KERALA SOLVENT EXTRACTIONS LTD
Submitted for partial fulfillment of the requirements for the
award of the degree of
MASTER OF BUSINESS ADMINISTRATION
MARIYA JASMINE. M. Y
Reg. No. 00000
Under the guidance of
Mr. M. D. JOHNY Prof. THOMAS
Company Guide Faculty Guide
DEPARTMENT OF MANAGEMENT STUDIES
MAR ATHANASIOS COLLEGE FOR ADVANCED
Tiruvalla – 689 101, Kerala
This is to certify that this report, based on the organization study
conducted by MARIYA JASMINE M. Y., second semester MBA
student of our college for 20 days starting from 2nd
May 2011 at
KSE LTD., is a bonafide record submitted in partial fulfillment
of the requirements for the degree of
MAR ATHANASIOS COLLEGE
FOR ADVANCED STUDIES
I hereby declare that this report titled “Organizational Study at
KSE LTD.” has been prepared by me during the academic year
2011 - 2012, under the guidance of Prof. THOMAS , Department
of Management Studies, MACFAST, Tiruvalla.
I also hereby declare that this project report has not been
submitted to any other University or institute for the award of any
degree or diploma.
Date MARIYA JASMINE M.Y
LIST OF TABLES
Table No. Title Page
3.1 Share capital pattern
5.1 Financial highlights
5.2 Net profit and sales comparison
5.3 Marketing price data
LIST OF FIGURES
Fig. No. Title Page No.
1 Purchase procedure
A A A :
A B B :
A B C :
B A A :
B A B :
B B A :
B B B :
B B C :
C A A :
C B A :
C B B :
C B C :
LIST OF TABLES (ii)
LIST OF FIGURES (iii)
CHAPTER 1. INTRODUCTION
1.1. Scope of the Study
1.2. Significance of the study 1
1.3. Objectives of the Study 1
1.4. Methodology 2
1.5. Limitations of the Study 2
CHAPTER 2. INDUSTRY PROFILE
2.1. Need for Solvent Extraction 3
2.2. Solvent Extraction Process 4
2.3. Coconut Oil Miller’s Co-Operative Society 4
2.4. The Solvent Extractors' Association of India 5
CHAPTER 3. COMPANY PROFILE
3.1. History of KSE.Ltd 8
3.2. Growth Chronicle of KSE Ltd. 10
3.3. Vision 11
3.4. Mission 11
3.5. Share Capital Pattern 12
3.6. Awards and Recognition 14
3.7. Management 16
3.8. Social Concerns 17
3.9. Marketing Scenario 17
3.10. Research and Developments 17
CHAPTER 4. PRODUCT PROFILE
CHAPTER 5. FUNCTIONAL DEPARTMENTS
1.1. Production Department 19
1.2. Finance Department 22
1.3. Marketing Department 31
1.4. Purchase Department 38
1.5. Personnel Department 43
1.6. Stores Department 50
1.7 Quality Control Division
CHAPTER 6. SWOT ANALYSIS
CHAPTER 7. FINDINGS, CONCLUSIONS AND SUGGESTIONS
6.1. Findings 66
6.2. Conclusion 67
6.3. Suggestions 69
1.1 SCOPE OF THE STUDY
The scope of the study is confined to the various levels of management and
their functions. This study is about the organization’s structure. It helps to
know the company policies and their implications and to know about the
detailed functions of each department. Also scope of study is to analyze the
strength, weakness, opportunity and threat of the company.
1.2 SIGNIFICANCE OF THE STUDY
In the educational context conducting an organizational
study is very much important. Because all things cannot be clearly
understand from the theoretical knowledge. It might need practical
experience too. Organizational study helps to fulfill this. It is the examination
of how individuals construct organizational structures, processes, and
practices and how these, in turn, shape social relations and create institutions
that ultimately influences people. Organizational studies comprise different
areas that deal with the different aspects of the organizations.
1.3 OBJECTIVES OF THE STUDY
1. To get a complete picture of the organization.
2. To know about the organizational structure of the company.
3. To have awareness about the working of the organization.
4. To know about the activities carried out in each department.
5. To suggest some measure to improve the performance of the
6. To analyze the strength, weakness, opportunities and threat faced by
7. To provide suitable suggestions for the smooth functioning of the
8. To know the profitability of the firm and marketability of the products.
Both primary and secondary data were collected from the company and the
same were used for the completion of the organization study.
Primary data are those which are collected afresh and for the first
time through consultation with various functional managers and staff. Thus
all the data collected are original in character.
For this study data were collected from all chief managers of the
departments by direct personal interviews and detailed interviews with
some departmental heads and other employees of the company.
Secondary data is the data which has been collected and published by other
person or publications by means of various books, newspapers and official
website of the company. All these means were used for the study.
1.5 LIMITATIONS OF THE STUDY
Time was the major limitation for this study
The company has imposed some rules and regulations on staff
not to reveal the confidential matters.
As many departmental heads were busy, it was not able to
collect all details of the organization.
Since the secondary data is not collected directly, it may involve
Solvent Extraction Industry
The solvent industry has achieved a phenomenal
progress and at present there are 520 units having over all oil cake or oil seed
processing capacity of more than 24.6 million tones per year, which included
rice bran processing capacity of more than 9.9 million per year. The solvent
extraction plays important role in the oil economy. Solvent extraction in India
was started in 1945.It had to struggle for more than 20 years to establish
2.1 Need for Solvent Extraction
In the early days, the oil extraction was mainly done by
locally framed chucks driven by animals. It was called as the rotary crushing
mill. The process was highly time consuming and laborious. The capacity was
too low and the input or output ratio was not economic. To solve these
problem motor-driven expellers were introduced. The expellers can process
larger qualities at comparatively shorter time with better output. The
expellers can extract about 68% of oil.
Still there exists about 32% extractable oil in
the copra cake. The oil researchers had found out the method of extraction
using certain solvent. This was used in this field and result was highly
promising. By using solvent in copra cake the residual oil of 32% contained in
it can be effectively extracted achieving 100% oil extraction from copra. The
solvent once used can be reused by cycling process.
This method was highly useful in the present
context in the Kerala. A large quantity of coconut copra cake containing 32%
oil has been going waste can now be used productively. Thus the problem of
the expeller mils could be considerably reduced by the establishment of
solvent extraction plants. There was a considerable demand for starting
solvent extracting plants in Kerala in this context.
2.2 Solvent Extraction Process
The solvent extraction process is a method of extracting
the oil from oil seeds using solvent which ensures the total recovery of oil.
This technique can be used in coconut extraction. The first factory of this type
was started in Madhya Pradesh in 1962 and now there are 526 factories all
The Kerala Solvent Extraction Limited was established
in 1972 on this line. At present the solvent extraction plant play a dominating
role in the edible oil production in our country.
2.3 Coconut Oil Miller’s Co-Operative Society
Lion share of copra went to mills in Bombay and they
were able to generate good profit. To overcome this situation a co-operative
society was formed by the name coconut oil miller’s co-operative society and
it was decided that this society would act as an agent of state trading
corporation for the distribution of copra.
By seeing the performance of the Bombay group an
investigation department was assigned to investigate it. Then they found out
that they were using expeller mills for extracting oil and was able to reduce
the oil content up to 6%. The industries in Kerala later began to follow it.
2.4 The Solvent Extractors' Association of India
From ancient time, vegetable oils were obtained by
crushing oilseeds in village ghanis/kolhus/chekkus in the country. At the
beginning of the 20th century the vegetable oils industry was based on
some 500,000 bullock-driven ghanis producing about 800,000 tonnes of
oils. Slowly, in addition to these ghanis, power-driven ghanis (rotary
ghanis made indigenously) imported expeller and imported hydraulic
press plants started crushing oilseeds.
Around this time many European countries and United
States of America had established huge solvent extraction plants for
recovering directly almost all the available oil in the oilseeds like
Cottonseed and Soybean.
On this background, just 2 years before independence, in
1945, a lone small Solvent Extraction Plant commenced operation in
Bhavnagar for extracting oil from oilseed cakes and oilseeds. And
gradually such units increased. They faced common problems, which
brought them together to form an Association with all the 40 units
operating at that time, in 1963.
The Solvent Extractors' Association of India was
formed in 1963 to help and foster the development and growth of Solvent
Extraction Industry in India. At present the Association is having 835
members including about 320 working solvent extraction plants having
combined oilcake/oilseed processing annual capacity of about 23.2
The Association is an all India body to solvent extractions industry and
premier vegetable oil Association in the country having wide
representative membership consisting of processors of Rice bran,
Oilcakes, Minor Oilseeds and Soybean.
Associate Membership of the Association includes
apart from processors, also merchant exporters, oil millers, refiners,
vanaspati manufacturers, importers of edible oils, brokers, traders, plant
& machinery manufacturers, clearing & forwarding agents, surveyors,
regional associations etc.
With such wide cross section of membership, SEA is a
broad based, all India apex body of solvent extraction industry and at
present practically all working solvent extraction units are its members.
Cattle Feed Industry
In the past, the cattle population was in
proportion to the amount of resource available to feed them. But today
things have changed and the natural feed available for the cattle has also
come down drastically. In addition to this the demand for the milk and
milk product have also been increasing ,thus making it absolutely
necessary for rearing cattle which produce high yield. From this arose the
concept of producing cattle wherein there is no compromise over the
From the beginning KSE LTD marketed
the buy product obtained from its solvent extraction division in the brand
name of JERSEY CORPRA CAKE. Most of the progress in the cattle feed
industry has come about in past 30 years only. There are only few cattle
feed units in the country especially in kerala. The cattle industry of the
state has been utilizing the indigenous raw material i.e. coconut cake
which is the residue left after the extraction of oil from copra which is
mainly used as a cattle feed .Coconut cake contain 4-5% oil is generally
used for industrial purpose and de oiled cakes is used to make mixed
In Kerala the rotary cake was used as a cattle feed
and actually this excessive oil on cakes reduced the quality of the cake and
upset the digestive system of the cattle. In foreign in the cattle is fed only
with de oiled cakes and according to the diary experts, the milk and fat
content of the feed .All these factors stressed the importance of having a
cattle feed industry in the state.
Thus in 1976 KSE LTD entered the cattle feed
industry, setting up new plant manufacturing ready mixed cattle feed. The
last 3 decades have been KSE LTD emerging as the leader in ready mixed
cattle feed in the country. Today KSE LTD commands the resources, expertise
and infrastructure of manufacture arrange of livestock feed in high volumes,
driven by a commitment to high quality.
The productivity of the cattle is limited of their
genetic make-up, so high quality compound feed (industry feed) may not
necessarily generate a significant improvement in productivity and this has
hampered growth of the cattle feed industry because most farmers reluctant
to use compound fully. They compromise by using such field in proportions
of 5to 6%, making up the balance with their formulation. It is only in the case
of highly productive animals that compound feed has been able to shoe the
real potential and the importance of technology has been demonstrated.
According to “Extract From Animal Feeding Safely”,
report of an FAQ expert consultation present condition of cattle feed is “world
wide, tonnage of feed exceeds 4 billion tonnes per annum of which some 550
million tonnes are milled feeds. The largest portion of the billion tonnes of
feed involves subsistence farming on the Indian subcontinent and Asia”
India is currently self sufficient live stock feeds and
does not depend on imports. Instead, the country exports large quantities of
solvent extracted meals which are a major source of foreign exchange
3.1 History of KSE.Ltd
It was in 1963 Kerala Solvent Extraction Limited now
known as KSE Limited entered the solvent extraction industry, setting up the
very first solvent extraction plant in Kerala.
Although Kerala produces 80% of total copra
produced in the country, large part of it was sold to other states as copra itself
and they were earning good profit when mills in Kerala wasn’t able to get
enough copra for their daily needs. When oil industry in other parts of the
country was thriving, in Kerala it was struggling. So they understood the need
for modernization of their mills. At that time Dr.P.S.Loknathan committee
setup to study the feasibility of starting new industries in Kerala,
recommended the establishment of three solvent extraction plants. And one
of them was in Thrissur district. The oil mill owners in and around
Irinjalakuda, who where thinking in similar lines saw the opportunity and
took the initiative to establish a solvent extraction unit. Thus was KSE
On the road to success, there were many hurdles.
Initially, the mobilization of capital posed the greatest challenge. The future
looked grim. But determination and optimism paid off. Thus on 25
September 1963 the Kerala Solvent Extraction Limited was registered as a
public limited company. The solvent extraction plant went on stream in 1972
and in 1976 a new plant was set up to manufacture ready mixed cattle feed,
which was pioneering step. Since then there was no looking back.
The last three decades have been seen KSE emerging
as the leader in solvent extraction and ready mixed cattle feed in the country.
And through these years of consolidation and diversification, KSE has created
a niche for itself.
Today KSE commands the resources, expertise and
infrastructure to manufacture a range of live stock feed, in high volumes,
coconut oil from coconut oil cake, and refined edible oil.
KSE had computerized its operations way back. In the
year 1999, KSE went on to upgrade its EDP setup further. A custom made
ERP software was developed for its units and head office through M/s.R.R
Software Private Ltd, Cochin and online computerization was fully
implemented at all its plants. Being custom made for KSE this ERP software,
with SQL RDBMS, front end on Visual Basic and Windows NT OS, seamlessly
had integrated all functions of the organization such as FA, Inventory, Billing,
Payroll, PPC, MIS, Share Accounting etc.
The Head office at Irinjalakuda has 2 servers and 40
nodes running the application. Other units, in all, have about 8 severs and
about 50 nodes. Their latest plant at Vedagiri, Kottayam has a computerized
control room for monitoring, homogenization, size reduction, batching, and
pellet cooling and aspiring systems.
From a single unit, solvent extraction plant, KSE has
grown in to a multi-unit, multi-product organization. Infrastructure for
growth has always been viewed as a priority at KSE. With modern
manufacturing facilities spread over three states, KSE caters to a vast belt
stretching across south India.
With a strong commitment to customers and product
quality and being cost competitive KSE, stands poised to meet new
3.2 Growth Chronicle Of KSE Ltd.
1972 Solvent plant commences operation.
1976 Mixed cattle feed production beginnings.
1987 Cattle feed production reaches 180 tonnes and introduction of
computers in the factory.
1988 New mixed cattle feed plant starts operation at swaminathapuram, in
Tamil Nadu with a daily production capacity of 180 tonnes.
1989 A solvent unit with a capacity of 120 tonnes per day commences
operation at TamilNadu plant.
1990 Introduction of KS Supreme pellets, a by –pass protein Cattle feed in
1991 Open Palakkad branch.
1992 Cattle feed manufacturing beginning in 3rd
1993 Enters the export market.
1994 Introduction of feed supplement KS FORTE, public issue and listing
1995 Vegetable oil refining plant commissioned.
KS SUPREME-sunflower oil launched.
Open Calicut branch.
1996 240 TDP cattle feed commences at vedagiri
1997 Company renamed as KSE LTD
Production unit at Palakkad
Launches dairy product
1999 A modern children park and information centre have been
completed at Irinjalakuda for the benefits of the public
Company introduces new product KS deluxe plus the new pellet feed
in HDPE bags of Kerala market
2000 Company starts production and distribution of milk and milk
products from konikara dairy units.
2001 Company started production and marketing of poultry feed at
2002 Company started production of ice cream and marketed under the
brand name of VESTA.
2004 ISO 9001:2000 accreditation for irinjalakuda plant
Company commissioned 200 TDP solvent extraction plant at KINFRA
industrial park, with Koratty with a production capacity of 100tonnes solvent
2005 Cattle feed production capacity at irinjalakuda unit increased to 210
MIT perday.Company acquired at Mysore.
2007 Company started production at Edayar Erode at lease
2008 Ice cream production Commissioned at Thalyathu
2009 Cattle feed production at Swaminathapuram increased to 200 MTs
Commenced 500 TDP fully state-of the art Germen technology animal
fed plant at irinjalakuda
2010 Ice-cream production unit at vedagiri commissioned.
“The company shall endeavor to maintain leadership through
quality products, explore new avenues in product development
and marketing, create a stronger bond between the
management, workforce, dealers and customers, contribute to
social development and rural uplifting and constantly strive for
excellence in all spheres of our activities”.
To maintain the market leadership.
To minimize the cost incurring in production process.
To maintain the product quality.
To be competitive at all markets.
To be compliment to all global quality standards.
To maintain top position in the industry.
To utilize the new technological changes for the benefits of the
3.5 Share Capital Pattern
Category No. Of Share Hold % Of Share
Private corporate bodies
Grand total 32,00,000 100.00
3.6 Awards and Recognition
1) Kerala’s first solvent extraction plant.
2) No: 1 in processing coconut oil cake through solvent extraction in India.
3) Winner of S.E.A National Awards and State Productivity and Safety
Awards continuously for 14 Years.
4) Front ranker in mixed cattle feed production in India.
5) Recognition from Animal Nutrition Society for contributions in cattle
6) Kerala’s first export mixed cattle feed.
7) Tamilnadu productivity council safety award.
8) Kerala state Productivity Council Award.
The management of KSE Limited rest on an eminent team of
personalities from cultural, financial and social streams of society who from
board of directors. The day to day management of various units is carried out
by experienced professionals under a chief general manager, who lead and
motivate a dedicated work force.
KSE Limited is a public limited with its share holding
numbering to 9000 and majority of them actively participate in the general
body meeting showing good interest in the affairs of the company. The
company is having 11 directors of which 10 are elected from among the share
holders and one nominated by the Kerala state industrial development
corporation. Every year 1/3 of the directors retire by rotation on the basis of
The articles of association of the company empower the board
of directors to appoint one of them as managing director. The managing
director, executive director and chairman are responsible for the day to day
affairs of the company. There is whole time director to look after the affairs of
the cattle feed plant at Palani. The major decision with serious matters are
taken by the executive body consisting of the managing director, the executive
director, the whole time director, the general manager, the finance manager,
the nutritionist, the marketing manager, the plant manager, the purchase
manager. All these executives are professionally qualified and competent to
make any decision benefiting to the situation. Usually the executive body
meet ones in every fort-night to discuss and evaluate the matters internal and
external affecting the company. Decision is taken according to the urgency
and importance. The relation between the management and employees
remained very cordial through the years so far. The company is maintaining a
good relation through discussion and consultation on matters of common
interest for mutual acceptance and keeping high standard of goodwill.
3.8 Social Concerns
The children’s information centre and park at Irinjalakuda, constructed
to commemorate the silver jubilee of production of the company at a cost of
RS.30 lakhs, has been opened for public on 2nd
April 2000. This project has
been dedicated to the public with an intention to facilitate children in and
around the place to have an experience in computer application, develop good
reading habit, provide recreation facilities and provide an opportunity to
them for personality development. The company contributed R.S 5 lakhs to
the Cargill fund and all the employees of the company contributed their one
day wage for this good cause. Company provided R.S 10 lakhs to ‘Gujarat
earthquake relief fund’. Again company contributed R.S 25 lakhs for
‘Tsunami’ victims. Company also contributed to chief minister’s distress fund
R.S 25 lakhs.
3.9 Marketing Scenario
Kerala and Tamilnadu comprise the largest market for KSE cattle
feed. The majority of customers are from the rural belt, with limited income
at their disposal. KSE has made arrangements for the supply of cattle feed to
villagers directly from dealers and through retailers over 600 KSE dealers
ensure that the KS range of cattle feed is available to them at lower price
suggested and enforced by the company. There are 500 distributors in Kerala
and 200 distributors in Tamilnadu
3.10 Research and Developments
The company always gives importance to quality of its products.
Quality is maintained at every stage from raw material procurement,
manufacturing to packing, which translates in to beauty products and happy
customers. Well equipped laboratories under expertise scientists,
Continuous supervision by experienced nutrition specialist and assimilation
of international development in the field of animal nutrition gives KSE an
edge in product development and quality.
The main products marketed by KSE Ltd. is as follows
1) K.S CATTLE FEED
It includes six types. They are;
A) K.S ORDINARY-MASH – 57 Kg
B) K.S SPECIAL-MASH – 50 Kg
C) K.S SUPER-MASH – 60 Kg
D) K.S DELUX PELLETS – 70 Kg
E) K.S DELUX PLUS PELLETS – 50 Kg
F) K.S SUPREAME PELLETS – 50 Kg
G) K.S PREMIUM PELLET – 50 Kg
2) JERSEY COPRA CAKE – 65 Kg
3) K.S FORTE – 750 Gm(Case)
4) K.S MINERAL MIXTURE – 1 Kg(Case)
5) MILK PRODUCTS
A) K.S PAAL
B) K.S GHEE
C) K.S CURD
D) BUTTER MILK
E) VESTA ICE CREAM
Production Units Of KSE Limited
1) KSE Limited,
2) KSE Limited,
3) KSE Limited,
In Irinjalakuda office the
organizational structure is formed as “functional”. That is the whole work is
divided in to various departments on the basis of functions. Each function is
entrusted to departmental managers who are generally a specialist in that
particular function. In each particular department there are respective
assistant managers who receive instructions from concerned managers. All
assistant managers are placed at same authoritative level. There will be
favorable numbers of workers in each department to carryout works.
The main benefit of this type structure is that
this system provides ample opportunities for minute specialization at
maximum extent. It makes extensive use of expertise knowledge of the
specialists. Since the workers receive instructions from experts higher
efficiency can be ensured. The entire work is divided in to various functions
and assigned to different executives. Thus no executive is over loaded with
too many duties of different nature. This system also provides scope for
proper training to supervisors and inspectors.
Following are the departments prevailing in the Irinjalakuda office;
Quality control Division
5.1 Production Department
The core of a production system is its conversion sub
system, where in workers materials and machines are used to convert inputs
into product and service. This process of conversion is at the heart of
production function and is present in some form in all organization. It may be
stated that every organization irrespective of its purpose, has a production
function where departments and personnel play a central role in achieving
the objective of the organization.
→ Production process
→ Employee supervision
→ Maintenance of machines
→ Quality assurance
→ Production plan
→ Production control
→ Maintaining a hygiene work place
→ Management of different shift of employee
→ Maximizing the production with minimum resources
In KSE, Production takes place in 3 plants;
Solvent extraction Plant
Cattle feed plant
Solvent Extraction Plant
The raw material used the company in this plant is recoiled
coconut cake having about 8 % of oil content. The coconut cake is being put
into a slow moving conveyor or belt. The next process is heating up of the
cake and after that hexane a product of petroleum would be spread into the
cake. The mixture of oil and hexane is known as micelle. The next step is to
separate the solvent form the cake and is stride fir use. For one tones of
coconut cake the usage of hexane is 9.19 kg, Here 24 hr production takes
place and it produces 200 tones per day.
There are 3 shifts
8. A.M -4 P.M
General office time
9. A.M – 5.P.M
Cattle Feed Plant
In this plant the company uses different types of cakes.
According to their availability apart from other material the company uses
coconut cake, sun flower cake, mustard cake, soybean, wheat, calcium,
vitamins, cottonseed, phosphate, tapioca, maize jowar and other vitamins.
Except from the coconut cake all
other material are purchase from other state. Here 24 hr production takes
place and it produces 650 tones per day.
This is being used for ensuring that all the granules are grinded,
screened 3 mm sieve. The materials feed into grinder are powered and it
passes through the screen provided at the bottom side of the grinding
chamber. The hammer mills at 30 tones per hour together are used.
The raw material will be mixed thoroughly by using horizontal mixer.
Capacity of this mixer is 6 m.
The steam for cooking is produced using 3 million tones boiler. The
mixer or homogenizer carry out a strong mixing while the mash is moved
forward and added with dry saturated steam. The cooking is carried out at a
temperature of 80 degree Celsius using a high pressure dry saturated steam.
The pellet mill dye by rotating drags the mixture of mash and steam
towards the roller. Which press it and consequently compel i to pass through
the hole of the dye? It increases the density of the mixture, which together
with heat generated by the saturated steam facilitates the extraction of the
pellet. Two pellet machines are there with 15 million tones per hour capacity
In this plant oil is refined according to the seasonal demand .Here two
types oil are refined
→ Solvent Extraction Oil
→ Sunflower Oil
Here 20 tons per day is produced .The oil so produced will be colorless
and dour less so it is not used for household consumption. The main users of
this oil are oil millers, industries who use this as an ingredient for its product.
5.2 Finance Department
Finance is regarded as the life blood of the business .In modern
money oriented company; Finance is one of the basis foundations of all kinds
of economic activities. It is the master key, which provides access to the entire
source for being employed in manufacturing and merchandising activities.
Finance plays a key role in all the activities
of business. It may be defined as the service of money. It deals with the
principles and of administrating it by those who control it. The success of
finance function depends on how finance function depends on how finance is
planned at the various levels of administration under the management.
The share holders Equity (Net worth) is
3335.34 during the year 2010-2011.Its shares are listed in Stock exchange of
Mumbai, Chennai, Cochin. The Total turnover during the year grew by 22%
compared to the previous years. But unfortunately the profit was declined
inconsistently compared to previous years. The total sales of the company
were increased from 37227.87 to 45368.03(in lakhs). The Company is
focusing on cost competitiveness and also is in search of new product lines to
further improve its overall performance. Financial data, which are not
audited, published by the company in quarterly. The company accepts fixed
deposits from the public at the rate of 15%per annum. The company keeps
book such as purchase daybook, sales day book, and cashbook and bank
The share capital of the company comes to 320 lakhs from
around 6500 shareholders. Its shares are listed in stock exchange of Mumbai,
Chennai, Cochin. This 320 lakhs where divided as 32 lakhs share of Rs/-10
Company’s banker is ICICI bank limited which allows a cash credit
subject to a maximum limit of Re. Crores.
Source of Finance
The company makes use of two types of source to finance its activities,
Share holders fund
Reserves And Surplus
Functions of Financial Department
Maintain a good financial structure
Identify the future financial requirement
Collection of cheque
Payment of raw materials
Maintenance of Cost Records
As far as KSE limited is concern maintenance of cost records is not
mandatory as none of its products fall with in that category. Even though not
mandatory, Company maintains necessary cost records to meet its own
The system of internal controls may define as the organizational plan and
all the methods and procedure adopted by the management of the entity to
assist in achieving.
Timely preparation of reliable financial information
Accuracy and completeness of accounting records
Prevention and completeness of accounting records
Adherence to management policies
Orderly and efficient conduct of its business
The company has constituted on adult company, three independent non-
executive directors assists members. The main auditors of the company are
Varma and Varma.
It is independent appraisal function within an organization, for the
review of activities as a service to all levels of management. Its objective is to
measure, evaluate, and report upon the effectiveness of internal controls,
financial and others as a contribution to the efficient use of resource with an
organization. The KSE Limited’s internal audit is taken care of by assistant
manager, some of the units are audited by himself and the rest, mainly
situated in other districts and states are performed by independent chartered
The company has devised internal check measures. Internal check refers
to a system of book keeping and arrangement of staff duties in the
organization in such a manner that no one person can completely carry
through a transaction and record every aspect.
Budget is prepared by each year .The budget is prepared in the month of
February. Profit and loss account is prepared monthly by finance
department .Two committee meeting are conducted by the management.
Considering the profits for the current year, your Directors recommend a
dividend of 100% ( Rs.10 per share of Rs each) for the year ended 31st
2011 which, if approved at the ensuring Annual General Meeting, will be paid
to those members whose names appear in the Register of members of the
company as on 28.07.2011.In respect of share held in dematerialized form,
the dividend will be paid on the basis of beneficial ownership as per the
details furnished by the Depositories for this purpose at the end of business
hours as on 18.07.2011.
The ice-cream manufacturing unit adjacent to our existing cattle feed
plant at Vedagiri has been commissioned on 28.03.2011.The capital outlay of
the new ice-cream unit is Rs 127 lakhs as on 31.03.2011 excluding the value of
land already owned by the company.
Sales and other Income 37227.89 45436.07
Gross Profit (Profit before
depreciation and interest) 1917.38 1359.80
Profit Before Tax
Net Profit after Tax
Share Holder’s Equity (Net worth)
Gross Fixed Asset
Share Holder’s Equity per share
Earnings per share of Rs.10 each
NET PROFIT AND SALES COMPARISON OF LAST
MARKETING PRICE DATA
(During the financial year 2010-2011 Based on BSE Data)
MONTH High(Rs) Low(Rs)
April 293.50 190.00
May 239.80 195.20
June 234.45 211.00
July 287.95 205.00
August 233.40 192.50
September 230.00 190.25
October 230.00 162.00
November 238.00 171.00
December 218.95 170.00
January 202.00 173.00
February 195.00 156.00
March 181.00 159.00
Accounts in KSE Limited are prepared under historical cost
convention on accrual basis unless otherwise specifically stated
in the notes to account
Asset put to use have been stated at less depreciation.
Asset not put to use have been stated at cost.
Depreciation on fixed asset has been provided on written down
value method at the rate prescribed in the company act1956.
Long term investments are stated at a cost less provision, if any
for permanent elimination in the value of such on investment.
Inventories as at the close of the year are valued at lower of cost
or net realizable value.
Contribution to provident fund and employee welfare fund is
charged to profit and loss account.
The accruing liability towards gratuity of employees is covered
by the group gratuity assurance scheme of life insurance
Corporation of India.
Company’s Philosophy on Corporate Governance
In KSE Limited, we believe that good
governance is a systematic process which enables the company to operate in a
manner that meets with the ethical, legal and business expectations and at
the same time fulfils its social responsibilities. We believe in good Corporate
Governance, with utmost transparency in its operations achieved by proper
disclosures in its Annual report, Quarterly Result, Public Announcements,
Press releases and all other communications to shareholders, so as to provide
shareholders and all other concerned with information about their company’s
working, its strength weakness, opportunities and threats and thereby
enabling them to develop a proper and balanced perspective on the working
of their Company
1. Payment of raw materials
Purchase department purchase raw materials according to
purchase order 90% of payment of raw material are made on delivering time.
Balance payment will paid after checking the quality of raw material, this
need material received report, order, and bill of lad report .It includes item,
weight gross quality, net quantity, net quantity, etc.This report will be signed
by head of purchase department. If the quality is not satisfactory, rebate will
2. General payment
This includes electricity charges, stationary items, telephone
charges, salary, ESI, PF, housing loan, state tax income tax, etc.
This mainly includes sales receipt. The company accepts sales
receipt in the form of cash, DD Cheque: the company will not accept credit
1) Cheque collection
The company has account in 12 banks. Bank of Baroda keeps large amount of
deposit of company. These banks also provide loan facilities to the company
maximum limit is up to and cores.
2) Salary payment
Plant workers will get salary on 6th day of month. Office staff will get salary
on 31st of each month. If an employee needs salary as advance; he can take
50% of salary. Another function of finance department is to collect or transfer
surplus fund from other unit to centre unit.
3) Other payments
Share holder will get dividend. This will be paid on interim dividend and final
dividend and now the value of the share is Rs55. Another function of finance
department is to provide festival gift in the form of cash, bonus payment of
upto20% of salary. Profit and loss account will be prepared monthly. It is
published quarterly in the news paper. The company also has public deposit
amounts to 6 cores.
5.3 Marketing Department
Today Marketing operates within a dynamic
global environment and is facing new challenges as we have reached the new
millennium. The market today is customer oriented. Consumers usually face
a broad area of products and services that might satisfy their needs. Customer
satisfaction comes in to picture now. The extend to which a product’s
perceived performance matches a buyer’s expectations. If the product fails to
keep up to the expectations, the buyer is dissatisfied. If the performance
matches or exceeds the expectations, the buyer is satisfied or delighted.
The story of success of KSE Limited would
reveal the excellence of the marketing brains of the company. During 1976,
when KS cattle feed was launched in Kerala market, the market was in the
hands of ‘Godrej’ and ‘Tata’, the big boys. The transformation from that level
to the market leader of the south and to the second largest seller of cattle feed
in the country tells entire story. The fact that KSE Ltd could export cattle feed
adds another feather to its cap.
Unlike other industries, the response from
customers is very quick in the cattle feed industry. The milk producing
environment in Kerala is entirely different from other parts of the country.
The lack of graze lands has limited the options of the cattle growers. They are
forced to depend on the compound cattle feeds that are available in the
market. Because of this reason, Kerala is the most potential market in the
country. The farmer is so watchful that even the slightest variation in quality
would be noted and responded. Reduced quality affects in different forms –
reduced milk production, reduced milk quality, deterioration in the health of
the cattle etc. Thus quality is the prime element that determines where the
products should stand. The product would be sold only if it maintains quality
consistently. KSE Ltd has always been successful in this regard and has
obtained the results.
The marketing department is headed by the
marketing manager. The main feature of KSE Ltd Is that the company has no
direct marketing. All sales activities are undertaken through dealers. The
company has around 600 dealers all around in kerala. The company has a
large dealer network which is directly under the control of the marketing
department. All planning and strategy formation regarding the marketing
activities of the company are devised, implemented and monitored by this
The department is divided into two. They are as follows:-
• Sales division
• Complaints and customer care division
1) Sales Division
This division is headed by an assistant manager. As mentioned
earlier all the dealers are controlled by the company directly. All orders from
the dealers all over the state are received by him. In consultation with the
production manager of various plants, he makes the allotment. The allotment
is made from the various plants depending upon the availability and
proximity to the dealer. The manager at the sales division informs the
production manager about the demand for the various products so as to plan
the production accordingly.
The requirement is placed by the dealers to the manager. The
requirement is analyzed and allotment is made depending upon the
availability of the products asked for. Also the allotment decision is based on
the financial position of the dealer. He must have a good and spacious
godown in his custody. Since the demand is very high, the dealers usually
have to place the order and wait for the production to undertake. The
payment policy under marketing department is full on cash policy. After the
allotment is made, payment is to be made through Demand Draft at the
counter provided for this purpose. Allotment statement is delivered here and
the dealer has to present this at the godown and take delivery there. Around
80% of out put from the Swaminathapuram unit is consumed by the Kerala
market. The unit at Mysore too is for catering the northern parts of Kerala.
Thus production and distribution from these units should be linked together.
Being the head office the Irinjalakuda unit co-ordinates the production and
distribution activities of all other units of the company.
2) Complaints And Customer Care Division
This is division is headed by an Assistant manager. Since
KSE Ltd has a large network of dealers directly under their control,
maintenance of this network is very difficult. In order to deal with the dealers,
the company has appointed 5 sales representatives directly from the
company. Since the dealer area is very small and closely situated, overlapping
of agencies is a big problem. Complaints regarding this reach this
department. The complaints are studied and necessary actions are taken.
Similarly, complaints regarding the product are also taken care here. As and
when a complaint is received, inspection team is sent to the specified area
and details are collected. Necessary actions are taken immediately.
The growth from 40 tons of production per day to
above 710 tons itself indicates the sharp growth of the company. The product
range too has widened along with this.
Selection of Dealer
The field staff under assistant customer service and complaint
manager will evaluate the dealer on the basis of his financial capabilities and
the scope of demand of products in the area. If the dealer doesn’t buy at least
one load of cattle feed in row of 3 month, automatically the company will
terminate his dealer ship.
PROMOTIONALS TOOLS OF KSE LTD
1) Advertising/ Sales Promotion
KSE Ltd has no need of advertising and sales promotion by because of
high demand of its quality products. But in order to compete with the
competitors, the company is using advertising as a small promotional
technique. Since the product is cattle feed, the advertisement should
reach on farmers. The company has adopted using radio advertisement
for the same. They do not wish to advertise in TV media. It does not
cover target groups such as farmers in rural area.
The following are the other methods adopted for advertisement:-
a) Product pamphlet
c) Cinema slides
d) Cloth banners
e) Wall painting
f) Hording, Tin boards,
g) Flex printing
h) Yearly calendar
i) Local news papers
j) Exhibitions and seminars
2) Public Relation
KSE Ltd is good in maintaining relation with its general
public. Most of the skilled and unskilled workers are from the nearby
areas of the company. The company is maintaining a park with in the
company premises which is intended for the small children. It has
been facilitated with enough playing equipments and parlors. It helps
in enhancing the brand image and brand loyalty.
3) Sales Promotion
KSE provide various sales promotion schemes to its dealers
and customers for increasing sales. Such activities include dealer
meets; farmer meets etc. in such occasions the dealers and farmers can
meet together and can clear their doubts. Also the company is
conducting seminars, conference for farmers, which are lead bye the
company’s chief nutritionist. He can solve various doubts of farmers in
the field of cow farming. And also provide advertisement materials like
advertisement to dealers, money refund offer, free trails,
demonstrations, and premium offers and dealers contests.
4) PERSONAL SELLING
Sometime KSE marketing executives approached to the
customers to face to face communications and presentation for the
purpose of making sales and clarifying their doubts.
Pricing Methods of KSE Limited
1) Cost Based Pricing Policy
The selling price policy is essentially on the basis of total cost per unit.
KSE is a super manufacturer in the field of cattle feed, so they can fix
cost based pricing policy irrespective of competitors. It is influencing
their competitors pricing policy such as Godrej, Kerala feeds.
2) Competition Based Pricing Policy
All products are not equal strength of the company.
Such products are more strengthen than competitors such as cattle
feeds. Whereas such products are not strengthening than competitors
such as milk products like Vesta ice cream, KS ghee, KS butter milk
and KS milk. In such case company cannot fix price its own style. So
they follow competition based pricing policy especially milk products
such as KS milk. The share of milk is controlled by Milma, so the milk
price is purely depends upon Milma milk price.
In short this is the policy of the price mainly on
the basis of price fixed by competitors. This policy does not necessarily
means setting of price saves.
Types Distribution Followed By KSE Limited
1) EX FACTORY RATE - Company need not bear the transportation
and insurance cost.
2) RATE AT DESTINATION - Company need to bear the
transportation and insurance cost.
It is a strong attachment of buyers towards particular products of
KSE Ltd such as KS milk, KS cattle feeds and Vesta ice cream. Brand loyalty
offers a number of advantages to the KSE Ltd.
Brand loyalty is the repeat purchase made by the consumer out of
commitment to the brand. They may become advocates of the brand by their
positive word of mouth. And also customers may become passionate about
Reasons for Brand Loyalty In KSE Limited
a) Uninterrupted distribution
b) High quality of product
c) Better than competitor
d) Affordable price
e) Promotion and advertising
Advantages Of Brand Loyalty In KSE Limited
a) Repeated purchase
b) Brand loyal customers start building a relationship with the company
c) Reduction in promotional activities
d) Facing competition
e) Keeping the quality of products
5.4 Purchase Department
Purchase department in KSE Limited mainly
concentrate on the purchase of raw materials for cattle feed. They purchase
stock normally for the 20 days .They take stock report daily and they
purchase on the basis of shortage of materials required in production.
The nutritionist prepares the formula for
production and requirement of raw material depend on it. He will prepare the
formula by considering the quality and availability of raw material etc. They
place order on the basis of fund, go down capacity, availability of labour,
space allotted to each materials and equipment, etc.....
In the case of purchase of packing materials
such as carry bags, the company purchase directly from the suppliers. For the
purchase of salt, contract is given for one year and the amendment will be
made on it according to fluctuation of price. They give contract to the
transportation companies for one year.
The purchasing mode of company is daily cash
price basis. Usually the purchases are made from other states of the country
such as Andhra Pradesh, Karnataka, Tamilnadu, Utter Pradesh, Maharashtra
etc. The company has no direct contract with suppliers of the materials. The
company makes agreements with agents from different places. They will
identify the supplier most suitable and makes the purchase contract.
Functions of Purchase Department
1) To keep a regular check with contracting brokers all over India and
thus know the market price.
2) Check whether the weight of goods in correct or not.
3) Storing the goods in appropriate places for easy retrieval and use.
4) Forwarding payment of foreign charges.
5) To give order to buy the goods.
6) To keep a feasible market to purchase.
It is a contract prepare for the purchase of
materials. It is signed by two signatories that is, the purchase manager and
the other is GM or FM .It include the following details
1) What material we are going to purchase?
2) What quality we are going to purchase?
3) At what rate we are going to purchase?
4) Whether there is tax included or not?
5) Time of purchase?
6) The type of packaging?
7) Mode of payment?
Purchase contract is printed in six copies, 2
copies send to the parties.1 copy returned with their signature as a token by
conformation.1copy for account department .1copy for godown.1 copy for
purchase department.1 copy used as running life. This is the usual system
followed in purchase department.
1) Purchase requisition
It is a document through which the user department requests the
purchase manager to make arrangement for purchasing the material
required. Each departmental head prepares the purchase requisition
report and send it to the purchase manager. On receipt of purchase
requisition report the purchase manager will make necessary steps for
purchasing material that has been mentioned in the purchase requisition
2) Plans are made by the purchase department about what to purchase, how
to purchase. When to purchase and so on.
3) Materials are purchased through brokers. They are not charging any
brokerage fee. Instead they will get commission from the suppliers. They
will send the rate of the materials from different suppliers according to the
4) A meeting of purchase committee held after receiving the quotation. The
committee includes general manager, finance manager and marketing
5) The purchase committee selects the supplier after proper evaluation.
6) The purchase manager then discusses with the suppliers about rate,
quality requirements, quantity, delivery time and packing.
7) If both parties agree they will enter in to purchase contract according to
supply and payment. There will be 6copies of the contract.2 copies to
supplier.1 copy to accountsdepartment.1 copy to godown, 1 copy running
file in dispatch session, 1copy as a token of confirmation should send it
back by supplier.
8) Purchase order
After selecting the supplier, the purchase order is send to the supplier. It
includes the date of order, description of the material to be supplied and
mode of supply.
9) Receiving and inspection of material
When the material is arrived in to the company, they can enter into the
material to check any compliant in vision and select sample randomly and
keep it in 3 packets. Then material received report will be prepared in
factory after getting permission from purchase department. Company will
check whether the bill is as per the contract and enter the order number
and give permission to lorry people to enter into the factory premises. At
the time of unloading ,take the sample of from three packets 1 sample to
lab, 1 to nutritionist and 1 sample keep it as check sample in go down.
Generally 90% of the payments are made in advance,
when the company receives the specified material and bill passed on to the
stores department. The purchase department will pay the remaining 10%
only after the approval from the laboratory the department. The
department will make reductions in payments according to the lab reports.
The following figure explains the procedure of purchase in solvent
5.5 Personnel Department
Purchase requisition for materials
Selection of suppliers
Placing the purchase order
Follow up the order
Receiving and inspecting materials
Checking and passing of bill of payment
Personnel department is the main and the most
important of a manufacturing concern. KSE Limited is proud of its well co-
coordinated labour force. The HR department was seen as a place where the
lesser productive employees could be placed with minimal damage to the
organization ongoing operation.
Human resource management is concerned with all
aspects of managing the human resource of an organization. More
specifically, human resource management involves determining an
organizations need of human resource, recruiting and selecting the best
available employees, developing counseling and rewarding employees, acting
as a liaison with unions and government organization and handling other
matters related to the wellbeing of employees.
Each of the functions is necessary to some degree
irrespective of nature and size of the organization that is why in most of the
organization a separate department is known as personnel department or
Human resource department is created for effective performance of these
functions. In KSE limited personnel department deals with following
→ Employees selection procedure
→ Remuneration of workers
→ Allowance of employees
→ Statutory liabilities
→ Trade union
→ Workers welfare activities
→ Workers safety measures
→ Leaves and retirements
→ Other functions
Functions of Human Resource Department
→ Man power planning
→ Welfare function
→ Grievance handling
→ Industrial relations
→ Public relations
→ Job description
→ Job specification
→ Performance appraisal
Employee Selection Procedure
Employees are selected strictly based on their
educational qualification, Work experience, technical know how and age.
Company will do the recruitment by giving advertisements in news papers,
employment exchanges and by promoting its own employees based on their
There are three types of wage earners:-
a) Unskilled but permanent workers-gets daily wages
b) Badali workers-wages on weekly basis
c) Office staff-salary on the last working day of every month.
Salary Consist Of
1) Basic pay
2) Fixed dearness allowance
3) Variable dearness allowance
1) Dearness allowance
This is given to permanent employees. D.A is divided into two classes;
a) Fixed DA - Calculated at the rate of 15% of the basic salary
b) Variable DA -Based on cost of living index published by Govt.of Kerala
2) Conveyance allowance
3) Washing allowance
4) Canteen subsidy
5) Leave and travel allowance
6) Housing subsidy
7) Shift allowance
8) Overtime allowance
9) Scholarship for employee’s children
10) Employees welfare fund
Provident fund: From the basic salary the company and the employees’
channalized 12% into the provident fund account equally. Out of the12%
contributed to P.F fund 8.33% are transferred to the pension account.
a) Employee’s state insurance: The Company pays about 4.75% of
total salary of employees to ESI. The employees pays a contribution of
1.75% of total salary
b) Gratuity: An employee needs minimum 5 years of service to avail this
c) Bonus: It varies according to their grades
There are four recognized trade unions in the company namely CITU, INTUC,
CITU-Confederation of Indian Trade Union
INTUC-Indian National Trade Union Congress
BMS-Bharat Mazdoor Sangh
A committee consisting of Chairman, Managing Director,
Whole time Executive Director, General Manager Works Manager and
Personnel Manger approve the demands of workers.
Works Welfare Activities
a) The company established a trust know as employee’s welfare trust in
which ensuring sound working condition.
b) Ensuring fair wage system.
c) Protecting the right of workers.
A committee consisting of Chairman, Managing Director, Whole time
Executive Director, General Manager Works Manager and Personnel
Manger approve the demands of workers.
Rs.20 is paid both by the employees and the company every month.
Additional funds are provided to employee during the death of employee
or in case of employee’s sibling’s marriage.
For safety of workers at plant, they are provided with mask, first aid
facility, dust extraction system in plant, which help to suck the dust
arising at the time of production.
1) Casual leave: 9 days for workers and 11 days fir staff
2) Privilege leave: For workers 1 day for 15 days worked, for staff its
3) Sick leave:7 days
Retirement age of employees is 58 years.
Qualification Required For Different Jobs
Unskilled workers: He should be group 25-30 years, should not have
studied more than 8th standard and should be residing within a radius of 5
Kilometers of KSE limited.
Office staff: He should be a graduate.
Shift engineer: He should be a diploma holder from ITI.
Security man: He should be an ex-service man in age group of 35-40 years.
Training and Development
KSE LIMITED gives the jobs training to the
employees. They are kept in probation for 6 months. If company found it
unsatisfactory, then probation period may be extended. Introduction training
is given at this period.
Workers are selected as a substitute worker. If a
substitute worker works for a period for a minimum of 240 days within a year
they would be made a permanent worker.
Fresh blood would be preferred for lower
divisional works. Based on this policy company promotion for a senior post is
made. After probation period the manager under whom the employee is
working gives an appraisal report to the personnel manager. Confirmation of
job is given after that.
Classification of Employee /Workmen
Permanent employee is one who has been
engaged on a permanent basis by a written order to that effect and include
any person who has satisfactorily completed a probationary period of 6
months, including period of service in any other post to which he may be
transferred, breaks due to sickness, accident, leave, lock out, inventory
closure of the establishment and who has been confirmed in writing as
Probationer: is one who is provisionally employed to fill permanent
vacancy in a permanent post.
Substitute is one who is appointed in the post of permanent workmen or
probationer who is temporarily absent. If a substitute worker for a minimum
of 240 days within 12 months, he will be made permanent.
Temporary employee: is one who is employed for work which is of an
essentially temporary nature likely to be finished within a limited period.
Casual employee is one whose employment is of casual nature and who is not
entitled to claim for future and continuous employment.
Each of the five categories of employee shall be grouped as follows. Monthly
rated employee/workmen whose salaries or wages are calculated at a monthly
time, Daily rated employee/workmen whose salaries or wages are calculated
at a daily rate.
KSE Limited proud of its well-coordinated labour force .The
personnel department was seen as a place where the lesser productive
employees could be placed with minimal damage to the organization ongoing
Employees are selected based on their educational qualification,
work experience, technical know how and age. Company ads on news papers
through employment exchange and by promoting its own employees based on
performance. In KSE Limited, Total numbers of employees are more than
900 including the employee in its 4 units. In this 500 employees attached to
The company has 926 employees in its rolls as on 31.03.2011.The company is
exception to the adverse labour conditions existing in Kerala. During its
working of 39 years the company had lost only few man days by labour unrest
.During the lockout period’s management had made alternative arrangements
to ensure regular supply to the dealers and the performance of the company.
There were no labour issues of a serious nature in any units of the company.
5.6 Stores Department
KSE follows centralized storing system.
Under this system requirement of various departments are stored and issued
from one store. The total available floor space is divided into various tracks.
When material in the store is exhausted the store department prepares
purchase requisition and put forward to purchase department.
Store is a place where all the materials
required for the production except raw materials is ordered, received stored
and issued. The store all the mechanical spare parts, company broachers,
hand gloves, safety goggles etc....the materials are issued from the store to
various departments on the receipts of requisition form duly signed by the
If the stock of material is less than the
minimum required quantity, the store clerk gives purchase requisition to the
store through works manager. On the receipt of the material he enters it in
the system. He also updates on the issues of the materials. So the system
quantity and the physical quantity will be the same
The officer in charge of the general store is
store keeper .The store keeper is responsible for identifying the materials that
has reached the order level and is responsible for its storing .the main item
purchased and stored here are spare part of machinery ,packing material, belt
chain, and other miscellaneous articles. This store issues the material to
solvent plant, cattle feed plant, refinery plant and to some other department.
→ Identify the material that has reached the re order level.
→ Storage and proper keep on material.
→ Store all date regarding the storage and supply of material in the
computer .Computerization of this department has helped the
company to save a lot of time and eliminate various records like
→ Issuing material to the consumer department.
Inspection of Materials
The materials purchased by the purchase department are
inspected by the general stores and if satisfied are accepted. Otherwise the
materials are rejected. The store keeper has the right to reject the materials if
he is not satisfied with the conditions.
After checking and verifying the material the general store
department repair the material received report (MMR).It is prepared in 2
copies and one copy is retained the general stores department for office
purpose and the other two copies are send to the purchase department.
Issues of Materials
The store department issues the material only when it is
required by the receiving department by material requisition or slips. These
slip are received from the required department in two copies. Out of this 1
copy is send to the accounts department and other one is kept by the general
store department itself.
Periodical Checking Of Store
Periodical checking of stores is done by the store department
in every six month. The checking is done by checking physically each and
every item in the stores. A written report is given to the management once in
every six month and this report contains the value of materials also.
The store are handled through the required department –
personnel .there is no separate device for store handling .The required
department prepare the material requisition or issue slips and submit to the
general store keeper.
It is a full –fledged department itself functioning under marketing
department to become an exclusive dealer of the company ;company sees
that the dealer’s agency would be 5kms away from other KSEL agencies
.Market study with the help of the sale representatives will be undertaken.
Social status, financial capacity, go down facility etc of the dealer will also be
studied; the demand of competitors product in the market also will be
assessed before giving the dealership.
Store Consumption Statement
It is prepared by the storekeeper and sends to the account
department for recording it in the profit and loss account. The consumption
of this material by each department are shown in this statement.
The officer in charge of the general store is store keeper. The store
keeper is responsible for identifying the material that has reached the re
order level and is responsible for its storing. The main item purchased and
stored here are spare parts of machinery, packing, material, belt, chain and
other miscellaneous articles.
The company store raw material for one month or one and half month. The
company has more than 7 godowns. In the case of sampling of good all the
visible impurities are identified. The impurities like fatty acid can be found
only after lab analysis. In the go down they follow FIFO .As the department is
computerized annual stock can be calculated easily. Following are the
functions in godown;
1) Storing of goods.
2) Sending material received report to purchase department.
3) Checking goods on arrival.
4) Unloading and preparation of daily stock summery report.
5.7 Quality Control Division
The quality control division of KSE Ltd. is
headed by chief nutritionist. The quality of a product begins from the quality
of the raw material used in it. The main task of this division is to completely
analyze the raw material and point out defect in it. The normal practice is
that, at the time of unloading, the authorized persons will take the sample of
materials for quality inspection. They will collect three packets and 1 sample
will send to the lab, 1 to nutritionist and 1 sample will keep as check sample
in go down. Normally every week the nutrition has to alter the formula of
cattle feed which in time governed the availability, rate and quality of raw
2) Crude protein
3) Acid insoluble ash
5) Crude fiber
For each parameter a set of standard is maintained and it
should not exceed or below the standard. If it is minimum, then that
ingredient is taken with a warning of party. If the level exceed standard, then
concerned committee can reject that at the spot of examination.
Quality Control in Solvent Plant
In this plant the raw material used is coconut
cake. There are many quality tests conducted to check the quality of material.
Air over method is used for identification of the percentage of protein. SOX
method is used for determination of percentage of crude fat.
Quality Control in Cattle Feed Plant
The raw material are randomly selected and if
it is found defective it would return to supplier and if the supplier has got any
dispute regarding the credibility of company’s laboratory, the company will
send the sample to independent labs. Final statements are made according to
the lab report. After the production of feed quality test is conducted again.
Quality is the factor, which helps the company to sell all its products.
1) KS Cattle feed
Oil content :2%
2) KS Special Cattle feed
Crude fibber : 11-12%
3) KS Supper Cattle feed
4) KS Deluxe
5) KS Deluxe plus
Protein : 17-18%
Protein : 22%
Fat : 2%
Sand & Silica :2%
ISO (International Organization for standardization)
Now a day the concept of Quality is undergoing a great
change. Quality control often involves testing well during and after
production. Today I.S.O 9000 certification is becoming almost essential for
Indian business house to export their products.
One of the requirements of the I.S.O standard is an
effective management representative who would be responsible for the
effective documentation, implementation, and co-ordination of activities of
all senior activities.
The standard requires that the management of the
organization must clearly enunciate its quality policy, the intensions and
directions of the organization vis-à-vis quality. Everybody in the organization
must understand the policy and work towards its implementation and
The I.S.O (International Standard Organization)
certification is applied to quality management system encompassing quality
in all functions such as marketing, design, purchase, assembly, testing,
packing, shipping, installation, after sales service and all other activities of an
organization. I.S.O certification is the mechanism by which a customer can
have confidence in a company and is most effective when carried out by a
national certification body. The I.S.O series of standards serve as a basic for
ensuring to all providers of goods and services.
Ares Covered In I.S.O 9000 Series
1. I.S.O 9000 provides the guidelines for selection and use of the quality
2. I.S.O 9001 is a quality system model for quality assurance in
design/development, production, installation and servicing. This is the
most exhaustive standard. The engineering organizations, where the
manufacturing capabilities are based on in-house design have to work
for I.S.O 9001 certification. Manufactures of(a) perishable consumer
goods like tooth paste ,etc. Which have both servicing and
design/development have to work towards I.S.O.9001
3. I.S.O 9002 provides a model for quality assurance only in production
and installation. This does not cover areas of design/development and
servicing. I.S.O 9002 also looks at internal quality audits. Steel plants,
departmental store, hospitals, chemical plants etc., where the
designing and do not constitute the key activities may prefer I.S.O
4. I.S.O 9003 deals only with quality related to final inspection and
5. I.S.O 9004 provides guideline for quality management and quality
SWOT analysis is a basic technique that is
often used in strategic planning, improving company success, organizational
development and identifying competitive advantage. It is a tool for auditing
an organization and its environment. As the first stage of planning; it helps
to focus on key issues. Role of SWOT is to take the information from the
environmental scan and separate it into internal and environmental scan
and external issues.
Once this completed, SWOT determines
if the information indicates something that will assist the information
indicates in accomplishing its objectives or if it organization in
accomplishing its objectives or if it indicate an obstacle that must be
overcome or indicates an obstacle that must be overcome or minimized to
achieve desired results.
SWOT - Strengths, Weakness, Opportunities and
Internal to the units; are a units resources and capabilities that can be used
as a basis for developing a competitive advantage; the strength should be
realist and not modest.
What does a company do well? What makes it better than others? What does
the company have, or do, that sets it apart from its competition?
These are important questions, and should include aspects of the company
that made people to consider it for investment in the first place. Look at
branding, image, pricing power, size, market share, financial position
(balance sheet strength etc.)
Here is some strength to look for
• The size of the company
• Balance sheet strength
• Cash flows
• Perception of the company’s products
• Perception of the company’s band(s)
• What advantages the companies have over its competitors
• In general, what does the company do well?
Examples: good reputation among customers, resources, resources, assets,
people, experience, data, capabilities
Think in terms of: capabilities; competitive advantages; resources, resources,
assets, people (experience, knowledge); marketing quality; location;
accreditations; certifications; processes/systems.
After analyzing the strengths of the company, the next step is to look for the
weakness. Internal forces could serve as a barrier to maintain or achieve a
competitive advantage; a limitation, fault or defect of the unit. Weakness
should be truthful so that they may be overcome as quickly as possible.
The questions should be asked when looking for weakness; what does the
company do poorly, or not so well? What are other companies doing better?
What is keeping the company from great success?
It is important that the customers don’t gloss over this section. SWOT
analysis is a brainstorming effort, so don’t discount anything that comes to
mind. If customers perceive a weakness, list it. The weakness customer fail
to list today could be why customer’s investment turns out poorly next year.
Some weaknesses to look for;
• Deteriorating balance sheet
• Poor perception about companies brand(s) and /or products
• Advantages that other companies have?
• Lack of management or other employees’ talent
• In general, what does the company do poorly?
Examples: gaps in capabilities, financial deadlines, morale.
Opportunities are any favorable situation present now or in the future in the
external environment. Opportunities are to identify areas of business we
think in the company is looking to enter, or should be looking to enter.
Opportunities are to gain market share from competitors, or grow the
company’s market to new customers.
But there are just external opportunities. There are opportunities within a
company that should be considered. Can the company combine products line
to increase the sales? May be the company has duplicate costs that can be
streamlined. Companies can always find ways to do things better.
Some opportunities to look for:
• New markets for products
• Financial or legal trouble for competitors
• New technologies the company could adopt
• Change in regulatory/tax burdens
• Strategic investments
• Internal efficiencies.
Examples: unfulfilled customer need, arrival of new technologies, loosening
of regulations, global influences, economic boom, demographic shift.
Threats are the external force that could inhibit the maintenance or
attachment of a competitive advantage; any unfavorable situation in the
external environment that is potentially damaging now or in the future.
Finally, we need to consider threats to the company. Again, threats can be
internal as well as external. Internal treats usually come first, which opens
the door to external threats. Therefore it is important to do a good threat
Internal threats aren’t usually classified as such, which is a common
mistake. Any internal problem is a threat to the company’s well being and
should be evaluated along side the external threats. For example, a company
that relies on developing innovative products, such as Microsoft or Intel,
faces the threat of losing engineering talent every day. This is an internal
threat that could easily pave the way for external threats.
Possible threats are:
• Internal obstacles the company facing
• Financial constraints on the company
• Cash flow problems
• Relative position of the competitors.
• Technological advances in the industry.
• New technologies that threaten to displace the company’s products.
Examples: shift in consumer tastes, new regulations, political or legislative
effects, new technology, loss of key staff, economic downturn, demographic
shifts, competitor intent, market demand, sustaining internal capability,
financial backing internal capability.
SWOT Analysis of KSE Ltd. (2010 - 2011)
The turnover of the company improved by 22% to Rs.371 crores
from Rs.454 crores during the financial year 2010-2011.through a
portion there of may be attributed to the increase in the selling
price of cattle feed. There is considerable volume wise growth in
sale of cattle feed. Cattle feed, Cattle feed sales volume improved
by12%when it grew from2.86 lakhs tones in the previous year to
3.20lakhs tons in the current year.
KSE Ltd has got vast experience of over 38 year. Kerala Solvent
Extraction limited now known as KSE Limited was established in
1963,bya handful of coconut millers in and around Irinjalakuda
.the company now produce 750 -800 metric tons of coconut cake a
day with four cattle feed production unit and two solvent
extraction plant. The company has diversified into the area of
dairying establishing 2 dairy plants for production of pasteurized
milk and milk products. It has obtained ISO recognition for its
commitment to quality and professionalism.
KSE feed have been highly accepted in the market. Its leadership in
the market is mainly due to its quality standards.
KSE provides prompt after sales service and good customer
The company has multi-units (having production unit in
Irinjalakuda, Palakad, kottayam, Konikkara,in Kerala state and
Swaminathapuram and Thalayuthu in Tamil Nadu state and
Mysore in Karnataka State)multi product company (product such
as Cattle feed, Poultry Feed, Edible oils and milk and milk
products)and exporter of cattle feed.
KSE is a company which is listed in stock exchange in the country.
The shares are listed in BSE and NSE.
The Dairy division excelled its performance by improving the
profits from that division by 43% compared to that of previous
year. The company achieved a 12.50% growth in ice-cream sales.
KSE has got good network of dealership. Majority of the milk
societies in the Thrissur District are dealers of KSE Ltd, for cattle
The company commissioned a new ice-cream plant with 20001 pt
capacity at Vedagiri in March 2011.Though there is stiff
competition from other local brands; the company is aiming to
better the performance of Dairy Division with the additional
KSE Ltd has won the best productivity performance Awards
instituted by the National productivity Council, New Delhi in the
category of animal feed processing industry for ten years beginning
with 1996-1997.The company has also won the SEA Award
constituted by Solvent Extractors Association of India for Highest
processor of Coconut Oil Cake for the year 2010-2011.this Award is
being received by the company for the past 20 years consecutively
since the inception of the award.
Cattle feed and solvent industries are passing through a very
challenging period. The average cost of cattle feed ingredients more
than doubled over the last 5 years. The company does not expect a
significant fall in the cost of cattle feed ingredients in the
immediate future, at the same time also not expecting a sudden
spurt. By optimizing the feed formulation and adjusting suitably
the selling price in tune with the ingredient prices, the company
expects to better their performance in the next year.
Upward increase of diesel prices in small dozes and the usage of
grains for manufacture of bio-diesel and ethanol by the developed
countries also fuelled the price rise.
The availability of local copra cake is still experiencing short
supply and high price.The company has made arrangement s to
cover up the shortfall by import of copra cake from Philippines and
Indonesia at comparatively economical price. The price of coconut
oil had surpassed Rs.100a Kg.,which has almost doubled
compared to the price a year before, and this is expected to rule for
another 6 months.
The State government’s stubborn decision to retain to retain the
retail price of milk at uneconomical levels for the farmer, also is a
hurdle for the company to adjust the price of the cattle feed in tune
with the ingredient prices. The competing brands controlled by the
state government holding their feed prices for reasons other than
economical also affected our flexibility in adjusting the feed price
In oil cake processing division, there is a slight fall of 2.65% in the
quality of cake processed .In the fourth quarter the company could
not procure sufficient quality of copra cake locally due to non-
availability at reasonable prices and there was delay in the arrival
of imported cake.
In dairy division, there is a fall in ice cream sales volume by
3.37% .But this fall in volume is after reporting an improvement in
volume to the tune of 12.50% in previous year.
Removal of value added tax on sales of cattle feed and de-oiled cake
enables the company to work effectively.
Presence of production units in two states helps company cover
those states competitively.
State of the art research facilities and qualified research personal
enable the company to add innovative products and improve
Expanding its distributing areas.
Growing demand of its products.
Probable entry of foreign entities in the case of raw material
Stagnant number in the cattle population affecting market growth
in future as a cattle rearing is still not very economical.
Competition from other manufactures of organized and
Indirect control by government over price of milk which is bottle
neck increasing price of feed to offset increase in raw material
• Good working environment
• Updated technology and concepts
• Performance appraisal system
• Strict disciplinary action
• Training programs, meeting according to the needs
• Satisfying the needs of the customers and employees
• Safety and security policy
• Harmony relation between the management and its employees
• Good co-ordination among the various departments
• Improved quality standards.
KSE, a company having an annual turn
over of Rs.350 crores, is the largest manufacturer of cattle feed. It provides
employment to around 1500 numbers directly and another 5000 indirectly.
Its shares are being listed in three stock exchanges in Cochin, Chennai and
Mumbai. The company commenced its production in the year 1972.
It is marketing annually about 1.80 lakh tons
of superior quality cattle feed. KSE had successfully launched its Vesta brand
Ice Cream which has been well accepted in the market for its matching
international quality standards. KSE plans to add more ice cream production
units across Kerala in the coming years to serve all pockets.
KSE is in the oil extraction industry for past
36 years. It is having two solvent plants with processing capacity of 100 tons
per day. The company has also a chemical oil refining plant of 20 tons per
day. The company has secured the National Productivity Award for the year
2001-2002 for being first in terms of production efficiency in the animal feed
sector. This is the sixth time in a row that the company is being selected for
this most coveted award.
It is pertinent to note that in the Kerala
industrial scenario, where many companies are closing down, either due to
labour unrest or due to other economic reasons, KSE continues to commence
new ventures each year and run them successfully. The company is having six
units at different locations. The relation with the labour unions of all these
units is very warm and cordial. KSE, with a capital base of Rs.36 crores
embarks on an expansion to double its solvent extraction capacity and add a
most modern eco friendly vegetable refining plant. The company has already
identified six acres of land in the KINFRA small industries park, Koratty for
In the first phase, the company plans to install
one 200 MT per day solvent plant for processing oil cakes and also a 100 MT
per day physical refining plant. Both these plants will be of international
standard using most modern technologies, where the process loss is kept to
minimum. The project will generate direct employment to 125 and indirect
employment to another 500 numbers. In the second phase, a 100 MT per day
oil fractionation unit will also be added.
As a pioneer in the solvent extraction industry,
leader in cattle feed manufacture, and an emerging force in ice cream and a
resourceful new entity in diary development and milk products, KSE is
determined to move with the times, taking on new challenges, achieving new
1) Open new branches for establishing the presence in all major centers and
backward areas, aiming at effective in rural presentation.
2) Starting of new product lines or introducing new product may helps to
increase the sales volume and profit.
3) KSE Ltd is making good use funds, so they can easily make good moves
in share market.
4) Advertisement is one of the Major problems in KSE Ltd, Which can avoid
through concentrating in Medias, internet and other popular methods.
5) Use of more board display advertisement.
6) The analysis shows the company have decline in profit in the current year,
effective performance is suggesting overcoming the huddles.
7) Off seasonal problems can avoiding by using more promotional program
to agencies and dealers.
8) Necessary precautions must be taken in advance to avoid any trade union
problems in the future.
9) Better co-ordination between all department s should be maintained for
the smooth running of the company.
10) It is necessary to provide full contribution from the functional
department for achieving the targets.
11) Perish ability was one of the main limitation of this industry; new
technologies must be introduced to avoid such problems.
12) Always try to maintain the domination in the field.
13) Providing proper safety equipments to protect from the hazards.
14) Reference group should be formed to educate consumers.
15) Company can earn more profit by expanding the market.