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AN ORGANISATIONAL STUDY

AT SHASTHA ENTERPRISES

QUILON, KERALA

PROJECT REPORT

Submitted by

SOLOMON BENJAMIN

Register No: 098001152045

In partial fulfillment for the award of the degree

Of

MASTER OF BUSINESS ADMINISTRATION

NEHRU INSTITUTE OF INFORMATION TECHNOLOGY &

MANAGEMENT

(Approved by AICTE, Affiliated to Anna University, Coimbatore)

Nehru Gardens, Thirumalayampalayam,

COIMBATORE - 641 105

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NEHRU INSTITUTE OF INFORMATION TECHNOLOGY &

MANAGEMENT

COIMBATORE - 641105

Department of Master of Business Administration

PROJECT WORK

This is to certify that the project entitled

ORGANISATIONAL STUDY AT SHASTHA ENTERPRISES,

QUILON

Is the bonafide record of project work done by

SOLOMON BENJAMIN

Register No: 098001152045

Of M.B.A during the year 2009-2011.

--------------------- ----------------------------------

Project Guide Head of the Department

Submitted for the Project Viva-Voce examination held on _________________

----------------------------- ----------------------------

Internal Examiner External Examiner

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DECLARATION

I affirm that the project work titled organizational study being submitted in partial

fulfillment for the award of MBA is the original work carried out by me. It has not formed the

part of any other project work submitted for award of any degree or diploma, either in this or any

other University.

(Signature of the Candidate)

SOLOMON BENJAMIN

098001152045

I certify that the declaration made above by the candidate is true

Signature of the Guide,

Ms.P.ALOSHA

MBA, Lecturer

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ACKNOWLEDGEMENT

I take this opportunity to express thanks and gratitude to one and all that rendered

necessary help to me in finalizing this project.

I express my whole hearted gratitude to CEO, Secretary Dr. P. KRISHNAKUMAR,

our principal Dr.R.MOSES DANIEL for giving me an opportunity to do this work successfully

I express sincere thanks to Dr. K.NANTHINI., (MBA, MA, Ph.D) Director,

NIITM(NEHRUAINSTITUTEAOFAINFORMATIONATECHNOLOGY.&

MANAGEMENT) for the valuable guidance, suggestions and encouragement for the

completion of this project.

I consider it as a great privilege to be under the guidance of Ms. P.ALOSHA,

Faculty guide, Department of MBA, NIITM. The contribution and significant role

played by her helped me in the preparation and submission of project report in time.

I express gratitude to Mr.Nandakumar, Managing Director of Shastha Enterprises

Who took out time from his tight schedule to guide and support me during the whole

tenure of this project.

I would like to extend my sincere gratitude to the officers and employees of

Shastha enterprises Quilon, for providing information about the project.

I also express thanks to everyone who have contributed their valuable time and

effort to make this project a success and to present it in this form.

QUILON SOLOMON BENJAMIN

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CONTENTS

CHAPTER TITLE PAGE No1 INTRODUCTION 6

2 COMPANY PROFILE 10

3 MOTTO, VISION, AND MISSION 11

4 ORGANISATIONAL CHART 12

5 PRODUCT PROFILE 15

6 DEPARTMENT PROFILE

6.1 PRODUCTION DEPARTMENT

6.2 MATERIALS AND CONTROL DEPARTMENT

6.3PURCHASE DEPARTMENT

6.4 FINANCE DEPARTMENT

6.5 AUDITINGDEPARTMENT

6.6 HUMAN RESOURCE DEPARTMENT

6.7MARKETING AND SALES DEPARTEMENT

23

31

33

35

39

42

50

7 FINDINGS AND SUGESSTIONS 53

8 SWOT ANALYSIS 56

9 CONCLUSION 57

10 BIBLIOGRAPHY 58

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INTRODUCTION

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1.1 INTRODUCTION

Cashew plays a pivotal role in the international trade, which earns a good amount of

foreign exchange by its export to different countries of the world. Cashew has been listed as one

of the worlds most nutritious nut. Epidemiological studies reveal that cashew nuts posses a

protective effect on the cardiovascular disease, possibly as a result of their established blood

cholesterol lowering capacity.

On analyzing the history of cashew, it enlightens the truth as a waste land crop has gained

its dignity a major plantation crop, which spreads in more than five lakhs hectares of land. In

early days people merely regarded cashew tree as a tree with a rare fruit, one on which the nut

stayed outside. The curiosity of the people led to break open the shell of cashew nut and they

found the kernel inside insensuosly delicious. The countries rolled by the economic and

commercial value of the cashew came to be recognized. New entrepreneurs came into the picture

and with for sightedness ventured in the export business to increase the production of indigenous

raw nuts cashew entrepreneurs has started cashew plantation in the locality. Owners have also

introduced value added cashew products in the market.

From the modest beginning in 1985 shastha enterprises has now grown into a large

organization playing a pivotal role in cashew industry in the world. The company has now more

than a turnover of Rs.50 crores. Now Shastha enterprises is running 15 cashew factories in a 50

km radius of Quilon district. In these factories more than 5000 workers and 400 staff members

are working. The company is a model employer in the field of cashew industry to other private

companies mainly to protect the interest of workers and to provide maximum employment to its

workers and to give statutory benefits like minimum wages, bonus, etc prevailing in the cashew

industry. To increase the production of indigenous raw nuts the company has started cashew

plantation in the district. The company has also introduced value added cashew products in the

market.

The industry, vitally important to society on account of its employment potential and its

significant role as a foreign exchange earner was in bad shape, coming up against one crisis after

another. Primary for want of nuts which have to be imported mainly from Africa.

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Shastha enterprises was made to combat the ills of the industry and put it back on rail along

with the innumerable private sector units saddled with the same problem which had

repercussions on the hopeless workers who have least mobility of labour.

1.2OBJECT OF THE STUDY

The study was conducted with the following objectives:

1. To get a real time exposure in the industry.

2. To study and understand the general workings of the organization.

3. To interact with managers at various levels of organization hierarchy.

4. To understand the functions of various departments in the organization.

5. To observe the work culture existing in the organization.

6. To understand the major problems faced by the organization.

OBJECTIVES OF COMPANY

1. Maximization of sales and productivity .

2. Maintaining employment and safeguard the interest of workers

3. Helping the industrial development of the state

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1.3SCOPE OF THE STUDY

This organizational study aims generating a practical awareness of the functions and

management of the company Shastha Enterprises Cashew Processing and Exporting Company,

The study covers a general understanding of the organization, its culture, departments, and its

business activities.

1,4SOURCES OF DATA

The study was conducted by using the following data, viz; primary data and secondary data.

The term primary data refers to the data which are directly collected for the first time andhappened to be original in character. The primary data for the study was collected through direct

observation and interviewing the company officials

Secondary data were made by the company. Financial statements and other relevant

records were the major source of information . Besides ,data available from the journals

published by cashew export promotion council of India and past research reports were made use

in the completion of this study

1.5LIMITATION OF THE STUDY

Time is a major limiting factor to make a deep study and analysis about the organization.

There may be error due to bias on the respondents.

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2 COMPANY PROFILE

Shastha enterprises cashew processing and exporting company, was started in July 1985

and started Commercial activities in the same year as a company fully owned by its proprietor

Mr.Nandakumar. The main function of the companies operation is the processing of raw nuts and

thereby production of cashew kernels and its byproducts. From the modest beginning in 1985

Company has now grown into a large organization playing a pivotal role in cashew industry in

the state. The products are exported and sold in the Indian market. Company has now more than

a turnover of Rs. 50 crores. Now shastha enterprises is running 15 cashew factories all over the

Quilon district. In these factories more than 5000 workers and 400 staff members are working.

From the modest beginning in 1985 shastha enterprises has now grown into a large organization

playing a pivotal role in cashew industry in the world. The company has now more than a

turnover of Rs.50 crores. Now Shastha enterprises is running 15 cashew factories in a 50 km

radius of Quilon district. In these factories more than 5000 workers and 400 staff members are

working.

The company is a model employer in the field of cashew industry to other private

companies mainly to protect the interest of workers and to provide maximum employment to itsworkers and to give statutory benefits like minimum wages, bonus, etc. To increase the

production of indigenous raw nuts the company has started cashew plantation in the district. The

company has also introduced value added cashew products in the market.

The company started functioning with one factory in 1985. Out of the above cashew

factories, 13 factories are owned by the corporation and 2 are leased factories. For administration

and convenience these 15 cashew factories are groups into 3 groups and each group is controlledby a group checker. Thus below the head office, there are 3 group checker, 15 cashew factories

and 1 tin factory.

The production capacity migration of the industry and the large scale diversion of raw

nuts to Tamilnadu resulted in acute shortage of raw nuts in the state. Even the state government

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owned K.S.C.D.C could not work for more than 100 days a year, owing to the shortage of raw

nuts.

The proper functioning of company is blocked by the limited supply of raw materials in

the industry. Proper functioning of shastha enterprises can be varied in the years, which there are

abandoned supply of raw materials. Thus we can see that the availability of raw materials is one

of the key factors which determine the efficient running of the industry. Even though the

company has these 15 factories we can see that it is not functioning in almost 2/3 of the year.

This is due to the non availability of raw materials collected by the company and union strikes in

company

2.1AWARDS

Forward-looking policies and their implementation have paid off rich dividends to the

company and to other private sector also. Apart from being one of the major cashew exporter in

the country from 2006-2008, Shastha enterprises have won awards at national level for export

performances continuously and in the latest 2006-2008 list, Shastha enterprises name has been

recommended, once again for the National award. Since the incorporation of the company plays

a credible and progressive role in many aspects.

2.2PRODUCTS

Shastha enterprises locally purchase / import raw cashew nuts and export the kernels in

large quantities. 80% of our sale is by way of export. Indian Grade Kernels, Rejection Grade

Kernels, Cashew Shell, Cashew skin, Shell Oil etc. are the by-products of raw cashew nut.

Shastha enterprises, has a capacity to process 50 Metric Tons of raw cashew nuts per day.

2.3VISION

A forward looking company

A strong and sound company for stake holders

2.4MISSION

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Building a vibrant, professional work environment that attracts nurtures and retains good

performers and, developing the expertise to be able to be strategic partner to fulfill present and

future business needs.

The present strength of the workers up to 2009 is 4600.

The figure below illustrate the number of working days that have been provided by the company

to workers from 1986-87 to 2005-2006.

Processing days of the shastha enterprises from 1985-86 to 2005-06

YEARS NUMBER OF DAYS

1986-1987 100

1987-1988 120

1988-1989 135

1989-1990 162

1990-1991 129

1991-1992 150

1992-1993 117

1993-1994 130

1994-1995 149

1995-1996 138

1996-1997 1801997-1998 180

1998-1999 153

1999-2000 150

2000-2001 165

2001-2002 93

2002-2003 Nil

2003-2004 118

2004-2005 198

2005-2006 212

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ORGANIZATIONAL CHART

Organization Chart

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MANAGING DIRECTOR


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3 PRODUCT PROFILE

Shastha enterprises locally purchase/import raw cashew nuts and export the kernels in

large quantities. 80% of sale is by way of export. Indian Grade Kernels, Rejection Grade

Kernels, Cashew Shell, Cashew Skin, Shell oil etc. are the by-products of aw cashew nut.

Shastha enterprises has a capacity to process 50 MT of raw cashew nuts per day. Product means

to the goods and services combination, the company offers to the target market. The product here

14

PURCHASE

DEPARTMENT

INVENTORY

DEPARTMEN

PRODUCTIO

NFINANCE

DEPARTMEN

PURCHASE

MANAGER

INVENTORY

SUPERVISIOR

PLANT

SUPERVISIOR

CHIEF

ACCOUNTANT

ASSISTANT

MANAGER

ASSISTANT

SUPERVISIOR

ASSISTANT

SUPERVISIOR

ACCOUNT

KEEPER

WORKERS


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is the processed cashew kernels. The cashew kernel here can be of different grades. The different

grades are the different products because of their feature, quality, size, shape etc.

Specifications for Cashew Kernels

GENERAL CHARACTERISTICS: Cashew Kernels shall have been obtained through roasting,

shelling and peeling Cashew nuts.

3.1 SPECIAL CHARACTERISTICS:

A - CASHEW KERNELS WHITE WHOLES

Grade

Designation

Trade

Name

Colour/

CharacteristicsCount

maximum

Moisture %

Broken

Max %

NLSG

NLG

Max %

W180White

Wholes

White/pale

ivory/Light ash/

Characteristic

shape

170-180 5 5

5 (NLSG

& SW

together)

W210 Do Do 200-210 5 5 Do

W240 Do Do 220-240 5 5 Do

W320 Do Do 300-320 5 5 Do

W450 Do Do 400-450 5 5 Do

B - CASHEW KERNELS SCORCHED WHOLES

Grade

Designation

Trade

Name

Colour/

Characteristics

Count/454gms

Size

Description

Maximum

Moisture

%

Broken

Max %

NLSG

NLG

Max %

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SWScorched

Wholes

Kernels may be

scorched/slightly

darkened due to

Over-heating while

roasting or drying

in drier/borma

N.A 5 5 7.5(SSW)

SW 180 Do Do 170-180 5 5

7.5

(NLSG

&SSW

togeth.)

SW210 Do Do 200-210 5 5 Do

SW240 Do Do 220-240 5 5 Do

SW320 Do Do 300-320 5 5 Do

SW450 Do Do 400-450 5 5 Do

SW500 Do Do 450-500 5 5 7.5(SSW)

C - CASHEW KERNELS DESSERT WHOLES

Grade

Designation

Trade

Name

Colour/

Characteristics

Count/454gms

Size description

Maximum

Moisture %

Broken

Max %

NLSG

NLG

Max %

SSW

Scorched

Wholes

Seconds

Kernels may be over

scorched, immature

Shriveled(pirival)

Speckled(karaniram)

Discoloured and light

blue

NA 5 57.5

DW

DW Desert

Wholes

Kernels may be deep

scorched,deep brown,

deepblue,speckled,

dis-coloured and

NA 5 5 --

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black Spotted.

D - CASHEW KERNELS WHITE PIECES

Grade

Destination

Trade

Name

Colour/

Characteristics

Count/454gms

size description

Maximum

Moisture %

Broken

Max %

NLSG

NLG Max

%

B Butts

White/pale ivory

or light

ash.Kernels

broken cross-wise

(evenly or

unevenly)

naturally attached.

NA 5 5 5 (SB)

S Splits

White/pale ivory

or light ash.

Kernels split

naturally

lengthwise.

NA 5 5 5(SS)

LWP

Large

White

Pieces

White/pale ivory

or light ash

Kernels broken

into more than

two pieces and

not passing

through 4 mesh

16 SWG

sieve/4.75mm.

I.S.Sieve

5 Nil

5 (SW &

SP

together

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SWP

Small

white

pieces

White/pale ivory

or light ash

Broken kernels

smaller than

those described

on LWP but not

passing through 6

mesh 20 SWG

sieve/2.80mm I.S

Sieve

5 Nil

5

(BB &

SSP

Together)

BBBaby

BitsDo

Plemules &

broken kernels

smaller than

those described

as SWP but not

passing through a

10 mesh 24 SWG

Sieve/1.70 mm

I.S.Sieve

5 Nil

1%

(Cashew

Powder)

E - CASHEW KERNELS SCORCHED PIECES

Grade

Designation

Trade

Name

Colour/

Characteristic

Count/454gms

Size

description

Maximum

Moisture

%

Broken

Max %

NLSG NLG

Max %

SB Scorched

Butts

Kernels broken

cross

wise(evenly or

unevenly &

naturally

attached. Kernels

may be

scorched/slightly

NA 5 5 7.5 (DB)

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darkened due to

over

heating while

roasting or

drying in the

drier/borma.

SS

Scorched

Splits

Kernels split

naturally length

wise. Kernels

may be

scorched/slightly

darkened due to

over-heating

while roasting or

drying in

drier/borma

NA 5 5 7.5 (DS)

SPScorched

Pieces

Kernels may be

scorched/slightly

darkened due to

over heating

while roasting or

drying in

drier/borma.

Pieces not

passing

through a 4

mesh 16 SWG

sieve/4.75 mm

I.S. Sieve

5 Nil7.5 (SSP & SPS

together)

SSP

Scorched

Small

Pieces

Kernels may be

scorched/slightly

darkened due to

over heating

while roasting or

drying in

drier/borma

Pieces smaller

than SP but not

passing

through a 6

mesh 20 SWG

Sieve/2.80 mm

I.S. Sieve4.

5 Nil 5 (DSP)

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F - CASHEW KERNELS DESSERT PIECES

Grade

Designation

Trade

Name

Colour/

characteristic

Count/454gms

Size description

Maximum.

Moisture %

Broken

Max %

NLSG

NLG Max

%

SPS

Scorched

Pieces

Second

Kernels may be

over scorched,

immature,

shriveled

(Pirival),

speckled

(Karaniram),

discoloured and

light blue

Kernels broken

Into pieces but

Not passing

through a 4 mesh

16 SWG

sieve/4.75 mm

I.S. Sieve.

5 Nil

7.5 (DP &

DSP

together)

DP DessertPieces

Kernels may be

deep scorched,

deep brown,

deep blue,

speckled,

discoloured &

black spotted.

Kernels broken

into pieces but

not passing

through a 4 mesh

16 SWG

sieve/4.75 mm

I.S.Sieve

5 Nil 7.5 (DSP)

4 DEPARTMENTS AND ITS FUNCTIONS

The various functions of the organization are carried through various departments. Theprocess of assigning various tasks or activities in the different segments on a horizontal basis is

called departmentation. It helps for proper administration of a company. There are 3 senior

checkers for each department under the control of general manager and other officers. In Shastha

enterprises, Quilon. Eight departments are functioning.

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The various departments are below:

Personnel department

Finance department

Production department

Commercial department

Purchase department

Sales department

Materials department

Auditing department

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PRODUCTION DEPARTMENT

5 PRODUCTION DEPARTMENT

Production is the process of making inputs into outputs or transformation of raw

materials into finished goods. The Production manager is in charge of the production department.

In production department, the production manager looks after all the matters connected with the

processing of raw cashew nuts. The production department co ordinates with the commerce

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Production Manager

section and fitting centers to ensure timely availability of finished products for export. The

hierarchy of production department:

Production Department

Checker

(Production)

Assistant Typist

5.1PROCESSING OF CASHEWNUT

Processing of cashew nuts refers to the conversion of raw cashew nuts in shell to its

blanched graded kernel form. The process is highly labour intensive and the work force consists

mainly of women.

(a) Drum roasting: This is one of the oldest and more widely used methods. The nuts are

fed into a rotating red hot drum which will ignite the shell maintaining its temperature

because of the burning of the shell liquid. The drum is kept in rotation for 3-4 minutes and

the roasted nuts are discharged from the lower end of the drum and immediately covered by

ash after sprayed with little water, so as to absorb the oil on the surface. This facilities the

removal of the remaining oil on the shell. Due to draw backs of the method is superseded by

oil bath roasting.

5.2PROCESSING AT ORCHARD LEVEL

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BORMA

PEELING

GRADING

FILLING & PACKING

5.5PROCESSING OF RAW NUTS AT FACTORY

The nuts which are required to be processed at factory should be dried again for 1 2

days to reduce and maintain the moisture level of 7 8 percent. The processing of raw nuts

involves roasting, shelling, drying, peeling, grading and packing. Once the raw nuts are entered

inside the factory, they will be weighed at gate. Then these cashews will be taken to the first step

of the processing that is roasting.

The steps involved in commercial processing of cashew nuts are detailed below:-

5.5.1Roasting

Roasting is the first processing that is to heat the raw nuts in a machine to a particular

temperature for the purpose of shelling. The roasting helps the cashews to get firm and easy to

break. This helps reduction of breakage in the next step of shelling. Roasting of raw nuts is done

to separate adhering shell from the Kernel.

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There are three types of roasting via, drum roasting, oil bath roasting and stream roasting.

Stream roasting is the commonly used method by most of the processing units. In the case of

steam roasting, the raw nuts are roasted at about 100 lb pressure for about 25 30 minutes.

Then the nuts are allowed to cool for 24 hours and taken for shelling.

5.5.2Shelling

The roasted nuts are ready for shelling. The shellers shell the roasted nuts with a small

wooden piece called kottu vady without destroying the kernels inside. The shellers themselves

grade the Shellers nuts. The shellers are all female workers. Cashew nuts after roasting and

cooling are to be shelled to remove kernels. One has to be very careful while shelling the nuts.

Hands are to be protected from Cashew Nut shelling. For the same reason, it is advisable to dust

the nuts with wood ash. Commercial processing units use foot operated shell cutters (mechanical

device) for shelling. This device consists of a pair blade (knives) shaped in the counter of half a

nut which could be operated by foot. The blades cut through the shell all around the net, leaving

the kernel untouched. After shelling the kernels and shell pieces are separated manually. The

nuts have to be grouped into various sizes, each size making a pair or blades of appropriate size.

5.5.3Borma/Drying

Borma is the processing where the shelled nuts are heated on a closed room in trays for

the purpose of getting crispiness to the cashew kernels. Here the cashews are not directly heated

but the heat air is pushed into these cashew kernels.

The kernels after shelling will have moisture content of more than 6 percent. Drying of

these kernels is necessary to prevent fungus attack during subsequent storage and to facilities

peeling of testa. The kernels are to be dried to moisture content of about 4 5 percent. This is

done by drying the kernels in hot chambers at 70 80 C in perforated trays for about 6 8 hours.

Uniform drying could be achieved with a cross flow drier using forced hot air circulation through

the kernel layers. In order to ensure uniform dying, the position of the trays has to be changed

frequently, as scorching may occur at hotter places. Excess drying of kernels leads to kernels

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becoming very brittle resulting in higher breakage. After drying, the kernels are kept in the moist

chamber for 24 hours which facilitates easy removal of testa (peling) and minimizes broken

kernels.

5.5.4Peeling

The shelled and heated nuts are then peeled by the peelers. There is a brownish yellow

skin over the nuts. The skin is peeled by the workers by hand manually. Here also the work is

done by female workers. This process involves the removal of testa (seed coat) from the kernel.

Care has to be taken while removing the testa. If kernels are scorched more it results in poor

quality kernels.

5.5.5Grading

Kernels are graded according to the size manually. In the International Market bold

whole kernels fetch premium price. The grading standards developed in India refer to white

whole (undamaged) kernels and indicate the number kernels per lb of weight. The largest kernels

come in the grade W 180 (340 380/kg) and the smallest of the seven grades in W 450 (810

1000/kg). Generally, Brazilian kernels have a relatively high proportion of large wholes, with the

extra attraction of the 180s grade, known as Special large Wholes. The white whole kernels are

priced according to size. Further classification refers to broken kernels, butts, splits, pieces, small

pieces and whether kernels are white or scorched.

5.5.6Packaging

As far as possible packaging material used should be eco friendly and recyclable and

containers are hermetically sealed after filling carbon dioxide. After grading the graded nuts are

filled in aluminum tins. Each in contains 25 pounds of nuts and these tins are arranged in cartons

for export.

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5.6 Functions of the Production Department

The production department is in charge of processing the raw nuts into finished products.

The major functions performed by them are;

I. Allotment of raw nuts for processing:

The raw nuts purchased by the commerce department will be handed over to the

production department for processing. The production department has to allot the raw nuts to

various factories for processing. The allotment is done after considering the processing capacity

of each factories, work force strength etc.

II. Quality Control

The production department have to look on the quality while the processing of raw

cashew. The quality products are also used as a marketing strategy of the organization. For the

purpose of determining the quality, the processed cashew kernels are divided into namely

Export grade and Indian grade. In order to maintain the quality they perform the following

functions.

Assurance of the incoming raw nuts quality and quantity.

Assurance that proper processes are operating on the raw nuts.

Assurance of the quality of outgoing finished goods.

The production is department conducts inspections from time to time to assure the quality inprocessing.

III. Grading

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The kernels processed are graded under hygienic conditions. It is as per international

standard of grading.

IV. Packing

The production department is also in charge for packing of the processed kernels.

Domestic standard packing includes 20, 40, 100, 250, 500 grams and 1kg bags. In addition to

that as per customer requirement bulk can be supplied. Gift packers containing 2kg of cashew

kernels are also available.

V. Transfer of processed kernels:

The kernels processed are transferred to the commerce section for sale. Indeed the

production department is in the overall charge of processing the cashew kernels into final

products.

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MATERIALS PLANNING AND

CONTROL DEPARTMENT

6 Materials Planning and Control (MPC)

This department is usually headed by General Manager. This department plays a strategic

role in materials management. MPC is the prime agency responsible for the availability of any

material required for production and hence contently keeps track material status. it is the

department which receives the Material Requisition (M.R) from the production department and

makes sure that the required material is made available to the manufacturing section. As this

department has the major responsibility of the stock in the store and for allocation and co-

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ordination with the purchase department for procuring right material.

6.1Duties of officials in Materials Department

A. The Materials Manager

The Materials manager is in charge of running and maintenance of vehicle, insurance,

lease deed, profession tax and factory license. Preparation of annual indent for stationery and

purchase of quality materials at competitive price is also done by him.

Apart from the above duties he has to ensure that adequate materials are supplied in

factories so that production can be carried out in an uninterrupted way. Thus the Materials

Manager plays a vital role in the smooth functioning of the organization.

The superintendent of the material department has to perform the following duties:

Attending all matters dealing in the material department.

Overall supervision of staff and their deployment and all other matters connected with

stores.

Maintain stock register and distribution of register.

He is in charge of stores to maintain the concerned records.

Enquiries and quotation may be invited for purchase of materials.

Any other work entrusted to him by the M.D or his department head.

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PURCHASE DEPARTMENT

7 PURCHASE DEPARTMENT

This department deals with the purchase of raw materials from various sources. In shatha

enterprises, raw materials are purchased through inviting tenders from suppliers. 100% of raw

materials are purchased from outside suppliers. Production department gives order to the

purchase raw materials. The main raw material is cashew nuts.

7.1Purchase policy

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Shastha enterprises has a purchase policy to purchase raw material in right quantity and

quality at right time and right place from right source. Acceptance of sample can be done as per

the recommendation from the quality assurance department. If the samples are qualified, the

suppliers can be included in the list of qualified suppliers. Tenders should be sent to qualified

suppliers only. They only have the ability to provide bulk of raw materials of the company.

The function of purchase of raw nuts is again classified into two:

i. Local purchase

Local purchase means the purchase made within the country. Before doing local purchase

they will specify the quality of raw nuts, quantity required, terms of payment, modes of delivery

etc. the local purchase is mainly made from the southern states of the country.

ii. Import

The raw nuts purchased from the country are not sufficient to meet the requirements of

the company. So they will import raw nuts from African countries. While importing the raw

cashews the modes of payment is done either through Letter of Credit (LC). At the time of

receiving the raw nuts, the company officials will inspect the landed weight and landed quantity

to ensure that the right quantity and quality is supplied as per the terms and conditions.

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FINANCE DEPARTMENT

8 FINANCE DEPARTMENT

The finance section is assigned to plan and control the firms financial resources. The

finance function of raising and using money has significant effect on other functions of the

organization.

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The finance manager is in charge of the finance department. The finance manager gets

proper support from other officials like the Assistant finance manager, superintendent, etc. The

finance department is responsible for the management and transfer of funds.

8.1Sections of finance department

The various sections under finance department are:

1. Books and Budget

2. Sales

3. Priced stores Ledger4. Costing

5. Establishment

6. Bills Payable

1. Books and budget:

Collection of accounts from different section

Preparation of trial balance and final accounts

Coordination with auditor

Helps statutory officer

2. Sales :

Invoice generation

Collection

Debtors ledger

3. Prices stores ledger:

This section is responsible for maintaining accounts for the stores in monitory items.

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4. Costing:

Each product is having a separate section. It sets the cost that is used by commercial

group to add profit margin to set the price.

5. Establishment:

This section is responsible for cash disbursements and payment. It handles all the

payment said to the employees such as benefits.

Medical reimbursement

Provident fund

Incentives

Loans and advances etc.

6. Bills payable:

This section handles the payment to be made to the suppliers once the SRV (store receipt

vouchers), P.O (purchase order) invoice are received, cross verification of P.O terms,

quality and quantity assurance with the SRV and invoice. Once all the claims are found

satisfactory, the payment is used as per the terms.

8.2Management of working capital

A firm should maintain a sound working capital position and that there should be

optimum investment in working capital. Thus there arises an unavoidable need to manage

working capital well. Working capital management involves management of different

components of working capital such as cash inventories, accounts receivable, creditors etc.

Finance manager has to spend their time to the daily internal operations, relating to current assets

and current liabilities of the firm.

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8.3Duties of officials in finance section

1. Finance Manager

The finance department is headed by the finance manager. The finance manager is

responsible for fund management and transfer of funds. He will also be responsible for watching

day today operation of bank accounts, passing of bills and signing cheques and overall

supervision of finance department. He is responsible to do any other work entrusted by the

managing director.

Work relating to income tax, sales tax, customs and central excise duty.

Correspondence with the government.

Attending various correspondences.

Supervision of the department.

Assist the finance manager.

Checking of cash, cash payment, receipts, and balance.

Verification of annual stock statement, closing stock statements.

Any other work entrusted by the managing director.

Supervision of the work of cashier and other staff of the finance department.

Supervision of the department, maintenance of attendance register, movement of register.

Joint custody of cash and securities.

Supervision of work allotted to finance department.

Reply to correspondence from government banks. Supervision and sanctioning of T.A, miscellaneous, advances etc and its adjustments.

Verification of cheques before signature.

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AUDITING DEPARTMENT

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9 INTERNAL AUDITING DEPARTMENT

The internal auditing department is headed by the Internal Audit Officer. The main objectof the internal audit department is to detect and prevent errors and frauds. The internal audit

department has to examine systematically the books and records of the organization. The

hierarchy of the internal audit department:

9.1Objectives of Auditing

The objective of auditing can be classified into:

1. Primary objective

2. Secondary objective

The primary objective of auditing is to verify accounts and report whether the P&L a/c and

Balance Sheet is properly drawn according to the companies act and they exhibit a true and fair

view of the state of affairs of the concern.

The secondary objective is to detect and prevent errors and fraud. The secondary objectives can

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Internal Audit Officer

Superintendent (Audit)

Senior Assistant

Junior Assistant


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be classified as follows:

Detection of errors

Detection of frauds

Prevention of errors and frauds

9.2Internal Audit Officer

The Internal Audit Department is headed by the Internal Audit Officer. He has to check

all expenditure of the corporation and ascertain whether the amount shown in the accounts are

legally disbursed or not. In addition to that he has to examine all the books of accounts to ensure

that the books of accounts depict a true and fair view of the state of affairs of the business. He

will check all the statements to analyze the financial position of the company.

To see whether all the receipts of the corporation have been properly accounted.

To audit the accounts of stores and stock kept in any office of the corporation.

To physically verify the cash and stock of corporation.

To inspect any office of the corporation and call for any accounting and processingrecords.

To give necessary assistance in the preparation of all trading, P&L accounts and balance

sheet.

To perform any other official duties assigned to him from time to time.

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HUMAN RESOURCE DEPARTMENT

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10 HUMAN RESOURCE DEPARTMENT

The personnel manager will be in the overall charge of personnel department. The

personnel section is in charge of all the matters related with recruitment, selection, training and

development, wages and salary administration, law etc.

The hierarchy of personnel dept:-

General Manager (Personnel)

Personnel Manager

Assistant Personnel Manager

Assistant Personnel Manager Superintendent (Personnel)

In shastha enterprises, the appointment of persons is made on a direct recruitment basis.

The persons are appointed through P.S.C and employment exchanges. Selected persons get 6

months training in the concerned department. The department provides guidelines to workers for

greater benefits from them.

Personnel department deals with managing and controlling of persons in an organization.

Personnel management is the part of the total management of the organization, which

specifically deals with the human resource, in respect of their procurement, development and

motivation towards the attainment of the organizational objectives.

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Shastha enterprises have been playing a highly progressive role in the best sense in

fighting of the workers and the industry in general. For example, it was first in the field to

oppose open general license for import of nuts and its plea for canalizing imports.

Last but not least are the fringe benefits enjoyed by its employees, they get minimumwages, dearness allowance, leave facilities, provident Fund, gratuity Festival bonus, holiday

wages, leave with wages, ESI, lwf,etc.

10.1 Duties of Officials in the Personnel Department

1. The Personnel Manager

The personnel manager is the head of personnel department. He is the overall charge of

the personnel section. He will attend any other work entrusted to him by the managing director.

His duties are:

Exercise effective supervision over the working of personnel section.

He will convene the central trade unions meeting.

Any other work entrusted to him by the managing director.

2. The Assistant Personnel Manager

His position comes next to the personnel manager. He is entrusted with the following

duties:

Correspondence with government departments.

Transfer and posting of staff and workers.

Declaration of production staff.

Employment of department staff and workers.

Foreign employment of staff and workers.

Retirement of staffs and workers.

Pay fixation of staffs.

Preparation of D.A to staffs and workers

Leave particulars of staff and workers.

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Conciliation and leave surrender of staffs.

Increment and leave surrender of staffs.

Any other work entrusted to him by the managing director.

Superintendent

The duties of superintendent are:

ESI and connected work.

EPF and connected work.

Gratuity.

10.2Profile of workers in factories of shastha enterprises

In the cashew factory broadly there are two categories of employees. They are the daily

paid workers and the salaried staffs. The workers are again divided into two categories. They are

the piece rated workers and daily rated workers. The piece rated workers are shellers and peelers.

Other workers are daily rated workers.

10.3About the Salaried Staffs:

The staff of the company mainly deals with the office work. The staffs of the company

are mainly concentrated in the head office and the group offices.

The monthly paid staffs are divided into two groups:

1. Fully salaried staff and

2. Retaining staff

The fully salaried staffs include clerks, drivers, lorry cleaners, mechanic blacksmith and

watchman. These staffs are entitled to receive the salary every month irrespective of the work

done in a year. Their salary is fixed.

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The retaining staffs do not receive the salary every month; they receive their salary only

in the month which has the processing of raw nuts. In the months where the works are not

performed i.e. in the months where no processing of raw nuts is done they are entitled to get just

the retaining allowance which is fixed by the pay commission. The retaining allowance is much

smaller compare to the salary which is received by them in the working months.

The retaining staffs include:

1. Bormen: Bormen are the worker who does the work of heating up of the raw nuts

up to a certain temperature to make easy the shelling of the raw nuts. An average in

K.S.C.D.C there is about 6 Bormen in a factory.

2. Roaster: Roaster is another retaining staff in the company. A roaster does the work of

roasting the heated raw nuts and burns up the shells of the raw nuts and makes it ready for

the shellers to shell up the nuts. There are about 4-7 roasters in a factory.

3. Kernel weigher: Kernel weigher is another type of retaining staff. The kernel weigher does

the work of weighing the nuts shelled by the shellers. The kernel weigher weighed the nut of

every shellers everyday and fixes their wages. There about 3 kernel weighers in every

factory.

4. Kernel checker: The kernel checker does the work of checking up of the graded kernels to

make sure that they are graded according to the standard prescribed. There are about 2 3kernel checker in every factory of the corporation.

5. Tinker: Tinker is a retaining staff who does the work of the sealing of all the edges and holes

of the tin in which the kernels are to be exported. The tinkers do the work of closing of all the

holes in the tin with the help of the lead which is heated and pasted on the edges of the tin.

There are about 2-4 tinkers in every factory.

6. Packer: The packer is another retaining staff who does the work of packing up of kernels in

the tin. The packer has to do his job with utmost care because he has to make sure that there

are no further holes in the tin to prevent the entry of worms and bacteria into the tin. There

are about 3-5 packers in a factory.

7. Masteries : This is the also type of retaining staff. Masteries do the work of supervising on

the workers in the factory. There are three types of masteries in each factory. They are;

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law

shelling masteries, peeling masteries and grading masteries. There are about 1 2 shelling

masteries, 1 2 peeling masteries and 1 grading masteries in every factory of the Shastha

enterprises.

10.4Functions of Personnel Section

The various functions performed by the personnel section are described here under with

the help of a chart.

Recruitment

Training

Development

Wage administration

ESI & PF Maintenance

The personnel section will perform the following functions.

a) Recruitment: The organization requires adequate human strength for its smooth

functioning. The personnel section is in charge of recruitment of the workforce. The organization

workforce can be classified into three:

The head office staff

The factory staff

The factory workers

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Personnel

Department

Function


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The top officials like Managing Director, Chairman etc. are appointed by the

Government. The head office staffs are appointed through the public service commission.

The factory staffs like the factory clerk, watchmen etc are appointed by the director

board. Such vacancies are sometimes filled through employment exchanges. The rest of theworkers are appointed through test work conducted by the organization. The organization is also

following the internal source recruitment methods such as transfer, promotion etc. to fill up the

vacancies.

A part from the above the organization will appoint some casual workers to meet its short

term demands. This would help them to meet their demand in an economic way.

b) Training : The workers are trained to increase their knowledge and skill. Here the

training is provided at the work place itself. The workers are put on their respective job under

the guidance of the immediate supervision. In this way, he learns the job and does the work

at the same time itself.

c) Wage and salary administration : The organization generally stands for protecting the

interest of the workers in the industry. The workers are provided with the statutory benefits

such as minimum wages, bonus etc. The personnel section is in charge of administration of

wages and other details. The wages and other benefits are determined as a result of collectivebargaining by the trade unions and the management.

Chart showing minimum wages with effect from 1-1-2010

Work Minimum Wage

Shelling Rs. 13.60 per kg

Peeling Rs. 16.61 per kgGrading Rs. 98.10 per kg

Roasting Rs. 8 per kg

d) ESI & PF : The employees are insured under the Employees State Insurance Act

of 1948. All the documents related with ESI & PF are maintained in the personnel section.

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e) Law: The personnel section is responsible for resolving all the work related dispute between

the organization and the external parties is also handled by the

personnel section.

10.5The employees strength

The Shastha enterprises is a model employer in the field of cashew industry mainly

protecting the interest of workers by giving the statutory benefits like minimum wages, bonus

etc. The present strength of workers with effect from 1-1-2008 is shown below:

Shellers 1800

Peelers 1900

Graders 300

Others 50

Factory staff 100

Head office staff 70

The shastha enterprises are giving employment to more than 5000 workers in all over quilon

district.

Social Responsibility

Shastha enterprises corporate social responsibility (CSR) initiatives cover:

Health

Safety

Environment

Health:

Good health is a basic driver for growth. Focusing on the people surrounding, shatha

enterprises has set up eye camps and organizes periodic health drives free eye operations or at

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highly subsidized rate. Mother/child care and community initiatives have been undertaken proper

sanitation clean surroundings eco friendly processing methods etc have been actuated.

Safety:

Safety standards are adopted in factories by its work place.

SALES & MARKETING

DEPARTMENT

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11 SALES/MARKETING DEPARTMENT

In shastha enterprises, sales department has the duty to sell the products. In an

organization sale of product is very important. The ultimate objective of all production is sales.

No business survives without marketing.

Shastha enterprises is one of the leading supplies of cashew kernels and to the nation and

abroad. For the sale of processed cashew kernels the company is focusing on two markets

namely:

Local market

For the local sale of processed nuts the company is following various techniques like

advertisement, sales promotion, publicity etc. In order to capture the local market now the

shastha enterprises has started a value addition unit for producing processed nuts in different

flavor. The promotional activities for capturing the market are in progress.

Foreign market

The major consumers of processed Indian cashews are the foreign countries. The

company will enter into contract with the foreign buyers for the sale of processed cashew

kernels. The major foreign buyers are Spain, USA, UK, Japan, Hong Kong, Germany, Australia

etc.

Shastha enterprises sales the item of products such as cashew kernels, shells, skin, CNSL etc.

Pricing is very crucial decision in marketing management. The objective of the firm is to

get optimum return to invest. It is very much depend upon the decision, after meeting the

exchange value of goods or services in terms of money. Pricing will have to accommodate trade

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practices and regulations in the market. Prices should take into account of additional cost

involved in respect of packaging and labeling etc.

Cost consciousness and consciousness and capacity utilization has importance at all. They are

considering factors affecting pricing decisions such as cost of product, competitors price,

economic environment etc. the head office does the pricing of the product.

The very purpose of every commercial organization is to promote sale, because it is the

only way to commercialize the product. The shastha enterprises is giving much importance to

sales promotional activities; almost they are giving cash discount to the product and giving them

rebate. The company has faced threats from competitors.

11.1Marketing Process

The company is now focusing on the most modern marketing activities to capture the

market. They are rightly following several strategies to attract the attention of customers. Shastha

enterprises is an organization that exports 80% of its products to the foreign countries. So in

order to attract the 20% local market they introduced the following products:

Value added products (roasted and salted) in small packets weighing even 20 grams worth

Rs.15 only.

Domestic packing in 20, 40, 100, 250 and 500 grams, in addition to that as per customer

requirement, they will supply in bulk quantities.

After considering the household requirements the company is now planning to produce

cashew powder for cooking purpose.

They are also planning to produce vegetable soup from the cashew apples.

11.2 Import pattern

The world import of cashew kernels was 2.86 lakh tonnes in 2005 of which USA was the market

leader with 39.76 percent of the volume and 41.66 percent of the value. USA was followed by

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Netherlands with 11.72 percent of the quantity and 10.85 percent of value. Other important

importers included United Kingdom (7.39%), Australia (4.40%), Germany (4.33%), Canada

(3.78%), UAE (3.42%), Russian Federation (2.22%), Japan (2.06%), and France (1.86%). The

cashew imports grew at an annual growth rate of 18 percent in quantity terms and 13 percent in v

The world import of cashew nuts with shell was 5.80 lakh tonnes in 2005 of which India

was the market leader with 93.44 percent of the volume and 91.37 percent of the value. Other

importers included Vietnam (5.44%), France (0.26%), Saudi Arabia (0.17%), UAE (0.12%),

USA (0.08%), Kenya (0.05%), Thailand (0.05%), Spain (0.05%) and Canada (0.04%). The

following table shows the country-wise import of cashew nut with shell during 2005.

11.3 Export pattern

The world export of cashew kernels was 2.88 lakh tonnes in 2005 of which India was the market

leader with 43.28 percent of the volume and 42.68 percent of the value. India was followed by

Vietnam with 28.25 percent of the quantity and 27.70 percent of value. Other important

exporters included Brazil (13.21%), Netherlands (8.24%), Indonesia ( 1.20%), Belgium (1.12%),

USA (0.80%), United Republic of Tanzania (0.59%), United Kingdom (0.44%), and

Mozambique (0.40%). The following pie diagram shows the country-wise volume of export of

cashew kernels during 2005.

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The world export of cashew nuts with shell was 4.89 lakh tonnes in 2005 of which

Cte d'Ivoire was the market leader with 34.34 percent of the volume and 26.70 percent of

the value. Cte d'Ivoire was followed by Guinea-Bissau with 19.12% of the quantity and

26.04 percent of value. Other important exporters included Indonesia (13.49%), Benin

(8.77%), United Republic of Tanzania (6.62%), Ghana (6.39%), Mozambique (4.31%),Nigeria (3.53%), Kenya (1.03%) and Guinea with 0.87 percent. The following pie diagram

shows the country-wise export of cashew nuts with shell in terms of quantity during 2005.

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FINDINGS AND SUGGESTIONS

12 FINDINGS AND SUGGESTIONS

12.1FINDINGS

1. The main advantage of the organization is that they sell the best quality of products.

2. They have better training welfare facilities.

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3. Due to the government formalities there was delay in the payment of pensions.

4. When compared with the public sector workers, most the Shellers in Shastha enterprises

were found less skilled.

5. The state government provides them with appropriate financial resources as and when

required.

6. The cashew industry in Kerala is not depending on domestic production of cashew nuts,

but on import source. This creates outflow of foreign exchange.

7. As the retirement of employees is too much, several posts in the organization is left

vacant and no new recruitment is done.

8. There is very good relation between various divisions and the workers and management.

9. Employees are committed and competent.

10. To protect the interest of the workers, public and co-operative sector was established in

the cashew industry.

12.2SUGGESTIONS

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1. The organization should recruit and train young employees for the future and the vacant

posts should be filled either by new recruitment or by promotion.

2. By avoiding competitors among the manufacturers of cashew kernels, the kernel price in

the national and international market can be raised.

3. Purchase only high quality of raw nuts.

4. Marketing of the employees should be widened.

5. Exporting of products and importing of raw materials have to be done.

6. Import restriction by the state is a remedy to avoid the outflow of the foreign exchange.

7. A target of particular has to kept as standard and the shellers must be told or expected to

shell the standard.

8. There is a delay in every matter because of government formalities. This has to be made

faster in proper channels.

9. The shellers have to be provided with proper ventilation to protect them from lung

diseases.

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13 SWOT ANALYSIS

To accomplish proper firm-environment fitness, company's strengths, weaknesses,

opportunities and threats should be understood. This analysis is commonly known as 'SWOT

ANALYSIS'. Strengths and weakness are internal factors. Opportunities and threats are external

factors.

13.1Strength

Shastha enterprises are the major cashew exporter in the country.

Provides large volume of employment opportunities.

Good reputation.

Shastha enterprises have a highly motivated work force.

Non occurrence of strikes and layouts.

13.2Weakness

Lack of competitiveness.

Non availability of raw materials.

Low degree of performance appraisal programmes

Financial crisis.

13.3Opportunity

Huge international order for salted and roasted cashew.

13.4Threats

They face extreme competition.

Better promotional strategies introduced by the competitors.

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14 CONCLUSION

The Shastha enterprise is one among the major private sector undertakings in Kerala

state. The organization is running in loss. The company has to pay off a huge liability by way of

bank loans. The major reason for its performance was due to the huge rate of bank interest levied

by the commercial banks. The shastha enterprises can perform well if they are in a position to

settle their liabilities in full. On the other hand, the company act as a model employer in the field

of cashew industry mainly to protect the interest of workers to give statutory benefits like

minimum wages, bonus etc.

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BIBLIOGRAPHY

BOOKS

1. Donalds Tull - Marketing Research

2. Kannan.K.P - Cashew Development in India, New Delhi.

3. H.G.Johns - Introduction of Economic Growth, London.

4. Russel.D.C - Cashew nut Processing United Nations, 1963.

REPORTS

1. Economic Review, Trivandrum.

2. Report on Annual Survey Industries, Trivandrum, Department of Economics, 1965.

3. Government of Kerala, a note on Cashew Industry-1970.

PERIODICALS

1. Financial Express, Bombay.

2. Cashew News, Teller, Cochin.

3. Indian Worker, New Delhi.

4. Indian Cashew Journal, Cochin.

WEBSITES

www.Cashewcorporation.com
http://c/Users/Vishnu/Desktop/www.Cashewcorporation.comhttp://c/Users/Vishnu/Desktop/www.Cashewcorporation.com

Documents

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