Project KMF

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Chapter-1
ECONOMIC SCENARIO
BISHOP COTTON ACADEMY OF PROFESSIONAL MANAGEMENT Page 1

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Economy of India
The economy of India is the eleventh largest in the world by nominal GDP and the
third largest by purchasing power parity (PPP). The country is one of the G-20 major
economies and a member of BRICS. On a per capita income basis, India ranked 140th
by nominal GDP and 129th by GDP (PPP) in 2011, according to the IMF.
After the independence-era Indian economy (before and a little after 1947) was
inspired by the Soviet model of economic development, with a large public sector, high
import duties combined with interventionist policies, leading to massive inefficiencies
and widespread corruption. However, later on India adopted free market principles and
liberalized its economy to international trade under the guidance of Manmohan Singh,
who then was the Finance Minister of India under the leadership of P.V.
NarasimhaRao the then Prime Minister who eliminated License Raj a pre- and post-
British Era mechanism of strict government control on setting up new industry.
Following these strong economic reforms, and a strong focus on developing national
infrastructure such as the Golden Quadrilateral project by AtalBihari Vajpayee the then
Prime Minister the country's economic growth progressed at a rapid pace with very
high rates of growth and large increases in the incomes of people.
India recorded the highest growth rates in the mid-2000s, and is one of the fastest-
growing economies in the world. India has recorded a growth of over 200 times in per
capita income in a period from 1947 (Rs 249.6) to 2011. The growth was led primarily
due to a huge increase in the size of the middle class consumer, a large labour force,
growth in the manufacturing sector due to rising education levels and engineering skills
and considerable foreign investments. India is the nineteenth largest exporter and
tenth largest importer in the world. Economic growth rate stood at around 6.5% for the
2011–12 fiscal year.
Per Capita Income of India
Per capita income or average income or income per person is a measure of mean
income within an economic aggregate, such as a country or city. It is calculated by

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taking a measure of all sources of income in the aggregate (such as GDP or Gross
National Income) and dividing it by the total population. It does not attempt to reflect
the distribution of income or wealth.
Per capita income as a measure of prosperity
Per capita income is often used as a measure of the wealth of the population of a
nation, particularly in comparison to other nations. It is usually expressed in terms of
a commonly used international currency such as the Euro or United States dollar, and
is useful because it is widely known, easily calculated from readily-available GDP and
population estimates, and produces a useful statistic for comparison.
Per capita income has several weaknesses as a measurement of prosperity:
 As it is a mean value, it does not reflect income distribution. If the distribution

of income within a country is skewed, a small wealthy class can increase per
capita income far above that of the majority of the population. In this respect
Median income is a more useful measure of prosperity than per capita income,
because it is less influenced by the outliers.
Economic activity that does not result in monetary income, such as service provided
within the family, or for barter, are usually not counted. The importance of these
services varies widely among different economies.
 Comparisons of per capita income over time need to take into account changes
in prices. Without using measures of income adjusted for inflation, they will tend
to overstate the effects of economic growth.
International comparisons can be distorted by differences in the costs of living between

countries that aren't reflected in exchange rates. Where the objective of the
comparison is to look at differences in living standards between countries, using a
measure of per capita income adjusted for differences in purchasing power parity more
accurately reflects the differences in what people are actually able to buy with their
money.

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GDP OF 10 YEARS
India's quarterly GDP growth declined for the eighth consecutive quarter in January-
March, hitting a nine-year low of 5.3%. C Rangarajan, Chairman of the Prime Minister's
Economic Advisory Committee says that the RBI will find it difficult to reduce rates
even with such a low GDP, as the inflation is still not under control. The big question
is: Should RBI change track and focus on growth or should it continue to train its gun
on inflation?
Chart Showing the GDP Growth Rate Below Shows the Changes from the
Financial Year 2009-2012
GDP Rate of India
India’s GDP growth rate declined by a disappointing 5.3 per cent in the quarter ended
March 2012, the lowest since 3.6 percent in the January-March quarter of 2003,
according to data from Thomson Reuters. It last hit this level in the December quarter
of 2008. Here are 10 things about the economy that the data tells us.

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Growth below expectation: India's economy grew at an annual rate of 5.3 per cent
in the quarter ended March 2012, much lower than expectations of 6.1 per cent
projected by a poll of 31 economists. Experts see a bleak growth rate looking
forward and stress on policy reforms by government to kickstart the manufacturing
sector. The GDP numbers mean that the country’s growth slowed for eight
successive quarters through the three months ended March 2012.
also the lowest GDP growth rate in 13 quarters; the last time India registered the
same rate of growth was in the quarter ended December 2009, when the global
financial system had all but collapsed in the aftermath of the bankruptcy filing by
Lehman Brothers Holdings Inc.
Weakest fiscal performance in 9 years: India’s growth rose 6.5 per cent in the
fiscal year to the end of March 2012. This is the lowest growth rate since 2002-03
when it fell to 4 per cent in the wake of a global slowdown. It is also a sharp
slowdown from the previous fiscal’s 8.4 per cent.
Why Sensex, Nifty fall did: The BSE Sensex hit the lowest point of the day after data
indicated that the Indian economy grew at a slower than expected pace in the March
quarter. Since corporate profits are to economic growth, a slowdown adversely affects
a company’s bottom-line. The fall in Sensex and Nifty indicates that investors expect
corporate profits to dip going forward.
Agriculture growth falters: The farm sector, which is the single largest employer in
the country but one of the lowest contributors to absolute GDP, grew at a measly 1.7
per cent against 7.5 per cent in the corresponding period last fiscal. This is bad news
as rural consumption drives considerable amount of growth for leading Indian
companies. Poor agriculture growth means rural consumers would have less money
to spend going forward.
Manufacturing and services struggle: A key drag on growth numbers were the
industry and services sectors -- both key drivers of growth -- which came in lower than
expected, at 1.9 and 7.9 per cent against 7 and 10.6 per cent in the year-ago period.
The manufacturing sector contracted (-) 0.3 per cent from 7.3 per cent in the same
period last fiscal.

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Exports hurt: The corporate sector has witnessed its worst slowdown in recent times.
Confidence and demand have been weighed down by higher interest rates, a
challenging export environment, and, perhaps most important, policy mismanagement
and political deadlock, according to Moody’s Analytics. A sluggish global economy has
also cut demand for India's goods overseas, despite the falling rupee, which means
exports may also not grow enough to compensate for the domestic weakness.
Expect fewer jobs: The ability of companies to create jobs is hurt during a successive
slowdown in the GDP growth rate. Company could conserve cash and put expansion
on hold as a result of weak growth prospects going forward. Lower investment is also
partially a fallout of a high interest regime to keep inflation in check.
No scope for economic stimulus: The current account deficit is the highest since
1980. This occurs when a country imports more than it exports. Costly subsidies have
pushed the fiscal deficit to 5.9 per cent from a target of 4.6 per cent of GDP in the
fiscal year that ended in March2012. This leaves little headroom for any fiscal stimulus.
The surging budget deficit means the government cannot provide for any tax related
incentives to stimulate growth.
RBI cannot stimulate the economy either: A sharp 25 per cent drop in the rupee
over the past 9 months could hurt RBI’s ability to cut interest rates because doing so
could increase inflationary pressure. There can be no growth stimulus from RBI
through a lower borrowing cost as it battles stubbornly high inflation.
No option but to reform: Reforms such as opening India's supermarket sector to

foreign chains like Wal-Mart stuttered as the government failed to convince powerful
coalition allies. Inflation is the highest among the so-called BRICS group of major
developing nations. The government must push fiscal consolidation to help reduce
inflation and the current account deficit, the Moody’s report said, warning that an
expected rise in global oil prices could again force New Delhi to overshoot its spending
target. In short, the government needs to cut subsidies on fuel, fertilizer and food.
Indian Inflation Rate

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Indian inflation exceeds acceptable levels and restraining it may require sacrificing
economic growth, central bank Governor V Subbarao said. “Headline inflation has
come down, core inflation has come down to below 5 percent, but WPI inflation is still
above our tolerance level at 7.5 percent,” Subbarao said in a speech in Mumbai
yesterday, referring to India’s benchmark wholesale-price index. “Consumer-price
inflation is running above 10 percent. That is quite disturbing.”
Monetary Policy
Monetary policy is the process by which the monetary authority of a country controls
the supply of money, often targeting a rate of interest for the purpose of promoting
economic growth and stability. The official goals usually include relatively stable prices
and low unemployment. Monetary theory provides insight into how to craft optimal
monetary policy. It is referred to as either being expansionary or contractionary, where
an expansionary policy increases the total supply of money in the economy more
rapidly than usual, and contractionary policy expands the money supply more slowly
than usual or even shrinks it. Expansionary policy is traditionally used to try to combat
unemployment in a recession by lowering interest rates in the hope that easy credit
will entice businesses into expanding. Contractionary policy is intended to slow
inflation in hopes of avoiding the resulting distortions and deterioration of asset values.
 Monetary policy differs from fiscal policy, which refers to taxation, government
spending, and associated borrowing.
Therefore, monetary decisions today take into account a wider range of factors, such
as:
 short term interest rates

 long term interest rates;
 velocity of money through the economy;
 exchange rates;
 credit quality;
 bonds and equities (corporate ownership and debt);
 government versus private sector spending/savings;

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 international capital flows of money on large scales;
 Financial derivatives such as options, swaps, futures contracts, etc.
Meaning of Fiscal Policy
The fiscal policy is concerned with the raising of government revenue and incurring
of government expenditure. To generate revenue and to incur expenditure, the
government frames a policy called budgetary policy or fiscal policy. So, the fiscal
policy is concerned with government expenditure and government revenue .Fiscal
policy has to decide on the size and pattern of flow of expenditure from the
government to the economy and from the economy back to the government. So, in
broad term fiscal policy refers to"that segment of national economic policy which is
primarily concerned with the receipts and expenditure of central government." In other
words, fiscal policy refers to the policy of the government with regard to taxation,
public expenditure and public borrowings.
The importance of fiscal policy is high in underdeveloped countries. The state has to
play active and important role. In a democratic society direct methods are not
approved. So, the government has to depend on indirect methods of regulations. In
this way, fiscal policy is a powerful weapon in the hands of government by means of
which it can achieve the objectives of development.
Main Objectives of Fiscal Policy In India
The fiscal policy is designed to achieve certain objectives as follows :-
1. Development by effective Mobilisation of Resources

The principal objective of fiscal policy is to ensure rapid economic growth and
development. This objective of economic growth and development can be achieved
by Mobilisation of Financial Resources.
The central and the state governments in India have used fiscal policy to mobilise
resources.
The financial resources can be mobilised by :-

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Taxation: Through effective fiscal policies, the government aims to mobilise
resources by way of direct taxes as well as indirect taxes because most important
source of resource mobilization in India is taxation.
Public Savings: The resources can be mobilised through public savings by reducing
government expenditure and increasing surpluses of public sector enterprises.
Private Savings: Through effective fiscal measures such as tax benefits, the
government can raise resources from private sector and households. Resources can
be mobilised through government borrowings by ways of treasury bills, issue of
government bonds, etc., loans from domestic and foreign parties and by deficit
financing.
2. Efficient allocation of Financial Resources

The central and state governments have tried to make efficient allocation of financial
resources. These resources are allocated for Development Activities which includes
expenditure on railways, infrastructure, etc. While Non-development Activities
includes
expenditure on defence, interest payments, subsidies, etc.

But generally the fiscal policy should ensure that the resources are allocated for
generation of goods and services which are socially desirable. Therefore, India's
fiscal policy is designed in such a manner so as to encourage production of desirable
goods
and discourage those goods which are socially undesirable.
3. Reduction in inequalities of Income and Wealth

Fiscal policy aims at achieving equity or social justice by reducing income inequalities
among different sections of the society. The direct taxes such as income tax are
charged more on the rich people as compared to lower income groups. Indirect taxes
are also more in the case of semi-luxury and luxury items, which are mostly consumed
by the upper middle class and the upper class. The government invests a significant
proportion of its tax revenue in the implementation of Poverty Alleviation Programmes
to improve the conditions of poor people in society.

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4. Price Stability and Control of Inflation
One of the main objective of fiscal policy is to control inflation and stabilize price.
Therefore, the government always aims to control the inflation by Reducing fiscal
deficits, introducing tax savings schemes, Productive use of financial resources, etc.
5. Employment Generation
The government is making every possible effort to increase employment in
the country through effective fiscal measure. Investment in infrastructure has resulted
in direct and indirect employment. Lower taxes and duties on small-scale industrial
(SSI) units encourage more investment and consequently generates more
employment. Various rural employment programmes have been undertaken by the
Government of India to solve problems in rural areas. Similarly, self employment
scheme is taken to provide employment to technically qualified persons in the urban
areas.
6. Balanced Regional Development

Another main objective of the fiscal policy is to bring about a balanced regional
development. There are various incentives from the government for setting up
projects in backward areas such as Cash subsidy, Concession in taxes and duties in
the form of tax holidays, Finance at concessional interest rates, etc.
7. Reducing the Deficit in the Balance of Payment

Fiscal policy attempts to encourage more exports by way of fiscal measures like
Exemption of income tax on export earnings, Exemption of central excise duties and
customs, Exemption of sales tax and octroi, etc.
The foreign exchange is also conserved by Providing fiscal benefits to import
substitute industries, Imposing customs duties on imports, etc.
The foreign exchange earned by way of exports and saved by way of import
substitutes helps to solve balance of payments problem. In this way adverse balance
of payment can be corrected either by imposing duties on imports or by giving
subsidies to export.
8. Capital Formation

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The objective of fiscal policy in India is also to increase the rate of capital formation
so as to accelerate the rate of economic growth. An underdeveloped country is
trapped in vicious (danger) circle of poverty mainly on account of capital deficiency.
In order to increase the rate of capital formation, the fiscal policy must be efficiently
designed to encourage savings and discourage and reduce spending.
9. Increasing National Income
The fiscal policy aims to increase the national income of a country. This is because
fiscal policy facilitates the capital formation. This results in economic growth, which in
turn increases the GDP, per capita income and national income of the country.
10. Development of Infrastructure

Government has placed emphasis on the infrastructure development for the purpose
of achieving economic growth. The fiscal policy measure such as taxation generates
revenue to the government. A part of the government's revenue is invested in the
infrastructure development. Due to this, all sectors of the economy get a boost.
11. Foreign Exchange Earnings

Fiscal policy attempts to encourage more exports by way of Fiscal Measures like,
exemption of income tax on export earnings, exemption of sales tax and octroi, etc.
Foreign exchange provides fiscal benefits to import substitute industries. The foreign
exchange earned by way of exports and saved by way of import substitutes helps to
solve balance of payments problem.
Conclusion On Fiscal Policy

The objectives of fiscal policy such as economic development, price stability, social
justice, etc. can be achieved only if the tools of policy like Public Expenditure,
Taxation, Borrowing and deficit financing are effectively used.
Though there are gaps in India's fiscal policy, there is also an urgent need for making
India's fiscal policy a rationalized and growth oriented one.
The success of fiscal policy depends upon taking timely measures and their effective
administration during implementation.

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Conclusion on economic scenario:
Economic scenario is very important to business due to their subsidies, tax rates,
incentives, allocation of funds for industry sector, industry development, infrastructure
facilities, leading to return of investment, etc.
It affects to imports and exports of raw materials and finished goods by tax
implementation, it enhances the company/industry growth & decision making for
future demand for their products.
Inflation rate may lead to increase in the price of the raw material and the increase in
the price of the product leads to increase in the profit (That is incidence).
Every company have been affected by internal and external factors directly or
indirectly, to predict and to know about these factors on the economy, Economic
scenario is studied in the organizational study.

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CHAPTER 2
INDUSTRY PROFILE
INDIAN DAIRY INDUSTRY
History

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'Oyster' of the global dairy industry, with opportunities galore for the entrepreneurs
India is the highest milk producer in the entire globe. India is well known as the
globally. It might be dream for any nation in the world to capitalize on the largest and
fastest growing milk and milk products' market. The dairy industry in India has been
witnessing rapid growth with liberalization. As the economy provides good
opportunities for MNCs and foreign investors to release the full potential of this
industry. The main objective of the Indian Dairy Industry is to manage the national
resources in a manner to enhance milk production and upgrade milk processing
using innovative technologies.
The crossbred technology in the Indian Dairy Industry has further augmented with
the viability of the dairy units by increasing the milk production per animal. Then
subsequently milk production has also increased at an exponential rate while the
benefits of an increase in milk production also reached the consumers from a relatively
lower increase in the price of milk. The favourable price environment for milk producers
for the Dairy Industry in India however appeared to have weakened during the 90's, a
decline in the real price of milk being noticed after the year 1992. And then slowly
regained it is glory after 1992 to till now.
In India dairying from very much earlier is regarded as an instrument for social and
economic development. The country's milk supply comes from millions of small
producers, who are dispersed throughout the rural areas. All these farmers maintain
an average herd of one or two milch animals, comprising cows and/or buffaloes. Mostly
ample labour and a small land base encourage farmers to practice dairying as an
occupation subsidiary to agriculture. As income from crop production is seasonal
instead dairying provides a stable which is a year-round income and also an important
economic incentive for the small farmer.
Brief Introduction

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India had tremendous milk production in 40 years and has become
the world's largest milk-producing nation with a gross output of 84.6
million tons in 2001. The Indian Dairy Industry has achieved this
strength of a producer-owned and professionally-managed
cooperative system, despite the facts that a majority of dairy
farmers are illiterate and run small, marginal operations and for
many farmers, selling milk is their sole source of income. More than
10 million dairy farmers belong to 96,000 local dairy cooperatives,
who sell their products to one of 170 milk producers' cooperative
unions who in turn are supported by 15 state cooperative milk
marketing federations.
In India dairy business has been practiced as rural cottage industry over the years.
Semi-commercial dairy started with the establishment of military dairy farms and co-
operative milk unions throughout the country towards the end of the 19th century. Since
Independence this Industry has made rapid progress. A large number of modern milk
and milk product factories have since been established. The organized dairies in India
have been successfully engaged in the routine commercial production of pasteurized
bottled milk for Indian dairy products.
The growth of Indian Dairy Industry during the last three decades has been impressive,
at more than 5% per annum; and in the 90's the country has emerged as the largest
producer of milk. This is not a small achievement when we consider the fact that dairying
in India is largely stringent that farmers in general keep dairy animals in proportion to
their free crop and also are available for family labour with little or no purchased inputs
and a minimum of marketed outputs. The existence of restrictive trade policy milk in the
Diary Industry and the emergence of Amul type cooperatives have changed the dairy
farming practices in the country. Farmers have gained the favourable price for their milk
and for their production which was essentially a self-reliant one is which is now being
transformed into a commercial proposition.
In India Milk production is dominated by small and marginal land-holding farmers and
also by landless labourers who in aggregate own 70% of the national milch animal

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herd. And as the crop production on 78% of the agricultural land still depends on rain,
which is prone to both drought and floods, rendering agricultural income is very much
uncertain for most of the farmers. Dairying, as a subsidiary source of income and
occupation, is real relief to most of the farmers in the society. Usually one or two milch
animals enable the farmers to generate sufficient income to break the vicious
subsistence agricultural-debt cycle.
The Operation Flood which is the successful Indian dairy development programmed has
analyzed that how food aid can be utilized as an investment in building the type of
institutional infrastructure that can bring about national dairy development. Programmes
like this, with similar policy orientations, may prove to be appropriate to dairy
development in India.
India in the early 1950's was commercially importing around 55000 tonnes of milk
powder annually to meet the urban milk demand. Most of the significant developments
in dairying have taken place in India in this century only.
India's Milk Product Mix

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Fluid Milk 46.0%
Ghee 27.5%
Butter 6.5%
Curd 7.0%
Khoa 6.5%
(Partially Dehydrated Condensed Milk)
Milk Powders 3.5%
Paneer & Chana (Cottage Cheese) 2.0%
Others, including Cream, Ice Cream 1.0%
Total contribution to the economy/ sales

The Indian Dairy Industry engages in the production and processing of milk & cream.
This industry is involved in the manufacture of various dairy products like cheese,
curd, yoghurt etc. The Indian Dairy Industry specializes in the procurement,
production, processing, storage and distribution of dairy products. India as nation
stands first in its share of dairy production in the international scenario. The industry
contributes about Rs 1,15,970 to the national economy.
Employment opportunities

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The Indian Diary industry which is in the developing stage provides gainful
employment to a vast majority of the rural households. It employs about 8.47 million
people on yearly basis out of which 71% are women.
Jobs in Indian dairy industry are mainly in the fields of production and processing of
dairy products. An individual with minimum of 60% marks who has bachelor's degree
course in the dairy technology can easily be availing an opportunity to work in this
industry. For the graduation course in Dairy technology one has to qualify the All
India Entrance Test that is affiliated to the Indian Council of Agricultural Research.
After that the person can continue with his masters in dairy technology. Jobs would
be for the following positions.
 Dairy Scientists: The main job of the dairy scientists is to deal with collection of milk
and taking care of the high yielding variety of animals.
 Dairy Technologists: the work of Dairy technology requires procurement officers
who take the responsibility of collecting milk from farmers, milk booths and cattle-
rearers. This particular procurement officer should well understand the latest
technology that is applicable in maintaining the quality of milk of the process of
transporting it to the desired location.
 Dairy Engineers: dairy engineers are usually appointed is to set up and maintain
dairy plants.
 Marketing Personnel: These individuals deal with the sale and marketing of milk
together with milk products.
Latest developments
 Indian Dairy Industry is the largest milk producer all over the world, around 100 million
Tinian Dairy Industries value of output amounted to Rs. 1179 billion in 2004-05 which
approximately equals combined output of paddy and wheat. With 1/5th of the world's
bovine population.
 In India the Milch animals constitutes45% indigenous cattle, 55 % buffaloes, and 10%
cross bred cows
Intensive Dairy Development Programmed (IDDP): The Schemes, modified

under this programmes are on the basis of the recommendation of the evaluation

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studies which were launched during Eighth Plan period and is being continued
throughout the Eleventh Plan with an outlay of Rs. 32.49 core for 2009-10.
Strengthening Infrastructure for Quality and Clean Milk Production (CMP): this
is a centrally sponsored scheme which was launched in October 2003, which had
the main objective of improving the quality of raw milk produced at the every village
level in the India.
Dairy Venture Capital Fund- this is introduced in the Tenth Five Year Plan to bring
about structural changes in unorganized sector, which would measure like milk
processing at village level, marketing of pasteurized milk in a cost effective manner,
quality or the up gradation of traditional technology to handle commercial scale using
modern equipments and management skills.
INDIAN DAIRY ASSOCIATION (IDA)
IDA is been Established in the year 1948, it is the apex body of the dairy industry
in India. The members are from the cooperatives, MNCs, corporate bodies,
private institutions, educational institutions, government and public sector units.
IDA functions very much closely with the dairy producers, professionals &
planners, scientists & educationists, institutions and organizations associated with
the development of dairying in India. The IDA since has a history of around six
decades now, it has had the privilege of being headed by several Presidents and
some of them were of national and international fame. The luminaries like Sadar
Datar Singh, Dr. K.C. Sen, Dr. Z.R. Kothawalla, Dr. D.N. Khurody, Dr. V. Kurien,
Dr. P. Bhattacharya were the past presidents of the IDA.
IDA has been providing a common forum to knit the dairy fraternity together and
thus, over the years, it has emerged as the reigning czarina of information. The

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Association is managed by an apex policy making body called the Central
Executive Committee (CEC). The CEC is headed by President and also been
supported by two Vice-Presidents and 19 Executive Committee Members. The
ongoing CEC is spear headed under the dynamic leadership of Dr. N.R. Bhasin,
IDA has emerged as a platform for assimilation and dissemination of knowledge,
as an important tool for policy making in the dairy sector, in India. The IDA
organizes seminars, symposia and exhibitions on very much wide range of topics
catering to various segments of professionals, scientists, institutions and
organizations associated with the development of dairying in India.

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CHAPTER 2
COMPANY PROFILE

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Mother dairy is a unit of KMF, it was inaugurated in the year 1984 by the president
of India Sri Gyani Zail Singh with the sale purpose of receiving the excess milk from
the unions and some shall be pasteurized and homogenized, sold through bulk
vending booths.
It has got ISO-9001 certificate in 2001, ISO 22000 in 2005 and also export
inspection council certificate in the year 2006. It is a unit of Karnataka Milk Producers
Co-operation Societies Union Limited. The plan has been laid out and whole project
was executed by NDDB, under the financial assistance from World Bank.
Mother dairy is essential liquid milk processing and marketing unit with the objective
of finding a suitable urban market for the milk produced by the rural producers. First
it handled 2 lakhs liters/day. Now it handles 4 lakhs liters/day and shall be able to
handle 6 lakhs liters/day.
Karnataka Cooperative Milk Producers' Federation Limited(KMF) is the Apex Body

in Karnataka representing Dairy Farmers' Co-operatives. It is the second largest dairy
co-operative amongst the dairy cooperatives in the country. In South India it stands
first in terms of procurement as well as sales. One of the core functions of the
Federation is marketing of Milk and Milk Products. The Brand "nandini" is the
household name for Pure and Fresh milk and milk products.
KMF has 13 Milk Unions throughout the State which procure milk from Primary Dairy
Cooperative Societies(DCS) and distribute milk to the consumers in various
Towns/Cities/Rural markets in Karnataka.
The first ever World Bank funded Dairy Development Program in the country started
in Karnataka with the organisation of Village Level Dairy Co-operatives in 1974. The
AMUL pattern of dairy co-operatives started functioning in Karnataka from 1974-75
with the financial assistance from World Bank, Operation Flood II & III. The dairy co-
operatives were established under the ANAND pattern in a three tier structure with
the Village Level Dairy Co-operatives forming the base level, the District Level Milk
Unions at the middle level to take care of the procurement, processing and marketing

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of milk and the Karnataka Milk Federation as the Apex Body to co-ordinate the growth
of the sector at the State level.
Coordination of activities among the Unions and developing market for Milk and Milk
products is the responsibility of KMF. Marketing Milk in the respective jurisdiction is
organized by the respective Milk Unions. Surplus/deficit of liquid milk among the
member Milk Unions is monitored by the Federation. While the marketing of all the
Milk Products is organized by KMF, both within and outside the State, all the Milk and
Milk products are sold under a common brand name NANDINI.
THE GROWTH PROCESS
The growth over the years and activities undertaken by KMF is summarised briefly
hereunder:
UNITS OF KMF
 KMF has the following Units functioning directly under its control:
 Mother Dairy, Yelahanka, Bangalore.
 Nandini Hi-Tech Product Plant, Channarayapatna.
 Nandini Milk Products, KMF Complex, Bangalore.
 Cattle Feed Plants at Rajanukunte/Gubbi/Dharwad/Hassan/Shikaripura.
 Nandini Sperm Station (formerly known as Bull Breeding Farm & Frozen Semen
Bank) at Hessaraghatta.
 Nandini Packaging Film Plant at Munnekolalu, Marathhalli.
 Central Training Institute, Bangalore & Training Institutes at Mysore/Dharwad
 Ice Cream Plant, Bellary.
NATURE OF THE BUSINESS CARRIED
PROCUREMENT
Mother dairy is procuring on an average 3.90 lakh of milk per day from Kolar
Milk Union’s chilling centers such as Chintamani, Sadali and Gowribidanur chilling
centers of Kolar milk union and dairy co-operative societies which are possessing
Bulk Milk coolers, through road milk tankers. The Dairy is processing and distributing
on an average 2.90 lakh liters of milk per day to the consumers in Bangalore

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City with the increase in demand for liquid milk, it is planned to increase the
processing capacity of the Dairy.
PRODUCTION
Mother Dairy has a unique nature of homogenizing the milk and selling it to
the consumers through Bulk Vending Booths and FRP tanks. In addition to
production of Toned milk in Sachet, it also produces Full Cream Milk in Sachet (6.0%
FAT and 9.0% SNF) and products like Butter, Ghee, Curds, Ice-cream, Yoghurt,
flavoured, milk as well as Buttermilk in Sachets.
ESTABLISHMENT OF 30 MT POWER PLANTS
To facilitate conversion of surplus milk of unions in the project area, Karnataka

Milk Federation has established a powder plant during the year 2002 with an outlay
of Rs.22.15crores with a capacity to convert 3lakh liters of milk into 30 tones of milk
powder. The surplus milk of Bangalore, kolar, Mysore, Hassan, Mandya and Tumkur
Milk Unions is being accepted for conversion. This benefits the member Milk Unions
financially by way of notable decrease in transportation cost. The quality of Milk
Powder manufactured in this unit is of international standard and has been exported
during last year through private contractors.
ICE CREAM MANUFACTURING UNIT
Ice cream manufacturing was with the small –scale industries till 1997.
For the first time the government of India allowed the cooperatives to manufacture
ice cream and hence the Karnataka Milk Federation could establish an ice cream
plant in the Mother Dairy premises during the year 1997 with an installed capacity to
manufacture 3000 liters of ice cream per day. Mother Dairy started distributing ice-
cream under the brand name of AMUL through Gujarat Cooperative Milk Marketing
Federation. The meet the increasing demand, the capacity of the plant was increased
to produce 1000 liters of ice cream per day during January 2006 at a cost of Rs.3.69
crores. The ice cream is also being marketed in Bangalore under the brand name of
NANDINI.

KMF MOTHER DIARY
SPECIAL FEATURES OF MOTHER DAIRY:
Mother Dairy is the first among the Dairy plants in south India to obtain
ISO-9002 and HACCP-15000 certificate from the Bureau of India Standard and is in
continuous process to further obtain ISO-22000 certificate. An ‘Extra Grade
Certification’ has been awarded to the milk powder manufactured by the Milk Powder
Plant. An online computer system carrying out all major transactions was installed
during the year 1993. Presently, the computer system is being upgraded at an
estimated cost of Rs. 1.05 crores. Consistency in the process of profit making since
1988-89. With a unique feature of Glycol chilling, on an average, 1.2 lakh liters of
milk was supplied to Calcutta Mother Dairy for many years.
COMPUTERISATION
Presently all major transaction is being carried out through its online Computer
System. The major areas covered are:-
(1)H R, Attendance and Payroll

(2)Purchase and store
(3)Sales and Distribution
(4)Procurement and Processing: - Weigh Bridge, Q C, Processing, Products, Ice
Cream Plant.
(5)Finance:-Receipt and Payment, Invoice, Taxation, Sub Ledger and Book of
Accounts.
(6)Engineering: - Boiler, Electrical, Mechanical, Transport And Refrigeration.
(7)Maintaining databases of all the above said transactions.
(8)Milk Products distribution,
Modernization and Expansion of Mother Dairy:-
With the increase in demand for supply of milk and milk products to the
Bangalore City and Supply processed to the powder plant, the existing capacity of

KMF MOTHER DIARY
4lakh liters per day is not sufficient. Hence, it is envisaged to increase the processing
capacity to handle 7lakh liters per day.
PRODUCT PROFILE
Pasteurised Toned Milk Shubham Milk
Nandini Double Toned Milk Samrudhi

KMF MOTHER DIARY
Homogenised Cow's Pure Milk Goodlife Slim Milk
Sampoorna Standardised Milk Smart Double Toned Milk
Good life UHT Long Life Milk Special Toned Milk
Curds & other fermented products
Yoghurt Mango Lassi

KMF MOTHER DIARY
Real Thick Curd Curd
Butter Milk Sweet Lassi
Milk powder
Dairy Whitener Skimmed Milk Powder
Badam Milk Mix

KMF MOTHER DIARY
Ghee & butter
Ghee in Standy Pouches Butter Salted & Unsalted
Bag-in-Box Ghee in Pet Jar
Ghee in Sachet

KMF MOTHER DIARY
Ice-cream & Frozen Desserts
Crazy Cone Ice Cream Butter Scotch Chocolate Nandini Magic Strawberry
Pista Kulfi Chocobar
Ice Cream Delightfully Tasty Anjir Ice Cream Delightfully Tasty Chocolate

KMF MOTHER DIARY
Ice Cream Delightfully Tasty Kaju Draksh
Ice Cream Delightfully Tasty Mango Kesar Pista
Black Currant Casatta Ice Cream
Nandini Sugar Free Pro Biotic Frozen Food Matka Kulfi
Ice Cream Delightfully Tasty Butter Scotch Ice Cream Delightfully Tasty
Pineapple

KMF MOTHER DIARY
Dolly Stick Ice Cream Raspberry & Orange Ice Candy Mango
Sundae Ice Cream Strawberry Sundae Ice Cream Butter

Scotch
Ball Ice Cream Vanilla Strawberry
Milk Sweets

KMF MOTHER DIARY
Mysore Pak Khova Jamoon
Dry Fruits Bu Rasgulla
Assorted sweets gift box Coconut Burfi
Vermicelli Payasa Mix (Kheer) Chocolate Burfi

KMF MOTHER DIARY
Nandini Bite Premium Badam burfi
Premium Besan Ladoo Premium Cashew Burfi
Pure Milk Elachi and Kesar Peda Pure Milk Peda
Chocolate
creamy bite Eclairs

KMF MOTHER DIARY
Chit Chat Eclairs
UHT Milk
Smart Sampoorna
Good Life Slim
Other Products
Process Cheese Spread Cheddar Cheese

KMF MOTHER DIARY
Diced Paneer Dharwad Peda
Flavoured Milk Pista Mango Strawberry Flavoured Milk Cool choco Milk
Shake
Flavoured Milk Pista Flavoured Milk Spiced Butter

Milk
Flavoured Milk Strawberry Flavoured Milk
Gulab Jamoon Mix Khova

KMF MOTHER DIARY
Kunda Nandini Magic Strawberry
Paneer
VISION
 To march forward with a missionary zeal which will make KMF a trailblazer of
exemplary performance and achievements beckoning other Milk Federations in the
country in pursuit of total emulation of its good deeds.
 To ensure prosperity of the rural Milk producers who are ultimate owners of the
Federation.
 To promote producer oriented viable cooperative society to impart an impetus to the
rural income, dairy productivity and rural employment.
 To abridge the gap between price of milk procurement and sale price.
 To develop business acumen in marketing and trading disciplines so as to serve
consumers with quality milk, give a fillip to the income of milk producers.
 To compete with MNCs and Private Dairies with better quality of milk and milk
products and in the process sustain invincibility of cooperatives.
MISSION

KMF MOTHER DIARY
 Heralding economic, social and cultural prosperity in the lives of our milk
producer members by promoting vibrant, self-sustaining and holistic cooperative
dairy development in Karnataka State
 Procuring the raw milk from the local farmers at a fair price.
 Pasteurization and homogenizing of the procured raw milk.
 Producing the other milk products.
 Transporting the pasteurized milk in various quantities from processing plant to the
urban areas.
 Supply milk to the consumer at a reasonable rate.
 Developing good infrastructure facilities.
Objectives
KMF is a Cooperative Apex Body in the State of Karnataka representing organisations

of milk producers' and implementing all round dairy development activities to achieve
the following objectives:
 To ensure assured and remunerative market round the year for the milk produced
by the farmer members.
 To make available quality milk and other premier dairy products to urban consumers.
 To build & develop village level institutions as cooperative model units to manage
the dairy activities.
 To ensure provision of inputs for milk production, processing facilities and
dissemination of know how.
 To facilitate rural development by providing opportunities for self employment at
village level, preventing migration to urban areas, introducing cash economy and
opportunity for a sustained income.
The philosophy of dairy development is to eliminate middlemen and organise

institutions to be owned and managed by the milk producers themselves, employing
professionals. To sum it up, every activity of KMF revolves around meeting one basic
objective: 'Achieve economies of scale to ensure maximum returns to the milk
producers, at the same time facilitate wholesome milk at reasonable price to urban

KMF MOTHER DIARY
consumers'. Ultimately, the complex network of cooperative organisation should
build a bridge between masses of rural producers and millions of urban consumers
and in the process achieve a socio-economic revolution in every hinterland of the
State.
Evolution
Karnataka Milk Federation which is most popular as KMF, evolved itself as a premier
and most profitable dairy farmers' organization in the State of Karnataka.
As an agency in 1975 to implement the World Bank Aided Dairy Development

Projects, Karnataka Dairy Development Corporation (KDDC) was formed, the
company grew itself fast and as it spreads the wings of new found rural economic
activity - Dairying all over the State, the genesis of apex cooperative body took the
shape of KMF in 1983 encompassing entire State with 13 District Co-operative Milk
Unions executing the various parameters of Dairy activity - organization of Dairy Co-
operatives, Milk Routes, Veterinary Services, Procurement of milk in two shifts of the
day, Chilling, Processing of milk, distribution of milk and also establishment of Cattle
Feed Plants, Nandini Sperm Station, Liquid Nitrogen Supply, Training Centres - as
its main stay.
The entire system was reconstructed on the model of now well known `ANAND'
pattern dairy cooperative societies. Eight southern districts of Karnataka was
considered initially with a target of organizing 1800 Dairy Co-operative Societies, four
Milk Unions and processing facilities were set up to the tune of 6.5 lakhs per day by
1984.
Under Operation Flood - II &III, project which started in 1984 & 1987 covered the
remaining parts of Karnataka. Thirteen milk unions are organized in 175 talukas of
all 20 districts then and the field work was extended by organizing more dairy
cooperative societies. The processing facilities i.e. chilling centres, milk dairies and
powder plants were transferred in phases to the administrative control of respective
cooperative milk unions and the activities continued to be implemented by these
District Organisations. Additional processing facilities were created & existing
facilities augmented every decade with the help of Govt. / Zilla Panchayat and NDDB

KMF MOTHER DIARY
to handle ever increasing milk procurement without declaring milk holidays. The
processing facility as exists at 32.25 lakh liters/day is further strengthened.
KMF Executives
Sri. Mahendra Jain, IAS
Principal Secretary to Government, Cooperation Department & Administrator, KMF
A S PREMANATH
Managing Director & CEO , KMF

KMF MOTHER DIARY
Mile Stones
 1955 : First Dairy In Karnataka Set Up At Kudige, Kodagu Dist.

 1965: Biggest Dairy In Karnataka With 1.5 Lakh Ltrs. Per Day Liquid Milk
Processing Facility
A) Set Up At Bangalore
B) Expansion Date
 1974: World Bank Aided Karnataka Dairy Development Project Implemented.
 1974: Karnataka Dairy Development Corporation (KDDC) Is Born.
 1975: First Spear Head Team Is Positioned.
 1975: First Registration Of Milk Producers' Co-Operative Society.
 1975: Government Dairies Transferred To KDDC.
 1976: First Registration Of Union.
 19 80: Karnataka Milk Products Limited Established.
 1982: First Milk Product Dairy Started At Gejjalagere, Mandya.
 1983: Corporate Brand Name ‘Nandini' Given.
 1983:
A) First Cattle Feed Plant Commissioned At Rajanukunte
B) Capacity Expanded From 100mt To 200 Mt
 1984: Nandini Sperm Station (Formerly Known As Bull Breeding Farm & Frozen
Semen Bank) Commissioned.
 1984: Operation Flood-Ii Implemented.
 1984: Karnataka Milk Federation Is Born.
 1984: KDDC Transformed Into KMF.
 1984: Product Dairy, Dharward Commissioned.
 1984: Mother Dairy Started Functioning.
 1985: Remaining Govt. Dairies Transferred To KMF.
 1987: Operation Flood-Iii Implementation.
 1987: Dairies At Hassan, Tumkur & Mysore Transferred To District Milk Unions.

KMF MOTHER DIARY
 1988: Dairies At Bangalore,Gejjalagere, Dharwad,Belgaum And Mangalore
Transferred To District Milk Unions.
 1988: Training Centres At Mysore,Dharwad & Gulbarga Transferred To Unions.
 1989: Milk Supply To Kolkata Mother Dairy Through Railway Tankers From Mother
Dairy, Bangalore.
 1989: Centralised Marketing Organised.
 1989: Last Milk Shed Registered As A Union (Raichur & Bellary Union).
 1991: Khafba Registered (Karnataka Holstein Friesian Breeders Association).
 1991: Chilling & Processing Plants At Bijapur, Gulbarga, Bellary, Shimoga And
Kolar Transferred To District Milk Union.
 1991: First Pilot Project On Embryo Transfer Technology Implemented.
 1992: Commercial Production & Marketing Of Nandini Flavoured Milk Launched.
 1993: Milk Procurement On A Single Day Crosses Million Kg Level In Dec. 1986 &
Average Milk Procurement Per Day For The Year Crosses Million Kg Level.
 1994: Liquid Milk Sale Crosses Million Litres/Day.
 1994: Starting Of Sales Depot At Bangalore.
 1995: Starting Of Sales Depot At Hubli.
 1995: Varieties Of New Nandini Products Viz. Nandini Paneer, Burfi, Khova &
Sweet Curds Launched.
 1996:
A) Foundation Stone Laid For Cattle Feed Plant At Hassan
B) Production Started
 1996:
A) Foundation Stone Laid For Pouch Film Manufacturing Unit At Munnekolalu,
Bangalore
B) Production Started
C) Plant Restarted Production
 1996: Foundation Stone Laid For Mega Dairy & New Powder Plant At B'lore, Mini
Dairy Schemes & Other Development Programmes.
 1997: Inauguration Of Ice-Cream Manufacturing Unit
A) At Mother Dairy Premises, B'lore B)
Expansion Of Plant From 3.000 Lpd

KMF MOTHER DIARY
 1998: Installation Of Ln2 Distribution System For Karnataka State.
 1998: Launching Of New Products
A) Jamoon Mix
B) Mysore Pak
C) Tetra Fino Packaged Nandini “Goodlife”Milk
 1999: Starting Of Sales Depot At Tirupathi.
 2000: Launching Of New Products
A) Badam Powder January 2000
B) Kunda January 2003
C)Yoghurt August 2004
D) Besan Laddoo Sept 2004
E)Good Life HighFat Milk Dec 2000
F) Nandini Goodlife Slim May 2002
G)Goodlife 200ml Tetra brick July2002 H)
Goodlife 1 Ltr Tetra Brik July 2002
 2000: “Mega Dairy”Started Functioning In Bangalore Union.
 2001: Starting Of Sales Depo At M'lore In Addition To Depos At B'lore,Hubli &
Thirupathi.
 2002: Adoption Of “Mnemonic Symbol”
A) In Bangalore, D.K. & Mysore
B) In Shimoga & Dharwad
 2002: Release Of 50gm. Smp In Metalized Polypack.
 2002: Registration Of Kmf Website As “Www.Kmfnandini.Coop”.
 2002: ‘Nandini Shop On Wheels' Started (Mobile Display Cum Sales Vehicle).
 2002: Release Of Urea Molasses Brick(3kg Pack)
 2002: Powder Plant Of 30 Mt Capacity Started At Mother Dairy.
 2004: Mou Agreement Signing By Gok & Nddb For Implementation Of Perspective
Plan 2010.
 2005: Laying Of Foundation Stone For 30 Mts Powder Plant At Channarayapatna.
 2005:Launching Of‘ Nandini Set Curd'.
 2006: Packing Station Commissioned At Kumbalgodu (Mandya Union).
 2006: Depos Opened At Kerala (Kannur & Ernakulam).

KMF MOTHER DIARY
 2006: Foundation Stone Laid For New 300 Mts Capacity At Hassan & Inauguration
Of Existing Cfp Expansion From 100 Mts To 200 Mts.
 2006:
A) Expansion Of Gubbi Cfp From 100mts To 150 Mts.
B)Expansion Of Dharwad Cfp From 100 Mts To 150 Mts.
 2006: Release Of New Generation Drinks Tetra Pack Variants Of Flavored Milk &
Buttermilk.
 2007: Release Of Nandini Homogenized Cow Milk(3.5%Fat / 8.5%Snf) In
Bangalore.
 2007: Opening Of“Nandini Dairy Farmers Welfare Trust” Hostel.
 2007: Launching Of“Bounce” Brand Milk At Goa.
 2007: Inauguration Of Additional Infrastructure Facilities For Uht Milk Production At
Kolar From Existing 40,000 Lpd To 1.5 Llpd.
 2008: Commissioning Of Channarayapatna Product Plant At A Total Cost Of Rs.
72 Crores.
A) Launch Of New Products & New Stunning Packs (Sundae, Crazy Cone Ice
Cream/Lite Skimmed Milk/ Cool Milcafe/Choco Milk Shake/Dairy Whitener)
B) Launch Of Goodlife Slim In 1ltr Brik.
 2009:
 Gulbarga Dairy & Milk Marketing Taking Over By Kmf
 Nandini Has Won “The Most Valuable Brand In Karnataka Award” In The 'Sunday
Indian & Iipm Regional Excellence Awards 2009'
 Channarayapatna Chilling Centre Inaguration - 1 Llpd
 New Sales Depo Started At Gulbarga
 All Nmp Products In New Packs - Mysore Pak,Peda,Burfi,Badam Powder,Jamoon
Mix(Dec'09); Paneer,Khova(Mar'09)
 Launch Of Good Life Variants In Cuttack,Orissa,Tiruchi(Tamilnadu)
 Inaguration Of Indinagar Shoppe Cum Cold Storage By Kmf Chairman
 Uht Supply To Andaman & Nikobar
 Chief Minister Sri B.S.Yeddyurappa,Was Conferred With "Ksheera Bandhu" Award
At State Level Milk Producers Convention At Dabaspet, Tumkur For Gok's Support
To Producers With Rs.2 Incentive Per Litre Of Milk.

KMF MOTHER DIARY
 2010:
 New Sales Depo Started At Mysore
 Foundation Stone Laying For Hostkote Dairy
 Mou For Commissioning Of Nandini Parlours In Iocl Retail Outlets Signed
 Peak Procurement Of 41.83 Lkpd (During 2010-11)
 Starting Of Procurement Routes At N.R.Pura,Koppa Taluk(Chickmagalur District)
 Hosting Of New Kmf Website Wwww.Kmfnandini.Coop With Online Order Facility
 Export Of 91mt Butter(In Direct Mode) To Iraq & Egypt By Kmf
 2011:
 The Two Co-Operative Giants Kmf & Campco Entered Into An Agreement By
Signing MOU For Production Of Chocolates
 The Grand Launch Of Brand New 10 Milk Products By Popular Kannada Cinesars
- Powerstar Mr.Punith Rajkumar & Ms.Ragini Dwivedi.
 Price Revision By Rs.2/- (Tm Revised To Rs.21/-,Dtm Revised To Rs.20/-,Hcm
Revised To Rs.28/-,Curds Revised To Rs.26/-
 Nandini Enters Sweet World Of Chocolate Nandini Creamy Bite,Goodlife,Chit Chat
& Eclairs On The Eve Of "Ugadi" Nandinichocolate Festival,Kmf Launched One More
Sweet Product.
 Inauguration Of 1lakh Ltr Capacity New Uht Plant At Milk Product Plant
Channarayapatna.
 The Official Launching Of E-Sale By Kmf
 Dk Milk Union Silver Jublee Celebration.
 Hassan Milk Union Milk Proc.Touched 5 Lkpd On 09.06.2011.
 Mysore Milk Union Milk Proc.Touched 5 Lkpd On 10.06.2011.
 Bellary Milk Union Milk Proc.Touched 1 Lkpd On 13.06.2011.
 Kolar Milk Union Has Crossed Another Milestone In Uht Sales And Marketing By
Reaching 3.45 Llpd
 Channarayapatna Milk Product Plant Has Crossed Uht Sales And Marketing 1.50
Llpd.
 Dharwad Milk Union Silver Jubilee Function Celebration
 A.I.Women Workers 2 Days State Level Conference Sponsored By Goi Under Step
Scheme Held At Nianp Auditorium,Banglore.

KMF MOTHER DIARY
 Mandya Milk Union Milk Proc.Touched 5 Lkpd On 10.11.2011
 2012:
 Price Revision By Rs.3/- (Tm Revised To Rs.24/-,Dtm Revised To Rs.23/-,Hcm
Revised To Rs.28/-,Curds Revised To Rs.30/-
 Karnataka Milk Federation Launches Nandini Goodlife Toned Milk In 100ml Tetra
Pak Package At An Affordable Price Of Rs 4.
 Felicitation To Dr. V.Kurien, Prize Distribution To The Winners Of Nandini Talent
Hunt Competition And Release Of New Delicious Products Of Nandini On 24.01.12
 Peak Procurement Of 46.49 Lkpd (During 2011-12)
 Hassan Milk Union Milk Proc.Touched 6 Lkpd On 07.05.2012.
 Bangalore Milk Union Milk Proc.Touched 10 Lkpd On 15.05.2012
 Kolar Milk Union Milk Proc.Touched 8 Lkpd On 20.05.2012.
 Mysore Milk Union Milk Proc.Touched 6 Lkpd On 25.05.2012.
 Kmf Has Reached Record Level In Milk Procurement Of 50.13 Lkpd On 18.5.12
 Peak Goodlife Sales 4.26 Llpd On 22.08.2012.
 Bangalore Milk Union Milk Proc.Touched 11 Lkpd On 06.09.2012
 Tumkur Dairy Unit Has Been Conferred With The Honour Of Iso 22000:2005
 Goodlife Sale Touched 4.26 On A Single Day On August 22, 2012.
 Foundation Stone Layed On October 16, 2012 Or Koppal Dairy
 Samrudhi, Nandini Full Cream Milk Is Relaunched On November 01, 2012
 1 Lakh Ltr Uht Plant At Kumblagodu (Mandya Milk Union) Is Commissioned On
December 10, 2012
 January 24, 2013 : Launching Of Mobile Milk Testing Facility In Bangalore City.
 Mandya Milk Union Milk Proc.Touched 5 Lkpd On 10.11.2011
 Procurement & Selling Price Of Nandini Milk Is Revised On February 09/12/2013.
 South India’s First Fodder Densification Unit Is Commissioned On February
20,2012
 Exporting Of Smp/Ghee Has Started To Bangladesh, Pakistan, Uae Etc In 2012-
13.
 Smp & Butter Sale Is Highest In The Year 2012-13 Compared To All Previous
Years.
 On November 01, 2012 - Relaunching Of Samrudhi , Nandini Full Cream Milk.

KMF MOTHER DIARY
 2013:
 On January 23, 2013 - Kmf Officially Launched Mobile Milk Testing Facility For
Creating Awareness About The Quality Of Milk Consumed And Detecting
Adulteration Of Milk .
 On February 09, 2013 - In The Interest Of The Milk Producing Farmers Of The
State And To Meet The Increased Cost Of Milk Production At Farmers Level The
Selling Price Of Nandini Milk Variants And Curd Has Been Increased By Rs.3/Litre.
 On August 01, 2013 - The Inaugural Function Of “Ksheera Bhagya”, -The
Innovative And Prestigious Program Of Distributing Milk To School And Anganwadi
Children By The Karnataka Government Was Organized By Karnataka Milk
Federation In Association With Lower And Higher Education Department, Women
And Child Department Of Karnataka State.
 On September 11, 2013 - Nandini Milk Price Is Increased By Rs.2/-.
 On November 07, 2013 - Inauguration Of Flexipack Unit At D.K.Milk Union.
 On November 23, 2013 - Laying Of Foundation Stone For Bagalkot Nandini Hitech
Dairy.
 On December 13, 2013 - 42nd Dairy Industries Conference At Chennai Trade
Center, Chennai, Tamil Nadu Under The Theme –Growth In Indian Dairying And
Trade Issues Organised By Ida.
 2014:
 On Febuary 22, 2014 - Chief Minister Shri Siddaramaiah Inaugurated Mega
Convention Of Milk Producing Farmers Of Karnataka Organized By Kmf.Actor
Puneeth Rajkumar, Who Is The Brand Ambassador For Nandini Was Felicitated On
This Occation.. Shri Siddaramaiah Also Laid The Foundation Stone To The New
Cattle Field Unit Of Kannamangala In Channapattana Taluk.
 On Febuary 23, 2014 - Inauguration Of New 300mtd Cattle Feed Plant At
Shikaripur, Shimoga District.
 As On 03.04.2014 Goodlife Sales Touched 530058 Ltrs

KMF MOTHER DIARY
Quality and Food Safety
During the last ten years, the Federation is giving greater emphasis on procuring
quality milk from DCSs under the concept of “Quality Excellence from Cow to
Consumer.” Many Clean Milk Production (CMP) initiatives have been implemented
at all the stages of procurement, processing and marketing. Among these CMP
initiatives, noteworthy initiative is the setting up of Community Milking Parlours in
villages.
The KMF is forerunner to introduce this innovative technological initiative for bringing
about revolutionary improvement in quality of milk collected in DCSs. This system
has several advantages such as elimination of mastitis in milch animals and
improvement of productivity. The milk from milking machines, collected through
Automatic Computerized Milk Collection Units is chilled directly in Bulk Milk Coolers.
This chilled raw milk, untouched and unadulterated by human hands, has very high
microbiological quality, comparable to international standards. This high quality milk
is being utilized for manufacturing high quality value added milk products, for both
domestic as well as international markets.
Other Clean Milk Production (CMP) Initiatives include: -
 Training of milk producers on modern dairy husbandry practices and CMP.

 Providing SS utensils, antiseptic solutions for udder cleaning on pre and post
milking, etc. to producers.
 Training to DCS staff and officers of the Unions on CMP.

KMF MOTHER DIARY
 Replacing Aluminium milk cans and collection vessels with SS –304.
 Posters, documentary films and booklets on Clean Milk Production.
MAIN COMPETITORS OF NANDINI:
1. Amul
2. Thirumala
3. Heritage
4. Arogya
5. Swastika
6. Milk way
7. Dodla
8. Cream line Gercy
9. Gomata
10. Nestle
ORGANISATION STRUCTURE
MEANING OF ORGANISATION STRUCTURE:
Organization structure is the formal system of task and authority relationship

that control how people co-ordinate their actions and use resources to achieve
organizations goals.
The purpose of organizational structure is one of the controls. For any organization
and appropriate structure facilities effective response to problems of co-ordination.
IMPORTANCE OF ORGANIZATION STRUCTURE:
1. The design of an organization determines how effectively an various factors in its

environment and obtains scare resources.
2. The way the organization design its structure is an important determinant how much
values the organization clean organization strategy.
3. An organization exists to produce goods and services that people value. The better
organization function the more value the design and use of new and more efficient
organization structure is equally important.

KMF MOTHER DIARY
ORGANIZATION STRUCTURE:
DIRECTOR
GM GM GM MGR MGR MGR MGR MGR MGR
(Tech) (MIS) (MKT) (PUR) (HR) (FIN) (FGS) (LOG) (ICP)
MGR MGR MG TO MGR AM(H

(MKT) (PRO) R (MIS) ENGG R)
AM AM AM(FIN) DM
(ICP)
STORES (PUR) FGS
DM DM SUPTD
DM
(PR (ICP) (MIS) AM AM
(MKT)
(ENGG)( FGS
O) STORES( ASST
BOILER) ASST PROT ASST
SUPTD) (PUR) PU(AD ECTIO DUE(FIN)
M) N(SUP
AM
DM ADMIN R)
AM (ICP)
(PREP ASST SUPTD( SUPTD
(MKT) FIN)
ACK) AM(ENG ADM(
G)(REFRI HEAD
ADMIN SUPTD(P SUP)
DGE) SECUR
ASST UR) ITY
SUPT TO GUAR ADM ADMIN
SHIFT (ICP) D IN
D (FGS)
IN- ADMI
(MKT TO(ENG ASST
CHARG N ADM
) G)
E ADM ASST ASST IN
ASST DM(LOG
MKT DS- )
TO( DS-I
ASST 1
NM
P)
AM(LOG
DS-II )
MK DS-II
TO
T (PD
ASS TS)
-II
SEN
TECH
KMF MOTHER DIARY
DM(QC)
SEN
TECH
JUNR
TECH
AM(QC)
JUNR
TECH
TO()QC
SEN
CHEMIST
LAB
ASST

KMF MOTHER DIARY
CHAPTER 3:
FUNCTIONAL AREAS (DIVISIONS)
 Production department
 Purchase department
 Ice-cream department
 Store department
 Quality Control
 Human Resource Management
 Marketing
 Administration
 Finance department
 Engineering department

KMF MOTHER DIARY
 PRODUCTION DEPARTMENT:-
The production department of Nandini milk products is located in the KMF mother
dairy. The production department in Nandini milk products performed the function
of developing a procedure transform a set of input elements like man, machine,
material, money, into specified set of output elements like finished goods is assigned
quantity and best quality in order to achieve the organization goal successfully.
1. Production department activities:-

Mother dairy with a processing capacity of 2 lakh liters per day was commissioned
under operation flood 2 on 7-12-1984 with a total investment of Rs 6.97 crores at
Yelahanka in a total area of 28.09 acres. It is expanded to 4 lakh liters under
operation flood 3 during 1933-94 with an additional cost of Rs.3.64 crores total
investment for this project is Rs. 10.61 crores.
2. Scope:-
To plan, execute and control all production activities with the available
resources inputs equipments and facilities, availability and co-ordination with other
departments.
3. Responsibilities:-
The production manager/technical production officer authorizes the functional
supervisors to the various production activities availing the assistance of quality
control specialist, supervisors, operator and other are under his control.
4. Production:-
Mother dairy has a unique nature of homogenizing the milk and selling to
the customers through Milk Shoppe’s and FRP tanks. In addition production of toned
milk in sachet , it also produces full cream milk in sachet (6% FAT and 9%SNF)
butter, ghee, curds in sachets as well as butter milk. Mother dairy also produces milk
for supply to mother dairy, Kolkata through rail tankers by making use of existing
deep chilling facility to 1-2 Degree, C (Glycol Chilling).
Functions of production manager

KMF MOTHER DIARY
1. Pre plan the production activities soon after receiving the intends of quality
demanded.
2. Execute, coordinate, organize and monitor production activities.
3. Ensure process control and quality of the product manufacturers.
4. Ensure that production meets the planned requirements.
Functions of Deputy Manager:-
1. Ensure the production schedule.

2. Supervision of milk processing.
3. Submitting reports to manager.

KMF MOTHER DIARY
HIERARCHY OF PRODUCTION DEPARTMENT:-
PRODUCTION MANAGER
DEPUTY MANAGER
ASSISTANT MANAGER
TECHNICAL OFFICER
ACCOUNTING ASSISTANT
TECHNICIAN
ASSISTANT
AAdministrative ADM
Assistant
HELPER

KMF MOTHER DIARY
FLOW CHART OFBUTTER PROCESSING UNIT
Cream from the cream separator is taken to If result +ve

pasteurizer and heated at 85deg. C to 90 deg.C reprocess
Phosphate
CCP3
test by Q.C.
Cream tank where stored at a temperature of If result –ve

10 deg.C to 15 deg.C for 4 to 6 hrs processed
Churning of cream and separation of butter If result +ve drain off

and butter milk at continuous butter
marketing machine
Quality checked by QC for COB
butter milk
Butter collected in trolley
If satisfactory bitter is packed in

25 kgs boxes and stored in cold
store at -5to 15 deg.C
Quality check for FAT% If unsatisfactory, taken for

moisture by CPC personnel ghee processing

KMF MOTHER DIARY
FLOW CHART OF MILK MOVEMENT:
Security Entry
Weigh bridge
Unloading dock Quality testing
Unloading through chiller
Raw milk silo’s
Pasteurization &
standardization
Process milk silos Quality testing
Issues
Prepack Skimmed ICP Cream Bulk milk Flavored milk

dispatching
Cold Powder Butter

store plant section
Coldstor
Bulk Bulk
e
Market packing packing

KMF MOTHER DIARY
 PURCHASE DEPARTMENT:
In every organization success is mainly depending upon the efficiency of the
department. Hence purchase department in an organization requires during its
functioning.
Objectives:-
1. To procure flights.
2. In right qualities.
3. In right quantities.
4. From right and reliable sources of supplies.
5. To produce materials economically i.e., at reasonable price.
6. To secure and deliver materials at right places and right time.
7. Purchase department has to perform certain activities, duties and function in
order to achieve the objects mentioned above.
Duties and Responsibilities:-

1. To keep records indicating possible materials and their substitutes.
2. Maintenance of relevant records of reliable records of reliable sources of supplies,
price materials.
3. Making contacts with right sources of supplies.
4. Analyzing, evaluation of offers/ quotations to procure the materials.
5. Maintaining all the relevant records of purchase made.
FUNCTIONS OF PURCHASEDEPARTMENT:-
1. While purchasing materials, it is see that is purchased at a reasonable low price.
2. Quality is not to be sacrificed at the cost of comes price, the material purchased
should be of that quality alone which is needed.
3. There should be continues availability of all types of materials in the factory so
that the production may not be held up for want of any material.
4. No excessive investment.
5. Available of materials

KMF MOTHER DIARY
6. There should be no excessive investment in stocks. Investment in materials must
not tie up funds that could be better used in other activities. Restocking should be
avoided.
PURCHASING PROCEDURES IN MOTHER DAIRY:-

There are three methods of purchase made by department. They are:-
1. Tender rate
2. Rate quotation
3. Direct purchase
HIERARCHY OF PURCHASE DEPARTMENT
MANAGER (PURCHASING)
ASSISTANT MANAGER
PURCHASE OFFICER
PURCHASING SUPERVISOR
SENIOR TYPIST
DISTRIBUTIONS:-
Regarding the distribution of the products they engage private vehicles on yearly
contract basis. In order to deliver the goods in time, the contractors should keep his
vehicles more productively. Contractors must follow the rules and regulations strictly
which are mentioned in the tenders by the organization at the time of contract.

KMF MOTHER DIARY
In regarding cash collections it is the vehicle contractor’s responsibility, for this
they have to deposit sufficient amount in the form of fixed deposit in the bank.
DISTRIBUTION CHANNELS
MOTHER DIARY
NANDINI SHOPPIES AGENTS MILK PARLORS
RETAILERS
CONSUMER
 ICE CREAM DEPARTMENT:
Objectives of the ice cream plant and future expansion:
1. To meet the demand schedule of Nandini ice cream.

2. To improve biological quality of ice cream to<1000 spc/g with nil counts forms
other pathogens.
This plant has been designed, installed, and commissioned by national dairy
development board in April 1997.Mother dairy has got an ice cream plant of 3000
liters capacity per day functioning from October 1997.
FUTURE GROWTH AND PROSPECTUS:

KMF MOTHER DIARY
1. Expanding of ice cream plant from 14000 liters per day to 20000 liters per day
and construction of packing materials stores at mother dairy, Bangalore are taken up
by national dairy development board. This work is under progress.
2. The total cost for this project is Rs. 369 lakhs. The civil works are nearing
completion. The progress of procuring plant and machines is to be cleared by
national dairy development board for which proposal has been send by KMF.
3. Expansion of frozen semen bank Hesaraghatta with an investment of Rs. 2.68
crore.
4. The monthly turnover is around 15 crores.
5. Expansion of gubbi cattle feed plant from 100MT to 200 MT per day at an outlay
of Rs. 8.8 crores.
6. Expansion of Hassan cattle feed plant from 100 MT to 200 MT per day.
7. Modernization of cattle fed plant, Rajankunte at an outlay of Rs. 4.4 crores.
8. There are 54 varients of ice creams is being manufactured.
9. Nandini is also co-packer for Amul brand ice cream.
10. There is storage capacity of 120000 liters per day.
11. The packing materials are procured through tenders as per Karnataka
Transparency Act.

KMF MOTHER DIARY
HIERARCHY OF ICE CREAM DEPARTMENT:
Processing Hall
Multipurpose Silo’s, Pipeline, Chiller, Ageing Tank and

continuous freezer
Continuous freezer
Sanitation of Agending tank, Pipelines, Flavor Tank and

continuous freezer
Manual cleaning of pipelines
Manual cleaning of valves
Manual cleaning of candy

moulds
Packing in
Automated
machines
 STORE DEPARTMENT:-
Introduction:-
Stores are the connecting link between the shops or works place and the production
control department, materials. Plan of working progress etc, move through store just
as money in and out of a commercial bank. The principle function of stores of goods
bought and issue of needed, materials in the plant.
Functions of stores:-

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 To place or send a requisition of materials to the purchase department on time.
 Receiving the incoming materials and to record the receipts in general ledger and
to carry out the inspection work properly.
 After the inspection work of the both quality of materials, are placed properly on the
basis their nature and to record them in (bin card) rejected materials are sent back
to the suppliers and asking the supplies to send the requirements or required type of
quality materials.
 Proper maintenances of stores records.
 To issue the materials a receipt of duly signed or authorised requisition note from
the respective department.
 To protect stores against damage theft etc.
PRODUCER TO RECEIVE GOODS:-

The user department will as the stores for the required stock is not available in the
stores will request the purchase department to place an order the purchase
department offer placing an order will send a copy of purchase order to the stores
department when the goods reach the premises concerned department hears before
inspects and it enters the premises. The inspection is done in order to see whether
the goods are meeting the specification.
The next step is that the goods will be sent to stores and stores department will
prepare goods received report. The same will be sent to quality control department
to test the quality of materials and the random sample method which the indent or
the user department orders will be sent to concerned department. When the approval
of the concerned department of quality control department is received the store's
manager will certify the same. Later stores manager prepares goods received note
for payment purpose.
Stores department is maintaining the bin card system to how the information relating
to the physical materials movement. The issue of materials will be made in First In
First Out (FIFO) method. The consumption statement will be prepared in every month
and closing statement at the end of year will be prepared department consisting of
two sections, i.e., issue and receipts.

KMF MOTHER DIARY
 QUALITY CONTROL:
Mother dairy has a very good and an extensive quality control department. The main
aim is to produce milk bacteria free and payment adulteration of milk. It also focuses
on producing proper quality of its and proteins needed.
QUALITY POLICY:-
The quality policy of mother dairy is collection of pure milk from kolar mil union and
testing scientifically and providing fresh and pure milk to consumer with associated
milk products with competitive prices and best services.
" every employee of mother dairy will strive for customer satisfaction by providing
quality milk and milk products at competitive rates and timely delivery through
continual improvement".
QUALITY PROCEDURES:-
It will be done three times.
1. Incoming milk will be checked properly
2. While production
3. Before packing
Objectives:-
a) Improve the quality of raw milk being received by the union.
b) Achieve better plant efficiency by caring out all the maintenance schedules in
time.
c) Achieve cost competitiveness by reducing the water consumption and energy
consumption in the plant to a maximum extent.
d) Maintaining a high standard of housekeeping by adopting 5-s concepts in the
plant.
e) Improve customer's satisfaction index.
FUNCTIONS:-
1. Testing of incoming materials and consumables.
2. Analyze for fat and soluble non fat (SNF) of the incoming milk.
3. Analyze of incoming milk for chemical and microbiological standards.

KMF MOTHER DIARY
4. Check the quality of milk that is in the process control.
5. Testing of packing materials.
6. Testing of detergent and cleaning and sanitizing chemicals.
7. Preparation of cultures for curds.
8. Regular inspections of milk tankers.
HIERARCHY OF QUALITY CONTROL DEPARTMENT:
DEPUTY MANAGER
ASSISTANT MANAGER
COMPUTER OPERATOR
LAB ASSISTANT GRADE 1
LAB ASSISTANT GRADE 2
DAIRY OPERATOR
HELPERS
TESTS CONDUCTED BY THE QUALITY CONTROL DEPARTMENT

KMF MOTHER DIARY
Alcohol test
Cob test (colton boiling)
Detection of adulterant
Detection of preservatives
Detection of acidity
Determination of solid nonfat (snf)
Determination of fat
Determination of solubility index for milk powder
Detection of phosphates test
Determination of carbonate and bicarbonate
Analysis of pasteurized milk
Determination of standard plate count
Determination of coil
TEST FOR ACIDITY:-
Milk in its natural state has acidity. It does not make the milk taste sour. Developed
acidity, however does affect the quality of milk. The acidity test is used to determine
the final acceptance/rejection of milk vis a vis its acidity levels.
TEST FOR FAT AND SNF:-
To make payment for milk received from farmers, it is tested for its fat/SNF content.
The farmers get more money if the milk has high levels of fat/SNF.
 HUMAN RESOURCE DEPARTMENT
It plays a very important role in the organization. It is primary concern with

human relationship in the organization. A sound human relationship within the
organization. Thus, its main objects lay in the maintenance of the relationship on a
basis which consideration of the well being of the individual.
1. Recruitment will be done by the central office.

2. Maintenance of seniority list.
3. Employees to promote under KMF interest.
4. Private employees trading.

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OBJECTIVES:
1. Training.
2. Career Development.
3. Responsibility and authority.
4. Promotional Policy.
5. Performance Appraisal
6. Suggestion scheme.
BENEFITS:
 Medical facilities are provided as per the law in force.
 Canteen facilities under subsidy rate morning 7 o' clock breakfast
 11 o' clock lunch and in the evening 7 o' clock dinner for night shift employees
 Free milk 250ml for employees every day.
 Shoe and uniform
 Washing allowance
 Government holiday payment
 Attendance bonus cold storage allowances
 Heat allowances
 Home travel concession (htc) for every two years
 Provident fund but no pension for employees
LEAVE:
Earned level (el) 30 days per year

10 days compensatory level or 20 days H.P.L
15 days casual leave
Government holidays
Special casual leave 7 days for sports
Extraordinary leave for accidents, sick 10 months for entire service.
Leave encashment
Maternity leave for female employees for eligible for 6 weeks after delivery (only
for two times), miscarriage 6 weeks.
Residential quarters for essential staff

KMF MOTHER DIARY
MODE OF PAYMENT TO DEALERS:

 Cheque
 Letter of credit
 Demand draft
AUDIT :
There is pre and statutory audit. This is basically at the end of the year. As mother
diary, yelahanka is a co-operative department under the government of karnataka.
The audit is done according to the rules and regulation of the karnataka co-operative
societies act. Double entry system of book keeping is followed by the finance
department to calculate the depreciation diminishing balance method of depreciation
is followed.

KMF MOTHER DIARY
PAY SCALE AND GRADES PAID TO THE MARKETING AND SALES

EMPLOYEES OF KMF:
DESIGNATION PAY SCALE
DIRECTORS 48,830-63,600
MANAGER 36,300-59,850
DEPUTY MANAGER 30,400-51,300
ASSISTANT MANAGER 14,050-28,100
OFFICERS OF DIFFERENT AREAS 22,800-43,200
SUPERVISERS 21,600-40,050
TYPISTS 14,550-26,650
TECHNICIANS 11,600-21,000
HELPERS 9,600-14,550

KMF MOTHER DIARY
HIERARCHY OF HUMAN RESOURCE DEPARTMENT:
MANAGER (HUMAN RESOURCE)
DEPUTY MANAGER
ASSISTANT MANAGER
ASSISTANT DIRECTOR
SUPERINTENENDENT
SYSTEM OPERATOR
ADMINISTRAND GRADE 3
HELPERS

KMF MOTHER DIARY
 MARKETING DEPARTMENT
INTORDUCTION:-
Marketing is a process of exchanging goods and services between producers and

customers. It is a human activity directed at satisfying needs and wants of the
customer.
They will distribute 135 outlets monthly. The retailer will come to organization if they
are interested to open nandini parlor. If the retailer wants to open the nandini parlor
they have to follow up the rules and regulations given by the organization.
The rules and regulations are as follows:-
 The nandini parlor must be open from 6am to 8pm.

 They have to sell only nandini based products
 They have to buy the refrigerator to keep the nandini ice cream from nandini dairy
itself.
The retailer will get discount on the refrigerator given by nandini company. Nandini
even produce the product of other company that is amul.
Amul is the biggest company in the north side, but in south there is no amul company.
So, they have given their project to nandini mother dairy, but the milk is marketed by
the name of kmf Nandini itself.
In rural area only milk has been supplied through agencies, nowadays nandini is
even supplying some of their products to the rural areas.
Promotional activities:-
 They promote their products through T.V network.

 They promote their products through print media.
 They issue pamphlets and brochures in free of costs to the retailers.
 Inviting the consumer forum and creating awareness to them.
Distributions:-

KMF MOTHER DIARY
Regarding the distribution of the products they engage private vehicles on yearly
contract basis. In order to deliver the goods in time, the contractors should keep his
vehicles more productively. Contractors must follow the rules and regulations strictly
which are mentioned in the tenders by the organization at the time of contract.
In regarding cash collections it is responsibility of the vehicle contractor, for this they
have to deposit sufficient amount in the form of fixed deposit in the bank.
Marketing channels:-
The organization use indirect channel of distribution. Regarding the distribution of the
products they engage private vehicles on yearly contract basis. In order to deliver the
goods in time, the contractors should keep his vehicles more productively.
Contractors must follow the rules and regulations strictly which are mentioned in the
tenders by the organization at the time of contract.
In regarding cash collections it is responsibility of the vehicle contractor, for this they
have to deposit sufficient amount in the form of fixed deposit in the bank.
Promotional activities:-
 Visiting to mahila mandal's

 School children program
 Participating in trade shows
 Exhibitions
 Advertisement
 Tv, newspaper etc
 Door to door campaigning
 Product brand is "Nandini"

KMF MOTHER DIARY
HIERARCHY OF MARKETING DEPARTMENT:
Manager (marketing)
Assistant Manager
(marketing)
Technical officers
Supervisors
Case workers
 FINANCE DEPARTMENT:-
KMF MOTHER DIARY
Every organization requires an account/finance department where the circulation of
all essential issues like salary billing, sales, purchase etc, are carried out it acts as a
heart of the organization without whatever may be result of functioning of a unit, the
accounting at the same time, it ensure the result experienced and qualified person
identified as purchase officer.
Functions of finance department:
1. Preparation of annual budget.

2. Scrutiny of all payments bill.
3. Maintains of sales ledgers.
4. Salary established ledger-EPR and ESI registers.
5. All subsidy books under co-operative societies.
6. Income tax and tax deductions at source registers.
7. Debtor’s ledger.
8. Cash book.
9. General ledger.
10. Preparation of cost sheet.
Functions of General Manager (Manager):
1. Has an authority of managing funds of the organization.

2. He takes the major decisions of managing the funds of the organization.
3. Investment decisions for long period of time.
4. Financing decisions for the capital mix.
5. Liquidity decisions for the short term asset mix.
Assistance Financial Manager:
1. Expected return and mix.

2. Maximization of the share value.
3. Risk returns relationship.
HIERARCHY OF FINANCE DEPARTMENT:
General Manager (Finance)

KMF MOTHER DIARY
Assistant Manager (Finance)
Administrative supervisors
Accountant Assistant
Helpers
 ENGINEERING DEPARTMENT
The units which require machinery, power consumption steam, chill water. Hot water
etc required an engineering department separately to maintain the power supply and
avoid breakdowns of the machinery and other necessary technical assistance
required for the production. This unit required all the above mentioned power and
energy for the manufacturer of the products and therefore has organized a separate
department called the “Engineering department” headed by a technical officer.
Sections of engineering department
1. Boiler section
2. Electrical section
3. Mechanical section
4. Refrigerator section
Engineering department also includes store section
STORES SECTION:

KMF MOTHER DIARY
1. One person is known as officer and other is his assistance who maintains books
of receipts and issue of goods from the department. The stores department maintains
a number of books such as stock ledger, stock inventory method.
2. As soon as the stock arrives, the stores keeper checks the quality and enters the
same into their receipts ledger, where the job of the accounting for stocks carries on
until they are sent to the department which requires this information.
Functions of manager (Engineering department):
 Supervision and maintenance of technical sections like

 Boiler section
 Electrical section
 Mechanical section
 Refrigerator section
 Technical assistance regarding power and machinery
 Submitting reports to the Director.
Functions of Deputy Manager (Engineering dept):
1. Inspection of machines, boiler.

2. Taking security measures.
3. Preparing work schedules.
HIERARCHY OF ENGINEERING DEPARTMENT:
Manager
(Engineering)
KMF MOTHER DIARY
Deputy Manager
(Engineering)
Technical Technical officer Technical officer Technical officer

Officer (Boiler) (refrigeration) (Mechanical) (Electrical)
Technicians
Dairy
operators/Helper
s

KMF MOTHER DIARY
CHAPTER 4:
SWOT ANALYSIS
STRENGHTS:
1. Each department in the organization is very coordinative.

KMF MOTHER DIARY
2. Providing the necessary welfare facilities for the employees thus putting the
employees in the comfort zone and increasing the retention level of employees.
3. Time duration between milk procurement and sale is comparatively less
4. More concentrated towards the quality of products.
5. The cooperative principles, which has laid the foundation of the company.
6. Better technological standard of the company.
7. All functions related to milk and milk products are processed at the same plant.
It can minimize the cost of production.
WEAKNESS:
1. As it is government organization, employee productivity is less

2. The promotion procedure in the company is too rigid.
3. The company has to focus more on sales and markerting.
OPPORTUNITIES:
1. Nandini is well known brand so it has an opportunity to diversify its business into
some other business.
2. Nandini is concerning only local markets so it has an opportunity to enter into
national and other markets.
3. Since Mother Dairy is recruiting its labor from both permanent and contract basis;
it has an opportunity to meet production as per fluctuating demand.
4. It has got infrastructure to expand production capacity
5. Exploring the possibilities to export the products required by the state of the art
companies.
6. Strengthening of union- management relationship to achieve organizational
objectives.
THREATES:
1. Stiff competition by brands Arogya, Heritage, Nestle and others brand.

KMF MOTHER DIARY
2. Threats due to entry of the private firms into milk processing business.

KMF MOTHER DIARY
CHAPTER 5
McKINSEY 7-S FRAMEWORK
The McKinsey 7S Framework is a management model developed by well-known

business consultants Robert H. Waterman, Jr. and Tom Peters (who also developed

KMF MOTHER DIARY
the MBWA-- "Management By Walking Around" motif, and authored In Search of
Excellence) in the 1980s. This was a strategic vision for groups, to include
businesses, business units, and teams. The 7S are structure, strategy, systems,
skills, style, staff and shared values.
The model is most often used as a tool to assess and monitor changes in the internal
situation of an organization.
The model is based on the theory that, for an organization to perform well, these
seven elements need to be aligned and mutually reinforcing. So, the model can be
used to help identify what needs to be realigned to improve performance, or to
maintain alignment (and performance) during other types of change.
Whatever the type of change – restructuring, new processes, organizational merger,

new systems, change of leadership, and so on – the model can be used to
understand how the organizational elements are interrelated, and so ensure that the
wider impact of changes made in one area is taken into consideration.
Objective
To analyze how well an organization is positioned to achieve its intended objective
Usage
 Improve the performance of a company

 Examine the likely effects of future changes within a company
 Align departments and processes during a merger or acquisition
 Determine how best to implement a proposed strategy
The Seven Interdependent Elements
 The basic premise of the model is that there are seven internal aspects of an
organization that need to be aligned if it is to be successful

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Hard Elements:
 Strategy
 Structure
 Systems
Soft Elements:
 Shared Values
 Skills
 Staff
 Style

KMF MOTHER DIARY
Mc KINSEY'S 7s model with reference to KMF mother dairy:

1) STRUCTURE:
Production Department:
The production department of nandini milk products is located in the kmf mother
dairy. The production department in nandini milk products performs the function of
developing a procedure to transform a set of input element like man, material, money
into specified set of output element like finished goods is assigned quantity and best
quality in order to achieve the organization goal successfully.

KMF MOTHER DIARY
Production of milk products:
The raw chilled milk is received through tankers and pasteurized at the main dairy.
Hi-tech machines pasteurize milk. Then the milk is used for the production of other
milk products like khova, paneer, mysorepak, burfi, peda etc., basically for burfi and
peda, khova is used as raw material.
Duties and responsibility:

The production manager/technical production officer authorizes the functional
supervisors to the various production activities availing the assistance of quality
control specialist, supervisors, and operators and other are under his control.
2) SKILLS:
As the milk and milk products are perishable in nature so they should be handled
carefully. So it required skilled manpower for handling, packing and skill in the sense
testing of fat content, micro-organism, humidity and moisture. It needs training.
Training will be given basic training program for about a month. Training for technical
officer about a month, they will be given to know about cattle feed plant insemination.
This expertise enables the group to provide high quality end and cost effective milk
products to domestic markets.
Both Bangalore dairy and mother dairy operates with different product lines in the
areas of routine. Use milk product like ghee, butter, ice cream in mother dairy and
sweet product like khova, nandini mysorepak, burfi, nandini pedas, curds, butter milk
in bangalore dairy.
3) STYLE:
 There is no differentiation, but the superiors and the subordinates with the various
degrees of responsibilities.
 To achieve the common goals the company has to make collaborations with in
and across organization boundaries. Ex: Amul
 By taking new ideas and views on procurement of milk from different source and
decision making.
 Try to solve and balance conflicts between the employees and milk unions.
 Share the information in decentralized manner.

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 Involvement of managers with their associative by sharing the views and ideas.
 Take initiative to support various functional strategies.
4) STRATEGY:
 Development of intermediates and bulk milk products order using a variety of

procurement technologies of milk.
 Development of cattle field plants of 100 TPD capacities, each and one plant of
200 TDP capacities with mineral mixture production facility in one unit.
 Providing assured and remunerative market for the milk produced by the farmers.
 Improving the quality status of milk and their derivatives to urban consumers.
 Milk and milk products should undergo various tests conducted by the quality
control department.
5) STAFF:
Staff is the process of acquiring human resources for the organization and assuring
that they have the potential to the achievement of the organizational goals. This
implies that it includes two fundamentally different processes selecting people for
specific organizational positions and developing the abilities and skills that they
would need to be effective in those and subsequent assignment. Staffing is defined
as the selection, the placement, training and development of appropriately qualified
employees". And in which there are totally 350 employees are working.
Employees performance can be measured by the "annual confidential report"
All the employees have the uniform and it is common for lower level to higher level
employees.
6) SHARED VALUES:
1. It has been serving the state from last 30 decades.

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2. State entirely covered by dairy development.
3. High capacity utilization of cattle feed plants.
4. Bulk suppliers of SMP, WMP and army.
5. Low price spread between procurement and sales price.
6. Wide spread dispersal of cross breed cattle.
7. Milk supply to Calcutta mother dairy through railway tankers from Bangalore
Mother Dairy.
8. Successful implementation of state government aided dairy development
programs through SC/ST development and backward class development.
9. Implementation of mini dairy scheme for rural unemployed youth sanctioning
2000 units it compromises 5 cows per unit.
7) SYSTEM:
Management information system:-
Online computer transaction system at mother dairy;

Presently mother dairy is having a system of all major transaction being carried on
though its online computer system. The major areas covered are:
 All milk distributors to retailers/factories/institutions.
 All incoming milk weighment, billing and its accounting.
 All financial accounts, book maintenance, employees payroll, sales transaction.
 Maintaining database of all the above said transactions.
The milk production and quality control system:-
The weighment of milk tankers taken on the weight bridge, which is inter forced with
the online system.
Quality test fat percentage and SNF percentage and entered in Q.C menu
The shift wise receipt issue milk processing register product reports are taken by
entering the details in production menu to arrive to material balance.
Milk marketing and distribution system:-

KMF MOTHER DIARY
Indenting for milk supply as per the retailers requisition quantity, production indent,
route sheet printing, distribution menus after the supply return entry, cheques entries
carried to take the cheques statement short or excess payment reports sales reports
and retailers reports are taken.
Financial accounting system:-
The general receipts are entered for cash or cheques receipts with GR print outs,
payment vouchers debit note, credit note, advances, bill payment, cheques, bounces
are entered. All financial reports petty cash book, trail balance, journal entries,
subsidiary ledgers, income tax from 16 TDS certificates etc., monthly annual reports
taken.
Integrated material management system:-
Material purchases are done by enquiry entry, quotation entry, and comparative
statement and vendor approval for placing the purchase orders. Stores are
maintained by entering mrr issues, stock ledgers, entry tax reports, issue reports are
taken.
Some of the benefits of the system are listed below:-
1. Shifts wise receipt and issue statements.

2. Material balance between any period( daily, weekly, monthly)
3. Milk conversion statement, quantity reports of film, packing materials etc.,
4. Milk processing, butter, ghee registers.

KMF MOTHER DIARY
CHAPTER 6:
FINDINGS AND SUGGESTIONS
SUMMARY OF FINDINGS:

KMF MOTHER DIARY
 Through the use of advanced technology, mother dairy provides its consumers
bacteria free and balance nutritious milk.
 Marketing department of mother dairy plays a major role in increasing the sales
through the promotion activities like
 Mother dairy is serving the society and its consumer by providing better milk and
milk products.
 Mother dairy is equipped with fully automatic system which ensures total quality
maintenance.
 Mother dairy provides training and education program that creates legal
awareness about social and economic up lift mate amount rural people, especially
women.
 Mother dairy has an efficient MIS department which maintains up to date
information's and helps in major decision making.
 Mother dairy gives importance towards animal health care, artificial insemination,
cattle feed and fodder development.
 Mother dairy has a sound financial department, which takes care of all financial
transactions and financial decisions.
SUGGESTIONS:

KMF MOTHER DIARY
 A quality is less when compared to lose milk so that quality should be improved
and also avoids powder smell.
 Cost of the milk and milk products can be reduced so it can reach all levels of
people.
 Should increase sales promotion.
 Milk should be reached to the consumer at proper time.
 Performance appraisal of all the employees must take place at least once in a
month.
 The marketing department needs to focus more on promotional activities which
seems to occupy the backseat at present.
 A suggestion box system needs to be maintained where in the workers can drop
their valuable suggestions which lead to the department of the union.
 In order to survive and to become leader, KMF needs to come out with new
products continuously and increase its product line.
 Very important of all is the marketing department function that has to do good
advertisement and build up brand awareness in the market.
 Job rotation, job enlargement and job enrichment needs to be done frequently
which would motivate an employee to do better.

KMF MOTHER DIARY
CONCLUSION:
The overall study of organization reveals that the company has grown tremendously
since 1924. Quality control mechanism can be updated on going on bases with
continues feedback from consumers.
Mother dairy is one of the leading suppliers of milk and milk products in south zone
of the country. Nandini has a very good reputation in market and can produced still
various produces so it is leading in market.
Consumers are delighted by Nandini milk and milk products they are fully satisfied
for these products. So they are not adopting any other products so there is no more
compilation.
The project reports reflect my knowledge gained during the period of in plant training.
This was a good opportunity for me to mingle with all employees of each and every
department of mother dairy. The training helped me to gain practical knowledge and
have a very good experience of mingling with all the people in the organization. It is
very good note that there are number of department and every departments is
headed by senior officer.
LEARNING EXPERIENCE

KMF MOTHER DIARY
Being exposed into an environment where we were given a chance to adjoin the
theory knowledge and apply it practically was helpful in adding to our credentials.
The entire scenario of corporate world and its exact functioning, the role of different
people in various levels contributing to the goals of the organization has proved to be
an excellent example in learning the organization structure and its various functions
Given a platform to widen the entire perspective of imbibing the knowledge in order
to inculcate the exact functioning of organization was extremely helpful.
Beginning from the company’s detailed profile giving an insight into the entire
functioning of its various units has been an added advantage. The in-depth
information about the company and its role in the industrial sector was beneficial.
The different value that each employee inculcates into themselves and abides by its
rules and regulations shows their dedication towards their organization
The structure of the organization describing various departments and their roles tells
how each department carries on its duties and responsibilities.
It was highly rewarding experience for me to be a part of Karnataka Milk Federation.

I learnt to analyze all important aspects of all departments. It helps me to find out
strength and weakness of the organization, which helped me to understand the
operation of financial department. In a nutshell I can say it helped me a lot in
following ways:-
 Helped me to find out strength, weakness, opportunity and threat of the sector as
well as the organization.
 Procedure for the recruitment and selection of the employees.
 Various benefits given to employees by the Human Resources Development.
 The bases and procedure for the promotion of the different levels of the
employees.

KMF MOTHER DIARY
 Importance of different management functions such as planning, organizing,
staffing, directing and controlling was known which guide the organization in
facing competition.
 I have come to know how different works and things are got done through others
and with others in a decentralized structure. I now know how a work
 flow model helps in organizing the work, by determining authority and
responsibility for staff.
 I also came to know how different employees/workers have different skills,
talents, abilities, attitudes etc and how they are being co-ordinate and utilized in
an optimum manner, in achieving organization goals.
 Also I understand the importance of leadership traits which guide in achieving
personal as well as organization goals. Also I have come to know how individual
should be dynamic in corporate sector, which should guide me in my career
planning and development.
 I understood the business set up and infrastructure of company.
 I have learnt work culture of establishment section.
 I understood the difficulties of HR and marketing strategies.
 I understood the kind of effort to be put into brand building activates and its
importance.
Hence the overall experience was very enriching, which gave me lot of exposure and
knowledge which can help me in my career growth in future.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Machines are essential but people are priceless.KMF, Mother diary places emphasis
on its employees’ aspirations and requirements.
Their comforts are satisfied by special medical facilities, visiting doctor, full time nurse
on premises, on call ambulance, day-care center, need based loans, educational
opportunities for their families etc. The directors are also involved in several social
causes and mental enrichment through yoga and meditation.

KMF MOTHER DIARY

KMF MOTHER DIARY
Websites:
 http://www.kmfnandini.coop/
 http://www.motherdairykmf.in/index.html
Books:
 Company books
 Annual reports
 KOTLER PHILIP - Marketing Management., 13th edition 2009
 P SUBBA RAO - Human Resource Management.
 SHASHI K GUPTA - Financial Management.

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BISHOP COTTON ACADEMY OF PROFESSIONAL MANAGEMENT Page 1

Per Capita Income of India

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Per capita income as a measure of prosperity

Per capita income has several weaknesses as a measurement of prosperity:

 As it is a mean value, it does not reflect income distribution. If the distribution

International comparisons can be distorted by differences in the costs of living between

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GDP Rate of India

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No option but to reform: Reforms such as opening India's supermarket sector to

Indian Inflation Rate

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 short term interest rates

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Meaning of Fiscal Policy

Main Objectives of Fiscal Policy In India

The fiscal policy is designed to achieve certain objectives as follows :-

1. Development by effective Mobilisation of Resources

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2. Efficient allocation of Financial Resources

expenditure on defence, interest payments, subsidies, etc.

3. Reduction in inequalities of Income and Wealth

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6. Balanced Regional Development

7. Reducing the Deficit in the Balance of Payment

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10. Development of Infrastructure

11. Foreign Exchange Earnings

Conclusion On Fiscal Policy

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INDIAN DAIRY INDUSTRY

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India's Milk Product Mix

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Milk Powders 3.5%

Paneer & Chana (Cottage Cheese) 2.0%

Others, including Cream, Ice Cream 1.0%

Total contribution to the economy/ sales

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Intensive Dairy Development Programmed (IDDP): The Schemes, modified

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INDIAN DAIRY ASSOCIATION (IDA)

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Karnataka Cooperative Milk Producers' Federation Limited(KMF) is the Apex Body

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THE GROWTH PROCESS

NATURE OF THE BUSINESS CARRIED

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ESTABLISHMENT OF 30 MT POWER PLANTS

To facilitate conversion of surplus milk of unions in the project area, Karnataka

ICE CREAM MANUFACTURING UNIT

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(1)H R, Attendance and Payroll

Modernization and Expansion of Mother Dairy:-

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