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Chapter I
INTRODUCTION
Organization definitely is the backbone of the management and without its proper care at the
higher, middle and lower level of administration, it would be practically impossible for any
management to run the show smoothly. It is a means by which problems of the enterprise
connected with policies, operations and administrations can effectively be solved. Sound
organization can contribute greatly to continuity and success to the enterprise.
Management is one of the prominent professional courses in the Twentieth Century. When we
consider Management as a profession it is imperative that the product of the management
education would be a management professional. Management as a subject can be taught in the
classroom, but apart from the theoretical study the student also requires practical knowledge and
experience, which can be achieved only through continuous exposure. The purpose of including
such a project in the management education is to satisfy this need. This gives students the
practical experience and knowledge about major functional areas in management, their working,
interlinking, inter departmental conflicts, etc
To familiarize myself with the different Functional divisions, their coordination, control
activities, etc. of an organization I have chosen Nitta Gelatin India Limited. (NGIL), Panampilly
Nagar, Ernakulam for my final project. NGIL is a one of the multi location company. It enhances
customer confidence through a better quality product and better public services.
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1.1 Objectives
To get familiarized with the different departments in the organization and their functioning.
To understand how key business processes are carried out in organizations
To understand how information is used in organization for decision making at various levels
To understand the strength and weakness of the firm
To understand the opportunities and threats of the firm
To relate theory with practice.
1.2 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.
1.3 Methodology
This part explains how various information about the organization was collected.
Secondary data:
These were obtained from the official documents of the organization such as the annual reports,
records and other department manuals. Good amount of information were obtained also through
the website of the company and other related sites.
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Chapter- II
INDUSTRY PROFILE
2.1 Gelatin
Gelatin is produced from Collagen which is a main protein found in animal skin and bones. The
raw materials are first carefully selected and refined and extracted. Gelatin is thus made up of
extremely pure protein. Gelatins are of three grades – (edible, pharmaceutical, and
Photographic.)
2.1.1Gelatin in Food Industry
There are many versatile uses for gelatin in modern food production. The main reason for this is
its unique ability to react under heat. Gelatin melts at 37 degrees Celsius and becomes firm again
when it cools down. Its pleasant eating properties make it irreplaceable for the food sector.
Just by the way, gelatin is a source of high-quality protein, low in calories, free of cholesterol
and sugar and containing practically no fat. It is easy to digest and completely broken down by
the human organism. On top of that, gelatin has hardly any potential for causing allergies.
Many half-fats, low fat or light products would not be possible without gelatin. Whether half-fat
margarine or butter, low-fat pates or reduced-fat cheeses – gelatin is used everywhere. It is
neutral in taste, binds large quantities of water, forms gels and gives food that “great mouth
feels”.
Sweets
Edible gelatin is indispensable for gummy bears, wine gums, liquorices, chocolate marshmallows
and many other treats
Baked Goods
Gelatin stabilizes the butter cream and cream filling.
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Milk Products and Desserts
Dairy products are very popular. Gelatin plays an extremely important role in their preparation
and in the development of ever more new varieties. The right dose and the right type of gelatin
ensure creamy-light yogurts or more solid dairy products, such as curd cheese.
Meat and Fish
In pates and aspic, gelatin ensures a delicious appearance. Many salami or pepper sausage
varieties are protected from drying out with a protective coating of gelatin.
In fish products, gelatin is mainly used in the manufacture of jelly products. Here, gelatin
protects against light and oxygen as well as enhancing appearance.
To increase protein enrichment in pates, ready-meals and other delicacies, special gelatins are
gaining in importance.
Drinks
Gelatin also enhances our drinking pleasure. Wines, juices, cider and, in some countries, beer are
subjected to a gelatin treatment to clarify them. In the process, gelatin reacts with the tannins and
bitter substances and absorbs cloudy elements that then sink to the bottom and can be separated
from the drink.
2.1.2Pharmaceutical Gelatin:
Gelatin is used in myriad ways in the pharmaceutical industry. It is used for the manufacture of
capsules, tablets, and prevents drugs being damaged by air and light
Capsules and Tablets
As a component of hard and soft capsules, gelatin protects the drugs against harmful influences,
such as light or oxygen. Soft capsules are mainly used for vitamins and food supplements while
hard capsules are mainly used for medicines. Gelatin helps to keep the active pharmaceutical
agents together reliably and for a long time. Thanks to careful selection and dosage, even the
release speed of active medical agents can be enhanced with the use of capsules.
Gelatin-coated tablets (caplets) are a new technological development. The external coating with
gelatin ensures that patients can swallow the caplets easily and without any problem.
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2.1.3Photographic applications
Silver salt photographic materials consist of up to 15 layers containing gelatin that are coated
onto film or paper. Here gelatin acts as a binding agent for light-sensitive silver halides. Due to
their swelling properties, the developing agents can penetrate the layers and be removed again by
watering. Gelatin is an important component for this complex layer technique. It has the ability
to form a solution during heating that sets to a gel again on cooling down and can be kept after
water removal. Gelatin’s properties are needed to produce photographic materials such as
amateur films, color paper, graphic films and X-ray films, in industrial volumes. Gelatin is also
indispensable for digital photography. The ink-jet printer paper coated with gelatin guarantees
brilliant colors and clear shapes. This results in prints of the highest quality.
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CHAPTER-2
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Chapter - III
COMPANY PROFILE
3.1 Introduction
NITTA GELATIN INDIA LIMITED
Formerly KERALA CHEMICALS & PROTEINS LIMITED
Registered Office
Post Box: 4262
50/1002 SBT Avenue
Panampilly Nagar
Cochin 682036
Kerala State, India.
Tel: 0484 2317805
Fax: 0484 2310568
Email: [email protected]
Nitta Gelatin India Limited (NGIL), one of the most successful Indo-Japanese industrial
ventures, was incorporated in 1975 and started commercial production in 1979. NGIL is
managed by a professional team. The Managing Director is appointed by KSIDC and a whole
time Technical Director by NITTA. Through its collaborators NGIL has access to state of the art
technology and process inputs that help the company achieve its global vision.
Today NGIL is one of Kerala’s leading exports company, manufacturing Ossein, Gelatin, and Di
Calcium Phosphate. The company’s exceptional performance in the export sector has also earned
it a Registered Export House status.
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3.2 NGIL’s Philosophy
The company’s philosophy of Corporate Governance aims at excellence in every sphere
of operation consistent with the highest ethical standards.
The Core Value underlying NGIL Corporate philosophy is "trusteeship". We believe, this
organization has been handed over to us by the various stakeholders in 'trust' and we are
the "trustees" of these stakeholders. It is therefore our responsibility to ensure that the
organization is managed in a manner that protects and furthers the interest of our
stakeholders. We recognize society as an important stakeholder in this enterprise and it is
part of our responsibility to practice good corporate citizenship.
NGIL is committed to conduct its business in accordance with the applicable Laws, Rules
and regulations and with highest standards of business ethics. This code is intended to
provide guidance and help in recognizing and dealing with ethical issues, provide
mechanism to report unethical conduct and to help foster a culture of honesty and
accountability. Each director, officer and employee is expected to comply with the letter
and spirit of this code.
We are committed to continuously reviewing and updating our policies and procedures.
Therefore, this code of business conduct and ethics is subject to modification.
The Directors, officers and employees of the Company must not only comply with applicable
Laws, rules arid regulations but should also promote honest and ethical conduct of the
business. They must abide by the policies and procedures that govern the conduct of the
company's business. Their responsibilities include helping to create and maintain a culture of
high ethical standards and commitment to compliance and to maintain a work environment
that encourages the stakeholders to raise concerns to the attention of the management.
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Vision:
To become a premier industry in India with a global perspective, world class standards of
efficiency and professionalism and core institutional values.
Reach the position as the leader in Gelatin manufacture in India
Maximize shareholder value through high sustained earnings per share.
Continue as an institution with a culture of mutual care and commitment, a satisfying work
environment and continuous learning opportunities.
3.3 Brief History of the Company
The company was incorporated on 30th April 1975 and began the commercial production
(Ossein) on 1st October 1979 with full-fledged plant at Koratty, Thrissur Dt., 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 at Kakkanad, Ernakulam Dt., Kerala started its commercial production on 8 th
March 1999. NGIL is managed by a professional team. Through its collaborators NGIL has
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access to state-of-the-art technology and process inputs that help the company achieve its global
vision.
Major Milestones
1979 Started Comm. Production of Ossein
1996 Limed Ossein Plant Commissioned
1997 Formed Bamni Proteins Ltd. (a subsidiary company)
1999 Gelatin Plant Commissioned
1999 ISO 9002 Certification
2002 EDQM Certificate of Suitability
2004 Capacity expansion at Gelatin Plant
2007 Capacity expansion at Gelatin Plant
Community Development Activities
The Company has been actively participating in community development activities right from
the beginning. The major community development projects sponsored by the Company are:
1. Construction of a 10-bedded hospital building, near the Ossein Factory.
2. Construction of a Reading Room under the name and style of Panampilly Smaraka
Vayanashala.
3. Co-partnership in the construction of “Krishi Bhavan” in Kadukutty Panchayat.
4. Sponsoring of prizes for the Best Students in SSLC exams, in General stream and in
Scheduled Castes stream, from the Kadukutty and Koratty Panchayat area.
5. Better services to the public.
6. Sponsoring of prizes in the sports activities in the area surrounding the Ossein Division.
3.5 Manufacturing Locations:
1) Ossein Division, at Koratty in Thrissur district,
2) Gelatin Division, at Kakkanad, Ernakulam district,
3) Subsidiary: Bamni Proteins Ltd.,at Maharashtra,
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3.6 Share Position
The percentage of share held by its promoters can be illustrated with following figure.
Shareholders pattern of Kerala Chemical and Protein Ltd as on 31.03.2007
SL
NO.
CATEGORY NO OF SHARES
HELD
PERCENTAGE OF
SHAREHOLDING
A PROMOTER’S HOLDING
1. INDIAN PROMOTER
KERALA STATE
INDUSTRIAL
DEVELOPMENT
CORPORATION LTD
TRIVANDRUM
2860000 34.07
2 FOREIGN PROMOTERS
NITTA, GELATIN INC,
JAPAN
3900300 46.43
SUB-TOTAL 6762520 80.50
B OTHERS (INCLUDING
PUBLIC)
1637480 19.50
GRAND TOTAL 8400000 100.00
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3.7 Products and its Applications
3.7.1 Products:
Ossein (intermediary product)
Gelatin (edible, pharmaceutical & photographic Grade)
DiCalcium Phosphate
3.7.2 Ossein
The bones are received crushed -- broken into small pieces no larger than one-half inch. Crushed
bone is loaded into wooden tanks, each of which holds greater than 10 tons. The bone is
demineralized by soaking it in Hydrochloric Acid. Demineralized bone is called ossein, or
collagen. NGIL manufactures Ossein under the technical guidance of NITTA. Besides using
Ossein for the manufacture of Gelatin, NGIL exports its Ossein to NITTA on a buy-back
arrangement.
With demand for Gelatin going up, NGIL has stepped up production capacity of Ossein to 7000
MT and set up facilities to produce 5000MT of Limed Ossein.
3.7.3 Gelatin
NGIL today is one of the major manufacturers of premium, export quality Gelatin in India.
Functioning in technical collaboration with NITTA, the company has a production capacity of
3300 MT. The special feature of NGIL’s Gelatin is the new concept of offering customer specific
products and solutions. Product features include:
Consistent quality meeting USP standards
Highly flexible product specifications. Viscosity, Gel strength etc. as per customer
requirements
Prompt and timely delivery
Packaging: 20kg paper bags or bulk bags, palletized and stretch wrapped
Ready for vendor audit requirements
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GMP implemented
3.7.4 Di Calcium Phosphate (DCP)
NGIL plant has the capacity to manufacture 15000 MT of Di Calcium Phosphate (DCP). NGIL
exercises stringent quality control not only in the selection of raw material but also through every
stage of production, until the product is finally delivered into your hands. Besides its own
research and quality control facilities, NGIL is uniquely placed to draw on the vast resources of
its collaborators to ensure products of consistently high quality.
Crushed bones are treated with HCL at concentration around 4% for 7 days to remove calcium
and phosphorous. The minerals dissolved in HCL and form mono calcium phosphate and are
treated with lime slurry to form di-calcium phosphate. The concentrated slurry is filtered, dried
using hot air and stored in bin. The material is the packed in 50 Kg HDPE bags with liner.
DCP is mainly used in 4 sectors:
1. Poultry Farms
2. Mineral Mixtures
3. Feed Manufactures
4. Industries (for manufacture of ceramic products)
Di Calcium Phosphate (DCP) from NGIL is already used worldwide in diverse products
especially in Poultry feeds. NGIL’s Di Calcium Phosphate is made exclusively from animal
bones and thus enjoys these critical advantages absent in similar products made from other
sources.
Higher content of easily digestible phosphorous and calcium
Better bio-availability of phosphorous
Lower fluorine content
Excellent storage life.
Fine, free flowing, powdery form
No genetic problems on usage
Technical support for farmers and end users.
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Chapter – IVORGANIZATION STRUCTURE
Organization is the foundation upon which the whole structure of management is built. It is the
backbone of management. The term ‘Organization’ refers to a mechanism which enables men to
live together. In a static sense an organization is a structure manned by group of individuals who
are working together towards a common goal. In a dynamic sense organization is process of
welding together a framework of positions, which can be used as a management tool for the most
effective pursuit of an enterprise. Organization is coordinative and unifying and concerns itself
with a well-planned division of the numerous functions and the devolutions of duties and
responsibilities to the individual executive and subordinate official supported by a rigid system
of supervision and coordinated control, in order to ensure the effective execution of the plans as
formulated by those in administrative authority. Some regard it as a network of relationships, a
blue-print of how the management will like the various functions and activities to be assigned
and connected together. Some others look upon it as a system with inputs (men, materials and
machines in cases of business), and processes through which these are converted into outputs
(e.g.: goods and services, profits etc.).
4.1. Organization Chart:
The pattern of network of relations between the various positions in an organization as well as
between their persons who hold those positions is referred to as ‘Organization Chart’.
Organization data are often shown in the form of graphic chart. According to Harold Koontz and
Cyril O’Donnell, ‘every organization can be charted, for a chart is nothing more than an
indication of how departments are tied together along their principal lines of authority.’ In the
words of George R Terry, “A chart is a diagrammatical form which shows important aspects of
an organization including the major functions and their respective relationships, the channels of
supervision, and the relative authority of each employee who is in charge of each respective
function.”
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An organization chart can be drawn in different forms like i) Top down chart, ii) Left to right or
horizontal type of chart and iii) Circular Chart. In the Top-down-chart the major functions are
shown at the top with subordinate functions in successive lower positions. Such type of an
Organizational Chart of NGIL is described below explaining the line of authority and the names
of concerned personnel who hold various responsibilities. See annexure.
ORGANISATIONAL CHART
Chart no:1
Board of Directors
Managing DirectorG.Suseelan
ED(HR&G Admn.). D.Raveendranath
GM(OD)B.Shaji Mohan
GM (GD)M.A.Xavier
DGM(Comml)E.Kesavan
GM(Mktg&B-D)R.Ranjit
DGM (IA)-CSG. Rajesh Kurup
MR
ED(F&CP). B.Mohana Prabhu
GM(F&A)K.Muraleedharan Nair
GM(QA)K.Suzuki
DGM(QA)Dr.J.S.Suresh
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Chapter – 5DEPARTMENTS AND THEIR FUNCTIONS
5.1 Various Departments
Corporate Office:
MD’s Office
P&A Dept.
Commercial Dept.
Finance Dept.
Secretarial Dept.
Marketing and Business Dept.
Divisions
Ossein Division:
o Production
o Central Engineering Services (Maintenance)
o QA/QC
o Stores-General Stores and Engg. Stores
Gelatin Division:
o Production
o Central Engineering Services (Maintenance)
o QA/QC
o Stores-General Stores and Engg. Stores
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ORGANISTIONAL CHART - OD
Chart no:2
Head (HR)
WorksManager
Dy. Mgr (CES)
Engr
ED(HR&G Admn.) (D.Raveendranath)
GM(OD)B.Shaji Mohan
Dy.M(S)
AM(OD)
Manager(Prdn.)
Sr.Engr
EngrShift
ForemanAO (3) AO (1)
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ORGANISATIONAL CHART- GD
Chart no:3
5.2 Detailed study of Departments
GM(GD)M.A. Xavier
Head (HR)
Dy. M (CES)
Manager
(Gelatin)
Sr.Engr
AO (E.Store
s)
Engr
Engr
Shift
ED(HR&G Admn.)(D.Raveendranath)
AM (P)
SO(S)
Engr
Shift
Foreman
Dy. M (P)
Manager (Peptide)
Sr. E ngr
Engr.
Sr. Eng. (B&P)
Sr. Engr.
OM
Foreman
Engr
Shift
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5.2.1 Personnel and Administration Department (P&A)
Production is the combined output of the efforts of the big agents, viz., land, labor, capital,
enterprise and management. Although all these factors occupy a significant place in production,
yet ‘labor’ or manpower is the most important. It is the foundation or the edifice of every
manufacturing unit. There may be a mass of land, capital and entrepreneurs, but they cannot
function without the active force of ‘Labor”. That is why it is deemed as an indispensable factor
of production. The following arguments may be added in support of the suggestions for having a
separate department of personnel management.
Job analyzing for aiding management
Reduction in cost of production
Necessity of a contented manpower
Necessity of trained and efficient labour force
Scientific recruitment of manpower
Scientific promotion, demotion, transfers etc.
Cordial subordinate-boss relationships.
It may be remarked that the department of personnel administration and management should be
under the charge of a capable and experienced senior officer of the concern. He may be
designated as the General Manager or Director of the Department of personnel administration
and management. There may be several Deputy
Directors/Managers under him for his assistance, who may be entrusted with different activities
and functions, which may be undertaken by the department of personnel administration and
management
The P&A departmental structure of NGIL is illustrated in the following chart
DEPARTMENTAL ORGANISATION CHART – P&ADEPARTMENTAL ORGANISATION CHART – P&A
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Chart no:4
Functions of Personal Administration Department
ED(HR&G Admn)D. RAVEENDRANATH
Manager Training Head (HR), GD
Personal Secretary
Head (HR) OD
Advisory Officer
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. PERSONNEL ADMINISTRATION
Manpower Planning Wage & Salary Administration Recruitment Welfare Functions Selection Social Security Functions Placement Liaison with Government Departments Induction General Administration:- Training Repairs & Maintenance of Office Building Performance Appraisal Vehicle Running & maintenance Compensation Planning Dispatch of mail Succession Planning Renewal of Licenses under various Statutes Industrial Relations Telephones Discipline and Disciplinary Finalization of Miscellaneous contracts proceedings Management of security
The following are the important functions of the P&A Department
Recruitment:
Liaison with sources of labor supply
Interview applicants
Tests and Physical Examination
Maintenance of Personnel statistics
Granting of Increments to employees
Training
Training of new starters, apprentices, employees for transfer and promotion, instructors,
supervisors, etc
Encourage additional education, qualification, and other necessary skills
Work tours
Internal Management
Promotion of employees
Transfer of employees
Demotion
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Termination of services
Wages and Salary Administration
Job analysis
Job evaluation
Wages surveys
Employee training
Wage incentives
Profit sharing
Workers participation in management
Industrial Relations
Workers morale and discipline
Labor legislation interpretation
Attending labor grievances
Labor management co-operation
Arbitration
Social security and Labour Welfare
Provision of labor amenities
Implementation of social security legislation
Other social security measures, like provident fund, old-age pension, employees’
insurance, etc.
Recruitment Policy
The qualification and other requirements for recruitment in NGIL are explained in table shown in
the annexure. (Annexure- 2)
Sources of recruitment:
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Internal
Promotion
Promotion involve change from one job to another job that is better in terms of status and
responsibility. with the help of promotion the recruited will be conducted the firm.
Transfer
Transfer means shifting of an employee from one job to another job.
Routine Applications
With the help of routine application the recruitment will be conducted by the firm.
External
Employment Exchanges
With the help of employeement exchange the candidate to be selected in the NGIL.
Professional Institutions(Engg colleges, Business Schools)
With the help of various business school ,engg college the candidate will be recruited in the
NGIL.
References from well-wishers
Reference from other industries, local bodies etc the candidate will be recruited in the NGIL.
ITIs, Supervisory Development Centres, Related Instruction centres
With help of ITI, related instruction centers,the candidate will be recruited in the particular
firm.
Campus selection
This is the another important external sources recruitment. with the help of campus selection the
candidate will be selected in the particular firm. During this period, the employee will be allowed
to exhaust the leave standing to his credit.
Terminal Benefits Mode of Recruitment for Fresher:
Written test
Psychological test
Physical Endurance Test
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Group Discussions
Preliminary Interview
Final Interview
Pre-Employment Medical Checkup done by Company’s approved medical institution.
Selection is based on the fitness certificate issued by the approved medical institution. The
medical institute provide the fitness certificate on the basis of urine normal test, blood test
etc
The appointment order will be issued by the personal and administration or by managing
director. The appointment order will include the -
Date of joining the duty
Period of probation
Duties and responsibilities etc…
Methods of the recruitment
With the help of three methods the employs will be recruited in the NGIL
Direct method
With the help of campus recruitment the employees will be selected in the particular
organization.
Indirect method
With the help of journals, magazines. The advertisement will be provided by the NGIL.
Third party method
With the help of a third party the employs will be recruited in the particular organization.
ADVATAGES OF CENTRALISED RECRUITEMENT
It has the benefit of centralized promotion.
It has the benefit of centralized transfer.
It is very helpful for uniformed recruitment.
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It is very helpful for reducing the advertising cost.
ADVANTAGES OF DECENTRALISED RECRUITMENT
With the help of decentralized recruitment the unit can understand the real background of the
candidate.It is helpful for placing the right person.
Placement/Induction:
The appointee will report to the Head(P&A) who will brief the appointee regarding the general
information about the Company and introduce the appointee to the concerned Division Head.
After meeting the Division Head, the appointee will report to the Admn.-in-Charge of the
concerned division where he’ll be required to fill up various forms regarding PF, ESI,
gratuity etc. The appointee will also fill up a joining report form. The Admn.-in-Charge 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 programme.
Performance Appraisal:
The appointee will be assessed by his immediate superior, and the Department Head while
he’s 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 send back 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 as the case may be. However,
the appointee will be given a feedback on the Performance Appraisal by the concerned
Division Head in the presence of the Admn.-in-Charge, especially upon an adverse remark.
Confirmation:
On completion of the stipulated probation period, the appointee will be confirmed in the
service of the Company in writing.
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The confirmation order will be issued by the Head(P&A) and will be served on the appointee
through the Department/Division Head.
In the absence of a Confirmation order in writing, the appointee will continue as a
probationer, till such time the confirmation order is issued.
Promotion Policy
Upgradation within the Level:
In the normal course upgradation 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 terms of experience in the lower level, prescribed
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 a applicable fitment benefit and a promotion increment in the
higher grade.
Internal promotions:
To the extent possible recruitment by internal promotions will be resorted to, subject to
availability of suitable candidates with required experience in the lower grade. Promotion
will be based on written test and/or interview. However, recruitment from external sources
will be resorted to if there are no suitable candidates available from within.
Assistant Officer/Foreman grade is the promotion grade for the workmen who are promoted
to Management Cadre.
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Direct Recruitment to Management Cadre will be as Officers/Engineers. In case of Fresh
Post graduates in Professional Disciplines and Fresh Engineering graduates, the recruitees
will be imparted on-the-job training for a period of 12 months and 18 months respectively
before posting to the position.
Compensation Pattern
Components of Compensation Package
Basic Pay
Variable Dearness Allowance
House Rent allowance at the applicable rates or reimbursement of house rent
and maintenance charges as per the norms fixed by the Company from
time to time
Monthly Production Incentive linked to the Production beyond a certain level
of production. Applicable only for Level III and Level II.
Uniform Washing Allowance at the rates prescribed from time to time.
Fringe Benefits
Reimbursement of Conveyance expenses for Two wheelers/Four wheelers as per the eligibility
criteria.
Children’s Education Assistance as per the eligibility criteria.
Professional Development expenses reimbursement as per eligibility criteria.
Subsidized Canteen facility/reimbursement of canteen subsidy based on attendance as the
case may be.
Reimbursement of Entertainment expenses depending upon eligibility criteria.
Reimbursement of Telephone call charges in respect of residential telephone subject to
conditions.
Holiday/LTA depending upon the eligibility criteria – Biennial
Reimbursement of Annual membership fee of Professional Bodies
Welfare Measures
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Housing Loan Interest subsidy
Provision of Uniform and Shoes.
Medical reimbursement scheme
Reimbursement actual medical expenses based on production of bills subject to a
maximum of one month Basic Pay plus Dearness Allowance per year with facility for
accumulation on the unexpired balance without any upper ceiling.
Loans for purchase of Computer systems at a nominal rate of 2% per annum
Interest free loans facility for professional education of the Management Staff
subject to certain conditions.
Mediclaim cover for self and dependents on contributory basis for covering
hospitalization medical expenses.
Personal Accident coverage Policy
Leave Benefits
Casual Leave………...10 days/yr
Sick Leave…………..10 days/yr
Earned Leave…………30 days/yr
Mediclaim Insurance Coverage
This scheme is mainly intended for employees who go out of the purview of the coverage of ESI.
All employees covered by the medical reimbursement scheme, shall be covered under a
group Mediclaim Open policy for meeting the medical expenses on account of
hospitalization.
50% of the premium will be borne by the Company.
Benefits under the Mediclaim policy will be available only for treatment connected with
hospitalization for a minimum period of 24 hours.
The claims under the Mediclaim Policy will be forwarded to the insurers through the
Company and the amount realized will be released to the concerned employee through
the Company.
The candidate will be provided the better training policy with the probation period. it help to
enhance the good morale of the employees in the particular organization.
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Training Policy
Standard Operating Procedure for Training Programs
1. Identification of Training Needs: -
Needs will be identified by the concerned Department Heads. While identifying the needs, the
suggestions put forth by the participants in the previous year’s training programs, will also be
taken into account. Manager (Training) will convene meetings at the Divisions /R. O. in the
month of January every year to assist the Department Heads to assess the training needs.
Manager(Training) will consolidate the Training needs and evolve a draft training plan in
consultation with ED(HR&G) and circulate the draft to the Division Heads, by the 3rd week
February every year
2. Preparation of the Final Training Plan:-
Manager(Training) will discuss with the Division Heads regarding the draft training plan. He
will incorporate the changes, if any, in the plan and a final training plan will be prepared and
submit to ED (HR&G) for inclusion in the Training Budget. After obtaining the Training
Budget approved, Manager(Training) will send copies of the Training plan to all concerned,
latest by the third week of March every year.
3. Conducting of the Training Program:-
Manager(Training) shall ensure that all the Training Programs are conducted as per the
schedule drawn up. Main steps to be followed are:
(a) Identifying Faculty
Internal - As suggested by the Division Heads.
External - From the panel of faculties available in the Training Department or
. specific faculty suggested by the Division Heads
34
(b) Structuring the Program
Fixing the date of training program and venue in consultation with the
Department/Division Heads. Drawing up the list of participants in consultation with all
concerned and issuance of formal notice. Getting course material from the faculty
concerned and making sufficient no. of copies for circulation among participants.
c) Conducting of the Training Program
Manager(Training) will make arrangements for the smooth conduct of the programme on the
dates/at the venue.
4. Getting Feedback on the Effectiveness of the Program
Manager(Training) will get the feedback on the effectiveness of the Training Program by
a 3-Tier assessment method as follows:-
(a) Feedback from Individuals
At the end of the Training Program a questionnaire will be circulated to all participants
wherein the following parameters will be evaluated on a five point scale i.e. Excellent, Very
good, Good, Average, Poor.
(i) Usefulness of the program to the participants.
(ii) Depth of the program content.
(iii) Rating of the faculty in terms of his/her presentation skills, ideational fluency,
knowledge of the subject, ability in bringing about attitudinal changes in the participants.
(b) Feedback from the Department/Division Heads
After three months of conducting the Training program, Manager(Training) will send an
evaluation sheet to the concerned Department/Division Heads to assess the effectiveness of
the training program with specific reference to the following areas.
(1) Application of the new skills acquired - By immediate superior
35
(2) Behavioral/attitudinal changes visible - By Middle Managers as a result of the Training
program
(3) Overall evaluation of the participants. - By the Division Head
5. Corrective Action
Based on the evaluations made by the participants as well as the Division Heads
Manager(Training) will initiate appropriate corrective action with focus on the following aspects.
(a) Reviewing the course content/duration.
(b) Changing the faculty if needed.
(c) Retraining the participants to make up the shortfall in
performance/for bringing about the desired attitudinal changes.
(d) Restructuring the training program to increase the usefulness to
the participants.
6. Preventive Action:
In case of non-conformities, suitable preventive action is initiated to avoid recurrence of such
non-conformities in future. Such cases are reported in the Corrective and Preventive Action
Committee Meetings. The effectiveness of the corrective/preventive action is regularly
monitored.
7. Improvements:
Continuous improvement being the backbone of TQM HR strategy, the systems and procedures
are periodically improved and revamped if found necessary. Such improvements are reported at
the Corrective and Preventive Action Committee Meetings.
Retirement
Age of retirement
Every employee shall retire on the attainment of 58 years of age.
Date of retirement
36
An employee will retire from the service on the last day of the month in which he superannuates.
Notice of Superannuation
An employee attaining superannuation shall be given a prior written notice 1 month in advance,
indicating the date of his superannuation.
During this period, the employee will be allowed to exhaust the leave standing to his credit.
Terminal Benefits
An employee on superannuation shall be entitled to the following terminal benefits:
a) Gratuity@15 days’ pay for every completed year of service.
b) Encashment of earned leave: the entire earned leave standing to the credit of the employee as
on the date of superannuation will be allowed to be encashed
c) Salaries/wages up to the date of retirement
Service certificate
An employee who superannuated shall be entitled for a service certificate on the date of
superannuation.
Settlement of PF, pension schemes etc
The papers regarding settlement of the PF, pension scheme etc will be processed well in advance
and forwarded to the authorities immediately after the superannuation of the employee
concerned. The Company will follow up the matter and will ensure that the superannuated
employee gets the benefits without much delay
Manpower Strength
Table no:1
37
Ossein
Division
Gelatin
Division
Registered
Office
Bamni Plant total
Mgt. Staff 32 46 35 18 131
Workmen 116 106 21 112 355
Total 148 152 56 130 486
Shift Working
Shift Timings:
a) Ossein Division:
Relay shift: A shift………………7:00 am to 3:00 pm
B shift………………3:00 pm to 11:00 pm
C shift………………11:00 pm to 7:00 am
b) Gelatin Division:
Relay shift: A shift………………7:30 am to 3:30 pm
B shift………………3:30 pm to 11:30 pm
C shift………………11:30 pm to 7:30 am
c) Registered Office:
Only general shift
Monday to friday …………….. 9:00am to 5:00 pm
Saturdays………………9:00 am to 1:00pm
Human Resources Information System
38
A human resources information system (HRIS) is a system of software and supporting
computer hardware specifically designed to store and process all HR information. Also known as
HRMS, human resources management systems or less commonly, HRIMS, these systems are the
mainstay of modern HR departments. Traditionally, human resources departments relied on
multiple programs in each department. An HRIS integrates all of these programs through a
common database and single-user interface. An HRIS combines separate HR systems into a
centralized database that performs the majority of HR transactions. HRIS are particularly useful
for payroll and benefits administration.
HRIS in NGIL consists of
Employee profiles
Training details
Reminders
Reports
Master forms
Miscellaneous forms
Payroll- MIS
Administration details etc
39
5.2.2 Commercial Department
The objectives of commercial department are:
1. To procure the necessary materials, supplies etc., of proper quality
2. To procure them at the lowest possible ultimate cost.
The task of the purchasing department is to have on hand necessary goods to ensure
uninterrupted production of a product of satisfactory quality is the lowest possible expense. More
briefly summarized, it is to obtain what is wanted, when it is wanted, where it is wanted of the
right quality and the right cost.
Functions of the Commercial Department
Locating and selecting sources of supply for materials required
Interviewing suppliers, representatives, arranging conferences and plan visit
Verifying quality and quantity received
Maintaining records necessary for proper operation of its function
Salient features of Commercial functions of NGIL
• Hygiene and sanitations
• Concept of trace ability
• Assurance of safe raw material for manufacture of safe gelatin
• certificate of Veterinary Doctors
40
ORGANISATIONAL CHART- COMMERCIAL DEPARTMENT
Chart no:5
DGM (Materials)E. Kesavan
M(Materials)K. Azeem
Officer (Mtrsl)
Officer (Mtrsl)
AM(Materials
.)
Managing Director G. Suseelan
41
5.2.3 Marketing Department
Marketing is fundamental organizational function, basic for its survival, sustenance and growth.
It has philosophical and strategic overtones for the individual organization, to the extent that this
function aims at achieving some of the basic organizational objectives. Peter Drucker says, “The
purpose of business is to create a customer”. This statement highlights the basic reason for the
existence of any business organization.
Marketing can be identified into types retail and corporate business. NGIL follows corporate
business marketing.
NGIL’s products are marketed directly to the customer or through dealers to the customers.
Marketing Functions
1. Identifying new markets
2. Sales
3. Sales review
4. Ensuring customer satisfaction
5. Business Development functions
6. Conceptualising new business Opportunities
7. Project Identification and Feasibility Study
8. Sourcing Know-how, preparation of action plan, selection of site, compliance to
regulations
9. Plan, co-ordinate, implement and monitor the individual projects
Gelatin
Gelatin is produced from collagen which is a main protein found in animal skin and bones.
Gelatin contains 84-90% protein, 1-2% mineral salts and the rest is water.
Gelatin is specified and classified to three types according to their application. They are:
1) Edible Gelatin
2) Pharmaceutical Gelatin
3) Photographic Gelatin
42
Edible Gelatin: The most common form of Gelatin is edible Gelatin. Edible Gelatin is used in
confectionery, Gelatin Desserts, diary products, Beverages& Juices
Pharmaceutical Gelatin: Gelatin is used as an ingredient to manufacture two-piece hard
capsules, soft gelatin capsule, tablets & tablet coating.
Photographic gelatin: this grade gelatin is used in applications of paper , film and inkjet paper
Major Competitors of NGIL Gelatin
Global Indian
D&F, Germany Sterling
Gelice, Japan Pioneer
P.B., UK IGCL
Rousselot Narmada Gelatin
Nippi, Japan Raymon
K&K, US CJ
The plant capacity of G.D is 3300 MT and 3000 MT of Gelatin is produced by NGIL in a year.
Of which 70% of Gelatin is exported and the remaining 30% is sold in the domestic market. The
major customer of Gelatin in the export market is Nitta Gelatin Inc. Major countries where NGIL
exports gelatin are Japan, Jordan, Iran, Turkey, Dubai, Oman, Srilanka, Singapore, Netherlands,
US, Canada, Australia, Egypt, Thailand, and Indonesia. Domestic market share covers the main
cities like Bangalore, Mumbai, Pune and Chennai.
Ossein
NGIL manufactures ossein under the technical guidance of NITTA & exports Ossein to Nitta,
Japan on a buy-back agreement. Also Ossein is used to manufacture Gelatin. NGIL is having is
having an Ossein production capacity of 7000MT and set up facility to produce 5000MT Limed
ossein
43
Ossein comes in two types:
1. Dry Ossein
2. Wet Ossein(limed ossein)
Dry Ossein is exported to NGI and limed Ossein is sent to the gelatin plant for manufacturing
gelatin. Ossein is an intermediary product and not sold in the market directly. Under the business
collaboration with NITTA, NGIL supplies 70% of Ossein to NITTA on a 100% buy-back
agreement; Remaining 30% is transported to Gelatin Division as a raw material for the
production of Gelatin. There is a special transport arrangement to carry Limed Ossein from
Koratty (Ossein Division) to Kakkanad (Gelatin Division).
Di-Calcium Phosphate (DCP)
Di Calcium Phosphate is a by-product which is extracted while manufacturing ossein from
crushed bone.
NGIL is the market leader in the production of premium DCP (animal feed grade). With over
twenty years of expertise, NGIL produces and supplies premium quality DCP to all major
poultry and animal feed manufacturers in India. The plant capacity of Di Calcium Phosphate is
15,000 MT .50% DCP is sold in domestic market through agents and also by direct selling. The
States where DCP sold are AP, Karnataka, Tamilnadu, Maharashtra, Orrisa, Chattisgarh. 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, Sri Lanka and
so on, for the same purpose.
NGIL DCP Sales:
1. Through the consignment agencies
2. Export
3. General
44
Promotional Efforts
Advertising and sales promotion activities: The nature of the product of NGIL is such that they
don’t require any aggressive sales promotional activities. 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, event sponsorships, and sales exhibitions
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 check the status of their products in the
market.
Marketing Strategy
Market- oriented strategic planning is the managerial process of developing and maintaining a
viable fit between the organization’s objectives, skills and resources and its changing market
opportunities. The aim of strategic planning is to shape the company’s business and products so
that they yield target profits and growth.
The main marketing strategies adopted by NGIL are:
Customization: customization is the art of tailoring the product according to the needs of
the customers. It is the ability to prepare individually designed products and
communication to meet each customer’s requirements. Today customers are taking more
individual initiative in determining what and how to buy. They log on to the internet;
lookup information and evaluations of product or service offers; dialogue with suppliers,
users and product critics; and make up their own minds about the best offer. NGIL
believes in the strategy of customization. To achieve this objective the marketing
department of NGIL undertake following activities.
Preparation of marketing plan (periodically both in short term & long term)
Modification of product to suit the customers needs.
Delivering the products in time
Contact with Q.A to meet the standard of the product.
Analyzing the competition
45
Attending customers’ complaints
Keeping alert with global scenario
Analysis of sales performance
Collection of marketing information (from customers, competitors and regulatory
authorities. The methods of collecting marketing information are through market surveys,
telephonic conversation, direct meetings, and from the media.)
Advertising and sales promotion activities: (the nature of the product of NGIL is such
that they don’t require any aggressive sales promotional activities. 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,
sales exhibitions and in Pharmacy Journals.
ORGANISATIONAL CHART- MARKETING DEPARTMENT
46
Chart no:6
5.2.4 Finance Department
Managing Director G. Suseelan
Dy.GM (Mktg & Bus Dev.) R.Ranjit
MktgMgr. Dy..
Mgr. Mktg
Engr. Mktg
(2)
OfficerMktg
Head(SP) C.Srikumar
M(P), A.N.KannanM(P), S. MURALIM(TS), S.Mohan
Sr.O(Mtrls), Anil Jacob
O(Prjts.), B.BeenaMaya RamanSandeep Nair
Business Development Team
Manager(Peptide)
Sr. Engr (1).
Engr. (2)
47
Finance is the lifeblood of any business. It is an important section in the finance department. It
plays an important role in the overall accounting procedure of the organization. All the major
works are done in the finance and accounts section.
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
Confirmation of balance of deposits, advances, if any
Preparation of Trial Balance, Profit & Loss account and Balance Sheet
Reconciliation of inter unit accounts
Attending all audits like statutory audit and preparation of all schedules related to Profit
& 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.
Investment Proposals
Company is right now implementing a capital project on capacity expansion of gelatin plant to
capitalize on the economies of large scale production. In addition to the above the company is
48
also contemplating massive investments on related areas of business to take care of any
eventualities in the export market.
Significant Accounting Policies:
Basis of Accounting: The financial statement are prepared under the historical cost convention
on accrual basis expect as otherwise stated and in accordance with the applicable Accounting
Standards
Uses of Estimated: The presentation of financial statements in conformity with the generally
accepted accounting principles requires estimated and assumptions to be make that affect the
reported amount of asset and liabilities on the date of the financial statement and the reported
amount of revenues and expenses during the reporting period. Differences between the actual
result and estimated are recognized in the period in which the results are known/materialized
Depreciation:
Depreciation on plant and Machinery (other than service equipment) is provided on straight
line method. The rates adopted are as prescribed in Schedule XIV of the companies act, 1956
read with circular no/1/1/86 dtd 21.5.86 of the Department of company affairs, Government of
India except, in respect of the items having value in excess of Rs.5000/-, which are depreciated
at higher rates of the basis of technical evaluation by the management.
Research and development:
Research and development cost is expensed in the year in which it is incurred unless the future
benefit thereon is certain
Income tax:
The provision for current tax is made based on the tax payable under the income tax act 1961
Deferred tax assets/ Liabilities representing timing differences between accounting income and
49
taxable income are recognized to the extent considered capable of being reversed in subsequent
years
Export incentives:
Export incentives are recognized on exports based on the estimated realizable value of such
entitlements.
Foreign currency Transactions:
Monetary items denominated in foreign currency are reported at the exchange rate prevailing as
at the date of the Balance sheet and the resultant exchange gain/loss if any has been adjusted to
profit and loss account to the extent they related to items other than liabilities incurred for
acquiring fixed assets and those relating to liabilities for fixed assets which have been adjusted to
the carrying cost of such assets.
ORGANISATIONAL CHART-FINANCE AND ACCOUNTS
Chart no:7
50
5.2.5 Secretarial Department
Duties of Company Secretary:
Managing Director
ED(F&CP)B. Mohana Prabhu
GM (F&A)
M (EDP)
PS
A.O(1)
M(A)
O(A/cs) - 1
Manager (Finance)
Dy. M (F) -2
O(Fin.)Exe. Fin.
51
The duties of a secretary may be classified into two divisions. Statutory duties and General
duties.
Statutory or legal duties:
Maintenance of statutory books of the company, such as Register of members, Share
Transfer Book, The Minute Book, Register of Charges, Register of investments, Register
of Directors, Managing Director, Manager and Secretary
Supervising the issue of allotment of shares, share transfers and forfeiture of share, stock,
bonds and debentures of the company and the issue of share certificates and other legal
documents
Keeping the common seal of the company in safe custody and using it only when
authorized by the Articles and the Board of Directors
Ensuring that the activities of the company are not ultra vires the Memorandum of
Association, or the Company Law.
Sending out copies of Balance Sheet, Profit and Loss Account and Auditors report.
General Duties:
He has responsibility of properly organizing the office
The secretary acts as a connecting link between the company and the shareholders
It is his duty to project the company’s image in the minds of the public at large
ORGANISATION CHART –SECRETARIAL DEPT..
Chart no:8
52
Board of Directors
Managing Director: G. Suseelan
Co. Sec & DGM (IA)G. Rajesh Kurup
SO(A)
53
5.2.6 Production department
Manufacturing in its broadest sense is decidedly an art. There are three important phases of
modern manufacturing.
Planning of Production
Supplying of men, machines and materials
Controlling of production quality and process.
The production department sets targets during the periodical common division meeting. From
this plan, daily production target is determined. The daily production detail is given to
commercial department for procurement of raw materials. For the smooth going of production,
the production department is always in contact with commercial department, and stores
department. The main objectives of production are:
To ensure that all the products will have consistent quality
To achieve maximum customer satisfaction
To foster team work for optimum productivity of men and machinery
To meet the environment regulations with emphasis on safety of all the employees and
maintain the best house - keeping standards.
5.2.6.1 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 de-mineralization 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
demineralized by soaking it in hydrochloric acid. Demineralized 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 Dicalcium Phosphate, which is used as an animal feed
supplement and as fertilizer.
54
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 evaporators. 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.
55
The following chart graphically describes their gelatin production process:
56
Engineering Services Department (Maintenance)
According to Alfred and Beaty, ‘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 equipments, 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. On the other hand, 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.
CES 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 shut down and daily works
Engineer
57
5.2.6.2 Quality Assurance and Quality Control
NGIL gives paramount importance to the quality of the product. To suite the customers needs
Q.A/Q.C 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 as
sampling, frequency distribution, quality control charts, standard deviation, range,
probability theories etc.
Maintenance of adequate inspection and control record.
58
Quality Assurance certifications
With the objective of providing credibility and quality assurance to their customers the company
has been certified
ISO 9001:2000 - Ossein Division, Gelatin Division and Bamni Proteins Limited
HACCP - Gelatin Division Ossein Division Drug Manufacturing License - Gelatin Division
WHO-GMP - Gelatin Division
EDQM - Ossein Division, Gelatin Division and Bamni Proteins Limited
USFDA - Gelatin Division
IFANCA & MUI Halal - Gelatin Division
KOSHER - Gelatin Division Completed Inspection by European Union Certification in October2008
Poised for ISO 14001 Certification for GELATIN Division
59
Quality policy
We in “NGIL are committed to enhance customer confidence through continual improvement of
product quality, safety and service”. It is this simple realization that urged them on across the
last twenty years 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, NGIL combines the best technology, marketing expertise and most
importantly, dedicated human resource. All of which go a long way to ensure their clients
absolute quality.
Sustained quality through advanced technology: Their association with NITTA
gives them access to the latest technologies in the industry. A whole time Joint Managing
Director from NITTA heads technical operation. Gelatin quality control is directly under
a Quality Control Manager for NITTA. A full-fledged R&D department focuses on
innovation, improvisation and process development.
Quality Customer Service: Comprehensive customer orientation is one of NGIL’s
entrepreneurial guidelines. We believe that technically demanding products are only as
good as they’re accompanying services. Excellent customer support service and prompt
delivery has helped them establish a long-term relationship with customers. Their support
services include after-sales guidance, technical advice and usage related solutions.
5.2.6.3 Stores Department
A store keeping is defined as ‘that aspect of material control concerned with the physical storage
of goods’. It is the connecting link between the planning and production department and the
shops. The main facets 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 the engineering
stores. General stores concentrates the storing of raw materials needed for production and
engineering stores is concerned with the storing of tools and material equipments.
60
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
Maintaining stores
Issuing stores
Co-ordination of storekeeping with materials control
61
62
Chapter- 6DATA ANALYSIS AND INTERPRETATION
6.1 Financial Highlights
Table no:2
Particulars 2008-2009
Rupees
2007- 20078
Rupees
Profit before depreciation
And Income Tax
Less: Depreciation
Loss/ Profit before Tax
Provision for income tax /FBT
Provision for Tax under(current year)
Provision for Tax of earlier years
Profit/Loss after tax
Balance profit available for appropriation
Transfer to general reserve
Proposed Dividend
Dividend Tax
Balance of profit/ loss brought forward
from previous year
Balance Profit/Loss
carried to Balance Sheet
1,617,864,172
64,979,838
246,637,566
1,524,745
27944036
1324956
150193829
150193829
40000000
25200000
4282740
51746023
28965066
1,385,706,643
64,375,610
72,890,851
1400000
8258533
(3375169)
66607487
66607487
3400000
12600000
2141370
100212140
(51746023)
63
.
In 2008-09, sales has increased by 25% over the previous year to Rs 182.48Crores as
result of increased demand of Ossein from collaborators, increased production and sales of
Gelatin and also better sales realization of DCP. Ossein turnover increased by 20% mainly on
account of increase in price and depreciation of rupee against US Dollar. Gelatin turnover
increased by 30% to Rs. 84.06Crores compared to 64.89Crores during the previous year
mainly on account of increase in sales quantity and weakening of Rupee against US Dollar.
DCP sales increased by 21% to Rs. 52.31Crores compared to Rs.43.18crores mainly on
account of increase in volume and price.
The Gross profit (earnings before interest, depreciation and taxes) for the current year was
Rs. 34.49Crores as against Rs. 17.61Crores in the previous year. The operating profit
(including other income) was Rs. 31.16Crores as against Rs.13.73Crores in the previous
year.
The interest expenses and depreciation for the current year was Rs. 3.34Crores and Rs.
6.50Crores as against Rs.3.88Crores and Rs.6.44crores of the previous year.
64
FINANCIAL ANALYSIS
65
RATIO ANALYSIS
In financial analysis ratio analysis is a power full tool. It is the process of establishing and
interpreting various ratios for helping in making certain decisions. The absolute accounting
figure reported in the financial statements does not provide a meaningful understanding of
the performance and financial position of a firm. In financial analysis, a ratio is used as a
benchmark for evaluating the financial position and performance of a firm.
LIQUIDITY RATIOS:
Liquidity is the ability of the firm to meet its current liabilities as they fall due. Since liquidity
is the basic to continuous operations of the firm it is necessary to determine the degree of
liquidity of the firm. The financial manager analyses the following important ratios for this
purpose
CURRENT RATIO
The current ratio is a measure of the firm’s short-term solvency. It is the relationship
between current assets and current liabilities.
Current ratio = Current assetsCurrent liabilities
Table no:3
2004 2005 2006 2007 20080
1
2
3
4
5
6
CURRENT RATIO
ratio
YEAR 2004 2005 2006 2007 2008
RATIO 5.34 4.91 4.42 4.12 2.39
66
Figure no:1
INTERPRETATION:
The current ratio of firm measures its short-term solvency. In a sound business a current ratio
of 2:1 is considered an ideal one.The current ratio of the company for the past four years was
quite favorable. It indicates that the company has a favorable liquidity position. It provides a
margin of safety to creditors. It also shows an adequate working capital
2) QUICK RATIO
Quick ratio establishes a relationship between quick or liquid assets and current liabilities.
Quick Ratio = Current assets – Inventories Current liabilities
Table no:4
YEAR 2004 2005 2006 2007 2008
RATIO 1.55 1.45 1.29 1.46 0.94
2004 2005 2006 2007 20080
0.20.40.60.8
11.21.41.61.8
QUICK RATIO
ratio
Figure no:2
67
INTERPRETATION:
Quick assets refers to current assets which can be converted into cash immediately. Quick
ratio of 1:1 is considered satisfactory as a firm can easily meet all its current liabilities. For
the past years except the last year the ratio is greater than 1:1. But for the last year the ratio is
0.95:1. This indicates the financial position is not sound.
TURNOVER RATIOS:
This ratio highlights upon the activity and operational efficiency of the business concern.
Turnover ratios measure how efficiently the assets are employed by the firm. These ratios
indicate the speed with which assets are being converted into sales. These ratios are also
called efficiency ratios or activity ratios
3) DEBTOR’S TURNOVER RATIO
This ratio indicates how much of the total sales are of credit
Debtor’s turnover ratio = Net Sales
Average debtor’sTable no:5
YEAR 2004 2005 2006 2007 2008
RATIO 15.56 17.11 17.99 13.27 15.53
2004 2005 2006 2007 200802468
101214161820
DrS TURNOVER RATIO
ratio
68
Figure no: 3
4) FIXED ASSETS RATIO
The ratio of fixed assets to net worth indicates the extent to which the shareholders funds are
sunk into the fixed assets.
Fixed Assets to Net worth Ratio = Fixed assets (after depreciation) Long term fund
Table no:6
YEAR
S
2004 2005 2006 2007 2008
RATIO 1.397 1.689
9
2.505 2.718
7
3.16
2004 2005 2006 2007 20080
0.5
1
1.5
2
2.5
3
3.5
FIXED ASSET RATIO
ratio
Figure no:4
INTERPRETATION:
The ratio indicates that in the initial years the company was maintaining its fixed assets
mainly by the outsider’s funds. The ratio has improved over the past five years. In the last
two years, company was able to maintain a good proportion between owners fund and
outsiders fund in maintaining fixed assets.
69
PROFITABILITY RATIOS
The profitability ratios are calculated to measure the operating efficiency of the company.
Profitability ratios may be classified into the following, gross profit margin, net profit
margin.
5) GROSS PROFIT RATIO
This ratio indicates the average spread between the cost of goods sold and sales revenue.
Gross Profit Ratio = Gross profit x 100 Sales
Table no:7
YEAR 2004
2005 2006 2007 2008
RATIO 0.26 -0.41 7.90 7.19
18.95
2004 2005 2006 2007 2008-5
0
5
10
15
20
25
GROSS PROFIT RATIO
ratio
Figure no :5INTERPRETATION
70
6) NET PROFIT RATIO
This ratio is the overall measure of the firm’s ability to turn each rupee of sales into net
profit.
Net Profit Ratio = Profit after tax x 100 Sales
Table no:8
YEAR 2004 2005 2006 2007 2008
RATIO -2.53 -3.68 4.34 4.38 7.95
2004 2005 2006 2007 2008
-6
-4
-2
0
2
4
6
8
10
NET PROFIT RATIO
ratio
Figure no:6
71
INTERPRETATION:
72
WORKING CAPITAL TURN OVER RATIO
Working capital turnover ratio = Net sales Working capital
Table no:9
YEAR 2004 2005 2006 2007 2008
RATIO 2.82 3.18 3.58 3.95 4.81
2004 2005 2006 2007 20080
1
2
3
4
5
6
TURNOVER RATIO
ratio
Figure no:7
INTERPRETATION:
As the year passes the company attains increasing working capital . The increase in the working
capital indicate the company is having less expenses and high sales
73
6.2 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
microenvironment actors (customers, competitors, distributors, suppliers) that affect its ability to
earn 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 threats. A major purpose of environmental scanning is to discern
new marketing opportunities. Each business needs also to evaluate its internal strengths and
weaknesses periodically. It can do so by using a Memo or checklist for performing strengths,
Weakness Analysis. Management reviews marketing, financial, manufacturing and
organizational competencies and rates each factor as a major strength, minor strength, neutral
factor, minor weakness, or major weakness.
Strengths
Technology: The technology used in the production of Gelatin by NGIL is world class
and there is a competitive technological support and assistance by the NITTA Inc, Japan.
Collaboration with World Class performers: NGIL has an excellent tie-up with
leading companies of the world
KSIDC’s Assistance: KSIDC is a fully owned company of the State Government and for
the business development and industrial promotion NGIL gets professional, technical and
financial assistance from this governmental agency.
A vast global clientele
Dedicated, technically qualified people
Committed to improving the quality of the society
74
Weakness
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 raw materials were brought by
Railway goods service but often there were delays in getting the material on time since the
Railway Transportation Board gives last preference to such materials. Hence bringing entire
raw material by trucks involves a high raw material transportation cost.
Foreign exchange fluctuation: There is high fluctuation in the value of US dollar to India
rupee. Since 80% of the sales into the export market are billed in terms of US$ company
is incurring loss.
Low Market share: When we consider the entire gelatin industry the contribution of
NGIL is very minimum of 8-10%.
Opportunities
NGIL has successfully faced two very important international regulatory inspections and
therefore expects an increased confidence of their overseas customers resulting in an
increased demand for Gelatin. It is poised for another certification under the European
Union Regulations.
NGIL expects orders from new international customers in the pharmaceutical sector.
NGIL’s products have the advantage of being well accepted in terms of quality and
regulatory compliance and therefore expect to increase its presence both in the export and
domestic markets.
The company is in the process of establishing business in new overseas markets on the
strength of the product quality and regulatory compliance
The company is also exploring the possibilities of offering value added products to new
markets and new customers.
75
Threats
There has been a substantial increase in the production volumes of Pork Skin Gelatin.
The increased availability of this type of Gelatin is likely to adversely affect the demand
of Bovine Bone Gelatin.
Also Gelatin alternatives such as HPMC and starch based products pose a great threat to
the future of the industry
Conventional photography is making way to digital photography and a steady decline in
this market segment has to be anticipated.
76
FINDINGS AND
SUGGESTIONS
77
FINDINGS:
Personal department is the largest department in the firm
The main cost is associated with the conservation of energy
The firm is in a liquidity position
The firm has an advanced technical knowledge
The workers are very much cooperative
Proper training is giving at the right time itself
The organization is financially in a sound position
Unity between trade union and the company
A good coordination exists between different departments
The Bamini plant doesn’t have good
78
SUGGESTIONS
The company should expand volumes of production so as to economize on the
advantages of higher production and thereby augment the increasing trend in the
domestic sale.
Vibrant presence of NGIL in the international market: Currently NGIL holds only about
8-9% of International market share. This can be further improved by attracting new
customers with continuous improvement in the international quality standards of the
product and with new strategies.
Control of manufacturing, administrative and selling expenses: raw material cost and the
production cost are increasing year by year. Thus these costs are to be further controlled
by minimizing the wastage and improving the efficiency of workers.
The company can have a pooled purchasing system for the main raw material, crushed
bone at the Bamni Plant and from there it can be transported to the Ossein division to
reduce the landed cost of raw material and cost of production.
The company can convert the Kerala based bone suppliers to captive suppliers by
properly helping them through strategic financial arrangements.
Company may also venture into agro-based diversification programmes.
Focus more on environment improvement: the company may take up more corporate
social responsibility programmes to improve the social status.
Young and qualified persons (merit basis) to be posted considering the future of the
organization
Company may initiate efforts to build new competencies/to enhance the existing
competencies to keep at pace with the growing international competency levels. For this
the activity of the training and development department may be accelerated.
Industrial counseling may be provided to the employees
Group activities such as quality circles, brainstorming, suggestion system etc should be
effectively revived.
79
NGIL recreation club activities can be made more dynamic and more regressive to
motivate the employees
Pollution is the major problem, the company should adopt techniques for treatment of
waste water from the plant
Should adopt cleanness in Ossein plant
Start quality checking at the lower level itself
Company can produce HCL for its use, to reduce the cost
80
CONCLUSION
CONCLUSION
81
The company’s focus on pharmaceutical grade gelatin is giving good results. The demand for the
company’s product in this segment is good and the company expects to further increase the sales
in this segment. Even though conventional photography is on the decline, the company will be
able to maintain sizeable sales volumes in this segment. Ossein Exports are expected to remain
stable for next few years. With Indian Poultry Industry on a growing path, the company expects
the demand for DCP to be steady in the current year.
At present a number of smaller companies are also coming into the market with their own
variety of products. So the company is prone to face a good competition in future, and as such
requires the company to think about better and new variety of products to capture the market.
NGIL is one of the best manufacturers ossein and products of ossein, gelatin and DCP and their
components for domestic commercial, industrial purpose etc. Their advanced technologies and
well-planned designs have helped them scale new heights and has attained customer satisfaction
by offering good quality products and services to the customers.
BIBLIOGRAPHY
82
1. Kotler, Philip, Marketing Management, Prentice Hall of India pvt. Ltd.
New Delhi, 2007.
2. NGIL Manuals
3. Annual Reports of NGIL 2007
4. www.gelatin.com.
5. www.NGIL.com
83
ABBREVATIONS
84
ABBREVATIONS
NGIL - NITTA GELATIN INDIA LIMITED
OD - OSSEIN DIVISION
GD - GELATIN DIVISION
DCP - DI CALCIUM PHOSPHATE
ED - EXECUTIVE DIRECTOR
HR & G - HUMANRESOURCE AND GENERAL
GM - GENERAL MANAGER
QA - QUALITY ASSURANCE
QC - QUALITY CONTROL
F& A - FINANCE ANED ACCOUNTS
DGM - DEPUTY GENERAL MANAGER
P &A - PERSONNAL AND ADMINISTRATION
LTA - LEISURE AND TRAVELLING ALLOWANCES
TQM - TOTAL QUALITY MANAGER
PF - PROVIDENT FUND
SO - SENIOR OFFICER
85
APPENDIX
86
BALANCE SHEET AS AT 31ST MARCH, 2009Particulars As at
31.3.2009Rupees
As at 31.3.2008
Rupees 1. SOURCES OF FUNDSi.Shareholders funda) Capitalb)Reserves and surplus
ii.Loan fundsa)secured loansb)Unsecured loans
iii. Deferred Tax LiabilityTOTAL2. APPLICATIONS OF FUNDSi. Fixed assets:a)gross blockb)Less: Depreciationc)Net Blockd)Capital Work-in-Progress
ii.Investmentsiii. Current Assets, Loans& Advances:a)Inventoriesb)Sundry Debtorsc)Cash and Bank Balancesd)Other Current Assetse)Loans & Advances
Less : Current Liabilities & Provisionsa) Liabilitiesb)Provisions
Net Current Assets
iv. Misc. Expenditure(to the extent not written off adjusted) TOTAL
84,000,000798,409,021
84,000,000677,697,932
882,409,021 761,697,932
76,687,050-
65,650,000
223,101,761 8,824,200
-
1,024,746,071 993,623,893
1,360,937,735785,292,484
1,240,203,447
701,779,101575,645,251
39,477,071 538,424,346 17,752,284
615,122,322 556,176,63035,990,237
312,425,030117,448,677
6,818,27336,990,55446,976,177
35,990,237
340,028,316110,028,297
13,477,063 31,08,747
33,338,944
520,658,711 527,960,087
94,473,91552,551,284
94,878,47434,256,795
147,025,199 129,135,269373,633,512
-
398,824,818
2,632,208
1,024,746,071 993,623,893
87
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31STMARCH, 2009
PARTICULARS Current year Rupees
Previous year Rupees
INCOMEGross SalesLess: Freight & Insurance on export salesLess: Excise Duty collected on domestic salesNet Sales Other Income
Stock Differential-Increase/(Decrease)
EXPENSESRaw Materials consumedPurchase of Finished GoodsOther Manufacturing, Administrative & Selling ExpensesFinancial ChargesDepreciation
PROFIT BEFORE TAXATIONLess: Provisions for TaxesIncome Tax- Current YearIncome Tax- Prior YearsIncome Tax- Deferred TaxFringe Benefit TaxPROFIT AFTER TAXATIONAPPROPRIATIONSTransfer to General ReserveProposed Dividend Tax on Proposed Dividend
BALANCE AFTER APPROPRIATIONSLess: Loss brought forward from previous year
PROFIT /(LOSS) CARRIED TO BALANCE SHEET
18733772351225800936344346182477488049839210(10112352)
1511124479123586143495219514681367049000241(54216417)
1864501738 1458597494
784281226-
7325591753604393364979838
754778573664686
5244418324144594264375610
1617864172246637566
279440361324956656500001524745
138570664372890851
8258533(3375169)-1400000
150193829
40000000252000004282740
66607487
3400000126000002141370
8071108951746023
48466117100212140
28965066 (51746023)