CHAPTER-1
INTRODUCTION
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INTRODUCTION
The global spirits industry has proved to be recession-resistant with slowing
economies not having any major impact on the overall growth of the industry. However,
there has been some shift in the business and consumption trends. For example, the
ongoing economic slump has led to a shift from on-premise to off-premise consumption
as off-premise consumption has proved more economical. Likewise, the aging
population, particularly in the United States, has created above-average demand growth
for spirits and wine. Globally, the spirits industry is growing on the back of two
importance factors. First, the emerging markets of Brazil, Russia, India and China
(BRIC) witnessing strong ongoing momentum in spirits and wine consumption as a result
of rise in discretionary spending of consumers. Secondly, the western markets, notably
United States although slow is still well oriented. .
Apart from the favorable demographics i.e. aging population, the shift in the
consumption of alcoholic beverage – from beer to spirits and wine - is helping the growth
of the spirits industry. Within the spirits business, the trend towards premium products
has further helped the industry in value terms. Spirit markets have been premiumizing
across the regions as premium consumers have more and more access to more
sophisticated products and are aggressively willing to pay premium for higher quality
brands.
2007 proved to be a remarkable year for the global distilled spirits market with
strong growth in emerging countries and moderate progress in Western markets within a
worldwide economic context of lower growth. In the year 2008 and beyond, despite of a
difficult economic environment, emerging economies have witnessed a strong growth
with significant moderate growth in other markets that will help the overall industry
growth.
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With the advancement of business processes, supply chain gained more and more
importance for each member of business community including manufacturers, retailers,
suppliers, suppliers’ suppliers and even consumer. Strategies were developed in order to
accelerate product sales and distribution. With the expansion of sales from areas to cities
and cities to countries, the need arose for proper tracking of demand and supply as well
as forecasting of materials, supplies, sales and distribution schemas. After the emergence
of Information Technology and business globalization, the concept of integrated supply
chain management was revolutionized. Information technology consists of the tools used
to gain awareness of information, analyze this information, and execute on it to increase
the performance of the supply chain.
OBJECTIVES OF THE STUDY
To study about the organization and its functions.
To have a study on organizational structure (hierarchy) of Kerala State Beverages
(Manufacturing and Marketing) Corporation.
To understand the working of various functional departments.
To make a SWOT analysis of the organisation.
To make an analysis of Porters five force model of the organization.
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SCOPE OF THE STUDY
The organization study was conducted at Kerala State Beverages (Manufacturing and
Marketing) Corporation (KSBC) .The Corporation does monopoly business and provides
income to the government. The study is intended to attain a firsthand experience of the
overall functioning of an organization. The study is also undertaken to observe and
analyze the functions of KSBC. As it has various departments for the smooth running of
the firm, it is important to understand how each section within the department’s
functions. The detailed analysis of the activities performed by the departments is included
in the study. The study also helps to make an analysis of company’s strengths, weakness,
opportunities and threats. The findings and suggestions of the study help the company to
improve their overall performance. Moreover to know more about the way it functions
and how they are providing genuine liquor at reasonable prices to consumers and thus
check the distribution of illicit liquor unauthorized shops. Hence the study is significant.
The study is confined to head office of KSBC in Thiruvananthapuram.
1.4 RESEARCH METHODOLOGY
The research methodology used for the organization study is through the collection of
primary and secondary data.
Primary data source
Primary data was obtained through observation, direct communication with the
management staff in one form or other and also through personal interviews. Primary
data for the study is obtained from:
(i) Unstructured interviews with managers, departmental heads, & employees.
(ii) Direct observation
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Secondary Data source
Secondary data are collected from
previous annual reports
companies’ official websites
journals
Text book
PERIOD
The research “organization study on Kerala State Beverages Corporation Limited
(KSBC)” was carried out period of fifteen days (15 days) from July 25 th 2011 to
August 7th 2011.
SCOPE AND SIGNIFICANCE
The organization study is conducting in Kerala State Beverages Corporation
Limited. The main aim of this study was to get a first knowledge of the various
activities of Kerala State Beverages Corporation LTD (KSBC) and its history and
make an objective assessment whether the organization is in proper line, observe
the soundness of financial and managerial principles coverable of modern
facilities, capital requirement, etc. Organization structure and management of
various department of Kerala State Beverages Corporation Limited are taken for
the purpose of study.
LIMITATIONS OF THE STUDY
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The important limitations encountered during the study are:
1. Since the employees are busy, they could not provide much more information.
2. The company does not provide any information relating to the status of the
company and the data obtained is limited.
3. The study relies largely on secondary data and hence the limitation.
4. The unavailability of the data, which were confidential.
5. Time constraint was the one of the limitation of my study.
CHAPTERISATION
Chapter I - Includes introduction, objectives, scope, methodology and limitations of the
study.
Chapter II - It includes Industry Profile. The Origin of the industry, its growth and
development.
Chapter III - Includes company profile of KSBC, their vision, mission, motto, their
objectives, their quality policy and their product profile.
Chapter IV - Puts forward the organizational structure of KSBC
Chapter V - It includes Departmental Analysis, the detailed analysis of the various
departments of KSBC
Chapter VI - It includes the SWOT Analysis of the company, the strength, weakness,
opportunities and threats of the company. It also includes the Porter’s Five Force Model.
Chapter VII - Involves the various findings, conclusions and suggestions about KSBC.
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CHAPTER - 2
INDUSTRY PROFILE
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2.1 HISTORICAL ASPECT OF ALCOHOL IN INDIA
Beverages believed to contain ethanol are mentioned in ancient literature dating
back to the Vedic period around 2000 B.C. Two varieties of drinks are described soma
and sura along with their effects and the harms that might result from excessive
consumption. Soma the drink of the social elite was credited with positive qualities. On
the other hand, sura was consumed by warriors to enhance their valor and courage
among, among other things. Soma receives no further mention in post-Vedic literature,
but sura and its variants have remained a part of Indian literature ever since. For example
South Indian literature contains descriptions of fermented palm sap drinks that may be
similar to present day toddy. Alcohol was also an ingredient in many medicinal
preparations in the traditional Ayurvedic medical system. Ancient Indian medical texts
describe in detail the harmful effects of excessive or indiscriminate drinking on the mind
and body.
Despite the knowledge and availability of alcoholic beverages, they were never a
routine part of the diet in India. Strict rules and guidelines governed who could drink and
under what circumstances. Manu, the ancient Hindu sage, strictly forbade drinking by
Brahmins, the learned ones. Members of other social classes were allowed to drink, but
only on special occasions.
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Although the Islamic tradition has stronger prohibitions against alcohol than the
Hindu does, drinking was common among the Mughal emperors and their subjects.
Soldiers were encouraged to drink habitually and other social sectors were allowed to
join in mass drinking at festivals or other public functions. While it does not favor
alcohol use, the Sikh religion tolerates drinking, especially by the military class.
Therefore it comes no surprise that Punjab-the traditional Sikh homeland-has one of the
highest alcohol consumption figures in contemporary India. In contrast to these other
religious traditions, the Buddhist and Jain religions strictly forbid alcohol use in any form
under any circumstance.
In sum, ancient Indian society had the knowledge of how to prepare beverage
alcohol, but did not support routine alcohol use and regarded abstinence as a virtue for
most people. Although alcohol never became a part of daily food and drink, its occasional
use was permitted. The available evidence suggests that alcohol use didn’t pose a
significant or social problem in ancient and medieval India.
The period of colonial rule saw a slow but steady rise in alcohol consumption,
with significant changes in the beverage consumed, the pattern of drinking, and social
attitudes towards alcohol use. Distilled beverages of a much higher alcohol content
gradually replaced traditional fermented beverages. Better fermentation and distillation
process and the introduction of new packaging technology resulted in alcoholic beverages
becoming mass- produced commercial items.
Improved transportation facilities contributed to wider alcohol availability
everywhere in India. While this played a role in increasing alcohol consumption, there
was a more fundamental change in the pattern of drinking. As conventional rules and
guidelines for alcohol use weakened, drinking changed from ritualistic and occasional to
become a part of routine every day social inter course and entertainment. This European
pattern of drinking was accompanied by a change in attitude towards alcohol, which
came to be regarded more positively.
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2.2 TYPES OF ALCOHOLIC BEVERAGES
Because India has great variety in topography, climate, vegetation, culture, and traditions,
it is unsurprising that hundreds of kinds of alcoholic beverages are made and consumed.
All of them however, can be grouped into the following for broad categories.
Indian Made Foreign Liquor
This category, created for revenue purposes, consists in Western style distilled
beverages such as whiskey, rum, gin, vodka and brandy. These are made in India under
government licenses and the maximum alcohol content allowed is 42.8%. Whiskey is by
far the most popular drink in this category, with hundreds of brands available, at least 20
of which have an all India presence. Several dozen brands of rum, gin and brandy are also
available. Wines fall under this category of liquor too, although until recently wine
production and consumption in India was almost nonexistent. Some wines are now made
in the country, and small amounts of wine are imported for selected consumers.
Country Liquor
These distilled alcoholic beverages are made from any cheap raw material
available locally, e.g. sugarcane, rice, or coarse grains. Country liquor is produced in
licensed distilleries and sold from authorized outlets within the same district. Common
varieties of country liquor are arrack, desis harab, and toddy. Excise duties are paid, but
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since production costs are low, the retail prices are also low. The licensing system and
some governmental monitoring of the production process ensures a uniformity in alcohol
content (around 40%) and basic safe guards against adulteration with other harmful
intoxicants. Northern and western India are sugar producing areas and a large amount of
molasses is available in these states at a very cheap price.
Consequently molasses is the main raw ingredient for country liquor there. In
south India, coconut and other palms are used for the same purpose. In addition,
inexpensive are grains are used for country liquor all over India
Illicit Liquor
Besides lisecensed distilleries, a number of small production units operate
clandestinely. The raw materials they use are similar to those in country liquor, but since
they evade legal quality controls the alcohol concentration in their products varies and
adulteration is frequent. It is common to find samples containing up to 56% alcohol. One
dangerous adulterant is industrial methylated spirit, which occasionally causes mass
poisoning of consumers who lose their lives or suffer irreversible eye damage. Since no
government revenues are paid, illicit liquor is considerably less expensive than licensed
country liquor, and thus finds a ready market among poor. In many parts of India illicit
liquor production and marketing is like a cottage industry, with every village having one
or two illegal operations. In addition to the commercial production of illicit liquor, home
production for personal consumption also is common in some parts of the country.
Beer
Beer is relatively recent arrival in India, which remains largely a spirits-consuming
society. However, beer production and consumption have grown rapidly. Indian beer is
manufactured in large licensed breweries and is available under more than 60 brand
names whose alcohol content ranges from 5% to 9%. Beer is available mostly in bottles,
but cans have been introduced recently. Since for the same amount of alcohol the price of
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beer is much higher than distilled liquor, beer is a drink for the middle and upper
economic classes. Beer also becomes a favorite beverage of the urban young.
2.3 TOP COMPANIES
Andhra Pradesh Beverages Corporation Limited
The Andhra Pradesh Beverages Corporation Limited (APBCL) was established in
the year 1986 as a fully owned undertaking of the Government, with the main objective
of supplying pure and hygienic packed arrack to the consumers and is incorporated under
Companies Act, 1956. The Corporation had set up 22 field units for carrying arrack
operations at various districts.
Karnataka State Beverages Corporation Limited
Karnataka State Beverages Corporation Limited (KSBCL) is a Government of
Karnataka undertaking registered under the Companies Act, 1956 in the year 2003.
Pursuant to Government of Karnataka notification No.FD 16 PES 2003 (viii) dated
30.06.2003; the Corporation is a distributor licensee under Karnataka Excise (Sale of
Indian & Foreign Liquor) Rules, 1968 in the State of Karnataka. The core activities of the
Corporation are to procure liquor and spirit from manufacturers/suppliers and sell the
same to wholesalers/licensees. The scope of activities extends to cover all initiatives,
steps and activities that are incidental and ancillary to carry out the core activities.
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In accordance with its Articles of Association, the Corporation is managed by a Board of
Directors constituted by the Govt. of Karnataka from time to time. The Principal
Secretary, Finance Department is the Chairman and the other Board members are
appointed from amongst senior IAS officers. The Managing Director is vested with
substantial administrative and managerial powers. The Government has also appointed
two Executive Directors in the Corporation.
Rajasthan State Beverages Corporation Limited
Rajasthan State Beverages Corporation Limited (Company) was incorporated
(February 2005), in wake of the Excise Policy of Rajasthan for the financial year 2005-
06, with the main objective to carry on business as manufacturer, producer, processor,
grower, trader, buyer, retailer, wholesale supplier of rectified spirit, all kinds of alcohol
and other spirits suitable for industrial use. The Company was provided with exclusive
rights for sourcing and pricing of Indian made foreign liquor (IMFL) and beer in the
state. The purpose was to make available proper quality and quantity of liquor to the
consumers at a uniform rate throughout the state and to remove middlemen between
manufacturers/suppliers and retailers so that the state could avoid revenue leakage.
The Company framed (March 2006) a Liquor Sourcing and Pricing Policy (LSP) under
the Excise Act for carrying out its commercial activities. The Company operates its
business activities through 39 depots in the State of Rajasthan.
All depots have been equipped with IT infrastructure for performing their
commercial functions. The manufacturers, both within and outside the state, keep their
stocks in the Company’s depots for distribution to the retail licensees for which the
Company collects two per cent margin on the landed cost of IMFL/beer sold from these
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depots. The turnover of the Company was Rs. 734 crores and Rs. 1003 crores in the years
2005-06 and 2006-07 respectively.
2.4 ALCOHOL CONSUMPTION IN INDIA
Alcohol consumption has been steadily increasing in developing countries like
India and decreasing in developed countries since the 1980s. The pattern of drinking to
intoxication is more prevalent in developing countries indicating higher levels of risk due
to drinking. 62.5 million alcohol users estimated in India Per capita consumption of
alcohol increased by 106.7% over the 15-year period from 1970 to 1996. Due to its large
population, India has been identified as the potentially third largest market for alcoholic
beverages in the world which has attracted the attention of multinational liquor
companies.
Sale of alcohol has been growing steadily at 6% and is estimated to grow at the
rate of 8% per year. About 80% of alcohol consumption is in the form of hard liquor or
distilled spirits showing that the majority drink beverages with a high concentration of
alcohol. Branded liquor accounts for about 40% of alcohol consumption while the rest is
in the form of country liquor. People drink at an earlier age than previously . The mean
age of initiation of alcohol use has decreased from 23.36 years in 1950 to 1960 to 19.45
years in 1980 to 1990. India has a large proportion of lifetime abstainers (89.6%). The
female population is largely abstinent with 98.4% as lifetime abstainers. This makes India
an attractive business proposition for the liquor industry.
Changing social norms, urbanization, increased availability, high intensity mass
marketing and relaxation of overseas trade rules along with poor level of awareness
related to alcohol has contributed to increased alcohol use. Taxes generated from alcohol
production and sale is the major source of revenue in most states (Rs.25, 000 crores) and
has been cited as a reason for permitting alcohol sale. Four states - Gujarat, Mizoram,
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Manipur and Nagaland - have enforced prohibition. Profile of clients in addiction
treatment centers in 23 states (including states with prohibition) showed that alcohol was
the first or second major drug of abuse in all except one state.
The Real Cost of Alcohol
Large amount of revenue is generated from sale of alcohol. Yet, the hidden,
cumulative costs of health care, absenteeism and reduced income levels related to heavy
alcohol use are higher. These costs were estimated to be 60% more than the revenue
generated in a study.
Health And Safety
Trauma, violence, organ system damage, various cancers, unsafe sexual practices,
premature death and poor nutritional status of families with heavy drinking fathers are
associated with alcohol use. Hazardous drinking was significantly associated with severe
health problems such as head injuries and hospitalizations. 15 to 20% of traumatic brain
injuries were related to alcohol use. Thirty seven percent of injuries in a public hospital
were due to alcohol. Seventeen point six percent of psychiatric emergencies were caused
by alcohol Thirty four percent of those who attempted suicide were abusing alcohol
Work Place
Twenty percent of absenteeism and 40% of accidents at work place are related to
Alcohol. Annual loss due to alcohol was estimated to be Rs.70 000 to 80 000 million In a
public enterprise, number of workplace accidents reduced to lesser then one fourth of the
previous levels after alcoholism treatment.
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Family
Eighty five percent of men who were violent towards their wives were frequent or
daily users of alcohol. An assessment showed that domestic violence reduced to one
tenth of previous levels after alcoholism treatment. 3 to 45 % of household expenditure is
spent on alcohol. Use of alcohol increases indebtedness and reduces the ability to pay for
food and education. Alcohol abuse leads to separations and divorces and causes
emotional hardship to the family. The emotional trauma cannot be translated in terms of
mo n e y but the impact it has on quality of lives is significant.
2.5 GLOBAL ALCOHOL/BEER INDUSTRY OVERVIEW
The US beer, wine, and liquor store industry includes about 30,000 stores with
combined annual revenue of about $30 billion. No major companies dominate; individual
states have different laws regulating liquor stores, complicating the ability to form
national chains. The industry is highly fragmented: the top 50 companies account for less
than 20 percent of sales.
Competitive Landscape
Personal income, consumer tastes and entertainment trends drive demand. The
profitability of individual companies depends on effective marketing and competitive
pricing. Large companies offer wide selections and deep discounts, but small companies
compete by offering specialized merchandise, providing superior customer service, or
serving a local market. The industry is labor-intensive: average annual revenue per
worker is about $200,000.
Liquor stores compete directly with grocery stores, warehouse clubs, convenience
stores, and gas stations, and indirectly with restaurants, bars, and other establishments
that serve alcohol.
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Products, Operations & Technology
Major products include distilled spirits, beer, and wine. Spirits or liquors account
for almost 40 percent of sales, beer for 30 percent, and wine for 25 percent; Liquor (or
hard liquor) includes gin, vodka, rum, whiskey, brandy, and liqueurs. State laws dictate
the type of alcohol sold in a particular venue. In some states, only liquor stores can sell
hard liquor.
Liquor stores may also be known as “package stores,” referring to the post-
Prohibition law requiring stores to cover or “package” alcoholic beverages in public.
Each state has an alcohol control agency, and state laws regulate the sale of alcohol,
including specifying what types of retailers may sell alcohol, and limiting days and hours
of operation. Most states are open or license states, and allow private ownership of
retailers. In control states, the state government controls liquor distribution, and may
operate retail liquor outlets. State-run liquor stores may be referred to as ABC (Alcoholic
Beverage Control) stores.
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CHAPTER - 3
COMPANY PROFILE
3.1 HISTORY OF KSBC
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The judicial commission of inquiry appointed by the Government to
streamline the liquor trade in the state recommends:
(1) To provide genuine liquor at reasonable price, through Government agencies.
(2) Exploitation through increased taxation and exploitation by middleman should be
stopped and consumer protection must be the guiding policy.
For achieving the above, nationalization of entire liquor trade was
suggested.In line with the suggestion the Government decided to set up a Public Sector
Corporation to procure spirit and arrange blending, bottling, sealing and distribution of
arrack and also for dealing with the sale of IMFL. An amendment was made in the
Abkari Act in 1984 to give effect to the same
KSBC was formed on 23.2.1984 to take over the wholesale distribution of
liquor in a phased manner and to eventually set up distilleries and blending units to
produce spirit, arrack and IMFL. Since then the distribution of liquor has been brought
under the control of the Corporation. By a decision in 2001 the majority of the retail
outlets also have been entrusted to the Corporation. As at present the whole activity of
IMFL from procurement to distribution and sale to the consumer is controlled by the
Corporation except for loose vending of liquor by Bars / Clubs and a small portion of the
retails by Consumer Federation
COMPANY DETAILS
UNITS
The Head Office of the Beverages Corporation is situated in Sasthakripa Office
Complex, Sasthamangalam, Thiruvananthapuram. There are 18 Warehouses in different
Districts and 337 FL1 shops under the Corporation.
TABLE 3.1
Name and address of KSBC warehouses
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Name Place
Alappuzha Kommady
Aluva Choondy
Attingal Near ITI
Chalakudy Chalakudy
Kannur Thavakkara
Kollam Karikode
Kottayam Ayarkunnam
Kottarakkara Kottarakkara
Kozhikode Vellayil
Nedumangad Pazhakutti
Palakkad Coimbatore Rd
Pathanamthitta Kodumthara
Perinthalmanna Angadipuram
Trippunithura Pettah
Thiruvalla Valanjavattom
Thodupuzha Olamattom
Vengola Perumbavoor
Thrissur Kuriachira
EMPLOYEES
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TABLE 3.2
Number of employees working in KSBC
Permanent staffs
Deputation
Daily wages
Labeling workers
Abkari workers
Arrack workers
232
1104
209
46
952
233
MIDDLE LEVEL OFFICERS
Regional Managers
3 Regional Managers placed in South, Central & North having supervisory
control over the Warehouses and Shops under their respective Regions.
Managers
One each placed in 18 Warehouses. The Managers are in charge of the wholesale
business activity of the Warehouses and supervision of the retail business of the KSBC
337 outlets, with the assistance of Assistant Managers / Accountants.
Line Officers
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Assistant Grade Employees placed in Head Office, Warehouses and Shops are
assisting the middle level and Senior Officers.
Helpers and Abkari Workers
Placed as supporting staff in the shops to attend the counter, in the warehouses for
attending the supportive work and in Head Office for assisting Staff and Officers.
Labeling Workers
Placed in the Warehouses for attending to labeling of liquor bottles.
Internal audit and Vigilance department.
After the takeover of the Retail Trade, the Internal Audit Department of the
Corporation based at Head Office was strengthened by setting up 14 District Audit teams
with total staff strength of 52. In addition to this, the Audit team and Vigilance teams also
conducts enquiries in to customer and the complaints.
MANPOWER IN FL-1 SHOP
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The overall staff strength has increased from 350 in 2000-01 to around 2700 after the
takeover of the retail shop. The staff in each retail shop comprises the following.
Table 3.3
Manpower In FL-1 Shop
Shop-in-charge 1
Shop Assistant 1
Billing Machine operator/Cashier 1
Helpers 4
Total 7
OBJECTIVES OF BOARD
To provide genuine quality liquor to consumers at reasonable prices.
To make available supplies of liquor commensurate to demand.
To evolve a proper system to prevent misuse, distribution of spurious liquor
through unauthorized sources and evasion of duties and taxes by middlemen.
Consumer protection and satisfaction.
Safeguarding of governments interests.
3.4 PRODUCT PROFILE OF KSBC
KSBC deals with the whole sale distribution of liquor which involves:
IMFL
Beer
IMFL involves Brandy, Whisky, Rum, Gin, Wine, Vodka. Some of the brands which
comes under IMFL and BEER are
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Brandy
Tifani’s xo brandy
VSOP premier EXCL
Elcanso prem fre GPE BDY
French BSOP brandy
Mc Caesar genuine GRP Brandy
Whiskey
Bagpiper DLX whiskey
Amrut prestige BLND MLT W
Mc dowel’s no.1 res WKY
Bag piper gold prem whiskey.
Black and white choice OS whiskey
Rum
Hercules SPL res 3X MTD R
White rum
Amazon matured white rum
Mc dowell old cash white rum
Tickling white rum
Mc dowels no.1 white rum
Hecules white rum
Bacardi classic superi rum
Gin
High birds lem flav Dr GI
MCD prem blue riband
Wine
Port wine no.7
Vinko de Goa PRM port] wine
Zinzi red wine]
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Vodka
Arizona apple vodka
Red sun vodka
Muscovy fini vodka
Smirnoff vodka
Johars Krystal vodka
Romanov red vodka
Prem power orange vodka
Beer
Foster’s export PRM lager
Kingfisher strong
Kingfisher Premium
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CHAPTER 4
ORGANISATIONAL STRUCTURE
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INTRODUCTION:
An organizational structure is a mainly hierarchal concept of
subordination of entities that collaborate and contribute to serve one
common aim. It is a frame work within which the manager’s decision
making behavior takes place. Organizations are a variant of clustered entities
An organization can be structured in many different ways and styles,
depending on their objectives and ambience. The structure of an
organization will determine the modes in which it operates and performs.
4.1 ROLE OF ORGANISATION STRUCTURE:
Organizational structure allows the expressed allocation of
responsibilities for different functions and processes to different entities such
as the branch, department, workgroup and individual. It can be viewed as
established pattern of relationships among the components of the
organization. An organizational structure is capable of serving many
functions at the same time but cannot serve all functions equally well over
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unlimited time. It is important for managers to determine the outcomes
desired from organization structure, and to match the organization with
changing needs. While talking about KSBC its structures starts with board of
directors followed by managing director, general managers and so on
The Managing Director controls the Beverages Corporation, Thiruvananthapuram.
He is the chief executive officer.
Appointment of Managing director
The governor may appoint any one of the directors to the managing director on such terms and for such period as he may think fit for the conduct management of the business of the company subject to the control and supervision of the board of directors
Hierarchy of the Organisation Structure
Under managing director there is Company Secretary, Internal Auditor,
Finance Manager, and General manager who are Senior Executives. The
middle level Officers are the Managers and the Assistant
Managers/Accountants. The lower level consists of staff and workers.
BOARD
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Board of Directors
Chairman
Board of directors is the supreme authority and exercises all the powers and
all policy matters of the corporation are taken by them.
COMPANY SECRETARY
The responsibility of secretary is to conduct legal and Courts, Company
meetings and secretarial aspects as per company law.
FINANCE MANAGER
Finance Manager is responsible to pay all the statutory requirements
like. Finance manager has the overall control of this department
GENERAL MANAGER
He is in charge of Aministration& full additional charges of company
secretary. He is in charge of Administration of establishment and
personnel,labour,industrial relations EDP etc
ORGANISATION STRUCTURE OF KSBC
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CHART 3.1 ORGANISATION CHART
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CHAPTER- 5
DEPARTMENTALIZATION
4.1 FUNCTIONAL AREAS
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KSBC is comprised of different functional areas and they can be classified into:
FINANCE DEPARTMENT
PURCHASE DEPARTMENT
SALES DEPARTMENT
PERMIT DEPARTMENT
EDP SECTION
AUDIT DEPARTMENT
SECRETERIAL SECTION
WARE HOUSES
FINANCE DEPARTMENT
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Finance manager
Purchase Sales Cash Permit
Accounts officer
Accounts manager
Accountants
Staff
Finance department is responsible to pay all the statutory requirements like sales
tax, income tax, etc. Its main function is to pay all the taxes at appropriate time.Finance
department includes:-
Purchase
Sales
Cash
Permit
The structure of Finance Department is shown below:
CHART 4.1: FINANCE DEPARTMENT
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The Financial department makes the plan annually. The tax policies of IMFL-
100% and Beer- 60%. The department is computerized with and the software is
Tally.Every shops and warehouses have insurance coverage.
The Organization is financially sound and it faces no risk as the payment is made
immediately in cash. The transactions are recorded in the books of accounts.That is all
transaction are generally entered in the journal and put into different ledger accounts like
cash account, bank account, sales account etc. The major banks associated with KSBC
are
1. State Bank of Travancore
2. Canara Bank
3. State Bank of India
4. Indian Bank
5. Syndicate Bank
6. Centurion Bank
7. Vijaya Bank
8. Dena Bank
9. Union Bank of India
10. Punjab National Bank
Finance manager has the overall control of this department. The main functions of
accounts department are:
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1. Receipt and payment of bills
2. Maintaining books of accounts
3. Meet the statutory requirements such as
Sales tax
Income tax
Vending fee
Excise duty
Kist charge
Activities of the finance department includes:-
Review funds, Disburse funds, Account Finalize to Present Audited
Figures.
To arrange for Imprested cash in all the units.
Remit funds from Head office to treasury.
Collect Expense Details, Pass Sheets, Bank reconciliation, Vouchers etc.
Daily Sales unit wise verification.
Process goods received and to arrive voluminous payments to Suppliers.
To handle tax matters and to Comply with Others
Preparation of monthly Trail balance and Balance sheet
Preparation of Annul accounts
MIS Reports , Reports to Financial Institutions ,banks, etc.
Budget and Budgetary control
Capital sanctions, maintenance of fixed asset registers ,periodical
verification of asset , provision for depreciation etc.
Arranging insurance for Fixed assets, current assets, money in transit,
fidelity etc.
Liaison with Statutory Auditor, Government Auditors and Tax
Auditors(I.T)
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Processing, settlement and accounting of Miscellaneous bills and
personal claims, including travel claims
Any other matters assigned to the group by the Department head
PURCHASE DEPARTMENT
Purchase of Indian Made Foreign Liquor and BEER are based on the average monthly sales of the respective supplier. The average is of the previous three month sales. The
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MANAGER
ASSISTANT
CLERKS
COMPUTER OPERATOR
average monthly sales are reviewed every month and a re-order quantity (ROQ) based on the requirement is placed. The ROQ is normally 30 days, 40 days, 45 days requirement as the case may be. When the stock plus the order pending execution falls below the ROQ, the shortfall is replenished on a daily basis. The day to day management of the purchases is by a committee consisting of Senior Officers and Middle Level Officers under the Managing Director.
The structure of is shown below:
CHART 4.2 : PURCHASE DEPARTMENT
Key Functions:
Verification of purchase requisition
Sending enquiries and getting quotation
Preparing comparisons and negotiation with the suppliers
Proposing order for approval and releasing the same
Follow up for material
Material clearance
Rejection of return and replacement
Payment to suppliers and final settlements
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Purchase Procedure:
Invitation of Offer
Every year, the Corporation invites offers from prospective Indian Made Foreign
Liquor/BEER suppliers situated throughout the country by inviting tenders for entering
into rate contract for sales and supply of “Indian Made Foreign Liquor” /BEER for the
ensuing financial year (April to March). This is being done as per directions of the
government. From Financial Year 2001-2002 the offer was extended for supply of
“Foreign Made Foreign Liquor” also.
The invitation to offer is advertised positively by February/every year in
important newspapers. Notices are also sent individually to the existing suppliers in this
regard. The offer document stipulate the conditions for supply, the quality specifications,
payment terms, general conditions to be complied etc. The offerors have also to submit
an earnest money deposit of Rs.10 lakhs each for FMFL / IMFL / Beer for a value of
business upto 15000 cases and shall progressively increase by Rs.1 lakhs upto addition of
every 15000 cases transacted.
Security Deposit for Suppliers
The maximum Security Deposit is Rs.75 lakhs. For exclusive Wine suppliers the EMD is
Rs.50,000 and for value of business of Wine above 550 cases and upto 1100 cases,
Security Deposit will be Rs.1 lakh and shall progressively increase by Rs.25,000 for
every additional sale of 550 cases of Wine. The maximum Security Deposit will be Rs.3
lakhs.
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The documents received within the stipulated date are tabulated and presented to
the Board of Directors. Suppliers who satisfy the conditions stipulated for supply are
accepted by the Board. The rate contract agreement for supply of liquor is not a
competitive tender. Each supplier has definite approved brands.
Only the approved supplier who owns the brand can supply the respective
brands to the Corporation Eg. Mc Dowelll brandy can only be supplied by Mc Dowell &
Co. Ltd., Hercules Rum by M/S Khoday Industries and King Fisher by Premier
Breweries Ltd. Therefore the choice of the Corporation is to accept the rate offered or to
decide not to purchase the brand. As per the provision in the rate contract agreed the
Board of Directors of the Corporation is empowered to fix the supply prices.
Supply price Fixation
Accordingly the Board of Directors fixes the supply prices at the time of
finalization of the rate contract agreement, which will be FIRM during the rate contract
period. The Corporation has however fixed a minimum price of Rs.235/- for a case of
“Indian Made Foreign Liquor”.
This is done on consideration of cost analysis of various elements that constitute
cost and thereby the minimum price at which supply could be made is arrived at. The
quality of Foreign Made Foreign Liquor and Indian Made Foreign Liquor and BEER
supplied confirm to the standards indicated in the offer condition. This has been fixed in
consultation with the Chief Chemical Examiner to the Government of Kerala.
Certification and Chemical Examination
The Chemical Examination Certificate has been used in production (in case of
Indian Made Foreign Liquor) is to be sent to the Corporation against dispatch of each
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batch of Indian Made Foreign Liquor/Beer. For Indian Made Foreign Liquor such
Chemical Certificates should be duly authenticated by the Chief Chemical
Examiner/Authority recognized by the State and ENA Certificate by the Chief Executive
of the distillery authenticated by Excise Authority. Chemical Examination Certificates of
Beer should be authenticated by the Chemist/Brew. Master of the Brewery and duly
authenticated by Excise authority of the Brewery.
The Corporation also reserves the right to periodically subject the samples for
Chemical Examination/Verification of standards and the Expenses incurred by the
Corporation for such Chemical Examination/Verification will have to be borne by the
supplier. These stipulations are strictly adhered to.
Replacement/Replenishment basis of Purchase
Government have issued guidelines vide G.O.No.24112/DL/85/TD dated
28.10.1985 to place orders “by and large only on replacement/replenishment basis”.
Accordingly purchase of Indian Made Foreign Liquor and BEER are based on the
average monthly sales of the respective supplier. The average is of the previous three
month sales. The average monthly sales are reviewed every month and a re-order quantity
(ROQ) based on the requirement is placed. The ROQ is normally 30 days, 40 days, 45
days requirement as the case may be. When the stock plus the order pending execution
falls below the ROQ, the shortfall is replenished on a daily basis.
The arrangement to replenish stock could be applied only if a supplier has an
average monthly sales. Unless an order is given to companies who quote for the first time
there cannot be an average monthly sales for the respective supplier and consequently the
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norm cannot be implemented. It is to ensure this the initial order of a few loads are given
for new suppliers at the commencement of the financial year. In order to ensure
uniformity in placing purchase orders at the commencement of the year all the companies
are uniformly given initial orders. Thereafter from the next fortnight onwards, orders as
per formula indicated above is being given.
Special Orders
Special orders are also placed on trade discount basis to the supplies depending
upon the requirement. That is if a company offers a trade discount of 10% for IMFL and
5% for Beer, special orders are placed to the extent of a maximum of two loads when the
stock is nil or meager.
Purchase committee
A Purchase Committee consisting of the Company Secretary, Internal Auditor,
Finance Manager, Administrative Officer, Regional Manager and Senior Manager
reviews the procedure above. Recommendations of the Committee are placed before MD,
who gives final orders for placement of purchase orders. The orders so placed are
subsequently ratified by the Board of Director.
TABLE 4.1
LIST OF SUPPLIERS
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SLNO.NAME OF SUPLIER STATE
1 Adarsh Winery Karnataka
2 Alcobrew Distilleries India Private Limited Punjab
3 Amrut Distilleries Ltd Bangalore
4 Amrut Distilleries Ltd, Palakkad Kerala
5 Arthos Brewewries Limited Tamil nadu
6 Bacardi Martini India Ltd Karnataka
7 Basantdar Bottlers Jammu & Kashmir
8 Brindco Sales Ltd New delhi
9 Carls Berg india private Ltd Maharashtra
10 Cassanova Distilleries Pvt Ltd Karnataka
11 Chamundi Winery & Distillery Karnataka
12 Deekey Exports Ltd Pondichery
13 Diageo India Pvt Ltd Madhya Pradesh
14 Diageo India Pvt Ltd Maharashtra
15 Diageo India Pvt Ltd(FMFL) Maharashtra
16 Elite Distilleries and Breweries co, Thrissur Kerala
17 Elite Distilleries Pvt Ltd Tamil nadu
18 Empee Distilleries Ltd Kerala
19 Empee Distilleries, Chennai Tamil nadu
20 Globus Spirits Ltd New delhi
21 Grover Vineyards Karnataka
22 Hampi Heritage Wineyards Pvt. Ltd Karnataka
23 Heritage Grape Winery Karnataka
24 Imperial Spirits Ltd Karnataka
25 India Glycols Gorakhpur
26 India glycols Uttarkhand
27 Indo Scotish Brand Pvt Ltd Kerala
28 Jagatjit Industries Ltd Punjab
29 John Distilleries Ltd, Goa Goa
30 John Distilleries Ltd, Goa (Wine) Goa
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31 K.S . Distilleries Kerala
32 Kals distillery Pvt Ltd Tamil nadu
33 Karnak Distilleries Assam
34 Kaycee Distilleries Kerala
35 Kerala Alcoholic Products Ltd Kerala
36 Kesar Enterprises ltd Uttar Pradesh
37 Khoday Breweries Ltd(IMFL) Karnataka
38 Khoday Breweries Ltd(Wine) Karnataka
39 Leela Distilleries Goa
40 Malabar Breweries ( Unit of Skol Breweries) Kerala
41 Mohan Breweries and Distilleries Ltd(IMFL) Tamil nadu
42 Mohan Breweries and Distilleries Ltd(WINE) Tamil nadu
43 Mysore Breweries Ltd Karnataka
44 Nashik Vinters Maharashtra
45 National Industries Corporation Ltd Goa
46 Naveen Distilleries Goa
47 Netravati Distilleries Karnataka
48 Nita Industries Goa
49 Normandy Breweries & Distilleries Pvt Ltd Kerala
50 Ojas Industries Pvt Ltd Rajasthan
51 Overseas Beverages Pvt Ltd Goa
52 Polsons Distillery Pvt Ltd Kerala
53 Potrivit Distilleries Goa
54 Prathamesh Wines Pvt Ltd Maharashtra
55 Radico khaithan Ltd, Andhra Pradesh
56 Radico khaithan Ltd, Rajasthan
57 Radico khaithan Ltd,Rampur New delhi
58 Radico khaithan Ltd,baspur Uttar Pradesh
59 Saraya Distillery Uttar Pradesh
60 SDF Industries Kerala
61 Sevenseas Distilleries Ltd Kerala
62 Simbholi Sugars Ltd New delhi
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63 Skol Breweries Ltd, (units of pals) Maharashtra
64 Skol Breweries Ltd( units of sica) Pondichery
65 SNJ Distilleries Pvt Ltd Tamil nadu
66 South Travancore Distilleries and Allied products Kerala
67 Southern Agrifurane Industries Private Ltd, Chennai Tamil nadu
68 Sovereign Distilleries Karnataka
69 Spring field India Distilleries, Goa Goa
70 Subhash Distilleries Pvt Ltd Maharashtra
71 The Devicolam Distilleries Ltd Kerala
72 Tilak Nagar Industries Ltd Maharashtra
73 TSCL Kerala
74 Ugar Sugar Works Karnataka
75 United Breweries Ltd, Bangalore Karnataka
76 United Breweries Ltd, Bombay Maharashtra
77 United Breweries Ltd Kerala
78 United Breweries Ltd, Goa Goa
79 United Breweries Ltd, Mangalore Karnataka
80 United Breweries Ltd, Palakkad Kerala
81 United Breweries Ltd, Calicut Kerala
82 United Spirits Limited Karnataka
83 United Spirits Limited, Cherthala Kerala
84 United Spirits Limited, Kumbalgode Karnataka
85 United Spirits Limited, Nashik Maharashtra
86 United Spirits Limited, Palakkad Kerala
87 Vinbros & Co, (IMFL) Pondichery
88 Vinbros & Co, Pudussery, Pondichery (Wine) Pondichery
89 Vinsura Wine Pvt Ltd Maharashtra
90 Vintage Wines Pvt Ltd Maharashtra
Details of purchases affected till date is given below.
TABLE 4.2
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PURCHASE DETAILS
YEAR IMFL BEER NET VALUE1984-85 10.82 5.51 32.791985-86 9.78 4.02 35.681986-87 11.82 4.43 40.871987-88 12.49 5.49 41.821988-89 10.36 2.93 24.341989-90 14.59 5.19 38.621990-91 16.02 10.11 59.031991-92 17.67 13.30 73.991992-93 18.84 14.95 84.501993-94 22.76 19.12 102.281994-95 26.38 26.91 135.031995-96 31.74 31.34 166.031996-97 31.96 32.36 146.381997-98 59.78 28.07 256.691998-99 62.92 27.28 270.801999-00 64.52 25.55 290.132000-01 72.19 28.93 293.652001-02 89.42 31.15 338.762002-03 99.62 35.24 347.952003-04 109.63 34.04 396.172004-05 110.98 38.92 465.042005-06 110.69 41.86 524.322006-07 129.56 48.21 605.482007-08 148.81 60.68 664.562008-09 174.87 70.22 855.582009-10 187.42 83.06
SALES DEPARTMENT
Sales are affected from the Warehouses and FL-1 Shops. Licensees through
Consumer fed and Bars authorized to Purchase approach the Corporation’s Warehouses
for purchases. The amount payable is first remitted into the respective bank accounts of
the Corporation and only after receipt of the remitted challans for the value thereof the
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MANAGER
ASSISTANT
CLERKS
COMPUTER OPERATOR
goods are released to the purchasers. For the requirements of the Corporation’s FL-1
Shops goods are just transferred.
The structure is shown below:
CHART 4.3 : SALES DEPARTMENT
The Sales department consists of a Sales Manager who has to control the whole sales
wing and there is an Assistant manager to give necessary support and reduce the work
load of Sales manager under them a group of clerical staff to perform the task
From the FL-1 shops, goods are sold in bottles to consumers direct on cash basis. Details of sales made till date is given below.
TABLE 4.3
SALES DETAILS
YEAR IMFL BEERNET SALES
VALUE GROSS SALES
VALUE1984-85 9.34 5.05 43.51 55.461985-86 9.98 3.63 50.42 67.121986-87 12.09 4.78 60.86 81.541987-88 12.56 5.16 58.93 81.421988-89 9.99 3.07 47.11 82.42
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1989-90 14.66 5.24 67.12 117.411990-91 15.43 9.53 89.93 142.331991-92 16.36 13.09 113.93 124.671992-93 18.22 14.53 139.33 208.021993-94 23.79 19.03 168.03 287.151994-95 24.61 26.79 207.95 353.911995-96 32.52 32.15 280.56 477.601996-97 32.42 30.85 441.04 762.931997-98 57.25 27.93 580.58 1000.831998-99 62.92 27.28 644.27 1112.231999-00 64.34 25.17 676.20 1184.652000-01 72.19 28.93 732.96 1337.582001-02 92.02 28.66 818.66 1694.822002-03 97.08 33.86 977.51 1847.402003-04 105.98 39.45 1105.96 2071.262004-05 108.92 37.98 1237.40 2320.152005-06 109.47 40.19 1406.93 2635.812006-07 132.65 50.05 1679.56 3145.292007-08 148.01 58.62 1961.96 3669.142008-09 171.17 70.60 2485.65 4631.002009-10 188.03 85.19 2974.07 5538.90
CONTRIBUTION TO STATE EXCHEQUER
The following were the amounts contributed to the State Exchequer during previous
twenty one completed years by way of Sales Tax, Excise Duty, Vending Fee, and License
Fee etc.
TABLE 4.4
CONTRIBUTION TO GOVERNMENT
YEAR CONTRIBUTION TO STATE EXCHEQUER1984-85 25.63
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1985-86 30.861986-87 40.061987-88 40.741988-89 57.351989-90 78.331990-91 92.071991-92 112.591992-93 133.001993-94 179.721994-95 215.581995-96 315.511996-97 611.191997-98 753.481998-99 847.561999-00 903.562000-01 1025.932001-02 1310.172002-03 1468.162003-04 1622.302004-05 1824.042005-06 2055.712006-07 2424.492007-08 2914.102008-09 3621.152009-10 4259.80
SECRETERIAL SECTION
The Secretarial Section consists of Company Secretary as Head of the department
who is the Reporting Officer to the Managing Director regarding the matters concerned
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with this department. He also interacts with the third party on behalf of the corporation
for the settlement of the issues or legal problems.
The Company Secretary is assisted by an Assistant Secretary who has the power
in his Absence. After taking over the Retail trade the Internal Audit Departemnt of the
Corporation based at Head Office was strengthened by setting up 14 district Audit teams
and Vigilance teams with a total staff strength of 52 in the Head office.
Functions:
Legal matters
Board meetings
Company law matters
Insurance general and vehicles
Rent payment of ware houses
Other matters regarding the opening of warehouses
Taking over of buildings
Additional space license agreements
Details pertaining to the fl1 shops
Opening of new shops
Authorization of the shops
Renewal of license of shops
Sanction for renewal of lease of fl1 shops
Sanction for increase in rent
Taking over of new buildings or additional space in respect of fl1 shops
Files relating to the vehicles of KSBC and its repair maintenance.
Rent relating to the head office and other accommodation works
Medical claims of staffs in this section
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COMPANY SECRATARY
ASSISTANT SECRATARY
CLERKS
COMPUTER OPERATOR
Work relating to wages, overtime allowance of drivers and daily wages of staffs
in the secretarial section
Matters relating to labeling work in the warehouses.
ORGANISATION STRUCTURE OF SECRETERIAL DEPARTMENT
CHART 4.4 : SECRATARIAL DEPARTMENT
Internal Audit and Vigilance Department
The Internal Audit of the Corporation is based at Head Office and has a staff strength of 82 comprising of a Head Office Audit Team and 18 Warehouse Audit teams. In addition
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PEON
Internal Auditor
Assistant Internal Auditor
Assistant Internal Auditor
Permit StaffAuditors
Peon/Sweepers
to frequent inspections, the Audit team and Vigilance teams also conducts enquires into customer and the complaints. The Audit teams annually conduct about 3000 inspections.
Functions
Verification and monitoring of fund inflow and outflow
Breach of trust, fraud , pilferage
Around 4000 inspection staff required every year
District audit teams for fl1 shops
Audit teams changes every year
STRUCTURE OF AUDIT DEPARTMENT
CHART 4.5 : AUDIT DEPARTMENT
WARE HOUSES
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There are 18 Ware houses, which are set up in various district where the liquor
supplied in cases by the suppliers are accumulated and distributed to the FL1 shops and
bars according to the order received.
CHART 4.6 : WAREHOUSES
ADMINISTRATION DEPARTMENT
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MANAGER
ASST MANAGER
ACCOUNTANT
ASSISTANT
LABELLING WORKERS
SWEEEPERSHELPERS
In KSBCadministrative department has much importance. The functions included in this
department are
Recruitment
Selection
Training
Wages and Salary administration
The administrative department as per the report coming from the concerned departments
controls the attendance, salary, disciplinary actions
Increase in Staff Strength from 2617 from 339 which include Deputation, Daily Wages
and Abkari workers
Functions:
Recruitment
The staff members are mainly selected through written tests conducted by the
government and interviews are also conducted
Training
On-Job-Training is given to employees
Promotions
Promotions are given on basis of their seniority skills ad ability
Wages and Salaries
Wages and Salaries are on the basis of basic pay, DA, HRA etc
Leave
Leave facility is provided to the employees. There are three types of leave.
Sick leave
Casual leave
Maternity leave
Recreation facilities
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Recreation facility club is provided to employees by KSBC
Labor Union
The staff unions consist of AITUC INTUC and CITUC
Administration is Centralized.
Matters from Appointment till Retirement of a Staff is handled here..
There is reporting officer and reviewing officer for the performance appraisal.
Salary, Verification of Medical Reimbursement, TA etc
Interactions by correspondence and otherwise with statutory bodies viz LIC, PSC,
Govt Dept, Abkari Welfare Fund.
Purchase of stationery.
Legislative Assembly Interpellations.
Interactions with Secretariat
Other matters related to general administration of the corporation.
Two Additional Posts of Managers are suggested effectively for controlling the
establishment and disciplinary matters of 2617 employees.
To cope up with the increase in work load, 12 posts of Assistants are Proposed.
One Assistant Manager for every 5 Assistants.
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GENERAL MANAGER
REGIONAL MANAGER REGIONAL MANAGERREGIONAL MANAGER MANAGERS
ASSISTANT MANAGERS ASSISTANT MANAGERSASSISTANT MANAGERS
CLERKS CLERKS
COMPUTER OPERATOR
PEON
COMPUTER OPERATOR
PEON
CLERKS
COMPUTER OPERATOR
PEON
STRUCTURE OF ADMINISTRATION DEPARTMENT
CHART 4.7 : ADMINISTARTION DEPARTMENT
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MANAGER
ASSISTANT
CLERKS
COMPUTER OPERATOR
PERMIT SECTION
Sales Proceeds from the warehouse are received by the Permit Section for Eligibility.
(Eligibity of Suppliers = Reorder quantity – Stock + Unexecuted Stock ISSUES =
SALES Availing Stock DAILY ORDERS, Current Stock = Opening Stock +
Receipts – Issues, Current Unexecutory = Opening Unexecutory – Receipts + Availed
Quantity) ROQ is the average of Previous 3 months Sales.
Permit helps in acquiring the Goods Requisition and Preparing the PERMIT
Application for Excise DEPT.The Process of filing of Permit Application for the
suppliers with the Excise Dept happens on a DAILY basis.
STRUCTURE OF PERMIT DEPARTMENT
CHART 4.8 : PERMIT DEPARTMENT
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EDP SECTION
The EDP or Electronic data Processing Section provides necessary technical
assistance to the other departments mainly the Accounts department and Permit Section.
The Sale Updates from the warehouses are processed in this section with proper technical
support which will make the data in an arranged form so that it can be used for the
Managerial decision making.
Functions
Cross Checking of the Eligibility Details of the Suppliers by taking daily Supply
and Stock reports
Giving Necessary Assistance to the Permit Section and Accounts Section.
Daily report of the Orders.
Generation of summary of performance
Generation of monthly performance report
Generation of annual survey report
STRUCTURE OF EDP SECTON
CHART 4.9 : EDP DEPARTMENT
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MANAGER
COMPUTER PROGRAMMER
COMPUTER ASSISTANTS
The most important activity performed in this department is the cross checking of
the Eligibility details given by the Permit Section in accordance with supply Updates
received from the Warehouses.
Daily Reports regarding the Supply and Sales of the liquor from the various
Warehouse are generated with proper GOODS RECEIVED NOTE in the case of supply
and GOODS TRANSFER NOTE in the case of sale of Liquor
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CHAPTER - 5
ANALYSIS
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SWOT ANALSIS
A scan of the internal and external environment 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 those 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. Sometimes a business does poorly
not because its department lacks the required strengths but because they do not work
together as a team,
A leading consultant suggests that winning companies are those that have achieve
superior in company capabilities, not just core competencies. Every company must
manage some basic processes such as new product development, sales generation and
other fulfillment. Each process creates values and requires inter-departmental team work.
Although each department may posses’ specific core competencies the challenge is to
develop superior competitive capability in managing the company’s key process.
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STRENGTH
One of the greatest Strengths of KSBC is its Monopoly in liquor business in the
State.
One of the greatest sources of income to the Government of Kerala
Another important Factor is the never reducing demand for its Product because
increase in the price of the product is not all a threat for the Sale of the Liquor
Supplied by the KSBC.
A pool of very experienced professional managers and workforce
Trust among people due to its age old tradition and govt control.
WEAKNESS
Congested Working environment in the Head Office.
Political Influences in a large scale affects the Industrial Peace leading to the
clashes between various trade unions.
There Staff consists of AITUC, INTUC, and CITUC but they are not united for
the Welfare of the Workers.
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OPPORTUNITY
KSBC has taken over Travancore Sugar mills and Planning to take over another
Sick units which will open
THREATS
The main threat is the Product itself which is a harmful one for the health of
people.
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PORTER’S FIVE FORCE ANALYSIS
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PORTER’S FIVE FORCE ANALYSIS
The model of pure competition implies that risk-adjusted rates of return should be
constant across firms and industries. However, numerous economic studies have affirmed
that different industries can sustain different levels of profitability; part of this difference
is explained by industry structure.
Michael Porter provided a framework that models an industry as being influenced
by five forces. The strategic business manager seeking to develop an edge over rival
firms can use this model to better understand the industry context in which the firm
operates.
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Supplier Bargaining Power
The Suppliers bargaining power depends on various factors such as:
Supplier concentration
Importance of volume to supplier
Differentiation of inputs
Impact of inputs on cost or differentiation
Switching costs of firms in the industry
Presence of substitute inputs
Threat of forward integration
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Cost relative to total purchases in industry
There is sufficient suppliers concentration in KSBC but they have but they have
no bargaining power because it holds the monopoly trade of liquor in the state.
Buyers Power
The Buyers bargaining power depends on various factors such as:
Bargaining leverage
Buyer volume
Buyer information
Brand identity
Price sensitivity
Threat of backward integration
Product differentiation
Buyer concentration vs. industry
Substitutes available
Buyers' incentives
The prospective buyers are driven by the addiction tendency rather than any other
demand and Supply factors so they are ready to purchase even at higher costs
without bargaining in the case of KSBC.
Barriers To Entry
The Entry of the new firms depends on various factors such as:
Absolute cost advantages
Proprietary learning curve
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Access to inputs
Government policy
Economies of scale
Capital requirements
Brand identity
Switching costs
Access to distribution
Expected retaliation
Proprietary products
The Corporation holds the monopoly of liquor trade in the State so there no new
firm can enter into the market.
Threat of Substitutes
Threat of the Substitutes depends on various factors such as:
Switching costs
Buyer inclination to substitute
Price-performance
trade-off of substitutes
The monopolistic feature once again protects KSBC from the Threat of
Substitutes.
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CHAPTER – 6
FINDINGS, SUGGESTION
AND CONCLUSION
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FINDINGS
1. Unlike other government organizations KSBC’s employees are highly
satisfied with the performance of this organization.
2. But facilities of these warehouses are not up to mark. Computer
facilities, storage capacity of warehouse, etc are not up the standard.
3. The increasing numbers of shops are good for the growth of KSBC.
4. The quality of IMFL and Beer was checked and certificates are issued
by the Chief Chemical Examiner of the state.
5. The arrangement of products in warehouse is based on demand.
6. In most demanded situation the availability of all the brands are poor.
7. The business diversification of KSBC is good for the growth of this
organization.
8. All retail shops keep a definite level of inventory.
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SUGGESTIONS
1. Computerize all the warehouses and retail shops of KSBC. This helps them to
lower paper works.
2. Improve infrastructure facilities of warehouses, retail shops and head office.
3. KSBC must implement a WAN (wide area network). This helps them to get
instant information from warehouses and retail shops.
4. In most demanded situation the warehouses must keep a definite amount of safety
inventory.
5. Working ambience can be changed accordingly so that the boredom and feeling of being
monotonous does not exist
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CONCLUSION
KSBC was formed to take over the wholesale distribution of liquor in a
phased manner and to eventually set up distilleries and blending units
to produce spirit, arrack and IMFL. Since then the distribution of liquor
has been brought under the control of the Corporation. By a decision in
2001 the majority of the retail outlets also has been entrusted to the
Corporation. As at present the whole activity of IMFL from procurement
to distribution and sale to the consumer is controlled by the
Corporation except for loose vending of liquor by Bars / Clubs and a
small portion of the retails by Consumer Federation.
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BIBLIOGRAPHY
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BIBLIOGRAPHY
1. Sekaran Uma,(2006), “Research Methods for Business: A Skill Building Approach”, John
Wiley & Sons, Inc., New Delhi
2. Kothari C.R, (2005), “Research Methodology Methods & Techniques”, New age
international publishers, New Delhi:
3. Annual Reports of KFC &other articles
Websites
1. www.ksbc.com
2. www.wikipedia.com
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APPENDIX
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