CHAPTER SCHEME

Chapter 1: Introducing to Operational efficiency

This chapter entails the concept of finance ,role and importance of finance,
introduction to cost accounting , need ,objectives, scope, types, general
principles, advantages and disadvantages of cost accounting , elements of
cost, profitability, income statement, introduction to operating cost
accounting, efficiency , measuring, comparing, tips for increasing
operational efficiency, Du-pont analysis.

CHAPTER 2: REVIEW OF LITERATURE AND RESEARCH DESIGN

This chapter includes the review of literature, statement of the problem,

title of the study, objectives of the study, the scope of the study, research
methodology, limitations of the study and the chapter schemes.

CHATPER 3: COMPANY PROFILE

This chapter comprises of company profile, history, vision &mission,

present status and future of the organization, growth and development,
products profile, customers ,branch offices.

CHAPTER 4: DATA ANALYSIS AND INTERPRETATION

This chapter portrays and interprets the results of the analyzed data with
the aid of tables and charts.

CHAPTER 5 : FINDINGS,SUGGESTIONS AND CONCLUSION

This chapter brings about the findings of the study, its conclusion and offers suggestions.
COMPANY
PROFILE
 CHAPTER-3

COMPANY PROFILE-2022

KOLAR - CHIKKABALLAPUR CO-OPERATIVE MILK

PRODUCERS SOCIETIES UNION LIMITED, KOLAR
KOLAR –CHIKABALLAPURA MILK UNION LIMITED:

Kolar –Chikkaballapura District Co- operative milk producers Union Ltd.,

(KOMUL) is Karnataka’s 2nd highest Milk cooperatives in Karnataka, which
aims to provide remunerative returns to the farmers by eliminating the
middlemen and also serve the interest of consumers by providing quality
Milk& milk products , which are good value for money.

Once the Dist. Was named as Land of Gold & Silk, is making inroads in
Quality Milk Production. It is KOMUL first installed “ Bulk Milk Coolers &
Community Milking Machines “at Society level in the state of Karnataka to
get the quality milk required for UHT milk packed at Kolar Dairy under the
brand name of nandini ‘Good –Life’. Presently Union has full pledged dairy
at Kolar with an installed capacity of 2.0 LLPD, and three chilling centers at
Chintamani, Sadli, & Gowribidnur with 1.0 LLPD capacity each respectively.
KOMOL started marketing of liquid milk in polythene sachets in entire Kolar
District and parts of Bangalore City since 1994. The Mnemonic Symbol of
NDDB was adopted by the Union from April’ 2002 to market the liquid milk.

OBJECTIVES OF THE UNION

a) To improve Dairy farming activities in rural area by establishing Milk

producers co-operative societies (MPCS) under co-operative principles.
b) To provide assured and remunerative market round the year for the Milk
produced by the producer members.
c) To provide package of technical inputs to its Milk producers for the
 enhancement of milk production. This includes facilities such as
emergency visit service, Infertility camps, First Aid services, Artificial
insemination, and Mass Vaccination programme against diseases.
d) Supply of balanced cattle feed at subsidised rate, Fodder development
programmes, beside extension programmes.
e) To provide necessary training for producers, members and staff of the
Dairy co-operative Society.
f) To facilitate rural development by providing self-employment
opportunities for unemployed youths at village level. In other words to
prevent migration of unemployed youths from rural area there are by
providing an opportunity for steady income.
g) To eliminate middleman by organizing MPCS which is owned and
managed by producers themselves.
h) To provide quality milk and milk products to urban consumers rates
consented by GOK from time to time.
i) To uplift the Socio economic status of the rural people.
STATUS

Kolar –Chikkaballapura District Co-operative Milk Producers Union is

registered under Co- operative Societies act after bifurcation from
Bangalore District Co-operative Milk Producers Union on 23/03/1987. The
area of operation is restricted to Kolar and Chikkaballapura Districts having
2919 villages of 11 revenue Taluks.

SHARE CAPITAL:

Union started with a Share Capital of Rs.8.56 Lakhs, which was transferred
from Bangalore District Milk Union. The Share Capital of the Unions on
2021-22 is Rs.73.42Crores.

MEMBERSHIP AND SHARE AMOUNT:

Union was started in the year 1987 with 460 functional DCS, as at the end of
Apr–2022Union has 2214Registered Dairy Co-operative Societies and
Commissioned 2207DCS, of which 1901MPCSare functional. Total
Members enrolled are 3,00,333 of which 1,01,509 are Small Farmers,
1,01,211 are Marginal Farmers, 55,051 are AgriLabourers42,562 are Others.
80,012 are Women Members 46,953are Schedule Caste 30,565 are Schedule
Tribe, and 1807 are OBC members.

Commissioned and Functional Societies for the last 5 years are as follows.

2021-
2017-18 2018-19 2019-20 2020-21 22
Districts
Func.
Func. DCS Func. DCS Func. DCS Func. DCS
DCS
KolarDist 890 900 905 916 926
CB PurDist 948 965 968 977 976
GRAND TOTAL 1838 1865 1873 1893 1902
%DCS IN KLR 48.42 48.26 48.32 48.39 48.69
% DCS IN CBP 51.58 51.74 51.68 51.61 51.31
 FUNCTION DCS Kolar Dist CB Pur Dist
977 976
965 968
948
926
916
900 905
890

Func. DCS Func. DCS Func. DCS Func. DCS Func. DCS

MILK PROCUREMENT:

The present average Milk procurement during the year 2016- 2017 is 9.63
lakh kgs per day from 1799 DCS comprises of 2.78 lakh members .The Union
had registered a growth to the tune of 9% for the last 5 years.

MILK PRICE: The cost per kg of Milk is calculated based on Fat and SNF
quality of milk. Basic price is calculated for 3.5% Fat and 8.5% SNF. At
present Milk is purchased from DCS at price of Rs.26.05 and DCS pays
Rs.25.00 to producers. In 2016-2017 the Union has paid Rs 774.86 crores to
milk producers.

Milk Procurement:

The present average Milk procurement during the month of Apr–2022is

8.55lakh kgs per day from 1901 DCS comprises of3.00 lakh members.
 Districts 2017-18 2018-19 2019-20 2020-21 2021-22
CBPurDist 485755 485076 445996 417439 402685
KolarDist 482179 530418 516458 503866 510623
Total AvgQty 967934 1015494 962454 921305 913308
% Growth 0.45 4.9 -5.2 -4.3 -0.9
Union Proc% IN CBP 50.18 47.77 46.34 45.31 44.09
Union Proc% IN KLR 49.82 52.23 53.66 54.69 55.91
 Procurment in Kgs CBPur Dist Kolar Dist
530418 516458 510623
485755482179 485076 503866
445996
417439 402685

2017-18 2018-19 2019-20 2020-21 2021-22

MILK PRICE:

The cost per kg of Milk is calculated based on Fat and SNF quality of milk. Basic price
is calculated for 3.5% Fat and 8.5% SNF. At present Milk is purchased from DCS at
price of Rs 28.25 and DCS pay Rs 27.00 to Producers. In 2021-22 the Union has
paidRs932.12crores to milk producers. In Apr-2022 Union has paid Rs72.58crores.

PROCUREMENT PRICE
3.5% FAT & 8.5% SNF
Year To DCS To Producers
2018-19 25.00 23.00
2019-20 27.05 26.00
2020-21 29.20 27.00
2021-22 25.25 24.00
2022-23 28.25 27.00
QUALITY INCENTIVE:

Quality Incentive is being paid once in 3 months to the DCS staff for procuring quality milk
which is to the tune of Rs3crores per year.
TECHNICAL INPUT ACTIVITIES

 FIRST AID FACILITIES:

Union is supplying drugs related to First-Aid service as per need of the DCS.Emergency service
of a qualified Veterinarian is made available at the DCS level. During 2021-222,885 animals
have been treated first aid. Apr–2022270animals have been treated first aid and 11,504
emergency cases were attended.

ARTIFICIAL INSEMINATION ACTIVITIES:

To improve the local breeds and to enhance milk
production Union is operating Artificial
Insemination (AI) centers through Single AI
and Cluster AI concept. In Cluster AI concept a
trained Inseminator discharges his service at the
doorsteps of member producers. As on Apr–2022
102 single AI centers and 182 cluster AI centers
are in operation covering 1901 societies. As on
Apr–202224,617 artificial inseminations have
been done. During the year 2021-22 a total of
1,22,158 calves were born.

Calves Born 2017-18 2018-19 2019-20 2020-21 2021-22

CBPurDist 91501 85838 91871 86626 59115
KolarDist 88677 78352 89942 86069 63040
GRAND
TOTAL 180178 164190 181813 172695 122155
% Growth 3.46 -8.87 10.73 -5.02 -29.27
 Calves Born CBPur Dist
91501 88677 85838 91871 89942 86626 86069
78352
59115 63040

2017-18 2018-19 2019-20 2020-21 2021-22

VACCINATION PROGRAMME:

During 2021-22, in association with Government Veterinary department 3,84,414 F & M

vaccination were carried out. The Union carried out 42,902Theileriasis vaccinations.

 FEEDS AND FODDER

During the year 2021-22 total of 69,340 MT cattle feed. In the month of Apr-202293,320Kgs of
Mineral Mixture was sold&6,470 MT of cattle feed was sold to MPCS. As on Apr–2022371.3
plots were raised.
CATTLE FEED SALES FOR LAST 5 YEARSAT A GLANCE

Year 2017-18 2018-19 2019-20 2020-21 2021-22

Cattle feed sales 66597 63218 53176 62406 69340
% Growth 0.73 -5.07 -15.88 17.36 11.11
 Cattle feed sales
69340
66597
63218 62406
53176

2017-18 2018-19 2019-20 2020-21 2021-22

STEP(Support to Training and Employment Programme)

STEP programmes implemented by KMF through Govt of
India funds. The Programme of STEP aims
 To make a significant impact on women in traditional
sectors (Dairying & Animal Husbandry) by upgrading skills.
 Providing employment to women on a project basis by
mobilizing women in viable groups, improving skills,
arranging for productive assets.
 Creating forward and backward linkages
&improving/arranging support services, providing access to
credit.
 Awareness creating, gender sensitization, nutrition
education, sensitization of project functionaries
Unionhas205 exclusive Functioning Women Dairy Co-operative Societies. Out of which 177
DCS are covered under STEP program.
 Programmes to develop dairy cooperatives:-

Members enrolled in Yashaswini Health Insurance scheme in Past 3 Years.

Years 2015-2016 2016-2017 2017-2018

Members 1,59,000 1,42,215 1,21,947
Rs. 4/- Incentive scheme:-

For every litre of milk supplied by the producer to DCSRs. 2/- was give as incentive by Govt of
Karnataka, effective from 19/09/2008. Subsequently ,from 14/05/2013Govt of Karnataka
increased it to Rs 4/- per litre of milk. In this scheme an average of 92,362 milk producers are
availing benefit of Rs 4/- GOK scheme through Kolar Chikkaballapura Milk Union. An average
of Rs 10.5 crores per month is being paid; from 01/12/2016 Govt of Karnataka increased it to Rs
5/- per liter of milk.

AmruthaYojana/ Special Component Programme/ Tribal sub Programme;-

For the economic upliftment of General, Scheduled Caste and Scheduled Tribe BPL women
beneficiaries, Kolar Chikkaballapura Milk Union also implemented state Government Sponsored
schemes like AmruthaYojana and SC, ST Schemes Under AmruthaYojana 50% subsidy for
General ,60% subsidy for SC and 75% subsidy for ST. The details are as follows.

2011- 2012- 2013- 2014-

Particulars 2010-11 Total
12 13 14 15
AmruthaYojana 117 55 128 174 37 474
Special Component Programme 10 30 0 40 19 80
ST sub Programme 6 6 0 17 10 29

Group Cattle Insurance:-

In the year 2021-22 1,10,682milch animals were enrolled for premium at the rate of 1.89% of the
rated value of the animal.

AAM Admi Bema Yojana:-

In year 2016-17 20,060 members were enrolled at premium rate of Rs 230 per member. Out of
this Central Government barred Rs 100 and remaining Rs 130 Rs 65 has been bared by Kolar
District Farmers Welfare Trust and remaining Rs 65 has been barred by enrolled members.

Processing Capacity

17
Kolar dairy was established during 1994 with a processing capacity of 1 LLPD of milk. The
processing capacity of the dairy was increased to 2.5 lakh liters during 2005 under Perspective
plan phase-I and again to handle 4.0 lakh liters per day in the year 2011. In the year 2018 a new
Mega dairy with a processing capacity of 3.0 LKPD was established in Chikkaballapura.

Milk Sales:

The marketing area includes entire Kolar, Chikkaballapura districts and parts of Bangalore urban
and rural districts. The Union sells following varieties of milks

1. Toned Milk
2. Shubam Milk
3. Special Milk
4. Samruddhi Milk.
5. Double Toned milk.
6. Homogenized Cow Milk.

The other products being manufactured and marketed includes UHT Milk, Butter Milk, Curd,
Ghee, Peda and Cheese. Besides this, the Union routes 63 other products of Nandini
manufactured by K.M.F and affiliates. The Union is increasing its market share steadily.
The average milk sale during the month of Apr–2022is3.79 lakh litres per day through 1522
retailers. During this year the Union registered milk sales of 4.12 lakh litres on 24/05/2022 and it
is highest milk sales for a single day.

The Average milk sales per day for the last 5 years are as follows

Year 2017-18 2018-19 2019-20 2020-21 2021-22

Avg Milk sales per day 294201 304878 319875 322315 355984
%Growth 4.78 3.63 4.92 0.76 10.45

Avg Milk sales per

355984
294201 day
304878 319875 322315

2017-18 2018-19 2019-20 2020-21 2021-22

 UHT MILK – speciality of KOMUL

In order to meet the requirement of different segment of consumers and their convenience,
KOMUL introduced UHT milk variants in Tetra packs to the market .During the process of
UHT, milk is sterilized at temperature of 137oC for 4 seconds and cooled instantly which retains
all the vitamins and nutritional value of milk providing zero bacteria product which needs no
boiling for use. The milk is packed in 6-layer tamper proofed Tetra-pack which ensures freshness
& Purity reiteration. The milk can be stored without refrigerating for 60/90 days in fino-
packaging and 180 days in brik packaging. The average sales of UHT milk during the year2021-
22 is 3.56 Litres per day .Union registered record UHT milk sales of 7.33 lakh litre on
26/08/2020and it is recorded as highest UHT milk sales for a single day. The average UHT milk
sale during the month ofApr–2022is2.80 lakh litres per day. The average UHT Flexi milk sale
during the month of Apr–2022is 0.15 lakh litres per day. The Total average UHT milk sale
during the month ofApr–2022is2.95 lakh litres per day

Year 2017-18 2018-19 2019-20 2020-21 2021-22

UHT sales ltrs 231009 267065 275119 350729 327917
%Growth 9.09 15.61 3.02 27.48 -6.50

UHT sales ltrs

350729
327917
267065 275119
231009

2017-18 2018-19 2019-20 2020-21 2021-22

PRESENT VARIENTS OF UHT MILK

100 MLFino Packing Good life Cow Milk [3.6% FAT & 8.5%SNF]
Smart Milk [1.5% FAT &
9.0%SNF] 180MLFino Packing Good life Cow Milk
[3.6% FAT 8.5%SNF]
Smart Milk [1.5% FAT & 9.0%SNF]
500 ML Fino Packing Good life Cow Milk [3.6% FAT & 8.5% SNF]
Slim Milk [0.5% FAT & 9.0% SNF]
500 ML Brik Packing Good Life Cow Milk [3.6% FAT & 8.5% SNF]
Smart Milk [1.5% FAT & 9.0% SNF]
 Slim Milk [0.5% FAT & 9.0% SNF]
1000 ML Brik PackingGood Life Cow Milk [3.6% FAT & 8.5% SNF]
Smart Milk [1.5% FAT & 9.0%
SNF] Slim Milk [0.5% FAT & 9.0%SNF]
Sampoorna (Std.) [4.5% FAT & 8.5% SNF]

Milk Products Average Sales per day for the Month of Apr-2022

Sl. No Products Unit Quantity

1 Ghee Kg 10,833

2 Peda Kg 100

3 Curd Kg 60,119

4 Cheese Kg 724

Profit and Loss:

During 2021-22, the unions turn over Rs 1563.15crores with profit of Rs. 4.19crores. In this
financial year, the union paid an average of Rs 27.96 per kg to milk producers.

Year 2017-18 2018-19 2019-20 2020-21 2021-22

Turn Over (Rs in Crores) 1374.65 1423.02 1482.27 1496.22 1563.15
Note: 2021-22 Turnover is subjected to Audi

Turn Over (Rs in Crores)

1563.15

1496.22
1482.27

1423.02
1374.65

2017-18 2018-19 2019-20 2020-21 2021-22

KOLAR-CHIKKABALLAPURA MILK UNION MILESTONES

 23.03.1987 Bifurcation of the district from an operational area of Bangalore Milk Union Ltd.,
(BAMUL) to form a separate milk union with 422 functional DCS and Rs 8.56 Lakhs Share
Capital.

 1987 Establishment of first Women Dairy Co-operative Society in the Union.

 1989 Inauguration of Sadali chilling center.
 1990 Initiation of milk marketing at Inter-dairy rate.
 1991 Inauguration of Gowribidnur chilling center.
 1991 KMF handed over chilling centers at Kolar, Sadali, Chintamani and Gowribidnur to
Kolar Milk Union Ltd.,
 1994 Inauguration of full-fledged dairy at Kolar with a processing capacity of 1.0 lakh
Liter/Day.
 1994 Union started liquid milk marketing under the brand name of Nandini in Polythene
Packets.
 1995 Inauguration of Administrative Building in the Dairy campus.
 1998 Inauguration of Cheese Plant.
 1999 For the first time in Karnataka State Union started marketing Nandini UHT milk in the
name of “Good life”,“Slim” and “Smart”.
 1999 Expansion of processing capacity of Chintamani chilling center.
 2000 Outside the state, entry into the Chennai for Milk marketing.
 2001 Kolar Dairy certified for ISO-9002 Quality Management System.
 2001 Installation of AMC Units at DCS level.
 2001 Union started marketing MastiDahi.
 2001 Expansion of UHT Unit in KOMUL.
 2002 Started implementation of TIFAC Project.
 2007 UHT Processing Capacity was increased from existing 0.4 LLPD to 1.5 LLPD.
 2008 Union started to export Goodlife milk with a shelf life of 1year to Singapore.
 2008 Union started to supply Goodlife milk to Indian army.
 2008 Our Union was renamed to “KOLAR CHIKKABALLAPURA COOPERATIVE
MILK PRODUCERS SOCIETIES UNION LTD”.
 2009 Introduced Goodlife milk 200ml Fino packets to market.
 2009 Launched New 1000ml Brik UHT variant Milk called “Sampoorna” with Fat 4.5% &
SNF 8.5% to market.
 2010 Enhanced UHT plant for 2.5 lakhs ltrs per day packing capacity.
 2010 Constriction of Mega Dairy has been Started near Nandi Cross Chikkabalapur.
 2011 Expansion of Processing Capacity from 2.5LLPD to 4.5 LLPD.
 2014 State Gov thus Transferred 10Acre of Land to KOMUL near Srinivasapur.
 2015 RO Plant & Multiplayer Boiler Inaugurated.
 2017 Expansion of Cheese plant from 2MT to 5MT.
 2017 Union Started Mysore Pak Production.
 2017 New Transformer Capacity of 1600 KVA have been Started.
 2017 Foundation Stone for "Automated Corrugated box manufacturing unit" has been laid.
 2018 March Mega Dairy Inaugurated at Chikkaballapur.
 2019 Alsafe installed in UHT Plant at Kolar Dairy. To enhance the production.
 2020 Expansion of Refrigeration Plant by Installation Screw Compressor with Scada System
with capacity of 540TR in Kolar Dairy.
 2020 Mega Dairy certified for ISO-2200-2018 Quality Management System.
 2021 Kolar Dairy certified for ISO-2200-2018 Quality Management System.
 ACHIEVEMENTS

 1994-95 Union was the first to introduce the “Operation Theileriasis” vaccination program in
India.
 1999 Installation of AMC Units at DCS level and For the first-time in the history of Karnataka,
inauguration of BMC centers in the jurisdiction of KOMUL
 2001 Inauguration of Animal Disease Diagnostic Laboratory at Chintamani chilling center
campus.
 2002-03 Inauguration of Community Machine Milking Parlors (centers) first of its kind in
India.
 2003-04 started “Clean Milk Program” for the first time in Karnataka.

 2003-04 started mass vaccination programs for Foot and Mouth Disease in coordination with
Animal Husbandry Department, Govt of Karnataka.
 2006 Producer welfare trust was started.
 26/08/2020 Highest UHT Milk Sales is 7.33LLPD.
 30/05/2022 Highest Liquid Milk Sales is 4.14LLPD.
 09/04/2022 Highest Curd Sales is 1,24,415 KGPD
 19/06/2018Highest Milk Procured is 11.64 LKPD.
2017 Union received "QUALITY MARK" certification from NDDB.
 Awards

 2003 Union bagged National Productivity Council Award – 2nd Place.

 2004 Union bagged National Productivity Council Award – 2nd Place.
 2006 Union bagged Best Co-operative Union Award in the state.
 2008Union received Energy Conservation Award both from Central and State Governments in
Dec.
 2009 Union got 1st Place in National Energy Award and 2nd place in State Energy
Conservation Award.
 GENERAL INFORMATION

Sl. No. Particulars

Kolar –
1 Area of operation
Chikkaballapura
2 No. of taluks covered 11
3 No. of revenue villages 2919
4 No. of villages covered 2809
5 No. of functional DCS 1901
6 No. of Milk procurement routes 74
7 No. of chilling centres 2
8 Dairy, Chilling centres &BMC’sProcessingcapacity (LLPD)
9 Main Dairy @ Kolar 4.5

Chintamani C.C. 1.0

GowribidnurC.C. 1.0
Sadali C.C. 1.0
10 MegaDairy @ CB Pur 3.0
11 KOLAR DAIRY
UHT Plant 3.0 LLPD
Cheese Plant 05 MT/Day
Butter Unit 20 MT/Day
Ghee Unit 06 MT/Day
Curd 50 MT/Day
12 MEGA DAIRY
UHT Plant at Mega Dairy 1.8 LLPD
FLEXI Pack Unit at Mega Dairy 0.8 LLPD
Paneer Plant at Mega Dairy 10 MT/Day
Butter Unit at Mega Dairy 10 MT/Day
Ghee Unit at Mega Dairy 04 MT/Day
13 Bulk Milk Coolers 360Nos 10,38,036 LPD
14 Automatic Milk Collection Units 1,295
15 EMT 665
16 Milk distribution routes 147
17 No. of retailers 1101
18 Nandini Milk parlours (including Franchises) 421
GowribidnurC.C. 1.0
Sadali C.C. 1.0
10 MegaDairy @ CB Pur 3.0
11 KOLAR DAIRY
UHT Plant 3.0 LLPD
Cheese Plant 05 MT/Day
Butter Unit 20 MT/Day
Ghee Unit 06 MT/Day
Curd 50 MT/Day
12 MEGA DAIRY
UHT Plant at Mega Dairy 1.8 LLPD
FLEXI Pack Unit at Mega Dairy 0.8 LLPD
Paneer Plant at Mega Dairy 10 MT/Day
Butter Unit at Mega Dairy 10 MT/Day
Ghee Unit at Mega Dairy 04 MT/Day
13 Bulk Milk Coolers 360Nos 10,38,036 LPD
14 Automatic Milk Collection Units 1,295
15 EMT 665
16 Milk distribution routes 147
17 No. of retailers 1101
18 Nandini Milk parlours (including Franchises) 421

BOARD OF DIRECTORS
SI NO Names Designations

1 Sri K Y Nanjegowda President, MLA MalurTq

2 Sri JayasimhaKrishnappa Director, BangarpeteTq

3 Sri K N Nagaraj Director, MulbagalTq

4 Sri V Manjunath Reddy Director, BagepalliTq

5 Sri J Kantharaj Director, GowribidanurTq

6 Sri Y B Ashwathnarayana Director, ChinthamaniTq

7 Sri D V Harish Director, KolarTq

8 Sri N Hanumesh Director, SVpuraTq

9 Sri N C Venkatesh Director, CBpuraTq

10 Sri R Srinivas Director, ShidlaghattaTq

11 Sri K AadinarayanaReddy Director, GudibandeTq

12 SmtSunandamma Director, CB puraDist

13 Smt R Kanthamma Director, Kolar Dist

14 Sri S V Subbareddy Govt Nominee Director

15 Sri Ashwathnarayana RCS Representative

16 Dr N Jagadish Kumar Dept. of AH Representative

17 Sri T TVinyagam NDDB Representative

18 Dr N Munireddy KMF Representative

19 Sri H Mahesh Managing Director

 f Directors

Sri. K Y Nanjegowda
President

Sri. Jayasimha
Sri K N Nagaraj
Krishnappa
Director, Mulbagal Tq
Director, Bangarpete Tq

Sri V ManjunathReddy
Sri. Kantharaju
Director, Bagepalli Tq Director, Gowribidanur Tq
Sri. Adinarayana Reddy Sri. Y.B. Aswthnarayana
Director, Gudibande Tq Director, Chinthamani Tq

Sri. D V Harish Sri. N Hanumesh

Director, Kolar Tq Director, SVpura Tq

Sri. N C Venkatesh Sri. R Srinivas

Director, CB pura Tq Director, Shidlaghatta Tq
 Smt. Sunandhamma Smt. R Kanthamma
Director, CB pura Dist Director, Kolar Dist

Sri. Subbareddy Sri. Ashwath Narayana

Director, Govt. Nominee RCS Representative

Sri. N Jagadishkumar Sri. T.T. Vinayagam

Dept. of AH Representative NDDB Representative
Sri. Munireddy N Sri. H. Mahesh
KMF Representative Managing Director
PROCESSING CAPACITY:

Kolar dairy was established during 1994 with a processing capacity of the dairy was increased
to 2.5 lakh liters during 2005 under Perspective plan phase 1. Due to the rapid increase in milk
procurement,again the processing capacity of the dairy is increased to 4.5 lakh liters per day.

Kolar- Chikkaballapura district co-operative milk producers union is registered under co-
operative societies act after bifurcation from Bangalore district co-operative milk producers
union on 23-03-1987. The area of operation is restricted to kolar and chikkaballapura district
having 2919 villages of 11 revenue taluks.

KOMUL has three subdivisions:

 At Chintamani
 At Kolar
 At Chikkaballapura

KOMUL has 4 chilling centre they are:

 Kolar chilling center

 Chintamani chilling center
 Sadali chilling center
 Gowribidnur chilling centre.
 NATURE OF THE BUSINESS CARRIED:

One of the core functions is procurement of milk, processing it and marketing milk and milk
products. KOMUL markets its products under the brand name Nandini. The union processes the
milk and market in urban area through various agents. The union is providing service to the milk
producer with technical inputs like veterinary service, seeds ,etc and also by giving training to
farmers and induction program.The union also takes research ,development and also other
promotional activities for the overall benefit of the farmers.

MISSION & VISION:

Kolar- Chikkaballapura Milk Union to continuously procure quality milk by providing

remunerative price & technical input services to Producers and supply quality Milk & Milk
Products to the consumers. It also strives to achieve top position in the dairy industry by
improving the financial position of the union.

Values:

1. Honesty
2. Discipline
3. Quality
4. Hardwork
5. Mutual Trust & Belief
6. Transparency
7. Co-Operation& Team Work

VISION 2021:

 Kolar- Chikkaballapura will collect 20 Lakh Lts. Of Milk/day.

 Entire Milk will be collected through Bulk Milk Coolers, Computerized systems at villages.
 Kolar – Chikkaballapura Milk Quality will be a Global Benchmark.

QUALITY POLICY

“We continuosly strive to improve our internal quality and operating systems by educating milk
producers ‘ and motivating work force to achieve customer satisfaction.”
Our Quality Policy :

“KOMUL is committed to supply safe Milk and Milk products to the satisfaction of customers.

 By adopting accepted and appropriate methods and technology in procurement,

processing, manufacturing packing and prompt delivery of milk and milk products.
 Maintaining by constant communication with all the parties involved in the food chain
to achieve ultimate goal of supplying good quality milk and milk products.
 By complying with statutory and regulatory requirements.

This commitment is supported by measurable objectives and shall be reviewed for continued
suitability from time to time.
PRODUCT PROFILE :

Milk is almost a complete food, with a very high nutritive value. It provides body building
proteins, energy giving lactose and milk fat, bone-forming minerals and health giving vitamins
.All these nutrients are present in an easily digestible and assimilable from in milk and is
therefore a very important food , especially for children. It is also important for the elderly , the
sick or the pregnant women. Milk comprises of water , fat and solid-not-fat(SNF).Milk is
nutritionally balanced when fat and SNF are in the right proportions.SNF is made up of proteins
,lactose and minerals .Normal cow milk contains about 4%fat and 8%SNF while buffalo milk
contains about 7%fat and 9%SNF of the average daily human requirements, a glass of milk
(about 200 ml) provides 16% protein , 30% calcium ,11% potassium, 20% Riboflavin, 13%
Vitamin, B-12 and 25%vitamin D.

MILK SALES:

The marketing area includes entire Kolar district and a part of Bangalore urban and rural
districts. The Union sells following varieties of milks.

 Toned Milk
 Homogenized cow Milk,
 Subham Milk
 Special Milk
 Samruddhi Milk Double Toned Milk etc…

The other range of the products being manufactured and marketed includes:

 UHT milk
 Butter Milk
 Curd
 Ghee
 Peda

Besides this, the Union sells all the products produced by Nandini Milk products , a unit of
K.M.F. The Union is increasing its market share steadily. The present aggregate growth rate
works out to be around 12.85% for the past 5 years.
The average milk sales during the month of November-2021 is 2.74 lakhs liters per day through
632 retailers . During this year the Union registered record milk sales of 2.87 lakhs kgs+ and it is
recorded as highest milk sales since inception.

The Average milk sales per day for the last 4 years are as follows

Year 17-18 18-19 19-20 20-21

Avg sales per day 2,22,530 2,36,950 2,43,833 2,66,969
%Growth 15.63 6.48 2.9 9.5

Milk products Average Sales per day for the Month of Feb-2021

Sl.No Products Unit Quantity

1 Ghee Kg 5,250
2 Peda Kg 36
3 Curd Kg 17,803
4 Cheese Kg 1,076

KOMUL PRODUCT RANGE:

The products produced by komul are:

 MILK
 CURD
 BUTTER MILK
 PEDA
 GHEE
 CHEESE
 GULAB JAMOON MIX
 MYSORE PAK
 PANEER FLAVOURED MILK
 KOVA
 BUTTER
1. TONED MILK: Karnataka’s most favourite Nandini toned milk. Pure milk containing 3.0%
fat and 8.5 %SNF . This is available in 500 ml and 1 ltr packs.

2. SHUBHAM MILK: Nandini Shubham milk is nutrious creamy milk with 4.5% fat and 8.5%SNF
suitable for all the purposes.This is available in 500 ml and 1 ltr packs.

3. HOMOGENIZED MILK: Nandini homogenized milk is pure milk which is homogenized and
pasteurized. Consistent right through, it gives you more cups of tea or coffee and is easily
digestible. This is available in 500 ml packs.

4. CURDS: Nandini curds are made out of pure milk. It is thick and delicious ,giving all the
goodness of homemade curds. It is available in 200 gms and 500 gms.

5. GHEE:Nandini ghee is made from pure butter. It is fresh and pure butter. It is fresh and pure
will a delicious flavor. Hygienically manufactured and packed in a special pack to retain the
goodness of pure ghee. Shelf life of 6 months at ambient temperature. This is available 5 ltr tins
and 15 kg.

6. BUTTER: Rich, smooth and delicious, Nandini butter is made out of fresh pasteurized milk
cream. Any preparations made from this will be a delicious treat. It is available in
100gms(salted),200 gms and 500 gms cartoons both salted and unsalted.

7. MASALA BUTTER MILK: Masala butter milk is manufactured and sold in the summer season,
especially from month of march to july, the only period during which it gets demand. On an
average the selling amounts to about 1000 ltrs per day in 250 ml sachets.
8. PANEER: Nandini paneer is very tasty, wholesome and nutrious supplement for a variety
of dishes. Add Paneer to make dishes creamy and mouth-watering . It is available in 200
gms(chiplets) and 1 kg (slab) packs. It can be stored for 30 days when kept frozen.

9. CHEESE: Nandini cheese is creamy , soft fresh , cheddar cheese made from pure whole milk
comes in an ‘easy-to-grate’ block. It is available in 1 kg and 200 gms packs.

10. KHOVA: Nandini pure milk Khova adds richness and increases the taste in the preparations
like carrot halwa, gulab jamoon etc., It is available in 200 gms packs .It can be stored for 30
days when kept frozen.

11. PEDA: Peda is sweetened heat desiccated product obtained from milk. It is rich in fat
,proteins , lactose and minerals especially iron content. On an average 25 kg peda is produced
and sold in units of 25 gms box. Each box contains 10 pedas weighing 25 gram each.
AREA OF OPERATION(NATIONAL):

Nandini (komul) has a long traditional of maintaining the highest quality standards, rights from
selection of raw milk to processing and packaging of the end products.

KOMUL comprises of Kolar- Chikkaballapura district 11 taluks with a total of 2919 revenue
villages.

The reason why its products are much in demand nationally and are exported regularly to
states like Andhra Pradesh ,Tamil Nadu , Kerala, Maharashtra, Goa and all over the Karnataka.
In many 2008 kolar milk union started to exported good life milk with a shelf life of 1 year to
Singapore and in sep 2008 union started good life milk to Indian army.

INFRASTRUCTURAL FACILITIES:

 Dispatching of milk from the remote area.

 Providing hospital facility to the employees.
 Giving quarters to the employee.
 Well organized machinery.
 Canteen facilities are provided at very subsidized rate .
 Conveyance allowance is given to all employees.
 Transportation facilities are provided to employees of the organization at free of cost.
DAILY ACTIVITIES OF THE UNION :-

Under Co-operative sector, Kolar – Chikkaballapura Milk Union Limited (KOMUL) is totally
autonomous organization.It functions through elected management committee .Operational
area of union is restricted only to Kolar district comprising of 11 taluks .In order to give more
importance to dairy farming activities in rural area in turn to bring overall improvement in
production and development , the Union is functioning with the following set of objectives they
are:

 To improve Dairy farming activities in rural area by establishing Milk producers co-
operative societies (MPCS) under co-operative principles.
 To eliminate middleman by organizing DSC owned and managed by producers
themselves.
 To provide quality milk and milk products to urban consumers at reasonable price.
 Finally, to provide contact between producers in the village and consumers in the town
,this acts as a bridge to bring society economics and changes in the society.
COMPETITORS:

Sl.No COMPANY NAME COMPANY LOGO

1 NESTLE

2 Swastik

3 Tirumala

4 Dodla
5 Heritage

6 Arokya

7 Amul
SWOT ANALYSIS:

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of
planning and helps marketers to focus on key issues.

This SWOT analysis is based on both external factors and internal factors of the organization.

STRENTGHS:

 Customer satisfaction
 Quick availability of raw materials
 Strategically located in the KOMUL
 Popular brand known from many years
 Milk and milk products are available at competitive prices
 KOMUL has very good infrastructure
 KOMUL attends to the complaints of consumers immediately.
 New technology implemented for production of milk
 Ability to maintain uniform quality
  Timely delivery
 Raw milk handling needs is upgrade in terms of physico –chemical and microbiological
attributes of the milk collected. The use of clarification and bactofugation in raw milk
processing has improved the quality of the milk products.
 KOMUL pays the highest price for the milk collected from farmers in India and loyally
among customers for the brand.

WEAKNESS:

 Freezing of marketable area

 Lack of flexibility in system
 Rivalry among sister unions
 Lack of personalized service to channel members
 High overheads
 Return are not expected

OPPORTUNITIES:

 Expansions of operations to rural areas

 Already planned for introducing some new products in means future to cater to new
segments of business.

THREATS:

 Entry of MNC’S into dairy industry

 Lack of proper promotions for the KOMUL range of products
 Competitions from private dairy company’s
 Unawareness about the various products of KOMUL among the people.

FUTURE GROWTH AND PROSPECTORS:

1. Quality prerequisite for growth and competitive edge.

2. Need of high quality raw milk for the productions of “Good Life’ brand UHT Milk.
3. Need to produce value added products like Cheese,Fruit based Drinking Yogurt.
ANNEXURE
ANCE SHEET ABSTRACT FOR THE YEAR 2017-18

PARTICULARS
SOURCES OF FUNDS
Share capital 669554554.53
Reserves and surplus 1394138817.00
Loans 784549390.00
GOK plan funds 359731317.00
Profit and loss a/c 64554747.8

Total 3272528826.33

APPLICATIONS OF FUNDS
Fixed assets 3252945674.21
Gross block 1005787489.96
Less: depreciation-note block 2247158183.25

INVESTMENTS 57728538.00
Current assets:
Stock 656026679.00
Trade debtors 611048040.00
Cash and bank balance 370748509.90
Loans and advances 301103689.01
Total (a) 1938926917.91

Less current liabilities and provisions 971284812.83

(b) 967642105.08
Net working capital (a-b)

TOTAL 3272528826.33
BALANCE SHEET ABSTRACT FOR THE YEAR 2018-19

PARTICULARS
SOURCES OF FUNDS
Share capital 677837205.00
Reserves and surplus 1492455328.00
Loans 920499411.00
GOK plan funds 622010843.00
Profit and loss a/c 36322919

Total 3749125706.00

APPLICATIONS OF FUNDS
Fixed assets 3784611242.00
Gross block 1350502157.00
Less: depreciation-note block 2434109085.00

INVESTMENTS 74447743.00
Current assets:
Stock 642981831.00
Trade debtors 662157998.00
Cash and bank balance 580182728.00
Loans and advances 393392251.00
Total (a) 2278714808.00

Less current liabilities and 1038145930.00

provisions (b) 1240568878.00
Net working capital (a-b)
TOTAL 3749125706.00
BALANCE SHEET ABSTRACT FOR THE YEAR 2019-20

PARTICULARS
SOURCES OF FUNDS
Share capital 708727805.00
Reserves and surplus 1830461545.00
Loans 812158486.00
GOK plan funds 899768005.00
Profit and loss a/c 119569766

Total 3560685607.00

APPLICATIONS OF FUNDS
Fixed assets 3964571133.00
Gross block 1675312573.00
Less: depreciation-note block 2289258560.00
90953076.00
INVESTMENTS
Current assets:
Stock 574189049.00
Trade debtors 334869132.00
Cash and bank balance 432108332.00
Loans and advances 598493781.00
Total (a) 1939660294.00

Less current liabilities and 759186323.00

provisions (b) 1180473971.00
Net working capital (a-b)
TOTAL 3560685607.00
BALANCE SHEET ABSTRACT FOR THE YEAR 2020-21

PARTICULARS
SOURCES OF FUNDS
Share capital 720953016.80
Reserves and surplus 2048033007.09
Loans 677415582.00
GOK plan funds 20604585.00
Profit and loss a/c 18523427.63

Total 3485529618.52

APPLICATIONS OF FUNDS
Fixed assets 4059848701.00
Gross block 1964067966.00
Less: depreciation-note block 2095780735.00

INVESTMENTS 107360884.00
Current assets:
Stock 759227165.00
Trade debtors 605971821.82
Cash and bank balance 34462304.05
Loans and advances 787181382.63
Total (a) 2186842673.50
Less current liabilities and provisions 904454673.98
(b)
Net working capital (a-b) 1282387999.52
TORTAL 3485529618.52
 KOLAR –CHIKKABALLAPURA MILK UNION LIMITED

PROFIT AND LOSS A/C AND COST PARTICULARS FOR THE YEAR 2016-17

PARTICULARS 2016-17 COST/KG

QTY.PROCURED(Kg’s) 351697061
Avg KPD 963554
A).SALES 12824490425.17 36.46
B).MATERIALS CONSUMED:
Opening stock 477632382.79
Purchases 10045702311.53
Closing stock 537414032.30
(Op.St+Pur-Cl.St) 9985920662.02 28.39
C) GROSS MARGIN(A-B) 2838569763.15 8.07
D). VARIABLE COSTS:
Proc.Trptn.Chgs 171198361.08 0.49
Processing Expenses 731430016.27 2.08
Packing Materials 719489342.54 2.05
Selling&Distbn Exps 312290767.03 0.89
TOTAL 1934408486.92 5.50
E).CONTRIBUTION(C-D) 904161276.23 2.57
F).FIXED COSTS
Technical Input Exps. 199901105.95 0.57
Staff Expenses 248326743.06 0.71
Admn. Exps&Taxes 75117874.52 0.21
NDP 19021197.00
Short Claims 0.00
TOTAL 542366920.53 1.54
G).PROFIT BEFORE INTEREST(E-F) 361794355.70 1.03
H).INTEREST 4481571.33 0.01
I).CAH PROFIT from OPRN(G-H) 357312784.37 1.02
J).DEPRECIATION 47659694.03 0.14
Reserve for Bad&Doubtful Debts
K).NET PROFIT from OPRN(I-J) 309653090.34 0.88
L).ADD.MISC.INCOME 84057591.5 0.24
Profit before tax 393710681.84 1.12
Provision for income Tax 136300000.00 0.39
Allocation to Infrastruture fund 224428582.00
Allocation to Price Fluctuation fund 0.00
Profit After Tax 32982099.84 0.09
PROFIT AND LOSS A/C AND COST PARTICULARS FOR THE YEAR 2017-18

PARTICULARS 2017-18 COST/KG

QTY.PROCURED(Kg’s) 353295953
Avg KPD 967934
A).SALES 13746530871.40 38.91
B).MATERIALS CONSUMED:
Opening stock 537414032.3
Purchases 10871120782
Closing stock 656026679
(Op.St+Pur-Cl.St) 10752508134.80 30.43
C) GROSS MARGIN(A-B) 2994022736.60 8.47
D). VARIABLE COSTS:
Proc.Trptn.Chgs 184350188.97 0.52
Processing Expenses 812882197.47 2.30
Packing Materials 718018330.43 2.03
Selling&Distbn Exps 336835798.62 0.95
TOTAL 2052086515.49 5.81
E).CONTRIBUTION(C-D) 941936221.11 2.67
F).FIXED COSTS
Technical Input Exps. 155213217.00 0.44
Staff Expenses 285307484.00 0.81
Admn. Exps&Taxes 127551869.79 0.36
NDP 11830589.00
Short Claims 0.00
TOTAL 579903159.79 1.64
G).PROFIT BEFORE INTEREST(E-F) 362033061.32 1.02
H).INTEREST 10075139.98 0.03
I).CAH PROFIT from OPRN(G-H) 351957921.34 1.00
J).DEPRECIATION 117783312.51 0.33
Reserve for Bad&Doubtful Debts
K).NET PROFIT from OPRN(I-J) 234174608.83 0.66
L).ADD.MISC.INCOME 84395138.97 0.24
Profit before tax 318569747.80 0.90
Provision for income Tax 115960000.00 0.33
Allocation to Infrastruture fund 138055000.00
Allocation to Price Fluctuation fund 0.00
Profit After Tax 64554747.80 0.18
PROFIT AND LOSS A/C AND COST PARTICULARS FOR THE YEAR 2018-19.

PARTICULARS 2018-19 COST/Kg

QTY.PROCURED(Kg’s) 370655079
Avg KPD 1015493
A).SALES 14230208518.00 38.39
B).MATERIALS CONSUMED:
Opening stock 656026679
Purchases 10736439100
Closing stock 642981831
(Op.St+Pur-Cl.St) 10749483948.00 29.00
C) GROSS MARGIN(A-B) 3480724570.00 9.39
D). VARIABLE COSTS:
Proc.Trptn.Chgs 201166426.00 0.54
Processing Expenses 973023075.00 2.63
Packing Materials 841895434.00 2.27
Selling&Distbn Exps 375415022.00 1.01
TOTAL 2391499957.00 6.45
E).CONTRIBUTION(C-D) 1089224613.00 2.94
F).FIXED COSTS
Technical Input Exps. 128452534.00 0.35
Staff Expenses 400111221.00 1.08
Admn. Exps&Taxes 161494685.00 0.44
NDP 1226922.00
Short Claims
TOTAL 691285362.00 1.87
G).PROFIT BEFORE INTEREST(E-F) 397939251.00 1.07
H).INTEREST 60551714.00 0.16
I).CAH PROFIT from OPRN(G-H) 337387537.00 0.91
J).DEPRECIATION 327836456.00 0.88
Reserve for Bad&Doubtful Debts
K).NET PROFIT from OPRN(I-J) 9551081.00 0.03
L).ADD.MISC.INCOME 46271838.00 0.12
Profit before tax 55822919.00 0.15
Provision for income Tax 19500000.00 0.05
Allocation to Infrastruture fund 0.00
Allocation to Price Fluctuation fund 0.00
Profit After Tax 36322919.00 0.10
 PROFIT AND LOSS A/C AND COST PARTICULARS FOR THE YEAR 2019-20.

PARTICULARS 2019-20 COST/Kg

QTY.PROCURED(Kg’s) 352258285
Avg KPD 962545
A).SALES 14822675805.00 42.08
B).MATERIALS CONSUMED:
Opening stock 642981831
Purchases 11090301081
Closing stock 574189049
(Op.St+Pur-Cl.St) 1159093863.00 31.68
C) GROSS MARGIN(A-B) 3663581942.00 10.40
D). VARIABLE COSTS:
Proc.Trptn.Chgs 198906465.00 0.56
Processing Expenses 969575260.00 2.75
Packing Materials 900154942.00 2.56
Selling&Distbn Exps 381778674.00 1.08
TOTAL 2450415341.00 6.96
E).CONTRIBUTION(C-D) 1213166601.00 3.44
F).FIXED COSTS
Technical Input Exps. 203670919.00 0.58
Staff Expenses 393220278.00 1.12
Admn. Exps&Taxes 154175628.00 0.44
NDP 0.00
Short Claims
TOTAL 751066825.00 2.13
G).PROFITBEFOREINTEREST(E-F) 462099776.00 1.31
H).INTEREST 77978229.00 0.22
I).CAH PROFIT from OPRN(G-H) 384121547.00 1.09
J).DEPRECIATION 310287676.00 0.88
Reserve for Bad&Doubtful Debts
K).NET PROFIT from OPRN(I-J) 73833871.00 0.21
L).ADD.MISC.INCOME 50735895.00 0.14
Profit before tax 124569766.00 0.35
Provision for income Tax 5000000.00 0.01
Allocation to Infrastruture fund 0.00
Allocation to Price Fluctuation fund 0.00
Profit After Tax 119569766.00 0.34
PROFIT AND LOSS A/C AND COST PARTICULARS FOR THE YEAR 2020-21.

PARTICULARS 2020-21 COST/Kg

QTY.PROCURED(Kg’s) 336276052
Avg KPD 921304
A).SALES 149622223959.48 44.49
B).MATERIALS CONSUMED:
Opening stock 574189049
Purchases 11432416410
Closing stock 759227165
(Op.St+Pur-Cl.St) 11247378293.51 33.45
C) GROSS MARGIN(A-B) 3714845665.97 11.05
D). VARIABLE COSTS:
Proc.Trptn.Chgs 205242957.85 0.61
Processing Expenses 1041989672.46 3.10
Packing Materials 1150654331.93 3.42
Selling&Distbn Exps 403431502.61 1.20
TOTAL 2801318464.85 8.33
E).CONTRIBUTION(C-D) 913527201.12 2.72
F).FIXED COSTS
Technical Input Exps. 183077488.58 0.54
Staff Expenses 418331966.87 1.24
Admn. Exps&Taxes 142275503.19 0.42
NDP 0.00
Short Claims
TOTAL 743684958.64 2.21
G).PROFITBEFOREINTEREST(E-F) 169842242.48 0.51
H).INTEREST 71011176.45 0.21
I).CAH PROFIT from OPRN(G-H) 98831066.03 0.29
J).DEPRECIATION 276362826.00 0.82
Reserve for Bad&Doubtful Debts
K).NET PROFIT from OPRN(I-J) -177531759.97 -0.53
L).ADD.MISC.INCOME 200796187.60 0.60
Profit before tax 23264427.63 0.07
Provision for income Tax 4741000.00 0.01
Allocation to Infrastruture fund 0.00
Allocation to Price Fluctuation fund 0.00
Profit After Tax 18523427.63 0.06
INTRIODUCTION
 CHAPTER:1
INTRODUCTION
 CHAPTER:2

RESEARCH DESIGN
This chapter is devoted to research design. The formidable problem that follows the task of
defining the research problem is the preparation of the design of the research project popularly
known as the “RESEARCH DESIGN”. A research design is the arrangement of conditions for
collection and analysis of data in a manner that aims to combine relevance to the research
purpose with economy in procedure. In fact ,the research design is the conceptual structure
within which research is conducted ;it constitutes the blue print for the collection,
measurement and analysis of data .As such the design includes an outline of what the research
will do from writing the final analysis of data.

TITLE OF THE STUDY

“A STUDY ON COST AND PROFITABILITY ANALYSIS OF KOMUL”AT KOLAR.

STATEMENT OF PROBLEMS

KOMUL is operating in highly competitive environment .Profitability, Cost &Risks are the key
parameters for analyzing company’s performance with an investor’s perspective. So the study is
conducted to know about operational efficiency of komul using du-pont analysis.

OBJECTIVES

 To gain a brief insight of the concept COST PROFITABILITY

 To know the cost profitability of KOMUL.
 To know the profitability of KOMUL.
 To know the Costing and Management efficiency of KOMUL.
 To know the changes in financial position of the firm.
 To suggest the financial decision making.
 To know the profitability and efficiency for managerial decision making.

SCOPE OF THE STUDY

It is an important means of assessing past performance and future forecasting and planning
future performed.

In organization there is only one finance department every transaction has to be entered in the
financial accounts books so finance department is our scope of study. There is no separate
costing department .Scope of the study includes some components of cost that is,
transportation cost, processing expenses, packing material, selling and distribution expenses,
technical input expenses, staff expenses , administration expenses.

1. It helps to analyse the information about their financial performance.

2. It helps to changes in financial position that is useful to a wide range of users in making
economic decisions.
3. It helps to provide information to the investors and the potential investors.
4. It helps to take the cash flow in the business.
5. Its provide information about the accounting policies used.
6. It enables the analysis of the assets and liabilities.

RESEARCH METHODOLOGY

Research methodology is the basic need of the research . The descriptive study has been
undertaken by studying various input costs involved in comparision with profit for operating the
firm and identifying the costs associated with each activity of the company to study the
implementation of operational efficiency. In deciding the implementation of the operational
efficiency and its benefits, various ratios has been illustrated and it has been applied to the
company by collecting and analyzing the income statement.

SOURCES OD DATA

PRIMARY DATA

Primary data has been collected through interaction with the company officials.

SECONDARY DATA

The data has been gathered through secondary sources such as:

 Annual reports,
 Text books,
 Brochures,
 Manuals,
 Income statement ,
 Balance sheet,
 Various documents of the organization, which was available in company library &from
their website.

HYPOTHESIS:

 NULL HYPOTHESIS(H0):
 There is no significance relationship of profit of the company with working capital ,total
revenue and fixed assets of the company.
 ALTERNATIVE HYPOTHESIS(H1):
There is significant relationship of profit of the company with working capital, total
revenue and fixed assets of the company.

SIGNIFICANCE OF THE STUDY:

Cost accounting, as a toll of management, provides management with detailed records of the
cost relating to products, operation or faction . Cost management assumes strategic
significance in the corporate sector in view of the following reasons:-

 This cost management provides data about profitable and unprofitable products and
activities.
 All items of cost can be analyzed to minimize the losses and wastage emerging from the
manufacturing process and reduce the cost associated with different activities.
 Cost data can be obtained and compared with standard cost within the firm of industry.
 Cost accounting also provides cost data and information to determine the price of the
product.
 Negotiations with government and labour unions can easily be made with the
information provides by the cost accounting system.
 More accurate and reliable financial accounts can be prepared promptly for use of
management.

LIMITATIONS OF THE STUDY

Though the present study aims to achieve the above mentioned objectives in full earnest&
accuracy ,it may be hampered due to certain limitations as follows:

 Since this study is conducted with reference to KMF union therefore it cannot be
generalized.
 As we know that the companies will maintains the secrecy with regards to their financial
position.
 CHAPTER-4

DATA ANALYSIS AND INTERPRETATION

KOMUL is operating in highly competitive environment. Profitability, Cost & Risk are thekey
parameters for analyzing company’s performance with an investor’s perspective. So the study is
conducted to know about operational efficiency of KOMUL using du-pont analysis model.

The data has been gathered through primary sources i.e . information through interaction with
company officials as well as secondary sources such as Annual reports, Brochures, Manuals,
Income statement, Balance sheet and various documents of the organization, which was
availed through company library & website for data analysis and interpretation.

This chapter port frays and interprets the results of the analyzed data with the aid of tables and
charts. The data analysis and interpretation has done based on Du-pont analysis.

DU-PONT ANALYSIS :

DEFINITION

Du-pont formula (also known as the Du-pont analysis Du-pont model ,Du-pont the equation or
the Du-pont method) is a method for assessing a company’s returns on equity (ROE) breaking
it’s into three parts. The name comes from the Du-pont Corporation that started using this
formula in the 1920’s.

CHART REPRESENTING DU-POINT AN PROFITABILITY

PROFITABILITY

PAT/PBT EBT/EBIT EBIT/SALES

COGS/SALES OPERATING EXP/SALES

Material/Sales Labour/Sales Direct Exp/Sales

TABLE : TABLE SHOWING PROFIT AND MARGIN

Formula used: PAT/SALES*100

Year Profit margin

2016-17 0.39%
2017-18 0.41%
2018-19 0.30%
2019-20 0.20%
2020-21 0.18%

ANALYSIS:

0.45

0.4

0.35

0.3

0.25
profit margin
0.2 Column2
0.15

0.1

0.05

0
2016-17 2017-18 2018-19 2019-20 2020-21

From the above table ,in 2016-17 the profit margin is positive that is 0.24%,where as 2017-18
the profit margin is 0.46%, 2019-19 the profit margin is 0.26%, 2019-20 the profit margin is
0.80% and 2020-21 the profit margin is 0.13%.

INTERPRETATION:
From the above analysis, it can be the profit margin is positive 0.39% in the year 2016-
17.However the profit margin in 2017-18 is 0.41%,2018-19 is 0.30%,2019-20 is 0.20% ,2020-21
is 0.18%.
Hence the revenue of the company has decreased profit margin. But made a positive impact on
the profit margin. No negative balance.

TABLE:

TABLE SHOWING RELATINSHIP BETWEEN TAXABLE PROFITS AND OPERATING PROFIT

Formula used: EBT/EBIT*100

YEARS OPERATING AND TAXABLE PROFIT

2016-17 50
2017-18 35
2018-19 43
2019-20 53
2020-21 60

ANALYSIS:

From the above table, the ratio of operating profit to taxable profit is positive i.e.,2016-17 is
50%,whereas in 2017-18 the ratio is 35%, in the year 2018-19 the ratio is 43%, in the year 2019-
20 the ratio is 53% and in the year 2020-21 the ratio is 60%.

GRAPH:

Graph showing operating profit and taxable profit

60

50

40

30 operating profit and taxable

profit

20

10

0
2016-172017-182018-192019-202020-21
INTERPRETATION:

From the above analysis all the year operating and taxable ratio of company is profit is positive.

However ,the profitability ratio in 2016-17 is 50%, in the year 2017-18 is 35%,2018-19 is 43%,
2019-20 is 53%, and the year 2020-21 is 60%.

Since, in 2017-2018 the operating expense is very low in the company.

Hence, it shows positive impact in the operating and taxable profit ratio of the company.

TABLE:

Table showing the relationship between profit after tax and profit before tax

FORMULA: PAT/PBT*100

YEARS PAT/PBT
2016-17 7O%
2017-18 40%
2018-19 70%
2019-20 53%
2020-21 70%

Formula used: PAT/PBT*100

ANALYSIS:

From the above table in 2016-17 relation between PAT and PBT is 70% where as in 2017-18 it is
40%,2018-19 is 70%, 2019-20 it is 53% and 2020-21 is 70%, in the above table 2017-18 profit is
very low.

GRAPH:

Graph showing the relationship between profit after tax and profit before tax
 PAT/
80% PBT
70%

60%

50%

40% PAT/PBT
30%

20%

10%

0%
2016-17 2017-18 2018-19 2019-20 2020-21

INTERPRETATION:

From the above an be analysis, it inferred that the profitability during the year 2019-20
decreased to 53%. In the following year the revenue of the company has picked up due to
which the profitability condition has increased.

TABLE:

Table showing Relationship between Operating Profit and Sales

Formula: EBIT/SALES*100

YEARS EBIT/SALES*100
2016-17 1.11%
2017-18 1.65%
2018-19 1.03%
2019-20 0.97%
2020-21 0.43%
ANALYSIS:

From the above table in the year 2016-17,2017-18,2018-19, is relationship between EBIT an
sales is high. In the year 2019-20,2020-21 the relationship is very low.

GRAPH:

Graph showing the Relationship between Operating Profit and Sales

 EBIT/SALES*100
1.80%
1.60%
1.40%
1.20%
1.00%
0.80% EBIT/SALES*100
0.60%
0.40%
0.20%
0.00%
2016-17 2017-18 2018-19 2019-20 2020-21

INTERPRETATION:

From the above analysis, it can be inferred that the relation between the operating profit and
the sales is high in the initial year 2018-19. It has subsequently decreased in the following years.

However, in 2019-20, and the expenditure of the company is increased, thus the relationship
between the operating profit and sales has decreased in the 2020-21.

TABLE:

Table showing Expenses Ratio

Formula: Expenses ratio/sales*100

YEARS EXPENSES RATIO

2016-17 81.10%
2017-18 78.25%
2018-19 79.21%
2019-20 78.44%
2020-21 77.59%
ANALYSIS:

From the above table, the expenses ratio for 2016-17 is 81.10% and then it as reduced to
78.25% in a year 2019-20 and 2020-21 is 77.59%.

GRAPH:
Graph Showing Expenses Ratio

EXPENSES
82.00% RATIO
81.00%

80.00%

79.00%
78.00%
EXPENSES RATIO
77.00%
76.00%
75.00%

2016-17
2017-18
2018-19
2019-20
2020-21

INTERPRETATION:

From the above analysis, it can be inferred that the expenses ratio is varying from the year to
year . In the year of 2016-17 the expenses ratio is more and it has decreased all the years. The
expenses ratio is less in 2020-21 compared to the previous years as the company has not
incurred any expenses on the purchase of materials.

TABLE:

Table showing the Relationship between Operating Expenses and sales

Formula Used : Operating Expenses/ sales*100

Years Operating exp/sales

2016-17 98.88%
2017-18 98.34%
2018-19 99.88%
2019-20 99.02%
2020-21 99.56%
ANALYSIS:

From the above table, the operating expense ratio for 2016-17 is 98.88%, then 2017-18 is
98.34% it has increased to 99.88% in the year 2019-20 and further it has to 99.02% during 2019-
20 and 2020-21 is 99.56%.

GRAPH:

Graph showing the Relationship between Operating Expenses and sales

operating
100.00% exp/sales
99.50%

99.00%

operating exp/sales
98.50%

98.00%

97.50%
2016-172017-182018-192019-202020-21

INTERPRETATION:

From the above analysis ,it can be inferred that the operating expenses have increased from
year to year. In the year of 2016-17 the expenses ratio is 98.88% and 2017-18 is 98.34% and it
has increased in 2018-19 and 2019-20 and 2020-21.

The relationship between the operating expenses and sales is impacted from the expenses of
administrative ,selling expenses. Since the company has incurred more expenditure and sales in
the year of 2018-19, the operating expense is high as compared to the following year.

TABLE:

Table showing Relationship between Selling Expenses and Sales

Formula used: Selling expenses/sales*100

 YEARS SELLING EXP/SALES
2016-17 2.21%
2017-18 2.69%
2018-19 2.81%
2019-20 2.59%
2020-21 3.04%

ANALYSIS:

From the above table, the selling expense ratio for the year 2016-17 is 2.21%,then it has to
increased 2.69% in the year 2017-18,2.81% in the year 2018-19,2.59% in the year 2019-20,and
2020-21 is increased to 3.04%.

GRAPH:

Graph showing relationship between selling expenses and sales

SELLING EXP/SALES

3.50%

3.00%

2.50%

2.00%
SELLING EXP/SALES
1.50%

1.00%

0.50%

0.00%
2016-172017-182018-192019-202020-21
INTERPRETATION:

From the above analysis ,it can be inferred that the selling expense to sales ratio has increased
gradually from year to year.

In the year 2020-21 the selling expense ratio is more when compared to the subsequent years
as the company has incurred more expenditure than sales in the initial year.

TABLE;

Table showing the relationship between Administrative Expenses with respect to Sales

Formula Used: Administrative expenses/sales*100

YEARS ADMINISTRATIVE EXP/SALES

2016-17 0.56%
2017-18 0.68%
2018-19 0.61%
2019-20 0.64%
2020-21 0.67%

ANALYSIS:

From the above table , the administrative expense ratio for the year 2016-17 is 0.56% ,then it
has increased to 0.68% in the year 2017-18 further it reduced to 0.61% during 2018-19. In 2019-
20 is increased to 0.64 % , and 0.67% is in the year 2020-21.

GRAPH:

Graph showing the relationship between the administrative expenses with respect to sales
 Administrative exp/ Sales
0.80%

0.70%

0.60%

0.50%

0.40%
Administrative exp/ Sales
0.30%

0.20%

0.10%

0.00%
2016-172017-182018-192019-202020-21

INTERPRETATION:

From the above analysis, it can be inferred that the administrative expense to sales relationship
has reduced gradually from year to year.

In the year 2017-18 the administrative expense ratio is high as the administration expenses is
more when compared to the subsequent years.

TABLE:

Table showing the relationship between Non-Operating Expenses to sales

Formula used : Non-Operating expenses /sales *100

Years Non-Operating exp/sales

2016-17 1.25%
2017-18 1.09%
2018-19 0.99%
2019-20 0.83%
2020-21 0.79%
ANALYSIS:

From the above table ,the non-operating expenses ratio for the year 2016-17 is 1.25%, then it
has reduced to 1.09% in the year 2017-18 further it reduced to 0.99% during 2018-19. In 2019-
20 is 0.83% and 2020-21 is 0.79%.

GRAPH:

Graph showing relationship between non-operating expenses and sales

Non-operating exenses
1.40%

1.20%

1.00%

0.80%

0.60% Non-operating exenses

0.40%

0.20%

0.00%
2016-172017-182018-192019-202020-21

INTERPRETATION:

From the above analysis, it can be inferred that the ratio between the non-operating expenses
and sales has reduced gradually from year to year .This reduction is due to decrease in
depreciation.(Only depreciation is considered as the non- operating expenses).

As the company is following the written down value method /diminishing value method and the
company has not purchased any fixed assets in the year 2019-20 and 2020-21, hence the value
of depreciation reduced.
TABLE:

Table showing relationship between Materials to Sales

Formula Used: Material*sales

Years Materials*sales
2016-17 80.64%
2017-18 78.49%
2018-19 80.37%
2019-20 80.77%
2020-21 81.47%

ANALYSIS:

From the above table ,the ratio between material purchase and sales for the year 2016-17 is
80.64%,then it is for the year 2017-18 is 78.49%. further it has increased to 80.37% in 2018-19,
in 2019-20 is 80.77%in 2020-21.

GRAPH:

Graph showing relationship between Materials to sales

MATERIAL*SALES
81.50%
81.00%
80.50%
80.00%
79.50%
MATERIAL*SALES
79.00%
78.50%
78.00%
77.50%
77.00%
2016-172017-182018-192019-202020-21
INTERPRETATION:

From the above analysis, it can be inferred that the materials to sales ratio is 80.64%in the year
2016-17 and the material to sales ratio for the year 2017-18 decreased to 78.49%, and
increased all the years.

However , the company has purchased the materials in the year 2020-21, so the relationship
between the material and sales has increased.

TABLE:

Table showing the relationship between Manufacturing Expenses and sales

Formula used: Manufacturing expenses/sales*100

YEARS MANUFACTURING EXP*SALES

2016-17 13.12%
2017-18 15.40%
2018-19 15.09%
2019-20 16.05%
2020-21 17.37%

ANALYSIS:

From the above table, the ratio between manufacturing expenses and sales for the year 2016-
17 is 13.12%, and then it has increased to 15.40% in the year 2017-18, 15.09% in the year 2018-
19,in 2019-20 is 16.05% and 2020-21 is increased to 17.37%.
GRAPH:

Graph showing relationship between manufacturing expenses and sales

MANUFACTURING EXXP*SALES
20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
MANUFACTURING EXXP*SALES
8.00%
6.00%
4.00%
2.00%
0.00%
2016-172017-182018-192019-202020-21

INTERPRETATION:

From the above analysis, it can be inferred that there is an increase in the manufacturing
expenses. The increased impact may be due to the increase in rate of wages or prices of
materials.

TABLE:

Table showing the Operating Profit (EBIT) to Net Profit (PAT) ratio

Formula used: EBIT/PAT*100

YEARS EBIT/PAT
2016-17 280
2017-18 397
2018-19 325
2019-20 352
2020-21 233
ANALYSIS:

From the above table, the ratio between operating profit to net profit for the year 2016-17 is
280%, then it has increased to 397% in the year 2017-18 and further it reduced to 325% during
2018-19 in 2019-20 it increases to 352%, and 2020-21 it reduced to 233%.

GRAPH:

Graph showing the Operating Profit(EBIT) to Net Profit (PAT)Ratio

EBIT/
PAT
400
350
300
250
200 EBIT/PAT
150
100
50
0
2016-17 2017-18 2018-19 2019-20 2020-21

INTERPRETATION:

From the above analysis, it can be inferred the operating profit ratio is 280% in the year 2016-
17, increased in the year 2017-18 is 397%, and 2020-21 is decreased to 233%.In the above
graph profits variation year to year.

TABLE:

Table showing the relationship between Financial Charges to Sales

Formula Used: Financial Charges/Sales*100

Years Financial Charges/Sales

2016-17 0.30%
2017-18 0.23%
2018-19 0.18%
 2019-20 0.19%
2020-21 35.73%

ANALYSIS:

From the above table, the financial charges relationship for the year 2016-17 is 0.30%, and then
it has reduced to 0.23% in the year 2017-18 and to 0.18% during 2018-19 and 2020-21 is
increased 35.73%.

GRAPH:

Graph Showing the relationship between Financial Charges to Sales

FINANCIAL CHARGES/SALES
40.00%

35.00%

30.00%

25.00%

20.00% FINANCIAL CHARGES/SALES

15.00%

10.00%

5.00%

0.00%
2016-17 2017-18 2018-19 2019-20 2020-21

INTERPRETATION:

From the above analysis, it can be very low in all the years 2020-21 is 35.73%. Since there is
decrease in the financial charges relationship from year to year, this shows that the company
has paid fewer amounts towards the financial charges.
 CHAPTER -5

FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS:

 Profit margin is the positive in all the year, and it has gradually increased in the
following years that show a good sign in the profitability margin of the company.
 The operating and taxable profit is positive in the initial year and it has gradually
increased in the following years and also sales of the company have improved in
the following year.
 In the initial year the operating expenses is more than the operating income, so
the operating and taxable profit of the company is in positive.
 In the initial year , the relationship between the profit after tax and before tax is
positive due to decreased expenditure compared to the revenue , in the following
year, the revenue of the company has picked up due to which the profitability
condition has increased.
 The relation between the operating profit and sales has not showed a greater
impact on the company in the initial year.
 The relationship between the operating profit and sales has been affected from
expenditure being incurred by the company. Initial year the expenditure of the
company is less than the total sales.
 The expenses ratio showing the variation from year to year , in the initial year
expenses ratio is more and it has decreased in following year.
 The expenses ratio is more in the 2012-13 compared to all the year due to the
company has purchased more material in this year.
 The operating expense has decreased to year by year. Expenses ratio is more and
it has decreased in the following year.
 There is decreased financial charges relationship from the year to year; this shows
the company has paid fewer amount towards the financial year.
 The non- operation expense and reduced gradually from year to year . This
reduction is due to the impact of the depreciation. (Only depreciation is
considered as the non-operating expenses.
 In the subsequent year the operating and net profit has increased as the sales of
the company has increased in the following year.
SUGGESTIONS:

1. From one of the above findings it can be noted that the company
experiences recession due to which its profit has been affected. So it is
suggested that the company should plan its expenditure in such a way that
any changes in the business cycle will not affect the profitability of the
company.

2. The company is suggested to frame strategies to control operating

expenses so that the company can better its operating profitability position.

3. Proper training must be given to sales executives and marketing research

must be done regularly. This would result in increasing the demand for the
products and sales would also increase.

4. The company should go for economic purchasing to reduce costs of production.

5. It is suggested for the company to frame and follow the effective

management policy in order to increase efficiency in the process of
manufacturing , administering and selling the products which results in high
sales and increase in profits.

CONCLUSION

In this competitive business world , operating efficiency of an organization

plays a significant role .Hence each and every organization irrespective of
their business line must try to accomplish the objective of training operating
efficiency as it impacts on the profitability status of the organization.

KOMUL has established in Karnataka for milk products. It offers varied

products of highest quality at competitive price. The company has grown
enormously in the last five decades by giving priority to research and
development in milk products to give better and good quality milk products
to its customer.

The operating efficiency of KOMUL is good as the company is managing the

resources in an efficient manner by controlling the cost. The Overall
performance of the company is satisfactory.

BIBILOGRAPHY

Company documents
 Annual report
 Profit and loss accounts statements
 Company website
Books referred

 Cost Management –Ravi.M.Kishore

 Advanced cost accounting –Jain and Narang

WEBSITES

 www.komul.co.in
 www.amulindia.com
 www.kmfnandini.coop/html/kmfunits-nmp.html
 www.kmfdairy.com