ORGANIZATIONAL STUDY

AT

KERALA SOLVENT EXTRACTIONS LTD

REPORT

Submitted for partial fulfillment of the requirements for

the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted By

MARIYA JASMINE. M. YReg. No. 00000

Under the guidance of

Mr. M. D. JOHNY Prof. THOMAS Company Guide Faculty Guide

DEPARTMENT OF MANAGEMENT STUDIESMAR ATHANASIOS COLLEGE FOR ADVANCED

STUDIESTiruvalla – 689 101, Kerala

2012

CERTIFICATE

This is to certify that this report, based on the

organization study conducted by MARIYA JASMINE M.

Y., second semester MBA student of our college for 20

days starting from 2nd May 2011 at KSE LTD., is a

bonafide record submitted in partial fulfillment of the

requirements for the degree of

MAR ATHANASIOS COLLEGE FOR ADVANCED STUDIES

TIRUVALLA

DECLARATION

I hereby declare that this report titled “Organizational

Study at KSE LTD.” has been prepared by me during the

academic year 2011 - 2012, under the guidance of Prof.

THOMAS , Department of Management Studies,

MACFAST, Tiruvalla.

I also hereby declare that this project report has not been

submitted to any other University or institute for the

award of any degree or diploma.

Date MARIYA JASMINE M.YTiruvalla

LIST OF TABLES

Table No. Title Page No.

3.1 Share capital pattern 5.1 Financial highlights 5.2 Net profit and sales comparison 5.3 Marketing price data

LIST OF FIGURES

Fig. No. Title Page No.

1 Purchase procedure

ABBREVIATIONS

A A A :A B B :A B C :B A A :B A B :B B A :B B B :B B C :C A A :C B A :C B B :C B C :

CONTENTS

ACKNOWLEDGEMENT

(i)

LIST OF TABLES

(ii)

LIST OF FIGURES

(iii) ABBREVIATIONS

(iv)

CHAPTER 1. INTRODUCTION

1.1. Scope of the Study1.2. Significance of the study

11.3. Objectives of the Study 11.4. Methodology

21.5. Limitations of the Study

2

CHAPTER 2. INDUSTRY PROFILE

2.1. Need for Solvent Extraction 32.2. Solvent Extraction Process 42.3. Coconut Oil Miller’s Co-Operative Society 42.4. The Solvent Extractors' Association of India 5 

CHAPTER 3. COMPANY PROFILE

3.1. History of KSE.Ltd 8 3.2. Growth Chronicle of KSE Ltd. 10

3.3. Vision 11 3.4. Mission 11 3.5. Share Capital Pattern 12

3.6. Awards and Recognition 14 3.7. Management 16

3.8. Social Concerns 173.9. Marketing Scenario 173.10. Research and Developments 17

CHAPTER 4. PRODUCT PROFILE

CHAPTER 5. FUNCTIONAL DEPARTMENTS

1.1. Production Department 191.2.Finance Department 221.3.Marketing Department 311.4.Purchase Department 381.5.Personnel Department 431.6.Stores Department 50

1.7 Quality Control Division

CHAPTER 6. SWOT ANALYSIS

CHAPTER 7. FINDINGS, CONCLUSIONS AND SUGGESTIONS

6.1. Findings 666.2. Conclusion 676.3. Suggestions 69

Bibliography

Appendix

1.1 SCOPE OF THE STUDY

The scope of the study is confined to the various levels of

management and their functions. This study is about the

organization’s structure. It helps to know the company policies

and their implications and to know about the detailed functions of

each department. Also scope of study is to analyze the strength,

weakness, opportunity and threat of the company.

1.2 SIGNIFICANCE OF THE STUDY

In the educational context conducting an

organizational study is very much important. Because all things

cannot be clearly understand from the theoretical knowledge. It

might need practical experience too. Organizational study helps to

fulfill this. It is the examination of how individuals construct

organizational structures, processes, and practices and how these,

in turn, shape social relations and create institutions that

ultimately influences people. Organizational studies comprise

different areas that deal with the different aspects of the

organizations.

1.3 OBJECTIVES OF THE STUDY

1. To get a complete picture of the organization.

2. To know about the organizational structure of the company.

3. To have awareness about the working of the organization.

4. To know about the activities carried out in each department.

5. To suggest some measure to improve the performance of the

organization

6. To analyze the strength, weakness, opportunities and threat

faced by the company.

7. To provide suitable suggestions for the smooth functioning of

the company.

8. To know the profitability of the firm and marketability of the

products.

1.4 METHODOLOGY

Both primary and secondary data were collected from the

company and the same were used for the completion of the

organization study.

Primary data

Primary data are those which are collected afresh and for

the first time through consultation with various functional

managers and staff. Thus all the data collected are original in

character.

For this study data were collected from all chief managers of the

departments by direct personal interviews and detailed interviews

with some departmental heads and other employees of the

company.

Secondary data

Secondary data is the data which has been collected and

published by other person or publications by means of various

books, newspapers and official website of the company. All these

means were used for the study.

1.5 LIMITATIONS OF THE STUDY

Time was the major limitation for this study

The company has imposed some rules and regulations

on staff not to reveal the confidential matters.

As many departmental heads were busy, it was not

able to collect all details of the organization.

Since the secondary data is not collected directly, it

may involve some errors.

INDUSTRY PROFILE

Solvent Extraction Industry

The solvent industry has achieved a

phenomenal progress and at present there are 520 units having

over all oil cake or oil seed processing capacity of more than 24.6

million tones per year, which included rice bran processing

capacity of more than 9.9 million per year. The solvent extraction

plays important role in the oil economy. Solvent extraction in India

was started in 1945.It had to struggle for more than 20 years to

establish itself.

2.1 Need for Solvent Extraction

In the early days, the oil extraction was mainly

done by locally framed chucks driven by animals. It was called as

the rotary crushing mill. The process was highly time consuming

and laborious. The capacity was too low and the input or output

ratio was not economic. To solve these problem motor-driven

expellers were introduced. The expellers can process larger

qualities at comparatively shorter time with better output. The

expellers can extract about 68% of oil.

Still there exists about 32%

extractable oil in the copra cake. The oil researchers had found out

the method of extraction using certain solvent. This was used in

this field and result was highly promising. By using solvent in copra

cake the residual oil of 32% contained in it can be effectively

extracted achieving 100% oil extraction from copra. The solvent

once used can be reused by cycling process.

This method was highly useful in

the present context in the Kerala. A large quantity of coconut copra

cake containing 32% oil has been going waste can now be used

productively. Thus the problem of the expeller mils could be

considerably reduced by the establishment of solvent extraction

plants. There was a considerable demand for starting solvent

extracting plants in Kerala in this context.

2.2 Solvent Extraction Process

The solvent extraction process is a method

of extracting the oil from oil seeds using solvent which ensures the

total recovery of oil. This technique can be used in coconut

extraction. The first factory of this type was started in Madhya

Pradesh in 1962 and now there are 526 factories all over India.

The Kerala Solvent Extraction Limited

was established in 1972 on this line. At present the solvent

extraction plant play a dominating role in the edible oil production

in our country.

2.3 Coconut Oil Miller’s Co-Operative Society

Lion share of copra went to mills in

Bombay and they were able to generate good profit. To overcome

this situation a co-operative society was formed by the name

coconut oil miller’s co-operative society and it was decided that this

society would act as an agent of state trading corporation for the

distribution of copra.

By seeing the performance of the Bombay group

an investigation department was assigned to investigate it. Then

they found out that they were using expeller mills for extracting oil

and was able to reduce the oil content up to 6%. The industries in

Kerala later began to follow it.

2.4 The Solvent Extractors' Association of

India 

From ancient time, vegetable oils were

obtained by crushing oilseeds in village ghanis/kolhus/chekkus

in the country. At the beginning of the 20th century the

vegetable oils industry was based on some 500,000 bullock-

driven ghanis producing about 800,000 tonnes of oils. Slowly, in

addition to these ghanis, power-driven ghanis (rotary ghanis

made indigenously) imported expeller and imported hydraulic

press plants started crushing oilseeds.

Around this time many European countries

and United States of America had established huge solvent

extraction plants for recovering directly almost all the available

oil in the oilseeds like Cottonseed and Soybean.

On this background, just 2 years before

independence, in 1945, a lone small Solvent Extraction Plant

commenced operation in Bhavnagar for extracting oil from

oilseed cakes and oilseeds. And gradually such units increased.

They faced common problems, which brought them together to

form an Association with all the 40 units operating at that time,

in 1963.

The Solvent Extractors' Association of

India was formed in 1963 to help and foster the development

and growth of Solvent Extraction Industry in India. At present

the Association is having 835 members including about 320

working solvent extraction plants having combined

oilcake/oilseed processing annual capacity of about 23.2 million

tonnes.

The Association is an all India body to solvent extractions

industry and premier vegetable oil Association in the country

having wide representative membership consisting of

processors of Rice bran, Oilcakes, Minor Oilseeds and Soybean.

Associate Membership of the Association

includes apart from processors, also merchant exporters, oil

millers, refiners, vanaspati manufacturers, importers of edible

oils, brokers, traders, plant & machinery manufacturers,

clearing & forwarding agents, surveyors, regional associations

etc.

With such wide cross section of

membership, SEA is a broad based, all India apex body of

solvent extraction industry and at present practically all

working solvent extraction units are its members.

Cattle Feed Industry

In the past, the cattle population

was in proportion to the amount of resource available to feed

them. But today things have changed and the natural feed

available for the cattle has also come down drastically. In

addition to this the demand for the milk and milk product have

also been increasing ,thus making it absolutely necessary for

rearing cattle which produce high yield. From this arose the

concept of producing cattle wherein there is no compromise over

the nutritional composition.

From the beginning KSE LTD

marketed the buy product obtained from its solvent extraction

division in the brand name of JERSEY CORPRA CAKE. Most of

the progress in the cattle feed industry has come about in past

30 years only. There are only few cattle feed units in the country

especially in kerala. The cattle industry of the state has been

utilizing the indigenous raw material i.e. coconut cake which is

the residue left after the extraction of oil from copra which is

mainly used as a cattle feed .Coconut cake contain 4-5% oil is

generally used for industrial purpose and de oiled cakes is used

to make mixed cattle feed.

In Kerala the rotary cake was used as a

cattle feed and actually this excessive oil on cakes reduced the

quality of the cake and upset the digestive system of the cattle. In

foreign in the cattle is fed only with de oiled cakes and according

to the diary experts, the milk and fat content of the feed .All these

factors stressed the importance of having a cattle feed industry in

the state.

Thus in 1976 KSE LTD entered the

cattle feed industry, setting up new plant manufacturing ready

mixed cattle feed. The last 3 decades have been KSE LTD emerging

as the leader in ready mixed cattle feed in the country. Today KSE

LTD commands the resources, expertise and infrastructure of

manufacture arrange of livestock feed in high volumes, driven by a

commitment to high quality.

The productivity of the cattle is limited of

their genetic make-up, so high quality compound feed (industry

feed) may not necessarily generate a significant improvement in

productivity and this has hampered growth of the cattle feed

industry because most farmers reluctant to use compound fully.

They compromise by using such field in proportions of 5to 6%,

making up the balance with their formulation. It is only in the case

of highly productive animals that compound feed has been able to

shoe the real potential and the importance of technology has been

demonstrated.

According to “Extract From Animal

Feeding Safely”, report of an FAQ expert consultation present

condition of cattle feed is “world wide, tonnage of feed exceeds 4

billion tonnes per annum of which some 550 million tonnes are

milled feeds. The largest portion of the billion tonnes of feed

involves subsistence farming on the Indian subcontinent and Asia”

India is currently self sufficient live stock

feeds and does not depend on imports. Instead, the country exports

large quantities of solvent extracted meals which are a major

source of foreign exchange earnings.

COMPANY PROFILE

3.1 History of KSE.Ltd

It was in 1963 Kerala Solvent Extraction

Limited now known as KSE Limited entered the solvent extraction

industry, setting up the very first solvent extraction plant in Kerala.

Although Kerala produces 80% of total

copra produced in the country, large part of it was sold to other

states as copra itself and they were earning good profit when mills

in Kerala wasn’t able to get enough copra for their daily needs.

When oil industry in other parts of the country was thriving, in

Kerala it was struggling. So they understood the need for

modernization of their mills. At that time Dr.P.S.Loknathan

committee setup to study the feasibility of starting new industries

in Kerala, recommended the establishment of three solvent

extraction plants. And one of them was in Thrissur district. The oil

mill owners in and around Irinjalakuda, who where thinking in

similar lines saw the opportunity and took the initiative to establish

a solvent extraction unit. Thus was KSE Limited born.

On the road to success, there were many

hurdles. Initially, the mobilization of capital posed the greatest

challenge. The future looked grim. But determination and optimism

paid off. Thus on 25 September 1963 the Kerala Solvent Extraction

Limited was registered as a public limited company. The solvent

extraction plant went on stream in 1972 and in 1976 a new plant

was set up to manufacture ready mixed cattle feed, which was

pioneering step. Since then there was no looking back.

The last three decades have been seen

KSE emerging as the leader in solvent extraction and ready mixed

cattle feed in the country. And through these years of consolidation

and diversification, KSE has created a niche for itself.

Today KSE commands the resources,

expertise and infrastructure to manufacture a range of live stock

feed, in high volumes, coconut oil from coconut oil cake, and

refined edible oil.

KSE had computerized its operations

way back. In the year 1999, KSE went on to upgrade its EDP setup

further. A custom made ERP software was developed for its units

and head office through M/s.R.R Software Private Ltd, Cochin and

online computerization was fully implemented at all its plants.

Being custom made for KSE this ERP software, with SQL RDBMS,

front end on Visual Basic and Windows NT OS, seamlessly had

integrated all functions of the organization such as FA, Inventory,

Billing, Payroll, PPC, MIS, Share Accounting etc.

The Head office at Irinjalakuda has 2

servers and 40 nodes running the application. Other units, in all,

have about 8 severs and about 50 nodes. Their latest plant at

Vedagiri, Kottayam has a computerized control room for

monitoring, homogenization, size reduction, batching, and pellet

cooling and aspiring systems.

From a single unit, solvent extraction

plant, KSE has grown in to a multi-unit, multi-product organization.

Infrastructure for growth has always been viewed as a priority at

KSE. With modern manufacturing facilities spread over three

states, KSE caters to a vast belt stretching across south India.

With a strong commitment to customers

and product quality and being cost competitive KSE, stands poised

to meet new challenges.

3.2 Growth Chronicle Of KSE Ltd.

1972 Solvent plant commences operation.

1976 Mixed cattle feed production beginnings.

1987 Cattle feed production reaches 180 tonnes and introduction of computers in the factory.

1988 New mixed cattle feed plant starts operation at swaminathapuram, in Tamil Nadu with a daily production capacity of 180 tonnes.

1989 A solvent unit with a capacity of 120 tonnes per day commences operation at TamilNadu plant.

1990 Introduction of KS Supreme pellets, a by –pass protein Cattle feed in the market.

1991 Open Palakkad branch.

1992 Cattle feed manufacturing beginning in 3rd party unit.

1993 Enters the export market.

1994 Introduction of feed supplement KS FORTE, public issue and listing of shares.

1995 Vegetable oil refining plant commissioned. KS SUPREME-sunflower oil launched. Open Calicut branch.

1996 240 TDP cattle feed commences at vedagiri

1997 Company renamed as KSE LTD

1998 4th Production unit at Palakkad Launches dairy product

1999 A modern children park and information centre have been completed at Irinjalakuda for the benefits of the public Company introduces new product KS deluxe plus the new pellet feed in HDPE bags of Kerala market

2000 Company starts production and distribution of milk and milk products from konikara dairy units.

2001 Company started production and marketing of poultry feed at palakkad.

2002 Company started production of ice cream and marketed under the brand name of VESTA.

2004 ISO 9001:2000 accreditation for irinjalakuda plant Company commissioned 200 TDP solvent extraction plant at KINFRA industrial park, with Koratty with a production capacity of 100tonnes solvent extraction

2005 Cattle feed production capacity at irinjalakuda unit increased to 210 MIT perday.Company acquired at Mysore.

2007 Company started production at Edayar Erode at lease

2008 Ice cream production Commissioned at Thalyathu

2009 Cattle feed production at Swaminathapuram increased to 200 MTs per day Commenced 500 TDP fully state-of the art Germen technology animal fed plant at irinjalakuda

2010 Ice-cream production unit at vedagiri commissioned.

3.3 Vision

“The company shall endeavor to maintain leadership

through quality products, explore new avenues in

product development and marketing, create a stronger

bond between the management, workforce, dealers and

customers, contribute to social development and rural

uplifting and constantly strive for excellence in all

spheres of our activities”.

3.4 Mission

To maintain the market leadership. To minimize the cost incurring in production process. To maintain the product quality. To be competitive at all markets. To be compliment to all global quality standards. To maintain top position in the industry. To utilize the new technological changes for the benefits of

the company.

3.5 Share Capital PatternCategory No. Of Share Hold % Of Share

Holding

PROMOTOR’S

HOLDING

Indian promoters

Sub total

NON-PROMOTER’S

HOLDING

Banks

Private corporate bodies

Indian public

NRIs/OCBs

Sub total

11,08,338

11,08,338

_

5,24,533

15,37,179

29,950

20,91,662

34.64

34.64

_

16.39

48.03

0.94

65.36

Grand total 32,00,000 100.00

Table 3.1

3.6 Awards and Recognition

1) Kerala’s first solvent extraction plant.

2) No: 1 in processing coconut oil cake through solvent

extraction in India.

3) Winner of S.E.A National Awards and State Productivity and

Safety Awards continuously for 14 Years.

4) Front ranker in mixed cattle feed production in India.

5) Recognition from Animal Nutrition Society for contributions in

cattle feed manufacturing.

6) Kerala’s first export mixed cattle feed.

7) Tamilnadu productivity council safety award.

8) Kerala state Productivity Council Award.

3.7 Management

The management of KSE Limited rest on an eminent

team of personalities from cultural, financial and social streams of

society who from board of directors. The day to day management of

various units is carried out by experienced professionals under a

chief general manager, who lead and motivate a dedicated work

force.

KSE Limited is a public limited with its share

holding numbering to 9000 and majority of them actively

participate in the general body meeting showing good interest in

the affairs of the company. The company is having 11 directors of

which 10 are elected from among the share holders and one

nominated by the Kerala state industrial development corporation.

Every year 1/3 of the directors retire by rotation on the basis of

seniority.

The articles of association of the company

empower the board of directors to appoint one of them as

managing director. The managing director, executive director and

chairman are responsible for the day to day affairs of the company.

There is whole time director to look after the affairs of the cattle

feed plant at Palani. The major decision with serious matters are

taken by the executive body consisting of the managing director,

the executive director, the whole time director, the general

manager, the finance manager, the nutritionist, the marketing

manager, the plant manager, the purchase manager. All these

executives are professionally qualified and competent to make any

decision benefiting to the situation. Usually the executive body

meet ones in every fort-night to discuss and evaluate the matters

internal and external affecting the company. Decision is taken

according to the urgency and importance. The relation between the

management and employees remained very cordial through the

years so far. The company is maintaining a good relation through

discussion and consultation on matters of common interest for

mutual acceptance and keeping high standard of goodwill.

3.8 Social Concerns

The children’s information centre and park at Irinjalakuda,

constructed to commemorate the silver jubilee of production of the

company at a cost of RS.30 lakhs, has been opened for public on 2nd

April 2000. This project has been dedicated to the public with an

intention to facilitate children in and around the place to have an

experience in computer application, develop good reading habit,

provide recreation facilities and provide an opportunity to them for

personality development. The company contributed R.S 5 lakhs to

the Cargill fund and all the employees of the company contributed

their one day wage for this good cause. Company provided R.S 10

lakhs to ‘Gujarat earthquake relief fund’. Again company

contributed R.S 25 lakhs for ‘Tsunami’ victims. Company also

contributed to chief minister’s distress fund R.S 25 lakhs.

3.9 Marketing Scenario

Kerala and Tamilnadu comprise the largest market for

KSE cattle feed. The majority of customers are from the rural belt,

with limited income at their disposal. KSE has made arrangements

for the supply of cattle feed to villagers directly from dealers and

through retailers over 600 KSE dealers ensure that the KS range of

cattle feed is available to them at lower price suggested and

enforced by the company. There are 500 distributors in Kerala and

200 distributors in Tamilnadu

3.10 Research and Developments

The company always gives importance to quality of its

products. Quality is maintained at every stage from raw material

procurement, manufacturing to packing, which translates in to

beauty products and happy customers. Well equipped laboratories

under expertise scientists,

Continuous supervision by experienced nutrition specialist and

assimilation of international development in the field of animal

nutrition gives KSE an edge in product development and quality.

PRODUCT PROFILE

The main products marketed by KSE Ltd. is as follows

1) K.S CATTLE FEED

It includes six types. They are;

A) K.S ORDINARY-MASH – 57 Kg

B) K.S SPECIAL-MASH – 50 Kg

C) K.S SUPER-MASH – 60 Kg

D) K.S DELUX PELLETS – 70 Kg

E) K.S DELUX PLUS PELLETS – 50 Kg

F) K.S SUPREAME PELLETS – 50 Kg

G) K.S PREMIUM PELLET – 50 Kg

2) JERSEY COPRA CAKE – 65 Kg

3) K.S FORTE – 750 Gm(Case)

4) K.S MINERAL MIXTURE – 1 Kg(Case)

5) MILK PRODUCTS

A) K.S PAAL

B) K.S GHEE

C) K.S CURD

D) BUTTER MILK

E) VESTA ICE CREAM

Production Units Of KSE Limited

Kerala

1) KSE Limited, Irinjalakuda unitThrissur District.

2) KSE Limited,Muppathadam postEdayar, Cochin.

3) KSE Limited,Othugad unitPalakkad District.

4) KSE Limited,Vedagiri unitKottayam District.

5) KSE Limited,Konikkara unit (diary)Thrissur District.

6) KSE Limited,

Nida menonpara roadKanjikode, Palakkad District.

Tamilnadu

1) KSE Limited,Swaminathapuram unitDindugal District.

2) KSE LimitedThalayath (diary)

3) KSE LimitedModakurichi, erode.

Karnataka

1) KSE Limited,Mysore unitKarnataka.

FUNCTIONAL DEPARTMENTS

In Irinjalakuda office

the organizational structure is formed as “functional”. That is the

whole work is divided in to various departments on the basis of

functions. Each function is entrusted to departmental managers

who are generally a specialist in that particular function. In each

particular department there are respective assistant managers who

receive instructions from concerned managers. All assistant

managers are placed at same authoritative level. There will be

favorable numbers of workers in each department to carryout

works.

The main benefit of this type

structure is that this system provides ample opportunities for

minute specialization at maximum extent. It makes extensive use of

expertise knowledge of the specialists. Since the workers receive

instructions from experts higher efficiency can be ensured. The

entire work is divided in to various functions and assigned to

different executives. Thus no executive is over loaded with too

many duties of different nature. This system also provides scope for

proper training to supervisors and inspectors.

Following are the departments prevailing in the Irinjalakuda office;

Production Department

Finance Department

Marketing Departments

Purchase Department

Personnel Department

Stores department

Quality control Division

5.1 Production Department

The core of a production system is its conversion

sub system, where in workers materials and machines are used to

convert inputs into product and service. This process of conversion

is at the heart of production function and is present in some form in

all organization. It may be stated that every organization

irrespective of its purpose, has a production function where

departments and personnel play a central role in achieving the

objective of the organization.

FUNCTIONS

Production process

Employee supervision

Maintenance of machines

Quality assurance

Production plan

Production control

Maintaining a hygiene work place

Management of different shift of employee

Maximizing the production with minimum resources

In KSE, Production takes place in 3 plants;

Solvent extraction Plant

Cattle feed plant

Refining plant

Solvent Extraction Plant

The raw material used the company in this plant

is recoiled coconut cake having about 8 % of oil content. The

coconut cake is being put into a slow moving conveyor or belt. The

next process is heating up of the cake and after that hexane a

product of petroleum would be spread into the cake. The mixture of

oil and hexane is known as micelle. The next step is to separate the

solvent form the cake and is stride fir use. For one tones of coconut

cake the usage of hexane is 9.19 kg, Here 24 hr production takes

place and it produces 200 tones per day.

There are 3 shifts

8. A.M -4 P.M

4. P.M-12.A.M

12. A.M-8.A.M

General office time

9. A.M – 5.P.M

Cattle Feed Plant

In this plant the company uses different types of

cakes. According to their availability apart from other material the

company uses coconut cake, sun flower cake, mustard cake,

soybean, wheat, calcium, vitamins, cottonseed, phosphate, tapioca,

maize jowar and other vitamins.

Except from the coconut cake

all other material are purchase from other state. Here 24 hr

production takes place and it produces 650 tones per day.

MMCP TECHNOLOGY

MILLING

This is being used for ensuring that all the granules are

grinded, screened 3 mm sieve. The materials feed into grinder are

powered and it passes through the screen provided at the bottom

side of the grinding chamber. The hammer mills at 30 tones per

hour together are used.

MIXING

The raw material will be mixed thoroughly by using

horizontal mixer. Capacity of this mixer is 6 m.

COOKING

The steam for cooking is produced using 3 million tones

boiler. The mixer or homogenizer carry out a strong mixing while

the mash is moved forward and added with dry saturated steam.

The cooking is carried out at a temperature of 80 degree Celsius

using a high pressure dry saturated steam.

PELLETING

The pellet mill dye by rotating drags the mixture of mash and

steam towards the roller. Which press it and consequently compel i

to pass through the hole of the dye? It increases the density of the

mixture, which together with heat generated by the saturated

steam facilitates the extraction of the pellet. Two pellet machines

are there with 15 million tones per hour capacity each.

Refining Plant

In this plant oil is refined according to the seasonal

demand .Here two types oil are refined

Solvent Extraction Oil

Sunflower Oil

Here 20 tons per day is produced .The oil so produced will be

colorless and dour less so it is not used for household consumption.

The main users of this oil are oil millers, industries who use this as

an ingredient for its product.

5.2 Finance Department

Finance is regarded as the life blood of the business .In

modern money oriented company; Finance is one of the basis

foundations of all kinds of economic activities. It is the master key,

which provides access to the entire source for being employed in

manufacturing and merchandising activities.

Finance plays a key role in all the

activities of business. It may be defined as the service of money. It

deals with the principles and of administrating it by those who

control it. The success of finance function depends on how finance

function depends on how finance is planned at the various levels of

administration under the management.

The share holders Equity (Net worth)

is 3335.34 during the year 2010-2011.Its shares are listed in Stock

exchange of Mumbai, Chennai, Cochin. The Total turnover during

the year grew by 22% compared to the previous years. But

unfortunately the profit was declined inconsistently compared to

previous years. The total sales of the company were increased from

37227.87 to 45368.03(in lakhs). The Company is focusing on cost

competitiveness and also is in search of new product lines to

further improve its overall performance. Financial data, which are

not audited, published by the company in quarterly. The company

accepts fixed deposits from the public at the rate of 15%per

annum. The company keeps book such as purchase daybook, sales

day book, and cashbook and bank book.

Capital Structure

The share capital of the company comes to 320 lakhs

from around 6500 shareholders. Its shares are listed in stock

exchange of Mumbai, Chennai, Cochin. This 320 lakhs where

divided as 32 lakhs share of Rs/-10 each.

Banker

Company’s banker is ICICI bank limited which allows a

cash credit subject to a maximum limit of Re. Crores.

Source of Finance

The company makes use of two types of source to finance its

activities, they are

Share holders fund

Share capital

Reserves And Surplus

Loan Funds

Functions of Financial Department

Maintain a good financial structure

Identify the future financial requirement

Dividend payment

Salary payment

Collection of cheque

Receipt

General payment

Payment of raw materials

Maintenance of Cost Records

As far as KSE limited is concern maintenance of cost records

is not mandatory as none of its products fall with in that category.

Even though not mandatory, Company maintains necessary cost

records to meet its own requirements.

Internal Control

The system of internal controls may define as the

organizational plan and all the methods and procedure adopted by

the management of the entity to assist in achieving.

Timely preparation of reliable financial information

Accuracy and completeness of accounting records

Prevention and completeness of accounting records

Safeguarding asset

Adherence to management policies

Orderly and efficient conduct of its business

Auditing

The company has constituted on adult company, three

independent non-executive directors assists members. The main

auditors of the company are Varma and Varma.

Internal Audit

It is independent appraisal function within an organization,

for the review of activities as a service to all levels of

management. Its objective is to measure, evaluate, and report upon

the effectiveness of internal controls, financial and others as a

contribution to the efficient use of resource with an organization.

The KSE Limited’s internal audit is taken care of by assistant

manager, some of the units are audited by himself and the rest,

mainly situated in other districts and states are performed by

independent chartered accountant firms.

Internal Check

The company has devised internal check measures. Internal

check refers to a system of book keeping and arrangement of staff

duties in the organization in such a manner that no one person can

completely carry through a transaction and record every aspect.

Budgeting

Budget is prepared by each year .The budget is prepared in

the month of February. Profit and loss account is prepared monthly

by finance department .Two committee meeting are conducted by

the management.

Dividend

Considering the profits for the current year, your Directors

recommend a dividend of 100% ( Rs.10 per share of Rs each) for

the year ended 31st march 2011 which, if approved at the ensuring

Annual General Meeting, will be paid to those members whose

names appear in the Register of members of the company as on

28.07.2011.In respect of share held in dematerialized form, the

dividend will be paid on the basis of beneficial ownership as per the

details furnished by the Depositories for this purpose at the end of

business hours as on 18.07.2011.

Capital Expenditure

The ice-cream manufacturing unit adjacent to our existing

cattle feed plant at Vedagiri has been commissioned on

28.03.2011.The capital outlay of the new ice-cream unit is Rs 127

lakhs as on 31.03.2011 excluding the value of land already owned

by the company.

FINANCIAL HIGHLIGHTS

2009 -

2010

2010 -

2011

Sales and other Income 37227.89 45436.07

Gross Profit (Profit before

depreciation and interest) 1917.38 1359.80

Profit Before Tax 1266.14 667.31

Net Profit after Tax 827.27 449.81

Share Holder’s Equity (Net worth) 3257.45 3335.34

Capital Employed 6456.64 6065.52

Gross Fixed Asset 6956.64 7220.58

Rs Rs

Share Holder’s Equity per share 104.23 101.81

Earnings per share of Rs.10 each 14.06 25.85

Dividend Rate 100% 100%

Table 5.1

NET PROFIT AND SALES COMPARISON OF

LAST SEVEN YEARS

Table 5.2

MARKETING PRICE DATA

YEARSNet Profit(In

Lakhs)

Sales(In

Lakhs)

2004-

2005675.58 21309.85

2005-

2006591.23 24060.44

2006-

2007101.09 27503.59

2007-

2008258.38 28947.50

2008-

2009320.54 35007.87

2009-

2010827.27 37094.19

2010-

2011449.81 45368.03

(During the financial year 2010-2011 Based on BSE

Data)

MONTH High(Rs) Low(Rs)

April 293.50 190.00

May 239.80 195.20

June 234.45 211.00

July 287.95 205.00

August 233.40 192.50

September 230.00 190.25

October 230.00 162.00

November 238.00 171.00

December 218.95 170.00

January 202.00 173.00

February 195.00 156.00

March 181.00 159.00

Table 5.3

Accounting Policies:

Accounts in KSE Limited are prepared under historical

cost convention on accrual basis unless otherwise

specifically stated in the notes to account

Fixed asset

Asset put to use have been stated at less depreciation.

Asset not put to use have been stated at cost.

Depreciation

Depreciation on fixed asset has been provided on

written down value method at the rate prescribed in the

company act1956.

Investment

Long term investments are stated at a cost less

provision, if any for permanent elimination in the value

of such on investment.

Inventories

Inventories as at the close of the year are valued at

lower of cost or net realizable value.

Retirement benefits

Contribution to provident fund and employee welfare

fund is charged to profit and loss account.

The accruing liability towards gratuity of employees is

covered by the group gratuity assurance scheme of life

insurance Corporation of India.

Company’s Philosophy on Corporate Governance

In KSE Limited, we believe

that good governance is a systematic process which enables the

company to operate in a manner that meets with the ethical, legal

and business expectations and at the same time fulfils its social

responsibilities. We believe in good Corporate Governance, with

utmost transparency in its operations achieved by proper

disclosures in its Annual report, Quarterly Result, Public

Announcements, Press releases and all other communications to

shareholders, so as to provide shareholders and all other

concerned with information about their company’s working, its

strength weakness, opportunities and threats and thereby enabling

them to develop a proper and balanced perspective on the working

of their Company

FINANCIAL PROCEDURE

1. Payment of raw materials

Purchase department purchase raw materials

according to purchase order 90% of payment of raw material are

made on delivering time. Balance payment will paid after checking

the quality of raw material, this need material received report,

order, and bill of lad report .It includes item, weight gross quality,

net quantity, net quantity, etc.This report will be signed by head of

purchase department. If the quality is not satisfactory, rebate will

be charged.

2. General payment

This includes electricity charges, stationary items,

telephone charges, salary, ESI, PF, housing loan, state tax income

tax, etc.

3.Receipts

This mainly includes sales receipt. The company

accepts sales receipt in the form of cash, DD Cheque: the company

will not accept credit sale.

1) Cheque collection

The company has account in 12 banks. Bank of Baroda keeps large

amount of deposit of company. These banks also provide loan

facilities to the company maximum limit is up to and cores.

2) Salary payment

Plant workers will get salary on 6th day of month. Office staff will

get salary on 31st of each month. If an employee needs salary as

advance; he can take 50% of salary. Another function of finance

department is to collect or transfer surplus fund from other unit to

centre unit.

3) Other payments

Share holder will get dividend. This will be paid on interim dividend

and final dividend and now the value of the share is Rs55. Another

function of finance department is to provide festival gift in the form

of cash, bonus payment of upto20% of salary. Profit and loss

account will be prepared monthly. It is published quarterly in the

news paper. The company also has public deposit amounts to 6

cores.

5.3 Marketing Department

Today Marketing operates within

a dynamic global environment and is facing new challenges as we

have reached the new millennium. The market today is customer

oriented. Consumers usually face a broad area of products and

services that might satisfy their needs. Customer satisfaction

comes in to picture now. The extend to which a product’s perceived

performance matches a buyer’s expectations. If the product fails to

keep up to the expectations, the buyer is dissatisfied. If the

performance matches or exceeds the expectations, the buyer is

satisfied or delighted.

The story of success of KSE

Limited would reveal the excellence of the marketing brains of the

company. During 1976, when KS cattle feed was launched in Kerala

market, the market was in the hands of ‘Godrej’ and ‘Tata’, the big

boys. The transformation from that level to the market leader of the

south and to the second largest seller of cattle feed in the country

tells entire story. The fact that KSE Ltd could export cattle feed

adds another feather to its cap.

Unlike other industries, the

response from customers is very quick in the cattle feed industry.

The milk producing environment in Kerala is entirely different from

other parts of the country. The lack of graze lands has limited the

options of the cattle growers. They are forced to depend on the

compound cattle feeds that are available in the market. Because of

this reason, Kerala is the most potential market in the country. The

farmer is so watchful that even the slightest variation in quality

would be noted and responded. Reduced quality affects in different

forms – reduced milk production, reduced milk quality,

deterioration in the health of the cattle etc. Thus quality is the

prime element that determines where the products should stand.

The product would be sold only if it maintains quality consistently.

KSE Ltd has always been successful in this regard and has obtained

the results.

The marketing department is headed

by the marketing manager. The main feature of KSE Ltd Is that the

company has no direct marketing. All sales activities are

undertaken through dealers. The company has around 600 dealers

all around in kerala. The company has a large dealer network

which is directly under the control of the marketing department. All

planning and strategy formation regarding the marketing activities

of the company are devised, implemented and monitored by this

department.

The department is divided into two. They are as follows:-

Sales division

Complaints and customer care division

1)Sales Division

This division is headed by an assistant manager. As

mentioned earlier all the dealers are controlled by the company

directly. All orders from the dealers all over the state are received

by him. In consultation with the production manager of various

plants, he makes the allotment. The allotment is made from the

various plants depending upon the availability and proximity to the

dealer. The manager at the sales division informs the production

manager about the demand for the various products so as to plan

the production accordingly.

SALES PROCEDURE

The requirement is placed by the dealers to the manager.

The requirement is analyzed and allotment is made depending upon

the availability of the products asked for. Also the allotment

decision is based on the financial position of the dealer. He must

have a good and spacious godown in his custody. Since the demand

is very high, the dealers usually have to place the order and wait

for the production to undertake. The payment policy under

marketing department is full on cash policy. After the allotment is

made, payment is to be made through Demand Draft at the counter

provided for this purpose. Allotment statement is delivered here

and the dealer has to present this at the godown and take delivery

there. Around 80% of out put from the Swaminathapuram unit is

consumed by the Kerala market. The unit at Mysore too is for

catering the northern parts of Kerala. Thus production and

distribution from these units should be linked together. Being the

head office the Irinjalakuda unit co-ordinates the production and

distribution activities of all other units of the company.

2)Complaints And Customer Care Division

This is division is headed by an Assistant

manager. Since KSE Ltd has a large network of dealers directly

under their control, maintenance of this network is very difficult. In

order to deal with the dealers, the company has appointed 5 sales

representatives directly from the company. Since the dealer area is

very small and closely situated, overlapping of agencies is a big

problem. Complaints regarding this reach this department. The

complaints are studied and necessary actions are taken. Similarly,

complaints regarding the product are also taken care here. As and

when a complaint is received, inspection team is sent to the

specified area and details are collected. Necessary actions are

taken immediately.

The growth from 40 tons of production per

day to above 710 tons itself indicates the sharp growth of the

company. The product range too has widened along with this.

Selection of Dealer

The field staff under assistant customer service and

complaint manager will evaluate the dealer on the basis of his

financial capabilities and the scope of demand of products in the

area. If the dealer doesn’t buy at least one load of cattle feed in row

of 3 month, automatically the company will terminate his dealer

ship.

PROMOTIONALS TOOLS OF KSE LTD

1) Advertising/ Sales Promotion

KSE Ltd has no need of advertising and sales promotion by

because of high demand of its quality products. But in order

to compete with the competitors, the company is using

advertising as a small promotional technique. Since the

product is cattle feed, the advertisement should reach on

farmers. The company has adopted using radio advertisement

for the same. They do not wish to advertise in TV media. It

does not cover target groups such as farmers in rural area.

The following are the other methods adopted for

advertisement:-

a) Product pamphlet

b) Notices

c) Cinema slides

d) Cloth banners

e) Wall painting

f) Hording, Tin boards,

g) Flex printing

h) Yearly calendar

i) Local news papers

j) Exhibitions and seminars

k)

2) Public Relation

KSE Ltd is good in maintaining relation with its

general public. Most of the skilled and unskilled workers are

from the nearby areas of the company. The company is

maintaining a park with in the company premises which is

intended for the small children. It has been facilitated with

enough playing equipments and parlors. It helps in enhancing

the brand image and brand loyalty.

3) Sales Promotion

KSE provide various sales promotion schemes to

its dealers and customers for increasing sales. Such activities

include dealer meets; farmer meets etc. in such occasions the

dealers and farmers can meet together and can clear their

doubts. Also the company is conducting seminars, conference

for farmers, which are lead bye the company’s chief

nutritionist. He can solve various doubts of farmers in the

field of cow farming. And also provide advertisement

materials like advertisement to dealers, money refund offer,

free trails, demonstrations, and premium offers and dealers

contests.

4) PERSONAL SELLING

Sometime KSE marketing executives

approached to the customers to face to face communications

and presentation for the purpose of making sales and

clarifying their doubts.

Pricing Methods of KSE Limited

1) Cost Based Pricing Policy

The selling price policy is essentially on the basis of total cost

per unit. KSE is a super manufacturer in the field of cattle

feed, so they can fix cost based pricing policy irrespective of

competitors. It is influencing their competitors pricing policy

such as Godrej, Kerala feeds.

2) Competition Based Pricing Policy

All products are not equal strength of the

company. Such products are more strengthen than

competitors such as cattle feeds. Whereas such products are

not strengthening than competitors such as milk products

like Vesta ice cream, KS ghee, KS butter milk and KS milk. In

such case company cannot fix price its own style. So they

follow competition based pricing policy especially milk

products such as KS milk. The share of milk is controlled by

Milma, so the milk price is purely depends upon Milma milk

price.

In short this is the policy of the

price mainly on the basis of price fixed by competitors. This

policy does not necessarily means setting of price saves.

Types Distribution Followed By KSE Limited

1) EX FACTORY RATE - Company need not bear the

transportation and insurance cost.

2) RATE AT DESTINATION - Company need to bear the

transportation and insurance cost.

Brand Loyalty

It is a strong attachment of buyers towards particular

products of KSE Ltd such as KS milk, KS cattle feeds and Vesta ice

cream. Brand loyalty offers a number of advantages to the KSE Ltd.

Brand loyalty is the repeat purchase made by the

consumer out of commitment to the brand. They may become

advocates of the brand by their positive word of mouth. And also

customers may become passionate about the brand.

Reasons for Brand Loyalty In KSE Limited

a) Uninterrupted distribution

b) High quality of product

c) Better than competitor

d) Affordable price

e) Promotion and advertising

Advantages Of Brand Loyalty In KSE Limited

a) Repeated purchase

b) Brand loyal customers start building a relationship with the

company

c) Reduction in promotional activities

d) Facing competition

e) Keeping the quality of products

5.4 Purchase Department

Purchase department in KSE

Limited mainly concentrate on the purchase of raw materials for

cattle feed. They purchase stock normally for the 20 days .They

take stock report daily and they purchase on the basis of shortage

of materials required in production.

The nutritionist prepares the

formula for production and requirement of raw material depend on

it. He will prepare the formula by considering the quality and

availability of raw material etc. They place order on the basis of

fund, go down capacity, availability of labour, space allotted to

each materials and equipment, etc.....

In the case of purchase of

packing materials such as carry bags, the company purchase

directly from the suppliers. For the purchase of salt, contract is

given for one year and the amendment will be made on it according

to fluctuation of price. They give contract to the transportation

companies for one year.

The purchasing mode of

company is daily cash price basis. Usually the purchases are made

from other states of the country such as Andhra Pradesh,

Karnataka, Tamilnadu, Utter Pradesh, Maharashtra etc. The

company has no direct contract with suppliers of the materials. The

company makes agreements with agents from different places.

They will identify the supplier most suitable and makes the

purchase contract.

Functions of Purchase Department

1) To keep a regular check with contracting brokers all over

India and thus know the market price.

2) Check whether the weight of goods in correct or not.

3) Storing the goods in appropriate places for easy retrieval and

use.

4) Forwarding payment of foreign charges.

5) To give order to buy the goods.

6) To keep a feasible market to purchase.

Purchase Contract It is a contract prepare for

the purchase of materials. It is signed by two signatories that is,

the purchase manager and the other is GM or FM .It include the

following details

1) What material we are going to purchase?

2) What quality we are going to purchase?

3) At what rate we are going to purchase?

4) Whether there is tax included or not?

5) Time of purchase?

6) The type of packaging?

7) Mode of payment?

Purchase contract is printed in

six copies, 2 copies send to the parties.1 copy returned with their

signature as a token by conformation.1copy for account

department .1copy for godown.1 copy for purchase department.1

copy used as running life. This is the usual system followed in

purchase department.

Purchase Procedure

1) Purchase requisition

It is a document through which the user department requests

the purchase manager to make arrangement for purchasing the

material required. Each departmental head prepares the

purchase requisition report and send it to the purchase

manager. On receipt of purchase requisition report the purchase

manager will make necessary steps for purchasing material that

has been mentioned in the purchase requisition report.

2) Plans are made by the purchase department about what to

purchase, how to purchase. When to purchase and so on.

3) Materials are purchased through brokers. They are not charging

any brokerage fee. Instead they will get commission from the

suppliers. They will send the rate of the materials from different

suppliers according to the specification.

4) A meeting of purchase committee held after receiving the

quotation. The committee includes general manager, finance

manager and marketing manager.

5) The purchase committee selects the supplier after proper

evaluation.

6) The purchase manager then discusses with the suppliers about

rate, quality requirements, quantity, delivery time and packing.

7) If both parties agree they will enter in to purchase contract

according to supply and payment. There will be 6copies of the

contract.2 copies to supplier.1 copy to accountsdepartment.1

copy to godown, 1 copy running file in dispatch session, 1copy

as a token of confirmation should send it back by supplier.

8) Purchase order

After selecting the supplier, the purchase order is send to the

supplier. It includes the date of order, description of the

material to be supplied and mode of supply.

9) Receiving and inspection of material

When the material is arrived in to the company, they can enter

into the material to check any compliant in vision and select

sample randomly and keep it in 3 packets. Then material

received report will be prepared in factory after getting

permission from purchase department. Company will check

whether the bill is as per the contract and enter the order

number and give permission to lorry people to enter into the

factory premises. At the time of unloading ,take the sample of

from three packets 1 sample to lab, 1 to nutritionist and 1

sample keep it as check sample in go down.

Generally 90% of the payments are made in

advance, when the company receives the specified material and

bill passed on to the stores department. The purchase

department will pay the remaining 10% only after the approval

from the laboratory the department. The department will make

reductions in payments according to the lab reports.

The following figure explains the procedure of purchase in

solvent plant

Purchase requisition for materials

Selection of suppliers

Placing the purchase order

Follow up the order

Receiving and inspecting materials

Checking and passing of bill of payment

Fig.1

5.5 Personnel Department

Personnel department is the main

and the most important of a manufacturing concern. KSE Limited is

proud of its well co-coordinated labour force. The HR department

was seen as a place where the lesser productive employees could

be placed with minimal damage to the organization ongoing

operation.

Human resource management is

concerned with all aspects of managing the human resource of an

organization. More specifically, human resource management

involves determining an organizations need of human resource,

recruiting and selecting the best available employees, developing

counseling and rewarding employees, acting as a liaison with

unions and government organization and handling other matters

related to the wellbeing of employees.

Each of the functions is necessary to

some degree irrespective of nature and size of the organization that

is why in most of the organization a separate department is known

as personnel department or Human resource department is created

for effective performance of these functions. In KSE limited

personnel department deals with following objective.

Employees selection procedure

Remuneration of workers

Allowance of employees

Statutory liabilities

Trade union

Workers welfare activities

Workers safety measures

Leaves and retirements

Other functions

Functions of Human Resource Department

Recruitment

Man power planning

Welfare function

Grievance handling

Discipline

Industrial relations

Public relations

Job description

Job specification

Training

Performance appraisal

Employee Selection Procedure

Employees are selected strictly based on

their educational qualification, Work experience, technical know

how and age. Company will do the recruitment by giving

advertisements in news papers, employment exchanges and by

promoting its own employees based on their performance.

Remuneration

There are three types of wage earners:-

a) Unskilled but permanent workers-gets daily wages

b) Badali workers-wages on weekly basis

c) Office staff-salary on the last working day of every month.

Salary Consist Of

1) Basic pay

2) Fixed dearness allowance

3) Variable dearness allowance

Allowances

1)Dearness allowance

This is given to permanent employees. D.A is divided into two

classes;

a) Fixed DA - Calculated at the rate of 15% of the basic salary

b) Variable DA -Based on cost of living index published by

Govt.of Kerala

2) Conveyance allowance

3) Washing allowance

4) Canteen subsidy

5) Leave and travel allowance

6) Housing subsidy

7) Shift allowance

8) Overtime allowance

9) Scholarship for employee’s children

10) Employees welfare fund

Statutory Liabilities

Provident fund: From the basic salary the company and the

employees’ channalized 12% into the provident fund account

equally. Out of the12% contributed to P.F fund 8.33% are

transferred to the pension account.

a) Employee’s state insurance: The Company pays about

4.75% of total salary of employees to ESI. The employees

pays a contribution of 1.75% of total salary

b) Gratuity: An employee needs minimum 5 years of service to

avail this fund.

c) Bonus: It varies according to their grades

Trade Union

There are four recognized trade unions in the company namely

CITU, INTUC, and BMS

CITU-Confederation of Indian Trade Union

INTUC-Indian National Trade Union Congress

BMS-Bharat Mazdoor Sangh

A committee consisting of Chairman, Managing

Director, Whole time Executive Director, General Manager Works

Manager and Personnel Manger approve the demands of workers.

Works Welfare Activities

a) The company established a trust know as employee’s welfare

trust in which ensuring sound working condition.

b) Ensuring fair wage system.

c) Protecting the right of workers.

A committee consisting of Chairman, Managing Director, Whole

time Executive Director, General Manager Works Manager and

Personnel Manger approve the demands of workers.

Rs.20 is paid both by the employees and the company every

month. Additional funds are provided to employee during the

death of employee or in case of employee’s sibling’s marriage.

Safety Measures

For safety of workers at plant, they are provided with mask,

first aid facility, dust extraction system in plant, which help to

suck the dust arising at the time of production.

Leave

1) Casual leave: 9 days for workers and 11 days fir staff

2) Privilege leave: For workers 1 day for 15 days worked, for

staff its 30 days

3) Sick leave:7 days

Retirement

Retirement age of employees is 58 years.

Qualification Required For Different Jobs

Unskilled workers: He should be group 25-30 years, should not

have studied more than 8th standard and should be residing within

a radius of 5 Kilometers of KSE limited.

Office staff: He should be a graduate.

Shift engineer: He should be a diploma holder from ITI.

Security man: He should be an ex-service man in age group of 35-

40 years.

Training and Development

KSE LIMITED gives the jobs

training to the employees. They are kept in probation for 6 months.

If company found it unsatisfactory, then probation period may be

extended. Introduction training is given at this period.

Workers are selected as a substitute

worker. If a substitute worker works for a period for a minimum of

240 days within a year they would be made a permanent worker.

Fresh blood would be preferred for

lower divisional works. Based on this policy company promotion for

a senior post is made. After probation period the manager under

whom the employee is working gives an appraisal report to the

personnel manager. Confirmation of job is given after that.

Classification of Employee /Workmen

Permanent employee is one who

has been engaged on a permanent basis by a written order to that

effect and include any person who has satisfactorily completed a

probationary period of 6 months, including period of service in any

other post to which he may be transferred, breaks due to sickness,

accident, leave, lock out, inventory closure of the establishment

and who has been confirmed in writing as permanent.

Probationer: is one who is provisionally employed to fill

permanent vacancy in a permanent post.

Substitute is one who is appointed in the post of permanent

workmen or probationer who is temporarily absent. If a substitute

worker for a minimum of 240 days within 12 months, he will be

made permanent.

Temporary employee: is one who is employed for work which is

of an essentially temporary nature likely to be finished within a

limited period.

Casual employee is one whose employment is of casual nature and

who is not entitled to claim for future and continuous employment.

Each of the five categories of employee shall be grouped as follows.

Monthly rated employee/workmen whose salaries or wages are

calculated at a monthly time, Daily rated employee/workmen whose

salaries or wages are calculated at a daily rate.

Manpower Planning

KSE Limited proud of its well-coordinated labour

force .The personnel department was seen as a place where the

lesser productive employees could be placed with minimal damage

to the organization ongoing operation.

Employees are selected based on their educational

qualification, work experience, technical know how and age.

Company ads on news papers through employment exchange and

by promoting its own employees based on performance. In KSE

Limited, Total numbers of employees are more than 900 including

the employee in its 4 units. In this 500 employees attached to

Irinjalakuda Unit.

Industrial Relation

The company has 926 employees in its rolls as on 31.03.2011.The

company is exception to the adverse labour conditions existing in

Kerala. During its working of 39 years the company had lost only

few man days by labour unrest .During the lockout period’s

management had made alternative arrangements to ensure regular

supply to the dealers and the performance of the company. There

were no labour issues of a serious nature in any units of the

company.

5.6 Stores Department

KSE follows centralized

storing system. Under this system requirement of various

departments are stored and issued from one store. The total

available floor space is divided into various tracks. When material

in the store is exhausted the store department prepares purchase

requisition and put forward to purchase department.

Store is a place where all the

materials required for the production except raw materials is

ordered, received stored and issued. The store all the mechanical

spare parts, company broachers, hand gloves, safety goggles

etc....the materials are issued from the store to various

departments on the receipts of requisition form duly signed by the

authority.

If the stock of material is less

than the minimum required quantity, the store clerk gives purchase

requisition to the store through works manager. On the receipt of

the material he enters it in the system. He also updates on the

issues of the materials. So the system quantity and the physical

quantity will be the same

The officer in charge of the

general store is store keeper .The store keeper is responsible for

identifying the materials that has reached the order level and is

responsible for its storing .the main item purchased and stored

here are spare part of machinery ,packing material, belt chain, and

other miscellaneous articles. This store issues the material to

solvent plant, cattle feed plant, refinery plant and to some other

department.

Functions

Identify the material that has reached the re order level.

Storage and proper keep on material.

Store all date regarding the storage and supply of material in

the computer .Computerization of this department has helped

the company to save a lot of time and eliminate various

records like storage ledger.

Issuing material to the consumer department.

Inspection of Materials

The materials purchased by the purchase department

are inspected by the general stores and if satisfied are accepted.

Otherwise the materials are rejected. The store keeper has the

right to reject the materials if he is not satisfied with the

conditions.

After checking and verifying the material the

general store department repair the material received report

(MMR).It is prepared in 2 copies and one copy is retained the

general stores department for office purpose and the other two

copies are send to the purchase department.

Issues of Materials

The store department issues the material only when

it is required by the receiving department by material requisition

or slips. These slip are received from the required department in

two copies. Out of this 1 copy is send to the accounts department

and other one is kept by the general store department itself.

Periodical Checking Of Store

Periodical checking of stores is done by the store

department in every six month. The checking is done by checking

physically each and every item in the stores. A written report is

given to the management once in every six month and this report

contains the value of materials also.

Store Handling

The store are handled through the required department

–personnel .there is no separate device for store handling .The

required department prepare the material requisition or issue slips

and submit to the general store keeper.

It is a full –fledged department itself functioning

under marketing department to become an exclusive dealer of the

company ;company sees that the dealer’s agency would be 5kms

away from other KSEL agencies .Market study with the help of the

sale representatives will be undertaken. Social status, financial

capacity, go down facility etc of the dealer will also be studied; the

demand of competitors product in the market also will be assessed

before giving the dealership.

Store Consumption Statement

It is prepared by the storekeeper and sends to the

account department for recording it in the profit and loss account.

The consumption of this material by each department are shown in

this statement.

General Store

The officer in charge of the general store is store keeper.

The store keeper is responsible for identifying the material that has

reached the re order level and is responsible for its storing. The

main item purchased and stored here are spare parts of machinery,

packing, material, belt, chain and other miscellaneous articles.

Godown

The company store raw material for one month or one and half

month. The company has more than 7 godowns. In the case of

sampling of good all the visible impurities are identified. The

impurities like fatty acid can be found only after lab analysis. In the

go down they follow FIFO .As the department is computerized

annual stock can be calculated easily. Following are the functions

in godown;

1) Storing of goods.

2) Sending material received report to purchase

department.

3) Checking goods on arrival.

4) Unloading and preparation of daily stock summery

report.

5.7 Quality Control Division

The quality control division

of KSE Ltd. is headed by chief nutritionist. The quality of a product

begins from the quality of the raw material used in it. The main

task of this division is to completely analyze the raw material and

point out defect in it. The normal practice is that, at the time of

unloading, the authorized persons will take the sample of materials

for quality inspection. They will collect three packets and 1 sample

will send to the lab, 1 to nutritionist and 1 sample will keep as

check sample in go down. Normally every week the nutrition has to

alter the formula of cattle feed which in time governed the

availability, rate and quality of raw material.

Quality Parameters

1) Moisture

2) Crude protein

3) Acid insoluble ash

4) Calcium

5) Crude fiber

For each parameter a set of standard is

maintained and it should not exceed or below the standard. If it is

minimum, then that ingredient is taken with a warning of party. If

the level exceed standard, then concerned committee can reject

that at the spot of examination.

Quality Control in Solvent Plant

In this plant the raw material

used is coconut cake. There are many quality tests conducted to

check the quality of material. Air over method is used for

identification of the percentage of protein. SOX method is used for

determination of percentage of crude fat.

Quality Control in Cattle Feed Plant

The raw material are randomly

selected and if it is found defective it would return to supplier and

if the supplier has got any dispute regarding the credibility of

company’s laboratory, the company will send the sample to

independent labs. Final statements are made according to the lab

report. After the production of feed quality test is conducted again.

Quality is the factor, which helps the company to sell all its

products.

Production Specification

1) KS Cattle feed

Protein :14-16%

Oil content :2%

2) KS Special Cattle feed

Protein :14-16%

Crude fibber : 11-12%

3) KS Supper Cattle feed

Protein :14-16%

Oil :2%

Fibber :12%

4) KS Deluxe

Protein :16-17%

Fat :2%

Fibber :12%

5) KS Deluxe plus

Protein : 17-18%

Fat :3%

Fibber :12%

6)KS Supreme

Protein : 22%

Fat : 2%

Fibber :12%

Sand & Silica :2%

ISO (International Organization for standardization)

Now a day the concept of Quality is

undergoing a great change. Quality control often involves testing

well during and after production. Today I.S.O 9000 certification is

becoming almost essential for Indian business house to export their

products.

One of the requirements of the I.S.O standard

is an effective management representative who would be

responsible for the effective documentation, implementation, and

co-ordination of activities of all senior activities.

The standard requires that the management of

the organization must clearly enunciate its quality policy, the

intensions and directions of the organization vis-à-vis quality.

Everybody in the organization must understand the policy and work

towards its implementation and maintenance.

The I.S.O (International Standard

Organization) certification is applied to quality management system

encompassing quality in all functions such as marketing, design,

purchase, assembly, testing, packing, shipping, installation, after

sales service and all other activities of an organization. I.S.O

certification is the mechanism by which a customer can have

confidence in a company and is most effective when carried out by

a national certification body. The I.S.O series of standards serve as

a basic for ensuring to all providers of goods and services.

Ares Covered In I.S.O 9000 Series

1. I.S.O 9000 provides the guidelines for selection and use of

the quality standard.

2. I.S.O 9001 is a quality system model for quality assurance in

design/development, production, installation and servicing.

This is the most exhaustive standard. The engineering

organizations, where the manufacturing capabilities are

based on in-house design have to work for I.S.O 9001

certification. Manufactures of(a) perishable consumer goods

like tooth paste ,etc. Which have both servicing and

design/development have to work towards I.S.O.9001

3. I.S.O 9002 provides a model for quality assurance only in

production and installation. This does not cover areas of

design/development and servicing. I.S.O 9002 also looks at

internal quality audits. Steel plants, departmental store,

hospitals, chemical plants etc., where the designing and do

not constitute the key activities may prefer I.S.O 9002.

4. I.S.O 9003 deals only with quality related to final inspection

and testing.

5. I.S.O 9004 provides guideline for quality management and

quality system elements.

SWOT Analysis

SWOT analysis is a basic

technique that is often used in strategic planning, improving

company success, organizational development and identifying

competitive advantage. It is a tool for auditing an organization and

its environment. As the first stage of planning; it helps to focus on

key issues. Role of SWOT is to take the information from the

environmental scan and separate it into internal and

environmental scan and external issues.

Once this completed,

SWOT determines if the information indicates something that will

assist the information indicates in accomplishing its objectives or

if it organization in accomplishing its objectives or if it indicate an

obstacle that must be overcome or indicates an obstacle that must

be overcome or minimized to achieve desired results.

SWOT - Strengths, Weakness, Opportunities and

Threats

6.1 Strengths

Internal to the units; are a units resources and capabilities that

can be used as a basis for developing a competitive advantage; the

strength should be realist and not modest.

What does a company do well? What makes it better than others?

What does the company have, or do, that sets it apart from its

competition?

These are important questions, and should include aspects of the

company that made people to consider it for investment in the first

place. Look at branding, image, pricing power, size, market share,

financial position (balance sheet strength etc.)

Here is some strength to look for

The size of the company

Balance sheet strength

Cash flows

Perception of the company’s products

Perception of the company’s band(s)

What advantages the companies have over its competitors

In general, what does the company do well?

Examples: good reputation among customers, resources,

resources, assets, people, experience, data, capabilities

Think in terms of: capabilities; competitive advantages; resources,

resources, assets, people (experience, knowledge); marketing

quality; location; accreditations; certifications; processes/systems.

6.2 Weaknesses

After analyzing the strengths of the company, the next step is to

look for the weakness. Internal forces could serve as a barrier to

maintain or achieve a competitive advantage; a limitation, fault or

defect of the unit. Weakness should be truthful so that they may be

overcome as quickly as possible.

The questions should be asked when looking for weakness; what

does the company do poorly, or not so well? What are other

companies doing better? What is keeping the company from great

success?

It is important that the customers don’t gloss over this section.

SWOT analysis is a brainstorming effort, so don’t discount

anything that comes to mind. If customers perceive a weakness,

list it. The weakness customer fail to list today could be why

customer’s investment turns out poorly next year.

Some weaknesses to look for;

Deteriorating balance sheet

Poor perception about companies brand(s) and /or products

Advantages that other companies have?

Lack of management or other employees’ talent

In general, what does the company do poorly?

Examples: gaps in capabilities, financial deadlines, morale.

6.3 Opportunities

Opportunities are any favorable situation present now or in the

future in the external environment. Opportunities are to identify

areas of business we think in the company is looking to enter, or

should be looking to enter. Opportunities are to gain market share

from competitors, or grow the company’s market to new

customers.

But there are just external opportunities. There are opportunities

within a company that should be considered. Can the company

combine products line to increase the sales? May be the company

has duplicate costs that can be streamlined. Companies can always

find ways to do things better.

Some opportunities to look for:

New markets for products

Financial or legal trouble for competitors

New technologies the company could adopt

Change in regulatory/tax burdens

Strategic investments

Internal efficiencies.

Examples: unfulfilled customer need, arrival of new technologies,

loosening of regulations, global influences, economic boom,

demographic shift.

6.4 Threats

Threats are the external force that could inhibit the maintenance

or attachment of a competitive advantage; any unfavorable

situation in the external environment that is potentially damaging

now or in the future.

Finally, we need to consider threats to the company. Again,

threats can be internal as well as external. Internal treats usually

come first, which opens the door to external threats. Therefore it

is important to do a good threat analysis.

Internal threats aren’t usually classified as such, which is a

common mistake. Any internal problem is a threat to the

company’s well being and should be evaluated along side the

external threats. For example, a company that relies on developing

innovative products, such as Microsoft or Intel, faces the threat of

losing engineering talent every day. This is an internal threat that

could easily pave the way for external threats.

Possible threats are:

Internal obstacles the company facing

Financial constraints on the company

Cash flow problems

Relative position of the competitors.

Technological advances in the industry.

New technologies that threaten to displace the company’s

products.

Examples: shift in consumer tastes, new regulations, political or

legislative effects, new technology, loss of key staff, economic

downturn, demographic shifts, competitor intent, market demand,

sustaining internal capability, financial backing internal capability.

SWOT Analysis of KSE Ltd. (2010 - 2011)

Strengths:

The turnover of the company improved by 22% to Rs.371

crores from Rs.454 crores during the financial year 2010-

2011.through a portion there of may be attributed to the

increase in the selling price of cattle feed. There is

considerable volume wise growth in sale of cattle feed.

Cattle feed, Cattle feed sales volume improved

by12%when it grew from2.86 lakhs tones in the previous

year to 3.20lakhs tons in the current year.

KSE Ltd has got vast experience of over 38 year. Kerala

Solvent Extraction limited now known as KSE Limited was

established in 1963,bya handful of coconut millers in and

around Irinjalakuda .the company now produce 750 -800

metric tons of coconut cake a day with four cattle feed

production unit and two solvent extraction plant. The

company has diversified into the area of dairying

establishing 2 dairy plants for production of pasteurized

milk and milk products. It has obtained ISO recognition for

its commitment to quality and professionalism.

KSE feed have been highly accepted in the market. Its

leadership in the market is mainly due to its quality

standards.

KSE provides prompt after sales service and good

customer relation.

The company has multi-units (having production unit in

Irinjalakuda, Palakad, kottayam, Konikkara,in Kerala state

and Swaminathapuram and Thalayuthu in Tamil Nadu

state and Mysore in Karnataka State)multi product

company (product such as Cattle feed, Poultry Feed,

Edible oils and milk and milk products)and exporter of

cattle feed.

KSE is a company which is listed in stock exchange in the

country. The shares are listed in BSE and NSE.

The Dairy division excelled its performance by improving

the profits from that division by 43% compared to that of

previous year. The company achieved a 12.50% growth in

ice-cream sales.

KSE has got good network of dealership. Majority of the

milk societies in the Thrissur District are dealers of KSE

Ltd, for cattle feed.

The company commissioned a new ice-cream plant with

20001 pt capacity at Vedagiri in March 2011.Though there

is stiff competition from other local brands; the company is

aiming to better the performance of Dairy Division with

the additional capacities.

KSE Ltd has won the best productivity performance

Awards instituted by the National productivity Council,

New Delhi in the category of animal feed processing

industry for ten years beginning with 1996-1997.The

company has also won the SEA Award constituted by

Solvent Extractors Association of India for Highest

processor of Coconut Oil Cake for the year 2010-2011.this

Award is being received by the company for the past 20

years consecutively since the inception of the award.

Weakness

Cattle feed and solvent industries are passing through a

very challenging period. The average cost of cattle feed

ingredients more than doubled over the last 5 years. The

company does not expect a significant fall in the cost of

cattle feed ingredients in the immediate future, at the

same time also not expecting a sudden spurt. By

optimizing the feed formulation and adjusting suitably the

selling price in tune with the ingredient prices, the

company expects to better their performance in the next

year.

Upward increase of diesel prices in small dozes and the

usage of grains for manufacture of bio-diesel and ethanol

by the developed countries also fuelled the price rise.

The availability of local copra cake is still experiencing

short supply and high price.The company has made

arrangement s to cover up the shortfall by import of copra

cake from Philippines and Indonesia at comparatively

economical price. The price of coconut oil had surpassed

Rs.100a Kg.,which has almost doubled compared to the

price a year before, and this is expected to rule for

another 6 months.

The State government’s stubborn decision to retain to

retain the retail price of milk at uneconomical levels for

the farmer, also is a hurdle for the company to adjust the

price of the cattle feed in tune with the ingredient prices.

The competing brands controlled by the state government

holding their feed prices for reasons other than

economical also affected our flexibility in adjusting the

feed price

In oil cake processing division, there is a slight fall of

2.65% in the quality of cake processed .In the fourth

quarter the company could not procure sufficient quality

of copra cake locally due to non-availability at reasonable

prices and there was delay in the arrival of imported

cake.

In dairy division, there is a fall in ice cream sales volume

by 3.37% .But this fall in volume is after reporting an

improvement in volume to the tune of 12.50% in previous

year.

Opportunities:

Removal of value added tax on sales of cattle feed and de-

oiled cake enables the company to work effectively.

Presence of production units in two states helps company

cover those states competitively.

State of the art research facilities and qualified research

personal enable the company to add innovative products

and improve exciting products.

Expanding its distributing areas.

Growing demand of its products.

Threats:

Probable entry of foreign entities in the case of raw

material purchasing.

Stagnant number in the cattle population affecting market

growth in future as a cattle rearing is still not very

economical.

Competition from other manufactures of organized and

unorganized sectors.

Indirect control by government over price of milk which is

bottle neck increasing price of feed to offset increase in

raw material prices.

7.1 Findings

Good working environment

Updated technology and concepts

Performance appraisal system

Strict disciplinary action

Training programs, meeting according to the needs

Satisfying the needs of the customers and employees

Safety and security policy

Harmony relation between the management and its

employees

Good co-ordination among the various departments

Improved quality standards.

7.2 Conclusion

KSE, a company having an

annual turn over of Rs.350 crores, is the largest manufacturer of

cattle feed. It provides employment to around 1500 numbers

directly and another 5000 indirectly. Its shares are being listed in

three stock exchanges in Cochin, Chennai and Mumbai. The

company commenced its production in the year 1972.

It is marketing annually about

1.80 lakh tons of superior quality cattle feed. KSE had successfully

launched its Vesta brand Ice Cream which has been well accepted

in the market for its matching international quality standards. KSE

plans to add more ice cream production units across Kerala in the

coming years to serve all pockets.

KSE is in the oil extraction

industry for past 36 years. It is having two solvent plants with

processing capacity of 100 tons per day. The company has also a

chemical oil refining plant of 20 tons per day. The company has

secured the National Productivity Award for the year 2001-2002 for

being first in terms of production efficiency in the animal feed

sector. This is the sixth time in a row that the company is being

selected for this most coveted award.

It is pertinent to note that in the

Kerala industrial scenario, where many companies are closing

down, either due to labour unrest or due to other economic

reasons, KSE continues to commence new ventures each year and

run them successfully. The company is having six units at different

locations. The relation with the labour unions of all these units is

very warm and cordial. KSE, with a capital base of Rs.36 crores

embarks on an expansion to double its solvent extraction capacity

and add a most modern eco friendly vegetable refining plant. The

company has already identified six acres of land in the KINFRA

small industries park, Koratty for this expansion.

In the first phase, the company

plans to install one 200 MT per day solvent plant for processing oil

cakes and also a 100 MT per day physical refining plant. Both these

plants will be of international standard using most modern

technologies, where the process loss is kept to minimum. The

project will generate direct employment to 125 and indirect

employment to another 500 numbers. In the second phase, a 100

MT per day oil fractionation unit will also be added.

As a pioneer in the solvent

extraction industry, leader in cattle feed manufacture, and an

emerging force in ice cream and a resourceful new entity in diary

development and milk products, KSE is determined to move with

the times, taking on new challenges, achieving new milestones.

7.3 Suggestions

1) Open new branches for establishing the presence in all major

centers and backward areas, aiming at effective in rural

presentation.

2) Starting of new product lines or introducing new product may

helps to increase the sales volume and profit.

3) KSE Ltd is making good use funds, so they can easily make

good moves in share market.

4) Advertisement is one of the Major problems in KSE Ltd, Which

can avoid through concentrating in Medias, internet and other

popular methods.

5) Use of more board display advertisement.

6) The analysis shows the company have decline in profit in the

current year, effective performance is suggesting overcoming

the huddles.

7) Off seasonal problems can avoiding by using more promotional

program to agencies and dealers.

8) Necessary precautions must be taken in advance to avoid any

trade union problems in the future.

9) Better co-ordination between all department s should be

maintained for the smooth running of the company.

10) It is necessary to provide full contribution from the functional

department for achieving the targets.

11) Perish ability was one of the main limitation of this industry;

new technologies must be introduced to avoid such problems.

12) Always try to maintain the domination in the field.

13) Providing proper safety equipments to protect from the

hazards.

14) Reference group should be formed to educate consumers.

15) Company can earn more profit by expanding the market.

Bibliography

Annual report KSE Ltd. 2010 - 2011 www.kseltd.com