SPECIMEN

A STUDY ON THE BUSIENSS PRACTICES IN ROOTS INDUSTRIES LIMITED, COIMBATORE

A SUMMER PROJECT REPORT

Submitted by

KARTHICK.S
Register Number: 1391016

in partial fulfilment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION
in
DEPARTMENT OF MANAGEMENT STUDIES

SRI RAMAKRISHNA ENGINEERING COLLEGE
Coimbatore-641 022
MAY-JUNE 2014







SPECIMEN
SRI RAMAKRISHNA ENGINEERING COLLEGE
COIMBATORE-641 022

Department of Management Studies

A SUMMER PROJECT REPORT

MAY-JUNE 2014

This is to certify that the project report entitled
A STUDY ON ORGANIZATION BEHAVIOUR LOTTE CORPORATION LIMITED, CHENNAI
is the bonafide record of project work done by
KARTHICK.S
Register Number: 1391016
of Department of Management Studies during the year 2014-2015


__________________ __________________________
Project Guide Director Management Studies


Submitted for the project Viva-Voce examination held on ______________



_______________ ________________
Internal Examiner External Examiner

DECLARATION



I affirm that the Summer Project work titled A STUDY ON ORGANIZATION BEHAVIOUR LOTTE
CORPORATION LIMITED being submitted in partial fulfillment for the award of MBA, is the original
work carried out by me. It has not formed the part of any other project work submitted for award
of any degree or diploma, either in this or any other University.






(Signature of the Candidate)

Name of the Candidate

Register Number


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










Signature of the Guide,
With Name & Designation













CHAPTER-1













1.1 ORGANIZATION PROFILE

1.1.1 INTRODUCTION:
Confectionery has grown from the ancient delights to a US$21 billion industry in the United
States. The U.S confectionery market leader Hershey Foods Corporation also has grown from a small
chocolate company in the countryside of Pennsylvania to the leader of the North American markets.
In recent years confectionery markets have been growing worldwide. However, Hershey is
experiencing difficulty in taking advantage of global growth. As a result of this concern, Hershey
needs to re-evaluate its strategies in order to seize the present global opportunities
1.1.2 HISTORY OF CONFECTIONERY:
Human's desire for something sweet to at goes back to primitive times and has grown into
$21 billion confectionery industry in the United States. The industry produces universal food
products using ingredients from many parts of the world. From the cocoa tree plantations of tropical
climates, to the cane and beet sugar field, to the confides of the middle west, to the fruit and trees in
many parts of the world, to the roots and herbs area, to the dairy lands in most countries, candy
strongly affects agricultural producers and their markets. Modern machines, skilled workers and
executive, scientific and distributive techniques combine to meet the great demand for the
confectionery products.
The recorded history of confectionery can be traced back to ancient Egyptians, Romans,
Greeks and Chinese. Nevertheless, the confections made at the time would seem strange compared to
modern candies.
Ancient Egyptians made candy from flour and crude starch, sweetened with honey, with
additions of spices and sweets. By combining honey with flour paste and fruits, ancient Romans and
Greeks also enjoyed their confections. Records date back to ancient china show that people made a
variety of hard candy by boiling barely and water to a hard consistency, spinning it into sticks and
then rolling these in toasted sesame seeds. At that time, candy was a luxurious treat that only a few
could afford.
The increased availability of sugar transformed candy from an ancient delight into a
major modern industry producing a relatively low cost food that millions of people could enjoy.
Candy evolved from ancient forms produced in ancient origins to a modern industry centred in
Europe. Venice has acquired sugar through trade with the east. In the 13
th
century, venetians had a
virtual monopoly on the European trade; they were also the first to first to prove sugar-refining
methods. Eventually refineries sprang up in Italy, Germany, Spain, England and Brazil.
The first confectioners in America were the Dutch backers of New Amsterdam, later called
New York. At the beginning of 20
th
century, there were about 1000 manufacturers in the United
States. They employed 27000 workers and the total annual sales were $60,000,000. Equipment until
the 1900s consisted chiefly of kettles, hand cutters, starch boards, shallow trays and hand printers.
The majority of these were quite primitive; the introduction of European candy manufacturing
inventions modernized the candy industry in the United States.
These inventions enabled mass production of candy at a lower cost, improved a sanitary
conditions of candy manufacturing by eliminating the work previously done by hand and increased
production to meet the ever-increasing demand for candy.
World War I fostered mass production of candy and revolutionized the industry. Almost
every candy making process, from the preparation of raw materials to the packaging of the final
product, was transformed to continuous operation. Candy became a nationally recognized food and its
evaluation from a mere delicacy to a world commodity was complete. World War II also fostered
many improvements in the candy flavours and freshness was developed and is still in general use of
advanced stages of development today.
Although it would be impossible to present an exact history, for sake of clarity, this
timeline illustrates the pattern at which the candy industry developed in the United States from 1800's
onward. As you will see, many candies and their founding companies have come and gone but it is
interesting to note that sixty five (65) percent of American candy bars have been around for longer
than sixty (60) years.

1.1.3 COMPANY PROFILE:
Name of the company: Lotte India Corporation limited
Controlling authority: Corporation Office in Chennai.
Registered office: 4/111, Mount Road,
Poonamallee High road,
Manapakkam,
Chennai-600089.
Telephone: 0091-44-32525000
Number of Plants: 3
Year started in Cuddalore: 1914
Shift Timings: I shift - 6.00 am to 2.00 p.m. II shift - 2.00 p.m. to 10.00 p.m. III shift -10.00 p.m. to
6.00am General Shift - 8.30 am to 12.30p.m / 1.30p.m to5.30 pm
Bankers: ICICI/ State Bank of India / Indian Bank
Chief Chairman:Mr. Yong Su Kim
Insurance Company: National Insurance Company
Nature of industry: Confectionary

Head Office :







Factory :


1.1.4 Board of Directors:
Corporate Board Members


Mr.MangKo Noh
Chairman
Mr. Milan Wahi
Managing Director
Mr. KyoHee Kim
Whole Time
Director
Mr. Myung Ki
Min
Director
Mr. D.G.Rajan
Director
Brands:
Gums- Booproo, Spout
Candy- Coffee Cite
Snacks- Choco Pie
QUALITY:
Quality management system ISO 9001:2008 and Environmental management system ISO
14001:2004certified.
FACTORIES:
Factory 1 - Nellikuppam, Cuddalore District, Tamil Nadu - Candies & Toffees line
Factory 2 - Neman Village, Thiruvullur District, Tamil nadu - fully automated Choco Pie & Gum
production line.

1.1.5 MISSION & VISION

MISSION:

We provide work environments where our employees can meet their potential and thrive in an
atmosphere of excellence.
We strive to be the industry standard in service to customers.
We maintain a superior level of integrity in interactions with business partners and associates.
We appreciate our achieved success and we conduct our business as model corporate citizens.
To develop, manufacture and market high quality and innovative products for their consumers
through efficient use of their resources and in partnership with their customers.
To create a fulfilling workplace for their employees built on trust, mutual respect and
appreciation of their diversity.











VISION:

It will enhance its world leadership in confectionary by creating value for people through
delightful and imaginative high quality products.







1.1.6 ORGANIZATION CHART:



1.1.7 SOCIAL RESPONSIBILITY:
Social Contributions
Believing that love grows when shared, LOTTE carries out activities to contribute to society in
various fields.
LOTTE gives care and support in many areas of society to help everyone fulfill their hopes for a
better world. Sincethe 1980s, LOTTE has supported immigrant workers, social welfare facilities, and
the socially disadvantaged alongwith offering scholarships in Korea and abroad by establishing the
LOTTE Scholarship Foundation and LOTTE WelfareFoundation. Moreover, the LOTTE Samdong
Welfare Foundation, founded in 2009, consistently supports neighbors inneed, focusing on local
communities in Ulsan. LOTTE also encourages education donations from all affiliates through
theEducation Donation Bureau, and carries out specialized activities of social contribution with each
affiliate, such as homerepairs, youth scholarships, volunteer activities, the one-company one-village
partnership, a food bank, visits to sickchildren, and fund-raising. Furthermore, LOTTE offers care
and support around the world by supporting scholarshipsand providing equipment in countries like
China and Vietnam, where LOTTE has expanded its markets. LOTTE will continue to offer hope,
care, and support to the disadvantaged and to customers worldwide.
Environmental Management

LOTTE is carrying out various activities to pass down a clean, green environment to the next
generation.

LOTTE is conducting various activities to prevent environmental pollution and restore polluted parts
of the environment in the belief that we must provide a clean, green natural environment for the next
generation. With the goal of being a leading company in global sustainability management by 2018,
LOTTE has established an environmental management system at the group level and set up specific
business policies. The LOTTE Group operates an exclusive department and systematically manages
environmental activities by selecting executives and relevant staffs at each affiliate, to implement
environmental management at the corporate level. LOTTE companies have led environmental
protection activities with various campaigns that can be carried out with clients and partners as well,
focusing on retail affiliates. LOTTE are also achieving low-carbon green growth with a voluntary
green purchase agreement with the Ministry of the Environment. Affiliates such as LOTTE Chemical
are making efforts to protect the environment by continuously developing environmentally-friendly
products. LOTTE will continue to take the initiative in responding to climate change to become a
sustainably green company through continuous green business R&D.












CHAPTER-2









2.0 MICRO & MACRO ANALYSIS

2.1 International Scenario
Background
LOTTE Confectionery is No.1 Confectionery Company that holds multiple No1 selling
products of gum, candy, chocolate and biscuit segments in Korea domestic market. LOTTE
Confectionery stands in unrivaled position by Xylitol and occupies strong position in chocolate by
Ghana chocolate and Dream Cacao.
Orion Confectionery international sale exceeded domestic sale in 2009.
Orion Confectionery ranks 1st in international sale among Korean confectionery companies
and possesses enormous growth rate at international market, because Orion Confectionery releases
gentrified domestic products to international market.
Domestic confectionery market is Red Ocean, recently revenue has been decreased. Domestic
confectionery market is saturated in fact (Daily. 2011.01.11). Even Foreign confectionery companies
are joining and intensifying competition in Korea.
The scale and profitability of international market are larger and higher than domestic market.
Thus, Korean Major Food companies decided to enter oversea markets. Among them, Orion
Confectionery ranks at 1st in international confectionery business.
Current strategy of LOTTE Confectionery
1) Me Too strategy
Me Too' strategy is a business strategy that following company emulates a market leading
company's strategy. It is called as Market follower strategy' or Imitation strategy'. With this
strategy, a follower can gain many advantages. The market leader often bears the huge expenses of
developing new products and markets, expanding distribution, and education the market. By contrast,
as with challengers, the market follower can learn from the leader's experience.
LOTTE Confectionery is a typical company to uses me too strategies' for products. There are many
cases that LOTTE Conf. emulates competitor's successful products.
2) M&A Strategy
LOTTE confectionery has invested 500 billion KRW to overseas market by 2010. LOTTE
focused VRICs (Vietnam, Russia, India, and China) with acquisition local companies and factory
construction. Sales result was under than expectation. LOTTE oversea sales consistently increased
and last year recorded 500 billion KRW.
They have a 650 billion KRW sales target this year.
LOTTE sped up their global business as entering China, India, Vietnam, Belgium, Russia and
Pakistan (6th largest population).
India:
LOTTE acquired Parry's in May 2004. It was a sole invest, not joint venture. LOTTE firstly
acquired 60.39% stock and gained the rest later. Stock acquisition cost was about 23.2 Bill KRW.
Parrys Confectionery Ltd, established in 1914, was one of the representative confectionery
companies in India. Annual sales are over 22 Bill KRW. By acquiring Parry's, LOTTE could
preoccupy India confectionery market as well as secured the price competitiveness making India as
production base for exporting to Africa and Middle East area.
China
LOTTE confectionery established LOTTE China foods limited liability company in Beijing,
China in 1994 and in 2005 it acquired Qingdao foods limited liability company which renamed
later LOTTE Qingdao foods limited liability company. In 2006 it also acquired Shanghai foods
limited liability company and renamed it as LOTTE Shanghai foods limited liability company.
The revenue in China in 2005 was about 90 billion Korean Won and slowly increased to 100
billion KRW in 2006, as the chocolate product which is main product of LOTTE Shanghai foods
LLC hit its strides in 2006, the revenue jumped up to 140 billion KRW in 2008.
LOTTE China foods limited liability company- Choco Pie, Gum Production
LOTTE Confectionery's expansion into the Chinese Market was especially remarkable. Even
through the heated competition of Global Food Industries, LOTTE was able to capture the Chinese
Flavor.
LOTTE Shanghai Foods Limited Liability Company- Production of raw liquid of chocolate.
In 2006 LOTTE Shanghai Foods Limited Liability Company' was solely acquired by LOTTE
Confectionery, established in 1993. This factory was mainly producing the raw liquid of chocolate. In
January of 2007, LOTTE Confectionery and Hershey's signed a strategic alliance to manufacture and
sell the main products from this factory. And from October 2007, LOTTE Confectionery started to
manufacture and supply its popular products, Ghana and Dream CaCao into all over the Chinese
market.


Vietnam
In 2007, LOTTE acquired 30% stocks of BBiCa which was the 2nd largest confectionery company
with annual sales 20Bil KRW in Vietnam. Using BBiCa's sales network over the country, LOTTE
expected to expand market presence in Vietnam, the population was about 84 Mil in 2007.
Pakistan
LOTTE Confectionery acquired Pakistan Kolson company's (K. S. Sulemanji Esmailji & Sons
(Private) Limited) stock 69.45% (20 Billion KRW) and became the biggest stockholder. Through this
acquisition, LOTTE could begin a nationwide business in Pakistan.
Pakistan confectionery market size was the 1/3 of Korean's. However it was expected to grow 10%
each year, since the population under the age of 14 was 37%. (Source: LOTTE Confectionary Internal
Data)
Kolson was founded in 1942, one of the leading company with asset 53.2 billion KRW and annual
sales were about 33 billion KRW. Kolson had the 2nd largest market share (29%) in snack, 4th(6%)
in biscuit, the 1st(44%) in pasta market in 2010.
2.2 Environmental Factors:
Macro environment
1. Demographics
a) Age
Briefly, we can say that Lotte chocolates are popular among every age group. This is because its
delicious, nutritious, hygienic and the best confectionary product.
b) Socioeconomic status
Previously, people used to prefer Cadbury. The reason was that it used to be cheap, available in
large quantities and worth a compromise on quality for price. To target such people, Lotte came
up with a 10 rupees economical Lotte Choco pie which is within the affordability of every income
group of Indian. With this introduction low income people switched to Lotte choco pie as it
provided them with high quality, nutrition, and delicacy at a very reasonable price.
c) Location of residence
Lotte choco pie is available everywhere right now. Where education and awareness level is
relatively high and people willingly go for the hygienic, nutritious and high quality products
irrespective of their prices.
2. Economics Conditions
a) Operations Restrictions
b) Labor Policies
c) Domestic Economic Problems

3. Social and Cultural Forces
First of all, we have to define what society is. Society is all about people in general, living in
communities. Then we have to know what culture is. Culture is basically the customs, beliefs,
way of life, and social organization of a particular country or group.
Now we have to see how and in what ways the cultural and social forces affect the marketing of
our chosen organization, Lotte in India. The first aspect that will be brought under
consideration is:
Family
In a country like India , family plays a major role in the everyday life of an individual. .
Besides having it as an accessory of food, simple chocolate is also used as a raw material for
cooking, which is again a part of our tradition, our culture. Lotte provides the Indian families with
all that they require purity, taste, hygiene everything in the lotte products.
4. Political and Legal Forces
Political and legal forces also influence every companys conduct. Political and legal forces on
marketing would be categorized into:
a) Trade policy
Taxes (state and local taxes). . Increase in vans for transportation is thus an uncontrollable factor
and demands tax payments.
b) Quality Control
"We at Lotte India Corporation Limited, endeavor to provide our products with appropriate
quality at right time and at an affordable cost."
c) Open/close economy:
Its an open economy facilitating foreign investments and allowing free trade.
5. Technology
Lotte uses the term "clean technologies" to describe its working environment. This term is defined
as "manufacturing processes or product technologies that reduce pollution or waste, energy use, or
material use in comparison to the technologies that they replace."
Microenvironment
1. Market
In marketing, the term market refers to the group of consumers or organizations that is interested
in the product, has the resources to purchase the product, and is permitted by the law and other
regulations to acquire the product.
In marketing any given good or service, three specific factors need to be considered:
People or organizations with needs,
Their purchasing power, and
Their buying behavior
2. Suppliers
The people or firms that supply the goods or services required by a producer to make what it sells
and also the firms that provide the merchandise, a wholesaler or retailer resells are the suppliers
and are a vital part of a firms marketing success.
3. Marketing Intermediaries
Marketing intermediaries are independent business organizations that directly aid in the flow of goods and
services between a marketing organization and its markets.
There are two types of intermediaries:
a) Middlemen, wholesalers and retailers
As for Lotte confectionary wholesalers are given license (i.e. those with best chillers).However
middlemen are less involved because it mostly done by their self owned departments.
b) Channels of distribution
They operate between a company and its markets and between a company and its suppliers. These
are the facilitating organizations that provide services such as transportation, warehousing, and
financing that are needed to complete exchanges between buyers and sellers.
2.3 SWOT ANALYSIS:
STRENGTH:
1. Good brand position and quality which is consumer favorites.
2. Strong partnership with retailers.
3. Stores are available in almost every market.
4. The shareholders have limited responsibility with regard to the debts or trials against the
corporation.
5. Corporations can obtain more capital through the sale of their actions.
6. A corporation can deduct the cost of benefits (benefits package) that offers to its managers and
employees.

WEAKNESS:
1. No varieties other than chocolate candy like waffer, milk drinks has been introduced yet.
2. Packing is not attractive
3. The process of integration requires more time and money to compare to other models of
organization.
4. The corporations are supervised and subject to rules of entities: federal, state and some local, and
therefore might have to comply with many more requirements and administrative documents to
demonstrate compliance.
OPPORTUNITIES:
1. Increase personal relation in village.
2. Increase product range as-Toffees-Bars.
3. As the harbor is near, can export the products by increase quality and range to the small continue.
THREATS:
1. Highly qualified employees in big brand.
2. Huge investment on advertisement by other brands.





















CHAPTER-3









3.1 HUMAN RESOURCE

3.1.1 Objectives of Human Resource Department
To define the process to ensure adequate control over hr policies /procedure document in
computerized mode.
Procedure
Distribution list for the hr manual is prepare maintained and updated by the corporate administration
executive.
Policies and procedure are identified with latest revision and date in the distribution list.
3.1.2 Recruitment
RIGHT PERSON IN THE RIGHT JOB
It is the policy of the company to employ always the best suited person for all its man power needs.
The process selection will therefore be on the basis of merit, ability, competence,experience and
potential.
Sources of Recruitment
Candidates already placed on wait list following an interview
Internal candidates
Existing data bank
Approved recruitment consultants
News paper advertisement
Internet based recruitment
Campus interview
Employee reference.
RECRUITMENT PROCESS:
Source of manpower
Short list of application
Interview call letters
Interview
Issue of offer letter and pre employment medical examination
Reference check
Withdrawal of offer appointment
Traveling allowance for candidate
Joining expense
Issue of appointment letter
General guidelines
3.1.3 Performance Appraisal
Process
Assessment of performance should be based on the performance of the executive during
period to which the appraisal reports relates to.
Each executive will summit his or her Self-appraisal as per prescribed to the initiating officer.
Assessment of performance of each executive is to be made by the initiating officer,
functional reporting officer and reviewing officer.
Methods
In the concern each functional head have to summarize the appraisal review and prepare
the rating recommendations of each individual executive under the HR control on a five scale rating
system.
Exceptional contribution (A)
This individual has made an exceptional contribution to the company in the last year.
She/he has gone beyond the define role and set standards of excellence in the company.
Significant contribution (B)
This individual has very significantly contributed to the company in the last year. She/he
is very focused on his targets and strives very hard to achieve them. She/he has a good people
orientation and is also oriented towards self-learning and development.
Good contribution(c)
She/he meets acceptable standards of performance within the company and also shows
potential for achieving higher standards.
Partial contribution (D)
If the employees Performance has not meet the acceptable standard s of the company.
No contribution (E)
Employee is not focused on the objectives and in fact has a negative impact on the
companys objective.
3.1.4 Welfare Benefits:
1. Long service award
2. Annual medical check up
3. Hospitalization expenses for dependent parents
4. Group personal accident policy
5. Marriage Gift
6. Funeral expenses & Death Relief
Long Service Award
To recognize and appreciate management staff who have served in the company for 20
, 25, 30 and 35 years.
Complete year of service Award
20
25
30
35

150 grams of silver plate
250 grams of silver plate
375 grams of silver plate
500 grams of silver plate

Annual medical check up
The facility of a comprehensive medical checkup by a competent nominated hospital or
diagnostic center to all management staff and their spouse.
A. Below 40 years once in a 2 years.
B. 40 years and above every year.
Tests
Hemoglobin
P.C.V
R.B.C
MHV, MCV, MCH
Total W.B.C
Platelet count
Differential count
E.S.R
Blood grouping / Rh typing
Complete urine Analysis
E.C.G (Resting)
Hospitalization expenses for dependent parents
Employees who have a need to avail of this benefit to cover hospitalization expenditure for
dependent parents, shall apply to corporate HR head with the bills, records etc.
The amount extended is an interest free loan which shall be recovered in 36 months ins talents.
Group personal accident policy
Medical expenses incurred consequently to the injury/accident will be reimbursed under
personal accident policy.

Description of injury Extent of injury
1. Death only
2. Loss of two limb, two eyes or one limb
and one eye
3. Loss of two limb, two eyes
4. Permanent total disablement
100% of CSI
100% of CSI

50% of CSI
100% of CSI


Marriage gift
The company shall buy a gift cheque for Rs. 1001/- and present it to the employee on the
day of his/her marriage.
Terminal benefit
Provident fund
Superannuation
Gratuity
Retrial benefits
Provident fund
The various benefits admissible under the provident fund are of the following type:
a) Non fundable loan towards Housing, Sickness, Marriage/Education, Natural calamities, etc..,
b) Lump sum payment in full and final settlement of the provident fund account.

Superannuation
The Superannuation scheme covers all executives borne on the probationary confirmed rolls
of the company.
Retirement on normal pension date
Retirement after normal pension date
Retirement before normal pension date
Death while in service
Resignation/cessation of service
Gratuity
Gratuity is payable all executives who join in the probationary/confirmed role of the
company and have completed five years of service under normal circumstances or below five year ink
the case of death or retirement due to physical /mental infirmities.
Retirement
This policy shall apply to all employees (excluding work men retiring from the service of
the company)
a) Retirement souvenir
b) Exgratia
c) Leave encashment

3.1.5 LEAVE
Types of leave
Earned leave
Casual leave
Sick leave
Maternity leave
Advance leave
Earned leave
Earned leave of thirty days shall be credited to management staff on the 1
st
January of each
year.

Casual leave
Management staff located in units that work more than five days a week shall entitled to
five days casual leave per calendar year
Casual leave cannot be availed for more than two days at a time and cannot be combined
any other type o fl leave
Sick leave
Management staff shall be entitled to seven days sick leave for every calendar year of
service.
Advance leave
Management staff have no leave to their credit they may be granted leave in advance in
exceptional circumstances.
Maternity leave
Maternity leave shall be granted only on written request of the employee supported by a
certificate from the attending doctor.
3.1.6 EXIT INTERVIEW
Exit interview is to ascertain the fact that causes the separation of the employee from the
organization and to frame suitable retention strategy.










3.2 MARKETING MANAGEMENT

3.2.1 Product/Service:

A price competitive edge while the distribution strategies will ensure that the products reach
the final consumers.


3.2.2 Product Segmenting, Targeting and
Positioning:-



SEGMENT
People looking to have
Gum
Candy and
Snacks
TARGET
Lower
Middle and
Upper middle class
POSITIONING
Positioned as a brand
Tasty Snacks
Chocolate












3.2.3 Marketing Mix

Products:


Product description

This marketing strategy will be offering a particular product in the market. It is specifically
offering white chocolate in the Indian market. The main brand that is to be introduced in the market
is Lotte choco pie which is mainly targeted for the youth and childrens. The product will be offered
in 56 gm packages, 168 gm, 336 gm and 504 gm packages. The co-brands are lacto king, lotte
clairs, fruitz , coffee bite, coconut punch & caramilk. These will be the most important sized
packages that the product will be sold in. it will be sold in whole sale and retail.

Pricing strategies

Since the product is being offered for the first time in the market, the company will use price
penetration strategy where it will use low prices strategy to penetrate the market. However this will
be combined with cost plus pricing since it will have to operate at a profit market. However the
initial price set up will be based on the low prices to penetrate the market. The product lotte choco
pie will be offered at Rupee 20 per 56 gm size bar and the products from the price of 0.50 Paise and
Rupee 1.00.

Place (Physical Distribution)

























LOCATION:
Companies now days are shifting base to lower cost of production which make sense .Production
base in cities or metros have become non-viable as cost of living , cost of raw material ,overhead cost
and transportation cost have gone above the roof . Companies are moving to low cost areas like
Centralized Distribution
Centre
North zone
Delhi
Ghaziabad
Lucknow
Ambala
Dehradun
Jammu
Parwanoo
Zirakhpur
Jaipur
East Zone
Kolkata
Siliguri
Guwahathi
Patna
Ranchi
Cuttack

West Zone
Bhiwandi
Nagpur
Pune
Goa
Indore
Ahmadabad
South Zone
Chennai
Trichy
Salem
Hyderabad
Vijayawada
Palaghat
Dharwad
Bangalore
CHINA,INDIA,UKRAINE, IRELAND, VIETNAM ETC... locallycompanies have shut operation in
DELHI , MUMBAI , CHENNAI , KOLKATA and moved to areaslike UTTARAKAND ,
JHARKHAND , JAIPUR , BADI , etc..
Business locations:
Zonal offices: Delhi, Kolkata, Mumbai, Chennai
Stock offices: Jammu, Jaipur, Dehradun, Ghaziabad, Kanpur, Patna, Ranchi, Siliguri, Cuttack,
Nagpur, Goa,Chennai, Bangalore, Dharwad, Lucknow, Trichy, Guwahati, Ahmadabad, Indore,
Palghat, Coimbatore.
Sub-contracting units: Nasik, Sangli, Chennai, Kollenchery, kanji ode.
Promotion:
Advertisement
Presentation and promotion of ideas, goods, or services by an identified
sponsor. Advertisement will be provided on TVs, Billboards, catalogs, posters, banner ads.

Personal Selling
A process of helping and persuading one or more prospects to purchase a
good or service or to act on any idea through the use of an oral presentation. Sales
presentations, sales meetings, sales training samples. These are the personal selling is been
done in lotte.

Personal Selling
Paid intimate stimulation of supply for a product, service, or business unit by
planting significant news about it or a favorable presentation of it in the media.

3.2.4 Distribution Channel:-
Manufactures normally use intermediaries for talking their products to the users. The
intermediaries bear a variety of names. All such intermediaries constitute the marketing channel. The
manufacturers branch offices, depots, warehouses and showrooms too form a part of the marketing
channel. Where institutional channels like chain stores, super markets, etc.are used by the firm, they
too form part of the marketing channel .where institutional channels like chain stores, super
markets,etc. are used by the firm, they too form part of the marketing channel of the firm. Channels
play a pivotal role in marketing; they perform a number of vital distribution functions.
Their importance emirates form the functions performed by them. Firms rely on the marketing
channels for generating customers satisfaction and for achieving differentiation over competitors.
Channels are thus a vital source of competitive advantages for the firm.



Type of marketing intermediaries:-

C&F agents (CFAs)
Stockiest/distributor/whole seller
Semi-whole seller
Retailer/dealer

In coverage Lotte being covered not all over Orissa, it covers seventy percent of total state. the
company target to cover the total state very soon. Instead of all these company is on growing stage.
Total sale is comparatively appreciative.

CFA:-
LOTTE has only and one CFA who supplies to all the super stockiest and stockiest located in
main cities.

Super
Lotte has super stockiest who are supplying stocks to the distributers for the rest area.
Distributers Stockiest
LOTTE has direct distributers and sub distributers by the help of this, LOTTE can distribute its products
very easily in all over the covered area. And it has modern trade, by which it reach at the customer.
Customers:-
Customers will buy the products from retailers, and whole sellers.
Distribution chart




Manufacture CFA
Whole
sellers
Retailers Customers
3.2.5 Competitors List:
Lotte competes with other packaged foods companies as well as store brands from retailers
Lottes major competitors are:
COMPANY FOUNDED IN BRAND PORTFOLIO
(confectionery products)
Nestle 1860s Kit Kat, Smarties, Wonka
Ferrero 1940s Rocher, Raffaello, Kinder, Tic Tac, Mon
Cheri, Nutella
Mars 1911 Bounty, Galaxy, Mars, Snickers, Milky
Way, Wrigleys, M&Ms etc
Amul 1945 Milk chocolate, Fruit & Nut chocolate
Hersheys 1894 Hersheys milk chocolate, Kisses, Pot of
gold, Milk duds, Reeses, Icebreakers etc
Perfetti Van
Melle
2001, when
Perfetti and Van
melle merged
Alpenliebe, Chlormint, Centerfresh,
Happydent, Mentos
ITC 2002(confectionery
segment)
Minto and Candyman
Parle 1929 Melody, mango bite, poppins, kismi
toffee, mazelo, xhale, clair, golgappa,
parlelites, orange candy
Cadbury 1948 (Indian
Market)
Dairy Milk, Dairy Milk fruit N nut,
Dairy Milk Shots, Dairy Milk Roasted
Almond, Dairy Milk Silk

Companys Competitive Advantage



Competitive Advantages (current)


Innovation is at the heart of creating brands people love. Lotte investment in technology of
taste, flavor, packaging, process development and nutrition has never been greater.

Scale of production
Distribution channel
Loyal base of customers



Competitive Advantages (to be developed)

Segmentation on the basis of income of the people in terms of branding
Packaging
Availability in the rural areas


3.2.6 Market Strategy:-
Segmentation:
Market segmentation is one of the steps that go into defining and targeting specific markets. It is the
process of dividing a market into a distinct group of buyers that require different products or marketing mixes.
Demographical bases (age, life cycle, occupation, income)
Geographical bases (states, regions, countries)
Behavior bases (product knowledge, usage, brand loyalty)

Target Marketing:
Target Marketing involves concentrating your marketing efforts on one or a few key segments.
Target marketing can be the key to a businesss success.
The beauty of target marketing is that it makes the promotion, pricing and distribution of your
products and/or services easier and more cost-effective.
Cost Leadership (Undifferentiated or Mass) Strategy
Differentiation Strategy
Segmentation Strategy
Positioning:
Positioning can be defined as how your target market defines you in relation to your
competitors. A good position makes the product unique and is considered a benefit by the target
market.
Product should be unique.
Product has to be beneficial
Affordable price
Quality packaging

3.2.7 CRM in customer contact centers
CRM systems are customer relationship management platforms. It is a platform for
progressing the payments and other related query management.























3.3 Financial Department

Financial Management is a operational activity of business i.e., responsibility for obtaining
the fund & effective utilizing the fund for effective operation that is called financial management

Definition Of Financial Statement Analysis:
The process of reviewing and evaluating a company's financial statements (such as the
balance sheet or profit and loss statement), thereby gaining an understanding of the financial health of
the company and enabling more effective decision making. Financial statements record financial data;
however, this information must be evaluated through financial statement analysis to become more
useful to investors, shareholders, managers and other interested parties.

Finance Department Chart of Lotte India Corporation Limited















3.3.1 Book of accounts

The financial statements are prepared and presented in accordance with Indian Generally
Accepted Accounting Principles (GAAP) under historical cost convention on accrual basis. GAAP
comprises of accounting standards notified by the Central Government of India under Section
211(3C) of the Companies Act, 1956, other pronouncements of the Institute of Chartered Accountants
of India and the provision of Companies Act, 1956, to the extent applicable. The accounting policies
have been uniformly applied by the Company and are consistent with those used in the previous year.

3.3.2 Share Price of the company:
95,60,021 equity shares of Rs.10/- each
94, 79,788 (99.16%) equity shares have been dematerialized as on December 31, 2013.


HEAD FINANCE
FINANCE MANAGER
EXECUTIVE
Capital Budgeting:

Capital budgeting is the technique of making decision for investment in long term proposals.
It is a process of deciding whether or not to invest the funds in a particular proposal, the benefit of
which will be available over a period of time longer than one year.
.
3.3.3 Capital Structure:





3.3.4 Deprecation Method:
Depreciation is provided on the straight line method at the rates of depreciation prescribed
in Schedule XIV to the Companies Act, 1956. If the managements estimate of the useful life of a
tangible fixed asset at the time of acquisition of the asset or of the remaining useful life on a
subsequent review is shorter than that envisaged in the aforesaid Schedule, depreciation is provided at
a higher rate based on the managements estimate of the useful life / remaining useful life. Pursuant
to this policy, based on the estimated useful life of the assets, depreciation is provided in respect of
certain assets at the rates which are higher than the corresponding rates prescribed in Schedule XIV to
the Companies Act, 1956. The
Estimated useful life of various tangible fixed assets is as under:

Description Estimated useful life (in years)
Building 28
Plant and machinery 5 - 13
Computer and accessories 5
Furnitures and fixtures 5 - 10
Office equipments 5 - 10
Vehicles 5
All tangible fixed assets individually costing Rs. 5,000 or less are fully depreciated in the
year of purchase.
Leasehold improvements are amortized on a straight line basis over the useful remaining
useful life of the asset or the lease period whichever is lower.
Type of Capital
Investment
Capital Investment in
Physical Assets
Land , Building,
Machinery, Vehicle,
Computer
Capital investment in
monetory Assets

Cash, Bank.
Capital investment in Intangible
Assets
R&D, T&D,
MKT Development

3.3.5 Financial Statements

Particulars Dec '12 Dec '11 Dec '10 Mar '10 Mar '09
Investment Valuation Ratios
Face Value 10.00 10.00 10.00 10.00 10.00
Dividend Per Share -- -- -- -- --
Operating Profit Per Share (Rs) 21.77 21.09 9.71 23.95 15.46
Net Operating Profit Per Share (Rs) 313.26 285.16 172.94 500.81 453.59
Free Reserves Per Share (Rs) -- -- -- -- 84.03
Bonus in Equity Capital 1.62 1.62 1.62 4.10 4.10



Profitability Ratios

Operating Profit Margin (%) 6.95 7.39 5.61 4.78 3.40
Profit Before Interest And Tax Margin
(%)
1.76 1.09 -0.14 2.31 0.30
Gross Profit Margin (%) 1.78 1.10 -0.14 2.32 0.30
Cash Profit Margin (%) 7.31 7.97 2.01 3.78 1.84
Adjusted Cash Margin (%) 7.31 7.97 2.01 3.78 1.84
Net Profit Margin (%) 2.20 1.75 -3.71 1.34 -1.24
Adjusted Net Profit Margin (%) 2.20 1.75 -3.71 1.34 -1.24
Return On Capital Employed (%) 1.86 1.39 0.15 12.16 2.00
Return On Net Worth (%) 1.47 1.08 -1.40 5.96 -5.33
Adjusted Return on Net Worth (%) 1.47 1.08 -1.40 5.96 -5.35
Return on Assets Excluding
Revaluations
472.74 465.77 460.70 113.08 106.34
Return on Assets Including Revaluations 472.74 465.77 460.70 113.08 106.34
Return on Long Term Funds(%) 1.86 1.39 0.15 12.16 2.01










Liquidity And Solvency Ratios

Current Ratio 1.67 2.00 1.99 0.81 0.72
Quick Ratio 1.17 1.20 1.25 0.38 0.30
Debt Equity Ratio -- -- -- -- 0.01
Long Term Debt Equity Ratio -- -- -- -- --



Debt Coverage Ratios

Interest Cover 183.80 82.68 5.99 29.38 0.24
Total Debt to Owners Fund -- -- -- -- 0.01
Financial Charges Coverage Ratio 521.63 310.34 90.37 55.65 1.73
Financial Charges Coverage Ratio Post
Tax

484.33 293.01 30.67 41.66 1.89


Management Efficiency Ratios

Inventory Turnover Ratio 9.59 7.46 6.02 9.45 9.53
Debtors Turnover Ratio 34.06 44.17 39.32 51.72 49.72
Investments Turnover Ratio 9.59 7.46 6.02 9.45 9.53
Fixed Assets Turnover Ratio 0.62 0.57 0.34 1.48 1.36
Total Assets Turnover Ratio 0.67 0.61 0.38 4.43 4.41
Asset Turnover Ratio 0.67 0.62 0.69 0.79 2.90
Average Raw Material Holding -- -- -- -- 29.76
Average Finished Goods Held -- -- -- -- 29.77
Number of Days In Working Capital 53.73 63.55 63.56 -22.64 -38.10


Profit & Loss Account Ratios

Material Cost Composition 53.87 58.33 57.57 67.13 61.75
Imported Composition of Raw Materials
Consumed
0.71 1.25 9.26 0.60 0.77
Selling Distribution Cost Composition 5.84 5.75 6.59 -- 17.19
Expenses as Composition of Total Sales 1.57 1.32 0.69 0.91 0.68



Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit -- -- -- -- --
Dividend Payout Ratio Cash Profit -- -- -- -- --
Earning Retention Ratio 100.00 100.00 -- 100.00 --
Cash Earning Retention Ratio 100.00 100.00 100.00 100.00 100.00
Adjusted Cash Flow Times -- -- -- -- 0.11


Dec '12 Dec '11 Dec '10 Mar '10 Mar '09
Earnings Per Share 6.97 5.07 -6.46 6.74 -5.68
Book Value 472.74 465.77 460.70 113.08 106.34



Balance Sheet of the Company:

Particulars Dec
'12
Dec '11 Dec '10 Mar '10 Mar '09
Sources Of Funds
Total Share Capital 9.56 9.56 9.56 3.77 3.77
Equity Share Capital 9.56 9.56 9.56 3.77 3.77
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 442.38 435.72 430.87 38.88 36.33
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Net worth 451.94 445.28 440.43 42.65 40.10
Secured Loans 0.00 0.00 0.00 0.00 0.00
Unsecured Loans 0.00 0.00 0.00 0.00 0.34
Total Debt 0.00 0.00 0.00 0.00 0.34
Total Liabilities 451.94 445.28 440.43 42.65 40.44

Particulars Dec
'12
Dec '11 Dec '10 Mar '10 Mar '09
Application Of Funds
Gross Block 481.38 479.43 483.90 127.67 127.46
Less: Accum. Depreciation 106.16 90.70 82.65 73.15 69.68
Net Block 375.22 388.73 401.25 54.52 57.78
Capital Work in Progress 32.03 8.42 0.27 0.01 0.77
Investments 0.00 0.00 0.00 0.00 0.00
Inventories 33.30 38.69 28.90 20.84 20.10
Sundry Debtors 10.07 7.51 4.83 3.58 3.73
Cash and Bank Balance 43.25 37.46 30.58 15.10 6.17
Total Current Assets 86.62 83.66 64.31 39.52 30.00
Loans and Advances 24.82 12.48 13.95 11.81 18.25
Fixed Deposits 0.00 0.00 0.00 0.00 0.07
Total CA, Loans & Advances 111.44 96.14 78.26 51.33 48.32
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 55.71 47.50 38.62 62.33 60.45
Provisions 11.04 0.52 0.73 0.88 5.98
Total CL & Provisions 66.75 48.02 39.35 63.21 66.43
Net Current Assets 44.69 48.12 38.91 -11.88 -18.11
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 451.94 445.27 440.43 42.65 40.44
Contingent Liabilities 5.43 23.68 151,420.00 2.22 1.51
Book Value (Rs) 472.74 465.77 460.70 113.08 106.34

Capital Structure:
Lotte India Corporation
Capital Structure
Period Instrument --- CAPITAL (Rs. cr) --- - P A I D U P -
From To Authorized Issued Shares (nos) Face Value Capital
2012 2012 Equity Share 370 9.56 9560021 10 9.56
2011 2011 Equity Share 370 9.56 9560021 10 9.56
2010 2010 Equity Share 370 9.56 9560021 10 9.56
2009 2010 Equity Share 10 3.77 3771289 10 3.77
2008 2009 Equity Share 10 3.77 3771289 10 3.77


Profit & Loss of the Organization:
Lotte India Corporation
Particulars Dec
'12
Dec '11 Dec '10 Mar '10 Mar '09
Income
Sales Turnover 319.54 288.74 173.86 197.03 183.52
Excise Duty 20.06 16.12 8.53 8.16 12.46
Net Sales 299.48 272.62 165.33 188.87 171.06
Other Income 3.08 3.21 0.92 0.80 0.28
Stock Adjustments -3.60 6.90 3.01 0.74 -1.50
Total Income 298.96 282.73 169.26 190.41 169.84
Expenditure
Raw Materials 161.35 159.03 95.18 126.80 105.65
Power & Fuel Cost 9.98 10.44 6.22 4.11 4.20
Employee Cost 20.80 18.75 12.27 15.30 14.47
Other Manufacturing Expenses 1.86 13.54 8.51 1.21 1.27
Selling and Admin Expenses 17.50 15.68 10.91 0.00 36.46
Miscellaneous Expenses 63.57 41.91 25.98 33.16 1.68
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Total Expenses 275.06 259.35 159.07 180.58 163.73

Particulars Dec '12 Dec '11 Dec '10 Mar '10 Mar '09
Operating Profit 20.82 20.17 9.27 9.03 5.83
PBDIT 23.90 23.38 10.19 9.83 6.11
Interest 0.05 0.08 0.11 0.18 3.54
PBDT 23.85 23.30 10.08 9.65 2.57
Depreciation 15.47 17.14 9.53 4.64 5.30
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 8.38 6.16 0.55 5.01 -2.73
Extra-ordinary items 0.00 0.00 0.00 0.00 0.00
PBT (Post Extra-ord Items) 8.38 6.16 0.55 5.01 -2.73
Tax 1.71 1.31 6.74 2.47 -0.58
Reported Net Profit 6.66 4.85 -6.18 2.54 -2.14
Total Value Addition 113.71 100.32 63.88 53.77 58.08
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 0.00 0.00 0.00 0.00 0.00
Corporate Dividend Tax 0.00 0.00 0.00 0.00 0.00
Per share data (annualised)


Taxation

a) Minimum alternate Tax: not applicable for domestic export
b) Registration of Central Excise
c) Registration of Sales Tax
d) Registration of The Income Tax Act 1961 (PAN No.)













Shares in issue (lakhs) 95.60 95.60 95.60 37.71 37.71
Earning Per Share (Rs) 6.97 5.07 -6.46 6.74 -5.68
Equity Dividend (%) 0.00 0.00 0.00 0.00 0.00
Book Value (Rs) 472.74 465.77 460.70 113.08 106.34

3.4 Production and Operation:
3.4.1 Manufacturing Facility of Lotte:
A state of the art manufacturing plant is at Nellikuppam. LOTTE India's manufacturing facility is
located at Nellikuppam, South Arcot District, Tamil Nadu, which is in the southern part of India. The
factory is housed in Buildings constructed in the British era; but refurnished inside to accommodate
the state of the art equipments.
Apart from having the own factory at Nellikuppam, Lotte India also has dedicated Sub-
Contracting in units at Kollenchery, Kozhikode in Kerala, Sangli in Maharashtra, Nemam and
Sholavaram in Chennai. All the products are manufactured under the most hygienic conditions. Great
care is exercised in the selection and quality control of Raw Materials and packing materials. Rigid
quality controls are implemented at every stage of production process. Every batch of production is
checked thoroughly using modern equipments.
The factory at Nellikuppam has been awarded with ISO 14001:1996 and HACCP awards by BVQI.


3.4.2 Quality policy
HACCP:
Food Safety Management System -
Hazard Analysis Critical Control Point (HACCP) is a preventive system of food control. It
involves examining and analyzing every stage of a food-related operation to identify and asses
hazards; determining the 'critical control points' at which action is required to control the identified
hazards; establishing the critical limits that must be met at, and procedures to monitor, each critical
control point; establishing corrective procedures when a deviation is identified by monitoring;
documentation of the HACCP plan and verification procedures to establish that it is working
correctly.


HACCP Policy
We are committed to provide safe products to our customers at all times, we shall strive to
achieve this through,
Practicing Systems & Procedures as per HACCP requirements.
Implement Control measures to ensure that the products are free from physical, Chemical and
Microbiological hazards.
Continuous improvements through training activities.
Adherence to Good Manufacturing practices and Good Hygiene Practices.

Quality Policy
We at Lotte India Corporation Limited, Endeavour to provide our products with appropriate
quality at right time and at an affordable cost
Towards this we would -
Continually improve our products and processes.
Educate, train and develop all our employees for enhancing their skills, knowledge and quality
of work life.
Provide safe products to our customers.
Adhere to good manufacturing practices.

ISO 9001:2000 specifies the requirements for a quality management system where an
organization:
Needs to demonstrate its ability to consistently provide product that meets customer and
applicable regulatory requirements, and
Aims to enhance customer satisfaction through the effective application of the system,
including processes for continual improvement of the system and the assurance of conformity
to customer and applicable requirements.
It is now the only standard in the ISO 9000 family against whose requirements the quality
system will be certified by an external agency. The ISO 9001:2000 certification signifies a
global benchmark in customer satisfaction, product quality and leads to significant reduction
in defects levels. The standard recognizes that the word product applies to services,
processed material, hardware and software intended for or required but the customer.




EVIRONMENTAL POLICY:
Environmental Management Systems -
ISO 140v 01:1996
Environmental management is a tool designed to assist an organization to remain in touch with
the environmental interactions and consequential impacts of its activities and poducts. It provides the
organization with programs and procedures to achieve due diligence in meeting regulatory
requirements. Its also promotes continual improvement performance.
An environmental management system is essentially a management framework to ensure you
evaluate how your business impacts the environment, know what impacts are significant, and
processes in place to minimize the significant environmental impact.
The basic element of our environmental management system is enabling our organization to:
Establish an appropriate environmental policy;
Identify its most significant environmental impacts;
Identify relevant legislative, regulatory and industry specific requirements;
set appropriate environmental objectives and targets;
Establish programs to implement the environmental policy and achieve objectives and targets,
and;
Continuously improve the environmental performance through improvement of the EMS.

Organizations can experience a number of benefits from implementing an effective
environmental management system, such as:
Preventive of pollution.
Reduction of consumption of materials and energy.
Limited liability by providing evidence of due diligence.
Improved access to capital.
Improved industry/government relations.
May reduce insurance costs.
Improved public relations.

Our Environmental Policy:
We are committed to the society we live in and it is our endeavour to improve continually the
environment around by -
Ensuring Zero discharge of effluents and developing a green belt to improve our environment.
Adhering to the emission norms to protect the quality of ambient air.
Focusing on conservation of energy and seeking opportunities for using alternative and
renewable energy sources.
Imparting awareness on the need for environmental protection to the people in the
neighbourhood.
Adhering to all statutory and regulatory requirements.


DISTRIBUTION NETWORK OF LOTTE INDIA CORPORATION:
Transportation investments often have direct effects on the spatial distribution of a
region or country's population and economic activity. Improved access to employment centres',
decreases in the travel time of trips and changes in the distribution of economic centres affect the
location decisions of people and businesses.
FACTORIES:




Plant Location
Our manufacturing unit will be located at 4/111, Mount Road, Poonamallee High road,
Manapakkam, Chennai-600089.
To export our product we use the Central Government transport facility named as Inland
Container Depot which is located at Daulatabad, Aurangabad, Maharashtra.
Labour is easily available since there are many such labour contractor available in
Aurangabad. We will get skilled and unskilled labour as per our need. Technical people are also
available easily to monitor the quality and consistency of our product.
Details of Land Requirement
The land required for our Chocolate manufacturing company is 5,500 sq.ft.it is on rental
basis and the rent would be 35,000 Rs./month.






Nemam
Nellikuppam
Sangli Kollenechery
Kozhikode Sholavaram






3.4.3 Plant Layout

3.4.4 Production Process:
Chocolate processing: Production flow of chocolate
Manufacturing process
Chocolate production is highly sophisticated computer controlled process with much of
the new specialist machinery. Machines like as chocolate cooling tunnels, enrobing machines,
coating machines, molding machines.

Cleaning
When seeds arrive to factory they are carefully selected and cleaned by passing through a
bean cleaning machine that removes extraneous materials. Different bean varieties are blended to
produce the typical flavor of chocolate of particular producer. Then the bean shells are cracked
and removed. Crushed cocoa beans are called nibs.
Roasting
The beans are then roasted to develop the characteristic chocolate flavor of the bean in
large rotary cylinders. The roasting lasts from 30 minutes to 2 hours at very high temperatures.
The bean colour changes to a rich brown and the aroma of chocolate comes through.
Grinding
The roasted nibs are milled through a process that liquefies the cocoa butter in the nibs
and forms cocoa mass (or paste). This liquid mass has dark brown colour, typical strong smell
and flavor and contains about 54% of cocoa butter.
Cocoa Pressing
Part of cocoa mass is fed into the cocoa press which hydraulically squeezes a portion of
the cocoa butter from the cocoa mass, leaving "cocoa cakes". The cocoa butter is used in the
manufacture of chocolates; the remaining cakes of cocoa solids are pulverized into cocoa
powders.
Mixing and Refining
Ingredients, like cocoa mass, sugar, cocoa butter, flavorings and powdered or condensed
milk for milk chocolate are blended in mixers to a paste with the consistency of dough for
refining. Chocolate refiners, a set of rollers, crush the paste into flakes that are significantly
reduced in size. This step is critical in determining how smooth chocolate is when eaten.
Conching
Conching is a flavor development process during which the chocolate is put under
constant agitation. The conching machines, called "conches", have large paddles that sweep back
and forth through the refined chocolate mass anywhere from a few hours to several days.
Conching reduces moisture, drives off any lingering acidic flavours and coats each particle of
chocolate with a layer of cocoa butter. The resulting chocolate has a smoother, mellower flavor.
Tempering and Molding
The chocolate then undergoes a tempering melting and cooling process that creates small,
stable cocoa butter crystals in the fluid chocolate mass and is deposited into moulds of different
forms. Properly tempered chocolate will result in a finished product that has a glossy, smooth
appearance.
Cooling
The molded chocolate enters controlled cooling tunnels to solidify the pieces. Depending
on the size of the chocolate pieces, the cooling cycle takes between 20 minutes to two hours.
From the cooling tunnels, the chocolate is packaged for delivery to retailers and ultimately into
the hands of consumers.

3.4.5 Lean manufacturing:
Lean production, often simply, "lean", is a production practice that considers the expenditure
of resources for any goal other than the creation of value for the end customer to be wasteful, and thus
a target for elimination. Working from the perspective of the customer who consumes a product or
service, "value" is defined as any action or process that a customer would be willing to pay for.
Lean production, aims to reduce waste. Waste is looked at in terms of time, money and
quantity of resources used in production. Reducing these elements aims to increase productivity and
efficiency.
Benefits of Lean Manufacturing
Lotte uses lean production techniques to bring benefits other than gains to efficiency and
quality. It also helps to create social and environmental benefits. Social benefits are those shared by
the communities in which Nestl operates.
Kaizen
Kaizen is another idea developed in Japan. It supports lean production by introducing the idea
of continuous improvement. Kaizen is a concept that makes improvement the responsibility of
everyone involved in production. Improving efficiency becomes a continuous process, not a one-off
activity. Kaizen implies that even the smallest improvement should be made, as many small
improvements can lead to big savings.
Elimination of Waste
Value refers to the aspects of a product that customers think it is worth paying for. Added
value refers to activities or processes that make the product better or worth more. Value can be added
through changes to design or changes to the way a product functions or behaves. Value can also be
added by reducing waste which in turn reduces production costs. Any activity which puts cost on a
product without adding value is waste. Waste can happen at any part of the process. Muda is the
Japanese term for waste. Muda is broken down into the seven areas that make up the mnemonic
TIMWOOD. (Transport, Inventory, Motion, Waiting time, Over-Processing, Over-Production,
Defects)


3.4.6 Details of machinery and sources of machineries
The product will be manufactured by Full Automatic Chocolate Production Line
(QH200), with this system, baking the moulds, depositing, forming etc. series procedure can be
achieved automatically.
The production capacity is fully automated as mentioned as follows, so the need of personnel is
comparative less than other semi-automatic machine. The detail description of the machineries is
as follows,

Chocolate Production Line:



This Machine Model NO.:QJZ-II especial for chocolate pouring and depositing including
mechanism, electrical controlling. The production flow including mould heating, pouring,
vibration, cooling, discharge, convey and so on with automatic operation. Suit for producing
pure chocolate, centre filled chocolate, double colour chocolate. Granule mixing pouring
chocolate, smoothly surface, weighing correctly is a good machine for producing high quality
chocolate. The capacity of the machine is producing 200kg per day.






High-Speed Automatic Pillow Packing Machine:

Full-automatic packager is applicable for packing oblong, Quadrate, round, oval and shaped
candies. It functions rapid computer programming and photoelectric tracing, frequency control
for stable and free running, reversible outsize candy sorting disc enables empty package rate to
get optimal effect, excellent performance, simple operation and high-speed package of the whole
machine.
The packaging speed (granile/m) 800
The dimensions (length-width-height) 300013501450mm
Production capacity of the plant
Our production capacity of the plant would be necessary to get the cost of equipment (bean
cleaner, roaster, cracker, grinder, refiner/conch - not including
(tempering/depositing/moulding/wrapping) down to 400 kg/day in order to really jumpstart the
growth of the small batch craft chocolate "industry" here in the India. Furthermore, we think that at
that price point it will be necessary to produce at least 1 ton per month of finished chocolate in order
to be able to break even.
Capacity utilization
The maximum production capacity of our plant would be 400 kg/day and we will try to
utilize optimize resources and our capacity of utilization is 300 kg/day.

Raw Material Sourcing:
1. Sugar
2. Full cream milk powder
3. Vegetable oil or fat
4. Cocoa, powder, mass and butter
5. Emulsifiers and flavors.


COUNCLUSION:
From the study of the company I understood the functions & features of the company.
This company is improving their quality, goodwill, market value and they are giving job opportunity
so many people. The expansion and establishment of the organization in various places and in various
forms denotes their financial efficiency and capabilities.






















BIBLIOGRAPHY:
WWW.Lotteindia.co.in
WWW.Google.com
WWW.Wikipidea.com