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Os mariya jasmine 2012


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Os mariya jasmine 2012

  1. 1. ORGANIZATIONAL STUDY AT KERALA SOLVENT EXTRACTIONS LTD REPORT Submitted for partial fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION Submitted By 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 STUDIES Tiruvalla – 689 101, Kerala 2012
  2. 2. CERTIFICATE 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 TIRUVALLA
  3. 3. DECLARATION 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 Tiruvalla
  4. 4. LIST OF TABLES Table No. Title Page No. 3.1 Share capital pattern 5.1 Financial highlights 5.2 Net profit and sales comparison 5.3 Marketing price data
  5. 5. LIST OF FIGURES Fig. No. Title Page No. 1 Purchase procedure
  6. 6. ABBREVIATIONS 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 :
  7. 7. CONTENTS ACKNOWLEDGEMENT (i) LIST OF TABLES (ii) LIST OF FIGURES (iii) ABBREVIATIONS (iv) 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
  8. 8. 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 Bibliography Appendix
  9. 9. 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 organization 6. To analyze the strength, weakness, opportunities and threat faced by the company.
  10. 10. 7. To provide suitable suggestions for the smooth functioning of the company. 8. To know the profitability of the firm and marketability of the products. 1.4 METHODOLOGY Both primary and secondary data were collected from the company and the same were used for the completion of the organization study. Primary data 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 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.
  11. 11. 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 some errors.
  12. 12. INDUSTRY PROFILE 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 itself. 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
  13. 13. 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 over India. 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.
  14. 14. 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 million tonnes. The Association is an all India body to solvent extractions industry and premier vegetable oil Association in the country having wide
  15. 15. 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 nutritional composition. 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 cattle feed.
  16. 16. 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 earnings.
  17. 17. COMPANY PROFILE 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 Limited born. 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
  18. 18. 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.
  19. 19. With a strong commitment to customers and product quality and being cost competitive KSE, stands poised to meet new challenges. 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 the market. 1991 Open Palakkad branch. 1992 Cattle feed manufacturing beginning in 3rd party unit. 1993 Enters the export market. 1994 Introduction of feed supplement KS FORTE, public issue and listing of shares. 1995 Vegetable oil refining plant commissioned. KS SUPREME-sunflower oil launched. Open Calicut branch. 1996 240 TDP cattle feed commences at vedagiri
  20. 20. 1997 Company renamed as KSE LTD 1998 4th 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 palakkad. 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 extraction 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 per day Commenced 500 TDP fully state-of the art Germen technology animal fed plant at irinjalakuda 2010 Ice-cream production unit at vedagiri commissioned. 3.3 Vision “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”.
  21. 21. 3.4 Mission  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 company. 3.5 Share Capital Pattern Category No. Of Share Hold % Of Share Holding PROMOTOR’S HOLDING Indian promoters Sub total NON-PROMOTER’S HOLDING Banks Private corporate bodies Indian public NRIs/OCBs Sub total 11,08,338 11,08,338 _ 5,24,533 15,37,179 29,950 20,91,662 34.64 34.64 _ 16.39 48.03 0.94 65.36 Grand total 32,00,000 100.00
  22. 22. Table 3.1 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 feed manufacturing. 6) Kerala’s first export mixed cattle feed. 7) Tamilnadu productivity council safety award. 8) Kerala state Productivity Council Award. 3.7 Management 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 seniority. 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
  23. 23. 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
  24. 24. 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. PRODUCT PROFILE 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
  25. 25. 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 Kerala 1) KSE Limited, Irinjalakuda unit Thrissur District. 2) KSE Limited, Muppathadam post Edayar, Cochin. 3) KSE Limited,
  26. 26. Othugad unit Palakkad District. 4) KSE Limited, Vedagiri unit Kottayam District. 5) KSE Limited, Konikkara unit (diary) Thrissur District. 6) KSE Limited, Nida menonpara road Kanjikode, Palakkad District. Tamilnadu 1) KSE Limited, Swaminathapuram unit Dindugal District. 2) KSE Limited Thalayath (diary) 3) KSE Limited Modakurichi, erode. Karnataka 1) KSE Limited,
  27. 27. Mysore unit Karnataka.
  28. 28. FUNCTIONAL DEPARTMENTS 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;  Production Department  Finance Department  Marketing Departments  Purchase Department  Personnel Department  Stores department  Quality control Division
  29. 29. 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. FUNCTIONS → 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
  30. 30.  Cattle feed plant  Refining 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 4. P.M-12.A.M 12. A.M-8.A.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.
  31. 31. MMCP TECHNOLOGY MILLING 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. MIXING The raw material will be mixed thoroughly by using horizontal mixer. Capacity of this mixer is 6 m. COOKING 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. PELLETING 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 each. Refining Plant In this plant oil is refined according to the seasonal demand .Here two types oil are refined → Solvent Extraction Oil
  32. 32. → 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
  33. 33. book such as purchase daybook, sales day book, and cashbook and bank book. Capital Structure 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 each. Banker 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, they are  Share holders fund  Share capital  Reserves And Surplus  Loan Funds Functions of Financial Department  Maintain a good financial structure  Identify the future financial requirement  Dividend payment  Salary payment  Collection of cheque  Receipt  General payment  Payment of raw materials
  34. 34. 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 requirements. Internal Control 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  Safeguarding asset  Adherence to management policies  Orderly and efficient conduct of its business Auditing The company has constituted on adult company, three independent non- executive directors assists members. The main auditors of the company are Varma and Varma. Internal Audit 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
  35. 35. situated in other districts and states are performed by independent chartered accountant firms. Internal Check 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. Budgeting 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. Dividend 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 march 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. Capital Expenditure 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. FINANCIAL HIGHLIGHTS
  36. 36. 2009 - 2010 2010 - 2011 Sales and other Income 37227.89 45436.07 Gross Profit (Profit before depreciation and interest) 1917.38 1359.80 Profit Before Tax 1266.14 667.31 Net Profit after Tax 827.27 449.81 Share Holder’s Equity (Net worth) 3257.45 3335.34 Capital Employed 6456.64 6065.52 Gross Fixed Asset 6956.64 7220.58 Rs Rs Share Holder’s Equity per share 104.23 101.81 Earnings per share of Rs.10 each 14.06 25.85 Dividend Rate 100% 100% Table 5.1 NET PROFIT AND SALES COMPARISON OF LAST SEVEN YEARS
  37. 37. Table 5.2 YEARS Net Profit(In Lakhs) Sales(In Lakhs) 2004-2005 675.58 21309.85 2005-2006 591.23 24060.44 2006-2007 101.09 27503.59 2007-2008 258.38 28947.50 2008-2009 320.54 35007.87 2009-2010 827.27 37094.19 2010-2011 449.81 45368.03
  38. 38. 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
  39. 39. January 202.00 173.00 February 195.00 156.00 March 181.00 159.00 Table 5.3 Accounting Policies:  Accounts in KSE Limited are prepared under historical cost convention on accrual basis unless otherwise specifically stated in the notes to account Fixed asset  Asset put to use have been stated at less depreciation.  Asset not put to use have been stated at cost. Depreciation  Depreciation on fixed asset has been provided on written down value method at the rate prescribed in the company act1956. Investment  Long term investments are stated at a cost less provision, if any for permanent elimination in the value of such on investment. Inventories  Inventories as at the close of the year are valued at lower of cost or net realizable value. Retirement benefits
  40. 40.  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 FINANCIAL PROCEDURE 1. Payment of raw materials
  41. 41. 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 be charged. 2. General payment This includes electricity charges, stationary items, telephone charges, salary, ESI, PF, housing loan, state tax income tax, etc. 3. Receipts This mainly includes sales receipt. The company accepts sales receipt in the form of cash, DD Cheque: the company will not accept credit sale. 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
  42. 42. 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
  43. 43. 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 department. 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
  44. 44. production manager about the demand for the various products so as to plan the production accordingly. SALES PROCEDURE 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.
  45. 45. 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 b) Notices c) Cinema slides d) Cloth banners e) Wall painting f) Hording, Tin boards, g) Flex printing h) Yearly calendar
  46. 46. i) Local news papers j) Exhibitions and seminars k) 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
  47. 47. 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. Brand Loyalty
  48. 48. 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 the brand. 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
  49. 49. 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
  50. 50. 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. Purchase Contract 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
  51. 51. 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. Purchase Procedure 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 report.
  52. 52. 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 specification. 4) A meeting of purchase committee held after receiving the quotation. The committee includes general manager, finance manager and marketing manager. 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
  53. 53. 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 plant
  54. 54. Fig.1 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
  55. 55. 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 objective. → Employees selection procedure → Remuneration of workers → Allowance of employees → Statutory liabilities → Trade union → Workers welfare activities → Workers safety measures → Leaves and retirements
  56. 56. → Other functions Functions of Human Resource Department → Recruitment → Man power planning → Welfare function → Grievance handling → Discipline → Industrial relations → Public relations → Job description → Job specification → Training → 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 performance.
  57. 57. Remuneration 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 Allowances 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
  58. 58. 9) Scholarship for employee’s children 10) Employees welfare fund Statutory Liabilities 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 fund. c) Bonus: It varies according to their grades Trade Union There are four recognized trade unions in the company namely CITU, INTUC, and BMS 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.
  59. 59. 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. Safety Measures 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. Leave 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 30 days 3) Sick leave:7 days Retirement 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.
  60. 60. 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 permanent. Probationer: is one who is provisionally employed to fill permanent vacancy in a permanent post.
  61. 61. 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. Manpower Planning 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 operation. 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 Irinjalakuda Unit. Industrial Relation
  62. 62. 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 authority.
  63. 63. 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. Functions → 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 storage ledger. → 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
  64. 64. 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. Store Handling 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.
  65. 65. 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. General Store 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. Godown 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.
  66. 66. 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 material.
  67. 67. Quality Parameters 1) Moisture 2) Crude protein 3) Acid insoluble ash 4) Calcium 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
  68. 68. 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. Production Specification 1) KS Cattle feed Protein :14-16% Oil content :2% 2) KS Special Cattle feed Protein :14-16% Crude fibber : 11-12% 3) KS Supper Cattle feed Protein :14-16% Oil :2% Fibber :12% 4) KS Deluxe Protein :16-17% Fat :2% Fibber :12% 5) KS Deluxe plus Protein : 17-18% Fat :3% Fibber :12% 6)KS Supreme Protein : 22%
  69. 69. Fat : 2% Fibber :12% 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 maintenance. 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
  70. 70. 1. I.S.O 9000 provides the guidelines for selection and use of the quality standard. 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 9002. 4. I.S.O 9003 deals only with quality related to final inspection and testing. 5. I.S.O 9004 provides guideline for quality management and quality system elements. SWOT Analysis
  71. 71. 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 Threats 6.1 Strengths 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
  72. 72. • 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. 6.2 Weaknesses 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.
  73. 73. 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. 6.3 Opportunities 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.
  74. 74. Examples: unfulfilled customer need, arrival of new technologies, loosening of regulations, global influences, economic boom, demographic shift. 6.4 Threats 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 analysis. 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
  75. 75. shifts, competitor intent, market demand, sustaining internal capability, financial backing internal capability. SWOT Analysis of KSE Ltd. (2010 - 2011) Strengths:  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 relation.
  76. 76.  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 feed.  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 capacities.
  77. 77.  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. Weakness  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.
  78. 78.  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. Opportunities:  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.
  79. 79.  State of the art research facilities and qualified research personal enable the company to add innovative products and improve exciting products.  Expanding its distributing areas.  Growing demand of its products. Threats:  Probable entry of foreign entities in the case of raw material purchasing.  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 unorganized sectors.  Indirect control by government over price of milk which is bottle neck increasing price of feed to offset increase in raw material prices. 7.1 Findings
  80. 80. • 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. 7.2 Conclusion
  81. 81. 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 this expansion.
  82. 82. 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 milestones.
  83. 83. 7.3 Suggestions 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.
  84. 84. 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.
  85. 85. Bibliography • Annual report KSE Ltd. 2010 - 2011 •