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SL NO. 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 INTRODUCTION INDUSTRY PROFILE COMPANY PROFILE ORGANIZATION STRUCTURE DEPARTMENT ANALYSIS HUMAN RESOURSE DEPARTMENT PURCHASE DEPARTMENT PRODUCTION DEPARTMENT MARKETING DEPARTMENT FINANCE DEPARTMENT QUALITY CONTROL DEPARTMENT FUTURE PLANS AND PROGRAMS SWOT ANALYSIS FINDINGS SUGGESTIONS CONCLUSION BIBLIOGRAPHY CONTENTS PAGE NO. 5 7 11 26 27 28 34 39 45 51 59 64 65 67 68 69 70
INTRODUCTION
This is an organization study about the KSE ltd. KSE stands for Kerala Solvent Extraction ltd. Company deals with the production of cattle feed products. Solvent extraction is usually used to recover a component from either a solid or liquid. The sample is contacted with a solvent that will dissolve the solutes of interest. Solvent extraction is of major commercial importance to the chemical and biochemical industries, as it is often the most efficient method of separation of valuable products from complex feed stocks or reaction products. Some extraction techniques in involve partition between two immiscible liquids, others involve either continuous extractions or batch extractions. Because of environmental concerns, many common liquid/liquid processes have been modified to either utilize benign solvents, or move to more frugal processes such as solid phase extraction. The solvent can be a vapour, supercritical fluid, or liquid, and the sample can be a gas, liquid or solid. The Indian feed industry is about 35 years old. It is mainly restricted to dairy and poultry feed manufacturing; the beef and pork industry is almost non-existent. The quality standards of Indian feeds are high and up to international levels. Raw materials for feed are adequately available in India. The industry's production is about 3.0 million tons, which represents only 5 percent of the total potential, and feed exports are not very high. The feed industry has modern computerized plants and the latest equipment for analytical procedures and least-cost ration formulation, and it employs the latest manufacturing technology. In India, most research work on animal feeds is practical and focuses on the use of by-products, the upgrading of ingredients and the enhancing of productivity. The country has entered into a period of liberalization and this is bound to influence the livestock industry. The per capita consumption of milk, eggs and broiler meat will grow. The Indian feed industry is undergoing a very exciting phase of growth for the next decade.
OBJECTIVES OF STUDY
The overall objective is to conduct a study on organizational structure of KSE Ltd. The following are the specific objectives of the study.
To examine the developments of KSE. To understand about the functional areas of the company. To understand the organization structure of KSE. To understand the product profile of KSE.
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With an increasing entry of new companies, information of newer technologies and changing economies, the world of business is changing very rapidly. This organization study in KSE Limited exposes to the practical side of the business enterprise. This study helps to understand the history, structure, activity and the products of the company and its contribution to the Indian cattle feed industry. This study exposes to various departments namely purchase department, production department, stores department, etc.
Primary data
Primary data is collected directly from the employees, department heads and the organization study guide in the company. It is collected through observation and direct interview methods.
Secondary data
The secondary data is collected from journals, company files and annual reports, department manuals and website of the company.
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INDUSTRY PROFILE
Growth in milk sector has occurred mainly through co-operative efforts. The milk collection centers started through co-operative effort and collected milk from villagers in quantities as small as liter and gradually started to provide other services to farmers, including education, artificial insemination, veterinary health support and feeding. Small farmers became prosperous, loan facilities were made available through banks, and member farmers started to share the profits from co-operatives .Co-operative society also set up their own computerized feed plant. They began to own modern computerized as well equipped milk processing plants from which they produce and market pasteurized milk, butter oil, chocolate, ice-cream from milk, sweets, which are very popular with Indian consumers. Today the feed production capacity of the co-operative society is about 0.7million tones per year. The solvent industry has achieved a phenomenal progress and at present there are 520 units having overall oil cake or oil seed processing capacity of more than 25.6 million tons per year, which included rice bran processing capacity of more than 9.9 million per year. The solvent extraction plays the 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 it.
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DIARY INDUSTRY
Most of the progress in the dairy sector has come about in the past 25 years only. Till 1970, the countrys milk production increased merely by one per cent a year. But after the intensification of cattle improvement programme through artificial insemination, using sasses of exotic breeds and launch of operation flood, the production started rising rapidly from the mid 1970s. The transformation of India from a milk deficit to a milk s u r p l u s c o u n t r y i s essentially the result of an intensive campaign launch by the Govt. and semi Govt. bodies to promote animal husbandry as a means of generating income for the landless poor. Many of these producers have organized themselves into co-operative under the umbrella if the National Dairy Development Board (NDDB) which had been running a highly successful animal husbandry promotion programme named Operation Flood. The private sector has now entered into this field in a big way, capitalizing on the availability of cheap surplus milk to produce various kinds of dairy products for the domestic and international market. Several dairy products like skimmed milk powder, whole milk powder, and infant milk foods of western origin are now being produced in India. A variety of cheeses, milk drinks, ice creams, pasteurized butter etc. which, were very common in this country till a few decades ago are now available in abundance in department stores of big and small cities. The main objective of this programme is to build a viable and selfsustaining national dairy industry capable of meeting the domestic demand for fresh liquid milk and milk products and competing in the international markets.
government costs and fiscal deficit, and the economy has suffered. A process of liberalization was set in motion by the government and has been implemented for the last eight to ten years. This has caused India to open up and invite investment from multinationals, liberalize imports, reduce government expenditure and remove public sector businesses. It also means that the days of nationalization, unnecessary government controls and restrictions will soon be over thanks to progress in the country's economy. India has entered into an agreement with its trade partners under the World Trade Organization (WTO). The changes brought about by the liberalization process will be slow but certain. The government is opening up imports in a phased manner, and it is expected that this process will be completed by April 2003. In the meantime, about 930 items, including agricultural products, will be open for import under open general license from April 2001, making it possible to import dressed chicken, milk and milk products. Various livestock industry associations have taken issue with such imports in an attempt to protect their members. If the livestock industry is affected, the feed industry will also be affected. The Government of India has raised the tariff on all poultry and poultry products from 35 percent to the WTO boundary level of 100 percent. It therefore appears that there will be a level playing field. In view of the expected rise in per capita consumption of chicken meat, eggs and milk, livestock production and productivity will grow. The dairy industry, which is cooperative-based, is growing with the increased capacities of milk processing units. The population of cross-bred cattle and buffaloes is also growing. Milk is very popular in India. The poultry industry is developing towards vertical integration and a few multinational companies have already entered the Indian poultry business. Although the live bird market currently accounts for about 90 percent of the total market, it is expected that the consumption of dressed chicken will grow in the next five years, from the existing 10 percent to 25 percent or more. This would mean establishing very hygienic and scientific processing units. Cold chains, branded chicken, chicken cuts, etc. will be introduced and, depending on the success and consistent quality, consumer preference for dressed meat will grow. The next decade will see significant changes in restructuring, mergers, acquisitions, amalgamations, joint ventures, diversification, integration and efficient service chains, e-commerce and use of the latest information technology in global tenders, trading, export/import and other commercial activities. At the root of all these developments will be the scientific development of feed manufacturing technology. The Indian feed industry will increasingly use biotechnology, more scientific formulations, new molecules and natural and herbal products to improve animal productivity. Indian agriculture will also use biotechnology and genetically modified organisms (GMOs) to support the feed industry, which is entering a very exciting phase of growth for the next decade
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COMPANY PROFILE
ESTABLISHMENT
Kerala Solvent Extractions Limited now known as KSE Limited was established in 1963 by a handful of coconut millers in and around Irinjalakuda with a vision to overcome the crisis of the coconut oil industry. Initially started as a solvent extraction plant, the company now produces 750 to 850 MTs of coconut cake a day with four cattle feed production units two solvent extraction plants. The company has diversified into the area of dairying by establishing two diary plants for the production of pasteurized milk and milk products. It has obtained ISO recognition for its commitment to quality and professionalism.
large portion of the copra from our state, starving our local industry. We could not keep the pace with the time due to the lack of capital and had to face tough competition from other states. In 1960, a committee was appointed under the chairmanship of Dr. Loganathan to study the feasibility of starting new industries in Kerala. Based on the technoeconomic survey conducted, the committee recommended for the establishment of the three solvent extraction plants in Kerala and one of them in Thrissur district. The oil mill owners in and around Irinjalakuda who were also thinking in similar lines and saw the opportunity and look the initiative to establish a solvent extraction unit and for this purpose they brought 9.6 acres of land in the name of Sri. K V Devassi and Sri. K L Francis and also applied for the industrial undertaking license. They decided to start it as a public limited company, issuing shares to almost all the oil millers who were interested. For this purpose on 1st May 1963, a meeting was held which was presided over by Sri. K V Devassi and attended 17 members. Sri. K V Devassi was elected as the chairman and 10 others were elected as Directors. The Directors were Sri. K L Frncis, Sri T O Paul, Sri. N P Venkittarama Ayyer, Sri. M S Menon, Sri. A P George, Sri. E T Joseph, Sri. P L Ouseph, Sri. M C Paul, Sri. M P Kochudevassi, Sri. A Narayan Swami. On 25th September 1963, the Kerala Solvent Extractions got certificate of incorporation (No.2028) from the Registrar of Companies, Kerala. The first formed meeting was held on 20th October 1963 and in this meeting, Sri. K V Devassi was elected as the chairman and Sri. K L Frnacis as the Managing Director. The initial capital of the company was Rs.4,17,500 consisting of 4175 shares of Rs.100 each subscribed by the promoters. The initial capacity of the plant was 40 tons per day. There were 23 staffs and 28 workers initially. On the road to success there were many hurdles in the beginning. Mobilization of capital caused the greatest challenge. But determination and optimism paid of. The solvent extraction plant was on stream in 1972 and in 1976 a new plant was set up at Irinjalakuda to manufacture ready mixed cattle feed, which was a pioneering step. Thus the KSE Limited had given Irinjalakuda an important place in the industrial map of Kerala and showed us how to convert a waste material into national income.
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IRINJALAKUDA UNIT
The pioneering plant of KSE at Irinjalakuda is unique in many ways. It was the first solvent extraction plant in Kerala. It was the first major factory in the locality spread over 15 acres. It was hear that KSE set up its first cattle feed plant. The plant embodied the spirit of the enterprise of a group of committed people, who wanted to usher in an era of modernity into a traditional society and change the industrial landscape of the state. Naturally, today the Irinjalakuda plant enjoys of flagship states and commands an edge on infrastructural strength. Taking great strides technological development, the process of computerization in plant and office was initiated way back in 1987. Micro processers have been in using in the production line since 1989. Research and development plays an important part in the activities of the KSE, central R & D unit is located here. The plant houses a modern laboratory. The quality control cell here leads and guides other units and formulates stringent standards. The chief Nutritionist and Assistant Manager of quality control are also based here. A proud symbol of growth, the Irinjalakuda unit is an inspiring force for the entire KSE family. In 2007, company decided to install 500 TPD cattle feed production in the unit. This unit acquired ISO 9001 2000 accreditation.
SWAMINATHAPURAM UNIT
Sale of KS cattle feed in selected markets in Tamil Nadu was started as early as 1984. To enable the company to extend its products and services to whole of Tamil Nadu, a new production unit was set up at Swaminathapuram in Dindigul district of Tamil Nadu. A solvent extraction plant was started the very next year. Spread out on 22 acres of land on the banks of river Amaravathi, this Rs.3.5 crores plant works round the clock. Keyes Forte is also manufactured in this unit. A model Diary farm with high yielding animals is also maintained in the unit for conducting feeding trials and other experiments.
VEDAGIRI UNIT
The third cattle feed plant of the company with a daily production capacity of 240 MTs started operation at Vedagiri in Kottayam district, in March 1996. This Rs.6 crores project, fully financed from internal resources, was formally inaugurated on 17th August, 1996. This unit is built on a spacious area of 10 acres. Utilizing highly advanced technological features, this unit marks a new chapter in the cattle feed manufacture.
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PALAKKAD UNIT
A recent addition to the KSE family is the livestock feed plant at Palakkad. With a manufacturing capacity of 120 TPD, this plant caters predominantly to the needs of the northern districts of Kerala such as Palakkad, Malappuram and part of Calicut.
KORATTY UNIT
Company acquired land from Kinfra Small Industries Park, Koratty, Thrissur district and installed 200 TPD Solvent Extraction Plant and 100 TPD Physical Refining Plant with a capital outlay for refining vegetable oil. Solvent extracted coconut oil is refined in the plant and made edible. Commissioned Fraction Plant in March 2009.
VISION
We shall endeavor to maintain leadership through quality products, explore new avenues in product development and marketing, create a stronger bond between the management, work force, dealers and customers, contribute to social development and rural upliftment, and constantly strive for excellence in all spheres of our activities.
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MISSION
To provide maximum benefit to the dealers and to give good quality products to the customers at a fair profit. To increase the turnover and to widen their markets to all the zones etc.
OBJECTIVES
The Memorandum of Association of the company lists out altogether 38 broader objectives. Out of these, the important objectives for which the company is established as follows: 1. To produce, manufacture, extract purchase refined, prepare, import, export, sell and generally to deal in oil form seeds, oil cakes and other oil bearing materials. To carry on business of the refining and hydrogenation of oil and the manufacturing of byproducts share from and of trades connected there with. 2. To acquire correct, construct, establish, operate and maintain oil mills, extraction plants, ghee plants, workshops other works. 3. To purchase for the purpose of the business of the company, oil neutralizing, in washing, tying, bleaching, filtration and hydrogen plant, boilers, tanks, engines, electric motor shafting tin plates punch machines and other machines. 4. To plant, cultivate and purchase all kinds of food stuffs, oil seeds, vegetable and other produce of land and to sell and deal in them. 5. To make, manufacture and prepare mixtures and fertilizers to install and run bone mills and to buy, sell or trade in trade in any fertilizers and manures of kind.
GOALS
To achieve a minimum compound growth rates on sales turnover. To promote sales turnover. To provide for the optimum use of technological innovation. To enhance productivity.
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BOARD OF DIRECTORS
Board of KSE Limited consists of ten Directors out of which the Chairman and Managing Director is the Chief Executive Officer of the company. Moreover there is one executive director who is looking after the daily transactions of the company. The Board invariably meets in every month and evaluates the performance of the company. All major policy and business decisions are taken after due deliberations and with mutual consensus. A management committee with five directors as its members is functioning to assists the Board, which is regularly meeting, twice in a month, in order to review the company and proposals that are to be placed before the Board and mark recommendations there on.
1984 : The Solvent Extraction Plant capacity of Irinjalakuda increased to 80 MTs per day. 1987 : Cattle feed Plant at Irinjalakuda capacity increased to 180 MTs per day.
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1991 : Palakkad Branch started. 1994 : Keyes Forte, the new feed supplement for cattle introduced. Cattle feed production capacity at Swaminathapuram increased to 180 MTs per day. 1995 : Calicut Branch opened. 1996 : 240 TPD cattle feed Plant at Vedagiri in Kottayam District started operation. Company renamed as KSE Limited. (Formerly Kerala Solvent Extractions Limited) 1998 : Company acquired its fourth manufacturing unit at Palakkad for manufacturing Cattle feed. 1999 : A modern CHILDRENS' PARK AND INFORMATION CENTRE was Completed at Irinjalakuda for the benefit of the Public. Company introduced K.S. Deluxe Plus" the Pelleted feed in HDPE bags for Kerala Market. 2000 : Company started production and marketing of Pasteurized Milk and Milk products from Konikkara Dairy, Trichur District,Kerala and Thalayuthu Dairy, Palani Taluk, Tamil Nadu.
2002 : Cattle feed production at Irinjalakuda unit increased to 195 MTs per day. 'VESTA' Ice Cream launched. 2003 : Started production of Cattle feed in a leased plant at Edayar, Kalamassery. Cattle feed production at the Swaminathapuram unit increased to 195 MTs per day.
2004 : Acquired Land from KINFRA for starting the new project of 200 TPD Solvent Plant and 100 TPD Oil Physical Refining Plant at Kinfra Park, Koratty. ISO 9001:2008 Accreditation for Irinjalakuda.
2005 : Cattle feed Production capacity at the Irinjalakuda unit increased to 210 MTs per day. Company acquired property at Mysore. ISO 9001:2008 accreditation for Vedagiri and Swaminathapuram units.
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2006 : The 200 TPD Solvent Extraction Plant at Koratty commissioned. 100 TPD Physical Refining Plant at Koratty commissioned. Solvent Plant at Irinjalakuda dismantled. 2008 : Ice cream production unit commissioned at Thalayuthu.
2009 : Cattle Feed production capacity at Swaminathapuram increased to 200 MTs per day. Commissioned Fractionation Plant at Koratty. Commenced 500 TPD Fully State-of-the-Art German Technology Animal Feed Plant at Irinjalakuda. 2010 : Ice cream production unit at Vedagiri commissioned.
PRODUCTION UNITS
KERALA : KSE LIMITED, IRINJALAKUDA UNIT, P.B.NO.20, IRINJALAKUDA -680121, PH: 0480 2825476/2826676, FAX: 0480 2825244
KSE LIMITED, VEDAGIRI UNIT, KURUMULLUR PO, ATHIRAMPUZHA, KOTTAYAM DIST 686632, PH: 0481 2536829/2538718/2538719, FAX: 0481 2536830
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KSE LIMITED, PALAKKAD UNIT, OTHUNGODE, PALAKKAD 678020, PH: 0491 2536332/2538451/2531858
KSE LIMITED, DAIRY DIVISION, KONIKKARA, MARATHAKARA PO, THRISSUR 680320, PH: 0487 2356394/2351501/2358806
KSE LIMITED, (KINFRA UNIT), KINFRA PARK, NELUKETTU ROAD, KORATTY 680306
KSE LIMITED XXXIII/2837, PAROPADI, MERIKUNNU PO, CALICUT-3 PH: 0495 2370056/2900194
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TAMILNADU
: KSE LIMITED, SWAMINATHAPURAM UNIT, SWAMINATHAPURAM, DINDIGAL DIST - 642113, PH: 04252 252560/252561/252562/252563, FAX: 04252 252565
KSE LIMITED, DAIRY DIVISION, THALAYUTHU, DINDIGAL DIST 624618, PH: 04252 252860/252867
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CATTLE FEED
PELLET
MASH
PELLET PLUS
DELUXE
SUPREME PELLET
ORDINARY
MASH
SUPER MASH
SPECIAL MASH
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PRODUCT PROFILE
KS : One of the all-time favorites in the cattle feed.
K S Super
K S Deluxe Pellets
Jersey
Keyes Forte
: Keyes Forte is a feed supplement for cattle. It contains Vitamin A, D3, E and all. The required trace minerals at recommended quantities.
K S Supreme oil.
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Winner of S.E.A. national award and state productivity and safety. Front-ranker in mixed cattle feed production in India.
Recognition from Annual Nutrition Society for contribution in cattle feed manufacturing. Keralas first export mixed cattle feed.
3. Kerala State Productivity Council Award. 4. Top Cattle feed Award for aflatoxin free feed from the Indian Association of Veterinary Pathologists (IAVP) and Kerala Agricultural University.
5. Tamil Nadu Productivity Council Safety Award. 6. Animal Nutrition Society of India award for Companys contributions for propagation of balanced compound livestock feed in India.
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7. Industry Excellence Award from the Indian Society for the Study of Animal Reproduction for the year 2001.
SOCIAL RESPONSIBILITY
KSE Ltd is in the forefront for meeting its responsibility towards the society. KSE has contributed liberally towards the social events. 1. Construction and maintenance of a modem childrens information centre KS PARK in irinjalakkuda at the cost of Rs 80 lakhs. 2. Construction of footpath cum handrail for public at cost of Rs 10 lakhs. 3. Contribution of Kargil Fund Rs 5 lakhs. 4. Contribution to Gujarat earthquake relief fund Rs 10 lakhs. 5. Contribution to Bharatia Vidya Bhavan in Irinjalakkuda Rs 1 lakhs. 6. Contribution to St. James Hospital Rs 3 lakhs. 7. To Amala cancer centre hospital and Research Centre Trissur Rs 3 lakhs. 8. The Chief Minister relief fund Rs3 lakhs. 9. Mahatma Gandhi 10. For construction of class rooms of Unnai Warier Smarakalanilaya Rs20000 11. To St Joseph Collage for women Rs 80000 12. For construction of blood bank attached to the Government Taluk Hospital Rs 25000
INDUSTRIAL RELATION
The company has 926 employees in its roll on 31.3.2011. the company is an expectation to the advise labor conditions existing in Kerala. During its working of 39 years, the company had lost few man-days by labor unrest. However, during the year under review, the Vedagiri unit was under lock out from 30.09.2010- 14.02.2011. Section of the employees of that unit resorted to slowing down of production to pass their demand for an interim hike in their remuneration during the validity field of settlement and management was forced to declare the lock out. After several round of negotiation, the management arrived at a settlement with the employees on their agreeing to drop their demands and the lock out was lifted. During the lockout period management had made alternate arrangements to ensure regular supply to the dealers and the performance of the company had in no way affected. There were no labor issues of serious nature in any other unit of the company. The management continues to maintain cordial industrial relation with its employees in all Units and is attending to their grievances with an open mind.
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ORGANISATION STRUCTURE
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CHIEF
MARKETING
MANAGER
CHIEF
NUTRITIONIST
CHIEF
PERSONNEL
WORKS MANAGER
FINANCE MANAGER
EXECUTIVE
SALES
EXECUTIVE PURCHASE
PERSONNEL OFFICER
SENIOR CHEMIST
JUNIOR
OFFICER
OFFICE ASSISTANT
RK CLERK
SENIOR ASSISTANT
OFFICE ASSISTANT
SENIOR
ASSISTANT
EXECUTIVE (PRODUCTION )
CLERK
OPERATOR
BOILER
OPERATOR
ELECTRICIANS
GODOWN ASSISTANT
WORKER S
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DEPARTMENT ANALYSIS
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Department Structure
PERSONNEL OFFICER
OFFICE ASSISTANT
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1. Recruitment
Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organization. This is made on the base of personal interview. Only qualified candidates are selected. Final selection is done by the head office.
2. Pay Fixation
It is based on the job analysis, conduct of salary survey, group similar jobs into pay grades, price each pay grade and wage administration rules.
3. Promotion
Advancement within an organization is ordinarily labeled as promotion. It refers to the advancement on an employee to a better job. Promotion is a mean of filling up vacancies which occur in any organization from time to time. Promotion is given on the basis of: Seniority Performance Additional Qualification
There is an understanding between the workers and the management that promotions will be made on the basis of ability and seniority.
4. Welfare
Labour welfare means anything done for the comfort and improvement intellectual or social, of the employees over and above the wages paid which is not necessary for the industry. KSE gives first priority to the welfare of the employees. Statutory and non-statutory benefits are provided.
5. Performance Appraisal
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Performance appraisal is the systematic, periodic and an impartial rating of an employee, excellence in matters pertaining to his present job and his potential for a better job. It is done to ensure the efficiency of workers.
6. Statutory Requirement
Factory license and boiler license renewed every year. Punchayathu tax and building tax, company tax, individual employee tax, etc. are paid. Diesel license and environmentally acceptable licenses are renewed every two years.
WELFARE ACTIVITIES
Labour welfare activities of KSE Ltd ensure a peaceful and friendly atmosphere in the workplace. Labour welfare is a matter of first priority to the management. The firm provides sanitation, periodical medical checkup and recreational facilities to the employees .Firm provides both statutory and non-statutory benefit.
Statutory Benefits
ESI and per ESI Act 1948. Gratuity as per payment of gratuity Act 1972. Employees Deposit Linked Insurance. Contribution to Kerala Labour Welfare Fund. P.F
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Employee Welfare Fund All employees of the firm contribute a fixed monthly amount to the fund. The fund is administrated by a committee nominated by the management and the employees.
Terminal Fund Death Fund Disablement fund Medical benefit Cash award for children Loan for marriage of children Loan for house hold items.
Annual Gift
Firm give annual gift to all employees. Same amount is given to all from the General Manager to Lowest paid workers.
Ex-Gratia Payment One month salary is granted as Exgratia in connection with marriage of employees and if an employee dies in service. Leave and Travel Allowance It is given every year.
Conveyance allowance
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Shift Allowance The second and third shift employees are provided with shift allowance .
Washing Allowance It is provided to all employees with uniforms. Group Insurance It is introduced recently in the firm. All employees are provided with group insurance of LIC. Leave Allowance 13 days declared as holiday in a year.
Trade Unions
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PURCHASE DEPARTMENT
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PURCHASE EXECUTIVE
SENIOR ASSISTANT
OFFICE ASSISTANT
The purchase department consists of purchase committee, which in turn is comprised of management officials. Purchases are normally done from reliable suppliers.
PURCHASE PROCEDURES
1. Purchase Requisition: It is a document through which the user department requests the purchase manager to arrange for purchasing the material required. Each department head prepares the purchase requisition and send it to the purchase manger on receipt of purchase requisition report. The purchase manager will make necessary steps for purchasing material that has been mentioned in the purchase requisition. 2. Plans are made by the purchase department about what to purchase, how to purchase, when to purchase and so on.
3. Purchase manager does not invite quotation for the supply of materials from different suppliers. Orders are placed through telephonic orders. Normally the orders are made in bulk quantity. Maximum Economic Ordering Quantity is 250 tons per order. 4. The purchase committee selects the supplier after evaluation. The purchase manager then discuss with the supplier about rate, quality, requirements, quantity, delivery time and packaging. Then both parties agree that they will enter in to purchase contract according to supply and payment.
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5. Making of purchase contract: Six copies of the purchase contract will be prepared and it is signed by Chief Purchase Manager and Chief General/Finance Manager. The company will send two copies of purchase contract to the supplier, one copy to the purchase department, one copy to the finance department, one copy to the stores department and the last one will keep it in their running file. The supplier will send back one copy as a token of confirmation. A purchase contract will contain the details such as, the name of the material, quantity to be supplied, agreed rate, quality specification, time in which it is to be supplied (delivery date), place of delivery, rate whether inclusive of tax, packing of material, mode of transportation, option if the material is not supplied on due date and mode of payment. Generally, 90 per cent of the payment will be made in the next day. In case the delivery is not made on due date, this 10 per cent will be adjusted. 6. Receiving and inspection of material: When the material arrives, the drivers have to report at the gate. The guards will inform it to the purchase department who will give permission to enter into the company.
Before taking the material to the godown, the total weight of the truck containing the materials will be calculated. This weight involves the weights of truck, materials, and packing of material. Later after unloading of material, the weight of the truck, gross weight (actual weight of material and its packing) and net weight (weight of materials only) will also be calculated. At the time of unloading the material, actual samples of it will be taken and send to the Lab another packet will be kept a check sample. The Material Received Report (MRR) will be prepared and send it to the purchase department. Full payment for the materials received will be given only after getting the lab results. The rebate will be deducted if there is any non-fulfillment of the conditions of the contract. If there is any dispute regarding the quality of the material, the company will send half of the check samples to the supplier who will send the second half of the check sample to an independent lab for re-test. Nearest results average will be taken for settlement.
MAINTANANCE OF STOCK
Materials purchased are required to be delivered at the Vedagiri unit. Specifications of the materials required are communicated to the supplier who supplies the materials as per specifications. The load of materials entering the factory will be registered at the factory gate. The load is then sending to the store where the store officials check the materials for visual defects through sample test. Once the store officials verified the load, it will be unloaded and each material will be stocked separately in its lot and stored in a pattern. Then raw material samples will send to the company late for content analysis. If the quality of the materials is found inappropriate, then adjustments in the price will be made in the final settlement. Maximum storage capacity of the store is 7500 tons. The company maintains a minimum stock level of 15 days a minimum of one and a half months.
MATERIAL HANDLING
Once the material requisition report is made, the material is accepted and receipt is forwarded to the accounts department. The load number is specified in the MRR. Factory item is stored as per specified act and each issue is recorded. Issue of material is done L.I.F.O basis. Hence stock can be verified easily whenever required.
FORMS USED
Forms used in the purchase department are ; 1. PURCHASE CONTRACT 2. MATERIAL RECEIVED REPORT (MRR)
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1. PURCHASE CONTRACT
This contains information regarding the name of the dealer, order number, date, name of the material, quantity required and rate. It also contains specific information regarding quality duties, packaging, and mode of delivery, place of delivery, delivery rate and payment schedule. Chief purchase manager of general manager will sign this report. Copies of this document are prepared too are send to the supplier out of which one will be send back by the supplier as confirmation, on copy is send to finance department, one to godown, one is kept in the running file.
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PRODUCTION DEPARTMENT
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ENGINEER
SENIOR SHIFT
SUPERVISOR
TECHNICAL STAFF
WORKERS
Production is the process of conversion of inputs into outputs. It involves certain heavy machineries and some complicated process to convert raw materials into finished products. Cattle feed production is based on the formula given by the nutritionist. The formula will change according to the availability and the price of raw materials. The important raw materials used for this purpose are coconut oil cake, cotton seed cake, maize, rice, wheat bran, etc. and nutrients.
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Batch Grinding
Batch Mixing
Molasses Mixing
Palletizing
Bagging
Quality Check
Despatch
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1. Raw Material feeding : Various raw materials to be taken for production are listed in the raw material feeding report on a day to day basis and fed to the conveyors. The materials fed are taken to the top floor through the coveyor. 2. Raw Material Weighing : The raw material is weighted in the weigh hopper as per the formulate given by the Chief Nutritionist. For each recipe, separate formulae are entered in the computer. 3. Batch Grinding : The batch which is weighed in the weigh hopper is taken for grinding in hammer mills, where required sleeves are used to ensure adequate particle size for the ground material. 4. Batch Mixing : The material ground in the hammer mill is taken to the ribbon type batch mixer for predetermined time to ensure homogeneous mixing. The minor ingredients are directly added to the mixer. 5. Molasses Mixing : The required molasses added to the batch and mixed in molasses mixer. 6. Palletizing : The food that is mixed with the molasses is passed through the pellet mill feeder conditioner where required quantity of steam is added. It is then passed through the pellet mill where pellet are produced. The hot pellets are cooled in cooler and then bagged. 7. Bagging : After completion of production, bagging is done and appropriate identification is done with respect to the date and shift of production.
OPERATION
The whole operation is automatic which is programmed to the computer placed at the plant operators room. After feeding of raw materials to the hopper, the computer automatically takes the amount of raw material needed for the batch as per the chief nutritionist formulae. The bagging is also done automatically. The plant operator is responsible for the change in the percentage of raw material in the batch. The raw materials are fed to hopper which itself is a weighing machine. It allows only the appropriate amount of raw material to enter the production.
PRODUCTION PLANT
In KSE Vedagiri unit, production take place in the cattle feed plant.
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MMCP TECHNOLOGY
It involves mixing, milling, cooking and pelleting.
MILLING
This is being used for ensuring that all the granules are grinded, screened three mm sieve. The materials feed in to the grinder and powdered as it passes. Through the screen provided at the bottom side of grinding chamber. Two hammer mills are used.
MIXING
The raw material will mixed thoroughly by using a horizontal mixer.
COOKING
The steam for cooking is produced using a boiler. The mixer carries 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 saturated steam.
PELLETING
The pellet mill die by rotating drags the mixture of mash and steam towards the roller, which press it and consequently compel it to pass through the hole of the die. It increases the density of the mixture, which together with heat generated by the saturated steam facilities the extraction of the pellet.
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MARKETING DEPARTMENT
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MARKETING DEPARTMENT
Department Structure
SA;ES EXECUTIVE
OFFOCE ASSISTANT
CLERK
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Functions
Marketing Department of the company concentrates on building long term relationship with the customers, dealers, distributors and suppliers. The company also undertakes sales promotion works. Marketing department mainly concentrate on consumer promotion and dealers promotion. In this company the departments by Marketing Manager and under him there are 2 Assistant Manager. One for sales Dispatch other for Customer service and Sales promotion. The company sells its products only through the dealers, No direct sales are allowed. The company has around 500 dealers. It delivers goods at their shop unloading changes; rent etc will not bear by the company.
Sales Procedure
1. Dealers can use own or rented vehicle 2. Vehicle is weighted before going to godown 3. After weighting it is loaded with required quantity 4. Vehicle is then weighed with load 5. Weight of products is verified 6. Bill clearance done
Training
Training for KS sales persons was conducted from 2001. According to the training session the main objectives of sales management were a) Sales volume b) Contribution to growth c) Continuing growth
Cattle Shows
Company sponsors cattle shows conducted by milk society, dairy departments etc. Cattle shows neither help the company to reach many prospects nor reached their sales force.
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Pricing
The pricing of KSE is flexible. Pricing of the product varies according to the cost of raw materials. During 1998 the company was forced to increase the price of their product. But when the price of row materials lowered, the company decided share it with the customer. As a result there was a reduction of Rs 13-18 per pack. According to Kerala General Sales tax a 15% additional sales tax was imposed. So price were renewed from 23rd August 2006.
Dealers Promotion
It carried out by providing dealers with a) Banners b) Purchase- pointers c) Dealers commission is granted at the rate of 10%
Marketing segmentation
Since the final consumer of cattle feed is cattle, market segmentation is done, on the basis of milk production of cattle is segmented as 1. Dry animals with no milk 2. Animal yielding milk 5 liters 3. Animal yielding milk between 5-10 litters 4. Animal yielding milk more than 10 litters
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DEALERSHIP CHART
Company
Authorized dealers
Sub dealers
Wholesalers
Retailers
Retailers
Wholesalers
Customers
Customers
Retailers
Customers
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FINANCE DEPARTMENT
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FINANCE DEPARTMENT
Department Structure
OFFICE ASSISTANTS
CLERKS
The main function of Finance department is to have overall control over both inflow and outflow of the financial resources. The finance department is divided into different sectors. The authorized share capital of the company is Rs 10crore and issues and subscribed capital is Rs3.2crore. The par value of 1 equity share capital is Rs 10. The company issued 6000 bonds 5% redeemable cumulative per share of Rs 100 each. The redeemable of this allotment. The company went in for public issue of shares in 1994. Company shares listed at stock exchange at Cochin, Chennai, and Mumbai. The present market value of the company share is Rs 200. The reserves and surplus us on 31 st march2012 is Rs . The company paid a dividend of Rs for the year 2011. Financial accepts fixed deposits from the public at the rate of 15%PA. The company keeps books as purchase day book, sales day book, cash and bank book.
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Major Applications
Computers are used for accounting and technical aspects of account such as; Inventory control Production Planning and Control Purchase Accounting Budgetary control and standard costing Machine capacity utilization Quality control Input/output Analysis Market research Management Information System
Source of Finance
Long term Finance, Medium term Finance and short term Finance is considered as source of finance. Source of long term finance are Shares Debentures Internal finance Public deposits Industrial financial institution Industrial banks
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Capital Structure
It consists of both owned capital and borrowed capital. Owned capital consist of funds brought in by owners, borrowed capital consist of shares debentures and loans.
Financial policies
Accounts in KSE Ltd are prepared under historical cost convention on accrual basis unless otherwise specially stated in notes to account
1. Fixed Asset
Asset put to use have been stated at cost less depreciation. Asset not put to use have been stated at cost
2. Depreciation:
Depreciation on fixed assets have been provided on written down value method at the rate prescribed in the company Act 1956,
3. Investments Investments as at the aloes of the year are valued at loses cost as net realizable Value.
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The accruing liability towards the gratuity of employees in covered by the group gratuity assures in scheme is charged to Profit and Loss account. Gratuity in respect of whole time directors is provided for or gross whole time directors is provided for on gross basis for on charged to P&L account
6 Sales:
Sales are stated gross of excise duty as well as net of excise duty and are stated exclusive of VAT/ sale tax
7 Claims:
Claims are accounted for as fund where finally determined/ settled.
8 Grants:
Grant/ subsidies received specially related to capital assets, are credited to the carrying cost of the respective assets other. Subsidies received are credited to capital reserve .
9 Inventories:
Inventories as at cost of the year are valued at lower cost or net realizable value. Cost includes cost of purchase, conversion and other cost, as the case may be, incurred in brings the Inventories to their location/ condition, determine on the following methods. a) Raw materials b) Packing materials c) Stores and spare and consumables cost : FIFO : FIFO
: At weighted average
Borrowing cost:
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Borrowing cost that are attributed to the acquisition or construction or production qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one of that necessarily takes substantial period of the fine to get ready intended use. All other borrowing costs are charged to revenue.
Tax on income:
Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is the required on timing difference, being difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods where there is un absorbed depreciation or carry forward losses deferred tax assets are recognized only if there virtual certainty of realization of such assets. Other deferred tax assets are recognized only to the extent to there is reasonable certainty or realization in future.
Segment reporting:
The companys primary segments (business segments) have identified as the a) Animal Feed Division b) Oil Lake Processing division c) Diary Division Compressing Milk and Milk Products Industry Ice Cream.
There no reportable geographical segments. Segments revenue, segment results, segment assets and segment liability include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable allocated to any of the business segment, are shown as unallocated expenditure. Assets and liabilities that cannot be allocated between the segments are shown as part of unallocated assets and liabilities
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respectively. Later segment transfer of processed material is accounted considering the estimated reliable value of such goods.
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 127 lakhs as on 31.03.2011 excluding the value of land already owned by the company
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The success of a company depends upon the quality of its product. Quality is the totality. Quality is the totality of features and characteristics of a product and service that bear on its ability to satisfy stated or implied needs. Total quality is the key to value creation and customer satisfaction. The quality control department has to play an important role in the success of a company through innovating quality product. It aims at total quality control. It begins right from the purchase of raw materials to after sales quality check. Uncompromising quality is the main feature of KSE. It is with which the company maintains its reputation. The quality control department ensures the quality of cattle feeds through testing the products at different stages. Statistical sampling techniques are applied for quality control tests. The quality control tests include the raw materials inspection, in process inspection, finished products inspection and finally after sales quality control.
Department Structure
CHIEF NUTRITIONIST
SENIOR CHEMIST
JUNIOR CHEMIST
ATTENDERS
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2. Product Quality
It involves a) Calcium content verification. b) Chlorine content verification
Volumetric test is used. Product quality verification is done at 3 shifts by taking samples and checking it at the lab. Then it is pat before the medical officer for approval.
Training:
Quality control personnel regularly undergo in service training at courses conducted at control food Training and Research Institute (CFTRI), RRL, NDRI & other national research organizations including various veterinary colleges in the southern states.
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SWOT ANALYSIS
Strength
Vast experience of 36 years in the cattle feed and solvent extraction industry. KSE has survived many ups and downs in the industry
KSE is the Market leader in the cattle feed segment KSE has won many awards and recognitions because of its outstanding quality of products which give them an edge when comparing to others companies.
KSE has a Huge network of product dealers because of this the company need not spent muc n the marketing.
Weakness
Labour unrest from 10 Feb 09 to 25 Mar 09 in KSE's Swaminathapuram unit caused a rift between the workers and the management
KSE is finding it difficult to procure coconut oil cake domestically and has rely on imports. Further the depreciation of the Indian Rupee against US Dollar is pushing up KSE's import costs
Promotional activities are limited High price row materials High cost of production
Opportunity
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With the VAT removed on sale of cattle feed, de-oiled cakes and coconut oil, KSE's products are competitively priced KSE is in process of establishing ice-cream production units near identified potential markets. This will expand its sales
Threat
Cutthroat competition from the unorganised sector who have comparitively less labour overhead costs
Stagnant growth in cattle population might slower growth prospects of the cattle feed industry
Crop rotation by farmers, since oil seeds and grains are raw materials for KSE Import of cheaper oils for industrial consumption leading to a fall in demand for solvent extracted coconut oil
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Findings
We have found many things in KSE they are as follows:
The company has huge market demand for its product. Because company has created a goodwill among customer over years. Company has faced many they problems over the years and they have been successfully running. Because of its good administration department. Company has always tried to maintain a good employer-employee relation by providing good working condition. While other companies have put lots f money in marketing their products KSE has limited marketing. But they have a huge demand for their products Even though they are running 365 days but they still cant satisfy the demands of the customers. In olden days their demand has been highly seasonal but now it have change. They are manufacturing milk and ice cream but due to unavailable of raw material they have been limited their market of those products. Their products price is little higher when compare to competitors but they still have demand because f its supreme quality of those products.
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SUGGESTIONS
Gather more raw materials from domestic territory. It reduce the cost of raw material and transportation. Introduce direct marketing with customer so that it helps customers to buy goods at low cost KSE can think of establishing human relation development for dealing with all aspects related to its employees
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Conclusion
KSE ltd Company has been running successfully over years. They have seen many up and down in market still they have become successfully. The reason behind it is the management and the workers jointly work together for the good will and for the profit of the company at times it needed most. Most of all they have given only good quality products to the costumers according to the needs of the customers. Perhaps this is the real reason for the companys success.
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Bibliography
Kotler Philip, Marketing Management Eleventh edition, prentice Hall of India Pvt Ltd, 2005. Annual report of KSE Ltd. Principles of mgt www.kselimited.com http://www.fao.org/DOCREP/Article/AGRIPA/X9500E01.htm http://stason.org/TULARC/science-engineering/chemistry/24-1-What-is-SolventExtraction.html
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