A STUDY ON WORKING CAPITAL KARNATAKA SOAPS AND DETERGENTS LIMITED

A STUDY ON WORKING CAPITAL

1.1 Introduction about the Internship

One of the most important areas in the day to day management of the firm is the management of working capital. Working capital management is the functional area of the finance that covers all the current accounts of the firm. It is concerned with management of the level of individual of current assets as well as the management of total working capital. Financial management means procurement of funds and effective utilization of these procured funds. Procurement of funds is firstly concerned for financing working capital requirement of the firm and secondary for financing fixed assets.1.2 Study of working capital

Ordinary, there term working capital stands for that part of the capital, which is required for the financing of working or current needs of the company. Working capital is the lifetime of every concern. Whether it is manufacturing or non- manufacturing one without adequate working capital, there can be no progress in the industry.

Inadequate working capital means shortage of raw material, labour etc., resulting in partial current assets less current liabilities-has no economic meaning in the sense of implying some type of normative behavior. According to this line of reasoning, it is largely an accounting artifact. Working capital management, them, is a misnomer

The working capital of the firm is not managed. The term describes a category of management decisions affects specific types of current assets and current liabilities. In turn, those decisions should be rooted in the overall valuation of the firm.

1.3Need for the studyThe pipes production serves as the index of the economic development of any country. Thus PVC pipes production is very vital from countrys agricultures point of view. The demand would be grown with increasing technologies and is likely to reach a staggering level in the decades to come.

On the other hand the price of the pipes as remained stagnant, because prices are determined market forces and presently production levels are greater than supply. A number of industries for the past of few years have been finding it difficult to solve the increasing problems of adopting seriously the management of working capital. Business concerns intent on developing their business have to use to be at most, their available resources for the development of the business, thereby enabling them profits.

Due to inflationary situations and restrictions imposed on borrowing facility, the commercial institutions and manufacturing industrial units have been confronting and difficulties in meeting day to day financial needs. Hence effective management of working capital becomes the problem for such organization and industries. The purpose of study is to examine analyze and evaluate working capital management and its components in KARNATAKA SOAPS AND DETERGENTS LTD.

1.4 Objectives of the study

To study the statement of changes in working capital To analyze the profitability liquidity position of the company To examine and evaluate cash receivables and inventory management performances1.5 Scope of the study1.6 Methodology adopted

1.7 Review of the literature

1.8 Limitations

At most of the financial information was considered confidential, the access to the information was restricted

The results of the study are limited information

Due to frequent and work load of the staff in the sufficient organization much time could not be by them project

The project is based mainly secondary sources of information

2.1 INDUSTRY PROFILE

Soap is one of the commodities which have become an indispensable part of the life of modern world. Since it is non durable consumer goods, there is a large market for it. The whole soap industry is experiencing changes due to innumerable reasons such as government relations, environment, energy problems and increase in cost of raw materials etc.The changing technology and ever existing desire by the individual and the organization to produce a better product at a more economical rate has also acted as catalyst for 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 a cut throat competition while multinational companies dominate the market. They are also facing severe threat from dynamic and enterprising new entrance especially during 1991- 1992.

If we look back into the history of soaps and detergents, mankind knew about Esoap, when roasted meat over flowed on the glow in ashes. The lump like product was soap and had foaming and cleansing character. In 1192 A.D. the first patent for making soap was taken in London. THE INDIAN SOAP INDUSTRY SCENARIOThe Indian has soap industry been dominated by handful of companies such as

1. Hindustan levers limited.

2. Tata oil mills

3. Godrej soaps private limited.

4. Recent entrants include- colgate Palmolive limited

-proctor and gamble limited

-Nirma soaps limited

-Wipro limited The Indian soaps industry continued to flourish very well and until 1967-68 but began to

Stagnate. Soon it started to recover and experienced a short upswing in 1974. This

Increases in demand can be attributed to:

1. Growth of population

2. Income and consumption increase

3. Increase in urbanization 4. Growth in degree of personal hygiene In India, the first soap company was established by North West Soap Company in 1897 at Meerut following the Swadeshi movement. From 1905 onwards few more factories were setup.

They are,

Mysore soap factory at Bangalore.

Godrej soap factory at Bombay.

Bengal Chemicals.

Tata Oil Mills.

Lever Brothers Company.

THE INDIAN SOAP INDUSTRY SCENARIO

The Indian soap industry has been dominated by long time with number of companies such as,

Hindustan Levers Limited.

Tata Oil Mills Limited.

Godrej Soaps Private Limited.

The Indian soap industry continued to flourish very well until 1967-1968, but began to stagnate and soon it started recovering. In 1974 it experienced a short upswing. This increase in demand is due to, Growth in population.

Increase in Income and consumption.

Urbanization.

Growth in degree of personal hygiene.

Soap manufacture has two classifications namely,

Organized sectors.PRESENT STATUS:Market scenario:

Indian is the ideal market for cleaning products. The countries per capita consumption

Of detergent powders and bars stands at 1.6kg and soap at 543gms Hindustan lever, which heralds over the cleaning business, sells in all over the cleaning business but the tiniest of Indian settlements. The 7.4lakhs tons per annum soap market in india in crawling al

PROBLEMS OF SOAPS AND DETERGENTS INDUSTRY

Industry faces some problems due to increase in the cost of raw material. The major ingredients like soda ash, linear alkyl benzene and sodium triply phosphate poses number of serious in terms of availability. The demand and supply gap of vegetables oil is 1.5 to 2lakh and is met through imports.

MARKET SCENARIO India is the ideal market for cleaning products. The Indian soap market is pseudo in nature and it is amazingly complex being segmented not only on the basis of price benefits, but even range emotions within that outlining framework. PROBLEMS OF KSDLSoap industry has some problems in case of raw materials. The major ingredients are soap ash, linear alkyl, benzene and sodium. Tripoly phosphate poses number of serious problems in terms of availability. The demand supply gap for vegetable oil is 1.5 to 2 lakh tons and is met through imports. In recent times, caustic soda and soap ashes in the cheaper varieties of soaps are quite high.2.2 COMPANY PROFILEMysore Sandal Soap is a brand of soap manufactured by the Karnataka Soaps and Detergents Limited [KS&DL], a company owned by the Government of Karnataka in India. This soap has been manufactured since 1916 when Nalvadi Krishna raja Woodier, the king of Mysore set up the Government Soap Factory in Bangalore. The main motivation for setting up the factory was the excessive sandalwood reserves that the Mysore kingdom had which could not be exported to Europe because of the First World War. In 1980, KS&DL was incorporated as a company by merging the Government Soap Factory with sandal oil factories at Shivmoga and Mysore. Mysore Sandal Soap is the only soap in the world made from 100% pure sandalwood oil. KS&DL owns a proprietary geographical indication (GI) tag on the Mysore sandal soap which gives it intellectual property rights to use the brand name, to ensure quality and also prevent piracy and unauthorized use by other manufacturers. In 2006, Mahendra Singh Dhoni, the Indian cricketer was selected as the first brand ambassador of the Mysore Sandal Soap.

HISTORY In the early 20th century, the Mysore kingdom in India was one of the largest producers of sandalwood in the world. It was also one of the major exporters of the wood, most of which were exported to Europe. During the First World War, large reserves of sandalwood were left over because they could not be exported due to the war. In order to make good use of these reserves, Nalvadi Krishnaraja Wodeyar, the king of Mysore took the advice of his diwan, Sir.M.Visweshwaraiah and established the Government Soap Factory in Bangalore. This factory which was set up in 1916, started manufacturing soaps under the brand name Mysore Sandal Soap using sandalwood oil as the main ingredient. A factory to distill sandalwood oil from the wood was setup at Mysore in the same year. In 1944, another sandalwood oil factory was setup in Shivmoga. After the unification of Karnataka, these factories came under the jurisdiction of the Government of Karnataka. In 1980, the Government decided to merge these factories and incorporate them under a company named Karnataka Soaps and Detergents Limited.

RENAMING OF THE COMPANY On October 1st 1980, the Government Soap Factory was renamed as KARNATAKA SOAPS AND DETERGENTS LIMITED. The company was registered as a Public Limited Company. Today the company produces varieties of products in toilet soaps, Detergents, Agarbathis and Talcum powder. KS&DL has been built up with tradition for the quality of its products. Mysore Sandal Soap is the No.1anywhere 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. 2.3 Promoters

Sales department Production department

Finance department

Human resources management

Research and development

Re-engineering

Marketing department

2.4 VISION, MISSION AND OBJECTIVESVision Statement :

Karnataka Soaps & Detergents Limited has a clear Vision for all round development of the Company. This is reflected in the form of a well conceptualized and cogent blue print called VISION 2013. The VISION 2013 sets the goals and suggests the strategies and plans necessary to achieve the Vision. The Vision of the KS&DL is embodied in the following statement:-

"KARNATAKA SOAPS & DETERGENTS LIMITED WILL LEVERAGE LATEST SOAP MANUFACTURING TECHNOLOGY AND INFORMATION TECHNOLOGY BY IMBIBING PROFESSIONAL MANAGEMENT TECHNIQUES TO IMPROVE ITS FUNCTIONAL ACTIVITIES, TRANSPARENCY, BUSINESS AND TO TRANSFORM ITSELF INTO A MODERN, PROFESSIONAL ORGANIZATION IN THE FMCG MARKET IN INDIA AND ALSO TO SPREAD ITS FRAGRANCE IN THE FMCG GLOBAL MARKET".MISSION STATEMENT

To serve the national economy.

To attain self reliance.

To promote purity and quality product

To maintain the brand loyalty of its customers.

To build upon the reputation of Mysore Sandal Soap based on pure sandal oil.

OBJECTIVES

To promote and uphold its image as a symbol of traditional products.

To build upon the reputation of Mysore Sandal Soap based on pure sandal oil.

To supply the products at most reasonable and competitive rate.

To maintain the brand loyalty of its custom

2.5 PRODUCT AND SERVICES PROFILE

KS&DL is the true inheritor of golden legacy of India. It is 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 the Soaps, Detergents, Agarbathis and Sandalwood oil.TOILET SOAPS

NAME OF THE PRODUCTUNITS OF GRAMS

Mysore Sandal Soap 75, 125

Mysore Sandal Classic Soap75

Mysore Sandal Gold Soap75, 125

Mysore Sandal Baby Soap75

Mysore Special Sandal Soap 75

Mysore Rose Soap100

Mysore Sandal Herbal Care Soap100, 125

Mysore Jasmine Soap100

Wave Soap 100

Mysore lavender Soap150

Mysore Sandal bath tablet150

Mysore Sandal Classic Bath Tablet 150

Mysore Jasmine Bath Tablet150

Mysore Special Sandal Tablet 150

Mysore Sandal rose Tablet150

Mysore Sandal Guest Tablet17

Mysore Sandal Millennium150

DETERGENT

NAME OF THE PRODUCTUNITS IN GRAMS

Mysore Detergent Powder1000

Mysore Detergent Powder500

Mysore Detergent Cake125

Mysore Detergent Cake2

TALCUM POWDER

NAME OF THE PRODUCTUNITS IN GRAMS

Mysore Sandal Talc20,50,100,300

Mysore Sandal Baby Talc100,200,400

AGARBATHIS

Paraijata

Alif Laila

Meditation

PRODUCT RANGE FROM THE HOUSE OF MYSORE SANDAL SOAP

a. MYSORE SANDAL SOAP

(75gms,125gm

b. MYSORE SANDAL BATH TABLET (150gms)

c. MYSORE SANDAL BABY SOAP (75gms)

d. THREE-IN-ONE GIFT PACK (SJR) 3TABS

(150gmseach)

e. MYSORE SANDAL GOLD SOAP

f. MYSORE ROSE SOAP

(100gms,125gms)

g. MYSORE SANDAL GOLD SIXER 6 TABS

(125GMS EACH)

h. SIX-IN-ONE GIFT PACK 6TABS

(125GMEACH)

MYSORE LAVENDER SOAP -150 GMS

i. MYSORE SANDAL CLASSIC SOAP

(75GMS)

j. MYSORE HERBALCARE (15GMS, 75GMS, 100GMS)

k. MYSORE JASMINE SOAP

(75GMS, 100GMS)

MYSORE SANDAL MILLENNIUM (150GMS)

DETERGENTS

KSDL also manufacture high quality detergents applying the latest spray drying technology with well balanced formulation of active matters and other builder, they provide the ultimate washing powder.

Sensor Detergent Powder (1kg/2kg)

Mysore Detergent Powder (1kg/500gms)

Mysore Detergents Bar (250gms)

Mysore Detergent Cake (125gms/250gms)

MYSORE DETERGENT CAKE

Mysore Detergent Cake is formulated with special dirt - busters for effective removal of toughest dirt on clothes and to give freshness with mild aroma all the day, while wearing. The product is available in variants like - 150gms and 250gms under the brand name of MDC.

AGARBATHIS

a. JASMINE REGULAR

b. MEDITATION SANDAL c. NAGA CHAMPA

d. ROSE REGULAR

e. SIR.M.V-100

f. JASMINE ROLLS

SANDALWOOD OIL

POWDERSa. MYSORE SANDAL TALCUM POWDER

b. MYSORE SANDAL BABY POWDER

MYSORE SANDAL ROOM FRESHNER

MYSORE SANDAL DHOOP

MYSORE SANDAL BILLETS

LIQUID DETERGENT - KLEENOL

WAVE COLOGNE POWDER

LIQUID SOAP

2.6 AREAS OF OPERATION

HUMAN RESOURCE DEPARTMENT

STRUCTURE OF HUMAN RESOURCE DEPARTMENT

01

M.D

Managing Director

02

ASST.GEN.MGR

Assistant General Manager [HRD]

03

MGR [HRD]

Manager [HRD]

04

ASST.MGR

Assistant Manager

05

LWO

Labor Welfare Officer

06

VMO

Visiting Medical Officer

07

OFFICER [HRD]

Officer [HRD]

08

JR. OFFICER [HRD]

Junior Officer [HRD]

09

SR. ASSTS

Senior Assistants

10

ATTENDER

Attender

11

COOKS

Cooks

12

HELPERS

Helpers

Luther Gulick highlighted PODSCORB which stands for planning, organizing, staffing, directing, coordinating, reporting and budgeting is the part of human resource management.

FUNCTIONS OF HUMAN RESOURCE DEPARTMENT

Recruitment and Selection.

Training and Development.

Promotion and Transfer.

Wage and Salary administration.

Performance appraisal.

Industrial relations.

Disciplinary action.

Welfare measures.

Maintain personnel records.

Study on labor turnover.

Verification of cash certificate, character and attitude.

Compilation of periodical report to various statutory authorities.

Maintenance of manpower inventory.

Maintain of SC/ST roster.

Study on absenteeism and suggesting measures.

Coordinating dispute cases before conciliation labor court and other court.

Grievance handling.

MANPOWER DETAILS

Group

Bangalore

Sandalwood oil division [Mysore]

Marketing branches

Duty paid gowdon [Shivmoga]

Total

Executives

78

08

53

02

141

Supervisors

49

08

15

_

72

Workers

523

28

36

14

601

Total

650

44

104

16

814

BENEFITS PAYABLE TO THE EMPLOYEES

First Shift

6.00am to 2.00pm

Second Shift

2.00pm to 10.00pm

Third Shift

10.00pm to 6.00am

General Shift

9.30am to 5.30pm

Shift allowance: There are three shifts and one general shift. The shift timings are as follows.

The lunch time is from 12.00pm to 12.30pm. Every Sunday is rest day for the employees. No allowance is paid to the first shift workers. A sum of Rs.25 and Rs.35 per day is paid to workers for second and third shift respectively.

Washing allowance: The company provides two sets of uniform once in a year. For this a washing allowance of Rs.50 per month is paid to every worker.

Conveyance allowance: The conveyance allowance of Rs.680 per month per worker is extended.

Family travel allowance: This allowance is paid at the rate of Rs.500 per employee per year who has put a minimum three years of service.

Death relief fund: Rs.30, 000 will be paid to the nominee in case of death of an employee.

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

Medical reimbursement: Benefit to non-ESI employees a sum of Rs.500 per month will be paid per employee towards domiciliary treatment. With regards to hospitalization treatment the company has taken medical claim policy from insurance company for a sum of Rs.1, 50,000 per employee which includes spouse and two children.

PAY SCALE OF UNIONISED EMPLOYEES

SL.NO

GROUP

REVISED PAY SCALE

01

I

5140-110-1690-140-6390-170-7240-200-8240

02

II

5250-110-5690-140-6360-170-7240-200-8240-240-9440

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

V

6110-140-6390-170-7240-200-8240-240-9440-280-10840-330-12490-400-14490

06

VI

6390-170-7240-200-8240-240-9440-280-10840-330-12490-400-14490-500-15990

07

VII

7240-200-8240-240-9440-280-10840-330-12490-400-14490-500-17990

08

VIII

8240-240-9440-280-10840-330-12490-400-14490-500-17990-600-19190

PAY SCALE OF OFFICERS

SL.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

DUTIES OF A MANAGER

Maintenance of attendance book of employees and various departments.

Promotion or demotion of labors according to their quality of their work.

Attending the problems faced by the workers while working.

She sees that every employee is satisfied with the job.

RECRUITMENT

Recruitment will be done by newspapers, through employees for workers.

For executives staffs, recruitment will be done through newspapers, internet and consultancy and through employees.

SELECTION

Workers will be selected by daily according to the requirement for the company. Workers should have to bring age proof like S.S.L.C marks card. For the executive staff the selection process will be done in the head office.

TRAINING

Training will be given to the new workers for 40 days, if the worker is trained up well, then they will be placed for batches.

FINANCE DEPARTMENT

STRUCTURE OF FINANCE DEPARTMENT

Finance 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 source of finance where to borrow i.e. ICICI, IRBI, IDBI, Corporation bank etc.

It has abundant of function which can be enumerated as follows:

Effective funds management which is inverted 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 and valuation of stores.

To protect financial interest of the company.

AUDIT DEPARTMENT

KS&DL audit wing is headed by internal auditor. Auditing is vital for the company as it facilitates verifying of all the books of account by trial balance, it also comply with requirements for central excise and income tax purposes. After the auditors monitor everything they give report which is helpful to the company.

COSTING

When a company does costing it ensures proper fixation of selling price of the product, cost control it also help in taking decision. KS&DL use process costing as the production mechanism is systematic it involves addition of a lot of ingredient in the manufacturing.

OBJECTIVES

Planning for short term and long term financial requirements of the organization.

Managing short and long term receivables and payables.

Managing capital both long term and short term.

Issuance and redemption of ownership and creditor ship securities [shares and debentures]

Safe custody of funds and securities.

Cash planning and credit management.

Providing top management with information on current and prospective financial conditions of the business of the enterprise as a basis for policy maki

PRODUCTION DEPARTMENT

STRUCTURE OF PRODUCTION DEPARTMENT

KS&DL has three production plants. They are,

1. Fatty Acid Plant.

2. Soap Plant.

3. Detergent Plant.

FATTY ACID PLANT

The basic raw materials, oils and fats undergo the splitting and refining process including hydrogenation at the fatty acid plant. It is also obtained and used for soap making. The plant has a capacity to process 10,000mt of oil and fats.

SOAP PLANT

The soap plant is one of the largest production plants in the country with an installed capacity of 26,000 tons per annum.

KS&DLs soap plant has its uniqueness that 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 stream line flow through right from raw material preparation to wrapping stage the line collation with the built in facility for continuous fat bleaching and saponification. The high speed auto wrapper has the capability to handle the soaps of virtually all size and shape.

DETERGENT PLANT

It has installed capacity of 10,000 tons per annum. To produce spray dried, powder and a syntax plant for detergent cakes and bars. It produces industrial detergent which is used in the formulation of wet table pesticide powders for crop protection.

WORK FLOW MODEL SILOS (Silos are closed chambers)Soaps noodles

Container mixer

Simplex plodder

It becomes noodles

MillinIt becomes soap ribbons

Duplex plodder

Cutting machine

Cakes are led

Stamping machine

Wrapping machine

Led through the conveyor belt MARKETING DEPARTMENTSTRUCTURE OF MARKETING DEPARTMENT

The company main products are soaps and detergents which are sold in different parts of India. There are depots at various places of the country which are controlled by six branches. The role of each branch is to ensure that the sales activities are under their control.

BRANCH

DEPOTS

Bangalore

Hubli, Raichur.

Chennai

Salem, Madurai, Cochin

Hyderabad

Vijayawada, Ananthapur

Mumbai

Bhiwandi, Ahmedabad, Pune

Kolkata

Cuttack, Patna, Gauhati

Delhi

Jallander

FUNCTIONS OF MARKETING DEPARTMENT

Marketing mix: It is the policy adopted by the manufacturers to get success in the field of marketing.

Product policy: It includes both the development and improvement produced and existing products. This all totally done by KS&DL both marketing and research and development department.

Distribution policy: The manufactured product of KS&DL is supplied to the various depots.

Sales and Promotion: It takes necessary steps for promoting its products.

EXPORTS

KS&DL export their products to different parts of the world they are,

Australia.

Berlin.

Canada.

France.

Germany.

Italy.

Kenya.

Malaysia.

Saudi Arabia.

Singapore.

Africa.

Srilanka.

USA.

Japan.

UK MATERIALS DEPARTMENTSTRUCTURE OF MATERIALS DEPARTMENT

FUNCTIONS OF MATERIALS DEPARTMENT

1. Maintaining continuous flow of materials.

2. Effective control of inventories.

3. Coordination.

4. Growth of the organization.

5. Maintaining ethical organization.

It has been divided into five sections as follows,

1. Oil and fats section.

2. Perfumery and aromatically section

3. Packing materials section.

4. Chemical section.

5. Miscellaneous and Engineering section.

According 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 simple relationship 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;

SKILLS

The term skills includes those characteristics, which people use to describe a company. Organization have strengths in a number of area but their key strengths are dominant skills are few. These are developed over a period of time of the result of the interaction of a number of factors 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 organization makes a strategic shift it becomes necessary to consciously build new skills.

Employees skills in an organization will be unique, this may be due to their experience in the place of work, and the similarity may also due to influence of the similar culture. However every person according to his traits possesses his own talents and special characters. This cannot be generalized skill among them.

The employees of KS&DL have different skill, which are relevant for their work. As it is common in big organizations, he also controversies between departments which can be solved by discussions and by conducting some interactive programs.

STYLE OF MANAGEMENT:

Decision-making is centralized with the head office. Authority is given to unit in-charge to take decision in day-to-day minor matters & other urgent matters.

Decision-making depends on the authority & responsibility conferred on each individual & thus its distributed based on designation & position held. In important matters, meetings are held to seek opinions of top management & various department manager & the decisions are taken & implemented. Decision-making is co-ordinate & done with wide consultations of top management of department managers consultation which gives best possible gains.

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, Agarbathies, creams and shampoos.

STAFF: As any employer, KS&DL follow ethical employment standards wherever it operates with a goal in mind company guarantees. 1. To fulfill its entire legal obligation in terms of employment payments and benefits practices.

2. Adequate and timely training for every one for the job for which they are employed.

3. Career advancement related to performance and experien

SHARED VALUES:

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.

2.8 COMPETITORS OF KS&DL PRODUCTS AND SERVICES

KS&DL is facing cut throat competition in national and international market. Some of its main competitors are,

Hindustan Unilever Limited.

Godrej Soaps Private Limited.

Proctor and Gamble.

Wipro.

Nirma Soaps Private Limited.

Jyothi Laboratories.

COMPETITORS INFORMATION AND MARKET SHARE IN SOAP INDUSTRY NO. PARTICULARSPERCENTAGES

1. HUL [Hindustan Unilever Limited] 64%

2. KS&DL 11%

3. Proctor & Gamble 10%

4. Godrej Soaps Private Limited4%

5. Wipro 4.6%

6. Others 6.4%

TRADEMARK OF KS&DLThe SHARABHAThe carving on the cover is the Sharabha, the trademark of KS&DL.

The Sharabha is a mythological creation from the puranas which has a body of a lion and head of an elephant, which embodies the combined virtues of wisdom and strength. It is adopted as an official emblem of KS&DL to symbolize a power that removes imperfections and impurities. The maharaja of Mysore as his official emblem adopted it. And soon took place as the symbol of the Government Soap Factory of quality that reflects a standard of excellence of Karnataka Soaps and Detergents Limited. SLOGAN NATURAL PRODUCTS WITH EXOTIC FRAGRANCESKS&DL has a long tradition of maintaining the highest quality standard, right from the selection of raw materials to processing and packaging of the end product. The reasons why its products are much in demand globally and are exported regularly to UAE, 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.

POLICY OF KS&DL

Seek purchase of goods and services from environment responsible suppliers.

Communicate its environment policy and best practices to all its employees. Set targets and monitor progress through internal and external audits.

Strive to design and develop products, which have friendly environmental impact during manufacturing.

Reuse and recycle materials wherever possible and minimize energy consumption and waste.

BIRDS EYE VIEW OF KS&DL

1918- Government Soap Factory was started by Maharaja of Mysore and the Mysore Sandal Soap was introduced into the market for the first time.

1950- The factory output rose to 500M.Tons with the following modifications

Renovating the whole premises. Installing new boiler soap building plant and drying chamber.

1954- Received license from Government to manufacture 1500 tons of soaps and 75 tons of glycerin per year.

1957- Factory shifted its operation to Rajajinagar industrial area. 1974- Mysore sales international limited was appointed as the sole selling agent, for marketing its products.

1975- Rs. 4 crores synthetic detergent plant was installed based on Italian technology by Ballestra SPA.

1980- On 1st October 1980 the Government Soap Factory was converted into a public sector enterprise and renamed as Karnataka Soaps and Detergents Limited

1981- A. Production capacity was increased to 6,000 tons

B. Rs. 5 crores Fatty acid plant was installed.

1984- Manufacturing of premium quality of Agarbathis at Mysore division.

1985- Production capacity was raised to 26,000M.tons per annum. A large variety of toilet soaps at attractive shapes, colors and fragrances introduced to meet the varieties and tastes of consumers.

1992- The company was registered with the Board for Industries and Financial Reconstruction (BIFR), New Delhi in December for rehabilitation, as the company suffered losses continuously since 1980 at its net worth eroded.

1996- The BIFR approved the rehabilitation scheme in September and the company started making profits. 1999- ISO-9002 Certificate for quality assurance in production, installation and servicing. 2000- ISO-14001 Certificate pertaining to environmental management system.

2003- The entire carried forward loss of Rs. 98 crores wiped out and in May BIFR, declared the company to be out of its purview. The company is making profit continuously; it is the only state public sector unit that has come out of BIFR.

2004- The ISO-9002 was upgraded to ISO-9001-2004, Quality systems.

2008- Company has introduced Hand wash liquids under the trade name of Herbal hand wash and Rose hand wash liquids. Company has also introduced liquid Detergent under the trade name of Kleenol liquid with different variants for floor wash, Dish wash and Automobile wash.

2009- Company has established In-House state of the Art manufacturing facilities for manufacturing Mysore Sandal Talcum powder. Company has re-introduced the Talcum powder variants with new outlook of containers.

2010- The ISO certification was upgraded to ISO 9001:2008. Company is on progressive growth for the last 10 years by increasing its production and sales volumes. The company turnover has increased from 100 crores during the year 2003 to 200 crores during the year 2010.

2011- The Research and Development Department of the company is in the process of development of the MILLENIUM SOAP new products like super specialty body wash, liquid wash, liquid soap, room fresheners, body spray perfume and pure sandalwood powder in small pouches.

2012- Indias most expensive Mysore Sandal Millennium Soap was launched on January 25th worth Rs. 720 per soap. 2013- They reached highest turnover and profit (322 crore) and

Got National award for Excellence Manufacturing Cost in Medium organization category.

ACHIEVEMENTS Government of Karnataka Department of Industries and Commerce. State Export Promotion Geographical Indication GI-2005.

ISO 9001-2000 in the year 1999.

ISO 14001-2004 in the year 2000.

Export award for the year 2006-2007 for the excellence in Exports market.

2.9 Swot analysisSTRENGTHS AND WEAKNESS

STRENGTHS

Only soap in India that contains pure sandal and almond oil.

The factory is located in the heart of the city and has all infrastructure facilities. They have quick movement of raw materials and finished products. Due to its proximity, habitation movement of men and materials are easy.

The company has brand loyalty of consumers and has 90% of sandal soap market.

An ISO 9002 certified company has its own brand image.

An ISO 14001 company which commits to reserve the natural environment in the production of its quality products to the satisfaction of its customers.

Diversified product range keeps the company stable.

Two sandalwood oil factories in Shivmoga and Mysore, which produce 75% of worlds sandalwood oil.

WEAKNESS

Lack of understanding among the lower level employees. Lack of updated technology

The large proportion of the target area is middle class and upper class people.

Low turnover resulting in low profits.

It has only 8% of the total detergent market share. OPPORTUNITIES AND THREATSOPPORTUNITIES

Existence of vast market and huge demand.

Traditional benefits that sandal is good for skin. Good export market can tap foreign market vigorously.

Good raw material sources to enhance production.

The toilet soaps and detergents market is an over expanding industry and a major company like KS&DL with its manufacturing expertise can call the shots if it reaches peak manufacturing capacity.

THREATS

Government interference is more.

As company depends on forests for its main raw materials it makes the company to find chemical alternative to sandalwood.

Other sandal soaps in the market. Entry of new multinationals in soap business. 2.10Future prospects of soap industryThe soap prospect seems to be numerous considering the fact that per capital consumption in India is below 0.3kgs over the years we have M\S HLL, Mof \S Tom co, M\S KS&DL leading the industry in the field of soap manufacturers. The growth population income and consumption expenditure increase in urbanization, spread of education, modernization are soap of the reasons that has increased the demand for soaps.2.11 Financial statement analysis

ANNUAL REPORT OF KSDL

Operational performance

Production:-Total Rs. 27497.65 lakhs as against Rs. 20983.97 lakhs

SI

NoClass of GoodsActual production in metric tons

2012 132011 12

01Soaps9786.112 8241.265

02Detergents1673.749 1693.663

03Sandal wood oil2.3351.616

04Agarbathies440.102 347.128

05Talcum Powder127.544145.290

Sales:-

Gross = Rs. 32280.72 lakhs as against Rs. 26117.00

Net = Rs. 25571.99 lakhs as against Rs. 21216.91

SI

NoClass of GoodsSales (Rs. In lakhs)

2012 20132011 2012

Quantity in M tonsValueQuantity in M tonsValue

01Soaps9303.03324902.918966.17120058.05

02Detergents1882.725762.421924.882728.34

03Sandal wood oil0.059106.910.04072.85

04Agarbathies451.5631229.72331.933900.72

05Talcum Powder167.336724.81142.505

648.47

06Coconut oil295.085580.6538.729436.70

PROFIT & LOSS ACCOUNT FOR THE YEARENDED 31ST MARCH 2013PARTICULARS AMOUNT

Rs.Rs.

INCOME

Sales286,21,32,818

Less: Excise duty30,49,33,560

Net sales255,71,99,258

Other income3,00,40,704

258,78,39,962

Increase/(-) Decrease in stock7,05,68,752

265,84,08,714

EXPENDITURE

Materials Consumed

(include trading items)129,67,11,687

Other Expenditure95,60,25,534

Depreciation73,41,146226,00,78,367

Operating Profit /Loss398330347

Less: Interest and Finance Charges-

PROFIT BEFORE TAX39,83,30,347

Less: Provision for Taxation

(i) Current Tax10,83,28,122

(ii) Fringe Benefit Tax

Deferred Tax Asset3,83,56,890

3,42,25,591

Profit/(loss)after tax 21,74,19,744

Concepts of working capital

The term working capital can be used in to different ways they are

1. Gross working capital

The gross working capital refers to investment in all the current asset taken together. The total of investment in all current assets is known as gross working capital

2. Net working capital

The term net capital refers access of total current assets over total current liabilities. It may be noted that the current assets refers to this liabilities which are payable with in a period of one year.

Types of working capital

from the point of view of time, the term working capital can be divided in to two categories

1 permanent working capital

2 temporary working capital

Permanent working capital

It is also refers to the hardcore working capital. It is the minimum level of investment in the current asset that is carried by the business at all times to carries hour minimum level of its activities

Temporary working capital

It refers to the part of total working capital which is required by a business over and about permanent working capital. It is also called variable working capital. Since the volume of the temporary working capital keeps on fluctuating from time to time according to the business activity it may be financed from short term resources.

Sources of working capital

1. Long term resources

2. Short term resources

Long term sources 1. Sale of share

2. Sale of debenture

3. Sale of idle fixed assets

4. Long term loans

5. Customers credit

6. Loans from directors

7. Security of employee

8. Factoring

Short term sources

Internal External

1. Depreciation funds

1. Trade credit

2. Provision of taxation

2. Credit papers

3. Accrued expenses

3. Bank credit

4 .public deposit

General factors determining working capital requirementThe working capital needs of a firm are determined and influenced by various factors. A wide variety of considerations may affect the quantum of working capital required and these considerations may vary from time to time. The working capital needed at one point of may not be good enough for some other situation. The determination of working capital requirements is a continuous process an be undertaken on and must be undertaken on a regular basis in the light of the changing situations. Following are some of the factors which

1. Production policy

2. Nature of the business

3. Credit policy

4. Inventory policy

5. Abnormal factors

6. Market conditions

7. Conditions of supply

8. Business cycle

9. Growth and expansion

10. Level of taxes

11. Dividend policy

12. Price level changes

13. Operating efficiency

Production policy

The size of business scheduled i.e. the plan for production, has great influence on the level of the inventories. In some cases raw materials

MANAGING DIRECTOR [M. D]

ASST.GEN.MGR [HRD]

MGR [HRD]

CANTEEN

ASS.MGRS

TIME OFFICE

FIRST AID

OFFICER

JR. OFFICER

ASS.MGR

VMO

JR.OFFICER

SENIOR ASSTS

JR.OFFICER

SR. ASST.

SR.ASSTS

ATTENDER

SR.ASSTS

HELPER

Cooks

ATTENDER

Helpers

MANAGING DIRECTOR

GENERAL MANAGER (Finance)

DEPUTY GENERAL MANAGER

ASSITANT GENERAL MANAGER

BILLS/COSTING SECTION

A/CS

AM (PR&PF)

PA TO GM GM

SUPER [A/CS]

JR.OFFICERS

SR.ASSITANT

JR. OFFICERS

SR.ASSITANT

SUPER [COSTING]

SR.ASSITANT

OFFICER

JR.ASSITANT

SR.ASSITANT

JR.ASSITANT

JR.ASSITANT

CHIEF MANAGER

GENERAL MANAGER

SENIOR MANAGER

MANAGER

MANAGER

MANAGER

WORKERS

ENGINEER

SENIOR ENGINEER

WORK MANAGER

DEPUTY MANAGER

MANAGING DIRECTOR

JR.ASST

SR.ASST

JR.OFFICER

ASST.MGR

MGR [MRIS]

JR.ASST

SR.ASST

OFFICER

ASST.MGR

ASST.MGR

PRODUCT MANAGER [SOAPS]

PRODUCT MANAGER [DET]

ASST. GENERAL MANAGER [ADV]

ASST. GENERAL MANAGER [CHE, HYD, BANG]

DEPUTY GENERAL MANAGER

GENERAL MANAGER

JR.OFFICER

MGR [SALES]

ASST.MGR

OFFICER

JR.OFFICER

SR.ASST

JR.ASST

DEPUTY GENERAL MANAGER

WORKERS

SR.ASST [OILS & CHEM]

OFFICER [CHE & OILS]

JR.ASST

JR.ASST

SR.ASST [PERFUME]

SR. ASST [MISC]

MGR [PACKING & ENGG]

ASST.MGR [ENGG]

JR.OFFICER [PACKING]

BGS INSTITUTE OF TECHNOLOGY, BG NAGARPage 39