KOF Regional Oilseeds Union, Chitradurga.

TABLE OF CONTENTS

Page
SL No Chapter
Number

Chapter:1

1 Introduction about the internship, and Industry 1 to 6

Profile

Chapter:2
2 7 to 21
Organization Profile:

Chapter:3
3 22 to31
McKinsey’s 7S framework

Chapter:4
4 32 to 34
SWOT Analysis

Chapter:5
5 35 to 41
Analysis of financial statement.

Chapter:6
6 42 to 43
Learning experience.

Bibliography 44

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 KOF Regional Oilseeds Union, Chitradurga.

CHAPTER-1

INTRODUCTION ABOUT THE

INTERNSHIP AND INDUSTRY
PROFILE

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NTRODUCTION ABOUT THE INTERNSHIP

As a part of our two year MBA programme at the end second semester we have
to carry on the internship about the organizational study in an organization to understand
functioning of the organization and its structure. This internship provided a great opportunity
for me to learn theoretical knowledge with practical experience. The main aim of this
organizational study is to understand the working culture of the organization and apply to
theoretical concepts real life situation at work place for various functions of the organization.

This internship is scheduled for a period of 4 weeks and I did my internship at Karnataka oil
federation (KOF). Chitrdurga. I learned so many things about how an actual an oil industries
which we theoretically learned in our classes and this internship also helped me to learn
improve my knowledge, Skills and abilities by working as an internship.

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INDUSTRY PROFILE

India is amongst the largest producer and consumer of vegetable oils. It was self-sufficient in
vegetable oils in the 1960s the domestic supply equilibrium almost vanished. The turning
point came in 1988, when the country faced shortfall of 2 million tonnes (MT) of oil,
necessitating imports worth $1bn. Alarmed at this situation, government made a concerted
effort to make oil seeds more attractive to growers, through a combination of specialized
extension campaigns including the high-profile Technology Mission. As a result the country
became almost self-sufficient (maximum 98% in 1992-93 and 1993-94)in edible oil.
In early 90s, the high prices of oils encouraged the entry of more firms into the
business, including some blue chips, in a major way. The result was a substation expansion of
processing capacity and an unprecedented increase in oilseeds production, in particular
soybeans, by over 70 per cent in six years. However, the liberalization of Indian economy at
this point of time fundamentally changed the import regime of India’s edible oil particularly
in 1994 when as part of its obligations under WTO rules India eliminated the state monopoly
on imports and placed the imports under a privatized open general license (OGL) system
Under the new rules, India also agreed to eliminate import quota and placed upper bound
limits on tariff levels. These changes made the rules governing edible oil import more
transparent and more responsive to 0.1 million tonnes in 1992-93 but have now touched 4.3
million tonnes (2002-03). Population due-to aberrant weather for several years, and
liberalization of import-export policy, are the causes behind such an import scenario. The
corresponding export earnings however have been much lower due to depressed prices in the
international market.

India’s Area, production and productivity of oilseeds

Oilseed crops account for 14.1% of the gross cropped area in India. Their area,
production and productivity (yield) in India have registered steady increase since t

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Inception of technology mission on oilseeds and pulses (TMOP) in april 1986 and reached
the peak of 26.23 million ha, 24.75 million ton and 0.94 ton/ha in 1998-99, respectively.
Nevertheless, area, production and yield (productivity) of oilseeds in India have been
fluctuating because of several biotic and abiotic stresses affecting the crops. Another
important factor contributing to insufficient domestic production/productivity of oilseeds has
been the small area under irrigation, which has increased by merely 3% in the last one decade
from 23.2% to 26.3%.India’s domestic price support program me, which has often favoured
production of crops that compete for area with oilseeds, is also responsible for such a
scenario.

The Import of Edible Oils

Trade in oilseeds has been completely deregulated within a short span of time and
oils are now freely importable with relatively low incidence of custom duties. The impact of
their liberalization on the import of edible oil in the total agricultural imports has ranged from
6% to 52% during 1991-92 to 2010-11. Almost four of edible oil. The country has spent 50%
of the total expenses on agricultural imports for the import of edible oil. The dramatic
decrease in self-sufficiency in the last 5 years is clean indication that globalization has
already made an impact of far reaching consequence in their sector. The economy was almost
self-sufficient in edible oils during 1991-92 to 1994-95 when the sufficiency level was in the
range of 95 to 98% However, gradually it has declined to about 53% in 2010-11.

Demand projections for India’s Edible Oil

By 2011, India’s total requirement of vegetable oils for the projected population of 1.25
billion at the projected per capita consumption of about 15kg/annum is expected to be around
19.0 million tonnes, which is roughly equalling to 57.0 million ton of oilseeds. This is a big
challenge to achieve in a short time of six years from now, considering the fact that the per
capita edible oils consumption has gone up from a mere 4.5kg in 1981-82 to 9.5kg in 2009-
10.

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Government of India’s fiscal incentives for motivating the farmer to shift to

oilseed cultivation.

During the early 1990s, Minimum Support prices, (MSPs) for food grains were kept in check
relative to oilseeds and the government controlled import monopoly dramatically lowered oil
imports. This contributed to a sharp improvement in domestic oilseed prices to relative to
competing crops and increased the oilseed production by 70% between 1987-88 and 1994-95.
However, after mid-1990s, oilseed prices declined relative to other crops, ainly due to the
increased domestic oilseed supplies and liberalization of edible oil import initiated in 1994.
MSP level for food grains were raised more than for oilseeds since the mid-1990s. As a
result, increasingly favourable returns from rice and wheat have drawn area away from
oilseeds, lowering oilseed production. Since 2010-11, however the MSP of the major edible
oilseeds have been moving upward more decisively, intending to lure the growers towards the
oilseed crops.

India is the fourth largest oilseed producing country in world, next to USA, China & Brazil
harvesting about 25 million tonnes of oil seed against the world, production of 250 million
tonne per annum.

Many varieties of oilseeds along with the oilseeds originated from trees are cultivated in India
like soybeans, Groundnut, sunflowers Rapeseed, sesame seed, linseed palm, and kernel. The
edible oil Industries of country comprises of 5000 expellers, 600 solvent Extraction Plants
&300 Vegetable oil refineries.

Edible oil occupies a distinct position in Indian economy as it provides jobs for millions of
people & India mainly dependent on rain to produce oil seed crops.

India’s more than one billion people annually consume about 11.5 million tonnes of oils.
Since Indian oil seeds crop is highly rain dependent and harvesting is mainly done in the
months of March or April.

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CHAPTER-2

ORGANIZATION PROFILE

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The Karnataka co-operative Oilseeds Growers Federation Limited, Bangalore was registered
on 26th October, 1984 to implementation the project “restructuring of edible oil and oilseeds
production and marketing in Karnataka.” The said project was structured Anand Model of
Malik co-operative with the objects to increase oilseeds production, procurement and
processing of oilseeds and create the market for edible oils and its by-products.

The project was initially envisaged to be implemented with a two-tier structure and
accordingly, primary oilseeds Growers’ co-operative societies at village level were registered
from time to time and got affiliated to the Federation at the state level. To provide better
services to the oilseeds growers in a short time, the structure was charged from two-tier to
three-tier during the month of June 1990 with the formation of three Regional Oil Union at
Hospet, Raichur and Hubli respectively.

Accordingly the regional oilseeds growers’ co-operative societies union ltd, chitradurga
(Earlier it was called as Hospet union) was registered on 30th June, 1990 with its area of
operation extending to three district of Bellary, chitradurga, Tumkur, an Davanagere.
Consequent to the all village oilseeds Growers co-operative societies formed under the
project area were affiliated to the union which in turn was affiliated to the Federation. During
august, 1998 Davanagere was constituted as a new district comprising of Taluks from
Bellary, Chitradurga Shivmoga Districts; thereby taking the number of districts in the project
are is four. As on date 130 oilseeds Growers co-operative Societies are affiliated to the union.

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Background

Edible oil processing consists of three operations: crushing and expelling

(separating oil from the solids), solvent extraction (to chemically remove residual oil from the
oilcake solids), and oil refining. In many countries, these three separate processing operations
are conducted by one vertically integrated plant. In India however only a small share of
oilseed production undergoes solvent extractors and oil refiners engaged separately?

Edible oil constitute an important component of India household’s expenditure on food.

According to NSS 60th Round (January-June, 2004), average monthly per capita consumption
expenditure (MPCE) of edible oil in food was 8.2% in rural India, and 8.2% in urban India.
The share of edible oil has increased in successive NSSO surveys.

 The Area Agronomic & Training Centre (AATC) was established during 1986, in an
area of 93.37 acres uncultivated land provided by the Govt. of Karnataka (Department
of Agriculture), on long lease for a period of 30 years @ Rs 100 / acre / annum.
 The initial infrastructure viz: farm development, office / quarters buildings, canteen,
dormitory, guest house & storage go downs, cattle shed, farm equipment’s including
tractor & bullocks etc. were funded by the NDDB, under the Restructuring of Oilseed
& Vegetable Oil Project.
 The Farm is located 8 Kim’s away from Haveri town and 1 Km from Haveri -
Hangal / Sirsi (Hosahally Cross) State Highway towards Kerimathihally village.
 The Soil is of mainly light – red loamy / shallow type requiring frequent irrigation.
The water is saline with high fluoride content. The water table is 350-400 Ft. depth.
The average rainfall in the region ranges between 400 – 500 mm and it is in the
border of transition rainfall zone.

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Nature of Business;

KOF regional oil seeds have good nature of this company have financial activity includes the
production and purchase, distribution of the products, it deals goods and services of this
industry. It implies regulatory transactions of this industry.

 Business is an economic activity

 It includes the activities of production or purchase and distribution
 It deals in goods and services
 It implies regulatory of transactions.
 It aims at earning profits through the satisfaction of human wants
 It involves risk, it is not certain that adequate profit will be earned.
 It creates utilities.
 It serve a social purpose by improving people’s standard of livin

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Company Vision and mission

Vision;

To become world-class oil producer committed to enhancing stakeholder value.

Mission;

One mission reflects our core values and beliefs to which we practice and abide-by everyday:
we strive for survival in our markets through our promise of quality, recognition and
reputation. We strive for development and progression through good faith, fairness and
innovation. Through our core values to the products we provide. We promise to enrich health
and create harmony amongst ourselves, our customers and to the environment that we live in.

Quality policy

In order to increase the domestic supply of oil seeds, the government has been frequently
freezing the MSP for wheat and rice while increasing the MSP for oil seeds, thereby
prompting a diversification from wheat-rice to oil seeds. This is intended to improve the
supply of oil seeds. However, despite these measures, the demand-supply gap is likely to
continue in the medium term. Again this does not push up prices, due to availability of low
priced imports, as edible oil is the common man’s utility item.

Free imports (since 1994) have lowered the entry barrier to the industry as crude or refined
oil can be imported, packed and distributed doing away with the need of having
manufacturing facility in the domestic market.

Custom tariff on edible oil continues to be the important and dynamic area of governed
intention. India adopted a modified tariff schedule for agricultural products in March 2000.
The tariff binding subsequent to revision in 1996 and renegotiations within the WTO in 1999
retain the overall structure notified after the Uruguay rounds 100% for commodities 150% for
processed products, and 300% for edible oils. Departure from this pattern are mainly with
respect of tariff lines that were negotiated as special cases. India’s bound rates for edible oil
are as high as 300% ad valorem, except for 45% on soybean oil, and 75% for rapeseed oil.
On all other oils, the gold can raise the level of customs duty us to 300%.

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Product/service profile.

This company produce products is SAFAL OIL(double filter groundnut

oil),SUNGOLD(refined sunflower oil), SUNSAFAL OIL(refined sun flower oil),
SAFAL(coconut oil),HEALTH (refined rice brain oil), SUGUNA(soya refined oil),
SAFAL(coconut oil),SWAGATH(RBDP palm oil), where oil is extracted from different
speeds and crops and packaging is done by giving brand name called which is directly sold to
whole sellers and retailers through supply agents and from them it will reach to final users as
customers.

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Safal oil.

This is one of the most commonly consumed oil in India, particularly in the rural areas. The
filtered oils are nutritionally superior they often contain toic compounds or others adulterants.
This oil is suitable for all types of cooking-frying, grilling seasoning etc.

afal Double Filtered Groundnut oil is produced from selected farm fresh Groundnuts in a very
hygienic condition without loss of any natural vitamins. The oil contains all natural vitamins
and rich in taste having traditional importance called as king of oils. Safal Double Filtered
Groundnut Oil is well nutritional oil preferred by all age groups / households and most
popular / highest selling brand in Karnataka. Safal Double Filtered Groundnut Oil is available
in consumer packs like ½ Ltr / 1 Ltr pouch / Pet Bottle, 5 Ltr Jerry can and Bulk packing of
15 Ltr / 15 kg Tins / 100 kgs HDPE Barrels for usage by Hotels, canteens, caterers, sweet
stalls etc

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Sungold oil.
It is popular cooking oil, available under many brand names. Extracted from the seeds of the
sunflower, sunflower oil is good for all-purpose oil cnnot be used as the only cooking oil
Sungold Refined Sunflower Oil is arrived from original Sunflower seed Oil, light in colour
without having odor and wax. The MUFA (Mono Unsaturated Fatty Acid) in the oil helps in
maintaining the cholesterol level in the human blood and helps in protecting health from heart
related diseases. The oil is rich with “C” and “E” vitamins naturally available in the
Sunflower oil and most popular / widely accepted oil in refined oil range.

The Sun gold Refined Sunflower Oil is pure and the only oil with AGMARK certification,
available at most reasonable price. The Sun gold Refined Sunflower Oil is most preferred
Refined oil by households and bulk users like Hotels, Canteens, Sweet stalls, Caterers etc..
for its reusable quality without having any unlinked odor.

Sungold Refined Sunflower Oil is available in consumer packs like ½ Ltr pouch / 1 Ltr pouch
/ Pet Bottle, 5 Ltr Jerry cans / Pet jars and Bulk packing of 15 Ltr / 15 kg Tins / 100 kgs
HDPE Barrels.

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Sunsafal oil.

Sunsafal refined sunflower oil is processed from good quality Sunflower oil and made
available to the consumers at very economical price. The oil does not have wax, odor and
light in colour suit to all the segments of consumers like households Hotels, canteens, sweet
stalls, caterers etc.

Sunsafal refined sunflower oil is available in consumer packs like ½ ltr pouch/ 1 ltr pouch /5
ltr jerry cans/pet jars and bulk packing of 15 ltr / 15 kg tins / 100 kgs Barrels.

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Swagath RBD Oil.

Swagath RBD palmolien is good in quality and arrived out of imported palmolien does not
have any odor. Wax and having more shelf life for the fried dishes. The RBD palmolien helps
in maintaining low cholesterol level in the blood and economically priced reaching all the
income groups customers and most preferred by the commercial users like Hotels caterers.
Bakeries condiments / confectionary units etc

Swagath RBD palmolien is available in consumer’s packs like 200 ml pouch / 1 ltr pouch and
bulk packing of 15 ltr / 15 kg tins / 100 kgs HDPE Barrels.

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Suguna soya bean Oil.

Refined soya bean oil is rich nutrition and most popular / widely used oil in western
countries. Soya bean oil is extracted from quality soya bean seeds and further processed to
reduce the colour and fishy odor which is inherent in the soya bean. The suguna refined
soyabean oil is rich in nutrition with linoleic acid contents in the oil which is good for health.

The refined soya bean oil is best priced in the refined oil range widely accepted by consumers
and bulk users preferably by modern world Hotels, fast food canters, pizza corners, chines
restaurants etc.

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Safal coconut oil.

Safal pure coconut oil is processed from selected copra arrived out well grown coconuts in
south Indian coastal belts, having pleasing flavour and aroma finds extensive use in food
because of its unique characteristics safal pure coconut oil is light in colour. Ideal for deep
frying, better shell life for fried products ideal confectionary fat, gives better taste for
traditional rich coastal foods coconut oil has attained prominence right from the age of vedas
in day to day usage. Safal pure coconut oil oil is available in economy range bulk packs for
edible / cocking range like 1 ltr / 1 kg jar, 5 kg jar, 15 kg tin / jar also available in various
small pack sizes like 50 ml / 100 ml / 200 ml / 500 ml bottle for convenience in usage.

This product is having good business in regional areas with comparative products like
Gemini, priya, gold winner, sun shud oil in market, price stability is maintained while
considering income level and consumer preference so that consumers can afford it with low
price.

This company is having good machineries of productions to produce quality products

so that consumer prefers this product for its quality and price. This product has brand
alertness through newspapers and local TV. Channels advertisements.

Product adopts simple marketing strategies and a single line distribution, channels
which helps product to move from company to whole sellers and retailers through whom
product can have fair computation among other brands and can become source for consumers
to have good product fulfil their demands and needs.

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Ownership pattern.

KOF Company has the good ownership pattern.

Company have a two ownership Pattern.

 Farmers Shares
 Chairman

Farmer’s shares;

KOF Company only have farmers shares no one other purchase shares in this company this
sale shares for only for farmers share price is 100 rupees per share this is very low cost shares
farmers almost purchase this shares. Farmers directly purchased shares in this company.

Farmers is the main owner of this company he lead this company farmers growing ground nut
purchase this company directly to farmers.

Chairman;

Hanumanth Rayappa is the present chairman of this industries.

Chairman of this company he also owner of this industry he maintained company discipline
and to adapt to the new technologies’ of this industries chairman taking the action of
company future plans. He have the hole responsibility of this company.

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Achievements /Awards;

 Second best productivity. Award from the national productivity. Council during 1985-
86. Best productivity. Award during 1987-88 for it’s over all progress in the oilseeds
sector from the national prod category activity. Council.
 International diamond star award for Quality from national institute of marketing
Mexico during the year 1994-95.
 Award for excellence and commitment to quality of the year 1995-96 by national
productivity council.
 Certificate of merit award for the year 1997-98 in the category of marketing and oil
seeds federation sector from national productivity council. New Delhi.
 Second productivity. Award for the year 1998-99 in the category of marketing and
oilseeds federation sector from national productivity council. New Delhi.
 First award for the year 2002-03 and second award for the year 2003-04 form national
productivity council. New Delhi.

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Future growth and prospects;

Future growth;

 Increase sale in the oil to target 5000 tonnes in this year.

 To develop organization
 To cover other district also
 To beat gold winner sale targets.
 To develop farmers.
 To introduce new products to market.
 To give the bonus facility of every year to workers.

Prospects;

 To facing main transportation problems.

 Sometimes workers strike
 Very less labours in this industry
 To face marketing problems
 Unable to reach targets.

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CHAPTER-3

MCKINSEY’S 7S FRAMEWORK AND

PORTER’S 5 FORCES MODEL

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3.1 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. A critical aspect. In their view
effective organizational change may be understood be a complex relationship between
strategy, structure, system, style, skills and shared values. The first three elements strategy,
structure and system are considered the “hardware” of success. The complex relations hip
diagrammatically presented below

KOF Company have the McKinney’s 7S Framework Viz.

Structure

Strategy
Systems

Shared values

Skills Style

Staff

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I. Structure of Organization;
a) Basis of Depart mutation
KOF is a manufacturing concern of moderately large size. We can see here
functions wise depart mutation. Is facilitate effective utilization of manpower
and resources and it is a simple, economical and reasonable organization
pattern.
b) Level of organization;
The organization of KOF consists of 3 levels
 Top level; consisting of BOD’s and MD
 Middle level; consisting of divisional head-administration, finance and
accounts, commercial, field operation and quality control.
 Lower level; consisting of officers and assistants and general workers.
c) Organization chart of KOF;

Board of Directors

Chairman

Managing Director

Departmental Heads and

section Heads

Administrative Field operation OPS Quality Finance and Commercial

control account section

Other and workers

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I. Skills
The term “skills” includes those characteristics which people use to describe a
company. Organization have strength 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 neew
skills. Employee’s skills in an organization will be unique, this may be due to their
experience in the place of work, and the similarly may also due to influence of the
similar culture.
However every person according to his traits possesses his own talents and special
character. This cannot be generalised skill among them. The employees of KOF have
different skill, which are relevant for their work. As it is common in big organization,
he also controversies between departments which can be solved by discussions and by
conducting some interactive programs.

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II. Style of management;

Decision-making is centralised with the head office. Authority is given to unit n
charge to take decision in day-to-day minor matters and other urgent decision-making,
depends on the authority and responsibility conferred on each individual and thus it’s
distributed based on designation and position held in important matters meetings are
held to seek opinions of top management and various department manager and the
decisions are taker and implemented. Decision-making is co-ordinate and done with
wide consultations of top management of department manager’s consultation which
gives best possible gains

III. 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 company’s 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 it’s objectives in a competitive situation. Any
statements on overall of functional strategythat the company may wish to share are;
Improvements of strategy
 Improve 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.

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IV. Systems;
 Accounting systems;
Financial statements are prepared under the historical cost convention on an
accrual basis and comply with the accounting standards refer to sec 2 of the
company’s act 1956.
 Costing system;
Process costing; process costing is an accounting methodology direct costs,
and allocates indirect costs of a manufacturing costs.
 Inventory control system;
ABC analysis for stock control.
FIFO method for issuing materials
Computerized accounting systems for stores.
 Remuneration system;
1) Time rate system is followed to employees.
2) Government fixes the remuneration to executives..
 Performance appraisal;
Confidential report is prepared by heads of various department for systematic
judgement of the subordinate by authority to assess the standard of work and
overall performance.

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V. Staff;
As any employer, KOF follow ethical employment standards whenever it operates
with a goal in mind company guarantees.
 To fulfil its entire legal obligation in terms of employment payments and
benefits practices.
 Adequate and timely training for every one for the job for which they are
employed
 Career advancement related to performance and experience.

Benefits provided by KOF;

Monitory benefits are basic wage allowances, employee’s contribution to PF.

Employee state insurance, bonus pension gratuity etc. fringe benefits like housing,
food canteens, etc.

Allowances

The gross salary includes basic pay

1. DA
2. City compensatory allowances 5% of basic pay
3. HRA
4. Leave allowance 12 days casual leave, 06 day of medical leave, 30 days
EL, 2 RH
5. Canteen facility
6. Bonus; it is declared within 8 months after closing the accounts the
management has declared two months’ salary.
7. Increments
8. P,F

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VI. Shared Values;

Values:
Values refer to the institutional standards of behaviour that strengths commitment to
the vision, and guide strategy formulation and purposive action. The core 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 ingredients 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 company’s value system.
 Customer satisfaction
 Committed to total quality
 Cost and time-consciousness.
 Innovation and creativity.

 Trust and team spirit.

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3.2 Porter’s 5 forces model

Rivalry among competitors: The market is very competitive. There are lots of competitors
in the Textile industry right now. And to some extent the price war also exists among the
competitors. But due to higher demand of the product the market is quite normal. So, in the
textile industry rivalry among competitors is moderate.

 Fixed costs are high in this industry

 Product differences are high
 The degree of rivalry in this industry is high

Bargaining power of the buyer: Previously there were very few textile product
manufactures. Foreign buyers got the textile product at a lower price compared to other
countries. So earlier the bargaining power of the supplier was low and the foreign buyers did
not want to argue too much with the manufacturer. But the current scenario is bit different.
Now there is lot of manufacturers and the market is getting competitive. For this reason, the
bargaining power of the buyer is quite high right now.

 High demand for apparels and home textiles in Us and Eu markets.

 Product differences and brand identity are quite high.
 Buyer concentration is very low.
 Buyer volume is generally low.

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 Buyer information is high.

 Ability to backward integrate is very low.
 Thus, the bargaining power of buyers are low.

Bargaining power of the Supplier: Along with the manufacturers, the demand of our textile
and garment product has also increased. For this reason, the bargaining power of the supplier
has not fluctuated too much. And the bargaining power of the supplier is moderate here.

 High availability of cotton.

 Low cost of labor.
 Differentiation of input is pretty low.
 Presence of substitute inputs to cotton like polyester, wool, etc. are present.
 Importance of volume to suppliers is very high.
 Cost relative to total purchases in industry is low.
 Thus, bargaining power of suppliers is low.

Substitute products: Substitute product does not exist in the market and the demand of this
product is quite inelastic. So here the threat of the substitute product is very low.

 Competition from low cost producing

Risk of entry of new firms:  Not only are the local investors but also the foreign investors
are very much welcome to invest in the textile industry in our country. And the government
gives all sorts of facilities to the new investors. And due to higher profitability investors are
very much interested to invest in this industry. For this reason the risk of the entry of the new
firms is very high.

 Economic of scale are high

 Low barriers in the domestic market
 The threat of new entrants is moderate

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 KOF Regional Oilseeds Union, Chitradurga.

CHAPTER-4

SWOT ANALYSIS

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 KOF Regional Oilseeds Union, Chitradurga.

Strengths:
 Company is having good plant where work is distributed to different department.
 Company is having good working condition, which will help in smooth flow of
business activities.
 Company is having a constant profit annually which leads to face unexpected
expenses.
 Direct marketing strategy of company helps in reducing expenses.
 Company is having good transformation facility which help in movement of
product end users at right times.
 Company comprises of talented employees and skilled workers leads to efficiency
in production.

Weakens:

 PSU status is a large weakness for KOF business as it is subject to their guidelines
and rules and is forced to transfer a large amount of labor force, which it is not
able to retrench .
 Workers lack skill of adapting new technology and change which leads to low
productivity and poor performance.
 Consumers are not properly aware of brand and also lack of information related to
product, which gives less performance to the product.
 Company is not having proper government support of case of sickness. finance, and
dispute related matter.

Opportunities

 The oil area changes are probable to choice up in the nearby upcoming in India ,
which would directly benefits ,KOF industry PVT.LTD,
 Company is having good transpiration through which they can expand their
business.
 Good plant and machineries help them to advertisements and promotional activities
through which it can create brand awareness.
 Skilled employees can be utilized for seeking quality work and productivity.
 Constant profit of company can be allotted for increasing production and in other
hand backward departments.

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 KOF Regional Oilseeds Union, Chitradurga.

Threats

 Continued economic and industrial slowdown different of projects adverse impact on

domestic business.
 Slow growth in global trade.
 Technology leaders unwilling to share new advances and demanding their
terms/forcing permitting limitations on domains.
 Universal players solidifying and setting up neighborhood producing bases.
 Infrastructure facilities and even agricultural outputs is the main concern for
company.
 Less brand awareness and minimum advertisements programs creates less publicity to
product.
 Government support and subsidies to company is rare

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 KOF Regional Oilseeds Union, Chitradurga.

CHAPTER-5

ANALYSIS OF FINANCIAL
STATEMENT

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 KOF Regional Oilseeds Union, Chitradurga.

ANALYSIS OF FINANCIAL STATEMENT

Finance is like back bone of the company should have appropriate funds to meet their
expenses and to stay in market having good funds to survive in business, and this company is
having good surplus and reserves compared to last year which should be managed for future
uncertainty in business and even cash and bank balance has increased which shows
companies good performance in business and further companies income should be
recognized through financial statements and by companies growth and company has
maintained good working capital structure and having good sources of funds.

KOF and its three Regional Unions started posting profits consistently from the last four
years. During the year 2002-03. KOF and regional unions are likely to post the net profit.
Through the vegetable oil industry is sick due to edible oils imports under OGL, KOF and its
Regional Oil Union have survived and started posting net profits. This achievement is
possible to KOF because of dynamic and dedicated Board, Officers, Employees, strong
marketing network and grass root village level farmers networks to source the raw materials.

Objectives of finance Department

a) To protect the financial interest of the company

b) To help in achieving the interest/goal of the company
c) Monitoring collections and payments
d) To exercise cost control and cost reduction techniques
e) To monitor budgets and budgetary controls
f) Controlling the out-flow and inflow of cash.

The main function of the finance department is.

a) To handle the customers problems

b) To handling the executives reimbursements
c) To handle the petty cash
d) To keep track of inflow and outflow of cash

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 KOF Regional Oilseeds Union, Chitradurga.

Profit and loss account for the year 2020 and 2021

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 PARTICULAR 2019(cores) 2020(cores) 2021(cores)

KOF
Sales turnover Regional Oilseeds
520.91Union, Chitradurga.
470.91 350.65

Excise duty 0.00 0.00 3.55

Net sales 520.91 470.91 347.10

Other income 8.30 7.30 -2.36

Stock adjustments 5.94 5.94 2.54

Total income 498.15 484.15 347.28

Raw materials 342.92 332.92 239.14

Power and fuel cost 0.00 0.00 18.07

Employee cost 32.78 22.78 16.67

Other manufacturing expenses 0.00 0.00 0.00

Selling and admin expenses 0.00 0.00 0.89

Miscellaneous expenses 81.28 71.28 36.14

Preoperative exp capitalized 0.00 0.00 0.00

Total expenses 486.98 426.98 310.91

Operating profit 57.97 49.87 38.73

PBDIT 67.17 57.17 36.37

Interest 9.76 8.76 4.83

PBDT 52.41 48.41 31.54

Depreciation 15.53 13.53 12.00

Other written off 0.00 0.00 0.00

Profit before tax 36.88 34.88 19.54

Extra-ordinary items 0.00 0.00 0.00

PBT 32.88 34.88 19.54

Tax 14.14 12.14 8.71

Reported net profit 25.74 22.74 14.70

Total value addition 91.06 94.06 71.78

Preference dividend 0.00 0.00 0.00

Equity dividend 0.00 0.00 0.00

Department of MBA Page 38
Corporate dividend tax 0.00 0.00 0.00

Share in issue(lakhs) 333.49 333.49 333.49

 KOF Regional Oilseeds Union, Chitradurga.

BALANCE SHEET FOR YEAR 2020 AND 2021

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 2019 (cores)
PARTICULAR 2020(cores) 2021(cores)

KOF
Total share Regional
capital Oilseeds Union, Chitradurga.
33.35 33.35
33.35
Equity share capital 33.35 33.35
33.35
Share application money 0.00 0.00
0.00
Preference share capital 0.00 0.00
0.00
Reserves 62.80 43.91
52.80
Revaluation reserves 0.00 0.00
0.00
Net worth 96.15 77.26
86.15
Secured loans 110.97 63.18
120.97
Unsecured loans 0.00 15.00
0.00
Total debt 110.97 78.18
120.97
Total liabilities 207.12 155.44
207.12
Gross block 98.12 144.69
78.12
Less; accum depreciation 0.00 80.72
0.00
Net block 98.12 63.97
99.12
Capital work in progress 0.00 5.30
0.00
Investments 5.04 5.04
6.04
Inventories 56.29 48.10
66.29
Sundry debtors 109.53 69.49
110.53
Cash and bank balance 6.11 7.44
7.11
Total current assets 171.93 125.03
172.93
Loan and advances 28.17 75.39
29.17
Fixed deposits 0.00 0.00
0.00
Total ca, loans and advances 200.10 200.42
150.10
Deferred credit 0.00 0.00
0.00
Current liabilities 93.33 115.48
83.33
Provisions 2.81 3.81
2.91
Total cl and provisions 96.14 119.29
97.14
Net current assets 103.96 81.13
Department of MBA 104.96
Page 40
Miscellaneous expenses 0.00 0.00
0.00
Total assets 207.12 155.44
217.12
 KOF Regional Oilseeds Union, Chitradurga.

1. Current ratio
The current ratio is a liquidity ratio that measures a company’s ability to pay short term and
long term obligations. To gauge this ability, the current ratio considers the current total assets
to company (both liquid and illiquid) relative to that company’s current total liabilities.

The formula for calculating a company’s current ratio, then is

Current ratio = current assets / current liabilities

year Current assets Current liabilities Current ratio

2020 207.12 93.33 2.22

2021 155.44 115.48 1.46

As per the above table it was defined that the current ratio was increased from 2019-2020
0.22% in 2020 it was decreased by 0.76 in current ratio

2. Inventory turnover ratio

The inventory turnover ratio was calculated by dividing the cost of goods sold for a period by
the average inventory turnover ratio for that period

Inventory turnover ratio = sales/ inventories

year Average sales Inventory turnover

inventory

2020 56.29 470.91 8.36

2021 48.10 347.10 7.22

As per above table it was defined that the inventory turnover ratio was 2019-2020 increased
in 1.36 2020-2021 it was decreased in 1.14 due to their no increase in sales and decrease in
inventory

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 KOF Regional Oilseeds Union, Chitradurga.

3. Net profit ratio

It express the relationship between the net profit after taxes and sales this ratio is a measure
of the overall profitability net profit is arrived at after taking into account both the operating
and non operating items of incomes and expenses. The ratio indicates what portion of the net
sales is left for the owners after all expenses have been met

Formula

Net profit ratio= (net profit after tax /net sales) 100

year Net profit sales Net profit ratio

2020 14.70 347.28 4.23

2021 22.74 470.91 4.89

As per above table during 2019/2020 it was 4.23 in 2020/2021 it was increased 0.66 increase
in sales &decrease in operating expenses.

4. Debt equity ratio

The Debt to equity ratio is a financial liquidity ratio that compares a company’s total debt
to total equity it shows the percentage of company financing that comes from creditors and
investors

Debt equity ratio= total liabilities/total equity

year total Total equity Debt equity ratio

liabilities

2020 207.12 33.35 6.21

2021 155.44 33.35 4.67

From the above table 2019\2020 the debt was 6.21 compare to 2019 it was decreased 1.54

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 KOF Regional Oilseeds Union, Chitradurga.

CHAPTER-6

LEARNING EXPERIENCE

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 KOF Regional Oilseeds Union, Chitradurga.

LEARNING EXPERIENCE

This organization study at Shri KOF Regional oil seeds Ltd, Chitradurga.This project
enhanced my knowledge about how the organizations are operated and how the organisation
structure is build and how it will helps to run the business.

The KOF Regional oil seeds ltd, Chitradurga.Has It has maintained good relationship
with all the departments

The experience was very good with employees and external guide. I learnt the actual
situations the theoretical knowledge in the organization.

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 KOF Regional Oilseeds Union, Chitradurga.

BIBLIOGRAPHY

 Official Website;-
 Books;
Human Resource management by VSP Rao 2008 Editio

Organization behaviour by S S Khanaka 2008 Editon

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