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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 departments 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 companys 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 y y y y previous annual reports companies official websites journals Text book

PERIOD
y The research organization study on Kerala State Beverages Corporation Limited (KSBC) was carried out period of fifteen days (15 days) from July 25th 2011 to August 7th 2011.

SCOPE AND SIGNIFICANCE


y 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 Porters 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 didnt 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 200506, 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 Companys 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 postProhibition 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 Alappuzha Aluva Attingal Chalakudy Kannur Kollam Kottayam Kottarakkara Kozhikode Nedumangad Palakkad Pathanamthitta Perinthalmanna Trippunithura Thiruvalla Thodupuzha Vengola Thrissur

Place Kommady Choondy Near ITI Chalakudy Thavakkara Karikode Ayarkunnam Kottarakkara Vellayil Pazhakutti Coimbatore Rd Kodumthara Angadipuram Pettah Valanjavattom Olamattom Perumbavoor Kuriachira

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EMPLOYEES 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.

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Line Officers 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.

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MANPOWER IN FL-1 SHOP 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 Shop Assistant Billing Machine operator/Cashier Helpers Total 1 1 1 4 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

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IMFL involves Brandy, Whisky, Rum, Gin, Wine, Vodka. Some of the brands which comes under IMFL and BEER are y Brandy  Tifanis 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 dowels no.1 res WKY  Bag piper gold prem whiskey.  Black and white choice OS whiskey y Rum  Hercules SPL res 3X MTD R y 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 y Gin  High birds lem flav Dr GI  MCD prem blue riband y Wine  Port wine no.7
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 Vinko de Goa PRM port] wine  Zinzi red wine] y Vodka  Arizona apple vodka  Red sun vodka  Muscovy fini vodka  Smirnoff vodka  Johars Krystal vodka  Romanov red vodka  Prem power orange vodka

Beer  Fosters 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 managers 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
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organization.

An organizational structure is capable of serving many

functions at the same time but cannot serve all functions equally well over 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.

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BOARD 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

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ORGANISATION STRUCTURE OF KSBC


Board of Directors

Chairman
Managing

Company

Finance manager

Internal auditor

GM

Supporting staffs

Accounts officer

Asst Auditor

Managers

Auditing Staff

Asst Managers

Supporting staffs

RM (South) Helper/peon/sweeper

RM

RM (North)

Warehouse managers

Accountants

Supporting staffs

CHART 3.1 ORGANISATION CHART

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CHAPTER- 5 DEPARTMENTALIZATION

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4.1 FUNCTIONAL AREAS 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

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FINANCE DEPARTMENT
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:

Finance manager
Accounts officer

Purchase Accounts manager Accountants Staff

Sales

Cash

Permit

CHART 4.1: FINANCE DEPARTMENT

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The Financial department makes the plan annually. The tax policies of IMFL100% 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

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Finance manager has the overall control of this department. The main functions of accounts department are: 1. Receipt and payment of bills 2. Maintaining books of accounts 3. Meet the statutory requirements such as y y y y y 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.

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 Arranging insurance for Fixed assets, current assets, money in transit, fidelity etc.  Liaison with Statutory Auditor, Government Auditors and Tax Auditors(I.T)  Processing, settlement and accounting of Miscellaneous bills and personal claims, including travel claims  Any other matters assigned to the group by the Department head

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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 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:

MANAGER

ASSISTANT

CLERKS

COMPUTER OPERATOR

CHART 4.2 : PURCHASE DEPARTMENT

Key Functions: y y y y Verification of purchase requisition Sending enquiries and getting quotation Preparing comparisons and negotiation with the suppliers Proposing order for approval and releasing the same
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y y y y

Follow up for material Material clearance Rejection of return and replacement Payment to suppliers and final settlements

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,

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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.

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.

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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 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.

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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 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.

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TABLE 4.1

LIST OF SUPPLIERS
SLNO. NAME OF SUPLIER 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Adarsh Winery Alcobrew Distilleries India Private Limited Amrut Distilleries Ltd Amrut Distilleries Ltd, Palakkad Arthos Brewewries Limited Bacardi Martini India Ltd Basantdar Bottlers Brindco Sales Ltd Carls Berg india private Ltd Cassanova Distilleries Pvt Ltd Chamundi Winery & Distillery Deekey Exports Ltd Diageo India Pvt Ltd Diageo India Pvt Ltd Diageo India Pvt Ltd(FMFL) Elite Distilleries and Breweries co, Thrissur Elite Distilleries Pvt Ltd Empee Distilleries Ltd Empee Distilleries, Chennai Globus Spirits Ltd Grover Vineyards Hampi Heritage Wineyards Pvt. Ltd Heritage Grape Winery Imperial Spirits Ltd India Glycols STATE Karnataka Punjab Bangalore Kerala Tamil nadu Karnataka Jammu & Kashmir New delhi Maharashtra Karnataka Karnataka Pondichery Madhya Pradesh Maharashtra Maharashtra Kerala Tamil nadu Kerala Tamil nadu New delhi Karnataka Karnataka Karnataka Karnataka Gorakhpur
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26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

India glycols Indo Scotish Brand Pvt Ltd Jagatjit Industries Ltd John Distilleries Ltd, Goa John Distilleries Ltd, Goa (Wine) K.S . Distilleries Kals distillery Pvt Ltd Karnak Distilleries Kaycee Distilleries Kerala Alcoholic Products Ltd Kesar Enterprises ltd Khoday Breweries Ltd(IMFL) Khoday Breweries Ltd(Wine) Leela Distilleries Malabar Breweries ( Unit of Skol Breweries) Mohan Breweries and Distilleries Ltd(IMFL) Mohan Breweries and Distilleries Ltd(WINE) Mysore Breweries Ltd Nashik Vinters National Industries Corporation Ltd Naveen Distilleries Netravati Distilleries Nita Industries Normandy Breweries & Distilleries Pvt Ltd Ojas Industries Pvt Ltd Overseas Beverages Pvt Ltd Polsons Distillery Pvt Ltd Potrivit Distilleries Prathamesh Wines Pvt Ltd Radico khaithan Ltd, Radico khaithan Ltd,

Uttarkhand Kerala Punjab Goa Goa Kerala Tamil nadu Assam Kerala Kerala Uttar Pradesh Karnataka Karnataka Goa Kerala Tamil nadu Tamil nadu Karnataka Maharashtra Goa Goa Karnataka Goa Kerala Rajasthan Goa Kerala Goa Maharashtra Andhra Pradesh Rajasthan

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57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87

Radico khaithan Ltd,Rampur Radico khaithan Ltd,baspur Saraya Distillery SDF Industries Sevenseas Distilleries Ltd Simbholi Sugars Ltd Skol Breweries Ltd, (units of pals) Skol Breweries Ltd( units of sica) SNJ Distilleries Pvt Ltd South Travancore Distilleries and Allied products Southern Agrifurane Industries Private Ltd, Chennai Sovereign Distilleries Spring field India Distilleries, Goa Subhash Distilleries Pvt Ltd The Devicolam Distilleries Ltd Tilak Nagar Industries Ltd TSCL Ugar Sugar Works United Breweries Ltd, Bangalore United Breweries Ltd, Bombay United Breweries Ltd United Breweries Ltd, Goa United Breweries Ltd, Mangalore United Breweries Ltd, Palakkad United Breweries Ltd, Calicut United Spirits Limited United Spirits Limited, Cherthala United Spirits Limited, Kumbalgode United Spirits Limited, Nashik United Spirits Limited, Palakkad Vinbros & Co, (IMFL)

New delhi Uttar Pradesh Uttar Pradesh Kerala Kerala New delhi Maharashtra Pondichery Tamil nadu Kerala Tamil nadu Karnataka Goa Maharashtra Kerala Maharashtra Kerala Karnataka Karnataka Maharashtra Kerala Goa Karnataka Kerala Kerala Karnataka Kerala Karnataka Maharashtra Kerala Pondichery

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88 89 90

Vinbros & Co, Pudussery, Pondichery (Wine) Vinsura Wine Pvt Ltd Vintage Wines Pvt Ltd

Pondichery Maharashtra Maharashtra

Details of purchases affected till date is given below. TABLE 4.2 PURCHASE DETAILS YEAR 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 IMFL 10.82 9.78 11.82 12.49 10.36 14.59 16.02 17.67 18.84 22.76 26.38 31.74 31.96 59.78 62.92 64.52 72.19 89.42 99.62 109.63 110.98 110.69 129.56 148.81 174.87 187.42 BEER 5.51 4.02 4.43 5.49 2.93 5.19 10.11 13.30 14.95 19.12 26.91 31.34 32.36 28.07 27.28 25.55 28.93 31.15 35.24 34.04 38.92 41.86 48.21 60.68 70.22 83.06 NET VALUE 32.79 35.68 40.87 41.82 24.34 38.62 59.03 73.99 84.50 102.28 135.03 166.03 146.38 256.69 270.80 290.13 293.65 338.76 347.95 396.17 465.04 524.32 605.48 664.56 855.58

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SALES DEPARTMENT
Sales are affected from the Warehouses and FL-1 Shops. Licensees through Consumer fed and Bars authorized to Purchase approach the Corporations 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 goods are released to the purchasers. For the requirements of the Corporations FL-1 Shops goods are just transferred. The structure is shown below:

MANAGER

ASSISTANT

CLERKS

COMPUTER OPERATOR

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
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YEAR 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

IMFL 9.34 9.98 12.09 12.56 9.99 14.66 15.43 16.36 18.22 23.79 24.61 32.52 32.42 57.25 62.92 64.34 72.19 92.02 97.08 105.98 108.92 109.47 132.65 148.01 171.17 188.03

BEER 5.05 3.63 4.78 5.16 3.07 5.24 9.53 13.09 14.53 19.03 26.79 32.15 30.85 27.93 27.28 25.17 28.93 28.66 33.86 39.45 37.98 40.19 50.05 58.62 70.60 85.19

NET SALES VALUE 43.51 50.42 60.86 58.93 47.11 67.12 89.93 113.93 139.33 168.03 207.95 280.56 441.04 580.58 644.27 676.20 732.96 818.66 977.51 1105.96 1237.40 1406.93 1679.56 1961.96 2485.65 2974.07

GROSS SALES VALUE 55.46 67.12 81.54 81.42 82.42 117.41 142.33 124.67 208.02 287.15 353.91 477.60 762.93 1000.83 1112.23 1184.65 1337.58 1694.82 1847.40 2071.26 2320.15 2635.81 3145.29 3669.14 4631.00 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.

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TABLE 4.4 CONTRIBUTION TO GOVERNMENT YEAR 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 CONTRIBUTION TO STATE EXCHEQUER 25.63 30.86 40.06 40.74 57.35 78.33 92.07 112.59 133.00 179.72 215.58 315.51 611.19 753.48 847.56 903.56 1025.93 1310.17 1468.16 1622.30 1824.04 2055.71 2424.49 2914.10 3621.15 4259.80

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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 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
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 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  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

COMPANY SECRATARY

ASSISTANT SECRATARY

CLERKS

COMPUTER OPERATOR

PEON

CHART 4.4 : SECRATARIAL DEPARTMENT

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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 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

Internal Auditor

Assistant Internal Auditor

Assistant Internal Auditor

Auditors

Permit Staff

Peon/Sweepers

CHART 4.5 : AUDIT DEPARTMENT


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WARE HOUSES

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.

MANAGER

ASST MANAGER

ACCOUNTANT

ASSISTANT

HELPERS

SWEEEPERS

LABELLING WORKERS

CHART 4.6 : WAREHOUSES

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ADMINISTRATION DEPARTMENT
In KSBCadministrative department has much importance. The functions included in this department are

y y y y

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: y Recruitment

The staff members are mainly selected through written tests conducted by the government and interviews are also conducted y Training

On-Job-Training is given to employees y Promotions

Promotions are given on basis of their seniority skills ad ability y Wages and Salaries

Wages and Salaries are on the basis of basic pay, DA, HRA etc y Leave  Sick leave  Casual leave  Maternity leave

Leave facility is provided to the employees. There are three types of leave.

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Recreation facilities

Recreation facility club is provided to employees by KSBC

Labor Union

The staff unions consist of AITUC INTUC and CITUC y y y y y 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. y y y y y 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. y 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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STRUCTURE OF ADMINISTRATION DEPARTMENT

GENERAL MANAGER

REGIONAL MANAGER

REGIONAL MANAGER

REGIONAL MANAGER

ASSISTANT MANAGERS

ASSISTANT MANAGERS

ASSISTANT MANAGERS

CLERKS

CLERKS

CLERKS

COMPUTER OPERATOR

COMPUTER OPERATOR

COMPUTER OPERATOR

PEON

PEON

PEON

CHART 4.7 : ADMINISTARTION DEPARTMENT

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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

MANAGER

ASSISTANT

CLERKS

COMPUTER OPERATOR

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

MANAGER

COMPUTER PROGRAMMER

COMPUTER ASSISTANTS

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CHART 4.9 : EDP DEPARTMENT

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 companys 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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PORTERS 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 KSBCs 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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