Internship Report - KOMUL, Kolar

CHAPTER – 1
INTRODUCTION ABOUT THE ORGANIZATION & INDUSTRY
1.1: INTRODUCTUION ABOUT THE INTRENSHIP
Meaning of internship:
The position of a student or trainee who works in an organization, sometimes
without pay, in order to gain work experience or satisfy requirements for a qualification.
An internship is a professional learning experience that offers meaningful,
practicable work related to a student’s field of study or career interest. An internship
gives a student the opportunity for career exploration and development, and to learn new
skills. Offers regular feedback to the student intern.
An internship is a period of work experience offered by an organization for a
limited period. Once confined to medical graduates, internship is used practice for a wide
range of placements in businesses, non-profit organizations and government’s agencies.
They are typically undertaken by students and graduates looking to gain relevant skills
and experience in a particular field. Employers benefit from these placements because
they often recruit employees from their best interns, who have known capabilities, thus
saving and money in the long run. Internships are usually arranged by third-party
organizations that recruit interns on behalf of industry groups. Rules vary from country to
country about time when interns should be regarded as employees. The system can be
open to exploitation by unscrupulous employers.
Internships for professional careers are similar in some ways. Like
internships, apprenticeships transition students from vocational school into the
workplace. The lack of standardization and oversight leaves the term “internship” open to
broad interpretation. Interns may be high school students, college and university students,
or postgraduate adults. These positions may be paid or unpaid and are temporary. Many
large corporations, particularly investment banks, have “insights” programs that serve as
a pre-internship event numbering a day to a week, either in person or virtually.
Typically, an internship consists of an exchange of services for experience
between the intern and the organization.

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Internships are used to determine whether the intern still has an interest in
that field after the real-life experience. In addition, an internship can be used to build a
professional network that can assist with letters of recommendation or lead to future
employment opportunities. The benefit of bringing an intern into full-time employment is
that they are already familiar with the company, therefore needing little to no training.
Internships provide current college students with the ability to participate in a field of
their choice to receive hands-on learning about a particular future career, preparing them
for full-time work following graduation.
Objectives of internship:
• To understand how the key business processes are carried out in organisation.
• To relate theoretical knowledge to the practical.
• To understand the operations and organisation structure of the company.
• To understand the growth and diversification strategies, portfolio structure of the
organisation.
• To understand the performance of the employees and various employee welfare
activities and training activities.
• To apply the Mckensy’s 7s framework and Porter’s Five Force Model to organisa-
tion.
• To familiarize with different departments and responsibilities of various depart-
ments and department heads respectively.
• To analyse Strength, Weakness, Threats and Opportunity of the organisation.
• To understand the financial position of the company by analyzing the financial
statements.

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1.2: INDUSTRY PROFILE
Introduction-Dairy Industry
Dairy industry is an important industry in India. The country is the world’s largest
milk producer, accounting for more than 13% of the world’s total milk production. It is
the world’s largest consumer of dairy products, consuming almost 100 percent of its own
milk production. Dairy products are a major source of cheap and nutritious food to
millions of people in India. It is the only acceptable source of animal protein for large
vegetarian segment in Indian population particularly among landless, small and marginal
farmers and women. Dairying has been considered as one of the activities aimed at
alleviating the poverty and unemployment especially in the rural areas where it is rain-fed
and drought-prone region.

History of Dairy Industry

The development of Indian dairy industry took its shape after the white
revolution. The white revolution has increased the milk production from 17 million tons
(1950-1951) to 110 million tons (2008-2009)
Dr. VargheseKurian engineered the white revolution in India. He was the
chairman of the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) and his
name was synonymous with the Amul brand. Operation Flood (white revolution) was
done in 3 phases.
Operation Flood:
Operation Flood has helped farmers, direct their own development, placing
control of the resources they create in their own hands. A ‘National Milk Grid’, bridges
milk producers throughout India with consumers in over 700 towns and cities, reducing
seasonal and regional price variations while ensuring that the producer gets a major share
of the price consumers pay.
The bedrock of Operation Flood has been village milk producers’ cooperatives,
which procure milk and provides inputs and services, making modern management and
technology available to members. Operation Flood’s objectives included:
• Increase milk production (“a flood of milk”)
• Augment rural incomes

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• Fair prices for consumers

Programme Implementation:
Operation Flood was implemented in three phases.
Phase I
Phase I (1970–1980) was financed by the sale of skimmed milk powder and butter
oil donated by the European Union (then the European Economic Community) through
the World Food Programme. NDDB planned the programme and negotiated the details of
EEC assistance. During its first phase, Operation Flood linked 18 of India’s premier milk
sheds with consumers in India’s major metropolitan
cities: Delhi, Mumbai, Kolkata and Chennai; thus, establishing mother dairies in four
metros.

Operation flood, also referred to as “White Revolution” was a gigantic project

propounded by Government of India for developing dairy industry in the country. The
Operation Flood – 1 originally meant to be completed in 1975, the period of about nine
years from1970-79, at a total cost of Rs.116 crore.

As start of operation Flood-1 in 1970 certain set of aims were kept in view for the
implementation of the programmers. Improvement by milk marketing was made by
organizing dairy sector in the metropolitan cities including Bombay, Calcutta, Madras,
and Delhi.

The objectives of commanding share of milk market and speed up development of dairy
animals respectively hinter lands of rural areas with a view to increase both production
and procurement.

Phase II
Operation Flood Phase II (1981–1985) increased the milk sheds from 18 to 136;
290 urban markets expanded the outlets for milk. By the end of 1985, a self-sustaining
system of 43,000 village cooperatives with 42.5 lakh milk producers were covered.
Domestic milk powder production increased from 22,000 tons in the pre project year to 1,
40,000 tons by 1989, and the increase coming from dairies set up under Operation Flood.
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In this way EEC gifts and World Bank loan helped promote self-reliance. Direct
marketing of milk by producer’s co-operatives has increased by several million liters a
day.

Phase III

Phase III (1985–1996) enabled dairy cooperatives to expand and strengthen the
infrastructure required to procure and market increasing volumes of milk. Veterinary
first-aid health care services, feed and artificial insemination services for cooperative
members were extended, along with intensified member education.
Operation Flood’s Phase III consolidated India’s dairy cooperative movement,
adding 30,000 new dairy cooperatives to the 42,000 existing societies organized during
Phase II. Milk sheds peaked to 173 in 1988-89 with the numbers of women members and
Women’s Dairy Cooperative Societies increasing significantly.
Phase III gave increased emphasis to research and development in animal health
and animal nutrition. Innovations like vaccine for Theileriosis, bypassing protein feed
and urea-molasses mineral blocks, all contributed to the enhanced productivity of milk
animals.

The market of milk industry in India:

The Beginning of organized milk handling was made in India with the
establishment of the “Military Dairy Farms” (oldest in Allahabad, 1889), the salient
features of the market of milk industry so far have been:
• Long distance refrigerator rail-transport of milk from AMUL to Mumbai since 1945.
• Handling of milk in co-operative Milk Union (oldest: Allahabad, 1913) established all
over the country on a small scale in the early stages.
• Pasteurization and bottling on a large scale for organized distribution was started at
Airey (1950), Worley (1961), Calcutta (Haringhata, 1959), Delhi (1959), Chennai
(1963), etc.
• Establishment of milk plant under the five-year plan for dairy Development all over
India. These were taken up with the dual object of increasing the national level of

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milk consumption and ensuring better return to the primary milk producer. Their
main aim was to produce more, better and cheaper milk.
Growth of Dairy Industry in India
India has become the world’s No. 1 milk producing country, with output in 1999-
2000 (marketing year ending March 2000) forecasted at 78 million tons. The annual rate
of growth in milk production in India is between 5-6 per cent, against the worlds at 1 per
cent. India’s annual milk production has more than trebled in the last 30 years, rising
from 21 million tons in 1968 to an anticipated 80 million tons in 2000.

The country's estimated milk production for the year 2010-11 is 121 million tons,
close to 17 percent of world milk production. Last year, the annual milk production stood
at 112 million tons. World milk production increased to 710 million tons in 2010, an
increase of 1.6 percent over previous year.

India's milk production increased from 21.2 million MT in 1968-69 to 66.2 million
MT in 1995-96 and to 121.7 million MT in 2010-11. Per capita availability of milk was
around 276 grams per day in 2010-11 increased from 195 grams per day in 1995-96, up
from 112 grams per day in 1968-69. India’s milk production increased over 4% annually
during 2000-01 to 2010-11 surpasses the 1.6% growth in population; the net increase in
availability is around 2.4% per year.

Estimation of milk production with table

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Estimation of milk production with graph

This rapid growth and modernization are largely credited to the contribution of dairy
cooperatives, under the Operation Flood (OF) Project, assisted by many multi- lateral
agencies, including the European Union, the World Bank, FAO and WFP (World Food
Program). In the Indian context of poverty and malnutrition, milk has a special role to
play for its many nutritional advantages as well as providing supplementary income to
some 70 million farmers in over 5, 00,000 remote villages.

Milk is the raw material of the dairy industry, which cannot be created artificially and
stored for a long time. The term “Milk Market” refers to the fluid whole that is sold to
the individuals usually for direct consumption.

The dairy industry has come up to the present stage because of well-planned,
effective and coordinated efforts of the National Dairy Development Board, co-operative
of the Government.

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National Dairy Development Board lays down rules and regulations to be followed by
the various co-operative milk societies. Amul (Anand Milk Union Limited) was a
pioneer in starting a co-operative milk producers society and thereafter many co-
operative societies where started. World Bank also had given credit of Rs.78 Crores for
starting another society as AMUL in 1975.

Salient Features of Indian Dairy Sector

• In Livestock sector, Dairy is one of the high growth areas. The Dairy sector
contributes 68 percent and in order to meet the target of 6 percent growth rate,
milk group must show a minimum growth rate of 5 percent. Dairying has shown a
growth of 3.5 per cent and is projected to grow at 3 per cent only during 2009 on
account of overall recession.
• Despite high growth rate in production, per capita availability of milk in India is
only 245 gms / day, which is much lower than world average 285 gms/ day.
• India is among the world’s largest and the fastest growing market for milk and
milk products. The market size in value terms is rupees 2000 billion (USD 47.6
billion) and growing at nearly 7.5% annually.
• Organized sector handles 10-12 million tons of packed liquid milk & 5-7 million
tons of value-added milk products while the unorganized sector handles 22-24
million tons of value-added milk products.
• Due to competitive farm gate prices, huge opportunity exists in export of milk and
value-added milk products, especially milk powders to neighboring countries
where domestic production cannot meet demand.
• The production capacities have increased of the Dairy by-products such as Casein,
Whey and Lactose, which are exported.
• Growth is organized F & G retail has created the demand for processed milk
products with longer shelf life. This has increased the necessity for large
continuous equipment manufacturers, which could help to increase the scale of
operations and reduce the manufacturing cost.

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• Dairy Scenario with its growing herd-size, steady rise in herd quality, productivity
and increasing mechanization will attain phenomenal growth in near future.
Improved herd health, productivity and milk output are the need of the day.

Turnover of Dairy Industry

Latest Developments in Dairy Industry

• Indian Dairy Industry is the largest milk producer all over the world, around 100
million MT Indian Dairy Industries value of output amounted to Rs. 1179 billion
in 2004-05 which approximately equals combined output of paddy and wheat.
With 1/5th of the world’s bovine population.
• In India the Milch animals constitutes 45% indigenous cattle, 55 % buffaloes, and
10% cross breed cows

Intensive Dairy Development Programmed (IDDP): The Schemes, modified under this
programme are on the basis of the recommendation of the evaluation studies which were
launched during Eighth Plan period and is being continued throughout the Eleventh Plan
with an outlay of Rs. 32.49 core for 2009-10.

Strengthening Infrastructure for Quality and Clean Milk Production (CMP): This is
a centrally sponsored scheme which was launched in October 2003, which had the main
objective of improving the quality of raw milk produced at every village level in India.

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Dairy Venture Capital Fund- This is introduced in the Tenth Five Year Plan to bring
about structural changes in unorganized sector, which would measure like milk
processing at village level, marketing of pasteurized milk in a cost-effective manner,
quality or the up gradation of traditional technology to handle commercial scale using
modern equipment’s and management skills.

Market share of Dairy Industry

Dairy activities form an essential part of the rural Indian economy, serving as an

important source of employment and income. India also has the largest bovine population

in the world. However, the milk production per animal is significantly low as compared

to the other major dairy producers.

Moreover, nearly all of the dairy produce in India is consumed domestically, with the

majority of it being sold as fluid milk. On account of this, the Indian dairy industry holds

tremendous potential for value-addition and overall development.

Along with offering profitable business opportunities, the dairy industry in India serves

as a tool of socio-economic development. Keeping this in view, the Government of India

has introduced various schemes and initiatives aimed at the development of the dairy

sector in the country.

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Evolution of Karnataka Milk Federation
Karnataka Milk Federation (KMF) was instituted in 1984, by federating the 13
milk unions in the state and thus forming the state level apex organization. As a co-
operative apex body of the state of Karnataka, it represents dairy farmer’s organization
and also implements dairy development activities to achieve the following objectives:
• To build village level institutions in co-operative sectors to manage the dairy
activities
• To ensure provision of milk production inputs, processing facilities and
dissemination of know-how
• Provides assured and remunerative market for the milk produced by the farmer
members
• To facilitate rural development by providing opportunities for self-employment at
village level, preventing migration to urban areas, introducing cash economy and
opportunity for steady income
• Provide quality milk to urban consumers.
List of Co-operative Milk Producers under Karnataka Milk Federation
1) Kolar Milk Union (KOMUL)
2) Bangalore Milk Union (BAMUL)
3) Mandya Milk Union
4) Mysore Milk Union
5) Hassan Milk Union
6) Belgaum Milk Union
7) Shimoga Milk Union
8) Tumkur Milk Union
9) Gulbarga Milk Union
10) Dharwad Milk Union
11) D K Milk Union
12) Bijapur Milk Union
13) Bellary Milk Union
Bangalore Dairy, a joint venture of UNICEF, Government of India and
Government of Karnataka was dedicated to the people of Karnataka on 23rd January 1965

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by the then Hon’ble Prime Minister Late Shree Lal BahaddurShastri. Sprawling over an
area of 52 acres, the Dairy had an initial capacity to process 50,000 liters of Milk per day.
This dairy was handed over to the ‘Karnataka Dairy Development Corporation (KDDC)’
in December 1975 as a part of Rural Milk Scheme of Mysore, Hassan and Kudige under
‘Operation Flood-II’ and then transferred to ‘Karnataka Milk Federation (KMF)’ in May
1984 as a successor of SDD.

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CHAPTER-2
ORGANIZATION PROFILE

Kolar-Chikkaballapura District Co-operative Milk Producers Union Ltd.,

(KOMUL) is Karnataka’s 2nd highest Milk Producing District organization. It is a
District level apex body of milk cooperatives in Karnataka, which aims to provide
remunerative returns to the farmers by eliminating the middlemen and also serve the
interest of consumers by providing quality Milk & milk products, which are good value
for money.

Once the District was named as Land of Gold & Silk, is making inroads in
Quality Milk Production. It is KOMUL first installed “Bulk Milk Coolers & Community
Milking Machines” at Society level in the state of Karnataka to get the quality milk
required for UHT milk packed at Kolar Dairy under the brand name of Nandini ‘Good-
Life.

“Nandini is a brand name for KOMUL, which is operating under KMF”.

2.1 Background and inception of the company.

Animal Husbandry is the most preferred allied activity in the district, which
contributes substantially to the total income of the district and dairy farming forms the

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major activity in this sector. Dairy development activity in the district was initiated
during the year 1975 under IDA assistance as a part of Bangalore Milk Union Ltd.
[BAMUL]. Subsequently, the district was bifurcated from the operational area of
BAMUL to form a separate milk union called Kolar Milk Union [KOMUL] with effect
from 01-04-1987.
The KOMUL has a milk processing plant at Kolar with a handling capacity of
25,000ltrs/ day [LPD] and three chilling at Chintamani, Gowribidanur, Sadli with
handling capacity of 1,00,000 LPD, respectively. At Kolar, the dairy is manufacturing
Butter, Ghee, Peda, Curds, Cheese, Masala Butter Milk, and UHT Milk in addition to
pasteurized toned milk and full cream milk. UHT milk is being sold under the brand
name of “Nandini Good Life” and “Nandini-Smart” while all other products are sold
under the brand name of “Nandini”. The KOMUL started marketing of liquid milk in
polythene sachets in entire Kolar district and in a part of Bangalore City since 1994.
Recently it has entered Chennai market also selling nearly 5,000 LPD.
KOMUL Milestones:

1987 Bifurcation of the district from an operational area of Bangalore Milk Union
Ltd. (BAMUL) to form a separate milk union
1987 Establishment of first Women Dairy Co-operative Society in the Union.
1989 Inauguration of Sadali chilling centre.
1990 Initiation of milk marketing at Inter-dairy rate.
1991 Inauguration of Gowribidnur chilling centre.
1991 KMF handed over chilling centres at Kolar, Sadali, Chintamani and
Gowribidanur to Kolar Milk Union Ltd.
1994 Inauguration of full-fledged dairy at Kolar with a processing capacity of 1 Lakh
Litre per day.
1995 Inauguration of Administrative Building in the Dairy campus.
1998 Inauguration of Cheese Plant.
1999 Union started marketing Nandini Good life Milk.
1999 Expansion of processing capacity of Chintamani chilling centre.
2000 Outside the state, entry into the Chennai for Milk marketing.

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2001 Inauguration of Animal Disease Diagnostic Laboratory at Chintamani chilling
centre campus.
2001 Installation of AMC Units at DCS level.
2001 For the first-time in the history of Karnataka, inauguration of BMC centres in
the jurisdiction of KOMUL
2001 Kolar-Chikkaballapura Dairy certified for ISO-9002 Quality management
System
2001 Union started marketing MastiDahi.
2001 Expansion of Terpak Unit.
2001 Inauguration of Community Machine Milking Parlours (centres).
2002 Started implementation of TIFAC Project.
2003 Union bagged National Productivity Council Award again – 2nd Place.
2004 Union bagged National Productivity Council Award – 2nd Place.
2004 So far, the day maximum milk procurement in the history is 3rd December
2004(7,38,838 Kgs)
2005 Inauguration of 100th BMC centres in the jurisdiction of KOMUL.
2006 Union bagged Best Co-operative Union Award in the state.
2006 Establishment of Producers Welfare Trust.
2007 Expanded UHT Processing Capacity from existing 0.40 LLPD to 1.5 LLPD.
2008- Union started to supply Goodlife milk to Indian army
Sep
2008- Union received Energy Conservation Award both from Central and State
Dec Governments.
2008- KOMUL was renamed to “KOLAR CHIKKABALLAPURA COOPERATIVE
Dec MILK PRODUCERS SOCIETIES UNION LTD”
2009- Installed and commissioned the following
March – 3600 Litres TFA-A1 500ml Fino Packing machine /hour
TFA-A1 200ml Fino packing machine – 2100 Litres/hour
2009 - Introduced Good life milk 200ml fino packets to market.
April

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2009 - Launched New 100ml Brik UHT variant Milk called “Sam Poorna” with Fat
May 4.5% & SNF 8.5% to market.
2009 - KOMUL Achieved the highest milk procurement of 7, 45,446 Kgs of
June Milk on 08/06/2009.
2009 1st Place in National Energy Award and 2nd place in State Energy Conservation
Award.
2010 Enhanced UHT plant for 2.5 lakhs litres per day packing

2. 2. Nature of business carried

The nature of business of KOMUL is processing of milk and procuring of milk
from the milk producing co-operative society. The plant carries out its functions of
processing the milk and distributing the milk continuously and regularly.

2. 3. Vision, Mission, and Quality Policy

VISION
"Wish to grow into a model milk co-operative in the country"

Vision 2020

• Kolar-Chikkaballapura will collect 20 Lakh Lts. of Milk/day.

• Entire Milk will be collected through Bulk Milk Coolers, Computerized systems
at villages.
• Kolar-Chikkaballapura Milk Quality will be a Global Benchmark.
• Milk Products manufactured from Kolar Raw Milk will be of International
Standards.

MISSION
➢ Kolar-Chikkaballapura Milk Union continuously procure good quality milk by
providing remunerative price & technical inputs to producers and supply good
quality of Milk &Milk Products to the consumers. It also strives to achieve top
position in the dairy industry by improving the financial position of the union.

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➢ To provide assured and remunerative market for all the milk sold by the
farmer members.
➢ To provide hygienic milk and milk products to urban consumers.
➢ To eliminate middlemen and organize institutions owned and managed by the
milk producers by themselves, by employing professionals.
.
Quality Policy
“KOMUL continuously strives to improve their internal quality & operating system by
educating milk producers & motivating work force to achieve customer satisfaction.”
KOMUL has obtained certification for ISO: 9001-2000 Quality Management
System and they are in the process of upgrading the System to ISO-22000.
Quality Policy Objective Statement of KOMUL is as follows:
“Every job operation will be done by everyone in right time & rightly at first time.

2.4. Workflow Model

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preliminarily the raw milk is collected in the stores department. Then the milk
goes through a process in production department where the milk and milk products are
produced. Produced products are clearly checked and packed in accordance to the quality
required. This process will carry on by quality control department. Finally, the products
which are ready for sales are sent to sales and marketing department to distribute it to the
consumers through various distribution channels like milk parlors, milk depots, and other
retail outlets.

2. 5. Product Profile.

KOMUL (Nandini) is one of the well-known brands in the country. The union offers few
products to its customers. The products are as follows:

Table 2.d.1: Showing Product Profile of KOMUL.

NANDINI TONED MILK:

Karnataka’s highest selling and most preferred milk.3%

fat and 8.5% SNF content make this milk the best choice
for all purposes.
Available in 250 ml, 500 ml and 1-liter pouches across
Karnataka.
Homogenized variant also available5 liter and 6 liter
pouches available in selected markets.

NANDINI HOMOGENIZED MILK:

Badam, Pista, Elechi and Banana. Sterilised
flavoured milks with rich creamy feel and great
taste.

Available in 200 ml take – away bottles.

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FULL CREAM MILK:

The Fresh Full Cream Milk available in the brand name

"Nandini" is rich, creamier and tastier milk that contains
6% Fat and 9 % SNF. The Full Cream Milk is suitable
for preparing home-made sweets and savories and
comes in 500 ml and 1-liter packs.

CURD:
Fresh curd that tastes just like traditional home – made
curd. Can be consumed as such or in combination with
cooked rice or added as an ingredient in certain
dishes.Available in 200g and 500 g pouches

BUTTER:

Made from fresh pasteurized cream for delectable

taste, smooth texture and butter some delight. Tasty
enough to relish in a variety of ways.
Available in 500 g slabs.

GHEE:
Nandini’ ghee is made from pure butter. It is fresh and
pure will a delicious flavor. Hygienically manufactured
and packed in a special pack to retain the goodness of pure
ghee. Shelf life of 6 months at ambient temperature.
This is available in 200ml, 500ml, 1-liter sachets, 5-liter
tins and 15kg tins.

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PEDA:
Mouth-watering peda made from pure milk. One
bite is enough to fill the heart with its creamy milk
flavor.Available in 25 g, 50 g sachets and 100 g,
250 g pack.

MASALA BUTTERMILK:
Fresh butter milk blended with quality spices to
give that enlivening spicy tang of traditional spiced
butter milk. A drink recommended after meals, for
easy digestion.
Masala buttermilk is manufactured and sold in the
summer season, especially form month of March
to July, the only period during which it gets
demand.
Available in 200 ml Tetra Brik 200 ml pouches.

MILK POWDER:
Dissolve just 3½ tablespoons full in 180 ml of lukewarm
water and your glass of delicious, sweetened milk is
instantly ready. Processed with ultra-modern ‘spray drying’
technology that makes the whitener completely miscible in
hot or lukewarm water, leaving no lumps behind.

Available in 25 g, 50 g. tear-away sachets, 200 g, 500 g, 1

kg metalized aluminium bowed laminated film pouches, 10
kg HDPE containers and 25 kg craft paper bags with poly
liner. It provides bone-building nutrients such as protein,
calcium, vitamin D and vitamin A. Powdered milk is a
source of protein and may be added to recipes to increase
the amount of protein and energy.

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ICE CREAMS:
Creamy delicacy to excite the most joyous
moments.

Available in 100 ml cups and 500 ml, 1250 ml,

5000 ml family packs.

ULTRA HIGH-TEMPERATURE HEAT-TREATED MILK:

It refers to ultra-high temperature heat-treated Milk. The concept of UHT milk is absolute
i.e., bacteria free besides retaining the nutritional quality of milk. During the process,
milk is exposed to a temperature of 137ºc for 4 sec and immediately cooled a room
temperature packing it aseptically.
At present two types of UHT Milk are being produced one “Nandini Good Life” with
3.6% fat and 8.5% SNF and another one is “Nandini Smart” with 1.5% fat and 9% SNF.
Nandini Smart being low fat products good for health-conscious people. Both the milks
can be stored for at least 45 days at room temperature. It needs no boiling before
drinking on an average 25,000 of both the Milk is being sold per day.
Constituters Fat Minerals Proteins Lactose Water Total Solids
Nandini
3.6% 3.5% 10.7% 4.3% 87.5% 12.1%
Good Life
Nandini
1.5% 3.95% 0.75% 4.3% 89.5% 10.5%
Smart

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It also includes “GOOD LIFE SLIM” Skimmed milk is 99.5% fat free. Cow’s
pure milk, homogenized, skimmed, UHT processed milk, bacteria free in a tamper proof
tetra-fine pack which keeps this milk fresh for 60 days without refrigeration until opened.
It’s available in 500ml pack.

2. 6. OWNERSHIP PATTERN

KOMUL is a District level Co-operative society, which operates under KMF (State level
Co-operative society).

SL No. CATEGORY NO. OF % OF SHARE

SHARES HOLDINGS
1 Promoter’s holdings 8,60,00,000 94.16
Promoters
2 Non-promoter’s holdings 35,65,000 3.90
Institutional investors
i.e.,banks, financial
institutions
3 Others 12,00,000 1.31
Public
4 Employees 5,62,700 0.63

Total 9,13,27,700 100

2.7. ACHIEVEMENTS/AWARDS

In recognition of the varied initiatives, KOMUL was conferred with several awards and
accolades. Some prominent awards received are as under

• KOMUL bagged National Productivity Council Award – 2nd Place.

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• KOMUL bagged best co-operative union Award in the state.
• KOMUL achieved the highest milk procurement of 7, 45,446 Kgs of milk on
8/06/2009.
• 1st place in National Energy Award and 2nd place in State Energy Conservation
Award.
• Kolar-Chikkaballapura Dairy with 3 Milk Chilling Centers is certified for ISO-9001:
2000 quality management system and they are in the process of upgrading the system
to ISO-22000.
• Winner of “Best Productivity Awards”

Achievements

1. Community Milking Machines first time in India.

2. Highest number of BMCS in the village after Gujarat.
3. UHT Tetrapak plant first in Karnataka with variants “Good Life”, “Smart”, &
“Slim”.
4. Union has implemented ‘Rain-Water’ Harvesting System.
5. Union has implemented “Total Energy Management “at Dairy.
6. Kolar-Chikkaballapura Dairy with 3 Milk Chilling Centres is Certified for ISO-
9001: 2000.
7. Farmers Health Insurance. -” Yashaswini”

2.8. FUTURE GROWTH AND PROSPECTS

Future growths of KOMUL are as follows:
• To establish a high- tech production plant in chikkaballapura district.
• To establish hi-tech parlors at Chintamani.
• To establish ATM (All Time Milk) in all taluk levels.
• Expansion of Kolar chilling center.
• To introduce clean milk production (CMP) at all levels.
• To introduce Dairy Animal Management (DAM).
• To introduce Total Quality Management (TQM) program in all levels.

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• To introduce Total Energy Management Program (TEM).
• To introduce the cluster concept to increase the consumption.
• Comprehensive training programs for DCS (District Co-operative Society) personnel
and milk union personnel.

2. 9. COMPETITORS INFORMATION

KOMUL has various competitors in the market such as: -

• Nandi
• Tirumala
• Heritage
• Swastik
• Shruthi
• Arokya
• Nilgiris
• Jersey
• Dodla

NANDI:
Nandi milk products Pvt ltd was started in the year 1997. It was under the care of
Sri.S.P.Y. Reddy. The industry is located at Nandyal-kurnool highway road in Kurnool
district. It is an industry that procures milk from four districts. From the year 1997-2009
the company has developed the business day to day. The company not only improves the
brand name but also it is overtaking the competitor’s brands.

TIRUMALA:

Tirumala Milk Products Private Limited is a professionally managed company

engaged in the manufacture of a wide range of Dairy Products which include Milk in
Sachets, Sweets, Flavored Milk, Curd in Cups and Sachets, Milk Powder, Butter, Ghee
and Butter Oil both in bulk as well as in consumer packs.

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Established in 1998, Tirumala Milk Products (P) Ltd. is one of the fastest growing
Private Sector Enterprises in India with a team of dedicated professionals. The company
has one of the most modern and versatile plants in the Indian Dairy Industry with state-
of-the-art technology. Tirumala Milk Products (P) Ltd. products meet stringent quality
control tests and cater to the premium segment of the market for Dairy Products.
Tirumala Milk Products (P) Ltd. is presently implementing an expansion programme and
proposes to launch new products soon.
Presently Tirumala market presence is in Andhra Pradesh, Karnataka and Tamil
Nadu. They handle 7 Lakh liters of milk per day in our packing stations and dairy plant,
which is the single largest plant in the state of Andhra Pradesh. Tirumala Registered
Office is located at Narasarao Pet, Futurist and Corporate Office is located at Ameerpet,
Hyderabad.
Tirumala Milk Products (P) Ltd. sells a rich, varied offering of nutritious, tasty
and healthy food products under well-known brand. Taste, health, convenience, reliability
and vitality for consumers are key characteristics.

HERITAGE:

The Heritage Group, founded in 1992 by Sri Nara Chandra Babu Naidu, is one of
the fastest growing Private Sector Enterprises in India, with four-business division’s viz.,
Dairy, Retail, Agri, and Bakery under its flagship Company Heritage Foods (India)
Limited (HFIL). The annual turnover of heritage Foods crossed Rs.1096 crores in 2010-
2011.
Presently Heritage’s milk products have market presence in Andhra Pradesh,
Karnataka, Kerala, Tamil Nadu, Maharashtra and Orissa and its retail stores across
Bangalore, Chennai and Hyderabad. Integrated Agri operations are in Chittoor and
Medak Districts, and these are backbone to retail operations and the state of art Bakery
division at Uppal, Hyderabad, Andhra Pradesh.

Dodla
Dodla Dairy Limited a Public Limited company established by a well-known family from
Nellore district of Andhra Pradesh in the year 1998. It Procures, Process and sell milk

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and milk products across 66 locations in India. The Company Head Quarter is located at
Hyderabad, Andhra Pradesh of India.

Dodla Dairy is an ISO 22000: 2005 and ISO 50001:2011 (EnMS) Certified Organization.
The company is having 7 state of art technology Processing Plants, 28 chilling centers, 15
Bulk Milk Chillers and 17 Associate Chilling Centers. The company has a wide
distribution network across pan India. The products and services are offered through 16
Sales offices.

The company offers a wide range of Milk Products Comprising Fresh Milk, Butter, Ghee,
Paneer, Curd, Flavored Milk, Milk sweets, Ice Cream and Skim Milk Powder. All the
products are conveniently packed in different pack sizes and types to suit various needs
of consumers. The company has grown multifold rapidly during the past one and half
decade and has become a popular dairy company in India. The consistent growth of the
organization reflects the consumer confidence and strength of the company.

The company has gained the competitive advantage over the other players by delivering
the highest Quality dairy products to the consumers. Now, the company is prepared to
face the future challenges by upgrading its systems and infusing new technology.

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CHAPTER-3
Mckensy’s 7S Framework and Porter's Five Force Model

3.1: MCKENSY’S 7S MODEL

The 7s model is better known as Mc-Kensky’s 7s, because the two persons who
developed this model, Tom peters and Robert waterman, have been consultants at Mc-
Kensky’s and co. at that time. They published their 7s model in their article “structure is
not organization” (1980) and in their books “the art of Japanese managements” (1981)
and “In search of exclusive” (1982).

Chart: Mc-Kensky’s 7s Frame work

The model consists of seven elements. Those seven elements are distinguished in
so called hard S’s and soft S’s. The hard elements are feasible and easy to identify. They
are strategy, structure and system of the organization. The four soft Ss are hardly feasible.

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They are highly determined by the people at work in the organization i.e., style, staff,
skills and shared values.

1. Hard’S
The hard elements of the McKinsey 7s model comprise of strategy, structure, and
systems. The hard elements of the model are easier to identify, more tangible in nature,
and directly controlled and influenced by the leadership and management of the
organization.
3.1.1 STRUCTURE
The structure followed in KOMUL is Functional Structure. It ensures maximum use of
principal of specialization. Since the workers are performing a limited number of
functions, their efficiency would be very high.
Chart: Showing Organization structure

KOMUL mainly has the following departments:

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• Procurement and input department
• Production department
• Quality control department
• Marketing department
• Finance department
• Management information system department
• Administration and Personnel department

3. 1. 2. SYSTEM

A system refers to formal process and procedures are used to manage the
organization. The systems followed in KOMUL are as follows.

INVENTORY CONTROL SYSTEM:

KOMUL maintains FIFO (first in first out) method to control the inventory in the
plant. Here the inventory is maintained correctly as it contains only perishable products.

MILK BILLING SYSTEM:

KOMUL maintains a weekly milk billing system. It has four cycles in a month.
They are from 1-7, 8-15, 16-23 and 24 to end of the month.

COLD STORAGE SYSTEM:

KOMUL has a cold storage machine called silo machine where the milk is stored
at 4degree to 5degree Celsius.

3.1.3: STRATEGY
Strategy is a plan or course of action in allocating resources to achieve identified
goals over time.
PRICING STRATEGY:Price is an important element in the marketing mix. The right
price can be determined through research and by adopting test marketing techniques. A
price policy is thus a standing answer of the firm. If competition is mainly on price basis,

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then each company prices its product at the same level as its products at same level of
prices of competition.
DISTRIBUTION STRATEGY:The Union has their own vehicles for distribution of milk
to various places which is an advantage for the company. The milk distribution vehicles
supply milk even during times of lorry strikes without any delay.
PROCUREMENT STRATEGY:The Union procures milk from the farmers by giving fair
prices to them. Procurement of milk is twice a day, morning and evening. Milk is
collected in dairy which is set up in every village from their milk is taken to the Union.

2. Soft’s
The soft elements of the Mc Kinsey 7s model, in turn, include shared values, staff, skills,
and strategy. These elements are less tangible in nature and are more influenced by the
organizational culture. As such, the management does not have direct influence or control
over them. These elements are also harder to describe and directly identify – but are
equally important for an organization’s success and improved performance.
3.1.4: STYLE
Style is the way in which key managers behave in achieving organizational goals,
that is the management style.
The leadership style followed in KOMUL is PARTICIPATIVE STYLE.
Participative leadership style is the styles where the subordinates are given equal
importance in participation of improvising the organization and in the betterment of the
organization.
The decision taken by the top management is in coordination with the
subordinates. In the organization, some of the decisions are taken with the mutual
consultation of the top management and the middle level management.
These decisions are through mutual exchange of knowledge and the experience of
the employees. The top management consults their immediate subordinates in case of any
important decisions, which are of strategic in nature.

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Implementation:
Participation in the meeting: Employees must take part in any meeting conducted by
the company to discuss company’s future. And employees are allowed to express their
opinion, view and ideas.
Recognition programme (Office Day): Employees who have suggested the best ideas in
making a decision related to any functional area and every year management select best
employee, they will be awarded by both monetary and non-monetary benefits.

3.1.5: STAFF
Staff refers to the number and type of people employed by the organization.
The people in the organization are very dedicated and work towards the improvement of
the organization.
Type of staff Number of staff Duties and Responsibilities
Managerial staff 98 • Manages the funds
• Handling the difficult situations.
• Supervising.
• Planning.
• Getting things done.
Technical staff 362 • Providing assistance to lower cadre.
• Manufacturing of products in time.
• Ensuring quality.
• Training the staff.
Non-technical 760 • Ensuring quality.
staff • Examining the work done.
Unskilled 300 • Maintaining cleanliness
• Providing assistance to superior staff.
• Ensuring safety
• Providing information to top level.
TOTAL 1520

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3.1.6: SKILL
A skill refers to the fact that employees have the skill needed to carry out the company’s
strategy.
Here the employees are further divided into four categories.

Type of staff Number of employees Skills required

Managerial staff 98 • Leadership skills
• Conflict resolution skills
• Decision making
• Communications skills
• Managerial skills
• Learning skills
• Analytical and logical thinking
skills
• Problem-solving management

Technical staff 362 • Computer knowledge

• Secretarial skill
• Accounting skill
Non-technical 760 • Communication
staff • Writing
• Managerial skills
• Learning skills
Unskilled 300 • Follow the instructions
• Complete the work which is
assigned in time.

This first category contains the people who are in the top-management level the second
category consists of the supervisor’s office assistants etc. The third category consists of
the employees at the operational level.

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The first category consists of the people who are in the decision-making process in
KOMUL these people are highly qualified.

The second category is related to office work and fieldwork. These people are also
trained in Computer Applications, secretarial skills, accounting skills etc.

The third level and forth level people consist of the employees who are actually into the
operation these People are also trained into fields like checking the quality of milk
processing packing etc.

3.1.7: SHARED VALUES:

The core or fundamental values that are widely share in the organization and serve as
guidelines that are important, these values have great meaning because they focus
attention and provide broader sense of purpose.
The values of the organization are:
• Honesty
• Discipline
• Quality
• Hard Work
• Mutual Trust & Belief
• Transparency

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3.2: PORTER’S FIVE FORCE MODEL

The five forces are:

• Threat of new entry

• Threat of substitution

• Buyer power

• Supplier power

• Competitive rivalry

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3.2.1: Threat of new entrants:

Milk processing is a rather complicated procedure that is subject to legislative regulation,
which affects the total costs of the procedure. Also, the technology needed for dairy
production typically single-purpose, unit costs can be decreased particularly by
distributing fixed costs among the highest number of products; they are not sufficiently
differentiated among producers. It is the reason why a new competitor entering the
industry is very exigent in terms of capital as well as building a distribution network
.Experience and knowledge of technology are not an important aspect, since the industry
is not, with some exceptions, protected by patents.

3.2.2: Threat of substitutes:

Substitutes of milk and dairy products are all types of food replacing milk made of
sunflower, rape, olives, nuts, soy, buckwheat, rice and other plants. Another alternative
are products made of milk other than cow milk, although they are not very popular with
consumers. Especially thanks to intense promotion of a “healthy lifestyle”, the position of
substitutes in the market has been reinforced over the long term, which affects negatively
the demand for dairy products. The more developed a society is, the more significant
determinant of human decision making a healthy lifestyle becomes. From the perspective
of quota abolition, dairy product substitutes are not a significant threat, but what cannot
be ignored is the growing media pressure on the population, which is enhanced by
measures taken by various institutions that, e.g., in case of life insurance favor
individuals leading a healthy lifestyle that is linked, although questionably, with
substitutes.

3.2.3: Bargaining power of buyers:

The most important buyers buying from processors are, with respect to the volume of the
production bought, retail chains, which are part of food sale network, the main group of
buyers being retailers. The market has a very low concentration of such buyers, while it
has a very dense and diversified network, which is unique. According to experts, we can
expect several big players to exit the industry in the years to come, however, bargaining

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power of buyers with respect to processors is already considerable, with great downward
pressure on reducing prices as low as possible It is apparent that quota abolition increased
the bargaining power of buyers. The situation could be changed with a government
intervention in the form of subsidies or buying certain products for state material
reserves. However, such interventions may damage the industry over the long term. This
force was assigned four points on the five-point scale – rather significant. It will be hard
for processors to find new customers if they lose an important one.

3.2.4: Bargaining power of suppliers:

Suppliers are all producers who supply milk processors with milk to be processed. Their
classification was sketched in the text above. They are predominantly national and local
suppliers, however, it is necessary to take into account also foreign suppliers, Larger
suppliers, and/or possibly suppliers guaranteeing constantly high quality of milk supplied,
who usually demand higher prices and longer term contracts may have stronger
bargaining power It is necessary to mention other suppliers such as power, technology,
chemical, food and other companies who are not affected by the quota abolition, which is
why they are no longer taken into consideration.

3.2.5: Rivalry among existing competitors:

Market participants are, for the purpose of this model, all processors registered in the
Republic. It proved convenient to classify them by their turnover as small ones (with
local reach), mid-sized (with regional reach) and large ones with a turnover of more than
one billion (they offer a wide product assortment with distribution in the entire Republic)
Furthermore, a group of key players who set trends in the market can be found in the last.
The model is conceived from their perspective.
Competitiveness in the market among current rivals has been very tough recently, for the
market is rather saturated with dairy products. Great pressure is exerted on processors in
terms of product quality, innovation, new forms and flavors; they are forced to pay
increased attention to promotion and pricing. There are enough processors in the market
none of them being dominant in pricing. Due to low customer loyalty, everyone needs to
conform to the current situation.

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CHAPTER – 4
S-W-O-T ANALYSIS
SWOT analysis is the scan of internal and external environment it is an important
part of the strategic planning process. Environmental factors internal to the firm usually
can be classified as Strengths (S) or Weaknesses (W), and that external to the firm can be
classified as Opportunities (O) or Threats (T). Such an analysis of the strategic
environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm's
resources and capabilities to the competitive environment in which it operates. As such, it
is instrumental in strategy formulation and selection. The following diagram shows how a
SWOT analysis fits into an environmental scan:

Chart: Swot Analysis

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STRENGTHS
• Biggest milk co-operative union in Karnataka
• Established brand of products, providing quality products from a long time.
• KOMUL attends to the complaints of consumers immediately.
• Strong physical infrastructure to support current and future requirements.
• KOMUL pays the highest price for the milk collected from farmers in India and
loyalty among the brands.
• Popular brand known from many years.
• Various new technologies implemented for production of milk.
• Timely delivery.
• The company is having functional structure, this helps in effective management
and control, and there is distribution of work.

WEAKNESS
• Less focus on innovative new products and no R&D programmes.
• Slow decision-making process and high manpower overheads.
• Rivalry among sister unions.
• Promotion’s strategies are not effective.
• Inadequate Knowledge about brand positioning strategies.
• Due to Government interference between company management activity, there is
a delay in successful strategy
• Lack of flexibility in system.
• Not concentrating on advertisements.
• Lack of personalized service to channel members.

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OPPORTUNITIES
• Enormous market potential with growing population
• Institutional, industrial and OEM customers can be targeted
• Dealership network can be tapped
• With the new DGS & D registration, large government and defense market
• Can also be tapped

THREATS
• Entrance of multinational companies into the field
• Competition from un – organized sectors
• Introduction of alternatives into the market
• Increase in raw material prices.

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CHPATER 5
ANALYSIS OF FINANCIAL STATEMENTS

Financial statements are reports prepared by a company's management to present the

financial performance and position at a point in time. A general-purpose set of financial
statements usually includes a balance sheet, income statements, statement of Owner’s
equity and statement of cash flows. These statements are prepared to give Users outside
of the company, like investors and creditors, more information about the Company’s
financial positions. Publicly traded companies are also required to present
These statements along with others regulatory agencies in a timely manner. Financial
Statements are the main source of financial information for most decision makers.
In financial statement 2 types:
a. Profit and Loss account
b. Balance sheet
Profit and loss A/c; -An Account in the books of an organization to which incomes And
gains are and expenses and losses are debited, so as to show the net profit or loss over a
given period
A financial statement showing a company’s net profit or loss in a given period.
Balance sheet; - Balance sheet shows the true financial position of the business on
aSpecificdate i.e., at the end of an accounting period the total assets and liabilities must
be equal.
While preparing a balance sheet the following steps must be considered. Balance Sheet is
known as liabilities on the left-hand side, assets on the right-hand side, instead
There is no debit side or credit side in the balance sheet.

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RATIO ANALYSIS:

1. LIQUIDITY RATIO

a) CURRENT RATIO:

The current ratio is a liquidity ratio that measures a company’s ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company
can maximize the current assets on its balance sheet to satisfy its current debt and
payables. Current ratios vary from industry and are generally between 1.5% and 3% for
healthy business. If a company current ratio is in this range, then it generally indicates
good short-term financial strength.

Current Asset
Current ratio=
Current Liability

Table 5.1showing current ratio

Year Current Assets Current Liabilities Current Ratio

2016 168.38 58.54 2.876
2017 209.83 80.08 2.629
2018 193.89 97.12 1.996
2019 227.87 103.81 2.195
2020 193.96 75.91 2.555

Analysis:
In the year 2016 current ratio was 2.876 in the year 2017 current ratio is decreased to
2.629, in 2018 again decreased its status, in the year 2019 the status of current ratio is in-
creased to 2. 195., and in the year 2020 the status of current ratio is increased to 2.555.
By analyzing this table we can consider that the current ratio has been fluctuating from
year to year.

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Graph 1 Showing Current Ratio

250
227.87
209.83
193.89 193.96
200
168.38

150
CA
103.81 CL
97.12
100
80.09 75.91 CR
58.54
50

0
2016 2017 2018 2019 2020

Interpretation:
From the above table, graph and introduction for current ratio suggest that the ratio be-
tween 1 to 3 will be the best for company and Sample Company’s current ratio is in be-
tween 1 to 3 in all the 4 years that is from 2016-19. So, we can say that the company is
good financial healthy position.

b) QUICK ASSET RATIO:

The quick ratio is an indicator of a company short term liquidity position and measures a
company’s ability to meet its short term obligations with its most liquid assets. The quick
ratio is a financial ratio used to gauge a company’s liquidity. The quick ratio is also
known as the acid test ratio.

Quick Assets
Quick asset ratio=
Current Liability

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Table 5.2Table showing Quick Asset Ratio

Year Quick Assets Current Liability Quick Ratio

2016 120.62 58.54 2.06
2017 156.09 80.01 1.95
2018 128.29 97.12 1.32
2019 163.58 103.81 1.57
2020 136.55 75.91 1.79

Analysis:
From table the quick ratio has been fluctuating. In the year 2016 the ratio is 2.06 ,in 2017
the ratiois 1.95,intheyear 2018 is1.32 ,andtheninthe year 2019 is 1.57 and then in the
year 2020 it is increased to 1.79.
Graph 2 Showing Quick Asset Ratio

Quick Ratio

2016
1.79 2.06
2017
2018
1.57
1.95 2019

1.32 2020

Interpretation:
The quick ratio is fluctuating from year to year. It shows the company can meet the cur-
rent or liquidity status. Which helps to reduce taking loans from other institutions to meet
the necessary requirements, because whenever the company wants funds it can get funds
through selling its securities and other easily cash convertible assets without loss or not
less than the book value? So, the company is in good position in the conversion of assets
into liquid cash.
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Ⅱ. PROFITABILITY RATIO

a) PROPRIETARY RATIO:

The proprietary ratio is the inverse of debt ratio. It is a part to whole comparison. The
proprietary ratio measures the amount of funds that investors have contributed towards
the capital of a firm in a relation to the total capital that is required by the to conduct
operations.

Shareholders Equity
Proprietary Ratio=
Total Assets

Table 5.3 showing Proprietary Ratio

Year Share holders Total Assets Proprietary Ratio

equity
2016 134.46 249.23 53.95%
2017 136.30 228.44 59.66%
2018 188.27 325.29 57.87%
2019 195.96 378.46 51.77%
2020 203.52 391.32 51.91%

Analysis:
From the above table it analyzes that the shareholders equity position as increased from
2016 to 2017 and the total assets and proprietary ratio is quite opposite to shareholders
equity means the ratios are fluctuating from the year 2016 to 2020.

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Graph 3 Showing Proprietary Ratio

400 378.46
350 325.29
300
249.23
250 228.44
184.88 188.27 195.96 SHE
200
134.46 136.3
150 116.97
100
50
0
2016 2017 2018 2019 2020

Interpretation:
Fromthegraphfindoutthattheproprietaryratioisfluctuatingfromyeartoyear that sin 2016 it
was increased 63.26% and in 2017 it was 53.95%.In the year 2018 it was
59.66%andintheyear 2019 itwas57.87% and in 2020 was decreased 51, 77%.

Ⅲ. SOLVENCY RATIO
a) DEBT EQUITY RATIO:
The debt-to-equity ratio is calculated by dividing a company’s total liabilities by its share
holder’s equity. These numbers are available on the balance sheet of company’s financial
statements. The ratio is used to evaluate a company’s financial leverage. The D/E ratio is
an important metric used in corporate finance. It is a measure of a degree to which a
company is financing its operations through debt versus wholly-owned funds. More
specifically, it reflects the ability of shareholders equity to cover all outstanding debts in
the event of a business downturn. The debt-to-equity ratio is a particular type of gearing
ratio.

Total Liabilities
Debt equity ratio=
Total Shareholders equity

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Table 5.4 showing Debt Equity Ratio

Year Total Liability Total Share Holders’ Equity Debt Equity Ratio

2016 4.75 116.97 0.04

2017 16.48 134.46 0.12

2018 5.85 136.30 0.04

2019 7.84 188.27 0.14

2020 9.20 195.96 0.05

Analysis:
The above table analyzes that by taking to consideration of the long-term liability and as
well as the shareholders fund the total debt equity ratio as drastically decreased from the
year 2016 to 2018. In the year 2020 it is increased to 0.05.

Graph 4 Showing Debt Equity Ratio

DEBT EQUITY RATIO

0.14 0.05
0.04 0.12 0.04
100%
80%
60% 116.97 134.46 136.3 188.27 195.96
40%
20%
4.75 16.48 5.85 7.84 9.2
0%
2016 2017 2018 2019 2020

LONG TERM LIABILITY SHARE HOLDERS FUND DEBT EQUITY RATIO

Interpretation:
From the above graph it easily identifies that the company’s debt equity ratio is falling
drastically year by year from 2016 till 2018 so the company is facing lack of financing
growth which leads to face losses in the future financial years’ so the company need to
consider the debt equity ratio and they need to improve its ratio.
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Internship Report - KOMUL, Kolar

b)NET PROFIT RATIO:

The net profit percentage is the ratio of after tax profits to net sales. It reveals the
remaining profit after all costs of production, administration, and financing have been
deducted from sales, and income taxes recognized. As such, it is one of the best measures
of the overall results of a firm, especially when combined with an evaluation of how well
it is using its working capital.

𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡
Net profit ratio= x 100
𝑁𝑒𝑡 𝑠𝑎𝑙𝑒𝑠

Table 5.5 Showing Net Profit Ratio

Year Net Profit Net sales Net Profit Ratio

2016 3.84 1049.55 0.365
2017 15.41 1097.17 1.404
2018 3.29 1282.44 0.256
2019 6.45 1374.65 0.46
2020 3.63 1423.02 0.255

Analysis:
From the above table it analyzes the profits of komul. In the year 2016 net profit ratio
was 0.365 and there was a gradual fluctuation in the year 2019 to 2020. It was fluctuating
due to less production.

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Internship Report - KOMUL, Kolar
Graph 5 Showing Net Profit Ratio

1600
1423.02
1374.65
1400 1282.44

1200 1097.17
1049.55
1000

800 PAT
NS
600

400

200
3.84 15.41 3.29 6.45 3.63
0
2016 2017 2018 2019 2020

Dept. of MBA & Research Center, East West Institute of Technology, Bengaluru Page 48
Internship Report - KOMUL, Kolar
CHAPTER 6

LEARNING EXPIERNCE

The training in the KOLAR-CHIKKABALLAPURA MILK UNION LIMITED, KOLAR

helped me a lot in studying functions of the manufacturing and production departments.
The training was very much educative. I came to know about the organization in depth,
their day to day operation procedure and how their service will be best to their customers.
The Information that I learnt from the company is very useful to my academics and also
to My career as well. Every day was a great learning process in the day to day activities,
But in reality I saw the other side of it where in theories was being come into practical In
the KOLAR- CHIKKABALLAPURA MILK UNION LIMITED, KOLAR.

• The employees at komul have extended tremendous support in doing the

organization study.
• Systematic and committed working is yet another important learning Experience.
• Apparel is growing fast, providing greater opportunities to both the customers as
well as job seekers.
• Did understand the practicality of running a start-up enterprise, the various
• Challenges faced in terms of finance, marketing, competition etc. among others.
• Overall the study gives a reasonable chance to apply theory into practice.
• My overall experience in the company was very pleasant.
• The response and support got from the management and staffs were appreciable.
• I would like to mention the name of Mr.NAGESH Unit Head HR and Admin,
who guided me in this Internship Report and who helped me in the Course of my
“in training”. The atmosphere and working conditions were encouraging in the
company.
• Visited training centre that is there inside the organization and interacted with
• The new candidates, who were selected for placement.

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Internship Report - KOMUL, Kolar

BIBLI0GRAPHY
• Annual reports
• Profit and loss accounts statements
• Company web site

Books referred:

Author Name Title of the Book

Dr.Anil Kumar Financial Management

Dr.SP.Gupta Advanced Financial Management

Websites:
• www.komul.co.in
• www.amulindia.com
• www.kmfnandini.coop/hmt/kmfunits-nmp.hmtl
• www.kmfdairy.com

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Internship Report - KOMUL, Kolar
Annexure:
Balance Sheet Abstract For the Year From 2016-17 To 2019-20
Particulars As On 31-03-2016 As On 31-03-2017
Source Of Amt in Rs Amt in Rs Amt in Rs Amt in Rs
Funds:
340894100.00 657533454.40
Share Capital 1003823066.08 1236330343.72
Reserves and
Surplus 164694666.00 585747840.00
Loans 382309863.50 244306833.18
GOK Plan Funds
Profit and Loss 15419555.14 32982099.84
A/C
Total 1907141250.72 2756900571.14

Applications Of
Funds:

Fixed Assets
Gross Block 1469990997.96 2284808834.96

Less: 796496976.18 866339165.12

Depreciation 673494021.78 1416469669.84
-Net Block
135189144.53 42230127.00
Investments

Current Assets: 477632382.79 537414032.30

a. Stock 457842415.88 603092950.97
b. Trade Debtors
c .Cash and 53966329.92 431151262.27
Bank Balances
d. Loans 208722465.03 526659141.27
&Advances 1683860493.6 2098317387.25
Total(a)
Less: current
liabilities 585402409.21 800116612.95
&provision (b)

Net working 1098458084.41 1298200774.30

Capital (a-b)

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Internship Report - KOMUL, Kolar
Total 1907141250.72 2756900571.14
Particulars As On 31-03-2018 As On 31-03-2019
Source Of Amt in Rs Amt in Rs Amt in Rs Amt in Rs
Funds:
669554554.53 677837205.00
Share Capital 1394138817.00 1492455328.00
Reserves and
Surplus 784549390.00 920499411.00
Loans 359731317.00 622010843.00
GOK Plan Funds
Profit and Loss 64554747.80 36322919.00
A/C
Total 3272528826.33 3749125706.00

Applications Of
Funds:

Fixed Assets
Gross Block 3252945674.21 3784611242.00
Less: 1005787489.96 1350502157.00
Depreciation 2247158184.25 2431109085.00
-Net Block
57728538.00 74447743.00
Investments

Current Assets: 656026679.00 642981831.00

a. Stock 6110448040.00 662157998.00
b. Trade Debtors
c .Cash and Bank 370748509.90 580182728.00
Balances
d. Loans 301103689.01 393392251.00
&Advances
1938926917.91 2278714801.00
Total(a)
Less: current
liabilities 971284812.83 1038145930.00
&provision (b)

Net working 967642105.08 1240568878.00

Capital (a-b)

Total 3272528827.33 3749125706.00

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Internship Report - KOMUL, Kolar

Particulars As On 31-03-2020
Source Of Funds: Amt in Rs Amt in Rs

Share Capital 708727805.00

Reserves and 1830461545.00
Surplus
Loans 812158486.00
GOK Plan Funds 89768005.00
Profit and Loss 119569766.00
A/C
Total 3560685607.00

Applications Of
Funds:

Fixed Assets
Gross Block 3964571133.00
Less: Depreciation 1675312573.00
-Net Block 2289258560.00

Investments 90953076.00

Current Assets:
a. Stock 574189049.00
b. Trade Debtors 334869132.00
c .Cash and Bank
Balances 4321098332.00
d. Loans
&Advances 598493781.00

Total(a) 1939660294.00
Less: current
liabilities
&provision (b) 759186323.00

Net working
Capital (a-b) 1180473971.00

Total 3560685607.00

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Profit & Loss A/C & Cost Particulars For The Year 2016-17 To 2019-20

Particulars 2015-16 Cost/Kg 2016-17 Cost/Kg

QTY.PROCURED(kg’s)-> 329303209 351697060

Average KPD 899736 960921

A.SALES: 10971766868.22 33.32 12824490425.17 36.46

B.MATERIALS
CONSUMED:

Opening Stock 315440471.38 477632382.79

Purchases 8660495280.55 10045702311.53
Closing Stock 47763282.79 537414032.30

(0.S+Pur+C.S) 8498303369.14 25.81 9985920662.02 28.39

C.GROSS MARGIN (A- 2473463499.08 7.51 2838569763.15 8.07

B)

D.VARIABLE COSTS:
Processing Transportation 150094317.34 0.46 171198361.08 0.49
charges
Processing Expenses 571762661.06 1.74 731430016.27 2.08
Packaging Materials 726816783.71 2.21 7194893$2.54 2.05
Selling & distribution
Expenses 306386179.40 0.93 312290767.03 0.89

Total 1755059941.51 5.33 1934408486.03 5.50

E.CONTRIBUTION(C-D) 718403557.57 2.18 904161276.23 2.57

F.FIXED COSTS
Technical Input Expenses 120123112.50 0.36 199901105.95 0.57
Staff Expenses 370065665.34 1.12 248326743.06 0.71
Administrative Expenses 62195540.00 0.19 75117874.52 0.21
and Taxes
NDP 10615785.00 0.03 5822639.00 0.02
RKVY 0.00 13198558.00 0.04
0.00 0.00

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Particulars 2017-18 Cost/Kg 2018-19 Cost/

Kg

Total 563000103.00 1.71 542366920.53 1.54

G.GROSS BEFORE
INTEREST (E-F) 155403454.57 0.47 361794355.70 1.54

H.INTEREST 14916752.29 0.05 4481571.33 0.01

I.CASH PROFIT FROM

OPRN (G-H) 140486702.28 0.43 357312784.37 1.02

J.DEPRECIATION 44691333.45 0.14 47659694.03 0.14

Reserve for Bad and
Doubtful Debts

K.NET PROFIT FROM

OPRN (J-I) 95795368.83 0.29 309653090.34 0.88

L.ADD:MISC.INCOME 92481854.31 0.28 84057591.5 0.24

Profit Before Tax 188277223.14 0.57 393710681.84 1.12
Allocation To
Infrastructure Fund 109717668.00 0.33 224428572.00 0.64
Allocation To Price
Fluctuation Fund 0.00 0.00
Provision For Income Tax 63140000.00 0.19 136300000.00 0.39
Profit after Tax 15419555.14 0.05 32982099.84 0.09

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QTY.PROCURED(kg’s)-> 35329853 370655079

Average KPD 967934 1015493

A.SALES: 13746530871.40 389.09 14230208518.00 328.3

9
B.MATERIALS
CONSUMED:

Opening Stock 537414032.30 656026679.00

Purchases 10871120782.00 10736439100.00
Closing Stock 656026679.00 642981831.00

(0.S+Pur+C.S) 10752508135.30 304.35 10749483948.00

29.00
C.GROSS MARGIN (A-B) 2994022736.10 84.74 3480724570.00 9.39
D.VARIABLE COSTS:
Processing Transportation 184350188.97 5.22 201166426.00 0.54
charges
Processing Expenses 812882197.47 23.01 973023075.00 2.63
Packaging Materials 718018330.43 20.32 841895434.00 2.27
Selling & distribution
Expenses 336835798.62 9.53 375415022.00 1.01

Total 2052086515.49 58.08 2391499957.00 6.54

E.CONTRIBUTION(C-D) 941936220.61 26.66 1089224613.00 2.94

F.FIXED COSTS
Technical Input Expenses 155213217.00 4.39 128452534.00 0.35
Staff Expenses 285307484.00 8.08 400111221.00 1.08
Administrative Expenses and 127551869.79 3.61 161494685.00 0.44
Taxes
NDP 11830589.00 0.33 1226922.00 0.00
RKVY 0.00 0.00 0.00
0.00 0.00

Total 579903159.79 16.41 691285362.00 1.87

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G.GROSS BEFORE
INTEREST (E-F) 362033060.82 10.25 397939251.00 1.07

H.INTEREST 10075139.98 0.29 60551714.00 0.16

I.CASH PROFIT FROM

OPRN (G-H) 351957920.84 9.96 337387537.00 0.91

J.DEPRECIATION 117783312.5 3.33 9551081.00 0.88

Reserve for Bad and
Doubtful Debts

K.NET PROFIT FROM

OPRN (J-I) 234174608.33 6.63 9551081.00 0.03

L.ADD:MISC.INCOME 84395138.97 2.39 46271838 0.12

Profit Before Tax 318569747.97 9.02 55822919.00 0.15
Allocation To Infrastructure
Fund 138055000.00 3.91 19500000.00 0.05
Allocation To Price
Fluctuation Fund 0.00 0.00
Provision For Income Tax 115960000.00 3.28 0.00 0.00
Profit after Tax 64554747.80 1.83 36322919.00 0.10

Particulars 2019-20 Cost/Kg

QTY.PROCURED(kg’s)-> 351295710

Average KPD 962454

A.SALES: 14822675805.00 42.19

B.MATERIALS CONSUMED:

Opening Stock 642981831.00

Purchases 11090301081.00
Closing Stock 574189049.00

(0.S+Pur+C.S) 1159093863.00 31.77

C.GROSS MARGIN (A-B) 3663581942.00 10.43

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D.VARIABLE COSTS:
Processing Transportation charges 198906465.00 0.57
Processing Expenses 1714840920.00 0.00
Packaging Materials 154889282.00 0.44
Selling & distribution Expenses 381778674.00 1.09

Total 2450415341.00 6.98

E.CONTRIBUTION(C-D) 1213166601.00 3.45

F.FIXED COSTS
Technical Input Expenses 203670919.00 0.58
Staff Expenses 393220278.00 1.12
Administrative Expenses and Taxes 154175628.00 0.44
NDP 0.00 0.00
RKVY 0.00 0.00
0.00

Total 751066825.00 2.14

G.GROSS BEFORE INTEREST (E-F) 462099776.00 1.32

H.INTEREST 77978229.00 0.22

I.CASH PROFIT FROM OPRN (G-H) 384121547.00 1.09

J.DEPRECIATION 310287676 0.88

Reserve for Bad and Doubtful Debts

K.NET PROFIT FROM OPRN (J-I) 73833871.00 0.21

L.ADD:MISC.INCOME 27579831 0.08

Profit Before Tax 124569766.00 0.35
Allocation To Infrastructure Fund 0.00 0.00
Allocation To Price Fluctuation Fund 0.00
Provision For Income Tax 5000000.00 0.01
Profit after Tax 1195699766.00 0.34

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