AN ORGANISATIONAL STUDY

AT SHASTHA ENTERPRISES

QUILON, KERALA

PROJECT REPORT

Submitted by

SOLOMON BENJAMIN

Register No: 098001152045

In partial fulfillment for the award of the degree

Of

MASTER OF BUSINESS ADMINISTRATION

NEHRU INSTITUTE OF INFORMATION TECHNOLOGY &

MANAGEMENT
(Approved by AICTE, Affiliated to Anna University, Coimbatore)
Nehru Gardens, Thirumalayampalayam,
COIMBATORE - 641 105

1
 NEHRU INSTITUTE OF INFORMATION TECHNOLOGY &
MANAGEMENT
COIMBATORE - 641105
Department of Master of Business Administration

PROJECT WORK

This is to certify that the project entitled

ORGANISATIONAL STUDY AT SHASTHA ENTERPRISES,
QUILON
Is the bonafide record of project work done by
SOLOMON BENJAMIN
Register No: 098001152045
Of M.B.A during the year 2009-2011.

--------------------- ----------------------------------
Project Guide Head of the Department

Submitted for the Project Viva-Voce examination held on _________________

----------------------------- ----------------------------
Internal Examiner External Examiner

2
 DECLARATION

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

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

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

other University.

(Signature of the Candidate)

SOLOMON BENJAMIN

098001152045
I certify that the declaration made above by the candidate is true

Signature of the Guide,

Ms.P.ALOSHA

MBA, Lecturer

3
 ACKNOWLEDGEMENT

I take this opportunity to express thanks and gratitude to one and all that rendered
necessary help to me in finalizing this project.
I express my whole hearted gratitude to CEO, Secretary Dr. P. KRISHNAKUMAR,
our principal Dr.R.MOSES DANIEL for giving me an opportunity to do this work successfully

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

NIITM(NEHRUAINSTITUTEAOFAINFORMATIONATECHNOLOGY.&
MANAGEMENT) for the valuable guidance, suggestions and encouragement for the
completion of this project.
I consider it as a great privilege to be under the guidance of Ms. P.ALOSHA,
Faculty guide, Department of MBA, NIITM. The contribution and significant role
played by her helped me in the preparation and submission of project report in time.
I express gratitude to Mr.Nandakumar, Managing Director of Shastha Enterprises
Who took out time from his tight schedule to guide and support me during the whole
tenure of this project.
I would like to extend my sincere gratitude to the officers and employees of
Shastha enterprises Quilon, for providing information about the project.
I also express thanks to everyone who have contributed their valuable time and
effort to make this project a success and to present it in this form.

QUILON SOLOMON BENJAMIN

4
CONTENTS

CHAPTER TITLE PAGE No

1 INTRODUCTION 6

2 COMPANY PROFILE 10

3 MOTTO, VISION, AND MISSION 11

4 ORGANISATIONAL CHART 12

5 PRODUCT PROFILE 15

6 DEPARTMENT PROFILE

6.1 PRODUCTION DEPARTMENT 23

6.2 MATERIALS AND CONTROL DEPARTMENT 31

6.3PURCHASE DEPARTMENT 33

6.4 FINANCE DEPARTMENT 35

6.5 AUDITINGDEPARTMENT 39

6.6 HUMAN RESOURCE DEPARTMENT 42

50
6.7MARKETING AND SALES DEPARTEMENT

7 FINDINGS AND SUGESSTIONS 53

8 SWOT ANALYSIS 56

9 CONCLUSION 57

10 BIBLIOGRAPHY 58

5
INTRODUCTION

6
1.1 INTRODUCTION

Cashew plays a pivotal role in the international trade, which earns a good amount of
foreign exchange by its export to different countries of the world. Cashew has been listed as one
of the world’s most nutritious nut. Epidemiological studies reveal that cashew nuts posses a
protective effect on the cardiovascular disease, possibly as a result of their established blood
cholesterol lowering capacity.

On analyzing the history of cashew, it enlightens the truth as a waste land crop has gained
its dignity a major plantation crop, which spreads in more than five lakhs hectares of land. In
early days people merely regarded cashew tree as a tree with a rare fruit, one on which the nut
stayed outside. The curiosity of the people led to break open the shell of cashew nut and they
found the kernel inside insensuosly delicious. The countries rolled by the economic and
commercial value of the cashew came to be recognized. New entrepreneurs came into the picture
and with for sightedness ventured in the export business to increase the production of indigenous
raw nuts cashew entrepreneurs has started cashew plantation in the locality. Owners have also
introduced value added cashew products in the market.

From the modest beginning in 1985 shastha enterprises has now grown into a large
organization playing a pivotal role in cashew industry in the world. The company has now more
than a turnover of Rs.50 crores. Now Shastha enterprises is running 15 cashew factories in a 50
km radius of Quilon district. In these factories more than 5000 workers and 400 staff members
are working. The company is a model employer in the field of cashew industry to other private
companies mainly to protect the interest of workers and to provide maximum employment to its
workers and to give statutory benefits like minimum wages, bonus, etc prevailing in the cashew
industry. To increase the production of indigenous raw nuts the company has started cashew
plantation in the district. The company has also introduced value added cashew products in the
market.

The industry, vitally important to society on account of its employment potential and its
significant role as a foreign exchange earner was in bad shape, coming up against one crisis after
another. Primary for want of nuts which have to be imported mainly from Africa.

7
 Shastha enterprises was made to combat the ills of the industry and put it back on rail along
with the innumerable private sector units saddled with the same problem which had
repercussions on the hopeless workers who have least mobility of labour.

1.2OBJECT OF THE STUDY

The study was conducted with the following objectives:

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

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

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

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

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

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

OBJECTIVES OF COMPANY

1. Maximization of sales and productivity .

2. Maintaining employment and safeguard the interest of workers

3. Helping the industrial development of the state

8
1.3SCOPE OF THE STUDY

This organizational study aims generating a practical awareness of the functions and
management of the company Shastha Enterprises Cashew Processing and Exporting Company,
The study covers a general understanding of the organization, its culture, departments, and its
business activities.

1,4SOURCES OF DATA

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

The term primary data refers to the data which are directly collected for the first time and
happened to be original in character. The primary data for the study was collected through direct
observation and interviewing the company officials

Secondary data were made by the company. Financial statements and other relevant
records were the major source of information . Besides ,data available from the journals
published by cashew export promotion council of India and past research reports were made use
in the completion of this study

1.5LIMITATION OF THE STUDY

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

• There may be error due to bias on the respondents.

9
2 COMPANY PROFILE

Shastha enterprises cashew processing and exporting company, was started in July 1985
and started Commercial activities in the same year as a company fully owned by its proprietor
Mr.Nandakumar. The main function of the companies operation is the processing of raw nuts and
thereby production of cashew kernels and its byproducts. From the modest beginning in 1985
Company has now grown into a large organization playing a pivotal role in cashew industry in
the state. The products are exported and sold in the Indian market. Company has now more than
a turnover of Rs. 50 crores. Now shastha enterprises is running 15 cashew factories all over the
Quilon district. In these factories more than 5000 workers and 400 staff members are working.
From the modest beginning in 1985 shastha enterprises has now grown into a large organization
playing a pivotal role in cashew industry in the world. The company has now more than a
turnover of Rs.50 crores. Now Shastha enterprises is running 15 cashew factories in a 50 km
radius of Quilon district. In these factories more than 5000 workers and 400 staff members are
working.

The company is a model employer in the field of cashew industry to other private
companies mainly to protect the interest of workers and to provide maximum employment to its
workers and to give statutory benefits like minimum wages, bonus, etc. To increase the
production of indigenous raw nuts the company has started cashew plantation in the district. The
company has also introduced value added cashew products in the market.

The company started functioning with one factory in 1985. Out of the above cashew
factories, 13 factories are owned by the corporation and 2 are leased factories. For administration
and convenience these 15 cashew factories are groups into 3 groups and each group is controlled
by a group checker. Thus below the head office, there are 3 group checker, 15 cashew factories
and 1 tin factory.

The production capacity migration of the industry and the large scale diversion of raw
nuts to Tamilnadu resulted in acute shortage of raw nuts in the state. Even the state government

10
owned K.S.C.D.C could not work for more than 100 days a year, owing to the shortage of raw
nuts.

The proper functioning of company is blocked by the limited supply of raw materials in
the industry. Proper functioning of shastha enterprises can be varied in the years, which there are
abandoned supply of raw materials. Thus we can see that the availability of raw materials is one
of the key factors which determine the efficient running of the industry. Even though the
company has these 15 factories we can see that it is not functioning in almost 2/3 of the year.
This is due to the non availability of raw materials collected by the company and union strikes in
company

2.1AWARDS

Forward-looking policies and their implementation have paid off rich dividends to the
company and to other private sector also. Apart from being one of the major cashew exporter in
the country from 2006-2008, Shastha enterprises have won awards at national level for export
performances continuously and in the latest 2006-2008 list, Shastha enterprises name has been
recommended, once again for the National award. Since the incorporation of the company plays
a credible and progressive role in many aspects.

2.2PRODUCTS

Shastha enterprises locally purchase / import raw cashew nuts and export the kernels in
large quantities. 80% of our sale is by way of export. Indian Grade Kernels, Rejection Grade
Kernels, Cashew Shell, Cashew skin, Shell Oil etc. are the by-products of raw cashew nut.
Shastha enterprises, has a capacity to process 50 Metric Tons of raw cashew nuts per day.

2.3VISION

• A forward looking company

• A strong and sound company for stake holders

2.4MISSION

11
 Building a vibrant, professional work environment that attracts nurtures and retains good
performers and, developing the expertise to be able to be strategic partner to fulfill present and
future business needs.

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

The figure below illustrate the number of working days that have been provided by the company
to workers from 1986-87 to 2005-2006.

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

YEARS NUMBER OF DAYS

1986-1987 100
1987-1988 120
1988-1989 135
1989-1990 162
1990-1991 129
1991-1992 150
1992-1993 117
1993-1994 130
1994-1995 149
1995-1996 138
1996-1997 180
1997-1998 180
1998-1999 153
1999-2000 150
2000-2001 165
2001-2002 93
2002-2003 Nil
2003-2004 118
2004-2005 198
2005-2006 212

12
ORGANIZATIONAL CHART

Organization Chart

MANAGING DIRECTOR

13
PURCHASE INVENTORY PRODUCTIO
FINANCE
DEPARTMENT DEPARTMEN N
DEPARTMEN
T

PURCHASE INVENTORY PLANT CHIEF

MANAGER SUPERVISIOR SUPERVISIOR ACCOUNTANT

ASSISTANT ASSISTANT ASSISTANT ACCOUNT

MANAGER SUPERVISIOR SUPERVISIOR KEEPER

WORKERS

3 PRODUCT PROFILE

Shastha enterprises locally purchase/import raw cashew nuts and export the kernels in
large quantities. 80% of sale is by way of export. Indian Grade Kernels, Rejection Grade
Kernels, Cashew Shell, Cashew Skin, Shell oil etc. are the by-products of aw cashew nut.
Shastha enterprises has a capacity to process 50 MT of raw cashew nuts per day. Product means
to the goods and services combination, the company offers to the target market. The product here

14
is the processed cashew kernels. The cashew kernel here can be of different grades. The different
grades are the different products because of their feature, quality, size, shape etc.

Specifications for Cashew Kernels

GENERAL CHARACTERISTICS: Cashew Kernels shall have been obtained through roasting,
shelling and peeling Cashew nuts.

3.1 SPECIAL CHARACTERISTICS:

A - CASHEW KERNELS – WHITE WHOLES

NLSG
Grade Trade Colour/ maximum Broken
Count NLG
Designation Name Characteristics Moisture % Max %
Max %
White/pale
5 (NLSG
White ivory/Light ash/
W180 170-180 5 5 & SW
Wholes Characteristic
together)
shape
W210 Do Do 200-210 5 5 Do

W240 Do Do 220-240 5 5 Do

W320 Do Do 300-320 5 5 Do

W450 Do Do 400-450 5 5 Do

B - CASHEW KERNELS – SCORCHED WHOLES

Count/454gms Maximum NLSG

Grade Trade Colour/ Broken
Size Moisture NLG
Designation Name Characteristics Max %
Description % Max %

15
 Kernels may be
scorched/slightly
Scorched darkened due to
SW N.A 5 5 7.5(SSW)
Wholes Over-heating while
roasting or drying
in drier/borma
7.5
(NLSG
SW 180 Do Do 170-180 5 5
&SSW
togeth.)
SW210 Do Do 200-210 5 5 Do
SW240 Do Do 220-240 5 5 Do
SW320 Do Do 300-320 5 5 Do
SW450 Do Do 400-450 5 5 Do
SW500 Do Do 450-500 5 5 7.5(SSW)

C - CASHEW KERNELS – DESSERT WHOLES

NLSG
Grade Trade Colour/ Count/454gms Maximum Broken
NLG
Designation Name Characteristics Size description Moisture % Max %
Max %
Kernels may be over
scorched, immature
Scorched
Shriveled(pirival) 7.5
SSW Wholes NA 5 5
Speckled(karaniram) DW
Seconds
Discoloured and light
blue
DW Desert Kernels may be deep NA 5 5 --
Wholes scorched,deep brown,
deepblue,speckled,
dis-coloured and

16
 black Spotted.

D - CASHEW KERNELS – WHITE PIECES

NLSG
Grade Trade Colour/ Count/454gms Maximum Broken
NLG Max
Destination Name Characteristics size description Moisture % Max %
%
White/pale ivory
or light
ash.Kernels
B Butts broken cross-wise NA 5 5 5 (SB)
(evenly or
unevenly)
naturally attached.
White/pale ivory
or light ash.
S Splits Kernels split NA 5 5 5(SS)
naturally
lengthwise.
Kernels broken
into more than
two pieces and
Large 5 (SW &
White/pale ivory not passing
LWP White 5 Nil SP
or light ash through 4 mesh
Pieces together
16 SWG
sieve/4.75mm.
I.S.Sieve

17
 Broken kernels
smaller than
those described 5
Small
White/pale ivory on LWP but not (BB &
SWP white 5 Nil
or light ash passing through 6 SSP
pieces
mesh 20 SWG Together)
sieve/2.80mm I.S
Sieve
Plemules &
broken kernels
smaller than
those described 1%
Baby
BB Do as SWP but not 5 Nil (Cashew
Bits
passing through a Powder)
10 mesh 24 SWG
Sieve/1.70 mm
I.S.Sieve

E - CASHEW KERNELS – SCORCHED PIECES

Count/454gms Maximum
Grade Trade Colour/ Broken NLSG NLG
Size Moisture
Designation Name Characteristic Max % Max %
description %
SB Scorched Kernels broken NA 5 5 7.5 (DB)
Butts cross
wise(evenly or
unev- enly &
naturally
attached. Kernels
may be
scorched/slightly

18
 darkened due to
over
heating while
roasting or
drying in the
drier/borma.
Kernels split
naturally length
wise. Kernels
may be
Scorched scorched/slightly
SS NA 5 5 7.5 (DS)
Splits darkened due to
over-heating
while roasting or
drying in
drier/borma
Kernels may be
Pieces not
scorched/slightly
passing
darkened due to
Scorched through a 4 7.5 (SSP & SPS
SP over heating 5 Nil
Pieces mesh 16 SWG together)
while roasting or
sieve/4.75 mm
drying in
I.S. Sieve
drier/borma.
Kernels may be Pieces smaller
scorched/slightly than SP but not
Scorched darkened due to passing
SSP Small over heating through a 65 Nil 5 (DSP)
Pieces while roasting or mesh 20 SWG
drying in Sieve/2.80 mm
drier/borma I.S. Sieve4.

19
F - CASHEW KERNELS – DESSERT PIECES

NLSG
Grade Trade Colour/ Count/454gms Maximum. Broken
NLG Max
Designation Name characteristic Size description Moisture % Max %
%
Kernels may be
over scorched, Kernels broken
immature, Into pieces but
Scorched shriveled Not passing 7.5 (DP &
SPS Pieces (Pirival), through a 4 mesh 5 Nil DSP
Second speckled 16 SWG together)
(Karaniram), sieve/4.75 mm
discoloured and I.S. Sieve.
light blue
Kernels may be Kernels broken
deep scorched, into pieces but
deep brown, not passing
Dessert
DP deep blue, through a 4 mesh 5 Nil 7.5 (DSP)
Pieces
speckled, 16 SWG
discoloured & sieve/4.75 mm
black spotted. I.S.Sieve

4 DEPARTMENTS AND ITS FUNCTIONS

The various functions of the organization are carried through various departments. The
process of assigning various tasks or activities in the different segments on a horizontal basis is
called departmentation. It helps for proper administration of a company. There are 3 senior
checkers for each department under the control of general manager and other officers. In Shastha
enterprises, Quilon. Eight departments are functioning.

20
The various departments are below:

Personnel department

Finance department

Production department

Commercial department

Purchase department

Sales department

Materials department

Auditing department

21
 PRODUCTION DEPARTMENT

5 PRODUCTION DEPARTMENT

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

materials into finished goods. The Production manager is in charge of the production department.
In production department, the production manager looks after all the matters connected with the
processing of raw cashew nuts. The production department co – ordinates with the commerce

22
section and fitting centers to ensure timely availability of finished products for export. The
hierarchy of production department:

Production Department

Production Manager

Checker
(Production)

Assistant Typist

5.1PROCESSING OF CASHEWNUT

Processing of cashew nuts refers to the conversion of raw cashew nuts in shell to its
blanched graded kernel form. The process is highly labour intensive and the work force consists
mainly of women.

(a) Drum roasting: This is one of the oldest and more widely used methods. The nuts are
fed into a rotating red hot drum which will ignite the shell maintaining its temperature
because of the burning of the shell liquid. The drum is kept in rotation for 3-4 minutes and
the roasted nuts are discharged from the lower end of the drum and immediately covered by
ash after sprayed with little water, so as to absorb the oil on the surface. This facilities the
removal of the remaining oil on the shell. Due to draw backs of the method is superseded by
oil bath roasting.

5.2PROCESSING AT ORCHARD LEVEL

23
 The processing of cashew in the orchard is mainly confines to removal of raw nuts from
cashew apple and drying. Harvest only fully matured nuts. Usually nuts are picked when they
fall off from the tree. Best quality nuts are obtained, where fresh fallen fruits are collected. The
apples are removed and the nuts are sun dried for 2 – 3 days to reduce moisture from 25 percent
to below 9 percent. It is very essential to dry the nuts after harvest to prevent spoilage during
subsequent storage. This helps the kernel to retain their quality, particular the flavor. However, if
cashew apples are used for processing, it is better to harvest them from the tree without
damaging the apples. The mature nuts will sink in water while the immature/unfilled ones will
float. This test could be used to find out whether the nuts are mature or not.

5.3 CASHEW PRODUCTS;

Main Product:- Kernels

By Products:-

Cashew Nut Shell Liquid (CNSL)

Skin

Shell

5.4PRODUCTION PROCESS

ROASTING

SHELLING

24
 BORMA

PEELING

GRADING

FILLING & PACKING

5.5PROCESSING OF RAW NUTS AT FACTORY

The nuts which are required to be processed at factory should be dried again for 1 – 2
days to reduce and maintain the moisture level of 7 – 8 percent. The processing of raw nuts
involves roasting, shelling, drying, peeling, grading and packing. Once the raw nuts are entered
inside the factory, they will be weighed at gate. Then these cashews will be taken to the first step
of the processing that is roasting.

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

5.5.1Roasting

Roasting is the first processing that is to heat the raw nuts in a machine to a particular
temperature for the purpose of shelling. The roasting helps the cashews to get firm and easy to
break. This helps reduction of breakage in the next step of shelling. Roasting of raw nuts is done
to separate adhering shell from the Kernel.

25
 There are three types of roasting via, drum roasting, oil bath roasting and stream roasting.
Stream roasting is the commonly used method by most of the processing units. In the case of
steam roasting, the raw nuts are roasted at about 100 – lb pressure for about 25 – 30 minutes.
Then the nuts are allowed to cool for 24 hours and taken for shelling.

5.5.2Shelling

The roasted nuts are ready for shelling. The shellers shell the roasted nuts with a small
wooden piece called “kottu vady” without destroying the kernels inside. The shellers themselves
grade the Sheller’s nuts. The shellers are all female workers. Cashew nuts after roasting and
cooling are to be shelled to remove kernels. One has to be very careful while shelling the nuts.
Hands are to be protected from Cashew Nut shelling. For the same reason, it is advisable to dust
the nuts with wood ash. Commercial processing units use foot operated shell cutters (mechanical
device) for shelling. This device consists of a pair blade (knives) shaped in the counter of half a
nut which could be operated by foot. The blades cut through the shell all around the net, leaving
the kernel untouched. After shelling the kernels and shell pieces are separated manually. The
nuts have to be grouped into various sizes, each size making a pair or blades of appropriate size.

5.5.3Borma/Drying

Borma is the processing where the shelled nuts are heated on a closed room in trays for
the purpose of getting crispiness to the cashew kernels. Here the cashews are not directly heated
but the heat air is pushed into these cashew kernels.

The kernels after shelling will have moisture content of more than 6 percent. Drying of
these kernels is necessary to prevent fungus attack during subsequent storage and to facilities
peeling of testa. The kernels are to be dried to moisture content of about 4 – 5 percent. This is
done by drying the kernels in hot chambers at 70 – 80 C in perforated trays for about 6 – 8 hours.
Uniform drying could be achieved with a cross flow drier using forced hot air circulation through
the kernel layers. In order to ensure uniform dying, the position of the trays has to be changed
frequently, as scorching may occur at hotter places. Excess drying of kernels leads to kernels

26
becoming very brittle resulting in higher breakage. After drying, the kernels are kept in the moist
chamber for 24 hours which facilitates easy removal of testa (peling) and minimizes broken
kernels.

5.5.4Peeling

The shelled and heated nuts are then peeled by the peelers. There is a brownish – yellow
skin over the nuts. The skin is peeled by the workers by hand manually. Here also the work is
done by female workers. This process involves the removal of testa (seed coat) from the kernel.
Care has to be taken while removing the testa. If kernels are scorched more it results in poor
quality kernels.

5.5.5Grading

Kernels are graded according to the size manually. In the International Market bold
whole kernels fetch premium price. The grading standards developed in India refer to white
whole (undamaged) kernels and indicate the number kernels per lb of weight. The largest kernels
come in the grade W 180 (340 – 380/kg) and the smallest of the seven grades in W 450 (810 –
1000/kg). Generally, Brazilian kernels have a relatively high proportion of large wholes, with the
extra attraction of the 180”s grade, known as Special large Wholes. The white whole kernels are
priced according to size. Further classification refers to broken kernels, butts, splits, pieces, small
pieces and whether kernels are white or scorched.

5.5.6Packaging

As far as possible packaging material used should be eco – friendly and recyclable and
containers are hermetically sealed after filling carbon dioxide. After grading the graded nuts are
filled in aluminum tins. Each in contains 25 pounds of nuts and these tins are arranged in cartons
for export.

27
5.6 Functions of the Production Department

The production department is in charge of processing the raw nuts into finished products.
The major functions performed by them are;

I. Allotment of raw nuts for processing:

The raw nuts purchased by the commerce department will be handed over to the
production department for processing. The production department has to allot the raw nuts to
various factories for processing. The allotment is done after considering the processing capacity
of each factories, work force strength etc.

II. Quality Control

The production department have to look on the quality while the processing of raw
cashew. The quality products are also used as a marketing strategy of the organization. For the
purpose of determining the quality, the processed cashew kernels are divided into namely –
Export grade and Indian grade. In order to maintain the quality they perform the following
functions.

 Assurance of the incoming raw nut’s quality and quantity.

 Assurance that proper processes are operating on the raw nuts.

 Assurance of the quality of outgoing finished goods.

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

III. Grading

28
 The kernels processed are graded under hygienic conditions. It is as per international
standard of grading.

IV. Packing

The production department is also in charge for packing of the processed kernels.
Domestic standard packing includes 20, 40, 100, 250, 500 grams and 1kg bags. In addition to
that as per customer requirement bulk can be supplied. Gift packers containing 2kg of cashew
kernels are also available.

V. Transfer of processed kernels:

The kernels processed are transferred to the commerce section for sale. Indeed the
production department is in the overall charge of processing the cashew kernels into final
products.

29
 MATERIALS PLANNING AND
CONTROL DEPARTMENT

6 Materials Planning and Control (MPC)

This department is usually headed by General Manager. This department plays a strategic
role in materials management. MPC is the prime agency responsible for the availability of any
material required for production and hence contently keeps track material status. it is the
department which receives the Material Requisition (M.R) from the production department and
makes sure that the required material is made available to the manufacturing section. As this
department has the major responsibility of the stock in the store and for allocation and co-

30
ordination with the purchase department for procuring right material.

6.1Duties of officials in Materials Department

A. The Materials Manager

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

lease deed, profession tax and factory license. Preparation of annual indent for stationery and
purchase of quality materials at competitive price is also done by him.

Apart from the above duties he has to ensure that adequate materials are supplied in
factories so that production can be carried out in an uninterrupted way. Thus the Materials
Manager plays a vital role in the smooth functioning of the organization.

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

• Attending all matters dealing in the material department.

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

• Maintain stock register and distribution of register.

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

• Enquiries and quotation may be invited for purchase of materials.

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

31
 PURCHASE DEPARTMENT

7 PURCHASE DEPARTMENT

This department deals with the purchase of raw materials from various sources. In shatha
enterprises, raw materials are purchased through inviting tenders from suppliers. 100% of raw
materials are purchased from outside suppliers. Production department gives order to the
purchase raw materials. The main raw material is cashew nuts.

7.1Purchase policy

32
 Shastha enterprises has a purchase policy to purchase raw material in right quantity and
quality at right time and right place from right source. Acceptance of sample can be done as per
the recommendation from the quality assurance department. If the samples are qualified, the
suppliers can be included in the list of qualified suppliers. Tenders should be sent to qualified
suppliers only. They only have the ability to provide bulk of raw materials of the company.

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

i. Local purchase

Local purchase means the purchase made within the country. Before doing local purchase
they will specify the quality of raw nuts, quantity required, terms of payment, modes of delivery
etc. the local purchase is mainly made from the southern states of the country.

ii. Import

The raw nuts purchased from the country are not sufficient to meet the requirements of
the company. So they will import raw nuts from African countries. While importing the raw
cashews the modes of payment is done either through Letter of Credit (LC). At the time of
receiving the raw nuts, the company officials will inspect the landed weight and landed quantity
to ensure that the right quantity and quality is supplied as per the terms and conditions.

33
 FINANCE DEPARTMENT

8 FINANCE DEPARTMENT

The finance section is assigned to plan and control the firm’s financial resources. The
finance function of raising and using money has significant effect on other functions of the
organization.

34
 The finance manager is in charge of the finance department. The finance manager gets
proper support from other officials like the Assistant finance manager, superintendent, etc. The
finance department is responsible for the management and transfer of funds.

8.1Sections of finance department

The various sections under finance department are:

1. Books and Budget

2. Sales
3. Priced stores Ledger
4. Costing
5. Establishment
6. Bills Payable
1. Books and budget:

 Collection of accounts from different section

 Preparation of trial balance and final accounts
 Coordination with auditor
 Helps statutory officer
2. Sales:

 Invoice generation

 Collection

 Debtor’s ledger
3. Prices stores ledger:

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

35
4. Costing:

 Each product is having a separate section. It sets the cost that is used by commercial
group to add profit margin to set the price.

5. Establishment:

 This section is responsible for cash disbursements and payment. It handles all the
payment said to the employees such as benefits.
 Medical reimbursement
 Provident fund
 Incentives
 Loans and advances etc.

6. Bills payable:

 This section handles the payment to be made to the suppliers once the SRV (store receipt
vouchers), P.O (purchase order) invoice are received, cross verification of P.O terms,
quality and quantity assurance with the SRV and invoice. Once all the claims are found
satisfactory, the payment is used as per the terms.

8.2Management of working capital

A firm should maintain a sound working capital position and that there should be
optimum investment in working capital. Thus there arises an unavoidable need to manage
working capital well. Working capital management involves management of different
components of working capital such as cash inventories, accounts receivable, creditors etc.
Finance manager has to spend their time to the daily internal operations, relating to current assets
and current liabilities of the firm.

36
8.3Duties of officials in finance section

1. Finance Manager

The finance department is headed by the finance manager. The finance manager is
responsible for fund management and transfer of funds. He will also be responsible for watching
day today operation of bank accounts, passing of bills and signing cheques and overall
supervision of finance department. He is responsible to do any other work entrusted by the
managing director.
• Work relating to income tax, sales tax, customs and central excise duty.

• Correspondence with the government.

• Attending various correspondences.

• Supervision of the department.

• Assist the finance manager.

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

• Verification of annual stock statement, closing stock statements.

• Any other work entrusted by the managing director.
• Supervision of the work of cashier and other staff of the finance department.
• Supervision of the department, maintenance of attendance register, movement of register.
• Joint custody of cash and securities.
• Supervision of work allotted to finance department.
• Reply to correspondence from government banks.
• Supervision and sanctioning of T.A, miscellaneous, advances etc and its adjustments.
• Verification of cheques before signature.

37
AUDITING DEPARTMENT

38
9 INTERNAL AUDITING DEPARTMENT

The internal auditing department is headed by the Internal Audit Officer. The main object
of the internal audit department is to detect and prevent errors and frauds. The internal audit
department has to examine systematically the books and records of the organization. The
hierarchy of the internal audit department:

Internal Audit Officer

Superintendent (Audit)

Senior Assistant

Junior Assistant

9.1Objectives of Auditing

The objective of auditing can be classified into:

1. Primary objective

2. Secondary objective

The primary objective of auditing is to verify accounts and report whether the P&L a/c and
Balance Sheet is properly drawn according to the companies act and they exhibit a true and fair
view of the state of affairs of the concern.

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

39
be classified as follows:

• Detection of errors

• Detection of frauds

• Prevention of errors and frauds

9.2Internal Audit Officer

The Internal Audit Department is headed by the Internal Audit Officer. He has to check
all expenditure of the corporation and ascertain whether the amount shown in the accounts are
legally disbursed or not. In addition to that he has to examine all the books of accounts to ensure
that the books of accounts depict a true and fair view of the state of affairs of the business. He
will check all the statements to analyze the financial position of the company.

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

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

• To physically verify the cash and stock of corporation.

• To inspect any office of the corporation and call for any accounting and processing
records.

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

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

40
HUMAN RESOURCE DEPARTMENT

41
10 HUMAN RESOURCE DEPARTMENT

The personnel manager will be in the overall charge of personnel department. The
personnel section is in charge of all the matters related with recruitment, selection, training and
development, wages and salary administration, law etc.
The hierarchy of personnel dept:-

General Manager (Personnel)

Personnel Manager

Assistant Personnel Manager

Assistant Personnel Manager Superintendent (Personnel)

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

The persons are appointed through P.S.C and employment exchanges. Selected persons get 6
months training in the concerned department. The department provides guidelines to workers for
greater benefits from them.
Personnel department deals with managing and controlling of persons in an organization.
Personnel management is the part of the total management of the organization, which
specifically deals with the human resource, in respect of their procurement, development and
motivation towards the attainment of the organizational objectives.

42
 Shastha enterprises have been playing a highly progressive role in the best sense in
fighting of the workers and the industry in general. For example, it was first in the field to
oppose open general license for import of nuts and its plea for canalizing imports.

Last but not least are the fringe benefits enjoyed by its employees, they get minimum
wages, dearness allowance, leave facilities, provident Fund, gratuity Festival bonus, holiday
wages, leave with wages, ESI, lwf,etc.

10.1 Duties of Officials in the Personnel Department

1. The Personnel Manager

The personnel manager is the head of personnel department. He is the overall charge of
the personnel section. He will attend any other work entrusted to him by the managing director.
His duties are:

 Exercise effective supervision over the working of personnel section.

 He will convene the central trade unions meeting.
 Any other work entrusted to him by the managing director.

2. The Assistant Personnel Manager

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

 Correspondence with government departments.

 Transfer and posting of staff and workers.
 Declaration of production staff.
 Employment of department staff and workers.
 Foreign employment of staff and workers.
 Retirement of staffs and workers.
 Pay fixation of staffs.
 Preparation of D.A to staffs and workers
 Leave particulars of staff and workers.

43
  Conciliation and leave surrender of staffs.
 Increment and leave surrender of staffs.
 Any other work entrusted to him by the managing director.

Superintendent

The duties of superintendent are:

 ESI and connected work.

 EPF and connected work.
 Gratuity.

10.2Profile of workers in factories of shastha enterprises

In the cashew factory broadly there are two categories of employees. They are the daily
paid workers and the salaried staffs. The workers are again divided into two categories. They are
the piece rated workers and daily rated workers. The piece rated workers are shellers and peelers.
Other workers are daily rated workers.

10.3About the Salaried Staffs:

The staff of the company mainly deals with the office work. The staffs of the company
are mainly concentrated in the head office and the group offices.

The monthly paid staffs are divided into two groups:

1. Fully salaried staff and

2. Retaining staff

The fully salaried staffs include clerks, drivers, lorry cleaners, mechanic blacksmith and
watchman. These staffs are entitled to receive the salary every month irrespective of the work
done in a year. Their salary is fixed.

44
 The retaining staffs do not receive the salary every month; they receive their salary only
in the month which has the processing of raw nuts. In the months where the works are not
performed i.e. in the months where no processing of raw nuts is done they are entitled to get just
the retaining allowance which is fixed by the pay commission. The retaining allowance is much
smaller compare to the salary which is received by them in the working months.
The retaining staffs include:

1. Bormen: Bormen are the worker who does the work of heating up of the raw nuts
up to a certain temperature to make easy the shelling of the raw nuts. An average in
K.S.C.D.C there is about 6 Bormen in a factory.

2. Roaster: Roaster is another retaining staff in the company. A roaster does the work of
roasting the heated raw nuts and burns up the shells of the raw nuts and makes it ready for
the shellers to shell up the nuts. There are about 4-7 roasters in a factory.

3. Kernel weigher: Kernel weigher is another type of retaining staff. The kernel weigher does
the work of weighing the nuts shelled by the shellers. The kernel weigher weighed the nut of
every shellers everyday and fixes their wages. There about 3 kernel weighers in every
factory.

4. Kernel checker: The kernel checker does the work of checking up of the graded kernels to
make sure that they are graded according to the standard prescribed. There are about 2 – 3
kernel checker in every factory of the corporation.

5. Tinker: Tinker is a retaining staff who does the work of the sealing of all the edges and holes
of the tin in which the kernels are to be exported. The tinkers do the work of closing of all the
holes in the tin with the help of the lead which is heated and pasted on the edges of the tin.
There are about 2-4 tinkers in every factory.

6. Packer: The packer is another retaining staff who does the work of packing up of kernels in
the tin. The packer has to do his job with utmost care because he has to make sure that there
are no further holes in the tin to prevent the entry of worms and bacteria into the tin. There
are about 3-5 packers in a factory.

7. Masteries: This is the also type of retaining staff. Masteries do the work of supervising on
the workers in the factory. There are three types of masteries in each factory. They are;

45
 shelling masteries, peeling masteries and grading masteries. There are about 1 – 2 shelling
masteries, 1 – 2 peeling masteries and 1 grading masteries in every factory of the Shastha
enterprises.

10.4Functions of Personnel Section

The various functions performed by the personnel section are described here under with
the help of a chart.

Recruitment

Training
Personnel
Department Development
Function

Wage administration

ESI & PF Maintenance

law

The personnel section will perform the following functions.

a) Recruitment: The organization requires adequate human strength for its smooth
functioning. The personnel section is in charge of recruitment of the workforce. The organization
workforce can be classified into three:

 The head office staff

 The factory staff
 The factory workers

46
 The top officials like Managing Director, Chairman etc. are appointed by the
Government. The head office staffs are appointed through the public service commission.

The factory staffs like the factory clerk, watchmen etc are appointed by the director
board. Such vacancies are sometimes filled through employment exchanges. The rest of the
workers are appointed through test work conducted by the organization. The organization is also
following the internal source recruitment methods such as transfer, promotion etc. to fill up the
vacancies.

A part from the above the organization will appoint some casual workers to meet its short
term demands. This would help them to meet their demand in an economic way.

b) Training: The workers are trained to increase their knowledge and skill. Here the
training is provided at the work place itself. The workers are put on their respective job under
the guidance of the immediate supervision. In this way, he learns the job and does the work
at the same time itself.

c) Wage and salary administration: The organization generally stands for protecting the
interest of the workers in the industry. The workers are provided with the statutory benefits
such as minimum wages, bonus etc. The personnel section is in charge of administration of
wages and other details. The wages and other benefits are determined as a result of collective
bargaining by the trade unions and the management.

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

Work Minimum Wage

Shelling Rs. 13.60 per kg

Peeling Rs. 16.61 per kg
Grading Rs. 98.10 per kg
Roasting Rs. 8 per kg

d) ESI & PF: The employees are insured under the Employees State Insurance Act
of 1948. All the documents related with ESI & PF are maintained in the personnel section.

47
e) Law: The personnel section is responsible for resolving all the work related dispute between
the organization and the external parties is also handled by the
personnel section.

10.5The employees’ strength

The Shastha enterprises is a model employer in the field of cashew industry mainly
protecting the interest of workers by giving the statutory benefits like minimum wages, bonus
etc. The present strength of workers with effect from 1-1-2008 is shown below:

Shellers 1800
Peelers 1900
Graders 300
Others 50
Factory staff 100
Head office staff 70

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

Social Responsibility

Shastha enterprises corporate social responsibility (CSR) initiatives cover:

 Health

 Safety

 Environment

Health:

Good health is a basic driver for growth. Focusing on the people surrounding, shatha
enterprises has set up eye camps and organizes periodic health drives – free eye operations or at

48
highly subsidized rate. Mother/child care and community initiatives have been undertaken proper
sanitation clean surroundings eco friendly processing methods etc… have been actuated.

Safety:

Safety standards are adopted in factories by its work place.

SALES & MARKETING

DEPARTMENT

49
11 SALES/MARKETING DEPARTMENT

In shastha enterprises, sales department has the duty to sell the products. In an
organization sale of product is very important. The ultimate objective of all production is sales.
No business survives without marketing.

Shastha enterprises is one of the leading supplies of cashew kernels and to the nation and
abroad. For the sale of processed cashew kernels the company is focusing on two markets
namely:

 Local market

For the local sale of processed nuts the company is following various techniques like
advertisement, sales promotion, publicity etc. In order to capture the local market now the
shastha enterprises has started a value addition unit for producing processed nuts in different
flavor. The promotional activities for capturing the market are in progress.

 Foreign market

The major consumers of processed Indian cashews are the foreign countries. The
company will enter into contract with the foreign buyers for the sale of processed cashew
kernels. The major foreign buyers are Spain, USA, UK, Japan, Hong Kong, Germany, Australia
etc.

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

Pricing is very crucial decision in marketing management. The objective of the firm is to
get optimum return to invest. It is very much depend upon the decision, after meeting the
exchange value of goods or services in terms of money. Pricing will have to accommodate trade

50
practices and regulations in the market. Prices should take into account of additional cost
involved in respect of packaging and labeling etc.

Cost consciousness and consciousness and capacity utilization has importance at all. They are
considering factors affecting pricing decisions such as cost of product, competitors price,
economic environment etc. the head office does the pricing of the product.

The very purpose of every commercial organization is to promote sale, because it is the
only way to commercialize the product. The shastha enterprises is giving much importance to
sales promotional activities; almost they are giving cash discount to the product and giving them
rebate. The company has faced threats from competitors.

11.1Marketing Process

The company is now focusing on the most modern marketing activities to capture the
market. They are rightly following several strategies to attract the attention of customers. Shastha
enterprises is an organization that exports 80% of its products to the foreign countries. So in
order to attract the 20% local market they introduced the following products:

 Value added products (roasted and salted) in small packets weighing even 20 grams worth
Rs.15 only.

 Domestic packing in 20, 40, 100, 250 and 500 grams, in addition to that as per customer
requirement, they will supply in bulk quantities.

 After considering the household requirements the company is now planning to produce
cashew powder for cooking purpose.

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

11.2 Import pattern

The world import of cashew kernels was 2.86 lakh tonnes in 2005 of which USA was the market
leader with 39.76 percent of the volume and 41.66 percent of the value. USA was followed by

51
Netherlands with 11.72 percent of the quantity and 10.85 percent of value. Other important
importers included United Kingdom (7.39%), Australia (4.40%), Germany (4.33%), Canada
(3.78%), UAE (3.42%), Russian Federation (2.22%), Japan (2.06%), and France (1.86%). The
cashew imports grew at an annual growth rate of 18 percent in quantity terms and 13 percent in v

The world import of cashew nuts with shell was 5.80 lakh tonnes in 2005 of which India
was the market leader with 93.44 percent of the volume and 91.37 percent of the value. Other
importers included Vietnam (5.44%), France (0.26%), Saudi Arabia (0.17%), UAE (0.12%),
USA (0.08%), Kenya (0.05%), Thailand (0.05%), Spain (0.05%) and Canada (0.04%). The
following table shows the country-wise import of cashew nut with shell during 2005.

11.3 Export pattern

The world export of cashew kernels was 2.88 lakh tonnes in 2005 of which India was the market
leader with 43.28 percent of the volume and 42.68 percent of the value. India was followed by
Vietnam with 28.25 percent of the quantity and 27.70 percent of value. Other important
exporters included Brazil (13.21%), Netherlands (8.24%), Indonesia ( 1.20%), Belgium (1.12%),
USA (0.80%), United Republic of Tanzania (0.59%), United Kingdom (0.44%), and
Mozambique (0.40%). The following pie diagram shows the country-wise volume of export of
cashew kernels during 2005.

52
 The world export of cashew nuts with shell was 4.89 lakh tonnes in 2005 of which
Côte d'Ivoire was the market leader with 34.34 percent of the volume and 26.70 percent of
the value. Côte d'Ivoire was followed by Guinea-Bissau with 19.12% of the quantity and
26.04 percent of value. Other important exporters included Indonesia (13.49%), Benin
(8.77%), United Republic of Tanzania (6.62%), Ghana (6.39%), Mozambique (4.31%),
Nigeria (3.53%), Kenya (1.03%) and Guinea with 0.87 percent. The following pie diagram
shows the country-wise export of cashew nuts with shell in terms of quantity during 2005.

53
54
 FINDINGS AND SUGGESTIONS

12 FINDINGS AND SUGGESTIONS

12.1FINDINGS

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

2. They have better training welfare facilities.

55
 3. Due to the government formalities there was delay in the payment of pensions.

4. When compared with the public sector workers, most the Shellers in Shastha enterprises
were found less skilled.

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

6. The cashew industry in Kerala is not depending on domestic production of cashew nuts,
but on import source. This creates outflow of foreign exchange.

7. As the retirement of employees is too much, several posts in the organization is left
vacant and no new recruitment is done.

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

9. Employees are committed and competent.

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

12.2SUGGESTIONS

56
1. The organization should recruit and train young employees for the future and the vacant
posts should be filled either by new recruitment or by promotion.

2. By avoiding competitors among the manufacturers of cashew kernels, the kernel price in
the national and international market can be raised.

3. Purchase only high quality of raw nuts.

4. Marketing of the employees should be widened.

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

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

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

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

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

57
 13 SWOT ANALYSIS

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

opportunities and threats should be understood. This analysis is commonly known as 'SWOT
ANALYSIS'. Strengths and weakness are internal factors. Opportunities and threats are external
factors.

13.1Strength

• Shastha enterprises are the major cashew exporter in the country.

• Provides large volume of employment opportunities.

• Good reputation.

• Shastha enterprises have a highly motivated work force.

• Non occurrence of strikes and layouts.

13.2Weakness

• Lack of competitiveness.

• Non availability of raw materials.

• Low degree of performance appraisal programmes

• Financial crisis.

13.3Opportunity

• Huge international order for salted and roasted cashew.

13.4Threats

• They face extreme competition.

• Better promotional strategies introduced by the competitors.

58
 14 CONCLUSION

The Shastha enterprise is one among the major private sector undertakings in Kerala
state. The organization is running in loss. The company has to pay off a huge liability by way of
bank loans. The major reason for its performance was due to the huge rate of bank interest levied
by the commercial banks. The shastha enterprises can perform well if they are in a position to
settle their liabilities in full. On the other hand, the company act as a model employer in the field
of cashew industry mainly to protect the interest of workers to give statutory benefits like
minimum wages, bonus etc.

59
 BIBLIOGRAPHY

BOOKS

1. Donalds Tull - Marketing Research

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

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

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

REPORTS

1. Economic Review, Trivandrum.

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

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

PERIODICALS

1. Financial Express, Bombay.

2. Cashew News, Teller, Cochin.

3. Indian Worker, New Delhi.

4. Indian Cashew Journal, Cochin.

WEBSITES

www.Cashewcorporation.com

60