organisational study at nitta gelatin

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Transcript of organisational study at nitta gelatin

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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

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(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

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(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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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)

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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

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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

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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

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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.

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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

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Board of Directors

Managing Director: G. Suseelan

Co. Sec & DGM (IA)G. Rajesh Kurup

SO(A)

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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.

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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.

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The following chart graphically describes their gelatin production process:

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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

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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.

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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

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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.

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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

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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)

Page 63: organisational study at nitta gelatin

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.

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FINANCIAL ANALYSIS

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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

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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

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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

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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.

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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

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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

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71

INTERPRETATION:

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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

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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

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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.

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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.

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FINDINGS AND

SUGGESTIONS

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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

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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.

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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

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80

CONCLUSION

CONCLUSION

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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

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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

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83

ABBREVATIONS

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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

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85

APPENDIX

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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

Page 87: organisational study at nitta gelatin

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)