papers/JCR11-2.pdf

http://labour.nic.in/upload/uploadfiles/files/ActsandRules/Service_and_Employme
nt/The%20Factories%20Act,%201948.pdf

http://www.advocatekhoj.com/library/bareacts/factories/index.php?Title=Factories
%20Act,%201948

http://www.labourandemployment.gov.in/idmis/download-pdf/acts-
rules/fact_act.pdf

http://en.wikipedia.org/wiki/Factories_Act_1948

http://delhi.gov.in/wps/wcm/connect/doit_labour/Labour/Home/Acts+Implemented
/Summary+of+the+Acts+Implemented/The+Factories+Act-1948

http://www.slideshare.net/shreya0907/factories-act-1948
 Appendix Questionnaire
I, Pushpinder Kaur, student of Management Studies, Mahamaya Technical
University, is currently assigned a project titled “ To identify the compliance level
of Factories Act, 1948 in International Tobacco Company Ltd, Ghaziabad and to
determine its relation to work performance” under “ Mr. Sandesh Bhardwaj,
Deputy Manager, Personnel and Welfare” in International Tobacco Company Ltd.
Therefore I request you to kindly spare your few moments and fill the
questionnaire. It is assured that the information provided by you will be kept
highly confidential.

Section (I) Health, Safety and welfare activities

Kindly tick the option using ratings 1 to 5 to answer the questions numbered 1 to
16.

Very Somewhat Very

Question What do you Dissatisfied Dissatisfied Satisfied Satisfied Satisfied
Numbers think about (1) (2) (3) (4) (5)
the
following:
1 Cleanliness
in your
organization
2 Drainage
Facility

3 Temperature
control in
the company
premises
4 Availability
of drinking
water
5 Accessibility
of drinking
 water
6 Number of
spittoons

7 Clean and
Hygienic
conditions
of spittoons
8 Availability
of sufficient
light
9 Canteen
services

10 Rest room
and Lunch
room
facilities
11 Medical
benefits
provided by
company
Very Somewhat Very
Question What do you Dissatisfied Dissatisfied Satisfied Satisfied Satisfied
Numbers think about (1) (2) (3) (4) (5)
the
following:
12 Sitting
arrangement
in the
organization
13 Working
hours of the
organization
 14 Conveyance
allowance
offered by
the company
15 Overtime
allowance
offered
16 Leave policy
of the
organization

Kindly tick the given options for the following questions:

Question
Number Questions: No
Yes
1 Does the organization offers sufficient number of toilets?

2 Does the organization offers separate washrooms for male

and females?
3 Are the washrooms lighted and ventilated?

4 Do you avail weekly off?

5 Does the company provide maternity leave to employees?

6 Does the company take care of the employees working in

the night-shifts?
7 Does working in the organization give you a feeling of
security?

8 Is the machinery being used fenced?

9 Does the company employ any welfare officer?

Section (II) Work Performance
Kindly tick the option using ratings 1 to 5 to answer the questions numbered 1 to
16.

Very Very
Questio Questions Dissatisfie Dissatisfie Somewha Satisfie Satisfie
n d d t d d
Number (1) (2) (4) (5)
s Satisfied
(3)
1 I hope
company
will help me
to meet my
personal
goals
2 Working
conditions
hesitates me
to show my
best
performance
3 I can work
with more
dedication if
company
offers
welfare
activities
4 Complaints
about flaws
in facilities
will made
 me face
repercussion
s
5 Working
conditions
causes
fatigue and
thus affects
my
performance
6 The salary I
get
compliment
my duties
7 Due
recognition
is given for
the work
that is done
well
.

Section (III) Personal information

1) For how many years are you working with the organization?
a) 0 – 5 years
b) 5 – 10 years
c) 10 – 15 years
d) More than 15 years

2) What age bracket do you come in?

a) 21 to 25 years
b) 26 to 30 years
c) 31 to 35 years
d) 35 or above
 3) What is your gender?
a) Male
b) Female

Section (IV) Miscellaneous

1) How will you rate overall welfare activities?
a) Very good
b) Good
c) Adequate
d) Poor
e) Very poor

2) Do you find welfare activities will affect your work performance?

a) Yes
b) To some extent
c) No

Thank you for your co-operation