ORGANISATION STUDY In

Karnataka Soaps and Detergents. Ltd.

Project submitted in partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

BANGALORE UNIVERSITY

Submitted by:

UMANANDA.H

Reg. No: 09JQCMA077

Under the Guidance of

Prof. H.S.MURTHY

JAYANAGAR, 7TH BLOCK, BANGALORE.

2009-2011.

1
 DECLARATION

I Mr. UMANANDA.H, Register Number 09JQCMA077 student of City College,

Bangalore University, hereby declare that this project entitled “Organization Study in
Karnataka Soaps and Detergents. Ltd. ” has been prepared by me in partial fulfillment for
the award of MBA Degree of Bangalore University.

This has not been submitted in part or full towards any other Degree or Diploma to
any University or Institution. I also declare that all information, data and input which I have
used and referred to in this report are meant only for academic purpose and will not be
parted with or used for any commercial or other purpose.

Date: UMANANDA.H
Place: Bangalore Reg No: 09JQCMA077

2
 CERTIFICATE BY THE GUIDE

Certified that this project entitled “Organization Study in Karnataka Soaps and
Detergents. Ltd.” submitted in partial fulfillment for the award of MBA Degree of
Bangalore University was carried out by UMANANDA.H, Reg No: 09JQCMA077 under
my guidance. This has not been submitted to any other University or institution for the
award of any degree/diploma/certificate.

Date: Prof. H.S.MURTHY

Place: Bangalore

3
 COLLEGE CERTIFICATE

This is to certify that UMANANDA.H, Reg. No 09JQCMA077 has completed and

submitted the Dissertation report, titled “Organization Study in Karnataka Soaps and
Detergents. Ltd.” under the guidance of Prof. H.S.MURTHY in partial fulfillment of the
requirement of MBA of Bangalore University.

Date: Dr. K.R. MUKUNDA.

Place: Bangalore DIRECTOR

4
 ACKNOWLEDGEMENT

I am grateful to Dr. Vijayalakshmi, our respected Principal, City College,

Bangalore to permitting me to do this project and I express my thanks to
Dr.K.R.MUKUNDA, Director of Department of Management Studies and Prof.
H.S.Murthy, Head of the Department of Management Studies for his valuable support and
guidance to complete my project.

I wish to take this opportunity to express thanks to my guide Prof. H.S.MURTHY

I would like to convey my regards to our Lecturers for their co-operation and best
guidance in carrying out the project work successfully.

I would like to express my gratitude to C. THIMMEGOWDA Welfare Department

Officer, and all the staff and Workers of Karnataka Soaps And Detergents.Ltd., Bangalore
for their whole hearted support and co operation in providing me the necessary information
to bring out this project.

UMANANDA.H

5
 CONTENTS
S PARTICULARS PAGE NO
NO
1 CHAPTER 1
Industry Profile 7
Company Profile 10
List of Competitors 13
Vision and Mission 12
Product profile 20
Area of Operation 24
Ownership Pattern 24
Work Flow Model 25
Structure of Organization 27
2 CHAPTER 2
McKinsey’S 7S Framework 31
Functional departments 32
3 CHAPTER 3
SWOT Analysis 60
4 CHAPTER 4
Findings and Possible suggestions 62
5 Bibliography 63

6 Annexure 64

LIST OF CHARTS

6
Sl. NO PERTICULARS PAGE NO

1 Turnover for the last five years 51

2 Profit Details for the last five years 52

INDUSTRY PROFILE:

7
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 and energy problems increase in cost of raw material 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 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 a cut
throat competition while multinational companies dominate the market. They are also facing
severe threat from dynamic and enterprising new entrance especially during 1991-92.

If we look back into the history of soaps & detergents, mankind knew about soaps nearly
2000 years back i.e. in 70 A.D. when Mr. Elder accidentally discovered the soap, when
roasted meat over flowed on the glow in ashes. This lump like product was soap & had
foaming & cleansing character. 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.

HISTORY OF THE SOAP:

8
Soap manufacturing was started in North America. Some American companies with well
known names were started 200 years ago. During middle age soap was made at various
places in Italy, France, England & other countries. France became famous & many small
factories were established there.
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.
They are,
• Mysore soap factory at Bangalore
• Godrej soap at Bombay
• Bengal chemicals
• Tata oil mills
• 1930 lever brothers company

THE INDIAN SOAP INDUSTRY SCENARIO:

The Indian soap industry has long been dominated by hand full of companies such as:
1. Hindustan Uni levers limited.
2. Tata oil mills (taken over by HUL)
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;
1. Growth of population.
2. Income & consumption increase.
3. Increase in urbanization.
4. Growth in degree of personal hygiene.

Soap manufacture has 2 classifications, organized and unorganized sectors. KSDL comes
under organized sector.

PRESENT STATUS:

9
Market scenario:
India is the ideal market for cleaning products. The country’s per capita consumption of
detergent powders & bars stands at 1.6kg & soaps at543Gm. Hindustan liver, which towers
over the cleaning business, sells in all over the cleaning business but the tiniest of Indian
settlements.
The 7.4lacks tons per annum soap market in India is crawling along at 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.

PROBLEMS OF 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 lacks tons & is met
through imports. In recent times, caustic soda and soap ashes in the cheaper varieties of
soaps are quite high.

10
COMPANY PROFILE:

HISTORY:-
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 world’s 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 infact
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.Visvesvaraya, the great Engineer who was the man behind the project.
Today’s 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.Visvesvaraya 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 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

11
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
for want of Natural Sandalwood.

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
1500 tons 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 1 st 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.Visvesvaraya, 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.

12
RENAMING: -
On 1st October 1980, the Government Soap Factory was renamed as “Karnataka Soaps and
Detergent Limited” The Company was registered as a public limited company. Today
Company produces varieties of products in the toilet soaps, detergent, Agarbathies and
Cosmetics.

OBJECTIVES OF KS & DL: -

To serve the national economy

 To attain self – reliance

 To promote and uphold its image as symbol of traditional products
 To promote purity and quality products and thus enhance age old – charm of
Sandalwood Oil
 To build upon the reputation of Mysore Sandal soap based on pure sandal oil.
 To maintain the brand loyalty of its customer.
 To supply the products mentioned above at most reasonable and competitive rate.

VISION STATEMENT:-
 Keeping pace with globalization, global trends and the state’s policy for
using technology in every aspect of governance.
 Ensuring global presence of Mysore Sandal products while leveraging its
unique strengths to take advantage of the current technology scenario by
intelligent and selective diversification.
 Secure all assistance and prime status from Government of India, all
technology alliances.
 Making all out efforts to achieve reasonable profits.
 Most importantly to earn the invaluable foreign exchange, both to the state
and to the country.

13
MISSION STATEMENT:-
• 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.

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:-

 M/S. Hindustan Uni Lever Ltd.,

 M/S. Godrej Soaps Private Ltd.,
 M/S. Proctor& Gamble
 M/S. Wipro
 M/S. Nirma Soaps Private Ltd.,
 M/S. Jyothi Laboratories
TRADEMARK OF KS & DL:-

The “SHARABHA”

The 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 elephant, which embodies the combined virtues of wisdom and strength. It
is adopted as an official emblem of KS& DL to symbolize the philosophy of the company.

The sharabha thus symbolized a power that removes imperfections and impurities.
The maharaja of Mysore as his official emblem adopted it. And soon took its pride of place

14
as the symbol of the Government Soap Factory of quality that reflects a standard of
excellence of Karnataka Soaps and Detergent Limited.

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, Beharen, 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’
implications.
 Set targets and monitor progress through internal and external audits.
 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 500 M.Tons with the following
modifications.
1. Renovating the whole premises.
2. Installing new boiler soap building plant and drying
chamber.
1954 – Received license from Government to manufacture 1500 tons
of soap and 75 tons of glycerine per year.
1957 – Factory shifted its operation to Rajajinagar industrial area.
1974 – Mysore sales international limited was appointed as the sole

15
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 & Detergents Limited”.
1981 – a) Production capacity increased to 6000 tons,
b) Rs.5 Crores Fatty Acid Plant was installed.
1984 – Manufacturing of premium quality of Agarbathies at Mysore
division.
1985 – Production capacity was raised to 26,000 M.Tons Per Annum.
A large variety of toilet soaps at attractive shapes, colors and
fragrances introduced to meet the varieties & 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 fully eroded.
1996 – The BIFR approved the rehabilitation scheme in September &
the Company stated 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 only State Public Sector unit that has come out of BIFR.
2004 – The ISO-9002 was upgraded to ISO-9001-2004, Quality Systems.
2006-07

16
PRESENT STATUS OF THE COMPANY
The company is mainly dependent on southern market. The product availability in retail
outlets particularly for Mysore sandal soap is almost comparable to any other similar
industries products in the premium segment in the south. Whereas in other parts like Eastern
& Northern markets penetration of KSDL product is relatively poor, which depends on the
company’s distribution structure, stockiest and field personnel strength.

With increased trust on distribution, the company does not foresee any problems to achieve
the projected sales through the redistribution package.
Further, the policy of Indian Government also sees the public sector enterprises enter the
industry in a large way there by making the products available to the consumers at
reasonable prices.

Being located in the centre of southern part of India the Government Soap Factory
claims preferential treatment for expansion programmed in view of availability of exotic
natural Sandalwood oil.

AN ISO-9001 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.
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 employee’s 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 9002

17
by the end of March to the Bureau of Indian Standards. Obtained the certificate by the end
of March 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.

ISO-14001:-
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.
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.

THE BIRTH OF A LEGEND:-

The early year of the 20th century witnessed the birth of a magical formula, created from the
finest and purest sandalwood oil, better known as “liquid gold”, distilled exclusively at our
divisions in Karnataka-Mysore. A fragrant gift to the world from the first Government Soap
Factory of India. Nurtured by the Maharaja of Mysore, enriched with all the goodness of
natural sandal wood oil, this unique soap captured hearts and markets at home, as well as
right across the globe creating a fragrant legacy for the state of Karnataka. Karnataka Soaps

18
and Detergents limited (KS&DL) is the true inheritor of this golden legacy of India.
Continuing the tradition of excellence for over eight decades, using only the best Grade
sandal wood oil in its product range, KS&DL today is one of the largest producers of Sandal
wood oil and sandal wood soaps in the world.

PRODUCT MANUFACTURED BY KS&DL:-

TOILET SOAPS
NAME OF THE PRODUCT UNITS OF GRAMS
Mysore Sandal Soap 75, 125
Mysore Sandal Classic Soap 75
Mysore Sandal Gold Soap 75, 125
Mysore Sandal Baby Soap 75
Mysore Special Sandal Soap 75
Mysore Rose Soap 100
Mysore Sandal Herbal Care Soap 100, 125
Mysore Jasmine Soap 100
Wave Soap 100
Mysore lavender Soap 150
Mysore Sandal bath tablet 150
Mysore Sandal classic bath tablet 150
Mysore Jasmine bath tablet 150
Mysore Special Sandal tablet 150
Mysore Sandal rose tablet 150
Mysore Sandal Guest tablet 17

GIFT RANGE
SBT
SJR
06 IN 01

19
 GOLD SIXER

DETERGENTS

NAME OF THE PRODUCT UNITS IN GRAMS

Mysore detergent powder 1000
Mysore detergent powder 500
Mysore detergent Cake 125
Mysore detergent cake 250

TALCUM POWDERS

NAME OF THE PRODUCT UNITS IN GRAMS

Mysore Sandal Talc 20, 50, 100, 300
Mysore Sandal Baby Talc 100, 200, 400

AGARBATHIES

NAME OF THE PRODUCT

Mysore Sandal Premium
Mysore Sandal Regular
Mysore Rose
Nagachampa

20
 Suprabhatha
Mysore Jasmine
Parijata
Sir M.V.100
Bodhisattva
Venkateshwara
Durga
Ayyappa
Alif Laila
Meditation

PRODUCT PROFILE-
KS&DL is the true inheritor of 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 the Soaps,
Detergents, Agarbathies and Sandalwood oil.

PRODUCT RANGE FROM THE HOUSE OF MYSORE SANDAL

SOAP
a. Mysore Sandal Soap (75gm,125gm & 150gm)

b. Mysore Sandal Special Soap (75gm)

c. Mysore Sandal Baby Soap (75gm)

21
d. Three-In-One Gift Pack –(SJR) 3Tabs (150gm Each)

e. Mysore Sandal Gold Soap (125gm)

f. Mysore Rose Soap (100gm)

g. Six-In-One Gift Pack- 6Tabs (150gm Each)

22
 h. Mysore Sandal Gold sixer 6 Tabs (125gm Each)

i. Mysore Sandal Soap Bath Tablet Trio 3nos. (150gm Each)

DETERGENTS:
KS&DL also manufactures high quality detergents applying the latest spray drying
technology with well balanced formulation of active matters & other builders; they provide
the ultimate washing powder.

1. Sensor Detergent Powder (1kg/2kg)

2. Mysore Detergent Powder (1kg/500gms)
3. Mysore Detergent bar (250gms)
4. Mysore Detergent Cake (125gms/250gms)

AGARBATHIS:
1. Mysore Sandal premium 8. Mysore sandal
2. Mysore Rose 9.Nagachampa
3. Suprabath 10.Mysore Jasmine

23
 4. Parijata 11.Bodhisattva
5. Venkateshwar 12.Durga
6. Ayyappa 13.Alif Laila
7. Chandhana

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

POWDERS:
1. Mysore Sandal Talk: Cooling & Healing, Fragrant freshness, Net. Wt 20gm, 60gm,
300gm and 1kg.
2. Mysore Sandal Baby Powder: Tender loving care for baby…& Mummy. Net wt
100-400gms.

AREA OF OPERATION:
GLOBAL FAVOURITES FOR THEIR NATURAL GOODNESS:
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. The reason why
its products are 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 Mr. the document close the document had me out show auctions
what can I do what can I do and as exit animal fat.

OWNERSHIP PATTERN:
“Wholly owned by Government of Karnataka”.

24
COMPETITORS INFORMATION AND THEIR MARKET
SHARE:
HUL 70%
Godrej 4%
Procter & gamble 10%
KSDL 11%
Others 5%

PRESENT STATUS:
1. The company has entered into shampoo, dish wash, detergent bar & room refresher.
2. The company is striving to develop new perfumes for soaps detergents, agarbathies
& shampoo.
3. The company wants to improve the existing products in terms of quality.

INFRASTRUCTURAL FACILITIES:
1. Canteen facility
2. Library
3. Car stand
4. Waiting room
WORK FLOW MODEL:
SILOS

(Silos are closed chambers)

Soaps Noodles

Container Mixer

25
 Simplex Plodder

It becomes NOODLES

Milling

It becomes soap ribbons

Duplex plodder

Cutting Machine

Cakes are led to

Stamping Machine

Wrapping machine

Led through the conveyor belt

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

FUTURE GROWTH AND PROSPECTUS:

26
• Introduction of anti-bacteria, herbal transparent soap, made out of 33 essential oil
based 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 demand
for religious purpose.
• Introduction of new higher powered detergent powder for institutional sales in bulk
packaging.
• 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.

27
STRUCTURE OF ORGANISATION:
A. BASIS OF DEPARTMENTATION
KS&DL is a manufacturing concern of moderately large size. It facilitates effective
utilization of manpower and resources and it is a simple, economical and reasonable
organization pattern.

B. LEVELS OF ORGANISATION
The organization of KS&DL consists of 4 levels, they are
 TOP LEVEL consisting of BOD’s and M.D

 SECOND LEVEL consisting of Directors of Finance and Special officers

 THIRD LEVEL consisting of senior managers, deputy managers and

officers.

 FOURTH LEVEL consisting of clerks, Assistants and Attendees.

28
C .ORGANIZATION CHART OF KS&DL

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.

29
KS&DL AT GLANCE:-
Incorporated Name - Karnataka Soaps and Detergents Limited.

Address -
Karnataka Soaps and Detergents Limited
Bangalore Pune High Way
Post Box No.5531, Rajajinagar,
Bangalore – 560 055
Ph: 080-3377691/3370469/23371103 to 06
22376922 to 24
Email : Mysorsandal @ vsnl.com
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 - The trademark is SHARABHA. It is the

Body of lion with the head of an
elephant means blending the
intelligence of lion with strength of an
elephant.

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

Powders, Agarbathies, Cosmetics,
Baby products, Sandalwood Oil.

30
Process know how - The facility is a pioneer in the
Manufactures of various soaps and
technology 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
Soap Plant
Detergent Plant
Fatty Acid Plant

- At Mysore
Sandal wood Oil
Agarbathies
- At Shimoga
Duty Paid Godown

31
McKinsey’s 7S Framework

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;

32
FUNCTIONAL DEPARTMENTS OF KS&DL
 Human Resources Department

 Production Department

 Marketing Department

 Finance\Accounts Department

 Research & Development Department

 Stores Department

 Welfare Department

 Maintenance Department

 Materials Department

 Management Information System Department

33
HUMAN RESOURCE DEPARTMENT:

ORGANISATION STRUCTURE OF HRD DEPARTMENT

MANAGING DIRECTOR

ASST.GEN.MGR
[HRD]

MGR [HRD]

FIRST AID
CANTEEN
TIME OFFICE OFFICER
[HR

VMO LWO
JR. OFFICER
ASST.MGR

SR.ASST.
JR.OFFICERS SENIOR ASSTS JR.OFFICER

SR.ASSTS. ATTENDER SR.ASSTS

HELPER

ATTENDER
Cooks

Helpers
34
01 M.D Managing Director
02 Asst.Gen.Mgr Assistant General Manager [HRD]
03 Mgr [HRD] Manager [HRD]
04 Asst.Mgr [Canteen] Assistant Manager [Canteen]
05 LWO Labour Welfare Officer
06 VMO Visiting Medical Officer
07 Officer [HRD] Officer [HRD]
08 Jr.Officer [HRD] Junior Officer [HRD]
09 Sr.Asst.s Senior Assistants
10 Attainder Attainder
11 Cooks Cooks
12 Helpers Helpers

Luther Gulick highlighted “POSDCORB” which stands for planning organizing, staffing,
Directing, Coordinating, Reporting & Budgeting is the part of personnel management.

Personnel management performs lot of function in KSDL.

1. Recruitment
2. Implementing.
3. Training
4. Cordial relationship of Industry
5. Disciplinary matters
6. Performance appraisal
7. Employee safety etc

KEY FUNCTIONS OF THE HRD:-

1) Recruitment and Selection
2) Training and Development
3) Promotion and Transfer
35
 4) Wages and salary administration
5) Performance Appraisal
6) Industrial Relations
7) Disciplinary Action and
8) Welfare Measures

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.
Personnel management is act as a mother as it ensures people are treated perfectly well &
widening the scope of the employees.

MAN POWER DETAILS:

SOD Marketing Duty paid

GROUP Bangalore branches Godown Total
Mysore
Shimoga
Executives 85 07 56 02 150
Supervisors 49 10 15 - 74
Workers 548 30 39 16 633
Total 682 47 110 18 857

FRINGE BENEFITS PAYABLE TO THE UNIONIZED CADRES

EMPLOYEES
1. Shift Allowance: There are three shifts and one general shift. The office hour is
from 9.30am – 5.30pm. The shift timings are as follows:

36
 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. 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.

2. 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.

3. Leave: The company provides:

• Earned Leave (EL): Workman who wishes to avail privilege leave shall
apply at least 3 days in advance to General Managers. This leave can be
accumulated and encased. 18 days EL is credited to an employee. It can be encased
and for this purpose the basic+ DA to the employee is calculated for 26 days but
paid for 15 days in a year.

• Casual Leave (CL): The leave is to meet unforeseen circumstances and is

granted for 3 days at a time and 7 days CL is given to an employee per year.

• Sick Leave (SL): Workman who avails sick leave exceeding 3 days at a
time should produce medical certificate from Doctor. 15 days of sick leave is given
for an employee per year and it can be encashed.

4. Conveyance Allowance: The conveyance allowance of Rs.680 per month per

workman is extended.

5. Special Allowance: Paid to Typists, Stenographers, Asst.Cashiers, and Store

Keepers from Rs.55 to Rs.75.

6. 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.

37
7. Canteen Facilities: All employees are provided with canteen facility at highly
subsided rate.

8. Annual Bonus: It is agreed to pay the profit sharing bonus in terms of the
provisions payments of Bonus Act 1965.

9. Attendance Bonus: It is paid equivalent to one day’s basic pay subject to

minimum of Rs.75 per month.

10. House Building Advance (HBA), House Repair Advance, House Purchase
Advance: 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: Number of paid holidays in the company is 10
festival holidays and 3 national holidays per calendar year. 2 holidays will be
treated as restricted festival holidays to be selected by the employees from the list
of holidays to be notified by the company for this purpose.

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

38
15. Postponement of Increment: Postponement of the annual increment
automatically in respect of the employees who are absent without pay
corresponding to the period apart from taking disciplinary action as per provisions
of standing orders

Units Postponement of increment by

Absence without pay for more than 30 One month
days less than 40 days.
Absence without pay for more than 40 2 months
days less than 70 days.
Absence without pay for more than 70 3 months
days less than 100 days.

39
PAY SCALE OF UNIONSED CADRE EMPLOYEES
W.E.F. 01.05.2008 TO 30.04.2013

Group
Revised Pay Scale
SI.NO
01 I 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 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

40
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:

1. Carrier Development Plan and Promotion Rules for Officers.

2. Time Bound Advancement Scheme for Unionized Cadre employees.

41
3. Standing orders applicable to Unionized Cadre employees.
4. KS&DL Conduct and Disciplinary Action Rules 1984 for Junior Officers and above.
5. Medical Attendance Rules.
6. Leave Rules with encashment benefit.
7. LTC / FTA.
8. Conveyance Allowance.
9. Education Advance.
10. Festival Advance.
11. TA / DA Rules.
12. HBA / Interest Subsidy.
13. Delegation of Powers.
14. Probationer’s Rules.
15. Annual Increment.
16. 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.

42
 • 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 is allotted 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 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. The promotion is effected only when there is a vacancy. The eligibility criteria
is a minimum of five years in the present grade and due weight age is given to
experience and qualification.

PRODUCTION DEPARTMENT:
KSDL has 3 main production plants:
Fatty Acid Plant

43
Soap Plant
Detergent Plant

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. But currently it is been stopped due to heavy operating cost.

Soap Plant:
The soap plant is one of the largest production plants in the country with an installed
capacity of 26,000 ton per annum.
KSDL’s soap plant has its uniqueness been in a position 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 end of the line
collation with the built in facility for continuous fat bleaching & saponification. The
finishing touches are given or high tech universal wrapping machine. This high speed auto
wrapper has the capability to handle soaps of virtually & size or shape.

Detergent Plant:
It has installed capacity of 10,000 ton per annum. To produce spray dried, powder & a
syntax plant for detergent cakes & bars. It produces industrial detergent which is used in the
formulation of wettable pesticide powders for crop protection

STRUCTURE OF PRODUCTION DEPARTMENT

44
 General Manager

Senior Manager

Manager Manager Manager

Deputy Manager

Works Manager

Senior Engineer

Engineer

Workers

MARKETING DEPARTMENT:

45
The company main products are soaps & detergents which 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 coming under their
control.

Branch Depots

1. Bangalore Hubli, Raichur

2. Chennai Madras, Salem, Madurai, Cochin
3. Hyderabad Hyderabad, Vijayawade, Ananchapur
4. Mumbai Bhiwandi, Ahmedabad, Pune
5. Kolkatta Cuttack, Patna, Gauhati
6. Delhi Delhi, Jaipur, Jullundur

ORG: Operational Research Group report main source of marketing research private
agency which study the competitors consumer demand, market etc that generates the report.

ORGANISATION CHART OF MARKETING DEPARTMENT

CHAIRMEN
46
 MD

GM(MKTG

DGM(MKTG)

AGM
AGM (Adv
(Adv &Soaps)
&Soaps) AGM(BB),
AGM(BB),
(CHE),(HYD)
(CHE),(HYD)

PM(Det&
PM(Det& M(MRIS)
M(MRIS) M
M (S)
(S)
PM(CFGS)
PM(CFGS)
Agb)
Agb)

AM AM AM AM
AM (S)
(S)
AM AM AM AM(A)
AM
(Mktg) (CFGS)
(CFGS) (Mktg)
(Mktg) (MRIS)
(MRIS)

Off Off (A)

Off (CFGS)
(CFGS) Off
Off (S)
(S)

Jr
Jr Officer
Officer Jr
Jr Officer
Officer Jr
Jr Officer
Officer Jr
Officer

Sr
Sr Asst
Asst Sr
Sr Asst
Asst Sr
Sr Asst
Asst Sr Asst

Jr
Jr Asst
Asst Jr
Jr Asst
Asst Jr
Jr Asst
Asst Jr Asst
Jr Asst

CHANNELS OF DISTRIBUTION:

47
KSDL manufactures their products i.e. soaps & detergents. After this sent to various
distribution points through agents. The stockiest sells to various retailers hence it reaches to
the consumer

CHANNEL DISTRIBUTION:

Manufacture (KSDL)
CFGS

C&FA (Godown)

RD's Stockiest
(Wholesalers)

Retailer

Consumers

As the company markets their products, it ensures that there is proper description of their
product & its distinct features. So that the consumer can be position to understand its
components.
EXPORTS:
KSDL export their products to different parts of world they are:

Australia Italy Srilanka

Berlin Kenya USA
Canada Malaysia Japan
Czechoslovakia Saudi Arabia UK
France Singapore Taiwan
Germany Africa Holland

STRUCTURE OF EXPORTS DEPARTMENT

48
 DGM

Manager PA

Asst. Manger Attender

Jr.Officer

Sr. Assistant

FUNCTIONS OF MARKETING DEPARTMENT:

1. Marketing Mix : it is the policy adopted by the manufactures to get success in the
field of marketing
2. Product Policy: It includes both the turns of development & improvement produced
and existing products. This all totally done by KSDL both marketing & R & D
department.
3. Distribution Policy: The manufactured product of KSDL is supplier to the factory
depots. There are various depots in various states & stored there.
4. Sales & Promotion: the drawback is poor advertising & sales promotion.
5. Packing: Uses different materials for different products, card board boxes synthetic
covers.
6. Market Share: The KSDL production strategy is more expensive when compared to
other product. At present co, holding market share of 18% in south India & 8%
throughout India basis for premium soaps.

FINANCE, ACCOUNTS, AUDITING DEPARTMENTS

FINANCE:

49
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 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 & valuation of stores.
• To protect financial interest of the company.

AUDIT DEPARTMENT:
KSDL audit wing is headed by interval auditor. Auditing is vital for the company as it
facilitates verifying of all the books of a/c by trial balance, it also comply with requirements
for central excise & income tax purposes.
After the Auditor’s 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.
KSDL use process costing as the production mechanism is systematic it involves addition of
a lot of ingredient in the manufacturin

FINANCE DEPARTMENT CHART:

Managing Director

General Manager (Finance)

50
 DGM (F)

AGM (F) / A/Cs/Audit/CE I/C (1)

AM (PR&PF) PA to GM (F)
A/Cs CE

Bills Section Costing Section Supr(A/C’s) JR.Officer JR.Officers SR.Asst

(V)-2

JR.Officers (3) Supr(costing) SR.Asst. SR.Asst. Officer

(3) Vacant

SR.Asst.

SR.Asst. SR.Asst.(1) JR.Asst.

JR.Asst.

Chief Mangaer JR.Asst.

(V) JR.Asst.

51
Turnover for the last 5 years
YEARS Rs in Lacks
2004-05 10179.71
2005-06 11092.11
2006-07 11958.03
2007-08 14552.85
2008-09 16939.19

52
PROFIT DETAILS FOR THE LAST 5 YEARS
YEARS PBT PAT
2004-05 -267.9 -267.9
2005-06 236.79 178.79
2006-07 433.57 358.56
2007-08 1179.35 1203.86
2008-09 1170.85 1168.14

53
RESEARCH DEVELOPMENT & QUALITY CONTROL
KSDL its full fledged quality control & R&D single mindedly pursue quality enhancement.
Both departments are headed by highly qualified professionals, committed to developing
products that keep place with customers changing needs & perceptive.
When doing Research they have a target which they get benefits & it enables the company
to forecast the future.

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

0Quality plays a very important role in KSDL majority of the products are consumer goods.
So it must satisfy the consumer expectation.
KSDL as 2QC division
Raw material QC division
Production QC division

OBJECTIVES OF R&D:
• 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

54
STORAGE DEPARTMENT:
In KSDL there are about 8 stores namely:
1. Packing Materials
2. Engineering Goods
3. Perfumery Stores
4. Oil & Fats Stores
5. Detergent finished goods stores
6. 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.

STRUCTURE OF STORAGE DEPARTMENT

Manager

Ast.Manager Officer

Jr. Assistant
Sr. Assistant 1

Sr. Assistant 2
KS&DL has 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 for raw material, finished goods and tools.
Objectives;
• Assuring the availability of raw material at right quantity.
• Maintenance of economical and uninterrupted flow of production activities and
finally to ensure minimum blockage.
• Achieving maximum efficiency in production and sales with least investment in
inventory.

55
WELFARE DEPARTMENT:
KSDL welfare department can be classified into 3 sections namely,
1. Statutory
2. voluntary
3. Non statutory

a) Statutory :
KSDL welfare association is based on employees contributions, interest carved.
• Canteen facility
• First aid
• Provident Fund

b) Voluntary benefit :
• workers education class conducted by the central board
• Inspection of fittings
• Dust nuisance
• Toxic gas nuisance

c) Mutual :
• Employees get 3 pair of uniform at every 2 years & a Pair of shoes for
every year
• Cultural Recreations
• Leave facilities
• Employees Co-operative society which give loan on credit
• Employees house building society.

56
 MAINTENANCE DEPARTMENT:
Effective maintenance is the goal of the company. The areas of maintenance are:
• Mechanical Maintenance
• Electrical Maintenance
• Civil Maintenance

Proper maintenance results to:

• Reduction of overload
• Cost Reduction
• Greater Safety of equipment & workers
• Delivery schedule is maintained.
This department contributes also working progress of the company.

DGM

Manager (civil) AGM (Electrical) AGM(Machinary)

Manager Manager

Contract based
employees
Jr.Officer Jr.Officer

Charge mans Charge mans

Workers Workers

57
 Fitters&helpers Fitters&helpers

MATERIALS DEPARTMENT:
Materials are obtained at right time, right quality at right place from right source &at right
cost which leads smooth flow of production.

Objectives:
• Maintaining continuity of flow of materials
• Effective control of inventories
• Coordination
• Growth of the organization
• Maintaining ethical organization
It has been divided into 5 sections:
• Oil & fats section
• Perfumery & aromatically section
• Packing materials section
• Chemical section
• Miscellaneous & Engineering stores section

58
 METERIALS DEPARTMENT STRUCTURE

CHAIRMEN

MD

DGM(Materials
&stores)

MANAGER(Packing)
OFFICER
Sr. ASST(Perfumery) (Che/Oils)

AM (Engg/Misc) Sr. ASST

(Oils/Che)
Sr.
ASST(Mis
Jr. OFFICER (Packing) c)

Jr, ASST WORKERS

Jr, ASST Jr, ASST

59
MANAGEMENT INFORMATION SYSTEMS DEPARTMENT:

A. Accounting System:
Financial statements are prepared under the historical cost convention on an accrual basis
and comply with the accounting standards refer to sec 211 (3c) 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:
1. Time rate system is followed to employees.
2. 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 by authority to assess the standard of work & overall performance.

60
 SWOT ANALYSIS
STRENGTHS
• The factory is located in the heart of the city & has all infrastructure facilities,
which helps in quick movement of raw materials & finished products. Due to
its proximity, habitation, movement of men and material are easy.

• It is fully owned by Govt. of Karnataka so in times of financial crisis it can

easily get the financial support from government.

• A very little competition for its major products sandal soap.

• 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.

• Abundant availability of raw materials at present.

61
 WEAKNESS
• Excessive labor force has increased the operating cost.
• Low turn over resulting in low profits.
• Defective marketing strategy lacks effective advertising and publicity.
• Technology used for production is old and needs up gradation.
• R&D is not effective in reducing the cost of production.
• The large proportion of the target area is upper middle class and upper class people, it
has very few offers to lower middle class.
• Unskilled labor force hampering the growth.

OPPORTUNITIES:
1. The toilet soap and the detergents market is an ever expanding industry and a major
company like KS& DL with its manufacturing expertise can grab the market if it
reaches peak manufacturing capacity.
2. Company has a great opportunity to expand its market share by increasing exports.
3. At present it has Good raw material sources to enhance production.

THREATS:
1. Competition from other global leaders like HUL.
2. Government interference may reduce growth potential.
3. Company has the threat of facing shortage of raw materials like sandal wood.

62
FINDINGS:
• It is a company wholly owned by government, so it has to follow the rules made
by the government.
• The company is under utilizing its capacity.
• Its production is based on old technology, which leads to more wastes in the
production process.
• Consumer awareness of its products is very less except for Mysore Sandal soap.
• Its products are not easily available outside Karnataka.
• There is mismatch in production & sales activity.
• Recruitment in the company has been stopped since 1988 due to excess labor
force and taking place only in some department like marketing.

SUGGESTIONS & RECOMMENDATIONS:

KSDL has a wide variety of products but people are unaware of many products like
Agarbathi, Detergents, Baby soaps etc. as its marketing is very weak. So it should spend
both money and man power on advertising. They should also improve in building up the
strong marketing strategy in order to improve the distribution channels and could be able to
increase the sales other then the Mysore Sandal soap.

Thus the R&D should work effectively to introduce new products and can make the
company to earn more profits. The management should design Training and development
programs and Career Development programs and identify the skills and knowledge. The
company should follow the policy of right man for the right job. Since they are not doing
any recruitments from outside, options available for them is limited. So they have to appoint
well qualified innovative people to take the company forward.

63
Books referred:-
1. Accounting for managers ,
Author: khan, jain and narang

2. Production and Operations management

Author:K. Ashwathappa and K.Shridhar Bhat

3. Marketing management .
Author : [Philip Kotler]

Website
1.www.google.com
2.www.ksdl.in

64
 ANNUAL REPORT OF KSDL
Operational performance
Production :-
Total – Rs. 17,460.20 lakhs as against Rs. 14256.86 lakhs in the previous year

Actual production in metric tons

SI Class of Goods
2008 – 09 2007 – 08
No
01 Soaps 7199.810 6452.917
02 Detergents 2814.466 1871.497
03 Sandal wood oil 1.068 1.152
04 Agarbathies 245.095 208.661
05 Talcum Powder 162.198 158.536
Sales :-
Gross = Rs. 19,006.53 lakhs as against Rs. 16,247.74 lakhs and
Net = Rs. 16,939.19 lakhs as against Rs. 14,552.85 lakhs in the previous year.
Sales (Rs. In Lakhs)

2008 – 2009 2007 – 2008

SI Class of Goods
Quantity in Value Quantity in Value
No
M tons M tons
01 Soaps 7555 14,808.29 7097 13,006.38

02 Detergents 2813 914.96 2007 577.54

03 Sandal wood oil --- 28.37 --- 28.63

04 Agarbathies 395 588.88 20 6 578.65

05 Talcum Powder 170 262.61 181 323.77

06 Other --- 336.08 37.88

TOTAL 16,939.19 --- 14,552.85

65
 PROFIT & LOSS ACCOUNT FOR THE YEAR
ENDED 31ST MARCH 2009

PARTICULARS AMOUNT
Rs. Rs.
INCOME
Sales 1,69,39,19,368
Less: Excise duty 16,02,15,837
Net sales 1,53,37,03,531
Other income 6,06,23,797
1,59,43,27,328
Increase/(-) Decrease in stock 7,03,74,213
1,66,47,01,541
EXPENDITURE
Materials Consumed 801928343
(include trading items)
Other Expenditure 73,44,42,910
Depreciation 39,69,038 1,54,03,40,291
Operating Profit /Loss 12,43,61,250
Less: Interest and Finance Charges 72,76,261
PROFIT BEFORE TAX 11,70,84,989
Less: Provision for Taxation
(i) Current Tax 1,85,00,000
(ii) Fringe Benefit Tax 21,28,828
Deferred Tax Asset 2,03,58,318
PROFIT AFTER TAX 11,68,14,479

Prior Period Income /(-) 1,40,78,609

Expenditure

Tax of earlier year ----

13,08,93,088
Profit/Loss brought forward previous 13,68,26,041
year
Profit /Loss Carried to Balance Sheet 26,77,19,129

66
 The Company earned EBIT (operating profit) of Rs. 4,80,05,540. The profit for the
year before tax (EBT) has been Rs.4,33,57,146. The Net Profit (after providing tax)
carried over to Balance Sheet was Rs. 1,50,70,294.
BALANCE SHEET AS ON 31ST MARCH 2009

PARICULARS 31/03/2009 31/03/2008

Rs. Rs. Rs. Rs.

SOURCES OF
FUND:
1. Share holders
Fund:
(a) Share Capital 31,82,21,000 31,82,21,000

(b) Reserves & 26,77,19,129 ----

Surplus
2. Loan Fund:

(a) Secured Loan 10,72,04,608 1,03,65,536

(b) Unsecured 8,35,06,504 19,07,11,112 8,99,95,436 10,03,60,972

Loans
TOTAL 77,84,20,599 55,54,08,013

APPLICATION
OF FUNDS:
1. Fixed Assets

(a) Gross Block 30,96,23,620 29,61,06,154

Less: 23,98,47,860 23,70,50,829

Depreciation
(b) Net Block 6,97,75,760 5,90,55,325

2. Investment 100 100

3.Deferred 5,25,04,866 3,21,46,548
Tax Assets

4. Current assets
Loans &

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(a) Inventories 40,74,52,487 29,60,12,822

(b) Sundry 16,35,29,618 14,63,46,670

Debtors
(c) Cash & Bank 25,51,32,910 33,43,85,423
Balance
(d) Loan & 21,52,57,572 10,49,44,640
Advance
(e) Investment 5,00,00,000 1,09,13,72,587 3,00,00,000 91,16,89,555
In gratuity trust
Less: Current
Liabilities
& Provisions
(i) Liabilities 24,66,50,794 30,87,52,365

(ii) Provision 20,49,56,560 45,16,07,354 16,67,70,640 47,55,23,005

Net current 63,97,65,233 43,61,66,550

assets
5. Miscellaneous 1,63,74,640 2,80,39,490
Expenditure
6. Profit & loss --------
Account -----
Total 77,84,20,599 55,54,08,013

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