mine - introduction

7/31/2019 Mine - Introduction

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ACKNOWLEDGEMENTS

I am grateful to a number of people who have helped me throughout this project work and

made the project report a successful one. I would like to acknowledge the help rendered by

each of them.

I take this opportunity to express my sincere thanks to Prof. A.V.M K. Ramesh Karnik

Director, Justice K.S. Hegde Institute of Management, Nitte for providing me with a good

educational environment.

I express my gratitude and sincere thanks to my Guide, Prof. Paul Aquinas, Department of

Human Resources, Justice K.S. Hegde Institute of Management, Nitte for his valuable

guidance in completing our project report.

I express my gratitude and sincere thanks to my company guide, Mr. Narayan Swami,

Department of Human Resources, Karnataka Soaps and Detergents Ltd., Bangalore for his

valuable guidance in completing my project report.

My grateful thanks and love goes out to my beloved parents, for standing by & providing

moral support and helping in every possible way.

Lastly, I would like to thank all our friendsfor their support and all those who have directly

or indirectly helped us in carrying out our project work.


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DECLARATION

I, the student of MBA of Justice K. S. Hegde Institute of Management, Nitte, hereby declare

that this project work entitled An organizational study on Karnataka Soaps & DetergentsLtd. in partial fulfilment of Master Degree in Business Administration, (An Autonomous

Institute under Visvesvaraya Technological University), is my work and that no part of this

research report ever been submitted for the award of any other degree diploma fellowship or

any other similar titles.

Place: Nitte Shareen Rodrigues

Date: 15/05/2012


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1. INTRODUCTIONIn this competitive business world success is an important factor for an organization. Success

leads to profit and making profits is one of the most important goals of an organization. So in

essence success is equivalent to profits. There are several things an organization must do and

steps it should take to achieve profits. Some of them are upgraded technology and

knowledge, training for personnel, upgrading of company procedures etc.

To upgrade technology and knowledge it is necessary to understand the organizational

structure. An organization structure consists of four major areas. They are

Specialization of work

Departmentalization

Span of control

Centralization and decentralization

By this we can say that every component of an organization has an impact on the

organizational structure. In order to study the impact of these components, an organizational

study is essential.

1.1 Objective of the study

Organizational study helps us understand and predict an organizations life.

Organizational study provides a road map to live in an organization.


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To study the comparison between the theoretical aspects and the practicalimplementation in the company

Organization study helps in generating new ideas. To know the financial status of the company. To expose the students to be the working of an organisation,

To relate the theoretical concepts learnt in the classroom to organisational functioning

To learn real life application of Management principles.


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2. INDUSTRY PROFILESoap is a commodity that has become an indispensable part of the modern world. Since it is a

non-durable commodity, there is a large market for it. The soap industry as a whole is

experiencing changes due to innumerable reasons such as government relations, environment

and energy problems, increase in cost of raw material etc. The changing technology and the

ever existing desire of the individual and the organization to produce a better product at a

more economical rate have acted as a catalyst for the dynamic process of change.

More and more soap manufacturers are trying to capture a commanding market share by

introducing and maintaining acceptable products. The soap industry in India faces cut throat

competition while multinational companies dominate the market. They are also facing severe

threat from dynamic and enterprising new companies.

If we look back into the history of soaps & detergents, we can determine that man knew

about soaps nearly 2000 years back i.e. in 70 A.D. when Mr. Elder accidentally discovered

soap, when roasted meat over flowed on the ashes. This lump like product was soap & had

foaming & cleansing properties. In 1192 A.D. the first commercial batch of soaps was made

& marketed by M/s Bristol soap market in London, from there in 1662A.D. the first patent

for making soap was taken in London. The world consumption of soap in 1884A.D. was said

to be 2 lakh tonnes p.a.

2.1 History of Soap manufacturing

The earliest recorded evidence of the production of soap-like materials dates back to around

2800 BC in Ancient Babylon. In the reign of Nabonidus (556539 BCE) a recipe for soap

consisted of uhulu [ashes], cypress [oil] and sesame [seed oil] "for washing the stones for the

servant girls". A formula for soap consisting of water, alkali, and cassia oil was written on a

Babylonian clay tablet around 2200 BC.

During the middle ages soap was made in various places in France, Italy, England and other

countries.


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2.2 Manufacturing process of soaps/detergents

In France, by the second half of the 15th century, the semi-industrialized professional

manufacture of soap was concentrated in a few centers of ProvenceToulon, Hyres, andMarseille which supplied the rest of France. In Marseilles, by 1525, production was

concentrated in at least two factories, and soap production at Marseille tended to eclipse the

other Provenal centers. English manufacture tended to concentrate in London.

Finer soaps were later produced in Europe from the 16th century, using vegetable oils (such

as olive oil) as opposed to animal fats. Many of these soaps are still produced, both

industrially and by small-scale artisans. Castile soap is a popular example of the vegetable-only soaps derived by the oldest "white soap" of Italy.

In modern times, the use of soap has become universal in industrialized nations due to a

better understanding of the role of hygiene in reducing the population size of pathogenic

microorganisms. Industrially manufactured bar soaps first became available in the late

eighteenth century, as advertising campaigns in Europe and the United States promoted

popular awareness of the relationship between cleanliness and health.

Until the Industrial Revolution, soapmaking was conducted on a small scale and the product

was rough. Andrew Pears started making a high-quality, transparent soap in 1789 in London.

His son-in-law, Thomas J. Barratt, opened a factory in Isleworth in 1862. William Gossage

produced low-price good-quality soap from the 1850s. Robert Spear Hudson began

manufacturing a soap powder in 1837, initially by grinding the soap with a mortar and pestle.

American manufacturer Benjamin T. Babbitt introduced marketing innovations that included

sale of bar soap and distribution of product samples. William Hesketh Lever and his brother,

James, bought a small soap works in Warrington in 1886 and founded what is still one of the

largest soap businesses, formerly called Lever Brothers and now called Unilever. These soap

businesses were among the first to employ large-scale advertising campaigns.

In India the first soap industry was established by North West soap company in1897 at

Meerat following the swadeshi movement. From 1905 onwards few more factories were

setup.


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They are,

Mysore soap factory at Bangalore Godrej soap at Bombay Bengal chemicals Tata oil mills 1930 lever brothers company

2.3 The Indian Soap Industry Scenario

The Indian soap industry has long been dominated by hand full of companies such as:

1. Hindustan levers limited.

2. Tata oil mills (taken over by HLL)

3. Godrej soaps private limited.

The Indian soap industry continued to flourish very well until 1967-68, but began to stagnate

& soon it started to recover & experienced a short upswing in 1974. This increase in demand

can be attributed due to

Growth of population. Income & consumption increase. Increase in urbanization. Growth in degree of personal hygiene.

Soap manufacture has 2 classifications

i. Organized Sectorii. Unorganized Sector.

KSDL comes under organized sector.


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2.4 Market scenario

India is the ideal market for cleaning products. Hindustan lever, which towers over the

cleaning business, sells in all over the cleaning business except the tiniest of Indiansettlements. The 7.4lakhs tons per annum soap market in India in crawling along at a growth

rate of 4%. The hope lies in raising Rupee worth, the potential for which is high because the

Indian soap market is pseudo in nature & it is amazingly complex being segmented not only

on the basis of price benefits, but even a range of emotions within that outlining framework.

2.5 Problems faced by Soap Industry

Soap industry faces some problems in case of raw materials. The major ingredients are soap

ash, linear alkyl, benzene& sodium. Tripoli phosphate poses number of serious problems in

terms of availability. The demand supply gap for vegetable oil is 1.5 to 2 lakh tons & is met

through imports. In recent times, caustic soda and soap ashes in the cheaper varieties of soaps

are quite high.

2.6 Present status of the company

The company is mainly dependant on the southern market. The product availability in retail

outlets particularly for mysore sandal soap is similar to that of premium products of other

companies. Whereas in northern and eastern markets penetration of KS & DL is relatively

poor, which depends on the companys distribution structure, stocklist and field force

strength.

With increased thrust on distribution, the company does not foresee any problems to achieve

the projected sales through its distribution set-up.

Being located in the southern part of India the government soap factory claims preferential

treatment for expansion programmed in view of availability of exotic natural Sandalwood oil.


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3. COMPANY PROFILE3.1 HISTORY OF KS&DL (INCEPTION)

India is a rich land of forest; ivory, silk, sandal; precious gems are magical charms of

centuries. The most enchanting perfumes of the world got their exotic spell with a twist of

sandal. The worlds richest sandalwood resource is from one isolated stretch of forests land

in South India that is Karnataka.

The origin of sandalwood and its oil in Karnataka, which is used in making of Mysore sandal

soaps, is well known as Fragrant Ambassador of India & Sandalwood oil is in fact known as

Liquid Gold.

By the Inspiration of His Highness Maharaja of Mysore late Jayachamarajendra Wodeyar, the

trading of sandalwood logs started which was exported to Europe and New destinations, but

with commencement of First world War India faced Severe Crisis on the business of

sandalwood.

This situation gave rise to start of an industry, which produces value added products i.e., of

Sandalwood oil. His Highness Maharaja of Mysore created this situation as an opportunity by

sowing the seed of the Government Sandalwood Oil Factory, which is the present KS&DL.

The project was shaped with the engineering skills and expertise of the top level. Late Sir

M.Visvesvaraiya, the great Engineer who was the man behind the project.

Todays famous Mysore sandal soaps credit goes to late Sri Sosale Garalapuri Shastri who

incorporated the process of soap making using Sandalwood oil. He was an eminent scientist

in the field working at the Tata Institute, Bangalore. He was sent to England to master the

fine aspects of soap manufacturing.

The Maharaja of Mysore & Diwan Sir.M.Visvesvaraiya established the Government Soap

factory during the year 1918. The factory was started as a very small unit near K.R.Circle,

Bangalore with the capacity of 100 tons P.A. In November 1918 the Mysore sandal soap was


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put into the market after sincere effort and experiments were undertaken to evolve a soap

perfume blend using sandalwood oil as the main base to manufacture toilet soap. The

factory shifted its operation to Rajajinagar industrial area, Bangalore in July 1957, where the

present plant is located. The plant occupies an area of 39 acres (covering Soaps, Detergents

and Fatty Acid divisions), on the Bangalore Pune Highway, easily accessible by transport

services and communication. Another sandal wood oil division was established during the

year 1944 at Shimoga, which stopped its operations in the year 2000.

This factory started at a moderate scale in year 1916. The first product was washing soap in

addition to the toilet soap in the year 1918. The toilet soap of the company was made up of

sandal wood oil.

In 1950 Government decided to expand the factory in two stages. The first stage of

expansion was done to increase the output to 700 tons per year and was completed in the year

1952 in the old premises.

The next stage of expansion was implemented in 1954 to meet growing demand for Mysore

sandal soap and for this purpose Government of India sanctioned license to manufacture 1500tons of Soaps and 75 tons of glycerin per year. The expansion project worth of Rs.21 lacks

includes the shifting of the factory to a newly laid industrial suburban of Bangalore.

The factory started functioning in this new premise [i.e., present one] from 1st

July 1957.

From this year onwards till date the factory had never looked back, it has achieved growth

and development in production scales and profits.

The industry has 2 more divisions one at Shimoga and another at Mysore where sandal wood

oil is extracted. The Mysore division started functioning from 1917 and only during 1984

manufacturing of perfumed and premiere quality Agarbathies at was started. Right from the

first log of sandalwood that rolled into the boiler room in 1916, the company has been single-

minded pursuit of excellence. The project took shape with the engineering skills and

expertise of top-level team under the leadership of Sir. M.Visvesvaraiya, Prof. Watson and

Dr.Sudborough. Like this soap factory was started as a small unit and now it has grown up to

a giant size.


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3.1.1 Renaming of Company

On Oct 1st 1980, the Government Soap Factory was renamed as KARNATAKA SOAPS

AND DETERGENTS LIMITED. The company was registered as a Public Limitedcompany. Today the company produces varieties of products in toilet Soaps, Detergents,

Agarbathis and Talcum powder. KS & DL has been built up with rich tradition for the quality

of its products. Mysore Sandal Soap is the No: 1 anywhere in the world. The Karnataka state

is the original home of the Sandal oil, which uses Original perfume sandalwood in the

manufacturing of Mysore Sandal Soaps.

It is also known as the FRAGRANT AMBASSADOR OF INDIA.

3.1.2 Slogan

Natural products with exotic fragrances.

KS & DL has a long tradition of maintaining the highest quality standard, right from the

selection of raw materials to processing and packing of the end product. The reasons why its

products are much in demand globally and are exported regularly to UAE, Bahrain, Saudi-

Arabia, Kuwait, Qatar, South America. The entire toilet soaps of KS & DL are made from

raw materials of vegetable origin and are totally free from animal fats.

3.1.3 Trademark of Mysore Sandal Soap

The Sharabha

The carving on the cover is the Sharabha, the trademark of KS&DL. The Sharabha is a

mythological creation from the puranas and embodies the combined virtues of wisdom,

courage & strength, it is illustrated from the body of a lion with the head of an elephant. It


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was adopted as an official emblem of KS & DL to symbolize the philosophy of the company.

The Sharabha symbolizes power that removed imperfections & impurities. The Maharaja of

Mysore has his official emblem adopted it. And soon took its pride of place as the symbol of

the government Soap factory, of quality that reflects a standard of excellence of Karnataka

Soaps & Detergents Limited.

3.1.4 Karnataka Soaps and Detergents at a Glance

Incorporated as: Karnataka Soaps and Detergents Limited.

Address: Karnataka Soaps and Detergents Limited

Bangalore Pune High Way

Post Box No.5531, Rajajinagar,

Bangalore560 055

Ph: 080-3377691/3370469/23371103 to 06

22376922 to 24

Email: [email protected]

Website:www.mysoresandal.com

Year of Establishment: 1918

Constitution: Wholly owned by Govt. of Karnataka Undertaking

Management: Govt.of Karnataka nominates/appoints

Board of Directors. Chairman & MD

Renamed: 1980

Trademark: Sharabha.

Production range: Toilet soaps, bar soaps, Detergent Cakes,

Powders, Agarbathies, Cosmetics,

Baby products, Sandalwood Oil.

Process: The facility is a pioneer in the manufacture of various soaps and

Technology is imported from Italy.

Capacity of the Unit: Licensed capacity is 26,000 metric tons of Soaps & 10,000 m. tons of

detergents Per annum

Plants: At Bangalore

o Soap Planto Detergent Planto Fatty Acid Plant
http://www.mysoresandal.com/http://www.mysoresandal.com/http://www.mysoresandal.com/http://www.mysoresandal.com/


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At Mysore

o Sandal wood Oilo Agarbathies

At Shimoga

o Duty Paid Godown

3.1.5 Birds Eye View of KD&DL

1918 - Govt. Soap factory started by Maharaja of Mysore

Mysore sandal soap was introduced.

1950 - The factory output rose to find terms.

1. Renovating the whole premises.

2. Installing a new boiler soap building plant & drying chamber.

1954 - Received License from government to manufacture 1500 tons of soap & 75 tons of

glycerin per year.

1957 - Factory shifted its operations to Rajajinagar industrial area.

1975 - A Rs. 3 crore synthetic Detergent plant was installed based on Ballestra SPA (Italy)

technology.

1981 - a. Production capacity was increased to 6000 tons.

b. A Rs.5 crore Fatty acid plant was installed with technical collaboration from

Europe.

1992 - The Board for Industrial & Financial Reconstruction (BIFR), New Delhi in December

for rehabilitation.

1996 - The BIFR approved the Rehabilitation scheme in September.

1999 - ISO 14001 Certificate pertaining to Environmental Management System.

2000 - In May, the BIFR, New Delhi Declared the Company to be out of the purview.

2004 - The company launched Herbal Care Soap.


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3.2 VISION, MISSION AND QUALITY POLICY

3.2.1 Vision

Keeping pace with globalization, global trends & the States policy for usingtechnology in every aspect of governance.

Ensuring global presence of Mysore Sandal products while leveraging its uniquestrengths to take advantage of the current Tech scenario by intelligent & selective

diversification.

Secure all assistance & prime status from Government India all Tech alliances.Further, ensure Karnatakas pre-eminent status as a proponent & provider of Tech

services to the world, nation, & private sectors.

3.2.2 Mission

To serve the National economy. To attain self-reliance. To promote purity & quality products To maintain the Brand loyalty of its customers. To build upon the reputation of Mysore sandal soap based on pure sandal oil.

3.2.3 Objectives of KSDL

To serve the National economy. To attain self-reliance. To promote purity & quality products To maintain the Brand loyalty of its customers. To build upon the reputation of Mysore sandal soap based on pure sandal oil.

3.2.4 An ISO-9001:2004 Company

KS & DL with a tradition of excellence of over eight decades is committed to customer

delight, through total quality management and continuous improvement through the

involvement of all employees. KS&DL has got ISO 9002 certificate.


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To improve the quality management system and to facilitate TQM in the process of soap and

detergent, the management took decision to obtain ISO-9002 by end of March 1999.

Accordingly action plan was drawn and a committee was set up for the purpose during

October 1998 with a mission statement.

The company gives initial training including conducting employees awareness programme,

document quality manual and quality system procurement.

In this direction company obtained the guidance from Consultancies, Bangalore and Bureau

of Indian Standards, Bangalore. Accordingly, company standards registered for ISO 9001 by

the end of March to the Bureau of Indian Standards. Obtained the certificate by the end ofMarch 1999 itself.

This is to project in the national and international market and also to improve quality of

products offered to the consumers with the assurance of quality in the message.

The Company got itself upgraded to ISO-9001-2004, Quality Systems in the year 2004-05.

3.2.5 ISO-14001:2008

The company is located in the heart of the Bangalore city. The management of the company

took a decision to get the ISO-14001 and become model to other public sector for the

techniques used and also to other Government units to spread the message of maintenance of

environment.

ISO-14001 and ISO-9001 will facilitate to improve the corporate brands in the global market

and it will help the company to improve the profits, year after year on long-term basis. The

environment management system adopted in the company through this motive as follows:

Conservation of energy Conservation of Surrounding Conservation of resources.


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Equipped with latest technology and backed by full-fledged quality control and R&D

support, KS&DL is marching confidentially ahead in the new millennium. The Company is

developing new products to meet the changing preferences of its customers.

3.2.6 ISO 14001 Enviromnental policies of KS&DL

Is committed to preserve the natural environment in the production of its qualityproducts to the satisfaction of its customer.

Will comply with all statutory & regulatory requirements pertaining to environmentstipulated by both state & central authorities.

Would invite & implement action to reduce all impacts that are likely to be a sourceof concern to the environment.

Would strive & set an example in protection & promotion of an eco-friendlyenvironment.

Is committed to prevent & minimize risks to the environment & conserve naturalresources by waging a war against wastes.

Will motivate every employee of the company in preserving the environment byproviding appropriate training.

Will make available a copy of environment policy, under environment Managementsystem on a written request to its manager (Environment & Policy)


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3.3 PRODUCT PROFILE

KS&DL is the true inheritor of the golden legacy of India. Continuing the tradition of

excellence for over eight decades, using only the best East Indian grade Sandalwood oil &Sandalwood soaps in the world. The products produced at KS&DL are soaps, detergents,

agarbathies and sandalwood oil.

3.3.1 Product Range from the House of Mysore Sandal soap

3.3.1.1 Soaps

They produce a wide range and varieties of soaps.

a. Mysore Sandal Soap

(75gm, 125gm & 150gm)

b. Mysore Sandal Special Soap

(75gm)


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c. Mysore Sandal Baby Soap

(75gm)

d. Three-In-One Gift Pack(SJR) 3Tabs

(150gm Each)

e. Mysore Sandal Gold Soap

(125gm)


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f. Mysore Rose Soap

(100gm)

g. Six-In-One Gift Pack- 6 soaps

(150gm Each)

h. Mysore Sandal Gold sixer 6 soaps

(125gm Each)

i. Mysore Sandal Soap Bath Tablet Trio 3nos.

(150gm Each)


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j. Mysore Sandal Classic Soap

(75gm)

k. Mysore Sandal Herbal Care

(75gm)

l. Mysore Jasmine Soap(100gm)

3.3.1.2 Detergents

KS & DL also manufactures high quality detergents by using the latest spray drying

technology with well balanced formulation of active matters & other builders; they provide

the ultimate washing powder.

a. Sansor Detergent Powder (1kg/2kg)

b. Mysore Detergent Powder (1kg/500gms)

c. Mysore Detergent bar (250gms)

d. Mysore Detergent Cake (125gms/250gms)


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3.3.1.3 Agarbathis

a. Mysore Sandal premiumb. Mysore Rosec.

Suprabath

d. Parijatae. Venkateshwarf. Ayyappag. Chandhanah. Mysore sandali. Nagachampa

j. Mysore Jasminek. Bodhisattval. Durgam. Alif Laila

3.3.1.4 Sandalwood oil

In 5ml, 10ml,20ml, 100ml,500ml,2kg,5kg,20kg,and 25kg packing.

3.3.1.5 Powders

Mysore Sandal Talk: Cooling & Healing, Fragrant freshness

Net. Wt 20gm, 60gm, 300gm and 1kg.

Mysore Sandal Baby Powder: Tender loving care for baby& Mummy.

Net wt 100-400gms.


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3.3.1.6 New Products Launched

1. Wave Turmeric Soap2. Wave Hand Wash Liquid Soap3.

Herbal Care Liquid Soap

4. Agarbathies- Mysore Sandal 3 - in - 1

3.4 AREA OF OPERATION

KS & DL has a long tradition of maintaining the highest quality standards, right from the

selection of raw materials to processing and packaging of the end product. This is the reason

why its products are so much in demand globally & are exported regularly to UAE, Bahrain,/Saudi Arabia, Kuwait, Qatar, South East Asian countries as well as North America & South

America. The Sandalwood oil, of course, is much sought after by the leading perfume houses

of the world. All the toilet soaps of KS & DL are made from oils & fats of vegetable origin &

totally free from animal fat.

3.5 OWNERSHIP PATTERN

The company is wholly owned by Government of Karnataka.

3.6 COMPETITORS INFORMATION AND THEIR MARKET SHARE

HLL 70%

Godrej 4%

Procter & gamble 10%

KSDL 11%

Others 5%

3.7 PRESENT STATUS

The company has entered into shampoo, dish wash, detergent bar & room refresher. The company is striving to develop new perfumes for soaps detergents, agarbathies &

shampoo.

The company wants to improve the existing products in terms of quality.


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3.8 INFRASTRUCTURAL FACILITIES

Canteen facility Library Car stand Waiting room

3.9 WORK FLOW MODEL


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3.10 ACHIEVEMENTS/ AWARDS

Government of Karnataka Dept of Industries and commerce State Export Promotion Advisory Board. EXPORT AWARD 1974-75 Detergent Plant M/s Chemical Bombay have given 1st price for the year 1980-81 Geographical Indication GI-2005 ISO 9001-2000 in the year 1999 ISO 14001-2004 in the year 2000

3.11 FUTURE GROWTH AND PROSPECTUS

Introduction of anti-bacteria, herbal transparent soap, made out of 33 essential oilbased perfume, Aloe Vera, Vitamin-E etc as additive and suitable for all types of skin

and all seasons.

Improvement in existing products Mysore Sandal classic improved moisturizers &skin conditions.

Introduction of sandalwood powder in 50gms, 100gms to meet the growing demandfor religious purpose.

Introduction of new higher powered detergent powder for institutional sales in bulkpackaging.

To attain market leadership. Introduction of new trade schemes to increase sales. Aggressive advertisement and publicity as part of sales promotion. Reduction in distribution expenses. Cost-reduction in all areas. Instant decision making in certain procurement activities. Timely introduction and implementation of market driven decisions. Ensuring effective internal control.


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4. McKinseys 7S FrameworkAccording to Waterman, organization change is not simply a matter of structure, although

structure is significant variable in the management of change. Again it is also not a simplerelationship between strategy and structure, although strategy is also a critical aspect. In their

view effective organizational change may be understood to be a complex relationship

between strategy, structure, system, style, skills & shared values. The first three elements-

strategy, structure &system are considered the hardware of success. The next four style

skills, staff, and shared values are called the software. The complex relationship is

diagrammatically presented below;


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4.1 STRUCTURE

In structure we discuss the structure of the company. The organization under study is

Karnataka soaps and detergents. It is a moderately large company. Their plant in Rajajinagar,

Bangalore spans several acres. They have several functional departments. They have a top

down organization structure and an authoritarian management. The organization is divided on

the basis of departments. Each department carries out various functions which are integral to

the running of the company.

4.1.1 Basis of Departmentation

KS&DL is a moderately large manufacturing concern. Departments are divided according to

functions. This facilitates effective utilization of manpower and resources. It has a simple,

economical and reasonable organizational pattern.

Levels of Organisation

The organization of KS&DL consists of 4 levels, they are

Top levelBoard Of Directors and Managing Directors

Second levelDirectors of Finance and Special officers

Third levelsenior managers, deputy managers and officers.

Fourth levelClerks, Assistants and Attendees.


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4.1.2 Organization chart of KSDL

KS&DL is Functional type of organization. Under this type of organization men with special

abilities in a specialized function are employed. The hierarchy is represented as follows.

MANAGING DIRECTOR

GEN. MANAGER

(R&D/P&M)

AGM

(HRD)

EXECUTIVE DIRECTOR

MARKETING

GEN. MANAGER

FINANCE

DY. GEN MGR

(FTD)

DY. GEN MGR

(MTLS & Strs)

AGM

(R & D)C S

MGR

(MDs Office)

MGR

(MIS)


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1 M.D Managing Director

2 E.D Executive Director

3 GEN. MGR (R&D/P&M) General Manager (R & D / Prodn.,& Maintenance)

4 GEN. MGR (F) General Manager (Finance)

5 DY. GEN MGR (FTD) Deputy General Manager (Foreign Trade)

6 DY. GEN MGR (MTLS & Strs) Deputy General Manager (Materials & Stores)

7 AGM (R & D) Assistant General Manager (R & D)

8 AGM (HRD) Assistant General Manager (HRD)

9 MGR (MD's Office) Manager (MD's Office)

10 MGR (MIS) Manager (Management Information System)

4.1.3 Functional Departments of KSDL

i. Human Recourse Department. (HRD).ii. Production & Maintenance Department.( P & M )

iii. Marketing and exports Department. ( MKTG )iv. Finance A/c & Audit Department.(Finance)v. Materials & Stores Department (MTLS & Strs).

vi. Research & Development and quality control(R & D).vii. Welfare Department.

viii. Management information Systems Department (MIDS)ix. Storage Department


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i. Human resource department

Assistant General Manager

(HRD)

Manager

HRD

Assistant Manager

(HRD)

Officer(HRD)

Labor WelfareOfficer

H R Dept Staff Junior

Officers

First Aid Time Office Canteen

Managing Director

(M.D)


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Luther Gulick highlighted POSDCORB which stands for planning organizing, staffing,

Directing, Coordinating, Reporting & Budgeting is the part of personnel management.

H.R.D functions in KSDL1. Recruitment and Selection

2. Promotion and transfer

3. Training and development

4. Wages and salary administration

5. Industrial Relations

6. Performance appraisal

7. Welfare measures

8. Disciplinary action

Cordial relation with Trade unions:

KSDL is trying its level best to ensure healthy & cordial relation with trade unions in all

matters regarding industrial disputes & employee satisfaction. HRD oversees everything and

ensures people are treated well & widens the scope of the employees.

Man power details

GROUP Bangalore SOD

Mysore

Marketing

branches

Duty paid

Godown

Shimoga

Total

Executives 85 07 56 02 150

Supervisors 49 10 15 - 74

Workers 548 30 39 16 633

Total 612 47 110 18 771


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Fringe benefits payable to the unionized cadre employees

1. Shift Allowance: There are three shifts and one general shift. The office hours are from9.30am5.30pm. The shift timings are as follows:

First Shift 6.00am to 2.00pm

Second Shift 2.00pm to 10.00pm

Third Shift 10.00pm to 6.00am

General Shift 7.30am to 3.30pm

The lunch time is from 12.00pm to 12.30pm. They have to work from Monday to Saturday.

Sunday is a holiday. No allowance is paid to the first shift workers; a sum of Rs.25 and Rs.35per day is paid to workers for second and third shift respectively.

2. Washing Allowance: The company provides two sets of uniform once a year. A washingallowance of Rs.50/month is paid to every worker.

3. Leave: The company provides:

Earned Leave (EL): Workmen who wish to avail privilege leave have to apply for thesame at least 3 days in advance to the General Managers. This leave can be

accumulated and encashed. 18 days EL is credited to an employee.

Casual Leave (CL): This leave is to provided so the workmen can meet unforeseencircumstances. It is granted for 3 days at a time. 7 days CL is given to an employee

per year.

Sick Leave (SL): Workman who avails sick leave exceeding 3 days at a time shouldproduce medical certificate from Doctor. 15 days of sick leave is given for an

employee per year and it can be encashed.

4. Conveyance Allowance: A conveyance allowance of Rs.680 per month for eachworkman is provided.


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5. Special Allowance: is paid to Typists, Stenographers, Asst. Cashiers, and Store Keepers. It

is approximately Rs.55 to Rs.75.

6. Family Travel Allowance: This allowance is paid at the rate of Rs.500 per employee per

year. The employee has to have put in a minimum service of three years.

7. Canteen Facilities: All employees are provided with canteen facility at highly subsided

rate.

8. Annual Bonus: The Company has agreed to pay a profit sharing bonus in accordance of

the provisions payments of Bonus Act 1965.

9. Attendance Bonus: It is paid equivalent to one days basic pay subject to minimum of

Rs.75 per month.

10.House Building Advance (HBA): also towards House Repair Advance, House PurchaseAdvance: KS&DL has agreed to provide subsidy on the loan amount secured by the

employee from HDFC or any recognized financial institutions viz., co-operative banks,

scheduled banks etc., If the interest payable by the employee exceeds 7% then he shall be

eligible for interest subsidy to be borne by the company not exceeding 5%.

11.Festival and National Holidays: The number of paid holidays in the company is: 10festival holidays and 3 national holidays per calendar year.

12.Death Relief Fund: Rs.30,000 will be paid to the nominee in case of death of anemployee.

13.Memento to retiring employee: Rs.2,500 will be paid as memento to retiring employees.

14.Medical Reimbursement: Benefit to non-ESI employees a sum of Rs.500 per month willbe paid per employee towards domiciliary treatment. With regards to hospitalization

treatment, the company has taken mediclaim policy from Insurance Company for a sum of

Rs.1,50,000 per employee, which includes spouse and two children.


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15.Postponement of Increment: Annual increment is postponed automatically if theemployees are absent without pay.

Units Postponement of increment by

Absence without pay for more than 30

days less than 40 days.

One month



2 months



3 months

Pay scale of unionized cadre employees

W.E.F. 01.05.2008 TO 30.04.2013

Sl.noGroup

Revised Pay Scale

01I

5140-110-5690-140-6390-170-7240-200-8240

02 II 5250-110-5690-140-6390-170-7240-200-8240-240-9440

03 III 5690-140-6390-170-7240-200-8240-240-9440-280-10840

04 IV 5970-140-6390-170-7240-200-8240-240-9440-280-10840-330-12490

05 V6110-140-6390-170-7240-200-8240-240-9440-280-10840-330-

12490-400-14490

06 VI6390-170-7240-200-8240-240-9440-280-10840-330-12490-400-

14490-500-15990

07 VII7240-200-8240-240-9440-280-10840-330-12490-400-14490-500-

17990

08 VIII8240-240-9440-280-10840-330-12490-400-14490-500-17990-600-

19190


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Pay scale of officers

W.E.F. 01.07.2008

SI.NO Designation Revised Pay Scale

01

Jr. Officer

10000-100-10500-300-12300-350-14400-400-16800-450-

18150

02

Officer

10800-300-12300-350-14400-400-16800-450-19500-525-

20025

03

Asst. Manager

14050-350-14400-400-16800-450-19500-525-22650-600-

25050

04

Manager

18150-450-19500-525-22650-600-26250-675-26925

05

Asst. Gen.

Manager

20025-525-22650-600-26250-675-28275

06

Dy. Gen. Manager

22125-525-22650-600-26250-675-30300

07 Gen. Manager 24450-600-26250-675-30300-750-31800

08 Director 26250-675-30300-750-34800-850-36500

The company has formulated the following HR policies

Carrier Development Plan and Promotion Rules for Officers. Time Bound Advancement Scheme for Unionized Cadre employees. Standing orders applicable to Unionized Cadre employees. KS&DL Conduct and Disciplinary Action Rules 1984 for Junior Officers and above. Medical Attendance Rules. Leave Rules with encashment benefit. LTC / FTA. Conveyance Allowance.


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Education Advance. Festival Advance. TA / DA Rules.

HBA / Interest Subsidy. Delegation of Powers. Probationers Rules. Annual Increment. Incentive for adopting small family norms.

Promotion

In the company the Promotional Policy has twin objectives because the career planning is

also included.

Ensure high level of expertise and professionalism. To create certain degree of mobility and job rotation.

The employees below the rank of officers i.e. unionized cadre of employees are eligible for

the promotion after satisfactory completion of seven and five years of service [Time Bound

Advancement Promotion]. The promotion is based on their grading obtained in the

performance done by their Supervisors.

The promotional policies for the officers divided into two categories. They are Career

Development Plan (CDP) and Vacancy Based Selection (VBS).

Career development plan

Officers from Grade I to IV come under this plan. The ingredients of this plan are given

below:

Eligibility: Is a minimum of five years of service. Selection: Is done through staff selection committee. Mode of selection: Is done through interview conducted by Staff Selection

Committee once in a quarter.

Final selection: Of the maximum of 100 marks earmarked for selection 70 marks isallotted to the performance in the present grade and the remaining 30 marks are

allotted to the performance in the VIVA during the interview by the Staff Selection


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Committee. Out of the weight age, the individual has to score a minimum of 35 from

the 70 performance marks and 15 from the VIVA marks to get the final selection.

Vacancy based selection

Officers from Grade-V and above come under this plan. Promotion is effected only when

there is a vacancy. The eligibility criteria is a minimum of five years in the present grade and

due weightage is given to experience and qualification.

ii. Production and maintenance DepartmentKSDL has a well organized production department. KSDL has 3 main production plants:

a. Fatty Acid Plant

b. Soap Plant

c. Detergent Plan

a. Fatty Acid Plant

The basic raw materials, Oil & fats undergo the splitting & refining process including

hydrogenation at the fatty acid plant. It is also obtained & used for soap making. The plant

has a capacity to process 10,000mt of oils 1 fat.

b. Soap Plant

The soap plant is one of the largest production plants in the country with an capacity of

26,000 tons per annum. KSDLs soap plant is unique. It has the capacity to process as many

as ten different varieties of soap simultaneously. The sophisticated plant from Italy has a

wholly integrated straight line facility that links up process sequence for higher productivity.

It is a straight line flow through right from raw material preparation to wrapping stage the

line collation with the built in facility for continuous fat bleaching & saponification. The

finishing touches are given by high tech universal wrapping machine. This high speed auto

wrapper has the capability to handle soaps of virtually all size & shape.


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c. Detergent Plant

It has an installed capacity of 10,000 tons per annum. It produces spray dried, powder & it

has a syntax plant for detergent cakes & bars. It produces industrial detergent which is used

in the formulation of wettable pesticide powders for crop protection.

Production Department Chart

General Manager

R&D / P & M

DGM

Production

AGM

Production

MGR

P&M

MGR

(E&S)

AGM

Production

CSVO

Works

Mana er

Chemist

Workers

Assistants

MGR

(PR)


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Maintenance Department

Effective maintenance is a goal of the company. The areas of maintenance are

1. Mechanical Maintenance2.

Electrical Maintenance

3. Civil Maintenance

Proper maintenance results in

Reduction of overload Cost Reduction Greater Safety of equipment & workers Delivery schedule is maintained.

This department contributes also working progress of the company.

iii. Marketing and exports department

The companys main products are soaps & detergents. They are sold in different parts of

India. There are depots at various places of the country which are controlled by seven

branches. The role of each branch is to ensure that sales activities are coming under their

control. ORG: Operational Research Group report main source of marketing research private

agency which study the competitors consumer demand, market etc that generates the report.

Branch Depots

1. Bangalore Hubli, Raichur

2. Chennai Chennai, Salem, Madurai, Cochin

3. Hydrabad Hyderabad, Vijayawade, Ananchapur

4. Mumbai Bhiwandi, Ahmedabad, Pune

5. Calcutta Cuttack, Patna, Gauhati

6. Delhi Delhi, Jaipur, Jullundur


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Marketing Department Chart:

Channel of Distribution

After KSDL manufactures their products i.e. soaps & detergents. These products are sent to

various distribution points through agents. The Wholesaler sells to various retailers hence it

reaches to the consumers.

Executive Director

(Marketin )

Dy Gen Manager

Marketin HO

AGM

MKTG

AGM

CFGS

Heads of

Branches

MGR

LEGAL

MGR

MRIS

Manufacture (KSDL)

Consumers

Retailer

Stockiest (Wholesalers)

Agents


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As the company packs its products, it ensures that there is proper description of their product

& its distinct features on the wrapper. This is done so that the consumer can understand about

the product. Also they are required to list the ingredients and chemicals used in the product

on the wrapper as per the government requirements.

Exports

KSDL export their products to different parts of world:

Australia Italy Srilanka

Berlin Kenya USA

Canada Malaysia Japan

Czechoslovakia Saudi Arabia UK

France Singapore Taiwan

Germany Africa Holland

Functions of Marketing Department:

1. Marketing Mix: It is the policies adopted by the manufacturers to get success in thefield of marketing.

2. Product Policy: It includes both the new product developments & improvement ofexisting products. All this is done by both the marketing & R & D department.

3. Distribution Policy: The manufactured product of KSDL is supplied to the factorydepots. There are various depots in various states. Goods are supplied to these depots

and stored there.

4.

Sales & Promotion: Their advertising & sales promotion is poor.5. Packing: They use different materials for different products. Card board boxes &

synthetic covers are used for packing.

6. Market Share: The KSDL production strategy is more expensive when compared toother products. At present the company holds a market share of 18% in South India &

8% throughout India for premium soaps.


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iv. Finance, Accounts, Auditing Departments

a. Finance

It is the life blood of every organization. It is concerned with managerial decision making.This department is concerned with proper utilization of cash. It identifies the sources of

finance where to borrow, how much to borrow and whom to borrow from etc.

It has abundant functions some of which are

Effective funds management which is utilized in beneficial projects. Decision making regarding fixing of cash account. Obtaining trade credit. Profit Maximization. Wealth Maximization. Preparation of cash budgets. Systematic approach to working capital management. Pricing of raw materials & valuation of stores. To protect financial interest of the company.

b. Audit Department

KSDL audit wing is headed by an internal auditor. Auditing is vital for the company as it

facilitates verifying of all the books of a/c by trial balance, it also complies with requirements

for central excise & income tax purposes.

After the Auditors monitor everything, they give a report to the company. This report

contains all the discrepancies, cash flow information etc..

c. Costing

When a company does costing it ensures proper fixation of selling price of the product, cost

control also helps in decision-making. KSDL uses process costing as the production

mechanism which is systematic and involves addition of a lot of ingredients in the

manufacturing.


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Finance Department Chart:

v. Materials and stores DepartmentMaterials are obtained at right time, at the right place from right source & at the right cost

which leads to the smooth flow of production. Materials used are of the highest quality.

It has been divided into 5 sections:

Oil & fats section Perfumery & aromatic section Packing materials section Chemical section Miscellaneous & Engineering stores section

GENERAL MANAGER

(Finance)

AGM

(Finance)

AGM (Costing) /

AGM (Bills)

MGR

A/Cs

MGR MGR

(PR&PF)

Junior Officer

Supervisor

Senior Assistant /

Steno ra her

Junior Assistant

Junior Officer

Supervisor

Senior Assistant /

Steno ra her

Junior Assistant

MGR

(LS)

Junior Officer

Senior Assistant /

Steno ra her

Junior Assistant


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Objectives

1. Maintaining continuity in the flow of materials2.

Effective control of inventories

3. Coordination4. Growth of the organization5. Maintaining an ethical organization

Material Department Chart

Stores Department

KS&DL has a well - managed stores department for each of the three divisions viz, soaps,

detergent & fatty acid division in the factory, there are separate miscellaneous stores

department each for raw material, finished goods and tools.

Objectives

Assuring the availability of raw material at right quantity. Maintenance of adequate, but not excessive storage of materials at all time. Maintenance of economical and uninterrupted flow of production activities and finally

to ensure minimum blockage.

Dy Gen ManagerMTLS & Strs

AGM

MTLS

AGM

Strs

MGRMTLS

Assistant

MGRStrs

Assistant


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Achieving maximum efficiency in production and sales with least investment ininventory.

Types of stores

1. Perfumery stores2. Chemical stores.3. Packing material stores.4. Oil & Fats Stores.5. Finished goods stores.

vi.

Research development & quality control

KSDL has a fully fledged quality control & R&D. It is single minded in its pursuit of quality

management and enhancement. Both departments are headed by highly qualified

professionals, committed to developing products that are in place with customers changing

needs & perspective.

When doing Research they have a target which they get benefits & it enables the company to

forecast the future.

Aim

Product process development. Product process improvement. Cost reduction Alternative raw materials Slow moving & non moving inventory reduction Technical advice to the management.

Quality plays a very important role in KSDL as majority of the products are consumer goods.

So the company must satisfy the consumer expectation.

i. KSDL as 2QC division

ii. Raw material QC division

iii. Production QC division


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Objective

To maintain customer satisfaction at optimum level. To retain perfumery content throughout it uses. To maintain standard weight, size &finishing. To improve the existing production To adopt new methods of product development To provide technical support for marketing department To make improvement in the process of production To administer & maintain technical library

Chart

vii. Welfare DepartmentKSDL welfare department can be classified into 3 sections namely,

1. Statutory2. voluntary3. Non statutory

AGM

R&D

MGR

(R&D)

Assistant

Mana er

Junior Officer

S R Assistant


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1. Statutory:

KSDL welfare association is based on employees contributions, interest carved.

Canteen facility First aid Provident Fund

2. Voluntary benefit

Workers education class conducted by the central board

Inspection of fittings Dust nuisance Toxic gas nuisance

3. Non Statutory

Employees get 2 pair of uniform & a pair of shoes for every year.

Cultural Recreations, Leave facilities. Employees Co-operative society which give loan on credit Employees house building society

viii. Management Information Systems Departmenta. Accounting System

Financial statements are prepared under the historical cost convention on an accrual basis and

comply with the accounting standards of the companies Act 1956.

b. Costing System:

Process costing

c. Inventory Control System

ABC analysis for stock control. FIFO method for issuing materials. Computerized accounting system for stores.

d. Remuneration System:

Time rate system is followed. Government fixes the remuneration to executives.


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e. Performance Appraisal System:

Confidential report is prepared by heads of various departments for systematic judgment of

the subordinate. They have the authority to assess the standard of work & overall

performance.

ix. Storage DepartmentIn KSDL there are about 8 stores namely

1. Packing Materials2. Engineering Goods3. Perfumery Stores4. Oil & Fats Stores5. Detergent finished goods stores6. Fuel & Serviceable stores

These stores play a great role in maintaining of required stock. It also facilitates maintenance

of suitable store organization structure. It monitors the procedures of the receipt. Materials

are issued on the basis of FIFO.

4.2 SKILLS

The term skills includes those characteristics, which people use to describe a company.

Organization have strengths in a number of areas but their key strengths i.e., their dominant

skills are few. These are developed over a period of time as a result of a number of factors

and after performing certain tasks successfully over a period of time, the kind of people in the

organization, the top management style, structure, the management systems, the external

environmental influence etc. Hence when an organization makes a strategic shift it becomes

necessary to consciously build new skills.

Employee skills in an organization are unique to their positions; this may be due to their

experience in the place of work. Any similarity may be due to similarity in their work

positions.


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Every person according to his traits possesses his own talents and special characteristics.

These personal skills cannot be generalized.

The employees of KS&DL have different skills, each employee has a skill which is useful in

their day to day work. When there is a strategic shift in procedures or management,

employees are provided with appropriate training to update their skills.

4.3 STYLE OF MANAGEMENT

KSDL has an authoritarian style of management. Their decision-making is centralized with

the head office having the highest authority. Authority is given to the unit in-charge. This is

done so that he can take decisions about day-to-day matters & other urgent matters. Decision-

making depends on the authority & responsibility given to each individual & thus authority is

distributed based on designation & position held. In case of important matters, meetings are

held so as to seek opinions of top management & various departmental managers. Decisions

are made during these meetings and are implemented later on. Here Top down method is used

which means the instructions come down from the top management and then to the middle

management and so on.

4.4 STRATEGY

Strategic planning is about asking questions, more than attempting to answer them. Strategy

formulation entails a search for a different frame of reference. It is the quest for a new

business paradigm. There are two types of paradigms that apply to management, namely the

business and the organizational or managerial paradigms. The business paradigms define a

companys position in the market place with respect to customers, technology and products.

Strategy is a choice of direction and action; the company adopts to achieve its objectives in a

competitive situation. Any statements on overall of functional strategy that the company may

wish to share are:

Improvement in the existing products. Their future plans include launching of new products. The cost control exercise is in consolidation. Introduction of cost effective substitutes without compromising on quality Development of new perfumes, soaps detergents, agarbathis, creams and shampoos.


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4.5 SYSTEMS

Every organization has some systems or internal processes to support and implement the

strategy and run day to day affairs. These processes are normally strictly followed and are

designed to achieve maximum effectiveness.

a. Accounting System

Financial statements are prepared under the historical cost convention on an accrual basis and

comply with the accounting standards of the companies Act 1956.

b. Costing System:

Process costing

c. Inventory Control System

ABC analysis for stock control. FIFO method for issuing materials. Computerized accounting system for stores.

d. Remuneration System:

Time rate system is followed. Government fixes the remuneration to executives.

e. Performance Appraisal System:

Confidential report is prepared by heads of various departments for systematic judgment of

the subordinate. They have the authority to assess the standard of work & overall

performance.


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4.6 STAFF

KS&DL follows ethical employment standards wherever it operates.

It fulfills its entire legal obligation in terms of employment payments and benefits practices.

It provides

1. Adequate and timely training for all the employees.2. Career advancement related to performance and experience.

4.6.1 Benefits provided by KSDL

Monetary benefits:basic wage allowances, employees contribution to PF. Employee state

insurance, bonus, pension gravity etc.

Fringe benefits: housing, food canteen, education to children, medical facility, holiday pay,

recreation etc.

4.6.2 Allowances

The gross salary includes

1. Basic Pay2. DA3. City compensatory allowance 5% of basic pay.4. HRA 20% of B.P who resides in rented house.5. Conveyance allowance, Rs.595/- per month for workers.6. Family Travel Allowance: Rs.1000/- per year for an employee.7. Shift allowance: 3 shifts,

1st: 6-2p.m

2nd: 2-10p.m Rs.15/- per shift.

3rd

: 10pmSecurity Rs.25/- per shift.

Regular timings are 9.30am to 5.30pm

8. Leave allowance: 18 days privilege leave, 7 days casual leaves and 15 days of sick leave.

9. Canteen facility: They have a functional canteen where they provide food at subsidized

rates.

10. Bonus: It is declared within 8 months after closing the accounts the management has

declared 20% bonus for the current year.


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11. Increments are given on a yearly basis as long as there are no prolonged absences. In case

of prolonged absences increments are postponed.

12. P.F: is provided to them

13. Medical benefit: is also provided by the company.

14. Workmen card: Domiciliary Rs, 400/- per month is given along with wages & group

insurance policy for self & family.

15. Office card: the company gives the actual cost covered & above the entitlement for major

diseases.

4.7 SHARED VALUES

Values refer to the institutional standards of behavior that strengthen commitment to the

vision, and guide strategy formulation and purposive action. The core values are shaped

around the belief that enterprises exist to serve society. In terms of this belief, profit is a

means rather than an end in itself a compensation to owners of capital linked to the

effectiveness of contribution to society and the essential ingredient to sustain such enlarged

societal contribution. Thus company has embraced an extended role of trusteeship that

reaches beyond the assets reflected in the balance sheet to encompass societal assets. An

unwavering commitment to integrity, ethical conduct, meritocracy, teamwork and abiding

concern for stakeholders are at the heart of your companys value system.

Customer satisfaction Committed to total quality. Cost and time-consciousness. Innovation and creativity. Trust and team spirit. Respect for individuals. Integrity health and ethics.


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4.7.1 Mission

To serve the National economy. To attain self-reliance.

To promote purity & quality products To maintain the Brand loyalty of its customers. To build upon the reputation of Mysore sandal soap based on pure sandal oil.

4.7.2 Vision

Keeping pace with globalization, global trends & the States policy for usingtechnology in every aspect of governance.

Ensuring global presence of Mysore Sandal products while leveraging its uniquestrengths to take advantage of the current Tech scenario by intelligent & selective

diversification.

Secure all assistance & prime status from Government India all Tech alliances.

Further, to ensure Karnatakas pre-eminent status as a proponent & provider of Tech

services to the world, nation, & private sectors.


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5. SWOT ANALYSIS

5.1 Strengths The factory is located in the convenient location. It has many infrastructure facilities; this helps in quick movement of raw

materials & finished products.

It is a public ltd company and owned by the government of India. So in case offinancial crisis it will get government support.

An ISO 9001 certified company and it produces goods of excellent quality. An ISO 14001 company, which has committed to reserve the natural

environment.

It has a wide range of products. Abundant availability of raw materials at present.

5.2 Weakness

Excessive labor force has increased the operating cost. Slow growth rate of 6.2 percent in the last 40 years. Low turnover resulting in low profits. It is dependent on power and power shortage may lead to under utilization of capacity. Defective marketing strategy: under utilization of publicity and advertisement. Technology used is old and needs upgrading. R&D is not effective in reducing the cost of production. Its main target is upper middle class, so lower middle class and lower classes are left

out.

Unskilled labor force is hampering the growth.

5.3 Opportunities

The soap and detergent market is very large and it has a lot of benefits if it reachespeak manufacturing capacity.

Company has a great opportunity to expand its market share by increasing exports. Abundance of raw materials are available at present. So it can utilize it in a judicial

manner.


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Perfumes produced by them are of superior quality so they have a good chance ofexpanding their market share.

5.4 Threats

Competition from other global leaders. Government interference may reduce growth potential. Company has the threat of facing shortage of raw materials especially in case of

sandal wood.

They need to concentrate on all sections of the society. They are losing out on profitssince they are concentrating only on the upper classes.


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6. SUMMARY OF ANNUAL REPORTS AND FINANCIAL

ANALYSIS

6.1 Introduction

Analysis is the process by which, the whole body of gathered data, facts, figures and ideas, is

converted into meaningful and usable information. Interpretation refers to the task of drawing

inferences from the collected facts after analytical and/or experimental study. In short, it is a

search for broader meaning of research findings.

6.2 Meaning of analysis and interpretation:

In the words of Kennedy and Memullar, "The analysis and interpretation of financial

statements are an attempt to determine the significance and meaning of the financial

statements data so, that a forecast may be made of the prospects for future earnings"

6.3 Techniques/tools of analysis and interpetation:

1. Comparative financial statements2. Common measurement statements3. Trend percentage analysis4. Funds flow statements5. Cash flow statements6. Net working capital analysis7. Ratio analysis

Among the various above techniques two tools have been selected in order to analyze the

financial statement of KS&DL , the tools used are:

1. Comparative financial statements2. Ratio analysis


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1. Comparative financial statementsIn comparative financial statements two or more balance sheets and or the income statement

of a firm are presented simultaneously in columnar form. The financial data for two or more

years are placed and presented in adjacent columns and thereby the financial data is provided

a times perspective in order to facilitate periodic comparison. In comparative financial

statements, the balance sheet and the income statements for a number of years are presented

in condensed form for year comparison and to exhibit the magnitude and direction of

changes.

The comparative financial statements may be prepared to show;

The absolute amount of different items in monetary forms. The amount of periodic changes in monetary terms. The percentage of periodic changes to reveal the proportionate changes. The comparative financial statement can be prepared for both balance sheet and the

income statement.

The analysts are able to draw useful conclusions when figures are given in acomparative position.

The figures of sales for a quarter or half year or one year may tell only the presentposition of sales efforts.

Comparative balance sheet:

The comparative balance sheet analysis is the study of the trend of the same items, group of

items and computed items in two or more balance sheets of the same business enterprise on

different dates. The changes in periodic balance sheet items reflect the conduct of a business.

The changes can be observed by comparison of the balance sheet at the beginning of the year

and at the end of the year. These changes will help in forming an opinion about the progress

of an enterprise. The comparative balance sheet has two columns for the data of columns for

the data of original balance sheets. A third column is used to show increase in figures. The

fourth and last column may be added for showing percentages of increases or decreases.

This statement prepared on two or more different dates can be used for comparing sources of

funds under that secured loans, unsecured loans and reserves & surplus. These statements

also used to compare fixed and current assets, liabilities & provision and to find out


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increase/decrease in these items. Below are the comparative analysis of the balance sheet for

the past 4 to 5 years:

On the basis of those we analyzed the performance of the company and changes in that.

Comparative balance sheet for the year 2006 & 2007

Particulars As on 31-03-06 As on 31-03-07 Absolute

changes

% of

changes

1.Sources Of Funds

a) Share capital318221000 318221000 0 0

b) Reserve & surplus- - 0 0

c) Secured loans39448184 39448184 100

d) Unsecured loans214405674 199911435 (14494239) (6.76)

Total 253853858 199911435 (5394239) (21.24)

APPLICATION OF

FUNDS

1.Fixed assets

a) Gross block348447394 302808002 (45639320) (13.96)

b) Net block 635943332 60360155 (32341177) (50.86)2. Investment 100 100 0 0

3.Deferred tax assets - - - -

4. current assets 760760496 700225559 (60534937) (7.95)

Total 760760496 700225559 (60534937) (7.95)

Less: current liabilities &

provision

i) Liabilities 207051365 170706357 (36345008) (17.55)Ii) provision 88833899 98239572 94.5673 10.58

Total 295885264 268945929 (26939335) (9.10)

profit & loss a/c 25572563 5326504 (20246059) (79.17)

Total 43605194 26492550 (17112644) (39.24)


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Interpretation

o There is decrease in fixed assets in 2006 to 2007 this shows the company is notcontributing amount for fixed assets out of profit and the companys liquidity position

is not good when compare to 2006 as the company is concentrating on earning profit.

The decreased %age of fixed assets is 13.96 and 50.86 in gross and net block

respectively.

o In the sources of funds secured and unsecured loans are decreasing in the year 2007 ascompared to 2006 which is a good sign for the company.

Secured loans are decreasing to zero and unsecured loans are decreased by 6.76%.

Share capital of the firm remains constant.

There are no reserve and surplus with the firm in both the years i.e 2006 & 2007.

o There is a decrease in the current assets from 2006 to 2007 with a percent of 7.95which shows a loss to the company.

o As seen in current liabilities companies position is good as they are decreasing in theyear 2007 as compared to 2006 with a percentage of changes 17.55, which is again

good for the company.

o In the profit and loss account, in 2006 company had Rs.25572563 of profit whichbecome Rs.5326504 in the year 2007 i.e 79.17% of change .

Overall company`s performance is satisfactory but company needs to give attention to some

of its major areas like current assets and fixed assets as there is a decrease in current and

fixed assets with a percentage change of 13.96 % and 50.86% respectively. There is a

decrease in secured and unsecured loans with a percentage change of 100% and 6.76%

respectively which is on the benefit side of the company.


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Comparative balance sheet for the year 2007 & 2008


changes

% of

changes

1.Sources Of Funds

e) Share capital318221000 318221000 - -

f) Reserve &surplus - 15070293 15070293 100

g) Secured loans16629120 16629120 0

h) Unsecuredloans 199911435 129995436 (6691599) (34.97)

Total 199911435 479915849 53286879 (26.66)

APPLICATION OF

FUNDS

1.Fixed assets

c) Gross block302808002 293406486 (10401516) (3.43)

d) Net block60360155 58930969 89722330 (3.70)

2. Investment 100 100 - -

3.Deferred tax assets - - - -

4. current assets 700225559 816621470 116395911 16.62

Total 700225559 816621470 116395911 16.62

Less: current liabilities

& provision

j) Liabilities170706357 280039861 109335504 17.42

Ii) provision 98239572 128527890 30288318 31

Total 268945929 408567751 139621822 52

MIS expenses 21166046 12931061 (8234985) (422)

Total 26492550 479915849 (5326504) (100)


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Interpretation

o From the above table again is a decrease in the fixed assets from 2007 to 2008 thisshows the company is not contributing amount for fixed assets out of profit.

The decreased %age of fixed assets is 3.43 and 3.70 in gross and net block

respectively.

o In the sources of funds secured and unsecured loans are increasing in the year 2008 ascompared to 2007 which is a not a good sign for the company.

Secured loans are increased from zero to Rs.16629120 and unsecured loans are

increased by 34.97%.

Reserve and surplus are also increased by 100% from 2007 to 2008.


o There is a increase in the current assets from 2007 to 2008 with a percent of 16.62which shows that the company`s liquidation position is becoming good.

o As seen in current liabilities companies position is not much better as they areincreasing in the year 2008 as compared to 2007 with a percentage of changes 17.42,

which is again not good for the company.

Overall the company`s performance is satisfactory as compared to the performance of 2007

as there is a decrease in unsecured loans but increase in secured loans with a percentage

change of (34.97)% and 0% respectively. There is an increase in the current assets but

decrease in fixed assets with a percentage change of 16.62% and (3.43) which is good on the

side of current assets but not good in reference of fixed assets.


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Comparative balance sheet for the year 2008- 2009


changes

% of

changes

1.Sources Of Funds

i) Share capital318221000 318221000 0 0

j) Reserve &surplus 15070293 136826041 121755748 807.91

k) Secured loans16629120 10365536 (6263584) (37.77)

l) Unsecuredloans 129995436 89995436 (40000000) (30.66)

Total 479915849 555408013 75492164 15.73

APPLICATION OFFUNDS

1.Fixed assets

e) Gross block293406486 396106154 3699668 1.26

f) Net block58930969 59055325 124356 0.21

2. Investment 100 30000100 30000000 30000000

3.Deferred tax assets - 32146548 32146548 100

4. current assets 816621470 881689555 65068085 7.96

Total 816621470 881689555 65068085 7.96


& provision

k) Liabilities280039861 308752365 28712504 10.25

Ii) provision 128527890 166770640 38242750 29.75

Total 408567751 475523005 66955254 16.38

MIS expenses 12931061 28039490 15108429 116.83

Total 479915849 555408013 75492164 15.73


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Interpretation

o In the sources of funds secured and unsecured loans are decreasing in the year 2009 ascompared to 2008 which is a good sign for the company.

Secured loans are decreasing by 37.77 and unsecured loans are decreased by 30.66%.


Reserve and surplus are increased with an absolute change of Rs.121755748 the firm

in the year 2009.

o The above table is showing a increase in the fixed assets from 2008 to 2009 thisshows the company is contributing amount for fixed assets out of profit.

The increased %age of fixed assets is 1.26 and 0.21 in gross and net block

respectively.

o From the above table, in the year 2009 the position of current assets is 88.16 whichwas 81.66 in 2008 and current liabilities is 30.87 and 28.00 in the year 2009 and 2008

respectively. All this is showing good results for the firm in accordance of current

assets but not good in current liabilities position.

o In 2009 company`s MIS expenses are increasing with a absolute changes of Rs.15108429 and percent change of 116.83, it means company should control its

undesired expenses.

Overall the performance of KS&DL is pretty satisfactory, when compare to the year 2008.It

indicate that, in both the year 2008-2009 the company has a good liquidity position as there`s

an increase in the fixed and current assets with a percentage change of 1.26% & 7.96% .The

firm position also increasing in the side of sources of funds as there is a decrease in the

secured loans with a change of (37.77)% and also decrease in the unsecured loans with

(30.66)%.


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Particular As on 31-03-09 As on 31-03-10 Absolute

changes

% of

changes

1.Sources Of Funds

m)Share capital318221000 318221000 0 0

n) Reserve &surplus 136826041 267719129 130893088 95.66

o) Secured loans10365536 107204608 96839072 934.24

p) Unsecuredloans 89995436 83506504 (6488932) (7.21)

Total 555408013 778420599 223012586 40.15

APPLICATION OFFUNDS

1.Fixed assets

g) Gross block396106154 309623620 (13517466) (4.56)

h) Net block59055325 69775760 10720435 18.15

2. Investment 30000100 100 (30000000) (99.99)

3.Deferred tax assets 32146548 52504866 20358318 63.32

4. current assets 881689555 1091372587 179683032 19.70

Total 881689555 1091372587 179683032 19.70


& provision

l) Liabilities308752365 246650794 (62101571) (20.11)

Ii) provision 166770640 204956560 38185920 22.89

Total 475523005 451607354 (23915651) (5.02)

profit & loss a/c 28039490 16374640 (11664850) (41.60)

Total 555408013 778420599 223012586 40.15


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Interpretation

From the table of comparative balance sheet of year 2009-2010

oIn the sources of funds secured loans are increasing highly and unsecured loans aredecreasing in the year 2010 as compared to 2009 which is a not good for the

company.

Secured loans are increased by 934.247 and unsecured loans are decreased by (7.21).

Reserve and surplus are increased with an absolute change of Rs.130893088 of the

firm in year 2010.


oThe above table is showing a decrease in the fixed assets from 2009 to 2010 thisshows the company is not contributing enough amount for fixed assets out of profit.

The decreased %age of fixed assets is 4.56.

o From the above table, in the year 2010 the position of current assets is 109.13 whichwas 88.16 in 2009 i.e there`s a increase and current liabilities is 30.87 and 24.66 in the

year 2009 and 2010 respectively. All this is showing good results for the firm in both

the cases, current assets and current liabilities.

Overall the performance of KS&DL is satisfactory but when compared to 2009 it`s not good

enough as there is an increase in secured loans but decrease in unsecured loans with a

percentage change of 934.24% and (7.21)% respectively. companys liquidity position is also

not satisfactory when compared to the year 2009 as there is a decrease in fixed assets gross

block with a change of 4.56% but increase in current assets with a percentage of

19.70%.company`s current liabilities are also decreasing with a absolute changes of

Rs.62101571 & percentage change of (20.11)% which is a good sign for the company.


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Particular As on 31-03-10 As on 31-03-11 Absolute

changes

% of

changes

1.Sources Of Funds

q) Share capital318221000 318221000 0 0

r) Reserve &surplus 267719129 343479146 75760017 28.30

s) Secured loans107204608 800922400 (27112208) (25.29)

t) Unsecuredloans 83506504 83506504 0 0

Total 778420599 163989804 (27112208) (14.22)

APPLICATION OFFUNDS

1.Fixed assets

i) Gross block309623620 327262896 1739276 5.69

j) Net block69775760 241431939 1584079 0.66

2. Investment 100 85830957 16055197 23.00

3.Deferred tax assets 52504866 100 0 0

4. current assets 1091372587 1239560593 148188006 13.58

Total 1091372587 1239560593 148188006 13.58


& provision

m)Liabilities246650794 292361773 45710979 18.53

Ii) provision 204956560 269166068 64209508 13.33

Total 451607354 561527841 109920487 24.34

profit & loss a/c 16374640 - - -

Total 778420599 - 16374640 100


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Interpretation

From the above table of 2010-2011

oIn the sources of funds secured loans are decreasing and unsecured loans are alsodecreasing in the year 2011 as compared to 2010 which is good for the company.

Secured loans are decreased by 25.29 and unsecured loans are decreased to zero (0).

Reserve and surplus are increased with an absolute change of Rs.75760017 in the year

2011.


o The above table is showing an increase in the fixed assets from 2010 to 2011 thisshows the company is contributing enough amount for fixed assets out of profit.The increased %age of fixed assets is 5.69.

o In the year 2011 the current assets are increasing with a percentage change of 13.58and current liabilities are also increasing with a absolute change of Rs. 45710979 and

a percentage change of 18-53.

The overall performance of the firm is comparatively good in the last year as it has covered

all of its unsecured loans and there is a decrease in the percentage of secured loans i.e

25.29%. Company is also contributing a good amount toward its assets as both of current and

fixed assets are increased in the year 2011. So, the company`s liquidity position is good and

the performance of the organization is also satisfactory.

2. Ratio analysis

Ratio

Ratios are guides or shortcuts that are useful in evaluating the financial position and

operations of a company and in comparing them to previous years or other companies. The

primary purpose of ratios is to point out areas for further investigation. They should be used

in connection with a general understanding of the company and its environment. Ratio

analysis is an important means of expressing the relationship between two numbers. A ratio

can be computed form any pair of numbers. To be useful, a ratio must represent a meaningful

relationship, but use of ratios cannot take the place of studying the underlying data.


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Importance of ratio analysis

Useful in financial position analysis Useful in simplifying accounting figures Useful in assessing the operational efficiency Useful in forecasting purposes Useful in locating the weak spots of the business Useful in comparison of performance

Objectives

To evaluate the profitability of the firm To evaluate and measure the financial strength of the firm To highlight the liquidity and profitability of the firm To know whether the firm is in a position to meet its current obligations To measure the firm's performance with the other firms in the same industry Ratio are a tool, which enables management to analyses business situations and to

monitor their performance as well as that of their competitors Ratio analysis help the management to diagnose the situation, monitor the performance

and help to plan forward

Ratio analysis is of much help in financial forecasting and planning

Classification/types of ratios

a. Profitability ratiosb. Coverage ratiosc. Turnover ratiosd. Financial ratiose. Leverage ratiosf. Current Ratio


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a. Profitability ratios:

Profitability is the overall measure of the companies with regard to efficient and effective

utilization of resources at their command.

The following are the important profitability ratio;

1. Gross profit ratio2. Operating ratio3. Expenses ratio4. Operating profit ratio5. Net profit ratio6. Return on capital employed /overall profitability ratio7. Return on shareholders' fund8. Return on total assets9. Earnings per share10.Dividend yield ratio

b. Coverage ratios

These ratios indicate the extent to which the interests of the persons entitled to get a fixed

return (i.e., interest or dividend) or a scheduled repayment as per agreed terms are safe.

The following are the important coverage ratio;

1. Fixed interest cover2. Fixed dividend cover3. Debt service coverage ratioc. Turnover ratio:

These ratios are very important for a concern to judge how well facilities at the disposal of

the concern are being used or to measure the effectiveness with which a concern uses its

resources at its disposal.

The following is the important turnover ratios:

1. Sales to capital employed/capital turnover ratio2. Sales to fixed assets/fixed assets turnover ratio3. Sales to working capital/working capital turnover ratio4. Total assets turnover ratio5. Stock/inventory turnover ratio


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6. Receivable/debtors turnover ratio7. Creditors/account payable turnover ratiod. Financial ratios:

These rati

mine - introduction

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