Srk final os report (1)

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1.1Introduction
The Indian cattle feed industry is about 35 years old. It is mainly restricted to dairy and
poultry feed manufacturing. Feed manufacturing on a commercial and scientific basis started
around 1965 with the setting up of medium-sized feed plants in northern and western India. Feed
was produced mainly to cater to the needs of dairy cattle. The poultry sector was not developed
at that time and was restricted to backyard production. The poultry industry is now growing in
importance. The cattle feed industry is been utilizing the indigenous raw material i.e.; coconut
cake, which is the residue after the extraction of oil from copra which is mainly used as a cattle
feed. Coconut cake contains 4-5% oil generally used for industrial purpose and de-oiled is used
to make mixed cattle feed.The trainee did her internship training in KSE as it is one of the
famous cattle feed manufacturing firms in Kerala. Internship training for two weeks is an integral
part of the PGDM curriculum of Bhavan’s Royal Institute of Management during the first year of
study.
1.2Need and Significance of the Study
1 To familiarize with the functions of the business organisation.
2 To study the work culture of the executives and the workers.
3 To familiarize with the different departments in the organisation, the structure and their
functioning.
4 To understand how key business processes are carried out in organisations.
5 To understand how the theoretical knowledge and practical knowledge go together in order
to achieve organizational goal.
1.3Objectives of the Study
The main objective of the study is to get knowledge about the organization and the
activities of various departments. The purpose is to acquaint the trainee with a large company’s
organizational climate.

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1. To get the knowledge about the organizational functions and strategies followed by
different departments to fulfill organizational goals.
2. To study how the management tries to control and co-ordinate various departments to
achieve organizational goal.
3. To do SWOT analysis of the firm.
4. To get an insight about the cattle feed industry
1.4 Scope of the Study
By doing this organization study one can understand about all the activities of the
organization .similarly this study help anyone to know about the manufacturing process of
concern and also understand the practical side of the theories, that taught in the class. This study
also given a clear picture of the Kerala Solvent Extraction Ltd, Irinjalakuda
The scope of the study is to understand the interrelation between various departments like
Purchase, Marketing, Finance, Human resource, Quality assurance etc. The study helped me to
develop an understanding about the structure and dynamics of a business firm. Due to time
constraint it was not possible to study the functions and operation of the entire organization.
Hence the scope of this report is constraint to 8 departments.
1.5Methodology of the Study
The study conducted was a descriptive study sought to collect information about an organization
in its actual working environment. For this purpose the data was collected with the help of
primary data and secondary data.
The researcher used observation method and interview techniques to collect the required primary
data
1) Observation method
The observation method is the most commonly used methods. The
information obtained in this method relates what is currently happening. It is not complicated by
either the past method behavior and future intention or attitude. This method is particularly
suitable in studies which deal with reason on the other.

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2) Interview method
This method require a person generally in face to face contact known as
the interviews asking questions generally in direct face to face contact to the forms of direct
personal investigation and it may be indirect personal investigation. In this case of direct
personal investigation the interviews than to collect the information personally from the sources
concerned. But in certain cases it may not be possible to contact directly with a person who
belongs to the firm.
Sources of Secondary Data
Secondary data means the data which is already available that is, they
refer to the data which may either be published data. Usually published data are available in
a) Various publications of central, state government. b) Technical and trade journal c) Books,
magazines and news papers d) reports and publications connected with business and industry etc
and reports prepared by research scholars, universities, economists etc. e) company websites .
The sources of unpublished data are many they may be found in diaries, letters, unpublished
biographies and auto biography etc.
1.6Scheme of Reporting
The first chapter deals with introduction, need of significance, objective behind conducting the
study, methodology used to collect data for the study, scope of the study, limitations of the study,
and the scheme of reporting.
Second chapter deals with the industry profile in global, national and state aspects and also
giving a small picture about the future of the respective industry.
Third chapter gives an idea about the company profile which includes history of the company,
mission and vision of the company, product profile etc.
Fourth chapter deals with the information gathered from company about the working, activities,
procedures etc.
Fifth chapter deals with the findings and recommendation and conclusion.

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2.1Cattle 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 feed wherein there is no compromise
over the nutritional composition.
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.
According to “Extract From Animal Feeding Safely”, report of an FAQ expert
consultation present condition of cattle feed is “worldwide, 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 sufficientlive stockfeeds 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.
2.2 World Scenario
The global animal feed market is growing at a steady pace and has a promising future
because of the globally increasing demand for meat and meat products. Feed additives are
becoming an important part of feed for animal growth and nutrition. Recently, disease outbreaks
such as avian flu and foot-and-mouth diseases have also increased concern over animal health
across the world. Environmental concerns, such as reduction of phosphorous content in manure
are promoting feed additives consumption for animals.
The Europe and the U.S. are the largest markets for animal feed additives and Asia is
emerging as a high growth market.

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Live stock production is growing rapidly as a result of the increasing demand for animal
products. A joint IFPRI /FAO/ILRI study :Live stock to 2020.the next food revolution (Delgado
1999),suggest that global meat production and consumption will rise from 233 million tons
(2000) to 300 million tons(2020),and milk from 568 to 700 million tons over the same period .
Over the few decades, the increasing demand has been largely met by the worldwide growth in
intensive livestock production, particularly poultry. This is expected to continue as real income
grows in the emerging economies.
Intensive livestock production is very efficient in using feed conversion rates of 1.8-1.9
are possible .feed conversion for layers is now below 1.65kg/dozen eggs. But production relies
heavily on grain, soya, fishmeal and other feed which frequently need to be imported into
developing countries. Feed grains are thought to compete directly, or in the use of land, with
grains for human consumption and livestock are often blamed for inefficient use of feed and
energy. Indeed, in some systems, e.g. beef feedlots, energy and nitrogen conversion is poor.
However, if efficiency is seen over the entire production chain, and expressed as input of edible
human food/output in human edible food, the view of animal production is more positive. If it is
assumed that all 1000 million tonnes of cereals, roots and tubers used for livestock are edible for
humans (in practice, they are not) then livestock use 80-100 million tonnes edible protein. On the
positive side, the 233 million tonnes meat, 568 million tonnes milk and 55 million tonnes eggs
produced globally contain 65 million tonnes of protein. So while input is higher than output, if
improved protein quality on the output side is considered, a reasonable balance emerges.
Industrial livestock production depends on external inputs. Technology, capital and
infrastructure requirements are based on large economies of scale and labour efficiency, which
may or may not be seen as positive in developing countries. One person can operate a unit of 10-
12,000 laying hens and 35-40,000 broilers, 6.5 times per year. Hence industrialisation requires
less labour than traditional systems. However, given the rapid increase in demand, there is
additional employment above the current level and further jobs are created in the supply and
processing industries. And as a way of providing eggs, poultry meat and pork at competitive
prices, it has been successful in meeting the escalating demands for low cost animal products in
rapidly growing urban centres of the developing world.
The industrial system is also associated with environmental problems. Industrialisation
implies large numbers, large volumes of wastes, animal and human health risks, and poor animal

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welfare. Waste products are often dumped without accounting for the environmental costs.
Manure storage and disposal is one of the main problems of large industrial operations. Pigs and
poultry excrete some 65 and 70 percent, respectively, of their nitrogen and phosphate intake.
Nitrogen, under aerobic conditions, can evaporate in the form of ammonia with toxic, eutrophic
and acidifying effects on ecosystems. Nitrous oxide, a greenhouse gas, is formed as part of the
denitrification process with particularly harmful effects on the environment. Nitrates are leached
into groundwater posing human health hazards, and run-off and leaching of nitrogen directly lead
to eutrophication and bio-diversity loss of surface waters and connected ecosystems. Phosphorus,
on the other hand, is rather stable in the soil, but, when P saturation is reached after long term
high level application of manure, leaching occurs and this also causes eutrophication or rivers
and lakes.
To control the undesirable effects of industrial livestock production, The Livestock and
Environment authors proposed:
1. to establish zoning for industrial production systems;
2. to bring animal densities in line with the absorptive capacity of land and water, through
quota systems, as already imposed in many parts of the world; and
3. to prescribe regulations for waste control from processing and industrial production units,
and use of noxious substances, management practices, and labelling.
They also point out that there may be environmental benefits of industrial production
systems.Firstly, the rapid development of pig and poultry systems helps to reduce total feed
requirements of the global livestock sector to meet a given demand. The shift from red to white
meat (i.e., ruminants to monogastrics) implies a great improvement in feed conversion
efficiency. It may therefore alleviate pressures for deforestation and degradation of rangelands,
such as is happening in parts of Latin America and Asia, thus saving land and preserving
biodiversity. Secondly, the feed-saving technologies developed for this system can be effective at
any scale and therefore can be successfully transferred to smaller farming systems. Thirdly,
waste management and treatment technologies have been developed which may convert it into
valuable organic fertilizer and energy in the form of biogas or electricity.
More benign development of pig and poultry production systems requires attention to national
and local government policy to promote and encourage effective solutions.

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2.3 Indian Scenario
The Indian feed industry is about 35 years old. It is mainly restricted to dairy and poultry
feed manufacturing; the beef and pork industry is almost non-existent. The quality standards of
Indian feeds are high and up to international levels. Raw materials for feed are adequately
available in India (there is the advantage of a successful soyabean industry with some 5.7 million
hectares in production). The industry's production is about 3.0 million tonnes, which represents
only 5 percent of the total potential, and feed exports are not very high. The feed industry has
modern computerized plants and the latest equipment for analytical procedures and least-cost
ration formulation, and it employs the latest manufacturing technology. In India, most research
work on animal feeds is practical and focuses on the use of by-products, the upgrading of
ingredients and the enhancing of productivity. The projected increase in the demand for livestock
products has important implications for the livestock feed industry, and the demand for energy
and protein raw materials. At present rates of growth, it is projected that production will have
reached 5 million tonnes by 2020.
Sustainable agriculture, integrated systems and organic farming methods have been
promoted by development agencies for many years, and yet their real impact is very small. Over
the last 30 years, FAO has worked in the field to develop technologies for integrated farming
systems appropriate to small producers, particularly in the tropics. For ruminant livestock, urea
treatment of straw and the use of multi-nutrient blocks have been shown to greatly improve
nutrition of animals fed on low quality roughage diets. The use of sugarcane and its by-products
has been demonstrated in many countries, including the feeding of pigs on sugarcane juice and
molasses while ruminants consume the pressed cane stalk or bagasse. Legumes and tree forages
have also provided needed protein inputs into cattle, sheep and goat production systems, while
benefiting the environment through nitrogen fixation and organic matter. Attention has been paid
recently to the use of mulberry, Morusalba, as a high quality forage for cattle. Finally, the use of
water plants (Azolla, Lemna, etc.) has been shown to provide good DM production and animal
performance in studies in Latin America and Asia.
These technologies have been combined into integrated farming systems for the small
producer that are biologically sustainable and achieve high levels of production, with minimal
environmental problems as the manure is recycled or used for biogas production.Much of this

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work is described in publications by T.R. Preston, of which one is cited here.Undoubtedly, the
technologies have contributed to the improvement of income and lifestyle of small farmers and
represent an effective approach to sustainable development and poverty alleviation. But the
approach has been divorced from the parallel growth of intensive systems and industrial
livestock throughout the world, which can be seen as providing the bulk of supply to meet the
demand.
The challenge is to enable small producers (who are usually the ones applying the more
sustainable technologies and integration of farming activities) to have access to a wider market -
termed Ruralizing the Livestock Revolution. There is also a need and demand for low cost and
simple technologies for livestock and product processing. All too often, the middle-men or
traders take the greatest share of the profit because they have the means, the knowledge and the
access to the consumer market. Emphasis needs to be given to the development of small-scale
and village-level processing, including equipment, training, distribution and marketing. India
already has an advantage in this area.Medium sized and small cooperative livestock systems
India's very positive experience with the NDDB and milk production could have
important lessons for the development of other parts of the livestock sector. If the cooperative
system and organized marketing is applied more to the poultry sector, there is enormous
potential for expanded production in rural areas, supplying the cities. The authors of the FAO
report suggest that backyard production could be coordinated through local units, given that the
scavenging hen produces the cheapest eggs. But this may not be the most effective method to
advance production and supplies to meet the demand. It may be better to develop medium sized
cooperative commercial units which are more susceptible to technological improvement and
sustained supply. Such systems would not be the very small, backyard operations but medium
sized village cooperatives of say 10000 to 50000 birds. The advantages of such development
would include:
1. Ownership remains with village people
2. Enterprise is larger and enjoys some economy of scale
3. Some of the technical advantages of industrial systems compared to backyard farming
4. A small but viable feed mill can be operated
5. Management is more efficient: breeding, feeding, veterinary treatment, etc.

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6. Extension work is facilitated
7. Can still be less capital intensive than industrial units
8. Labour is reduced and allows for secondary employment/income
9. Marketing is more efficient: regular supply, increased scale, improved standards possible...
10. More people participate and benefit from the market
11. Easier to apply Good Agricultural Practices than either industrial or backyard farming
12. Environmental and ethical advantage over industrial units could be exploited for added value
Given the potential market for an additional million tonnes each of eggs and poultry
meat, the is considerable opportunity for participation in this expanding sector. It also implies
more than 2-3 times the required capacity for poultry feed production, preferably in small
integrated units.
The implications for local feed production are that these small units (10,000
layers/35,000 broilers) would need 1-2 tonnes per day of poultry feed. This might be further
integrated, particularly in the states of Karnataka, Kerala, Andra Pradesh, Tamil Nadu and
Maharashtra, with soya bean production and small-scale processing.
Such vertical integration, albeit on a relatively small scale, is desirable and appears
feasible with these numbers. Cooperative marketing is required to ensure the scale needed to
supply the cities.Unfortunately, experience in the Indian poultry industry has been mixed with
wide shifts in prices and failures of companies as a result.
There is suspicion of the present 'integrators' and a need for a more organized and
sustainable system to develop the sector effectivelyThe above analysis highlights the potential
for livestock production globally and in India particularly. However, there are serious concerns
about food safety and the environment associated with the growth of intensive, commercial
livestock which need to be addressed if the livestock sector is to develop in a sustainable way,
satisfying the more exacting demands of the consumer and world markets.In recent years and in
many countries, public concern about the safety of foods of animal origin has heightened due to
problems that have arisen with bovine spongiform encephalopathy (BSE), dioxin contamination,
outbreaks of foodborne bacterial infections, as well as growing concern about veterinary drug

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residues and microbial resistance to antibiotics. These problems have drawn attention to feeding
practices within the livestock industry and have prompted health professionals and the feed
industry to closely scrutinise food quality and safety problems that can arise in foods of animal
origin as a result of animal feeding systems.
Some foodborne diseases have recently become more common. For example, outbeaks of
salmonellosis have been reported for decades, but within the past 20 years the disease has
increased in incidence on many continents. In the Western hemisphere and in Europe,
Salmonella enteritidis (SE) has become the predominant strain. Investigations of SE outbreaks
indicate that its emergence is largely related to consumption of poultry or eggs. In 1994, there
was a nationwide outbreak of salmonellosis in the United States as a result of contamination of
pasteurized ice cream during transport in lorries that had previously carried nonpasteurized liquid
eggs containing Salmonella enteritidis. It is estimated that 224,000 persons were affected by the
outbreak.
Other foodborne pathogens are increasing in prevalence because they are new
microorganisms or because the role of food in their transmission has been recognized only
recently. Infection with Escherichia coli serotype O157:H7 (E. coli) was first described in 1982.
Subsequently, it has emerged rapidly as a major cause of bloody diarrhoea and acute renal
failure. The infection is sometimes fatal, particularly in children. Outbreaks of infection,
generally associated with beef, have been reported in Australia, Canada, Japan, United States, in
various European countries, and in southern Africa. In 1996, an outbreak of Escherichia coli
O157:H7 in Japan affected over 6,300 school children and resulted in 2 deaths. This is the largest
outbreak ever recorded for this pathogen.
Listeria monocytogenes (Lm) is considered emerging because the role of food in its
transmission has only recently been recognized. In pregnant women, infections with Lm can
cause abortion and stillbirth, and in infants and persons with a weakened immune system it may
lead to septicemia (blood poisoning) and meningitis. The disease is most often associated with
consumption of foods such as soft cheese and processed meat products that are kept refrigerated
for a long time because Lm can grow at low temperatures. Outbreaks of listeriosis have been
reported from many countries, including Australia, Switzerland and the United States. Two
consecutive outbreaks of Listeria monocytogenes in France in 1992 and 1993 were caused by

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contaminated pork.tongue and potted porkFAO data show that livestock production, and
demand for animal products, will grow rapidly in the next 20 years. These predictions show a
massive increase in animal protein demand, needed to satisfy the growth in the human
population. Consumption of livestock products, with the associated demand for feed grains and
the environmental effects of this pressure, will grow even faster in some countries. It is predicted
that there will also be a greater concentration and associated problems of livestock in the cities
and peri-urban areas. These problems will include environmental pollution and, not least, the
increasing risks of zoonotic diseases affecting humans.
The big increase in animal protein demand over the last few decades has been largely met
by the world wide growth in intensive livestock production, particularly poultry. This is expected
to continue as real income grows in the emerging economies. Industrial production relies heavily
on grain, soya and fishmeal, and has a high cost in terms of fossil fuel consumption. The
concentration of animals, disassociated from land and crops, presents alarming problems of
waste disposal. Technologies are needed to make use of the waste as fertilizer and fuel.
Sustainable agriculture, integrated systems and organic farming methods have been
promoted by development agencies for many years, and yet their real impact is very small. The
challenge is to enable small producers to have access to a wider market. There is also a need and
demand for low cost and simple technologies for livestock and product processing. Emphasis
needs to be given to the development of small-scale and village-level processing, including
equipment, training, distribution and marketing.
It may be better to develop medium sized cooperative commercial units which are more
susceptible to technological improvement and sustained supply. If the cooperative system and
organized marketing is applied to the poultry sector, there is enormous potential for expanded
production in rural areas, supplying the cities. The advantages of such development are:
ownership remains with village people; enterprise is larger and enjoys some economy of scale;
some of the technical advantages of industrial systems compared to backyard farming; a small
but viable feed mill can be operated; regular supply, increased scale, improved standards
possible; more people participate and benefit from the market; its is easier to apply good
agricultural practices than either industrial or backyard farming; and there are environmental and
ethical advantage over industrial units that could be exploited for added value.

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Fulfilment of consumer demand is not only quantitative but also qualitative. Livestock
products must be produced from disease-free animals and under hygienic conditions. We must
also question the use of additives that 'improve' production but are unacceptable to the consumer.
At the policy, producer and processor level, the provision of safe and wholesome food must be
recognised as the cornerstone to sustainable livestock and product development.
FAO is engaged in developing Codes of Good Agricultural Practices (both in the feed
industry and from 'farm to fork') which will support Quality Assurance schemes that address
issues of human health, animal health and the environment
India's animal wealth is quite large in terms of its populations of cattle, poultry, sheep and
goats, camels, horses and pets Recently, aquaculture has also been growing in importance in
India.
Feed manufacturing on a commercial and scientific basis started around 1965 with the
setting up of medium-sized feed plants in northern and western India. Feed was produced mainly
to cater to the needs of dairy cattle.
CLFMAwas formed in June 1967 as an association of feed manufacturers and associated
industries such as ingredient suppliers, importers, feed additive manufacturers, consultants,
hatcheries and milk cooperatives and feed machinery manufacturers.
The objectives of CLFMA are to promote the concept of nutritionally balanced
compound feed; to promote, assist, organize and coordinate scientific research in the field of
animal nutrition; to conduct, assign, sponsor or co-sponsor surveys and studies; to collect,
classify and circulate information related to animal feed to its members and government; to offer
suggestions to government in formulating policies; and to impart training to livestock farmers,
feed mill personnel, veterinarians, students and others. The office-bearers of CLFMA are elected
and operate for a maximum of two years at one level.
Over the years, CLFMA has been able to solve many problems of the industry, but many
others still remain unsolved. CLFMA is gradually becoming a representative of the entire
livestock industry.

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Formed in June 1967 as The Compound Feed Manufacturers Association, CLFMA now
has around 200 members, including all sectors of the livestock industry. CLFMA OF INDIA is
recognized not only by livestock farmers, Central and State Governments, Government
Departments, Agricultural Universities, Veterinary Colleges and National Research Institutes in
the country, but also by related sectors outside the country.
CLFMA's views are solicited and reckoned with by our Central and State Governments
while formulating policies governing not only animal feed industry but also the entire gamut of
animal production.
CLFMA, the sole, All-India representative of manufacturers of nutritionally balanced and
scientifically compounded feed for cattle, poultry, fish, prawns etc., manufacturers and suppliers
of feed supplements & raw materials, feed plants & machinery and other service providers
business associated with livestock industry. Today CLFMA has around 200 members including
all sectors of the industry.
Few animal feed manufacturers’ way back in 1964 initiated the dialogue to give
organizational bent to this industry. As a result, CLFMA was formed and registered on 8th June
1967, which in 1969 was registered as a charitable public trust. The prime objective of CLFMA
is helping the promotion of overall animal husbandry, by promoting the concept of balanced
feeding of animals in accordance with their nutritional requirements for deriving the maximum
output from them through productivity improvement.
CLFMA is fully committed to manufacturing and supplying high quality; safe and
conversion-efficient animal feeds to livestock farmers at prices affordable to them.During 2001,
at the AGM held at Goa, the resolution was passed to form a Sub-Committee to broad-base
CLFMA.It was agreed by the members present that all sectors of livestock industry should come
together for the progress of the industry.
The share of compound cattle feed manufactured by the industry, in relation to the overall
potential, is low for the following reasons:

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1. The cattle population is fragmented and spread over large parts of the country. Farmers'
low level of education and strong traditional beliefs mean that there is generally little
awareness of compound cattle feed.
2. More than 50 percent of the country's total milk production comes from a very large
number of low-yielding cows and buffaloes. A further 25 percent of milk production
comes from buffaloes and only the remaining 25 percent of the total is produced by
cross-bred and improved cows.
3. Industrially manufactured compound cattle feed has proved its value for cross-bred cows
and buffaloes but not for low-yielding cattle because of their genetic limitations. Home-
mixed feed is very frequently used for buffaloes and low-yielding cattle.
2.4 Kerala Scenario
Cattle feed industry is growing in Kerala. There are many cattle farmers as well as
laboratories, so cattle feeds industry is growing. The major players n Kerala are Kerala
feedsGodrej FeedsLtd,Milmafeeds,SunandhiniFeed , Prima Feed.
a) Kerala Feeds
Kerala Feeds Ltd is a public sector stock feed manufacturing Unit under the Government
of Kerala which was set up in 1995 with a total project cost of approximately Rs.35 Crore. The
plant is located in Panjapally (Now Feed Nagar) in Kalletumkara Village of Thrissur District, 2.5
kms away from the Irinjalakuda Railway station. The commercial production was started in
1999. Within a short period of 4 years the company has increased its total production from
3793.49 MT in 1998-1999 to 125567 MT in 2004-2005. The technology used for manufacturing
is MMCP (Milling, Mixing, Cooking & palletizing). The machinery is imported from
Netherlands
b) Milma
The name MILMA has been derived from the cumbersome predecessor, Kerala Livestock
Development Board and Milk Marketing Board (KLD&MMB). KLD&MMB existed from 1976
to 1981. The name MILMA was coined at the official level by Mr. S. Nagarajan IAS. A 1961
batch Indian Administrative Service (IAS) officer, he took over KLD&MMB as its first
chairman.

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Milk distribution in Kerala was available at only a few locations in Kerala. The
distribution and sale was handled by the employees of the Board. The consumers had to purchase
coupon booklets in advance and exchange the coupons in exchange for milk. No mechanism
existed to tally the sale of milk and the coupons received. Mr. Nagarajan bought about a change
in this system by making the consumer pay for milk at the time of purchase instead of the coupon
booklet system. Moreover at that time milk was being sold in bottles and for the first time in
India he introduced milk in ½ liter sachets. He had a prototype machine for packaging milk in
sachets installed in Thiruvananthapuram. From the public sector he moved the sale of milk to the
private sector. Milk booths permits were issued to private entities for the sale of milk from
MILMA. From 1981 onwards under the advice of Dr. V. Kurien, by forming cooperative
societies PrayarGopalakrishnan and others were able to introduce MILMA to the whole of
Kerala
The KeralaCo-operative Milk Marketing Federation (KCMMF) or Milma started its
operation in 1980 with its head office at Thiruvananthapuram. It was started under the Indo-
Swiss project The project was launched in 1963 on the basis of a bilateral agreement executed
between the Swiss Confederation and the Government of India. The project has made great
strides in the improvement of livestock farming in the state. One of them is the development of
Swiss Brown, a cross breed suited for the state's conditions. The project is now managed by the
Kerala Livestock Development and Milk Marketing Board. It main motive was to implement the
Operation Flood programme started by the National Dairy Development Board (NDDB) in
Kerala.
The project impact was so widespread that close to about 83 % of the adult cattle of the
state got converted to the new breed – Sunandini-, the milk production increased by over ten
times and the per capita availability of milk increased by over 7 times with over a million
families dependent on milk production. The project has succeeded in integrating better
technology and management to the traditional small holder production system. It also
demonstrated how the high productive, semi stall fed cows led to a spontaneous decline in the
total bovine population of the state from 34.6 lakh in 1977 to 21.86 lakh in 2003 when the total
bovine population of India went through an upsurge. This contributed immensely to
environmental sustainability. By demonstrating a growth model for productivity enhancement,

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the project not only impacted the million small livestock holders in Kerala, but also millions
outside the state
The project demonstrated revolutionary institutional changes beginning with the Indo
Swiss project of Kerala, an autonomous institution under the govt. of Kerala to the Livestock
Development and Milk Marketing Board and then to the present autonomous company - the
Kerala Livestock Development Board, with the formidable dairy cooperative system under the
Kerala Cooperative Milk Marketing Federation (MILMA), under the able guidance of its first
managing director S. Nagarajan IAS, spun off as successful an independent entity.
Kerala's milk demand / consumption per day is 10.90 Lakhs liters, whereas total
production in Kerala amounts to 7.80 Lakhs liters per day. Thus, Kerala imports round about 3
Lakhs liters per day of milk from Karnataka, Tamil Nadu and Maharashtra.
c) Prima Feeds
Prima Agro Products Ltd is a Cochin based company. The Company is a Prima Group
Company. The company has identified Ms Jung Won Corporation, Seoul, South Korea as a
collaborator for the expansion project. The company has launched in the Kerala market its
Rich Foods brand of food products. It has entered the capital market in August 1993 with a
public issue of Rs 360 lakhs. It has already launched cattle feed products in different varieties
under the brand name Prima Feed

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2.5 Porter’s Five Forces Analysis
The Porter’s five forces model is an analysis of the structure of the industry should be
undertaken in order to find effective sources of competitive advantage. Therefore, in
ordertoanalyze the competitive environment of KSE, Porter’s five forces analysis has been us
Fig No.2.1 Porter Five Force Model for Industry Analysis
1. Threat of new entrants
The threat of new entrants is moderate mainly because of the
1. It would be very difficult for a new company to enter this industry because
they would not be able to compete with the established brand names,
distribution channels, and high capital investment.
2. Need of high end and sophisticated technology requirements is pausing the
entry of new players.
3. The new companies who are entering are Active Kerala feeds, Milmaetc
2. Bargaining power of buyers
Rivalry
Among
Competin
g Firms in
Industry
Threat of
New
Entrants
Bargaining
Power of
Buyers
Threat of
Substitute
Products
Bargaining
Power of
Suppliers

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The buyers in India have variety of choice. There are more than 6 cattle feed
producing companies in India. So, the bargaining power of buyers is more because they
have lot many choices available to purchase cattle feed.
1. They can switch from one company to other since the switching cost is very
low because the cost of cattle feed is almost same in every company.
2. Since the buyers of cattle feed purchase in bulk quantities the buyers has the
power to bargain over the price of cattle feed.
3. Bargaining power ofsuppliers
The supplier population in this industry has low to moderate bargaining power due to the
following matters:
1. Bargaining power of supplier depends on famers availability.When the
demand for farmers is more suppliers will drive the bargaining power.
2. The switching cost is also very low. It’s not going to cost much for the industry to
shift from one supplier to another and this is one big threat for the supplier and
other reason is there is lots of supplier.
4. Threat of substitute Products
There is not much substitute in this case. Customers view the substitute based on the
cattle feed industry as extremely satisfactory in terms of quality, comfort and
convenience
5. Rivalry Among Existing Competitors
Companies are able to maintain a competitive advantage with innovation due to the large
amount of technology that goes into the products and services. Obtaining that competitive
advantage is a key factor. Economies of scale can play a huge role in success as well as
the market can also be price sensitive. Due to the fact that the cost of raw materials can
sometimes be volatile, the company must plan ahead in order to remain efficient as extra
expenses can only be made up by passing the burden to their customer.
Major cattle feed industries are Milma, kerala feeds, etc.

19
3.1 Introduction
It was in 1963 that 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 KSE was established.
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
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 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.

20
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.
3.2Vision
The company shall Endeavour to maintain leadership through quality products explore
new avenues in product development and marketing create stronger bond between the
management ,workforce, dealers and customers ,contribute to social development and rural up
liftman and constantly strive for excellence in all shapes of our objective.
3.3Mission
1. To maintain the market leadership.
2. To minimize the cost incurring in production process.
3. To maintain the product quality.
4. To be competitive at all markets.
5. To be compliment to all global quality standards.

21
6. To maintain top position in the industry.
7. To utilize the new technological changes for the benefits of the company.
3.4Corporate Objectives of the Company
The memorandum of association of the company lists out 38 broad objective for which the
company is registered .Out of these the most important objectives are:
1. To produce, manufacture, extract purchase, refine prepare import, export, sell and generally
to deal in oil bearing materials to carry on business of the refining the hydrogenation of oil
and manufacturing of by products there from and of trades connected there with.
2. To acquire erect construct establish .operate and maintain oil mills, extraction plants, ghee
plants and workshop.
3.5Growth Chronicle of KSE Ltd.
1972 Solvent plant commences operation.
1976 Mixed cattle feed production beginnings.
1987 Cattle feed production reaches 180 tones 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 tones.
1989 A solvent unit with a capacity of 120 tons per day commences operation at
TamilNaduplant.
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.

22
1995 Vegetable oil refining plant commissioned, KS Supreme-sunflower oil launched, and
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 centrehave 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 Konikaradairy
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

23
2010 Ice-cream production unit at Vedagiri commission
3.6Product Profile
1. K.S Cattle feed
There are 6 type of cattle feed. There are,
i. K.S-Mash
ii. K.S Supper
iii. K.S Ordinary
iv. K.S Delux pellet
v. K.S Delux and pellet
vi. K.S Premium pellet
2. K.S Supreme(Refined Sunflower Oil)
3. Jersey copra
4. K.S Forte (Feed Supplement-Tonic )
5. K.S Mineral mixture
6. Milk Products
i. K.S Milk
ii. K.S Ghee
iii. K.S Curd
iv. K.S Butter Milk
v. Vesta ice cream
3.7 Future Scope of the Industry
India’s animal wealth is very large in term of its population of cattle, poultry, sheep, goat,
camel, horses and pets. This India’s lives stock industry will be facing with a lot of challenges in
the coming decades. The per capital consumption of milk, meat and eggs expected to doubly by
2020.Globally the demanded for the food of animal origin will increase. These will be shift of
live stock production from temperate and dry areas warm and humid areas. Hence there is
tremendous opportunity for India’s to be a leading exposure. INDIA would need to become very
competitive in a world of globalize.

24
3.8 Future Scope of the Company
1. After three decades of credible growth and achievements, KSE is looking forward .Plans
are already a foot to strength its operation in the edible oil business. Dairy business and
reinforce its core capabilities and continue the process of forward integration.
2. Company has acquire a land property in mysore.Company is in the process of planning in
respect of the project that property
3. Company has endeavored for a Karnataka market survey.
4. Company is planning to dispose of its solvent extraction plant at Irinjalakuda unit which
has been worn out completely and install a cattle feed plant. This project of 2000 core
Rupees.
5. The company has plan to strengthen its dairy business by increasing production and
adding more items to that product line
6. Plan to pelletize at Palakkad unit
3.9Company’s Philosophy on Corporate Governance
In KSE Limited, they 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. The company 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 .

25
3.10Organizational Structure
Fig: No: 3.1 Showing the Organizational Chart
Board of Directors
Who Time DirectorExecutive Director
Program
Manager
Quality
Manager
Marketing
Manager
HR
Manager
Purchase
Manager
Finance
Manager
General Manager
Managing Director
Executive
Officer
Security
Officer
Customer
Service
Chief
Nutritionist
Assistant Sales
Manger
EngineerExecutive
Officer
Share
Department
Assistant
Finance
Manager
Assistant A/c
Manager
Clerk Clerk
Sales
Representatives
Lab
Attainder
Clerk
Worker
Security
Guard Executives

26
Department Details
In KSE the work activities that are similar and logically connected are grouped to
form departments. At present there are seven departments in the organization. They are as
follows.
1) Finance Department
2) Marketing Department
3) Human Resource Department
4) Production Department
5) Purchase Department
6) Store Department
7) Quality Department
The study was confined only to four departments of the firm due to lack of time. The
department scovered under the study were marketing, finance, quality control.
4.1Finance Department
Fig: No: 4.1 Showing the Structure of Finance Department
Finance Manager
Deputy Account Deputy Finance
Manager
Deputy Share
Manager
Executive Officer
Clerk
Executive Officer Executive Officer
Clerk Clerk

27
Learning Objective:
To study the;
a) Department structure
b) Accounting Policies
c) Marketing Price Data
d) BSE Sensex
e) Summarized Balance sheet for the last five years
f) Summarized profit and loss account for the last five years
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 was 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

28
4.1.1Capital 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
4.1.2Banker
Company’s banker is ICICI bank limited which allows a cash credit subject to a
maximum limit of Rs cores.
4.1.3Source of Finance
The company makes use of two types of source to finance its activities, they are
1. Share holders fund
2. Share capital
3. Reserves And Surplus
4. Loan Funds
4.1.4Functions of Financial Department
1. Maintain a good financial structure
2. Identify the future financial requirement
3. Dividend payment
4. Salary payment
5. Collection of cheque
6. Receipt
7. General payment
8. Payment of raw materials
4.1.5Maintenance of Cost Record
As far as KSE limited is concern maintainer 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.

29
4.1.6Internal 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.
1. Timely preparation of reliable financial information
2. Accuracy and completeness of accounting records
3. Prevention and completeness of accounting records
4. Safeguarding asset
5. Adherence to management policies
6. Orderly and efficient conduct of its business
4.1.7Auditing
The company has constituted on adult company, three independent non-executive directors
assists members. The main auditors of the company are Varna and Varna
a) 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.
b) 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 there

30
4.1.8Budgeting
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.
4.1.9Dividend
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
4.1.10Capital 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.

31
4.1.11Financial Highlights
Table 4.1 Showing the Financial Highlights for the Period of 2009-2011
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 1.00 1.00
Source: Company Records
Table 4.2 Showing the Sales Comparison of Last Six Years
Years Net Profit (In Lakhs) Sales(In Lakhs)
2004-2005 675.58 21309.85
2005-2006 591.23 24060.44
2006-2007 101.09 27503.59
2007-2008 258.38 28947.5
2008-2009 320.54 35007.87
2009-2010 827.27 37094.19
2010-2011 449.81 45368.03
Source: Company Record

32
Table 4.3 Showing the Market Price Data
(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
4.1.12 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
1. Asset put to use have been stated at less depreciation.
2. Asset not put to use have been stated at cost.
Depreciation
1. Depreciation on fixed asset has been provided on written down value method at the rate
prescribed in the company act1956.
Investment
1.Long term investments are stated at a cost less provision, if any for permanent
elimination in the value of such on investment.
Inventories

33
1. Inventories as at the close of the year are valued at lower of cost or net realizable value.
Retirement benefits
1.Contribution to provident fund and employee welfare fund is charged to profit and loss
account.
2.The accruing liability towards gratuity of employees is covered by the group gratuity
assurance scheme of life insurance Corporation of India.
4.1.13Financial 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.
4) Cheque Collection
5) 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.
6) Salary Payment

34
Plant workers will get salary on 6th day of month. Office staff will get salary on 31 st of
the 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.
7) 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.
4.2Marketing Department
Fig: No: 4.2 Showing the Structure of Marketing Department
MARKETING MANAGER
Sales Manager
Clerk
Sales Executive
Senior Assistant
Office Assistant
Customer Service
Manager
Sales Executive
Senior Assistant
Office Assistant
Clerk

35
Learning Objectives:-
1. To know the idea about product mix of KSE Ltd.
2. To study the pricing mix of KSE Ltd.
3. To know the organization structure of marketing department.
4. To familiarize the distribution system of KSE Ltd.
5. To get the idea about the promotional activities of KSE Ltd
“Marketing is the process of planning and executing the consumption, pricing,
promotion and distribution of ideas, and services to create exchange that satisfy individual and
organizational structure”.
The story of success of KSE Limited would reveal the excellence of the marketing
brains of the company .During 1976, When KS cattle feed 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 the cattle feed in the industry
tell the entry story. The fact that KSE limited could export cattle feed adds another feather to its
cap.
The company must design a marketing organization that can carry out marketing
strategies and plants. If the company is very small, one person might do all of the research,
selling, advertising, customer service and other marketing activities. As the company expands a
marketing department emerges to plan and carry out marketing activities. The most common
form of marketing organization in which a functional specialist heads different marketing
activities are headed by a functional specialist ,a sales manager ,advertising manager, Marketing
research manager, and Customer service manager
The marketing department is headed by a marketing manager .the company has a large
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 in to two:
a) Sales division.
b) Complaints and customer care division.

36
4.2.1 Sales Division
This 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 managers of the various plants. He makes the
allotment. The allotment is made from the various plants he makes the allotment .the allotment
is making 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 production accordingly.
4.2.2 Complaints and Customer Service
This division is headed by an assistant manager .Since KSE Limited has network of
dealers directly under their control, maintenance of this net work is very difficult .The dealer
area is very small and closely situated. Overlapping of agencies is a problem .complaints
regarding agencies will reach this department. The complaints are studied and necessary actions
are taken. Similarly, companies 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 and
necessary actions will be taken immediately.
4.2.3 Marketing in Modern World
In the olden days, marketing has identified as physical movement of goods from
producer to consumer. But modern concept of marketing aims at satisfying the needs and wants
of consumers with a reasonable amount of profit alone.
According to modern concept, profit, profit can be earned only through customer
satisfaction. To satisfy a customer his needs are to be known. This is possible only when
information is collected from the customers. Marketing research starts at this stage .Through
marketing research information is flowing back to customers from producers. Thus modern
marketing starts with customers and ends with customers.

37
Table No: 4.4 Showing the Sales of the Company in the Last Five Years
Years Sales( In Lakhs)
2006-2007 45436.07
2007-2008 37094.19
2008-2009 35007.87
2009-2010 28947.50
2010-2011 27503.59
4.2.4 Marketing Strategy of KSE Limited
1) Necessary publicity will be provided for assistance. The company reduced its
advertising expenditure and concentrates more on radio, wall paintings and hoardings.
2) Seminar will be conducted on relevant topics.
3) Cost of operation kept to be minimum.
4) Sales representatives will be providing for assistance.
5) Supply quality products at reasonable prices using advanced production technique.
6) Other marketing strategies.
4.2.5Channel of Distribution
1. Manufactures
2. Dealers
3. Retailers
4. Customers
a) Selection of Dealer
The field staff under assistant customer service and complaint manager will evaluate the
dealer on the basis of certain things those are..
1. Financial position of the dealer
2. Good and spacious go down.
3. Marketing potentiality
4. Dealers credit worthiness
5. One dealer within an area of 5 KM

38
a. If the dealer doesn’t buy at last one load of cattle feed in row of 3 month,
automatically the company will terminate his dealership.
b) Dealer Commission
1. For KS cattle feed 10%
2. For de oiled coconut cake (jersey)5.5%
c) Market Segmentation
It is the process of spiting customers in to different group or segment, with in which
customers with similar characteristics have similar needs. By this each one can be targeted and
reached with a distinct marketing mix. Being the company’s main emphasis on animal fed
products company has adopted following steps to segment the market. Company first decided
on the animal-cow and buffalo after choosing target industry(cow and buffalo) it segment on the
basis of geographical area it plants to focus on Kerala, Tamil Nadu,Karnataka.further
segmentation was on the basis of the size of the company/farmer-medium and large scale.
Finally on the basis of purchasing criteria, customers seeking good service and quality.
4.2.6Marketing Information System
These are collected from:
1. Daily call reports by sales representatives
2. Field force like sales representatives.
3. Competitors telephoning
4. Customer telephoning
5. Report from sub dealers
6. Directly from dealers
a) Marketing Research
1. It is done by company’s sales force by
2. Redressal of customers complaints
3. Seeing the competitors activity
4. Checking whether the channel in the distribution system is weak or not.

39
4.2.7 Sales Promotions Activities
1) Farmers meet and dealers meet
These are conducted by the company once in every two years at different head
quarts.(TVM, ERM, TCR ,Calicut)these meet are conducted in five star hotels. It is a one day
programme with two sessions. In that dealers can express their problem current market for the
product, farmer’s attitude towards the product etc.
2) Giving incentives
Dealer’s promotion KSE give a target to dealers. If any dealer achieves that target KSE
gives incentives.
3) Coupons
Coupons are put inside the package; these offers are made in onam season. Coupons are
certificates offering a started amount of reduction in the purchase of specific product. This
method includes customers to buy a particular brand.
4) Seminars
Seminars will be conducted for farmers about cattle feed. In this seminar, an award is
given for the best farmer this award is in the form of cattle feed.
4.2.8 Sales Procedure
Order is received through phone or in person. Name and expected date of delivery of
goods will be entered in a computer system. The advance payment is received in the form of
cash (up to Rs 200000), DD, or premium cheque along with the indent form in which the
product needed quantity required, expected date of delivery along with some remark are
specified, sale department issues delivery order to the go down people .There will be three
copies of delivery order, one kept for data storage in computer, the other two with go down
people out of which one is sent back to sales department for the preparation of invoice. One
copy is kept in files and other two copies are sending to the dealer from which the carrier
returns one copy.

40
a) Location of Sales Offices
1. Vedagiri near kottayam
2. Irinjalakuda
3. Palakkad
4. Edayar near cochin
b) Marketing Mix of KSE Limited
Marketing mix is the combination of elements that are used by the marketer to bridge
the gap between the company and the market. In short, Marketing mix is a combination of
elements like product, place, price promotion ,etc in the right proportion to provide maximum
satisfaction to consumers and maximum profit to the company.
4.2.9 Product Line of KSE Limited
KSE Limited produce various kind of cattle feed products which helps the customers to
select their product according to necessity .Different flavors packaging price differentiation
contents variation etc,are maintained by the company in its product line .It will help to attract
more customers to buy the product.

41
Table No: 4.5 Showing the Details Regarding the Products Produced by the Co:
LINE 1 LINE 2 LINE 3 LINE 4 LINE 5 LINE 6 LINE 7
KS Cattle
feed
KS
Supreme
coconut oil
Keyes
forte
KS pall KS
Ghee
KS Ice
cream
KS Butter
milk
KS Mash KS
Solvent
Extraction
Oil
KS
forte
KS Milk KS
Ghee
500 ml
Mango bar KS Butter
Milk 200
Ml
KS
Special
Mash
KS Refined
oil
KS
Homogenize
KS
Ghee
200ml
BudkaKulfi
KS
Supper
Mash
KS
Ghee
Vesta
Sundae
100 ml
KS
Deluxe
Pellets
KS VestaContop
Ghee 50
ml
KS
Deluxe
plus
KS Choco bar
Ghee
5Ltr tin
KS
Supreme
Pellets
Vesta
Flavours
4.2.10 Brand Loyalty
It is strong attachment of buyers towards a particular product of KSE Limited such as
KS cattle feeds, KS Pal and Vesta Ice-cream. Brand loyalty offers a numbers of advantage to
the KSE Limited Brand loyalty are the repeat purchase made by the customers out of
commitment to the brand. Brand loyalty customers start building a relationship with brand.
They may become advocate of the brand by their positive word of mouth. The brand loyal

42
customer may become passionate about the brand and from the clubs which results in further
strengthening of the brand
Reasons for Brand Loyalty for KSE Limited
1. Different product line
2. Better customer relationship
3. Promotion and advertising
4. Affordable price
5. Better than competitor
6. High quality of product
7. Uninterrupted distribution
Advantages of Brand Loyalty for KSE Limited
1. Reduce the competition
2. Repeated purchase
3. Reduction in promotional activities.
4. Keeping the product quality
5. Increased profit earning ability of the company
6. All around development of the firm
7. Introduction of new product as per the customer specification.
8. Good relationship with the company by customer
4.2.11 Price Mix
Price is the amount paid by a buyer to seller for a product .It is the exchange value of a
product in the term of money .Price means nothing to customers and something else to the
seller. To the seller, price is a source is revenue. To the buyer, it is the cost of something.
Price Mix in KSE Limited
Objective of pricing
1. To maximize the profit
2. To maintain the market share

43
3. To achieve a desired rate of return on investment
4. To meet the competition
5. To stabilize the product price
6. To build the image and enhance the good will.
7. Ensure the coverage of all cost.
Pricing Method of KSE Limited
1) Cost Based Pricing Policy
The policy of selling price essentially on the basis of total cost per unit.KSE is super
manufacture in the field of cattle feed, so they can fix cost based pricing policy irrespective of
the competitors. It is influencing their competitors pricing policy such as Godrej, Kerala feeds
2) Competitors Based Pricing Policy
All products are not equal strength of the company .Such product are more strengthen
than competitors such as milk product like Vesta ice cream KS ghee. KS Butter Milk, KS paal,
In such case company cannot fix price its own style so they follow competition based pricing
policy especially milk products such as KS pal, The share of milk is controlled by Milma so the
milk price purely depends upon the Milma milk price.
In short this policy of the price mainly on the basis of price fixed by the competitors.
This policy does not necessarily means settings of price save.
4.2.12 Place Mix
“Distribution is the operation which creates time, place and form utility through the
movement of goods and persons from one place to another”
There are two type of distribution
1) Ex factoryrate: Company need not bear the transportation and insurance cost.
2) Rate at destination: Company need to bear the transportation and insurance cost.
4.2.13 Promotion Mix

44
“Promotion consists of those activities that are designed to bring a company’s goods and
service to the favorable attention of customers”
Objectives of promotion mix
1. To create awareness of the product.
2. To retain loyal customers
3. To become market leader
4. To popularize brand name
5. To help distributors or agent
6. To stimulate the demand
4.2.14 Promotion Mix in KSE Limited
Promotion mix is the combination of components or elements of promotion.
Each promotional tools are different from the product .KSE Limited
used various promotional tools to their products according to the product characteristics, such
promotional tools are follows:
1) Advertising
KSE Ltd used advertising to its products for promoting sales.Avertisement are gives the
company according to the product nature. In cattle feed product, they are using radio
advertisement. They do not wish to advertisement T.V because it doesn’t cover target group
such as farmers in rural areas.
Following are other type of advertising media used by the firm
1. Magazines
2. Newspapers
3. Yearly calendar
4. Cloth Banners
5. Cinema slides
6. Notices
7. Product pamphlet

45
8. Wall painting
2) Public Relation
KSE Ltd trying to maintain the good public relation to general public relation. It is enhancing to
build their brand image and brand loyalty.
3) Sales Promotion
KSE provided various sales promotion schemes to its dealer and customers for
increasing sales. Such activities like seminar, conference of farmers, Classes conducting
Company’s chief nutrition. 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,premium offers, dealers contests.
4).Personal Selling
Sometime KSE executives approached to the customers to face to communication and
presentation for the purpose of making sales and clarifying their doubts.
4.2.15 Sales of KSE Limited
KSE Limited is the number one cattle feed industry in south India.The cattle feed is
mainly two types, mash and pellet. They are in bags of 50kg, 75kg, 57kg, and 40kg.KSE limited
seller the product through its dealers. The daily sales of the concerned come to about 100 tones.
The total turnover during the year grew by14% compared to the previous year,
the profit also improved considerably compared to previous year. The advertisements place a
great role in improving the performance of the company

46
4.3 Human Resource Department
Fig: No: 4.3 Showing the Structure of Human Resource Department
HR department is the main and the most important of a manufacturing concern.KSE
Limited is proud of its well co-ordinate labour force. The HR department was seen as a place
where the lesser productive employees could be placed with minimal damage to the organization
Human resource management is concerned with all aspects of managing the human
resource of an organization. More specifically, human resource management involve determining
an organization 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
HR MANAGER
Executive Officer Security Officer
Senior
SecurityOfficer
Officer
Junior Officer
Security Guard
Senior Assistant
Watch ManOfficer Assistant
Clerk

47
department or Human resource department is created for effective performance of these
functions. In KSE limited personnel department deals with following objective.
1. Employees selection procedure
2. Remuneration of workers
3. Allowance of employees
4. Statutory liabilities
5. Trade union
6. Workers welfare activities
7. Workers safety measures
8. Leaves and retirements
9. Other functions
4.3.1 Functions of Human Resource Department
1. Recruitment
2. Man power planning
3. Welfare function
4. Grievance handling
5. Discipline
6. Industrial relations
7. Public relations
8. Job decription
9. Job specification
10. Training
11. Performance appraisal
4.3.2Employee Selection Procedure
Employees are selected strictly based on their educational qualification. Work experience
technical knowhow and age .company will do the recruitment by giving ads in news papers,
through employee exchange. And also promoting its own employees based on their performance.

48
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:-
Fixed asset DA: Calculated at the rate of 15% of the basic salary
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

49
10) Employees welfare fund
Statutory Liabilities
Provident fund: From the basic salary the company and the employees channelized 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
4.3.3 Trade Union
In this company there are four recognized trade unions like CITU, INTUC, and BMS
CITU-Confederation of Indian Trade Union
INTUC-Indian National Trade Union Congress
BMS-Bharat MazdoorSangh
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
The company established a trust know as employee’s welfare trust in which ensuring sound
working condition.
a) Ensuring fair wage system.
b) Protecting the right of workers.
c) A committee consisting of Chairman, Managing Director, Whole time Executive
Director, General Manager Works Manager and Personnel Manger approve the demands
of workers.

50
d) 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.
4.3.4 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.
1.Leave
a) Casual leave: 9 days for workers and 11 days fir staff
b) Privilege leave: For workers 1 day for 15 days worked, for staff its 30 days
c) Sick leave:7 days
2. Retirement
Retirement age of employees is 58 years.
4.3.5 Qualification Required for Different Jobs
a) Unskilled Workers: He should be group 25-30 years, should not have studied more than
8 th standard and should be residing within a radius of 5 KMs of KSE limited.
b) Office Staff: He should be a graduate.
c) Shift Engineer: He should be a diploma holder from ITI.
d) Security Man: He should be an ex-service man in age group of 35-40 years.
4.3.5.1 Training
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.

51
Fresh blood would be preferred for lower divisionalworks.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.
4.3.5.2Classification 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.
a) Probationer: is one who is provisionally employed to fill permanent vacancy in a
permanent post.
b) 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.
c) 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 rate s
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.
4.3.6 Manpower planning
KSE Limited proud of its well-coordinated labor 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.

52
Employees are selected based on their educational qualification, work experience,
technical knowhow 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.
4.3.7 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.
4.4 Production Department
Fig: No: 4.4 Showing the Structure of Production Department
Store
Officer
PRODUCTION MANAGER
Elect
Foreman
Godown
Executive
Store
Supervisor
Maintence
Officer
Shift
Engineer
Boiling
Operator
Electrical
Supervisor
Officer
Plant
Engineer
Engineer
Main
Foreman

53
Learning Objective:
To study the:
1. Department structure.
2. Function of the production Department.
3. Function of the solvent plant.
4. Function of the cattle feed plant.
5. MCCP Technology.
6. Refining plant.
7. Quality parameters.
8. Quality control in solvent and cattle feed plant.
9. Product specification and ISO certification.
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
1. Production process
2. Employee supervision
3. Maintenance of machines
4. Quality assurance
5. Production plan
6. Production control
7. Maintaining a hygiene work place
8. Management of different shift of employee
9. Maximizing the production with minimum resources

54
4.4.1 KSE-Production Units
Kerala
1) KSE Limited, Irinjalakuda Unit
2) KSE Limited, Vedagiri unit Kottayam
3) KSE Limited, Palakkad Unit
4) KSE Limited, Edayar Unit, Cochin
5) KSE Limited, Konikara Unit (Dairy)
6) KSE Limited, Koratty
Tamil Nadu
1) KSELimitedSwaminathapuram unit
2) KSE Limited,Thalyathu(dairy)
3) KSE Limited, Erode
Karnataka
1) KSE Limited, Mysore unit
4.4.2 K.S.E & Its Products
K.S Cattle Feed
There are 6 type of cattle feed. There are,
a) K.S-Mash
b) K.S Supper
c) K.S Ordinary
d) K.S Delux pellet
e) K.S Delux and pellet
f) K.S Premium pellet
7. K.S Superme (Refined sunflower oil)
8. Jersey copra
9. K.S Forte (feed supplement-tonic)

55
10. K.S Mineral mixture
11. Milk products
a) K.S Milk
b) K.S Ghee
c) K.S Curd
d) K.S Butter Milk
e) Vesta Ice Cream
In KSE, Production takes place in 3 plants
1) Solvent extraction Plant
2) Cattle feed plant
3) Refining plant
Solvent 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 miscella.the next step is to separate the
solvent form the cake and is stride fir use. For one tonnes of coconut cake the usage of hexane is
9.19 kg, Here 24 hr production takes place and it produces 200 tonnes per day.
There are 3 shifts
8. A.M -4 P.M
4. P.M-12.A.M
12. A.M-8.A.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, soya
been, 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.

56
4.4.3 MMCP Technology
a) 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 tonnes per hour together are used.
b) Mixing
The raw material will be mixed thoroughly by using horizontal mixer. Capacity of this
mixer is 6 m.
c) Cooking
The steam for cooking is produced using 3 million tonnes boiler. The mixer or
homogeniser 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.
d) 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 tonnes per hour capacity
each.
Refining Plant
In this plant oil is refined according to the seasonal demand .Here two types oil are
refined
1. Solvent Extraction Oil
2. Sunflower Oil
Here 20 tons per day is produced .The oil so produced will be colourless and dourless 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.

57
4.5 Purchase Department
Fig: No: 4.5 Showing the Structure of 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 ability of raw material
etc.They place order on the basis of fund, go down capacity, availability of labor, space allotted
to each materials and equipment, etc.....
PURCHASE MANAGER
EXECUTIVE OFFICER
JUNIOR OFFICER
SENIOR
ASSISTANTOFFICER
OFFICE ASSISTANT
CLERK

58
4.5.1 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.
4.5.2 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 they are going to purchase
2) What quality they are going to purchase
3) At what rate they 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.
4.5.3 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

59
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. 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 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. 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 cuttings according to the lab reports.

60
The following table explains the procedure of purchase in solvent plant:
Table No: 4.6 Showing the Details 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
Godowns
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.

61
4.6Store Department
Fig: No: 4.6 Showing the Structure of Store 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,
STORE DEPARTMENT
STORE
OFFICER
GO DOWN
EXECUTIVE
GODOWN
SUPERVISOR
GODOWN
ASSISTANT
WORKERWORKER
STORE CLERK
STORE
SUPERVISOR

62
and other miscellaneous articles. This store issues the material to solvent plant, cattle feed plant,
refinery plant and to some other department
4.6.1Functions
1. Identify the material that has reached the re order level.
2. Storage and proper keep on material.
3. 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.
4. Issuing material to the consumer department.
4.6.2Inspection 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.
4.6.3 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.
4.6.4 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.

63
4.6.5 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
4.6.6 Store Consumption Statement
It is prepared by the storekeeper and send 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
4.6.7 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 part of
machinery,packing,material,belt,chainand other miscellaneous articles.
4.6.8Godown
The company store raw material for one month or one and half month. The company has
got 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.

64
4.7 Quality Control Department
Fig: No: 4.7 Showing the Structure of Quality Department
The main task of this department is to completely analyze the raw material and point out
defect in it. 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
Quality Control Department
Nutritionist
Assistant Manager
Chemist
Junior Chemist
Lab Attendent

65
2. Crude protein
3. Acid insoluble ash
4. Calcium
5. Crude fibre
For each parameter asset of standard is maintained 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
4.7.1 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.
4.7.2 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 agin.Quality is
the factor ,which helps the company to sell all its products.
4.7.3 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%

66
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
4.7.4 ISO (International Organization for Standardization)
Now days the concept of Quality is undergoing a great change .Quality control often
involve 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-s-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

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