CHAPTER 1 INTRODUCTION Keeping pace with the winds of rapid industrialization that are sweeping Karnataka, MSIL is today resting on a strong footing of excellent performance coupled with rooted trust and confidence amongst its clientele. Mysore Sales International Limited popularly known as MSIL, is a marketing organization formed in 1966 to meet the marketing needs of Karnataka. Since then, the company has grown from strength to strength, to emerge as a dynamic marketing force with a national presence and international reach. A keen sense of business acumen, trade experience, managerial effectiveness and credibility are a few of the hallmarks of this marketing giant. And, its ability to manage a diverse range of products and services through innovative marketing strategies is the secrete of its success. In a business where the prime motivator is people, MSIL has developed flexibility in its thinking and management, enabling it to tackle every fresh challenge with 1
Transcript
CHAPTER 1
INTRODUCTION
Keeping pace with the winds of rapid industrialization that are sweeping
Karnataka, MSIL is today resting on a strong footing of excellent performance
coupled with rooted trust and confidence amongst its clientele.
Mysore Sales International Limited popularly known as MSIL, is a marketing
organization formed in 1966 to meet the marketing needs of Karnataka. Since
then, the company has grown from strength to strength, to emerge as a dynamic
marketing force with a national presence and international reach.
A keen sense of business acumen, trade experience, managerial effectiveness
and credibility are a few of the hallmarks of this marketing giant. And, its ability to
manage a diverse range of products and services through innovative marketing
strategies is the secrete of its success. In a business where the prime motivator
is people, MSIL has developed flexibility in its thinking and management,
enabling it to tackle every fresh challenge with an innovative approach. To stay in
rhythm with the changing tastes and values.
From a modest turnover of just Rs. 1.5crores in 1966, MSIL has today
achieved a turnover of Rs. 280 crores. And, is one of the very few public sector
undertakings to earn substantial profits continuously.
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1.1OBJECTIVES OF THE STUDY
This is a pre-determined study on MSIL, with specific objectives like:
Using and analysing the available information to determine the quality of
the performance.
To learn how the different divisions like Finance, Marketing, Personnel, etc
are co-ordinated and synchronized to meet the goals and objectives of the
organization.
To get acquainted to the real working environment in the organization.
To gain valuable knowledge and experience during the study
Finally, to gain a practical knowledge about the functions and working of
the company.
1.2 PURPOSE OF THE STUDY
1. The Performance and Functions of different business Organisations can be
evaluated in different methods in the area of marketing, finance, human
resources etc.
2. Each area of the evaluation is entirely different from one and the other; one
might influence the other tremendously. By conducting the analysis in different
area of operating insides (employees, managers), outsiders (shareholders,
general public, creditors, government etc). One can get an extremely valuable
and useful view of the enterprise and its operation in the form of a bird’s eye
view.
3. Evaluation of financial performance will serve as an eye opener to any
company and the company could understand its own position overtime.
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4. This study also helps us (students) to get practical knowledge about the
functions and working of the Organisation
CHAPTER 2
INDUSTRY PROFILE
ON
PAPER INDUSTRY
INTRODUCTION
The word paper is derived from the name of the reedy plant papyrus, which
grows abundantly along the Nile River in Egypt. In ancient times, the fibrous
layers within the stem of this plant were removed, placed side by side, and
crossed at right angles with another set of layers similarly arranged. The sheet so
formed was dampened and pressed. Upon drying, the gluelike sap of the plant,
acting as an adhesive, cemented the layers together. Complete defibring, an
indispensable element in modern papermaking, did not occur in the preparation
of papyrus sheets. Papyrus was the most widely used writing material in ancient
times, and many papyrus records still survive.
Overview
Industry Scenario - Why Priroty
The challenge for the Indian paper industry to meet the ever increasing demand
of paper, board and newsprint is getting crippled due to shortage of fibres in the
country. The future demand of paper is expected to grow from 5.6 MT at present
TO 9.5 MT in 2010 and 13 MT in 2015. Demand for creamwove paper is
expected to increase by 7-8%. Demand for different kinds of coated paper has
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increased by 8% in 2002, duplex board has recorded increase by 6.5%, kraft paper has
registered a 6% rise in demand and newsprint an impressive 10%.
Indian paper industry can be broadly classified into paper and paperboards and
newqsprint. The paper and paper board segment constitutes of cultural paper,
industrial paper, speciality paper. We will be treating newsprint as a separate
type of paper and it is dealt in detail in the last section.
The paper industry in India has a long history with the first mill being
commissioned in 1832. The number of paper mills in the past with average
capacity is as given in the table below.
Year No. of Mills
Installed capacity million ton
Average capacity ton
1950-1951 17 0.137 8,050
1970-1971 55 0.768 13,500
1980-1981 137 1.816 11,500
1990-1991 325 3.304 10,000
1999-2000 406 6.200 15,270
2001-2002 594 8.500 22,000 (approx)
Why a priority?
The Indian paper industry, reeling under liberal imports, price cuts and rising
input costs for the past three years, seems to be on a comeback trail. With the
firming-up of international pulp and paper prices, the domestic paper market
registered an upward trend.
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In South India, starting with ITC Bhadrachalam Paperboards Ltd (ITC-BPL) many
paper mills increased production and posted higher turnovers last year on
account of improved market conditions. For instance, The Andhra Pradesh Paper
Mills (APPM), The South India Paper Mills (SIPM), The Sirpur Paper Mills
(SPML), Delta Paper Mills (DPM) and the Coastal Papers (CP) have all posted
higher turnovers in 2001-2002.
Characteristics of Market
PAPER
Size of Market
The Indian paper industry is extremely fragmented. This industry structure is the
result of the past Government policies which encouraged the setting up of many
small mills with as low capacity as 1 ton per day.
Market Trend
The present domestic paper demand is 5.6 million tpa . Indian per capita
consumption of paper is 5 Kgs with an expected growth rate of 6-7% per annum
over the next 5 years. Paper consumption in India is expected to reach 9.5
million tonnes by the year 2010 and 13 MT by 2015. The capacity utilisation of
the industry presently is 67%.
Constraints
Paper manufacturing is a highly capital and energy intensive industry. The
manufacturing process demands considerable material handling skills as very
large quantities of raw materials are used as input. Paper manufacturing is also a
highly polluting process and requires substantial investments in pollution control
equipment. Typically, a grass root paper plant costs about INR 50,000 to INR
120,000 (£750-1800) per ton of capacity and the average is around INR. 60,000
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(£895) per metric ton. To achieve significant economies of scale the plant size
should be at least 3000 tonnes per annum, implying nearly Rs.1.8 billion (£27
million) of investment, with a minimum gestation period of two years
Demand Conditions
Demand for paper is strongly correlated with trends in GDP growth and increase
in per capita income (PCI). According to studies conducted by the UN, the
demand for paper increases by around 1.5-2.5% for every 1% increase in PCI.
This holds good even for India in the higher range in spite of year on year
variations in demand growth. Demand for paper is also influenced by other
factors like literacy rate, growth of service sector, advancement of printing
technology in the country, development of paperless transaction, development of
packaging industry, acceptability of substitutes, etc.
Different types of paper along with their usage, constitution of total demand and
expected growth rate is as given in table below:
Type of paper Main varieties Applications Expected growth rate (% of total
consumption) 2002-2003Cultural paper (46%) cream woven, maplitho, textbooks,
notebooks, 7-8% bond paper, Chromo paper office stationeryIndustrial paper
(48%) kraft paper ,paper board - wrappers, corrugated boxes, 6-7% paper board
- single layer liners, sacks and textile tubes board, multilayer board, packaging of
pharmaceuticals, duplex board, chromo board, cigarettes, match sticks, hosiery,
SCHEDULE 2001-02 2002-03INCOME NOSALES 3210401847 3168476334COMMISSION AND SERVICE CHARGES 194634599 201960417OTHER INCOME 15 164724715 162765725EXTRA-ORDINARY INCOME 10902736 --ACCRETION/DECRETION 16 -24312096 11374233TO STOCK 3556351801 3544576709
EXPENDITURECOST OF MATERIALS 17 2769109888 2859518175PACKING AND FORWARDING 9862636 11531098MANUFACTURING,SELLING AND ADMINISTRATIVE EXPENSES 18 505237985 484389944FINANCIAL EXPENSES 19 46247060 39504945DEPRECIATON 5 67137640 71920041DONATION 6295000 4525000
3403890209 3471389203PROFIT BEFORE TAX 152461592 73187506PROVISION FOR TAX 27500000 49200000CURRENT DEFERRED -- -22321100PROFIT AFTER TAX 124961492 46308606PRIOR PERIOD ADJUSTMENTS 20TAX RELATING TO EARLIER YEARS 466630 2371585EXPENSES 1890102 -479964
2356732 1891621BALANCE B/F FROM LAST YEAR 89284 694AMOUNT AVAILABLE FOR APPROPRIATIONS 122694144 44417679
APPROPRIATIONSDIVIDENDPROPOSED DIVIDEND-SUBJECT TO TAX 5493450 5493450INCOME TAX THERE ON 0 703848TRANSFER TO GENERAL RESERVE 117200000 38219000
122693450 44416298BALANCE CARRIED TO BALANCE SHEET 694 1381
PROFIT BEFORE TAXFor 5 Years From 1998-99 to 2002-03
(Rs. In Lakhs)
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RESERVES AND SURPLUSFor 5 Years From 1998-99 to 2002-03
(Rs. in Lakhs)
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The Division-wise FINANCIAL PERFORMANCE is detailed below:
LIQUOR DIVISION:
The liquor division achieved turnover of Rs.20763.40 lakhs during the year under
review. During the year, the performance was satisfactory, inspite of unfriendly
market conditions.
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The State government has formed the Karnataka State Beverages Corporation
ltd., for channelising the sale of liquor in the State with the result the liquor
business of your Company ceased to continue from 1.7.2003. The wholesale
business in Bangalore has also been discontinued from 1-07-2003. A majority of
the staff attached to the erstwhile liquor business of your company has been
taken on a deputation basis by the said new corporation.
ARRACK DIVISION
The division achieved a turnover of Rs.3794.80 lakhs during the year under
review as compared to Rs.3797.55 lakhs achieved during the previous year. The
division exercised adequate control to contain the production wastage to a bare
minimum as in the previous years and to sell fully matured arrack to the
maximum extent.
INDUSTRIAL PRODUCTS DIVISION
The division achieved a turnover of Rs.1425.34 lakhs during the year under
review and the main contribution came from sale of “HOT SPRING” solar water
heating systems.
PAPER DIVISION
The paper division recorded a total turnover of Rs.1994.65 lakhs during the year
under review compared to Rs.2165.80 lakhs achieved during the previous year.
The decline in turnover was due to unfavourable market conditions. The division
achieved a turnover of Rs.197.39 lakhs for stationary products as against
Rs.257.20 lakhs during the previous year.
LOTTERY DIVISION
The lottery division’s performance during the year under review was Rs.4545.67
lakhs as against Rs.4757.60 lakhs achieved during the previous year. The gross
revenue to the State Government stood at Rs.1167.92 lakhs as against
Rs.1219.85 lakhs during the previous year.
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HIRE PURCHASE DIVISION
The hire purchase division achieved a turnover of Rs.1040.94 lakhs during the
year as compared to the achievement of Rs.1159.74 lakhs during the previous
year. The reduction in the limit of loan allowed to group D employees, restriction
imposed to the employees of certain department due to heavy overdues and also
the reduction in two-wheelers sales due to stiff competition from other finance
companies including commercial banks are attributable to the overall reduction in
the sales.
TOURS AND TRAVELS DIVISION
The division achieved a turnover of Rs.502.26 lakhs as against Rs.395.04 lakhs
achieved during the previous year registering a growth of 27%. The division has
been accredited with IATA recognition. The division introduced KSRTC online
booking services and also group bookings of conducted tours and packages
through its tour operators during the year under review.
BANGALORE AIR CARGO COMPLEX
The division earned revenue of Rs.1952.74 lakhs during the year under review
as against Rs.1709.75 lakhs during the previous year.
4.2 PERSONNEL DEPARTMENT
MSIL has a separate department for monitoring the human resource of the
organization i.e., the Personnel Department. The total strength of the
organization is 674 employees.
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The personnel HR department of MSIL concerns itself with the task of ensuring
that people working for the company are always physically and mentally fit and
competent. It develops/evolves policies & procedures and communicate such
policies to its employees, takes care of recruitment, training, salary and benefits
planning, motivation of staff etc.,. It also takes care of the salary/wage
preparation, maintenance of attendance, leave and personnel records. The
department also ensures the security and safety of the organization by
interfacing the security department.
SWOT Analysis of the Manpower at MSIL:There are about 674 skilled, and experienced employees at MSIL working for
past many years.
Strength:Experienced personnel in relevant field.
Weakness:Disproportionate composition of personnel in relation to functional areas.
Opportunities:a) To train the man power in specific functional areas such as sales, accounting,
quality assurance, inventory management, computers etc., so that
disproportionate composition of personnel is overcome at intra & interdivisional
levels. This enables job enrichment as well as job rotation.
b) Induction of skilled personnel in relevant areas of operation at appropriate
levels by way of:
Recruitment
Deputation
Indirect Induction i.e., like dealer sales representatives in respect of sales
function, involvement of third party inspection in respect of quality assurance etc.
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Threat:1. Resistance to change.
2. Policies of the Government.
General Functions of the Personnel department:a) Recruitment
b) Reservations
c) Induction
d) Placement
e) Keeping track of Service Records
f) Increments
g) Transfers and Promotions
h) Retirements.
Wage and Salary Administration: It keeps track of the-
Attendance
Leave records
Preparation of payrolls
Salary advances
Statutory deductions-PF, ESI
Voluntary deductions
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Welfare Scheme:MSIL has personally provided with many welfare schemes to the employees for
their benefits, to encourage them to work better and to accomplish the
company’s functions and goals. They include:
Medical Benefit
Accident Scheme
Group Savings Scheme
Super annuation for officers risk, EDLI scheme
Medical Scheme:In case of emergences like open-heart surgery, etc the entire expense is borne
by the company.
Incase of non-emergency maximum limit of Rs.1.5 lakhs is granted.
For the employees dependents 50% of the expense is reimbursed.
Recruitments:In the year 1986, government of Karnataka has banned on the recruitment
programme of MSIL. Since then there is no recruitments happening in the
company. Presently limited recruitments are open to the SC/STs. Last year out of
the 21 vacancies in the company only 19 were filled up. MSIL has its own rules of
Recruitment process.
Salaries: Salaries to the employees are paid as per the fixed salary scale given by the
government, which is as under:
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Staff Salary Scale:
Category I - 2500-50-2700-75-3450-100-4450-125-4825
Category II - 2850-75-3450-100-4450-125-5325
Category III - 3225-75-3450-100-4450-125-5700-150-6300
Category IV - 3750-100-4450-125-5700-150-7200-200-7400
Category V - 4250-100-4450-125-5700-150-7200-200-8200
Category VI - 5200-125-5700-150-7200-200-8800-260-9580
Officers & Executives Salary:
O1 – 6450-150-7200-200-8800-260-10880-320-11840
O2 – 8600-200-8800-260-10880-320-13440
E1 – 10620-260-10880-320-13440-380-14960
E2 – 11840-320-13440-380-14960-440-16720
E3 – 13440-380-14960-440-16720-500-18720
E4 – 13820-380-14960-440-16720-500-19720
Other Benefits:Apart form salary and frienge benefirs like PF, gratuity, Medical allowance,
Insurance and Incentives, employees are also provided with other benefits like:
Education allowance
Paper allowance
Tea/coffee and snacks
Canteen, etc
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Benefits given to the Executives are as follows:
Flats/Housing
Conveyance-cars
Telephone/mobile phones
Others
Employee Motivation in the organization:In order to motivate the employees in the organization to work better apart from
salary and allowances the above said benefits are provided to them. Incentives
are given to the employees depending upon the volume of the turnover in the
organization.
Sick Leave & Paid Leave:Basically three types of leave are provided to the employees:
1. Casual leave
2. Sick Leave
3. Other leaves - paid leave, etc.
Facilities to the Women Employees:MSIL’s Women’s Association works on the well being of the women employees
on the job. On the request of this association a lady medical representative is
being appointed for their examination. All the requests, desires of this association
is fulfilled by the management.
TRAINING AND DEVELOPMENT:
Training acts as an important activity in any organization. It is the process of
imparting the knowledge to the employees. Well-trained employees are the
assets of the organization.
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MSIL is not involved in much of the training activities. MSIL provides training to
its employees once in a year, and a gap of 5 years is given between each
training and if need arises the training is provided as per the need.
From past 2-3 years MSIL is providing training for Marketing and Administration
fields.
Trainings provided: In-house training i.e., training within the working environment
External training i.e., outside the work place wherein special seminars,
programs lectures, workshops and other management programmes are given by
the professionals from the IIM, XRIL, TATA, etc.
Professional training is given by employing professionals in specific fields.
Computer training is being given to all the employees irrespective of the
staff and the Executives.
The Government is also giving free training to the employees.
LABOUR UNIONS:
There are 2 trade unions in MSIL, which handles the grievances of the
employees and the officers. The employees themselves elect these unions. They
work on all the activities related to the employees, their salaries and other
welfare benefits of the employees. They arrange meetings with the management
regularly to discuss on all the matters relating to the employees.
The major problem is the inter-union rivalry arising because of the existence of
the two unions, wherein the strength in the first union is 560 and 20 in the other
union.
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3.3 MARKETING/SALES DEPARTMENT:
Marketing is the heart of MSIL. All its activities begins and ends with marketing.
MSIL is into marketing of note books, stationeries, lottery tickets, solar water
heaters, silk etc.Marketing in MSIL is done through various depots spread allover
the state. MSIL has efficient sales executives, sales representatives.
The department identifies the needs of the customer. Functions such as Market
Research, Advertisements, Sales promotion and corporate communications are
part of this department for each of its functional divisions. This department is the
core of the entire organization.
ADMINISTRATION DEPARTMENT:
The department is concerned with administrative functions like handling of paper
work involving data capture, information retrieval, processing and recording data,
handling inward and outward mail, payment of telephone bills, maintenance and
upkeep of office equipments like Air-conditioners, telephones, computers etc., it
looks after vehicle maintenance and the proper utilization of the staff involved in
these activities throughout the organization. The department also gives
importance to cleanliness of the entire office premises by keeping it neat and
clean.
ESTATE DEPARTMENT:
The estate department of MSIL is responsible for overall maintenance of
organizations building. It supervises and overseas the use of space. So, that
maximum productivity and effectiveness may be achieved at minimum cost. It
also sees to the payment arrangement of the office premises-with good interior
decoration and lighting, comfortable seating etc.
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SECURITY DEPARTMENT:
The security department ensures the physical security of the organizations
assets. It also see to the safe custody of goods at various godowns, stores and
depots located at different places. The department ensures the observance of
safety precautions/measures to avoid accidents. Shift timings for security
personnel’s is planned by the department. If necessary, round-the-clock security
is arranged by the department.
EDP DEPARTMENT:
This department deals with the computerization operations of the task in some
fields like processing of payroll or any of the finance and accounts functions.
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3.4 VARIOUS DIVISIONS AT MSIL
MSIL’s operations are divided into distinct divisions-
Each self-sustained but working towards, and in harmony with,
A common corporate philosophy.
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PAPER DIVISION
AIR CARGO DIVISION
MSIL
SILK SHOWROOMS
EXPORT DIVISION
TOURS & TRAVELS
HIRE PURCHASE
CONSUMER PRODUCTS INDUSTRIAL
PRODUCTS
LIQUOR DIVISION
LOTTERY DIVISION
PAPER DIVISION
Concern for students
MSIL’s association with the student community dates back to 1977 when the
company was entrusted with the responsibility of distributing subsidized not
books. A special marketing programme was conceptualized and thus the brand
‘Lekhak’ was born. Subsequently, ‘Lekhak’ became the brand leader and a
household name for note books in Karnataka. As an extension of this brand, a
complete range of school and office stationery was also introduced. Keeping in
true with the times, the division also offers computer stationery. MSIL’s
involvement with students was further strengthened through the popular “Lekhak
Student of the Year contest”.
The ‘Vidya’ notebooks have carried on this tradition of quality at reasonable
prices and have also emerged as the brand leader in the current scenario. The
recent addition of a range of colourfull schoolbags in various sizes and attractive
designs have now been making waves. During the peak season, this division
brings notebooks within easy reach of the students by operating special depots.
The notebooks are manufactured by over 100 small-scale industries, which
create employment to a large number of skilled labourers.
Cargo Complex. Operations at this new Air Cargo Complex are expected to start
by end of December 2001.
The Company encourages the supply of notebooks directly to schools/colleges
and co-operative societies. These notebooks have not only made deep inroads
into Tamil Nadu, Kerala and Maharashtra but are also exported to several South
African countries.
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Paper Division Preamble: The paper division started its small beginning in the year 1974 under 20 point
economic programme initiated by central government. Under this programme,
the Central government allotted certain quantity of concessional paper for the
use of student community. The Concessional paper was used for conversion of
notebooks and was sold to the students of Karnataka at a concessional rate.
Since this was a social service to the student community, MSIL took up the work
in the right earnest and continued the committed service to the student
community even to this date, which is more than what the state government
expected MSIL to do. However, during the late 80’s the supply of concessional
paper also was completely stopped by the central government. This provided an
opportunity to launch `VIDYA` brand of notebooks in place of “LEKHAK”. The
VIDYA unlike the LEKHAK was altogether a new brand made out of paper
purchased in open market and was priced competitively keeping in mind the
quality attributes of this product.
Unlike LEKHAK notebooks, which were being sold only to the license holders, it
was required to develop different marketing system for VIDYA brand of
notebooks. The company therefore, appointed stockiest network all over
Karnataka to ensure that the secondary distribution is done by MSIL stockiest
and representatives to enable the students to get their requirement of VIDYA
notebooks from the nearest retailer. The company in their fold 262 stockiest who
have successfully contributed to the marketing of VIDYA notebooks over past 2
decades. MSIL paper division has expanded its operation not only in school
stationery segment but also in office
Stationer segment and is effectively catering to the various needs of our
consumers.
The LEKHAK stationery products are well known for the quality as it has
affordable price. These are being manufactured/ procured through various
converters/suppliers appointed under government sponsored `VISHWA`
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programme and general category converters/suppliers. At present they have 58
VISHWA converters and 83 small-scale units who are registered with MSIL. The
division is making all out efforts to get these units busy through out the year by
providing the job work.
Although note book sale is seasonal, the Divisional is providing adequate job
work to convert office stationery items like files, file wrappers, ledgers, envelopes
etc. Still there is enough capacity to undertake requirements of all Government
departments. If entire stationery requirements of the state owned organization\
Public Sector Undertakings and all Government Departments are met through
MSIL, then the Divisional will be in a position to job work to all the Vishwa
converters and SSI units throughout the year on perennial basis.
MARKET SCENARIO:
1. School Stationery: is divided into Note books and stationery
(a) NOTE BOOKS: The sale of note books is highly seasonal and is confined
only to 3-4 months in a year i.e., between April to July. The note book industry on
an average products note books for about 6 to 7 months in a year.
(b) STATIONERY: This segment unlike notebook segment is highly branded.
The presence of national brands like Camlin, Natraj, Camel, Apsara, luxury,
Reynolds etc., only indicate that this segment is highly organized.
2. Office Stationery: The office stationery segment is the largest compared to school stationery
segment. Accordingly, it is characterized by the presence of various product lines
ranging from flat files to box files, duplicating paper to Xerox paper; stencil paper
to carbon paper, computer stationery to consumable etc.
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LOTTERY DIVISION
The BeginningThe Lottery Scheme in Karnataka was introduced during 1969-70, after obtaining
necessary permission from the Government of India, Ministry of Home Affairs,
New Delhi. The Scheme is governed by the Karnataka State Lottery Rules, 1983.
The Private
Lotteries are controlled by the Karnataka Lotteries and Prize competitions
Control and Tax Act, 1951. The printing of lottery tickets, holding of draws and
distribution of prizes is done by the Director, Karnataka State Lottery. In the
Directorate, the employee strength consists of one Class I, one Class II and 6
officials.
Sole Selling AgencyThe Government owned Company, i.e., Mysore Sales International Limited, has
been appointed as Sole Selling Agents for the sale of Karnataka State Lottery
tickets. MSIL has been authorized to appoint any number of sub-agents for the
sale of tickets within or outside the State. As on date, more than 4,000 sub-
agents through the representatives of MSIL in the Southern States and through
their Branch Offices at New Delhi, Calcutta and Bombay in the Northern, Eastern
and Western regions respectively.
Printing of ticketsThe tickets are printed at Canara Security Press, Manipal that has full security
measures. The tickets are foolproof. Since Government is taking all precautions,
not a single duplicate ticket has come to the notice so far. However, there have
been cases of tampering of tickets, but these are detected promptly during the
course of verification and claims are rejected. The designs and artworks, etc are
prepared by MSIL in consultation with Marketing Consultants &Agencies Limited
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(a Government of Karnataka Undertaking) and sent to the printers, The tickets
printed at Manipal are delivered to MSIL, Bangalore. The printing charges are
borne by the Government.
Holding of DrawsThe draws are held under the supervision of the Managing Committee appointed
by the Government in the presence of the public only. The equipments used by
the RBI for prize Bond Scheme are used for holding the lottery draws. The draws
are held at Bangalore and outside the Capital also. At present 2 Bumper Draws
are conducted outside Bangalore every month. The proposals for the draw
places are given by MSIL, which is approved by the Director, Karnataka State
Lottery. Before holding the draw, MSIL is required to furnish the list of unsold
tickets. The Bumper Prize, I and II Prizes should go to the sold out tickets only.
ResultsThe results are released to the newspapers by MSIL. The results are published
in almost all the important newspapers all over India, the very next day of the
draw. The expenses on publicity and advertisement are borne by MSIL.
Payment of prizesMSIL has been authorized to make payment up to Rs.1000/- on behalf of
government. Prizes above Rs.1000/- are paid by the Directorate. Ninety days
time from the date of draw is allowed to claim the prizes. A grace period of thirty
days is allowed. The Director, State Lottery, can admit the claim if the reason for
the delay is explained satisfactorily. Beyond 4 months in any case, the claim is
not considered and the prize amount stands forfeited to the Government.
Audit of AccountsThe accounts of MSIL and Directorate of Small Savings & State Lottery are
audited by the Accountant General of India every year.
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MSIL has been performing well in the last 25 years and is meeting the targets
fixed by the Government inspite of stiff competition from other State Lotteries.
There is a steady growth in the turnover as well as in the revenue accrued to
Government out of the Karnataka state Lottery Schemes since its inception in
1969. The value of tickets sold during the year 1993-94 was Rs.21.19 crores and
the revenue accrued to Government was Rs.6.89 crores.
At present, the following 7 types of conventional draws are being conducted:
a. Special Bumper Drawsb. Super Bumper Drawsc. Monthly Bumper Drawsd. Nandi Bumper Drawse. Krishna Bumper Drawsf. Kabini Main Drawsg. Kapila Weekly Draws
MSIL has a wide sales network consisting of above 150 main dealers, 4,000 sub-
agents and more than 1,00,000 sellers all over India including physically
handicapped persons, who are directly or indirectly serviced by our field force
regularly. Most of the sub-agents have been in the business with MSIL for more
than two decades. These sub-agents are also encouraged and motivated to take
up sales promotional activities in their respective markets. They are also guided
to cover village shandies and sell tickets through mobile units. The Karnataka
State Lottery draws have been conducted in almost all the District/Taluk
Headquarter Towns in Karnataka. By the fair method of conducting the Draws in
the presence of the public, holding of draws in time, announcing results on the
very next day of the draw and quick disbursement of prizes, it has earned the
reputation as “The Most Trusted Lottery” in the country. Necessary Product/Draw
publicity is also given through Press, Radio, T.V., Hoardings, etc. Display
contests are also conducted in selected towns whenever the draws are held
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outside Bangalore. Publicity materials such as Posters, Streamers, Banners, etc,
are regularly supplied to sub-agents and it is ensured that these materials are
displayed effectively. Karnataka is the only State in the country, which has such a
wide marketing arrangement for the State Lottery Schemes.
Apart from a steady growth in the revenue accrued to Government from the
Karnataka State Lottery Schemes, the Scheme has helped the Government
indirectly in reducing the unemployment problem to some extent.
As a matter of State Policy, the Government has not given permission to run or
sell the tickets of private lotteries in Karnataka. The requests received on this
behalf have been rejected by the Government. The guidelines issued by the
Government of India, even though not mandatory, are broadly followed in
Karnataka.
Making dreams come trueHaving been associated with the marketing of lottery tickets right from inception,
the Division has over 30 years of experience in this highly competitive market. In
an area beset with a large number of private agencies, MSIL has created a
distinct identity for Karnataka State Lottery (KSL) – making it the most trusted
lottery in the country. With regular draws held with public participation, immediate
announcement of results and prompt disbursement of prize money, KSL is
recognized as the best managed lottery in India.
This Division operates through 1,600 accredited dealers and provides direct
employment to more than 32,000 people. Special consideration has been made
to provide mobile sales units to handicapped persons.
Lottery schemes planned by the Division cater to all income groups with tickets
ranging from Rs.2/- to Rs.100/-, making thousands of dreams come true. With
the Government planning to introduce online lotteries, the Division looks forward
to increased business, leading to higher revenue to the State.
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LIQUOR DIVISION
In 1989, when the Government of Karnataka felt the need to streamline the
distribution of liquor in the State, MSIL was the choice as the sole Distributor.
Consolidating its role in the post-liberalization period since 1997, today MSIL
handles distribution for nearly 30 manufactures of popular and leading liquor
brands from Karnataka and other States. And serves as the sole distributor for all
liquor imported into Karnataka from other States. This role is being extended to
imported liquor bottled abroad also.
MSIL’s distribution infrastructure with its own network of over 20 depots spread
across the State covers activities reaching out to wholesale and retail operations.
LIQUOR DISTRIBUTION
In 1989 when the Government of Karnataka felt the need to streamline the
distribution of liquor in the State, MSIL was the choice as the Sole Distributor.
MSIL has consolidated its role in the liquor trade in the post liberalization period
since 1997 and handles distribution for nearly 30 Liquor Manufactures of popular
and leading brands of liquor from Karnataka and other States. MSIL serves as
the sole distributor for all liquor imported from other States into Karnataka which
role is being expanded to imported liquor bottled abroad as well. MSIL provides
distribution infrastructure through its own network of over 20 depots spread all
over the State with the activity also reaching out to wholesale and retail
operations.
MSIL also manufactures and supplies arrack in the two Northern Revenue
Divisions of Karnataka viz., Gulbarga and Belgaum through its six arrack
processing units since 1993. It has arrack processing units situated at Bidar,
Gulbarga, Bellary, Kustagi, M K Hubli and Ugarkhurd. Arrack is processed under
45
the supervision of excise authorities and is supplied to approved arrack
contractors as per the excise permits catering to the requirement of 12 districts of
Nothern Karnataka. As a result it has developed professional expertise and
infrastructure to handle the jobs resulting in increased revenue to the state.
MSIL contributed about Rs. 85 lakhs per year towards the licence fee to the
department of excise in 2000-01 besides payment of excise levies on the sale of
liquor. MSIL supplies liquor as per the permits issued by the department of
excise, Government of Karnataka.
MSIL also has a wholesale depot in Bangalore catering to the requirement of
Star Hotels and Clubs in Bangalore City and it is planned to extend this activity to
Belgaum and Mysore cities. The licence fee payable to the Government of
Karnataka is Rs. 10 lakhs per wholesale depot per year. MSIL also has two retail
outlets in Bangalore located in the premises of Janata Bazaar, KG Road and the
Food World complex in Cunningham Road offering genuine liquor to consumers.
The Indian made liquor achieved its highest turnover of Rs. 20716.11 lakhs
during the year 2001-02 as compared to Rs. 12882.17 lakhs during the previous
year and attains the growth of 60.81% over the previous year. The growth was
inspite of unfriendly market conditions. The liquor division opened a new retail
liquor outlet under a joint venture viz., ‘Not Just Wine & Cheese’ in Bangalore.
This modern outlet offers a wide range of reputed brands to the customers.
Further the Government appointed MSIL as the sole distributor for the import of
liquor bottled abroad. The sale of imported foreign liquor has not commenced
due to high duty structure and other related issues. In order to redress the
situation, the Government and the Excise department were moved to reduce the
duty structure and label registration charges. MSIL is expecting favorable
decision from the Government and expects to generate sufficient business from
the sale of liquor imported bottle abroad during the current year. There are large
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number of suppliers and manufacturers who are ready to do business with MSIL
if the duty structure is reduced by the Government.
Further there was an overall improvement in the performance of arrack division
by way of reduction in the production wastages from 0.054% to 0.030% and
improvement in sachetting LDPE film yield. The installation of additional vats in
the arrack unit was taken up by the company as a priority area in order to
eliminate the payment of penalty.
MSIL started as a liquor distributor in November 1989. In 1989, Karnataka excise
act was passed, which encouraged the distribution of all liquor through MSIL. In
July 1993, it started as a distributor of arrack also. From 30 th June ‘03, liquor
distribution was taken away from MSIL. Government took away IMFL (Indian
made foreign liquor) from 1sr July. Presently, MSIL handles distribution of only
Arrack.
The investment is very huge. Stock handling is around 30-35crores. It operates
throughout the state through 22 depots, wholesalers and retailers. In Bangalore
there are 80-100 whole sellers and there are other whole sellers in all the district
headquarters. Msil gets a fixed benefit of 5% margin on the sales.
Brands:
It deals with the distribution of 20-30 major popular brands.
Eg: Khodays, Peter Scotch, etc.
Msil deals in Whisky, Brandy, Rum, Gin, etc.
To deal in the same MSIL gets various licenses from the excise department like:
Distribution License, Wholesale license, and Retail license.
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Presently, distribution of liquor is taken over by the Karnataka State Beverage
Corporation, which is the sole distributor throughout the state.
List if Distillery-wise Brands Distilleries:
I. Khoday India Limited, Bangalore.
II. Khoday RCA Industries
III. Khoday Breweries Ltd., (Distillery Division)
IV. Khoday Breweries Ltd., (Brewery Division)
1. Peter Scot Malt Whisky
2. Red Knight Whisky
3. Old keg Whisky
4. Khoday No.1 Whisky
5. Hercules Deluxe 3 XRUM
6. Hercules XXX Rum
7. Khoday XXX Rum
8. Bianco White Rum
9. Sovereign Brandy
10. Constatino Brandy
11. Hercules Strong Beer
12. Buntens Lager Beer
13. Royal Challenge Premium Larger Beer
14. Haywards 2000 Extra Strong Beer
15. Haywards 5000 Extra Strong Beer
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16. Haywards Lager Beer
17. Laltoofan Premium Strong Beer
18. Posy Pelican Lager Beer
TOURS & TRAVELS
The main aim of MSIL’s Travels & Tourism department is to promote Karnataka
Tourism, was started in the year 1991. It was basically into Air ticketing and was
tied-up with Indian Airlines. It acts as a sub-agent to the State Government. It
basically caters to the needs of the government officials. It works for both
International and Domestic travel purposes. It is affiliated to the IATA. Presently,
it also takes up the ticket bookings/reservations for KSTDC and IATA.
MSIL’s tours and travels department is also tied-up with ORBIT tours and travels
for International pacakage, and also with other airlines like Indian airlines, Jet
airways, British airlines, etc. It also provides the facilities of Hotels, Resorts and
lodges bookings for the tourists.
Taking people placesAs an IATA approved travel agent, this Division caters to the travel needs of
several Government officials and State Boards and Corporations. In association
with Orbit of Mumbai, MSIL has been promoting package tours to various trade
fairs abroad. The Division is also a Booking Agent for the conducted tours of
ITDC, KSRDC and Jungle Lodges and Resorts Ltd., to take tourists to
enchanting places in Karnataka and beyond.
The division accreditied with IATA recognition and steps are being taken for
booking/issuing international air tickets. The companies Mumbai and New Delhi
branches have been equipped to promote Karnataka Tourism. Travel desks have
been set up at Mysore & Mangalore for increasing tourism related activities. Also,
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as general sales agent of Mumbai M/S Orbit, the division has been promoting
international package tours to trade fairs all over the world.
Tours & Travels Activities:
1. Booking of international/domestic air ticket to Government departments,
officials of public sector undertakings and private institutions.
2. Organizing international business tours, executive tours, trade fairs and
regular tours to various countries-Australia, USA, Europe, Dubai and Srilanka in
association with M/s ORBIT, Bombay based organization.
3. Conducting tours and sight seeing arrangements-Belur, Halebid,
