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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. YReg. No. 00000
Under the guidance of
Mr. M. D. JOHNY Prof. THOMAS Company Guide Faculty Guide
DEPARTMENT OF MANAGEMENT STUDIESMAR ATHANASIOS COLLEGE FOR ADVANCED
STUDIESTiruvalla – 689 101, Kerala
2012
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
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.YTiruvalla
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
LIST OF FIGURES
Fig. No. Title Page No.
1 Purchase procedure
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 :
CONTENTS
ACKNOWLEDGEMENT
(i)
LIST OF TABLES
(ii)
LIST OF FIGURES
(iii) ABBREVIATIONS
(iv)
CHAPTER 1. INTRODUCTION
1.1. Scope of the Study1.2. Significance of the study
11.3. Objectives of the Study 11.4. Methodology
21.5. Limitations of the Study
2
CHAPTER 2. INDUSTRY PROFILE
2.1. Need for Solvent Extraction 32.2. Solvent Extraction Process 42.3. Coconut Oil Miller’s Co-Operative Society 42.4. 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 173.9. Marketing Scenario 173.10. Research and Developments 17
CHAPTER 4. PRODUCT PROFILE
CHAPTER 5. FUNCTIONAL DEPARTMENTS
1.1. Production Department 191.2.Finance Department 221.3.Marketing Department 311.4.Purchase Department 381.5.Personnel Department 431.6.Stores Department 50
1.7 Quality Control Division
CHAPTER 6. SWOT ANALYSIS
CHAPTER 7. FINDINGS, CONCLUSIONS AND SUGGESTIONS
6.1. Findings 666.2. Conclusion 676.3. Suggestions 69
Bibliography
Appendix
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.
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.
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.
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 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.
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 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.
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.
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 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 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
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”.
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 PatternCategory 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
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 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.
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
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 unitThrissur District.
2) KSE Limited,Muppathadam postEdayar, Cochin.
3) KSE Limited,Othugad unitPalakkad District.
4) KSE Limited,Vedagiri unitKottayam District.
5) KSE Limited,Konikkara unit (diary)Thrissur District.
6) KSE Limited,
Nida menonpara roadKanjikode, Palakkad District.
Tamilnadu
1) KSE Limited,Swaminathapuram unitDindugal District.
2) KSE LimitedThalayath (diary)
3) KSE LimitedModakurichi, erode.
Karnataka
1) KSE Limited,Mysore unitKarnataka.
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
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
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.
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
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 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
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 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
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
Table 5.2
MARKETING PRICE DATA
YEARSNet Profit(In
Lakhs)
Sales(In
Lakhs)
2004-
2005675.58 21309.85
2005-
2006591.23 24060.44
2006-
2007101.09 27503.59
2007-
2008258.38 28947.50
2008-
2009320.54 35007.87
2009-
2010827.27 37094.19
2010-
2011449.81 45368.03
(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
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
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
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
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
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 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.
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
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
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
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
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.
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
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.
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
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
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
Fig.1
5.5 Personnel Department
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
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.
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
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.
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.
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.
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
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.
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 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.
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.
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.
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
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%
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
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
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
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.
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.
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 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.
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.
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.
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.
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
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
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.
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.
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.
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.
Bibliography
Annual report KSE Ltd. 2010 - 2011 www.kseltd.com
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