NITTA GELATIN INDIA LIMITED

KAKKANAD
Organization Study Report submitted in partial fulfillment of the
requirements for the MBA (Full time) Degree of the Mahatma
Gandhi University

Submitted by

JEENA GEORGE

1702270015

2017-2019

ALBERTIAN INSTITUTE OF MANAGEMENT

A UNIT OF ST. ALBERT’S COLLEGE (AUTONOMOUS)

Banerji road, Cochin – 682018

May 2018
 ACKNOWLEDGEMENT

I bow my head before God Almighty whose blessings and grace guided me
throughout the project. My deep sense of gratitude to our beloved Dean [Link] Jos
Fernandez, for his support and encouragement. I extend my whole hearted thanks
to my external guide Mr. Vimal Kumar (Sr. officer HR department), for the
commendable inspiring guidance, motivation and all the help given to me to
succeed in my endeavors. I express my sincere thanks to my internal guide Dr.
Shiny C M, Assistant Professor, Albertian Institute of Management and all the
faculty members and technical staff for their support and encouragement for
completion of this project, and finally I sincerely thank my beloved family and
friends and all the well-wishers for their prayers and support, which helped me in
completing this project successfully.

JEENA GEORGE
 DECLARATION

I hereby declare that the Organization Study Report entitled Nitta Gelatin India
LTD is a record of bona-fide work done by me in Nitta Gelatin India Limited,
Kakkanad, Kerala during 1st May to 31st under the supervision of Mr. Vimal
Kumar Chandran [Link] , HR Department and [Link] C.M Asst.
Professor, Albertian Institute of Management, and that no part of this report has
formed the basis for award of any degree, diploma, associate ship, fellowship or
any other similar title or recognition in any other institution.

Place: Ernakulam
Date Name: Jeena George
TABLE OF CONTENTS
LIST OF ABBREVATIONS
 BOD : BOARD OF DIRECTORS
 MD : MANAGING DIRECTOR
 DGM: DEPUTY GENERAL MANAGER
 GM : GENERAL MANAGER
 AM : ASSISTANT MANAGER
 QC : QUALITY CONTROL
 CES :CENTRAL ENGINEERING SERVICE
 DM :DEPUTY MANAGER
 CHAPTER- 1
INTRODUCTION

1.1 INTRODUCTION
 The organizational study was conducted in Nitta Gelatin India ltd,
Kakkanad. As a part of MBA course this organizational study helps to know
about the organizational activities and various functions of the different
department. The organizational study was mainly conducted for knowing the
particular organization and also for getting amble information about the
activities of each department.
Nitta Gelatin India (NGIL) incorporated in 1975, is one of the most
successful Indo-Japanese industrial ventures. It started commercial
production in 1979. The company was jointly promoted by the Kerala State
Industrial Development Corporation Limited with Nitta Gelatin Inc. Japan
and Mitsubishi Corporation Japan.
NGIL is the market leader in the production of premium Di Calcium
Phosphate (DCP). With almost thirty years of expertise, NGIL produces and
supplies premium quality DCP to major poultry farms and animal feed
manufactures in India. NGIL combines the best technology, marketing
expertise, and most importantly, dedicated human resource. All of which go
a long way to ensure their customer‘s absolute quality. It is this simple
realization that urged them on across the last three decades to focus solely on
quality. Perhaps it is this preoccupation with quality that won them rich
dividends awards for quality and performance, discerning clients across the
world and a steady growth rate.

1.2 OBJECTIVES OF ORGANIZATION STUDY

Primary Objective
  To get familiarized with the different departments in the organization and
their functioning.

Secondary Objectives

 To understand how key business processes are carried out in NGIL

 To understand the functioning of each department and management of the
organization, and also about the employer-employee relationship.
 To conduct SWOT analysis and make inference.

1.3 SCOPE AND METHODOLOGY OF THE STUDY

SCOPE
This project aims at generating a practical awareness of the functions and
management of the company NGIL. The study covers a general understanding of
the organization, its culture, departments, and its business activities. This
Organization study is useful in getting the quality and performance of the
company. It will help to conduct a detailed study on the structure of the functional
areas of the organization. It helps to find out the area in which the organization has
to improve. This study helps to familiarize with the gelatin and ossein industry and
also ascertain the present position of the company. It helps to know the market
position of the organization and also how a company working successfully in such
a competitive scenario.

METHODOLOGY

Methodology means, it’s a systematic way of doing a research, it explains how

various information about the organization was collected. In this study, the
research design used is descriptive and the methodologies used to collect the
primary data are discussion and observation.

Primary data
Primary data collected through observation, personal interview and discussion with
managers and employees of the various departments of the organization.

Secondary data

These secondary data obtained from the official documents of the organization
such as annual reports, records and other department manuals, memorandum of
settlement. Good amount of information will also obtain through the website of the
company and other related sites.

1.4 LIMITATIONS

 The method used for collection mainly provides qualitative data, and there
for may lack precision.
 As the organization is facing various allegations from the external
environment some data and documents are considered confidential and are
not available.
 Difficulty in meeting with all the Top-level officials.
 CHAPTER – 2
INDUSTRIAL PROFILE

2.1 INDUSTRY PROFILE

The global market for Gelatin is projected to exceed 480 thousand metric
tons by 2022, driven by myriad applications in food. Pharmaceutical, and
nutritional solution: supported by its excellent properties and functionalities. Use
of gelatin in the manufacture of hard-shelled capsules will benefit significantly
from the growing demand for medicines and the resulting spurt in drug
manufacturing activity. Strong consumer interest in micro nutrition and the ensuing
rise in consumption of multivitamins and supplements including gelatin
supplements which are rich in essential amino acids will continue to push the value
of gelatin in the nutraceuticals industry. Europe represents the largest market
worldwide. Asia-Pacific is forecast to spearhead future growth with the fastest
CAGR of 5% over the analysis period led by factors such as growing population
and robust food production where gelatin is used widely as a gelling agent;
growing spending on appearance maintenance products among the expanding base
of affluent middle class population and the resulting increase in the use of gelatin
in cosmetic formulations; and rising prevalence of osteoarthritis and a parallel
increase in the consumption of gelatin supplements.

2.2 Global Scenario

Global Gelatin market size was 412 thousand MT in 2015 and is expected to
grow at a CAGR of 3.8% p.a. The worldwide production amount of gelatin is
about 300000 tons per year, roughly 660 million lb. The increasing application of
the product in food & beverage and pharmaceutical applications on account of
exhibiting excellent stabilizing characteristics and good binding features is
expected to remain a favorable factor for growth over the forecast period.

The increasing health care spending together with growing demand from
various end use applications is expected to drive the Gelatin market growth. The
market is characterized by high demand from food processing and pharmaceutical
industries. Application growth of pharmaceutical products including tablets and
capsules in emerging markets of China and India owing regulatory support
intended for promoting investments in the healthcare sector is expected to increase
the demand for stabilizing agent. Gelatin also finds use as thickening agents in the
photographic industry.

Gelatin is derived from collagen which is obtained from various animal

sources including pig skin, bovine hides, cattle bones and fish. This type of animal
collagen helps to swallow tablets and capsules easily.

The product is majorly used as a gelling agent in numerous applications

including food & beverage, nutraceuticals, healthcare, personal care, and
photography. Increasing demand for convenience foods in emerging economies
including China, India, and Middle East countries is expected to promote the usage
of the product as a functional ingredient in confectionaries.

Food & beverage was the largest application, accounting for 29.0°o of
the global volume in 2016. The ingredient is used in sports drinks on account of
needed to repair damaged structures and muscle tissue by accelerating recovery via
transporting oxygen & other nutrients. Pharmaceutical applications consumed 85.6
kilo tons of the ingredient in 2016.

Increasing usage 0f hydrocolloids in the pharmaceutical industry on account

of excellent solubility is expected to promote the usage of gelatin over the next
eight years. Gelatin is also used in the production of broad range of
pharmaceuticals including wound dressings, blood| volume substitutes and
homeostatic sponges. Development of the pharmaceutical industry in the U.S. and
Canada in light of increasing expenditure for incorporation of latest technologies is
expected to have a substantial impact.
 Over the past few years, polysaccharides are being increasingly used as an
important constituent in healthcare and food & beverage applications on account of
providing excellent hydrolyzing enzymatic properties. Therefore, industry presence
of polysaccharide is expected to pose a substitutional threat to gelatin market over
the next eight years. Collagen Peptide market size is valued at more than USD 0.75
billion in 2015 and is likely to be worth around USD 1.25 billion by 2023.
Applications of Collagen Peptide can be segmented into cosmetics, food
and beverages, nutraceuticals, healthcare and pharmaceuticals. With a steady
demand for poultry products, the demand for Di Calcium Phosphate is also
expected to be stable. Increasing awareness towards microencapsulation in the
broad range of applications including food & beverage and healthcare is expected
to open new markets over the next eight years.

Global Players

At present, there are around 25-30 manufactures of gelatin across the world, out of
which, Gelita AG(Formerly DGF stores), Rousselot SAS,PB gelatin Steriling,
Weishardt Group and Nitta Gelatin are the key manufactures .

Key industry participants globally include

 Rousselot SAS,
 Eastern Gelatin corporation, USA
 Nitta Gelatin Inc. Japan
 Nitta Gelatin, Canada Inc.
 CatalentPharma Solutions,
 Gelita AG,
 Weishardt Group
 PB Gelatin (Tessenderlo Group),
 Sterling Biotech Ltd

2.3 Indian Scenario

At present there are top 5 gelatin industrial companies which will

alone account for 62% of the total gelatin production. Around Rs500 cr
domestic gelatin capsule industry is expected to witness a sustained demand
in the next 5-6 years. Indian pharmaceutical companies have grown
simultaneously with the local capsule manufacturers. India which has an
advantage of producing the cheapest gelatin in the world could attract global
players to mark their presence in Indian market. The Indian market is
growing at rate of more than 50% p.a as compared to the global average of
2-3%.
India can opt for manufacturing hard gelatin capsules for import
substitution. Soft capsules are used for medicine in oil or paste form and
hard ones are used for other drugs. Herbal or nutraceutical drug
manufacturers are opting for plant based cellulose capsules. As such there
will be good demand for gelatin in India. Some of the India’s leading players
include. Some of the leading players include ACG Worldwide, Bharathi
Healthcare, Medi Caps, Sunil Sync hem. Companies like Sterling biotech
and Kerala Chemicals and Proteins are in to the manufacture of gelatin used
in making the capsule. The leading manufacturers in India are
  NGIL cochin Kerala
 Sterling , Baroda Gujarath
 Sterling Ooty Tamil Nadu
 RaymonBaroda, Gujarat
 IGCL -Vapi,Gujarat
 NarmadaJabalpur, MP

Analysis of remote external environment

The external environmental factors that affect the company’s business could be
analyzed using PESTEL analysis. This analysis is one important tool that
executives can rely to organize factors within the general environment and to
identify how these factors influence this organization.

 Political environment.
While looking at the political environment of the company, sometimes there
is political disturbance. The company had faced strikes or look outs by the
political parties. Group of unions who take voluntary separation form NGIL
action council with support from some local politicians alleging pollution.

 Economic environment.
The company raises its fund through issuing share. The salaries and other
benefits are paid by the company. The company has a better financial and
economic position due to its increasing demand for the products and
growing gelatin industry worldwide. The major part of revenue of the
company is from exports.

 Social environment.
The company initially doesn’t had a good reputation from the public due to
the pollution related problem. Later the company created a good image by
 its better environment management projects, corporate social activities and
providing employment opportunities to the public.

 Technological environment
The technology for the manufacture of Ossein, Di calcium Phosphate,
Limed Ossein, Gelatin and Collagen Peptide transferred by the overseas
collaborators has been fully absorbed and improved upon over the years.
The Company is making continuous efforts for further improving
technology to economies on consumption of utilities and improving product
quality and productivity. The company continues to be under a Technical
Assistance Agreement with the overseas collaborator, NGI, Japan whereby
it can avail the services of trained experts in Nitta Group in any desired area
of Gelatin / Peptide production and also that any noteworthy developments
in the area of any of the products at NGI, Japan or its associates shall be
shared with the company. The Company is investing substantially for
environment improvement projects at all its production.

 Environment
The company initially faced the problem of improper waste disposal; later
the company has mobilized Rs15.80 crore through issue of share to enhance
the infrastructure for environment management. Now the company has odor
control and management facility with two bio filters and spraying of
effective microorganisms’ solution and potential odor generating are at
periodic intervals to eliminate smell from generating points.

 Anaerobic Digester for generating biogas from the effluent which

is again used as fuel with an investment of 12.30 lakhs.
 Diffused air floatation system (DAF) system for primary treatment:
Installed two DAFs for removing suspended oil, grease from waste
 stream by the use of air bubble floatation at an investment of 100
lakhs.
 Sludge drier: To reduce the sludge quantity from 25 MT to 10 MT
per day with an investment of 500 lakhs.
 Ambient Air Quality Monitor Station to check the variations in
the air.
 Legal environment.
Legal system for business in India is very flexible. The legal segment
centers on how the courts influence business activity. Examples of
important legal factors include employment laws, health and safety
regulations, discrimination laws and labor law. The company has got its
own unique technique in manufacturing products. The company follows all
the statutory requirements under company’s act.
2.4 Kerala Scenario
The market analysis based on key regions and finds that Europe currently
represents the biggest producer of gelatin followed by North America, Asia and
South America. Based on the global import and export data, the report finds that
the United States is currently the largest importer of Gelatin and its derivatives
followed by Germany, Japan, United Kingdom and Canada. On the other hand,
Brazil is the world's largest exporter of Gelatin and its derivatives. Other major
exporters include Germany, France, United States and Belgium.Eur0pe was the
largest market, accounting for 41.2% of the global revenue in 2015. Increasing
awareness towards incorporation of nutritional ingredients in food & beverage
industry, particularly in developed economies including Germany, UK, and France,
is expected to have a high impact on the market. Also, the presence of a robust
pharmaceutical manufacturing base in Germany, UK and Belgium is supposed to
remain a favorable factor. Asia Pacific is projected to witness the fastest growth at
a CAGR of 6.0% from 2016 to 2024, in terms of volume, over the next eight years.
Positive outlook towards the healthcare sector in Thailand and Malaysia in light of
increment in sales volume of pharmaceuticals is expected to promote the usage of
gelatin in the near future. The increasing importance of emulsifying property in
food & beverage industry of major markets of Germany, UK, and France is
expected to promote the usage of gelatin as a gelling agent over the next eight
years. The market is projected to witness growth at a CAGR of 6.7% from
2016 to 2024, in terms of revenue.

Application growth of pharmaceutical products including tablets and capsules in

emerging markets of China and India owing regulatory support intended for
promoting investments in the healthcare sector is expected to increase the demand
for stabilizing agent. Gelatin also finds use as thickening agents in the
photographic industry.

Products and its application

The main products manufactured by NGIL are as follows:

Gelatin: Gelatin is the fibrous insoluble protein which forms around one third of
the body’s mass. Gelatin is a translucent, colorless, brittle nearly tasteless solid
substance derived from the collagen inside animal bones and skin. For application
in pharmaceutical industry and as food ingredients. Pharmaceuticals grade gelatin
is used to manufacture hard and soft capsules. Gelatin is an inevitable factor in the
life of humans today.
Gelatin is a product used by many industries:

1. Food industry
Gelatin used in food industry is probably the best recognized in gelatin
deserts and confectionery applications such as marshmallows and gummy
candies. It is also used as a binding and or glazing agent in meat and aspics.
2. Pharmaceutical and Health industry
In the pharmaceutical and health industry, gelatin is used to make the shells
of soft and hard capsules, tablets, granulation, suppositories, Plasma
substitute for medicines, Dietary and health supplements, syrups etc. It is
highly digestible and serves as a natural protective coating for medicines.

3. Photography
Gelatin dry-plate process, photographic process in which gelatin is used as
the dispersing vehicle for the light-sensitive silver salts. The chemical
treatment necessitated the presence of a darkroom wherever a photograph
was to be made. The development of a process in which a sensitized gelatin
emulsion could be dried on the plate and stored, protected from light, for
months before use revolutionized the world of photography.

4. Nutraceuticals
The use of gelatin in the nutraceutical industry is widespread. Gelatin not
only serves as a recipient, but also an excellent and economical source of
multiple amino acids. Gelatin is the foundation of many nutritional and
arthritis/joint care formula.

5. Cosmeceuticals
Gelatin has been used for many years in the cosmetics industry as
“hydrolyzed animal protein” in shampoos, conditioners, lipsticks, and
 fingernail formulas. Recently additional uses for gelatin are being found as
collagen source in topical creams and other value added cosmetic products.

Ossein: ossein is used for manufacture of gelatin

Di Calcium Phosphate (DCP): For poultry feed substitute

Collagen Peptide: for application in healthcare. Personal care and food

 Gelixer is brand name used for consumer markets (B2C)

 Cartipep is a doctor prescribed brand
 Wellnex is brand name used for business markets (B2B)

Nutrigold: Plant growth promoter for agriculture use developed by Tamil Nadu
agriculturalUniversity tiom company‘s gelatin extraction residue.

Chitosan: For applications in agriculture, water treatment and varied industrial

uses.
Haemaccel: Blood Plasma Expanders (made from company‘s Low Endotoxin
Gelatin), are used in medical emergencies to save lives. Our Gelatin is the cardinal
ingredient in this product. Haemaccel is a plasma substitute for volume
replacement used to correct or avert circulatory insufficiency due to plasma/ blood
volume deficiency, either absolute (e.g. resulting from bleeding) or relative (e.g.
resulting from the shift in plasma volume between circulatory compartments).
Haemaccel is applied in the following areas:
 Hypovolemic shock
 Loss of blood and plasma
 For filling the heart-lung machine

CHAPTER - 3
COMPANY PROFILE
3.1 COMPANY PROFILE
Full name : Nitta Gelatin India Ltd.
Previous name(s) : KERALA CHEMICALS & PROTEINS
LIMITED (1975)
Status : Listed
Legal form : Public Limited Company
Operational status : Operational
EMIS id : 1625380
IN-CIN : L24299KL1975PLC002691
ISIN : INE265B01019
Incorporation date : 1975

HISTORY OF THE COMPOANY

The company was incorporated on 30th April 1975 and began the commercial
production of ossein on 1St October 1979 with full-fledged plant at Koratty,
Trissur Dist, Kerala. The company acquired its own building (Corporate Office)
for administrative purposes in the year 1988 at panampilly Nagar Kochi. NGIL
covered an important milestone when it commenced the production of Gelatin.
Gelatin Division in Kakkanad Ernakulam dist, Kerala started its commercial
production on 8‘h March 1999. NGIL is managed by a professional team. Through
its collaborators NGIL has access to state-of-the-art technologies and process
inputs hat help the company to achieve its global vision.

Major milestones
1975; Incorporation of the company

1979: Started commercial production of ossein

1985: Granted export house status

1996: Limed ossein plant commissioned

1997: Formed Bamni proteins ltd

1998: Gelatin plant commissioned

1999: ISO 9002 certification

2004: Gelatin plant capacity expansion

2004: ISO 9001

2005: Facilities inspected by usfda &European directorate for the quality of

medicines
2007: Gelatin plant capacity expansion
2008: Company name changed to Nitta

Gelatin India Limited

2010: ISO 14001:2004

2011: Inspection by EUROPEAN FVO

2012: Introduced Nutri gold

2014: FSSC certification

Ownership of the company is shared by:

Nitta Gelatin Inc, Japan -43%
Kerala State Industrial Development Corporation Ltd -32%
Public -25%
Plant locations
With two plants in Kerala and one each in Maharashtra and Gujarat, the
company products reach 30 countries:

Ossein Division, Koratty, Trissur.

Gelatin Division, Kusumagiri, Ernakulam.

Bamni Proteins which is a subsidiary located in Chandrapur, Maharashtra.

Reva Proteins which is a subsidiary located in Ankleshwar, Gujarat

Registered Office in Panampilly Nagar, Kochi.

Company Description: Nitta Gelatin India Ltd. (NGIL), incorporated in 1975,

manufactures Gelatin, Collagen Peptide, Ossein, Di Calcium, Phosphate Chitosan,
NutriGold, Seed aid and CartiPep. The company has its registered office located in
Kochi. The Company's geographic segments include Export and Domestic. The
Company's products also include Ossein (Limed), Chitosan, NutriGold and
CartiPep. Collagen Peptide is used in various applications, including healthcare,
personal care and food products. The Company supplies DCP to poultry farms and
animal feed manufacturers in India. Chitosan is used in various industries,
including pharmaceutical, medical, and cosmetic, food and agriculture, textile and
water treatment. CartiPep is a formulation of Bioactive Collagen Peptides,
Glucosamine hydrochloride (HCI) and Vitamin C. The Company‘s support
services include after-sales guidance, technical advice and usage-related solutions.
The Company's plants are located at Koratty, Trissur District, Kerala, Kusumagiri,
Ernakulum District, Kerala, and CherthalaTaluk, Alappuzha, Kerala.

Award and certifications

NGIL was awarded the top export award in Ossein & Gelatin panel instituted
by CAPEXIL for the year 2012-13.

The following prestigious certifications are retained by your Company:

 European Directorate for the Quality of Medicines & Health (EDQM)

Certificate for Gelatin Division
 HACCP Certificate for Ossein Division and Gelatin Division fc food
safety.
 ISO 14001:2004 for Gelatin Division for Environmental Management
System
 ISO 9001: 2008 for Quality Management System of the Company
 FSSC Certification for Food Safety Management System For
Gelatin Division
 Halal / Kosher Certification for Gelatin and Collagen Peptide
 NABL Accreditation for in-house laboratory
 WHO-GMP
 United States Food and Drug Administration (USFDA)
  Product conforms to IP/BP/USP
 IFANCA International, America
 Indonesian council of ULMA
 JumiatUlma -E-Maharashtra

Board of Directors
The present strength of board of directors is 10. The board has a
combination of executive and non-executive directors who are eminent
professionals in their respective field.

Mr. Paul Antony IAS (Chairman)

Sajiv K. Menon (Managing Director)

Dr. Shinya Takahashi, (Director)

Dr. Beena IAS

Mr. Koichi Ogata

Mr. Hiroshi Nitta

Mr. A.K Nair

Dr. Naotoshi Umeno

Mr. K.L Kumar

Mrs. Radha Unni

Dr. K Cherian Varghese

5S Implementation
The company has a well versed structure after the implementation of 5s
system. The 5s System include sort, set in order, shine, standardize and sustain.
The 5s System is implemented in NGIL to ensure safe working environment, to
establish high standards, reduce wastage, has 5s zones wherein thon the total area
of the company is divided on the basis of nature of job in to seven different zones
and is again divided into subzones, also marked. Each zone is headed by a zone
leader and subzone by subzone champion. Duties and responsibilities are divided
and allocated to each team members in sub zonal zone.

The hierarchy of 5s team is as follows:

 Chairman
 Coordinator
 Facilitators (i.e. Ossein/ Gelatin division head)
 Steering Committee
 Zone leaders
 Sub zone champion
 Team members
  Trainers
 Internal Auditors

Organizational structure
BOD

MD

DIRECTOR

(OPERATIONS)

GM

R & D head QC Prodn&CES Hd Store Mgr Marketing Mgr Head HR Finance Head

DM(QC) AM
[Link] Sr. Officer DGM (CE)

Sr. Officer AGM (WORKS)

Sr. Officer [Link]

 Officer Officer
AMevm AM pro [Link] DM plant
[Link]
[Link]

AM CES
[Link]

Jr. En
[Link]

3.3 FUNCTIONAL AREAS

1. Human Resource Department

2. Production department

3. Central Engineering Service Department

4. QA/ QC

5. Research and development Department

6. Marketing Department

7. Finance Department
STRUCTURE OF HR DEARTMENT

BOD

MD

DGM

GD RO OD

Head HR Head HR

Sr. Officer
44- AM AM

[Link]

3.3.1 HUMAN RESOURCE DEPARTMENT

HRM is a function in organization which is primarily concerned with the
management of people within the organization and to maximize employee
performance in achieving the organizational Objectives. HR department primarily
undertake a number of activities including employee recruitment, training and
development, performance appraisal, rewarding etc. Human Resources are a
business field focused on maximizing employee productivity. Human Resources
professionals manage the human capital of an organization and focus on
implementing policies and processes.

Human Resource in NGIL

The company has both direct and indirect employees. Direct employees are the
work force in production, central engineering service, station keeper, and
laboratory. All others are indirect employees. Among the total employees 120 are
permanent staff, others include contract labour, casual labour etc. Total number of
employees of the company is [Link] Ossein Division, Koratty have 500
employees including 158 Permanent employees and other indirect employees.
NGIL Gelatin division in Kusumagiri have 450 employees in total including both
direct and indirect employees NGIL Registered office have 75 employees Bamni
Proteins ltd have 150 employees Reva Proteins ltd have 45 employees.

Employee Benefits
 Salary

Basic pay

Variable Dearness allowance

House rent allowances

Monthly Production Incentive linked to the Production beyond a certain

level of production

Transport subsidy

Shift Allowance

Washing allowance

Festival allowance

Personal allowance

 Leave

1) Casual leave: the number of casual leave will continue to be 11 as present

 2) Sick leave: Those employees who are out of ESI will be given 7 days sick
leave in the year. If an employee is out of ESI only for a part of the
year he will be eligible for proportionate sick leave. Sick leave can be
accumulated up to 40 days.

3) Earned leave: Earned leave will be calculated strictly as per the

factories Act 1948 and is calculated on the basis of 1 day for every 7 days. Earned
leave shall not be allowed to be availed of for less than one day.

4) short leave: Short leave up to 2 hours will be granted up to office/stores staff

twice in a month, in which case half days’ casual leave will be adjusted.

Other employee benefit

i. Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the
service are classified as short-term employee benefits and recognized in the period
in which the employee renders the related service.

ii. Defined Contribution Plans

The company has defined contribution plans for employees comprising

of superannuation, Provident Fund and Employee’s State Insurance. The
Contributions paid/ payable to these plans during the year are charged to the
Statement of Profit and Loss for the year.

iii. Defined Benefit Plans

Payment of Gratuity to employees is covered by the KCPL Gratuity Trust Scheme

based on the Group Gratuity cum Assurance Scheme of the LIC of India, which is
a defined benefit scheme and the company We contributions under the said
Scheme.

iv. Long Term Employee Benefits

Compensated Absences: The Company has a scheme for compensated

absence for the employees.

Retirement
Every employee shall retire on the attainment of 58 years of age. An employee will
retire from the service on the last day of the month in which he superannuates. The
employee will be provided will all terminal benefits.

Working hours

The company has arranged 8 hour shill for both workmen in production plant and
office workers. The general shift of office workers is from 8.30 AM to 4.30 PM.
The production is continuously done whole day, so the workers also have night
shifts. The working hours is arranged as follows:

A shift from 7AM to 3PM

B shift is from 3PM to 11 PM

C shill is from 11PM to 7AM

Recruitment and selection

Recruitment and selection forms a core part of the activities of Human resource
management. It is important for the organization to have right people for right job.
A good recruitment process is essential for the company to have more efficient and
motivated workforce, to reduce employee turnover and cost. NGIL also has a
systematic method of recruiting employee which is done by HR department.
Recruitment is done with direct method, indirect method or third party method
through both external and internal sources.

Internal sources which includes:

a) Transfer: The employee working in the company shall be transferred into any
of the divisions/Registered choice and such employees shall be eligible for
benefits applicable to that division.
b) Promotion of existing employees: Promotion to any category shall be based on
suitability, written test and interview. A minimum of 3 year: shall be completed
as qualifying service in the existing grade for consideration. Factors like
training attended attendance of last 3 years, individual performance and group
behavior, disciplinary action, observance and participation in the systems like
 TPM, quality circles .58 etc. shall be given weightage for considering
promotion

 Up gradation within the Level:

In the normal course up gradation from lower grade to the next higher
grade within one level will be given within a timeframe.

 Promotion from Lower Level to Higher Level

Promotion from lower level to next higher level will be based on the
following criteria.
(1) Availability of a position in the higher level.
(2) Suitability of the candidate in team of experience in the lower ma,
When qualification and aptitude. In case more number of candidates
are available for promotion to a post in the next higher level the
promotion will be based on written test and/or interview. Promoters
Shall be entitled to applicable fitment benefit and a promotion
increment in the higher grade. External sources are advertisements,
recruitment agencies, job portals, recommendations from the
existing employees. The applicants are short listed after conducting
a written test and selected after two rounds of interview, a
preliminary interview followed by a final interview by the human
resource department of the company. A pre-employment Medical
checkup is done by the company’s approved medical institution. The
selection is based on the fitness certificate issued by the approved
medical institution.

Placement and Induction

The appointee will report to the HR manager who will brief the
appointee regarding the general information regarding the company and introduce
the appointee to the concerned division head. After reporting to the division head,
the appointee will report to the senior administration officer of the concerned
division where he will fill up his joining report form and various other forms as for
company’s requirement. The administration officer will brief the appointee on the
various procedures to be followed and will direct him to the concerned department
head. Subsequently the appointee will undergo an induction training program.
There shall be training for the fresh candidate for a period of 1-2 years and
probation of one year for a fresh entrant.

Performance appraisal

The appointee will be assessed by his immediate superior and the

Department Head while he is undergoing the Training/probation. At the end of the
training/probationary period, a performance appraisal format will be forwarded by
the P&A Department to the concerned Department. The concerned Department
will do the Performance Appraisal and sent1 pack the Appraisal Form to the P&A
Dept. with Specific recommendations. On receipt of the recommendations, the
P&A Dept. will process the necessary papers for the regularization/confirmation/
extension of the training/ probation. However, the appointee will be given a
feedback on the Performance Appraisal by the concerned Division Head in the
presence of the Administration officer, especially upon an adverse remark.

Training policy

NGIL has set a structured training policy for all the employees of the company, to
ensure that every employee is imparted training in different stages ,on joining,
during service ,based on needs identified and career oriented , including updating
of skills ,acquisition of additional/ specialized skills on a continuous basis to
accomplish organizational goals.

TRAINING POLICY

Training policy

Compulsory Specific/ Need based

Induction On the job Common Selective

Training Training Training Training

Refresher Training
 Specialized Developmental Professional

Induction training

It is the process of educating the new entrants about the organization, procedure
process and quality parameters training modules are maintained in each department
according to the needs 0f each positioning.

On the job training

The new employee to be imparted a brief training regarding the joy requirements.
0n the job training is a process of imparting specific; awareness of the practical
aspects of the job through hands on training at the work spot. The employee is
trained in all procedures relating to good manufacturing practices, hazard analysis,
safety aspects etc. the concerned department head shall be responsible to maintain
the documents regarding such training.

Refresher Training

It is the process of refreshing the awareness through the repetitive training on

technical aspects. The responsibility to coordinate training, once a year is with the
HR department.

Specific Training
It is we training imparted based on the needs identified on an individual as well as
group basis as per a structured procedure.

Common Training

Training imparted based on a common need identified for employees of cross

functional teams to enhance behavioral skills. HR department shall be responsible
for the conducted programs and for the maintenance of the documents thereof.

Selective Training

It is an individual based training depending on specific needs identified by the

concerned department heads for the acquisition of additional skills
enhancement or updating of skills and overall development.

Specialized Training

It is a training process indented to impart new or additional skills based on

individual needs depending upon the specialized activities to be performed by
concerned individuals.

Developmental Training

It is the training process indented for the overall development of individual i.e.
personality development.

Professional Training
The persons to be sent for professional training to acquire the required skills
related to the new area of activity. Training to be imparted at the leading
professional institution.

HR development
To retain a sustainable competitive advantage in the new knowledge economy,
learning is a key catalyst for an organization’s survival and success. The Company,
therefore, provides tremendous learning and development opportunities to its
employees starting from induction and orientation program for all the new joiners
to regular training program to develop and enhance the skill levels, both functional
and behavioral, for all the employees. The training programs are tailored according
to the business requirements and employee needs at various levels and designed
with the help of a well-structured process of need identification connected to the
business demands. Functional and technical training formed an important part of
the Company’s annual training calendars they are directly linked with the
employees’ role and on the job performance. The Company also continues with the
following initiatives targeted towards human resources development:
i) Sponsored program leading to Post Graduate Diploma in Business Management
for Senior Executives at the School of Communication & Management Studies
(SCMS), Cochin.

ii) Exclusive in-house training department for assessing and imparting

the training needs.

iii) Apart from in-house training facilities, employees are imparted extensive on
the job training at our collaborator’s factory in Japan.

Health and Safety Policy

The Company is committed to promoting the health and safety of its employees.
Each of our plants is having a Safety Officer and Safety Committee which includes
representation from workmen. The Committee meets regularly to review issues
impacting plant safety and employee health. Regular health checkup of the
employees is carried out through reputed hospitals. Various training programs are
conducted at me plant on health and safety issues including emergency
preparedness, work safety, first-aid, etc. The Company is augmenting resources to
further strengthen the level of safety at its NGIL plants have the highest concern
and commitment for protecting the health and safety of all employees, contractors
and visitors having access to the work place.

Towards this end NGIL shall strive to:

 Provide safe and healthy working conditions to prevent work related

injury and ill health.
  Comply with all applicable legal and other requirements related to
occupational health and safety (OH & S) .
 Mitigate the OH&S risks using hierarchy of controls and risk
management measures. Ensure employee participation in decision
making on OH & S management system.
 Inculcate in all employees the understanding of their responsibility for
one’s own safety and action which could affect the safety of others.
 Continually improve OH & S management system and OH &S
Performance.

Welfare measures
The organization takes care of the employees in all possible ways. This
includes providing adequate welfare benefits, which are listed as follows,

1. Medical Allowance

Those employees who are out of ESI will be paid one month’s basic pay plus
personnel pay plus special pay plus VDA as medical allowance in 12 equal
monthly installments. In case of heavy expenditure on medical treatment of self or
family the company may pay the medical allowance for the full year in advance to
him upon written request duly supported by medical reports. In case of workmen
who go out of ESI scheme the company shall contribute l % of basic pay plus
personal pay plus special pay plus VDA towards insurance premium to cover the
family members under a suitable medical insurance scheme.

2. Shoes, Uniform, Rain Coat etc.

Currently 3 pairs of PVC shoes per year for those working in the plant are given;
all office male staffs are given leather shoes. All male workers are given a head
cover. All of them are provided with 3 pairs of uniforms and shoes that shall wear
on the same when on duty. One good quality rain coat and umbrella are also given.

3. Housing loan interest subsidy

An interest subsidy of 5% for housing loan is given to the existing

employees where in the fresh recruits will not be eligible for this.

4. Advance for the purchase of two wheelers

Advance for the purchase of two wheelers will be given to 5 workers (fresh
applicants) per year on the basis of seniority at an interest rate of
6% p.a recoverable in 60 equal monthly installments.

5. Assistance for children education

6. Assistance for higher education of employees

7. Medical check up

All workmen attached to Ossein division/ registered office will be

subjected to a medical checkup once in a year at company cost.

8. Job for dependents:

In case a workman dies in harness the children of the employee can apply for any
vacancy arises in the company if they possess qualification
and experience.
Industrial Relations

The long term settlement between the management of M/s Kerala Chemicals and
Proteins Ltd and their workmen expired on 19.05.2016. Charters of demands were
submitted jointly by Kerala Chemicals and Protein Ltd. Employees Federation,
Kerala Chemicals and Protein Ltd. Employees Union and Kerala Chemicals and
Protein Ltd. Workers union and Nitta gelatin worker union. Series of bilateral
negotiation were held with them and based on the understandings signed in a
meeting held on 11.09.2016 by both panics; memorandum of settlement was
signed with regard to the outlines and guidelines to be observed for the purpose Of
finalizing a new long term settlement.

The company has four unions;

 Kerala Chemicals and Protein Ltd. Employees Federation.

 Kerala Chemicals and Protein Ltd. Employees Union
 Kerala Chemicals and Protein Ltd. Workers Union
 Nitta gelatin worker Union.

The main objective of the settlement is “building and developing a

versatile workforce optimizing productivity through total employee
involvement resulting in customer satisfaction leading to well-being of
employees and shareholders”. The purpose of this is to provide orderly
collective bargaining relations to establish fair working standards and
conditions to maintain harmonious relationship between the workmen and
the company to prevent strikes, lockout and slowdowns to maintain efficient
and an interrupted operations in the plant and in office thus ensuring
optimum production and promote stability and prosperity of the
company for the benefit of its stakeholders.
STRUCTURE OF PRODUCTION DEPARTMENT

BOD

MD

DIRECTOR OPERATIONS

GM

PRODUCTION & CES

AGM (works)
 MANAGER (Production)

SENIOR ENGINEER

JUNIOR ENGINEER JUNIOR OFFICER

3.3.2 PRODUCTION DEPARTMENT

Production process
The main raw materials used for the production of gelatin are Crushed bone,
Hydrochloric Acid, and Hydrated Lime. Ossein (intermediary product) becomes
the raw material in the gelatin division after the demineralization process of
crushed bones. The production process of gelatin is described below:
 Demineralization:
The bones are received crushed broken into small pieces no larger than one-
half inch. Crushed bone is loaded into concrete tanks, each of which holds
greater than 10 tons. The bone is de mineralized by soaking it in
hydrochloric acid. De mineralized bone is called ossein, in this
demineralization step; phosphate is dissolved out of the bone and collected.
In a subsequent step it is converted into Di calcium Phosphate, which is used
as an animal feed supplement and as fertilizer.
 Liming:
The Ossein which became pliable during the demineralization process is
washed and placed in liming tanks where it remains for a period of weeks.

 Extraction:
After the liming process is completed, the Ossein is washed and treated with
acid. It is then placed in large stainless steel tanks where several hot water
extractions are made from each batch. Each extract is. in reality, a gelatin
solution at this point.

 Refinement:
The solutions are filtered and concentrated in evaporator. They are chilled,
set and forced out through a nozzle in spaghetti-like strands onto a conveyor
made of wire mesh screen.
 Drying and Grinding:
This solidified gelatin is then conveyed through an air tunnel. Heated air is
blown through it and it becomes out dry and brittle. It is put through a
grinder, and ground into a fine powder. This powder is stored in large
boxes until quality tests can be made.
 Lab Testing:
After drying, lab testing will be conducted.
 Post Processing:
After testing, the different gel batches (each with its special characteristics)
are blended to meet the requirements of user whether it's for photographic
film or paper, pharmaceutical use, or edible.
PRODUCTION PROCESS

DEMINERALIZATION

LIMING

EXTRACTION

FRFINEMENT

DRYING AND GRINDING

 11111111111111111111111111
LAB TESTING

POST PROCESSING

STRUCTURE OF CENTRAL ENGINEERING AND SERVICE

DEPARTMENT

BOD

MD

DGM

Snr. Office [Link]

 Asst. Officer

3.3.3 CENTRAL ENGINEERING SERVICES DEPARTMENT

(MAINTENANCE)

According to Alfred and Beatty, Maintenance in an industrial plant is the upkeep,

repair, renewal and replacement of worn, damaged, or obsolete parts of buildings,
machinery and equipment. Maintenance aims primarily to keep in efficient
operating condition the productive Plant and equipment, their auxiliaries, general
engineering services, material handling units etc., as well as to keep in good state
of repair the buildings and structures. Maintenance also aims at keeping to the
minimum possible level down-time of such plant and equipment so as to ensure
their higher availability for production. There can be two types of maintenance:

Preventive and Corrective

Preventive Maintenance implies frequent inspection to detect minor faults and the
early correction of them, supplemented by periodic overhauling in accordance with
a plan so that the possibility of a major breakdown is almost entirely eliminated.
Corrective Maintenance means that action is taken only when the need for it
becomes obvious, and therefore gives no assurance that a major breakdown will
not occur. CBS in NGIL is responsible for equipment and plant maintenance,
breakdowns and improvements.

For maintenance to be done by external contractors approval from MD & Finance

department are to be sought.

Duties and responsibilities Deputy Manager

 Bring machine breakdowns to zero

 Track schedules for maintenance of machines.
 Prevention of equipment failures

Senior Engineer
 Maintenance planning activity
 Planning materials for daily works and shut down
STRUCTURE OF Q.A/QC

MD

Director of Operations

GM

[Link]

DM

AM
 Office

3.3.4 QUALITY ASSURANCE AND QUALITY CONTROL (QA/QC)

NGIL gives paramount importance to the quality of the product. To suite

the customer’s needs Q.A/QC department of NGIL regularly evaluate the
production process starts from raw material inspection and assessment of the
finished product whether the product has met all the standard quality requirements.
Quality Control stands for the systematic control of those variables, which affect
the excellence of the ultimate product.

The general quality control process involves:

 Establishment of quality standards.

 Ascertainment of quality deviation
 Evaluate the methods of process of production and suggest improvements
 Accelerate the sale by presenting only the quality goods
The main functions of this department are

 Control of raw materials

 Standards and specifications
 Control over production Operations
 Testing the quality of the equipment and other devices
 Gaining control of quality through location Of inspection points.
 Amount of inspection desired
 Development of quality consciousness
 Quality control of products through standardization of products and
prior shipments
 Application of statistical methods of quality control through the devices such
assembling, frequency distribution, quality control charts,
standard deviation, range, probability theories etc.
 Maintenance of adequate inspection and control record
3.3.5 RESEARCH AND DEVELOPMENT DEPARTMENT

The Company has three exclusive Research & Development Centers attached to
each of its major production centers. All these Centers are approved by the
Department of Scientific and Industrial Research, Government of India and they
carry out development of new products besides improvement of existing products
and production processes. R&D Division is playing not only a pivotal role,
especially line extension of existing products and new applications for the same.

 Evaluation and development of new sources for various raw materials

 Development of new process techniques for cost optimization as well as

fuel and energy conservation. In the case of new products already launched
but also those on the anvil. In view of the criticality of Crushed Bone quality
in the overall cost of production, R&D wing has been entrusted with the
responsibility to develop ways and means to minimize the adverse effect of
quality deterioration of crushed bone. The Company is continuing R & D
efforts for carving out novel techniques for separation of Chloride,
development of alternate raw materials, reduction in process time etc.
Specific areas in which R&D is carried out are:
 Development of production processes to meet specific
customer requirements.
 Development of new product
 Reduction in water consumption
3.3.5 Storage and warehousing

A store keeping in defined as that aspect of material control concerned with the
physical storage of good. It is the connecting link between the planning and
production department and the shops. The main functions of the stores keeping
services are receiving, recording, storing and preserving, issuing, replenishing and
controlling the materials. Stores department of NGIL is segregated into two
namely, general stores and me engineering stores. General stores concentrates the
storing of raw materials needed for production and a separate one for storage of
finished goods and engineering stores is concerned with the storing of tools and
material equipment.

Objectives of storekeeping

There are three principal objectives of stores keeping

 To safeguard all goods in storage against losses

 To have available all such goods ready for prompt delivery when properly
authorized, and
 To provide maximum stores keeping service to the manufacturing and
sales department at a minimum cost.

Function of storekeeping department:

 Receipt of materials into store.
 Record keeping of materials in store
 Storage of materials and co-ordination of store keeping
 Maintaining stores and issuing stores
STRUCTURE OF MARKETING DEPARTMENT

BD

MD

DGM (Gelatin Division)

Asst. Manager

Sr. Officer

Officer
3.3.6 MARKETING DEPARTMENT

 PRODUCT MIX
The main products of the company are Gelatin, Ossein or limed Ossein, Di
Calcium Phosphate and collagen peptide. The gelatin contributes 53.33%
Ossein 18.31%, Di Calcium Phosphate 16.11% and collagen Peptide 12.25%
of the total turnover of the Company.

1) Gelatin:
It is commonly used as a gelling agent in the food, pharmaceuticals,
photography, and cosmetic manufacturing. Pharmaceutical gelatin used
in the production of capsules. The plant capacity of gelatin division is
4000MT and 3500 MT of gelatin is produced by NGIL in a year. Of which
70percent of gelatin is exported and remaining 30% is sold in the domestic
market. The major consumer of gelatin is Nitta Gelatin Inc. Major Countries
are J apan, Jordan, Iran, Turkey, Dubai, Oman, Srilanka, Singapore,
Netherlands, US, Canada, Australia, Egypt, Thailand, and Indonesia.
Domestic market includes main cities like Bangalore, Pune,Mumbai and
Chennai.

2) Ossein:
NGIL manufactures ossein user the technical guidance of NITTA
and exports ossein to Nitta, Japan on a buyback agreement. Also ossein is
used to manufacture gelatin NGIL is having an ossein production
capacity of 7000MT and set up facility to produce 5000MT limed ossein.

Ossein comes in two types:

 a) Dry ossein

b) Wet Ossein or limed ossein1

Dry Ossein is exported to Nitta gelatin Inc. and Limed Ossein is send to the gelatin
plant for manufacturing gelatin. Ossein is the intermediary Product and not sold in
the market directly. Under the business collaboration with NITTA, NGIL supplies
70% of Ossein to NITTA on a buyback agreement and 30% is transported to
gelatin division as a raw material for the production of gelatin. There is a special
transport agreement to carry limed Ossein from Koratty Ossein division to
Kakkanad Gelatin division.

3) Di calcium phosphate (DCP)

Di Calcium Phosphate is a by-product which is extracted while manufacturing

ossein from crushed bone. It is white, odorless tasteless powder .It is an important
constituent of mineral mixtures and is used in feed industry to mainly supplement
calcium and phosphorus. Feed grade DCP manufactured from bones does not
contain high level of fluorine, lead and arsenic impurities. NGIL is a market leader
in the production of premium DCP (Animal Feed Grade). With over 20 years of
expertise NGIL produces and supplies premium quality DCP to all major poultry
and animal feed manufacturers in India. The plant capacity of DCP is 15000 MT.
50% of DCP is sold in domestic market through agents and also by direct selling.
The domestic markets include states Karnataka, Andhra Pradesh, Tamil Nadu,
Maharashtra, Orissa and Chhattisgarh. In AP and Karnataka there are appointed
agents to sell the DCP. Nearly 50% of the production is exported to countries like
Thailand, Malaysia, Indonesia, Philippines, Singapore, and Sri Lanka for the same.

4) Collagen peptide

Collagen Peptide market size is valued at more than USD 0.75 billion in 2015 and
is likely to be worth around USD 1.25 billion by 2023. Applications of Collagen
Peptide can be segmented into cosmetics, food and beverages, nutraceuticals,
healthcare and pharmaceuticals.

 PLACE
Exports
The Company maintained its prominence in the niche overseas markets
during the quarter under review. Export of Ossein during the year 15-16 was
3508 MT as against 4624 MT during the previous year. Export of Limed
Ossein was 504 MT against 306 MT during the previous fiscal. DCP exports
during the year were 301 MT as against 430 MT during the previous year. In
the case of Gelatin, exports for the year stood at 1700 MT against 1764 MT
during the previous fiscal. Export of Collagen Peptide during the year was
89.4 MT against 142 MT during 2014-15. The average USD/INR exchange
rate for the year 2015-16 was 65.15 as against 60.69 for the previous
financial year.
Domestic
The volume of domestic sale of Gelatin witnessed increase of 11.27% during
the year and touched 2120.9 MT. Domestic sale of Collagen Peptide was
 145.47 MT against 225MTduring the previous financial year and Di calcium
Phosphate 16781 MT against 18879 MT during the previous financial year.

 PRICE

Price of the edible gelatin is lower than that of the pharmaceutical grade
gelatin. Pricing of gelatin depends upon its bloom strength or bloom value
which indicates the molecular weight of gelatin. India has an advantage of
producing cheapest gelatin in the world which could attract the global
players .India can opt for manufacturing hard gelatin capsules for import
substitution. As the availability of good quality crushed bones at a
reasonable cost is critical for the competitiveness of the domestic ossein and
gelatin industry, the government has allowed imports. For the gelatin
industry, raw material costs constitute almost 50-55 per cent of the total cost.
The global price of crushed bone is under Rs.25/kg, whereas Indian prices
today hover around Rs.28-30, which itself a sharp drop is from last year’s
nearly Rs.35/kg.
 PROMOTION

Advertising and Sales Promotion Activities.

The quality of the product of NGIL is such that they do not require any
aggressive sales promotion activities. The products are targeted to a
particular group of customers and it is easy to identify and spot the
customers and they are constantly being in touch with their customers.
However on requirement basis NGIL conducts sales promotion activities by
advertising the products through posters even sponsorship and sales
exhibition and in pharmacy journals. Apart from these, frequent market
visits are conducted to study new market entries. Test marketing and
 marketing share analysis are carried out to set the status of their products in
the market.

The main marketing Strategies adopted by NGIL are

Customization
Customization is the art of tailoring the product according ‘0 the need of
customers. It is the ability to prepare individually designed products and
communication to meet each customer’s requirements. NGIL believes in
strategy of customization. To achieve this objective the marketing
department 0f NGIL undertakes following activities.
 Preparation of Marketing Plans periodically both in short term and long
term.
 Modification of product to suit the customer need.
 Delivering the products in time
 Contact with Quality Assessment to meet the standard of the product.
 Analyzing the competition
 Attending customer’s complaint
 Keeping Alert with global scenario.
 Analysis of Sales Performance
 Collection of marketing information from customers, competitors and
regulatory authorities. The methods of collecting market information are
through market surveys, telephonic conversation and direct meetings and
from media.

Segmentation
The company is engaged in the business of manufacturing and sale of
Gelatin, ossein, Di calcium phosphate, collagen peptide, which form broadly
the part of one product group and constitute a single business segment.
However, based on the geographical factors reportable geographic segments
have been identified as export sales and domestic 53165“ The market has
been segmented on the basis of region. Country, wise, Europe Currently
 represents the biggest producer of gelatin accounting for around 40% of the
total global production. Europe was followed by North America, Asia and
South America. The market has also been analyzed on the basis of end-use
industries. The food and beverage sector currently represents the largest end-
use sector for gelatin followed by nutraceuticals, pharmaceuticals,
photography and cosmetics.

Competitors
The global competitiveness of Indian gelatin had been severely dented in
the past few years due to falling prices of hides used as the raw material by
many gelatin manufacturers abroad even as raw material prices in India
surged and reached unsustainable levels. Key industry participants include
Rousselot, Capsgel Inc., CatalentPharma Solutions, Gelita AG, PB Gelatin
and Sterling. At present, there are around 25-30 manufacturers of gelatin
across the world, out of which, Gelita AG (Formerly DGF Stoess), Rousselot
SAS, PB Gelatin (Tessenderlo Group), Sterling Biotech Ltd, Weishardt
Group and Nitta Gelatin are the key manufacturers.

Global players
 Gelita Australia Pvt ltd, Australia
 Eastman gelatin corporation, USA
 Atlantic Gelatin/Kraft foods Global Inc, USA
 Gelco, Columbia
 Rousselot Gelatin Co

Domestic Players
 Sterling, Baroda, Gujarat.
 Sterling Ooty, Tamil Nadu
 Raymon -Baroda, Gujarat
 IGCL Vapi, Gujarat
 Narmada Jabalpur, Madhya Pradesh

STRUCTURE OF FINANCE DEPARTMENT

BD

MD

DGM (CE)

[Link]
Manager

Officer
Officer
3.3.7 FINANCE DEPARTMENT

Finance is the lifeblood of any business and therefore finance department plays an
important role in the overall accounting procedure of the Organization. All the
major works are done in the finance and accounts

Functions of Finance and Accounts Department

 To check whether accounting system is properly maintained or not

 To see that posting of ledgers, passing of vouchers etc. are properly done
 Total analysis of income and expenditure accounts
 Preparation of yearly budgets such as capital budget, revenue budget etc.
 Capitalization of the assets
 Continuation of balance of deposits, advances, if any
 Preparation of Trial Balance, Prof1t& Loss account and Balance Sheet
 Reconciliation of inter unit accounts
 Attending all audits like statutory audit and preparation of all schedules
related to Prof1t& Loss account and Balance sheet
 Disbursement of wages / salaries
 Scrutiny and approval of funds needed by various departments of the
organization
  Loan recoveries
 Tax remittance
 P.F contribution remittance
 Leave encashment, retirement benefits, welfare, recoveries and remittances,
medical facility for accident compensation etc. are provided.

Budgeting

The company follows historical budgeting and prepares yearly budgets for
the company as a whole. And also separate for registered office.
Ossein and Gelatin divisions.

Share capital

The Authorized share capital of your Company is Rupees Thirty Five Crores
Eighty lakhs and forty only (comprising of two crore equity shares of Rs. 10/each
and 929,412 Optionally Convertible (noncumulative) Preference Shares of Rs.
170/each). During the year, the Company has issued 929,412 Optionally
Convertible (non-cumulative) Preference Shares of Rs. 170/each aggregating to Rs.
15,80,00,040/-to Ms. Nitta Gelatin Inc., Japan, one of the promoters carrying a
fixed dividend of 5.4029% and redeemable at par at the expiry of seven years from
the date of allotment, 28.04.2015 with put and call Option at the expiry of five
years from the date of allotment. The said OCPS carry the option to get converted
into equity shares either in full or in part at a Value of Rs. 170/per equity share of
face value of Rs. 10/and share premium of Rs. 160/per share not later than 18
months from the date of allotment.

Reserves
An amount 0f Rs. 600.00 lakhs is transferred to General Reserve during the year.
Reserves as on 31.03.2016 comprises of Security Premium Reserve of Rs. 2895.90
lakhs, Capital Investment subsidy of Rs. 15.00 lakhs, Special Export Reserve of
Rs. 79.00 lakhs, General Reserve of Rs. 7236-64 lakhs, Hedge Equalization
Reserve of Rs. 151.02 lakhs and credit balance in the Profit and Loss Account of
Rs. 2091.32 Lakhs, aggregating to Rs. 12468.88 lakh.

Dividend
The Board has, subject to approval of the members at the ensuing Annual General
Meeting; recommend a dividend @ 5.4029% p.a. for the year ended 31st March,
2016 on the 929,412 Optionally Convertible Preference Shares of face value of Rs.
170/each on a pro-rata basis from the date of allotment. Considering the
Company’s performance and financial position for the year under review, the
Board has also recommended a dividend of Rs. 2.50 per share Le. 25% of the face
value of Rs. 10/per share on the equity capital for the year ended 31st March, 2016,
subject to the approval of the members at the ensuing Annual General Meeting.
Together with corporate tax on dividend, the total outflow on account of dividend
will be Rs. 368.07 lakhs (including RS. 94.88 lakh on preference shares)

Analysis of financial reports

The Company has adapted accounting policies which are in line with the
Accounting standards and the act. They are in accordance with the generally
accepted accounting principles in India. Changes in policies, if required, are made
in consultation with the auditors and are approved by me Audit Committee.

The Board is of the view that appropriate Procedures and controls are operating
effectively and monitoring procedures are in place.
Basis of Accounting

The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in India (Indian GAAP). The Company
has prepared these financial statements to comply in all material respects with the
Accounting Standards Specified under Section 133 of the Companies Act, 2013
read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial
statements have been prepared on an accrual basis and under the historical cost
convention. The accounting policies adopted in the preparation of financial
statements are consistent with those of the previous year.

Use of Estimates

The presentation of financial statements in conformity with the generally accepted

accounting principles require estimates and assumptions to be made that affect the
reported amount of assets and liabilities on the date of the financial statements and
the reported amount of revenues and expenses during the reporting period.
Difference between the actual result and estimates are recognized in the period in
which the results are known /materialized.

Revenue Recognition

Sales are recognized on transfer of title of the goods to the customers. Export
incentives are recognized 6n exports on accrual basis, (except when there are
significant uncertainties) based on the estimated realizable value 0f such
entitlements. Other income is recognized on accrual basis, (except when there are
significant uncertainties).
Fixed Assets

Fixed assets are stated at the cost of acquisition less depreciation and
impairment in value if any is adjusted. For this purpose, cost consists of purchase
costs and includes taxes, duties, freight and other incidental expenses incurred for
bringing the assets to the working condition for their intended use.

Depreciation/Amortization

i) Depreciation on Plant and Machinery (other than Service Equipment) is

provided on Straight Line Method. The useful lives adopted are as
prescribed under Schedule H of the Companies Act, 2013, except
in respect of the following items, which are depreciated over lower
useful lives on the basis of technical evaluation:
 Plant and Machinery of Ossein Division- 40 years
 Plant and Machinery 0f Gelatin Division -15years
 Effluent Treatment Plant at Ossein Division - 5years
 Effluent Treatment Plant at Gelatin Division - 40 years

ii) Depreciation on service Equipment and other items of fixed assets is

provided on Written down Value Method based on the useful lives
prescribed in Schedule II of the Companies Act 2013.
iii) Lease Premium on Land is depreciated (amortized) over the period of
lease.
 RATIO ANALYSIS

March 2016 March 2015 March 2014

Current ratio 2.49 2.27 2.04

Quick ratio 1.20 1.00 .84

Fixed assets 1.92 2.12 1.76

Turnover ratio

Dividend payout 14.26 17.79 0

ratio

Current ratio expresses the relation between current assets and current liabilities.
The ideal ratio is 2:1

Current ratio = current assets/current liabilities

While quick ratio express the relation between quick assets and / current liabilities.
Quick ratio = current asset – inventory – prepaid expenses / current liabilities

Fixed asset turnover ratio specifically measures how able a company is to generate
net sales from fixed-asset investments, namely property, plant and equipment
(PP&E), net of depreciation.

Fixed asset turnover ratio = Net sales / Fixed Asset –accumulated depreciation

Dividend payout ratio shows the portion of profits the company decides to keep the
fund operations and the portion of profits that is given to its shareholders.

Dividend Payout Ratio = Total dividends / Net income.

The current ratio and quick ratio has increased from the previous year’s which
shows the company is maintain optimal level of liquidity. The dividend payout
ratio is reduced from the previous years as the company has retained its earnings.
Financial analysis and business Performance
Despite a challenging business environment, NGIL has notched up a profit of 16.6
crore in the first half of the current fiscal, compared With 33 crore in the same
period last year.

The Company’s Operations have resulted in a pre-tax profit of Rs. 26.43 acre for
the current year as against Rs. 10.03 crore for the previous financial year. The post-
tax profit for the current year is Rs. 16.69 crores whereas it stood at Rs. 5.10 crore
for 2014-15. During the year, the Company has sourced sizeable volume of low
cost funds to optimize on interest costs. Rs. 15.80 crores through the issue of
Optionally Convertible (Non-Cumulative) Preference Shares to NGI, Japan
carrying dividend @ 5.4029% to finance the Environment Improvement Projects.
The sales mix during the year was such that the Company could achieve a
reduction in selling expenses such as freight charges on products, discount and
commission on sales, etc. aggregating to Rs. 3.52 crores during the year the entire
sale of Ossein / Limed Ossein, 44.5% of the total sale of Gelatin and 38.6% of
Collagen Peptide were through exports.

The gross revenue from operations of your Company during the year under review
was Rs. 370.86 crore. Though there has been an increase in the unit sales
realization in all our products during the year, increase in sales volumes could not
be achieved due to various extraneous factors. With all the domestic Gelatin plants
in full scale operation during the year and the resultant heavy demand for crushed
bone, the quality of Supplies could not meet the export quality specifications for
Ossein and Limed Ossein. This has led to a reduction in export volumes of Ossein /
Limed Ossein by 19% during the year. The company attributes the better
performance to the concerted efforts on cost reduction, production efficiencies and
strict environment management. Nearly 60% of the revenue comes from exports.

CHAPTER 4
SWOT ANALYSIS
4. SWOT ANALYSIS
The overall evaluation of a company’s strengths, weakness, opportunities and
threats is called SWOT analysis. In general, a business unit has to monitor key
macro environment forces (demographic, economic, technological, political-legal
and social-cultural) and significant micro environment actors (customers,
competitors, distributors, suppliers) that affect its ability profits. The business unit
should set up a marketing intelligence system to track trends and important
developments. For each trend or development, management needs to identify the
associated opportunities and treats. A major purpose of environmental scanning is
to discover new marketing opportunities. Each business needs also to evaluate its
internal strengths and weaknesses periodically. The SWOT analysis of NGIL is as
follows;
STRENGTHS
 World class Technology in Production
The technology used in the production of Gelatin by NGIL is world class
and there is competitive technological support and assistance by the NITTA
GELATIN Inc. Japan. Thus helps the company for market penetration.
 Very strong and crucial environment policy
In order to sustain in the Kakkanad location company has initiated various
projects in environment management. Large investment in solid waste
management, odor control, ambient air quality monitoring system, online PH
meters, automated effluent treatment system. Irrespective of cost, time, and
management difficulties company has installed highly sophisticated effluent
treatment plant.
 Monopoly product in Kerala
The product of the company is monopolistic in nature. The only ossein
manufactures in Kerala.
 Ease of distribution in Kerala
The distribution process is quite easier. Exporting of the product is easy
because the company is approximated to Cochin shipyard.
WEAKNESSES
 Raw material transportation and availability
Raw material transportation is one of the main problems that the company
faces. Major part of the cattle bones is brought from North India and they are
being transported by trucks earlier. Hence bringing entire raw material by
trucks involves a high raw material transportation cost. And availability of
raw material is also depended on the consumption pattern and government
regulations.
 Foreign exchange fluctuation
There is a high fluctuation in the value of US dollar to Indian rupee. Since
80% of the sales into the export market are billed in terms of US$ company
is incurring loss. Changes in tax rates also affect the profitability of the firm.

OPPORTUNITIES
Growth of pharmaceutical industries owing to increase in awareness for about
preventive healthcare, the increased Government spending in the health sector
from FDA & IMA for Gelatin in medical drugs and food additives has fuelled the
market growth. Applications of Collagen Peptide can be segmented into cosmetics,
food and beverages, nutraceuticals, healthcare and pharmaceuticals. With a steady
demand for poultry products, the demand for Di Calcium Phosphate is also
expected to be stable. The company has a better opportunity in the future to expand
its production to reach the increasing demand for its products.

 Increasing demand for gelatin

The increasing health care spending with growing demand from various
end use applications is expected to drive the Gelatin market growth. The
market is characterized by high demand from food processing and
pharmaceutical industries. Application growth of pharmaceutical products
including tablets and capsules in emerging markets of China and India
owing regulatory support intended for promoting investments in the
healthcare sector is expected to increase the demand for stabilizing agent.
Gelatin also finds use as thickening agents in the photographic industry.
 Future demand for byproducts
With a steady demand for poultry products, Di Calcium Phosphate is also
expected to be stable. Increasing awareness towards microencapsulation in
the broad range of applications including food & beverage and healthcare is
expected to open new markets over the next eight years.

THREATS
 The base raw material for Ossein, Gelatin and Collagen Peptide is
crushed animal bone. The price of animal bones is dependent on
numerous factors such as variations in meat consumption pattern
reflecting global economic conditions as well as changes in supply
demand dynamics. An increase in price of crushed bone can adversely
affect the operating results and financial position of both the Gelatin and
Collagen Peptide business.
 The demand for Di Calcium Phosphate is linked to the price of soya meal
which experiences high price volatility.
 Increasing labor costs is another threat for the company which will
increases its cost of production and affects the profitability of the firm.
 CHAPTER 5
FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS
 All the factories owned by the Company are being operated in strict
compliance with the applicable standards / norms prescribed by the
statutory authorities including the State Pollution Control Board.
 The company maintains its standard till the date by providing very good
quality products and maintains good reputation to the industry as a whole.
The products of the company confirms to international standard system. It
has wide acceptance of product range and good consumer hang.
 The company is well structured with its entire department including Human
resource Department, Finance department, Production, Marketing
department, Research and development, Quality Assessment and Quality
control. The company has skilled employees who are the backbone of the
company. They are enhanced with training to update and improving their
skills. The management also gives importance to the welfare and safety of
the employees of the company.
 Main revenue of the company comes from the export of the company,
therefore the Company has arrangements with its overseas collaborators,
Nitta Gelatin Inc., Japan to leverage their expertise and market insights in
servicing its customers in a proactive manner in line with the global
standards of NI'I'I‘A Group and is updated with their technologies in the
Production.
 The company is focusing on creating a 5S company for ensuring a better
and safe working environment in the company, to reduce wastage during die
production, to ensure satisfaction among the customers and thereby
increasing the profitability of the firm.
 The company is also extending its activities to the society by way of
corporate social activities for the development for the locality where the
company is situated. The company also invested in environment
 management projects to reduce the pollution and to have a better waste
management system.

SUGGESTIONS
 In order to optimize the utilization and natural resources like water fuel
Company can adopt new technologies after conducting feasibility study.
  R&D department should the take initiative to develop new products that
can be directly reach to customers (B2C).
 The company should update its technology to compete with other players
in the market.
 The company should implement proper communication channel
for the effective flow of information with the external
environment

CONCLUSION
Nitta Gelatin India Ltd is the first Indo-Japanese venture in India, incorporated
in the year 1975 and reputed company. The major production facilities of the
company are Ossein plant at Koratty, Trissur District and Gelatin / Peptide Plant at
Kakkanad, Ernakulum District, Kerala. The company is extending its activities to
the society by way of corporate social activities for the development for the
locality where the company is situated and the company is focusing on creating a
5S company for ensuring a better and safe working environment in the company.
The organizational study conducted in Nitta Gelatin India Ltd, helped to
understand the actual functioning of the departments and management of the
company affairs. It also helped to understand the company structure and the
working atmosphere and the hierarchy followed in the organization. Also gained
some practical exposure relating to the functioning and its complexity.
 BIBLIOGRAPHY

BIBLIOGRAPHY
BOOKS
 Kotler Philip, Marketing Management- Analysis, Planning,
Implementation, and Control, 8th Ed, New Delhi, Prentice-Hall of
India Pvt Ltd, 1996.
 Mahadevan B, Operations Management-Theory and Practice, South
Asia, Pearson Education, 2007.

RECORDS

 Memorandum of settlement
 Annual report of Nitta Gelatin India Limited

WEBSITE

 http//:[Link]