Amul -Test of India
173
PROJECT REPORT ON MARKET RESEARCH AT SUBMITTED TO: - SIKKIM MANIPAL UNIVERSITY CENTER CODE: 02914 1
Transcript of Amul -Test of India
PROJECT REPORT
ON
MARKET RESEARCH
AT
SUBMITTED TO: -
SIKKIM MANIPAL UNIVERSITY
CENTER CODE: 02914
1
SUBMITTED BY:
Malhan Nareshsingh B
510824594
ANNEXURE –A
Shri Krishna Infotech
AhmedabadCenter Code No.02914
“Market Research”
AT
BY
Malhan Nareshsingh B
A project report submitted in partial fulfillment of the
requirement
for
2
Master Of Business Administration
Of
Sikkim Manipal UniversityIndia
SIKKIM MANIPAL UNIVERSITYOF HEALTH MEDICAL AND TECHNOLOGICAL SCIENCE
DISTANCE EDUCATION WINGSYNDICATE HOUSEMANIPAL-576104
ANNEXURE –B
I here by declare that the project report entitled
Study on
“Market Research”
AT
Submitted in partial fulfillment of the requirement for
the degree of
Master of Business Administration
3
To, Sikkim Manipal University, India is my original work
and not submitted for the award of any degree,
diploma, fellowship, or any other similar titles or prizes
Place: Ahmedabad Malhan NareshsinghDate: 30th Nov. 2009 Reg.No.520575669
ANNEXURE –C
The project report of
Malhan Nareshsingh B
Study on
“Market Research”
AT
Is approved and is acceptable in quality and form.
Internal Examiner External Examiner
4
ANNEXURE –D
This is to certify that the project report entitled
Study on
“Market Research”
at
Submitted in partial fulfillment of the requirement for the degree
of
Master Of Business Administration
Of
Sikkim Manipal University
Of
Health, Medical & Technological Science
5
Malhan Nareshsingh B.
Has worked under my supervision and guidance and that no part
of this report has been submitted for the award of any other
degree, diploma, fellowship or any other similar titles or prizes
and that the work has not been published in Journal or Magazine.
(Reg. No.) Certified
PREFACE
MBA is a course where on one can learn
effectively with theory and concepts. One has to
learn the practical application by working in the
filed and doing live projects. The actual learning
is where the actual work is, not in the
classrooms.
The main aim & objective behind this training is
to integrate the knowledge & analysis of
mentioned project. Its really a great learning
session for me as for the first time I have made
such long project after gathering datas.
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ACKNOWLEDGEMENT
I would like to express our gratitude to the Sikkim Manipal
University of health medical and techno sciences for
providing us the great opportunity of working on this project.
I express my sincere gratitude to all members of library of the
institute for their wholehearted support and providing the
latest information from books, journals, periodical, and
Internet to us.
Although my project began on a slow footing, the past few
days have been a stimulating learning experience and I shall
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always be indebted to all the people whose role has been
instrumental in making this project successful.
Table of Contents1. Company Profile2. Market research at Amul
3. Introduction of the Topic
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INTRODUCTION TO VADILAL
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Today, the name Vadilal conjures images of lip-smacking ice
cream in a whole gamut of flavors. Vadilal spells quality,
availability, variety and state-of-the-art machinery and
equipment. It has, however, been a long journey for the
group, which traces its origins way back to 1907, when a
certain unassuming gentleman, by the name of Vadilal
Gandhi, the great-grand father of Virendra R Gandhi, Rajesh
R Gandhi and Devanshu L Gandhi, started a soda fountain.
He passed on the business to his son, Ranchod Lal, who ran a
one-man show, and, with a hand cranked machine, started a
small retail outlet in 1926. Eventually, Ranchod Lal's sons,
Ramchandra and Lakshman, inherited the business and they
were instrumental in giving a new direction to the company.
The duo imparted a new vision to the venture and infused a
spirit of calculated risk-taking into the company. As a result,
by the 1970s, the Vadilal Company had already evolved into
a modern corporate entity.
"In 1972-73, the company had 8-10 outlets in Ahmedabad.
Gradually, we moved from the city to other parts of Gujarat.
By 1985, the company moved towards neighboring states like
Rajasthan and Madhya Pradesh.
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But the expansion was undertaken very methodically and we
spent five to six years in spreading our business and then
consolidating it" says Shri Ramchandrabhai Gandhi
(Chairman).
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1.1 INTRODUCTION TO VADILAL GROUP
Vadilal, the name conjures up images of ice cream laden bowls and a
plethora of new flavors. Starting from one man show with a hand
cranked machine in 1926 as a small retail outlet, the ice cream
division now has a production capacity of 1 lac ltrs/day at 3
sophisticated plants, located at Ahmedabad, Pundhra and Bareilly.
These ISO 9002 certified plants for Pundhra and Bareilly are
established in such a way that they are in consonance with the market
expansion strategies of the division.
Vadilal has one of the largest cold chain networks in India,
comprising of 12 C&F agents, 250 distributors and 15,000 retailers.
The network is kept alive by a large fleet of refrigerated vehicles.
Refrigeration equipments and retail freezers are sourced from world
leaders in the technology so as to deliver quality products to the
consumers, which is a commitment at Vadilal.
Vadilal has 25% of the Indian ice cream market as its share. But that's
no surprise considering that the group has the largest range of ice
creams in the country in a variety of flavors, packs and forms. The
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group has a product matrix of over 200 SKUs comprising of cones,
cups, candies, family and party bricks and bulk packs. Vadilal
introduced the concept of "flavor of the month" under which the
company develops and markets one new flavor every month for its
customers delight.
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1.2 HISTORY & DEVELOPMENT OF VADILAL
Vadilal – a company established in 1926 was started by Late Shri
Vadilal Gandhi who commenced the business of making ice cream
with the help of a hand-cracked machine in a small retail outlet.
Today, Vadilal is a name familiar in partially every Indian household.
Well-known umbrella brands, covering a diverse range of products
and activates which have one thing in common: a vibrant present ad a
bright future. Accompany that has a simple yet straight forward
mission:
“To provide quality products and
Services at an affordable price.”
What started as a one-man show with a hand-cranked Ice-cream
maker in a small retail outlet has today grown to apply over 700
people. What started with earnings that could easily fit into a pocket,
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has today risen to an annual turnover of Rs.1800 million (USD 41
million) and still rising of which around 25% is contributed by the
experts. What started as a home-made ice –cream has today branched
out include processed Foods, chemicals and specially Gases,
construction and Real Estate, Forex advisory Services.
Vadilal Enterprise Ltd. is the marketing arm of Vadilal Industries Ltd.
They have a dynamic sales force of over 150 sales and marketing
professionals. The company has affected hangs in its organizational
structure and training inputs from time to time, in order to infuse a
competitive spirit amongst peers and build a consolidated force of
live-wire professionals.
In 1997 ‘Vadilal’ was converted from private limited to public limited
company. It is listed on Mumbai and Ahmedabad stock exchanges.
Vadilal has stood the challenge of time and held its own in the country
even in the presence of global giants.
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YEAR EVENT
1961
Vadilal Ice-cream Pvt. Ltd. was Incorporated on 12th June,
to carry on the business of manufacture of ice cream
candy.
1982
The Company was incorporated in the name of Vadilal
Oxygen Pvt. Ltd., on 28th April to carry on the business of
purification and refilling of oxygen gas and selling the same.
The Company's objects in Processing of frozen fruits and
vegetables and manufacture of ice cream.
1985
The Company was amalgamated with Vadilal Oxygen Pvt.
Ltd. effective 1st July.
The company issued 3,00,000 - 14% secured redeemable
convertible debentures of Rs.130 each as follows.
(i) 30,000 Debentures to UTI,
(ii) 15,000 debentures to Employees
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Balance 2,25,000 Debentures along with 1,15,550
debentures not taken up under preferential quota was issued
to the public.
Additional 45,125 debentures were allotted to retain over
subscription.
Part A of Rs.100 of each debenture was to be converted into
4 equity shares of Rs.10 each at a premium of Rs.15 per
share on the date of allotment of debentures. Accordingly
13,80,500 shares were allotted.
Part B of Rs.30 of each debenture was to be redeemed on
three full installments of Rs.10 each at the end of 7th, 8th
and 9th year respectively from the date of allotment of
debentures.
1989
Name of the Company was subsequently changed to Vadilal
Industries Pvt. Ltd. and it became a Public Ltd., company
from 4th August. It was promoted by Ramchandra R.
Gandhi and Laxmanbhai R. Gandhi.
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1991
The processed foods and frozen vegetable division
commenced activities in May.
The products such as canned/frozen tropical fruit juices and
pulp canned/frozen vegetables are mainly exported. The
commodities division comprises HPS groundnuts, soya bean
extraction, sesame seeds, non-basmati rice etc.
1993
The ice-cream division had introduced 300 flavors in 600
different packs. The company entered into a marketing
arrangement with a leading Company in U.P. to manufacture
and sell the products under the brand name and as per the
quality stipulated. Similar arrangements are to be entered
into with Companies in Tamil Nadu, Punjab, M.P., and
W.Bengal.
In future, it was proposed to include extruded products,
frozen desserts, low priced varieties like milk, lollies, mini
milk fingers, fruit based ice creams etc.
The Company proposed to manufacture concentrated fruit
juices/ pulps aseptically packed with an annual capacity of
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16,200 TPA.
Also frozen dessert an item containing vegetable fat and in
low cholesterol was to be manufactured in novelty shapes
and bulk packs in various flavors.
2,46,500 No. Of equity shares of Rs.10 each, issued,
subscribed and paid up. 15,53,000 bonus equity shares issued
in prop.
3107:493 shares held on 25th November 1989. 13,80,500
shares allotted in part conversion of 14% second redeemable
partly convertible debentures.
1994
Exports of agricultural commodities such as HPS, soya bean
natural and hulled sesame seeds and also vegetable and fruit
pulps rose by 61% to Rs.18.46 cr when compared on an
annualized basis and the overall working was reported to be
satisfactory.
The company launched low fat calorie ice cream `Vadilal
Lite' in different flavors manufactured at Ahmedabad,
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Gujarat.
The Company undertook to install new machineries for IQF
project (for manufacturing frozen vegetables and fruits) at
Dharampur, Dist. Valsad, and Gujarat.
The Company launched mango pulp, mixed fruit and
pineapple jam, tomato ketchup sauce, sweet corn soup
(cream style) and baked beans.
The Company installed wind farm unit with total capacity of
1.28 MW consisting of 4 Wind Turbine Generators (WTG)
of 320 KW each and 400 KVA transformers at village
Lamba, Dist. Jamnagar, and Gujarat.
During July, the company issued 15,00,000 No. Of equity
shares of Rs.10 each at a prem. of Rs.42.50 per share to
promoter group of companies.
On 23rd July, the company allotted 20,00,000 No. Of equity
shares of Rs.10 each at a premium of Rs.37.50 per share to
promoters on private placement basis.
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1995
The Company was on the look out for a foreign
collaboration.
Additional WTGs of 320 KW each was installed at village
Bhogat, Dist. Jamnagar, Gujarat.
The company received necessary permission for developing
commercial building project name `Mahalay' off C.G. Road,
Navrangpura, and Ahmedabad at a cost of Rs.9 cr.
1996
The company has installed IQF facilities at Dharampur plant
at a total cost of Rs.6 cr by using fluidized bed-belt type
continuous freezing technology imported from U.K. with a
capacity of process 2 MT of fruits and vegetables per hour.
The Company has launched Mango/Pulp/Ral, frozen green
peas into domestic market.
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1.3 VISION & MISSION STATEMENT
MISSION
“To provide quality products and Services at an affordable price.”
Quality Policy :
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Vadilal Industries Limited firmly believes in providing quality
products with innovative features at competitive prices for customers’
satisfaction.
We shall strive to achieve our Goals by continuously improving and
upgrading Technology, selecting appropriate process and providing
vibrant environment with help of High Quality standards and
emphasis on Hygiene.
We aim to be industry leader by recognizing the changing needs of
customer and ensuring full commitment towards implementing
Quality Management System as per ISO 9002.
Quality Assurance
Pundhra:
Our Pundhra Plant is ISO: 9001:2000 and HACCP Certified. The
certification of this plant has been carried out by BVQI under the
latest regulations of food safety system, September 2002. BVQI is a
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wholly owned subsidiary of Bureau Veritas, a France-based
multinational organization.
The plant has recently received the Export Inspection Council of
India, Ministry of Commerce and Industry, Government of
India certification for exports that in it is a benchmark for hygiene and
quality.
Bareilly:
Bareilly plant is also having ISO 9001: 2000 & HACCP certification
as per IS/ISO 9001: 2000 & IS 15000: 1998 respectively from Bureau
of Indian Standards (BIS) which is the largest certification authority in
India.
Vadilal Industries Limited, Bareilly was established in 1996 for ice
cream manufacturing with an installed capacity of 15000 liters per
day. To cater to the increasing demand of ice cream in India the
company expanded the capacity to 60,000 liters per day in 2005. We
plan to enhance the capacity by 1,00,000 liters ice cream per day in
near future. This shall be supported by state-of-the-art machineries
from China, Denmark and other foreign countries.
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1.4 SIZE OF THE UNIT & FORM OF ORGANIZATION
Size of the unit
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Large-scale unit
Forms of the organization
1. Vadilal Enterprise Ltd.
2. Vadilal chemical Ltd.
3. Processed food division
4. Forex advisory division
5. Construction division
1.5 ORGANIZATION STRUCUTRE
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Chairman
Managing Director
General Manager
FinanceDepartment
ProductionDepartment
MarketingDepartment
Senior Manager
Senior Manager
Senior Manager
Manager Assistant Manager
Manager & Salesman
AccountantManager
Executive Manager
Sales Executive Assistance Labor
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PersonnelDepartment
Senior Manager
Deputy Manager
Assistant
2.1 ORGANIZATION CHART
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PRODUCTION MANAGER
2.2 TYPES AND SOURCES OF RAW MATERIAL
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SENIOR MANAGER
LABOUR
ASSISTANT MANAGER
EXECUTIVE MANAGER
ASSISTANCE
The following are the raw materials are used in the manufacturing of
the ice cream
1. Milk
2. Cream and butter
3. CMC powder
4. GMC powder
5. Sugar
6. Different flavors
7. Nuts
8. Vegetable oil
Here is milk purchased in bulk. The main suppliers of milk are
Mahalaxmi dairy, Kamdhenu dairy and the other local suppliers like
farmers.
All the raw material is analyzed by quality assurance department. In
this department various types of tests are done in raw material. In this
department quality of milk is checked by microbiological technique.
2.3 PRODUCTION PROCESS
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Milk
Boil milk in high temperature add in the milk’s.
After boiling process, add GMC & CMC powder.
GMC & CMC powders are useful to maintain in thickness.
When milk becomes cold then cream, flavors and nuts is added.
Then this mixture is put into refrigerator for freezing process at-
18 c.
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Add sugar
GMC/CMC powder
Cream
Flavors
Freezing process
Production facility available at Pundhra Plant.
A- Mix plant ( pundhra)
Mixing tank -2 no., online duplex filter, HTST , flow diversion valve,
two stage Homoginiser,
Turbo blender for dry mixing, storage tanks ( storage cap. 50000 ltr.
at pundhra )
B- ICE CREAM Freezing-pundhra
8 cont. freezer for ice cream and novelties production having different
capacity.
2 fill and cap machine for cone and cup production.
5 Hardening tunnel for quick hardening of ice cream, novelties, cone,
etc.
C- CANDY PRODUCTION-pundhra
2 Brine tank for manual candy production
1 cont. freezer
1 candy hardening tunnel
candy mould having diff. shape and volume- 125 no.
Candy wrapping machine for pillow packing
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D- AUTOMATIC CANDY MAKING MACHINE- pundhra
Neumatic candy making machine
cont. freezer wrapping machine for pillow packing with conveyor.
E- SEMI AUTOMATIC CLEANING SYSTEM- CIP ( cleaning
in place)
F- RAW MATERIAL PROCESSING - pundhra
Seiveing machine, nut cutting machine, Hot air oven, fruit processing
machinery, choclate preparation tank, chikky making machine, cake
production facility.
Bareilly plant details:
In our unit we use modern sophisticated machinery for making high
quality ice cream. We take utmost care during selection and
processing of ingredients. In our mix preparation section we use
latest machinery like Homogenizer and Pasteurizer, which ensure our
commitment of producing good quality ice cream. We have very
sophisticated imported homogeniger (capacity 3000 ltr /hr) and a
automatic panel based Pasteurizer, which ensure food safety.
In freezing section we have automatic continuous freezers of capacity
ranging from 300 lts/hr to 2000 lts/hr ice cream.
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We have our own raw material processing section which provide very
pure and processed raw material to freezing section .In our raw
material processing section we use ultramodern oven and machinery
for heating and other treatment of fruits and nut which make all these
very much safe for human consumption.
For cone production we have fully automatic cone filling machine .
We produce fully untouched cones.
As we are producing a very sensitive food product we take utmost
care about cleanliness and hygiene of our plant. For cleaning we have
a central. CIP system. We used to take plant for total CIP before and
after every production shift and sterilize each and every
pipeline ,pasteurizer, homozenizer, storage tank, freezer, balance tank
and ice cream filler using steam.
Every workers are trained for their work and they follow strict norms
for cleanliness and hygiene during production of ice cream.
All staff that work in production area is being daily checked for their
personal hygiene.
Every staff use to pass through a thorough medical check up after a
fixed time interval to ensure whether he/she is fit for working in
production department or not.
Ice Cream is shifted from production section to dispatch section using
FIFO SYSTEM.
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1. Mix Section : Automatic homogenizer and pasterizer with
capacity of 3000 liters of mis per hour.
2. Freezing Section : 9 Automatic continuous freezer capacity
city ranging from 300 to 2000 liters of ice cream per hour.
3. Fruit Feeder : 3 Automatic fruit feeder for proper nut addition.
4. Raw material process: Cake production as well as a fully
automated oven for proper heat treatment of nuts.
2.4 VARIOUS PRODUCTS OF VADILAL
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BIG CUPS
Vanilla
Ripe Strawberry
2 – in –1
Chocolate Chips
Tuti Fruity
Real Mango
Rainbow
Fruit Bonanza
Kaju Draksh
Butter Scootch
Kewra
Jafrani Badam Pista
Rajbhog (Ice Mithai)
SMALL CUPS
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Vanilla
Ripe Strawberry
Super Vanilla
Strawberry Special
FAMILY PACKS
PLAIN FAVOURTIES
Vanilla
Ripe Strawberry
2-in-1
CHOCOLATE ECSTASIES
Chocolate Chips/
FRUIT FANTASIES
Real Mango
Fresh Strawberry
NUTTY DELIGHTS
Kaju Draksh
Butter Scotch
Real Kesar Pista
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Jafrani Badam Pista
ICE MITHAI
Rajbhog
FROZEN DESSERTS
Snowy
Yummy Kesar Pista
Yummy Mango Munch
KING KONES
Pineapple Delight
Chocolate Drip
Yummy Butter Scotch
Chashmeshahi
Prime Kesar Pista
Almond Kulfi Cone
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KULFIES
KULFI CORNER
Kesar Pista Kulfis
Chowpati Kulfi
Kewra Kulfi
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DANDY CANDIES
Pencil
Mango Juicy
Juicee Orange
Kaju Candy
Litchee Dolly
Orange Dolly
Raspberry Dolly
Mango Dolly
One-up Chocobar
Nutty Chocobar
Chocolate Chocobar
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Soft Spot (Chocolate)
Fantastic
FROZEN DESSERT
Bargain
Best Chocobar
Mango Tango Dolly
Fun Bhari Raspberry
VADILAL SPECIALS
Heart Throb
Mini Sandwich
Sajan Sajani (Roll Cut)
Quik Sundae
Easy Sundae
August - 15
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Cassatta Slice
Cassatta (Cut)
Sajan Sajani (Roll)
Vanila Magic
Strawberry Magic
Mango Magic
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NEW INTRODUCTIONS
1. Tiranga Candy:
2. Party pack of Swiss Cake
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3. Chocochips Cookies
4. Cookies & Caramel
5. Choco Rocherr
6. Choco Cream (Chocolate Candy)
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2.5 INSTALLED AND UTILIZED CAPACITY
Vadilal industries Ltd has informed the Company has embark upon
further expansion and new project in its Ice-cream Division as under:
The company has proposed to set up a new ice-cream
manufacturing plant at Kolkata in the state of west Bengal
( instead of at Uttranchal as decided earlier ) with an installed
capacity of 32000 Liters per day with a project cost around Rs
97.40 million.
The company to incur capital expenditure to the extent of Rs
75.60 million for its ice-cream plant situated at Bareilly in the
State of Uttar Pradesh towards purchase of new automatic
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Candy machine and others machine for its various sections in
the plant.
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3.1 Organization chart of personal department
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Managing Director
General Manager
Senior Manager
Deputy Manager
Executive officer
Assistant
3.2 Introduction to Personnel Department
a lot in terms of money but may generate alienation and frustration
among employee Effective organization are not built merely on
investment and but more so on the quality of their workforce, their
commitment to the goals of the investment made to organization and
attract, train and retain superior human resources.
Management of organization is management of human resources.
In modern business organization employee hold a key place in
business. No business enterprise can exist and function without
employees. The success of business enterprise depended to a large
extent on the willingness and ability of the organization yeas.
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3.3 Recruitment and selection
Recruitment is an important part of any business’ human resource
planning and Vadilal industries Ltd. is no exception. Rather
Recruitment and selection forms the most important at vadilal group.
In all business, people are a vital resource and they need to be
managed as such. Effective recruitment is central and crucial to the
successful day-to-day functioning of any organization. Successful
recruitment depends upon finding people with the necessary skills,
expertise and qualification to deliver organizational objectives and the
ability to make a positive contribution to the values and aims of the
organization.
The overall aim of the recruitment and selection process here is to
obtain the number and quality of employees that are required in order
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for the business to achieve its objective. After all having the right
person, in the right place, at the right time, is crucial to organizational
performance.
Recruitment and selection process consists of identifying the need for
a job, defining
The requirements of the most position and the jobholder, advertising
the position and choosing the most appropriate person for the job.
Undertaking this process is one of the main objectives of
management. Indeed, the success of any business depends to a large
extent on the quality of its staff. Recruiting employees with the correct
skills can add value to a business and recruiting workers at a wage or
salary that the business can afford, will reduce costs. The management
understands this and therefore they believe that employees should be
carefully selected, managed and retained, just like any other resource.
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3.4 Training and Development
In this fast moving world with constant changes and
innovations in technology, increasing career aspirations of employees
and cut throat competition in the market, the training and development
of employees have become necessary equipment in the overall
development of the entire organization. It is the dire need for any
organization today to have well-trained and experienced personnel
and therefore it becomes necessary to provide training to both new
entrants as well as existing employees.
Training and development function is definitely carried out in vadilal
but on a small scale. The new employees are given some basic
training and existing employees are given training after certain time
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period has passed. However this time interval is not fixed. The most
commonly used method of training employees is – On the job
Training. This training is given to both new as well as existing
employees. The new entrants are trained on the job during their
probation period ranges from three to six months depending upon the
post and the job.
There is no formal provision of budget for training and development.
Training of existing employees consists of training for those of sales
force people only. Sales force people are trained by their Head of the
department for two to three days but it is not systemic and is a kind of
informal training given.
At VADILAL in-house training is not given rather the employees are
sent outside the organization for their training. For the development of
executives, they are allowed to attend various seminars, lectures
professional meeting of national level, special training programs,
study special courses etc. organized by any organization like A.M.A,
academic institution like IIM, Nirma institute, etc. The company
sponsors such training courses for them.
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3.5 Employee services
Canteen facilities
Canteens have been provided lunch, tea and snacks. Canteen
management committees consisting of the employees also monitor the
menus, cleanliness, and quality of food.
Dress facility
Vadilal has an in dress facility, provide pent, shirt and helmet. All
such types of safety clothing facility provide to own employee for a
doing a particular job.
Medical facility
When some making a accident in operational level and managerial level or other department in that case, vadilal has paid some amount given to the employee.
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Transportation facility
For the convenience of the employees to reach and depart from the company. The Vadilal is providing the transportation facility.
3.6 Time keeping system
Time is also an important factor for the organization; all the activities
and job are to be performed in a particular pre decided time. So good
time keeping system play a main role in the organization efficient and
also for achieving its targets.
The corporate office and all the other branch of vadilal limited will
have the following office timings:
1. Monday to Saturday 9:15 a.m. to 6:30 p.m. with 30 min
lunch break from 1:00 pm to 1:30 pm.
2. Second and fourth Saturday’s shall be observed as a holiday
and other Saturday’s working hours are 9:15 am to 6:30 pm
3. Weekly off’s shall be observed on Sunday.
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3.7 Performance appraisal
Performance appraisal is a useful tool to strength and weakness of the
organizations of people. It proves very harmful to the H.R department
of any organization in taking important decisions as to who should be
promoted, whatever any employee is to be considered for promotion,
increment, incentives etc. it helps to identify the underperformers as
well as star performers of the organizations on the basis of which the
strength and weakness of the entire organization can be known.
It depends on the organization at what intervals (yearly, half yearly,
quarterly) should the performance appraisal like self-appraisal, rating
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scale method ranking method narrative method or the latest 360-
degree performance.
Performance Appraisal, at Vadilal, is conducted on yearly basis. It
takes place in the month of the September-October every year.
However this is applicable for the existing employees. For the new
recruits, performance appraisal is undertaken at the end of their
probation period or at the end of six months from the date of their
joining in the organization which ever is earlier.
The method of performance appraisal adopted by the management
here is 180-degree performance appraisal. This 180 degree appraisal
includes self appraisal as well as appraisal by the superiors of the
employee. Also rating scale method of appraisal is used. But self-
appraisal governs the other methods i.e. appraisal by superiors and
rating of employees is done in few cases. So ultimately the
employee’s performance is judged on the basis of their self-appraisal.
The employees are given appraisal forms to be filled by them as well
as to be filled by their superiors in which one make their comments
for the consideration by the H.R department these forms can also
contains factors like productivity, Job knowledge interpersonal
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relations decision making leadership etc. on which each employee is
rated accordingly on parameters like-outstanding , very good, good,
Fairly good average below average. This performance appraisal
forms are narrative nature it asks the employee questions like-
Assignment that gave satisfaction or dissatisfaction from the job etc. it
also includes comments or suggestions of the superior on the
responses given by employees.
The main objectives of the performance Appraisal are:-
To review the performance and set the goals for future
To provide the feed back if it is necessary counseling
To asses the capabilities and provide guidance
However performance appraisal is mainly conducted for making
decisions about pay rise of existing employees and to decide upon
weather to confirm the new recruits after their completion of their
probation period.
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3.8 Grievance handling process
Grievance handling is the most important task in any of the
organization its needs a healthy and peaceful atmosphere for the
success of the organization all the type of the grievances are taken
very delicately in the company firstly the grievance is communicated
to the supervisor then the supervisor to the manager and if the
problem is not solved then it is communicated to the union leader of
the company and after the keen observation of the matter the decision
is taken on the basis of facts efforts are made to find a sober way and
in this way the problem is solved without harming the organization
and fair justice is done to the employees.
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3.9 Salary & Wages Administration
WAGES: The wage and salary determination is fixing per unit (per
day, per month or per annum) and calculate the total wages by
multiplying the number of unit with the rate per unit time.
“Wages” usually refers the hourly rate of daily paid for the service of
labors in the production.
SALARY: In Vadilal industries ltd, they need more labors. If it is the
peak season company needs extra labors. They are giving as per the
regulations of government
“Salary “normally refers to the weekly or monthly rates paid to
derive.
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3.10 PROMOTION & TRANSFER
PROMOTION
“Good promotion is the perfect way to motivate the employees.”
Generally in any organization promotion is based on two ways.
1. Seniority
2. Merit
In Vadilal industries ltd promotion decision taken by
management.
Management of company observes the performance of employees,
past data about the work. After that if management feels that
employee for that is perfect for the promoted job then only company
gives promotion.
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Generally in Vadilal industries ltd after three-year promotion will be
gives to the employees.
TRANSFER:
In Vadilal industries ltd. transfer policy is based on three conditions.
1. When there is storage of manpower
2. When there is recognition
3. When there is an over staffing
Company gives transfer to one department to another department, one
section to another section. One shift to another shift, one plant to
another as per company’s requirement and employee’s demand.
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4.1 ORGANIZATION CHART
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MARKETING MANAGER
SALES EXECUTIVE
AREA MANAGER
ASSISTANT MANAGER
4.2 MEANING
“Marketing is an organizational function and a set of process for
creating, communicating, and delivering value to customer and for
managing customer relationship in ways that benefit organization and
its stake holder.”
“Marketing is a societal process by which individuals and groups
obtain what they need want through creating, offering and freely
exchanging product and service of value with each other.”
Brand Promotion:
Basically, these are very well known brand in every nook & corner of
the country with a strong brand image and high brand recall.
They generally promote their brand through various ways like,
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Advertisement, Sponsoring Events, and by providing Publicity
material (Glow signs, Danglers, Posters, Banners etc.) at our Retail
Outlets. They basically look forward to print media as main stay to
promote our brand & for the advertisement of our products as well as
schemes / offers, as well as TV commercial to cover maximum
consumers. Here advertisement in leading National (Hindustan Times,
Times of India etc.) as well as popular Vernacular Dailies (like,
Gujarat Samachar, Divya Bhaskar & Sandesh in Gujarat, Rajasthan
Patrika & Dainik Bhaskar in Rajasthan, Dainik Jagran & Amar Ujala
in U.P. & Uttranchal, etc.) and done TVC in leading TV channels like
Star Plus, Star News, Cartoon Network, Nick, UTV and Hungama
etc,.
At present no any celebrity connected with Ad Campaigns. However,
they take Models for our Product & Brand Promotion.
Sales Network:
Vadilal has very strong sales network, they have a sales team network,
which covers our entire distributor network.
They have a state wise sale team, which generates sales through retail
outlets, institutions, Hotels & restaurants, Functions. Here for Sales
Company’ management plays major role like providing various
Dealer schemes, consumer schemes etc. Vadilal has one of the widest
ranges of consumer schemes in the industry. More sales are generated
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through new product developments, schemes and lucrative dealer
margins.
Network: Plant - C&F – Distributor – Dealers – Consumers
With supply chain of about 23 C&FA, more than 500 Distributors
and over 40,000 Retailers ice cream is widely accessible in most parts
of India. Ice cream can be purchased in big tubs and surrounds from
supermarkets/grocery stores, in smaller quantities from ice cream
shops, convenience stores, and milk bars, and in individual serves
from small carts or even at public events and places.
Plants:
Ahmedabad
Pundhra, Gujarat and
Bareilly, UP
Above three plants are located in geographically favorable areas with
ultra modern production facilities. It is our quality traditions and
stringent norms only due to which our plants are accredited with
world’s most trusted quality standards like ISO 22000:2005, ISO
9001:2000 and BRC Global Standard.
Distribution Network/ C & F Agents:
The reason for having strong distribution and dealer network is due to
the lucrative margin and returns that Vadilal provides to them. Vadilal
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provides them deep freezers for storage of ice creams, Display sing
broads, POP, etc promotional material that helps for in boosting
business.
4.3 PRODUCT PLANNING
Product planning is one of the most effecting factions in
marketing department. The certain product planning refers the product
should be marketed in which manner and style and what quantity this
determine the market share and earning.
VADILAL is doing the product planning by collecting the
information from the market they get information from the two type
of customer.
Primary customers
Secondary customers
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The primary customer’s means that purchase the product
directly from the VADILAL like dealer, agent.
The secondary customer’s means that purchase the product from the
primary customers.
For the product planning the VADILAL is taking the data
given by the primary customers.
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4.4 ADVERTISING
Advertising is play very important role in any unit of business.
Advertising is paid from of communication. It includes the reader’s
buyer’s viewer and listeners to buy a product or to get favorable upon
products.
Today more popular media to give advertising news paper,
magazines, radio, television, cinema, film, outdoor, holdings, postage
and direct E-Mail success of marketing programmed legally depend
on advertisement.
The advertising is done by mainly 2 ways.
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Television
News paper
Since last two years, the television-advertising share has been shared
and Advertising through Newspaper has spurted. The reason is that
now days, Companies are coming with different promotional schemes
in different states.
The Newspaper is the easier and cheaper way to convey the
promotional schemes. VADILAL prefers Newspaper for their
advertising.
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4.5 MARKET SEGMENTATION & TARGETING
A company cannot serve the entire customer. In the
marketing as they are too numerous and diverse in their buying
requirements. Instead if competing everywhere. The company has to
identify the marketing segment that it can serve must effectively, and
then target on o more of there segment and develop a product and
marketing process tailored to those segments. Thus instead of
scattering their marketing effort, the cost can focus on the buyer
whom they have the greatest chance if satisfying.
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Company has segment and targeted consumer marketing on
the basis of the following variable.
Geographical segmentation
Demographic segmentation
Psychological segmentation
Behavioral segmentation
4.6 PRICING POLICES
The pricing polices followed by the Vadilal are as below.
1) Policy on pricing relative cost:
Vadilal follows full cost / cost plus pricing, for states where their
manufacturing plants are situated. Under full cost pricing no scale is
made at a price lower then the covering total cast including the
variable cost including the fixed cost.
For example:
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X Cost of production
X+Y Cost of goods sold to VEL
X+Y+6% cost of good sold+ Distributor
Margin
X+Y+6 %+( 12%TO20%) Dealer margin added to above
Value
= MRP (consumer price)
2) Geographical Pricing:
Vadilal charges extra penny as geographical pricing from the state
where the manufacturing plants are not located. Here, the margin of
the C & F agent added to the MRP of the ice cream. Also the
distribution cost is higher for such states so these states have to pay
somewhat higher charges for the vadilal ice cream.
Example:
X+Y+Z Cost of goods sold + C& F agent’s
margin
X+Y+Z (12% to 20%) Cost of goods sold + C & F agent’s
margin
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Distributor’s margin + dealer’s
margin
4.7 CHANNEL STRATEGY
The above channel strategy defines the channel member and whether
they are part of VEL. As shown the manufacturer and C & F agents
are handled by the VIL, where as serving the distributor, dealers and
customers are the responsibility of the VEL.
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4.8 ORGANIZATION CHARTS OF DISTRIBUTION CHANNEL
77
Factory Production
C & F agents
4.9 DISTRIBUTION INTENSITY
There are basically three types of distribution intensity.
Distribution
Wholesalers
Retailers
Customers
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1) Selective distribution: Selective distribution means
selection only those outlets/retailers that can best serve
the manufacture’s interest.
2) Exclusive distribution: Exclusive distribution means
distribution of manufacturer’s product or products within
particular area is to be confined solely to the retailer with
whom the manufacturer had made written or oral
agreement of distributing the product/products.
3) Intensive distribution: The manufacturer following the
policy of mass distribution or intensive distribution aims
for the maximum sales exposure by securing distribution
through all those outlets from which customers might
expect to purchase the product/products.
VADILAL has adopted the intensive distribution to have
maximum sales by availing ice cream at the nearest location
to the customer. This way Vadilal is getting maximum
business.
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Following are the different tips for distribution by the company.
Storing Tips
Vadilal products are best stored unopened at (-)18 deg C or below.
Serving Tips
Before serving, Vadilal ice creams should be allowed to soften
slightly for best results.
Scooping Tips
For perfect scooping, start from back edge and draw the scoop toward
you as you skim the surface. When a well-shaped ball has formed,
turn and lift the scoop away from the pack and gently press it against a
dish or cone to release it.
Health Tips
Frozen desserts to keep you slim and trim:
Bilumia and anorexia are as common words as "Samosas and
Rasgulla" in this health conscious world. New generation is
becoming slim and slimmer and everyone is counting the
calories of food intake. Now you can have frozen dessert
product and can keep your body slim and trim.
If required, one should drink pot water only after having ice cream.
Safe storage and handling
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All Ice-Cream manufactures and retailers have to carefully
control the temp. of ice cream throughout the distribution chain
so that it maintains excellent quality up to the point of sale.
After this the consumer has a part to play in ensuring that their
Ice cream is in peak condition when served.
Follow the guidelines below to ensure that to keep your Ice
Cream at it best.
Always make ice-cream the last item you choose in the
supermarket so it does not melt while you choose the rest of
your goods
Take a thermal bag or picnic box with ice pack when you shop-
this will protect the product until you get it home.
Make sure you take ice-cream home as soon as possible do not
plan other shopping when you have ice cream on board.
When arriving home give ice cream priority when unpacking
the shop put it straight in to the freezer and make sure your
freezer reaches low enough temperatures to keep the product.
When you serve ice-cream and only take a few scoops from a
large tub, make sure to return the tub to the freezer as soon as
possible before it has chance to melt. If you wish to protect the
quality of the ice cream by preventing air getting to it, scrunch
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up a few pieces of greaseproof paper and put these on top
before replacing the lid.
Ice cream should not be kept indefinitely. Follow the star
marking in relation to the freezer you have.
>Ice crystals in ice cream show that it has been badly kept i.e..
it has been allowed to thaw and then been re- frozen.
If you detect ice crystals you should throw the ice cream away
and buy more.
Current Trend:
CUSTOMARILY, Gujarat and monsoons do not go
hand-in-hand though the State is still chary of admitting that it is faced
with a drought-like situation. But, the scant rains have not stopped the
ice-cream majors from declaring the arrival of monsoon here, in the
process signaling a price war of unparalleled intensity, much to the
delight of the customers.
The Rs 525-crore Indian ice-cream market with a sale of 80.8 million
liter per annum in the organized sector has reasons to put the turf war
in Gujarat under the microscope. Amul, with a 24.75 per cent share of
the all-India market at 20 million liters and Vadilal, with 13.61 per
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cent market share at 11 million liters, may not be an even match
elsewhere.
However, competition between the two could not have got any closer
in Gujarat. Here, it is 22 per cent of Amul's volumes that is pitted
against 40 per cent of Vadilal's — both fetching up at 4.4 million
liters each. With HLL's Kwality Walls (22.8 million liters sales and
28.22 per cent market share) having virtually opted out of Gujarat, it
is no wonder that Vadilal and Amul are engaged in a slugfest in the
State.
Naturally, neither of the brands has actually reduced prices, but the
freebies have been coming thick and fast. Taking a leaf out of the
goodies on offer from the branded apparel sector and footwear to
name a few items, most of the flavors are now available in `twos'. One
would now get two units of quite a few flavors for the price of one, in
effect cutting the price by half.
Thus, Vadilal has offered `one plus one' in the liter versions of mango,
butterscotch and kaju draksh (nuts 'n grapes), while offering 50 per
cent extra on pineapple, chocochips, butterscotch and fruit bonanza.
According to Mr S. Keraleeyan, Product Manager, Vadilal Ice cream,
the freebies have ensured that the monsoon months will not be bad
after all.
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"Normally, there is a major dip in ice-cream sales during July and
August. The schemes on offer this year have ensured that we reverse
the slide by over 50 per cent. Vadilal has targeted a turnover of Rs 96
cr for this fiscal as against Rs 77 cr in 2000-01. Gujarat is our single
largest market, accounting for 40 per cent of total sales," Mr
Keraleeyan said.
Amul, already competitively priced at Rs 60 per liter for vanilla, has
now brought it down to Rs 45 for the monsoon season. The other
goodies on offer include a `combo-pack' of vanilla (1 liter) and kaju
draksh (1 liter) at Rs 100, Rs 5 off on cones, and Rs 3 each off on
Chocobar and 100 ml cups. The main pitch by Amul, of course, is that
its ice cream has a milk fat base as against vegetable fat used in the
`frozen dessert' by its competitor, which is one-third cheaper.
Clearly, the price war seems to have rejuvenated the Gujarat market,
not known for brisk ice-cream sales in the wet season.
Ahmedabad, the ice-cream capital of India and the other major cities
of Vadodara, Surat and Rajkot - remember, here you do not step out
for a drink in a pub or bar, instead you console yourself by having one
more ice-cream, be it day or night - is sitting up in anticipation of a
long `monsoon season' ahead.
Expansion Planning:
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Vadilal to invest Rs 40 cr to expand ice cream, food
biz
Vadilal Industries Ltd will invest Rs 40 cr this year to expand existing
manufacturing capacities at its two ice-cream and processed food
plants in Gujarat and Uttar Pradesh and the proposed third unit in
West Bengal before the year end.
The company earlier planned to set up a new manufacturing facility in
Uttranchal, as it was a no-excise region. But after the Union Budget
scrapped excise duty on ice-cream, the company recently decided to
set up the plant at Kolkata. "Under the changed circumstances, it
would not be prudent to have a new manufacturing facility so close to
Bareilly in Uttar Pradesh," Vadilal's Managing Director Mr Rajesh
Gandhi said.
Expansion
He told Business Line that the company has instead decided to expand
the Bareilly plant's capacity from 60,000 liters to 90,000 liters a day.
The Rs 200-crore Vadilal Group's second plant at Pundhra, near
Gandhinagar in Gujarat, has a capacity of 85,000 liters per day.
The Kolkata plant, with a capacity of 35,000 liters a day, is being set
up at a cost of about Rs 9.75 cr, he said.
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Processed food biz
The company is also expanding capacity at its processed and frozen
food plant at Dharampur in Valsad district of South Gujarat to one lac
kg per day. This plant, started as a horticulture processing industry in
1991, manufactures ready meals and fruit pulp, besides preserved
vegetables and fruits, the majority of which is exported to fetch about
Rs 25 cr per annum, Mr Gandhi said.
The total investments in the Bareilly, Dharampur and Kolkata plants
would amount to Rs 40 cr, he said. The company has been awarded
the ISO 9002 certification for quality systems.
Although Amul recently emerged as the largest ice-cream brand in
India, Vadilal claims to be the largest brand in Gujarat, with about 80
flavors and 70 per cent market-share; its national share is 25 per cent
in an industry worth about Rs 800 cr.
If Amul turned Anand into the `milk capital of India', Ahmedabad has
emerged as the ice-cream capital over the last two decades with
several players entering the fray. Ice-cream is consumed across all
age-groups in the city round the year.
The 70-year-old Vadilal Group has three companies listed on the
Bombay Stock Exchange (BSE) — Vadilal Industries Ltd, which
manufactures ice-cream and frozen food, Vadilal Enterprises that
markets food products and Vadilal Chemicals Ltd dealing with
specialized industrial gases and other chemicals. The group is also
involved with real estate and construction business, forex advisory
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services and full-fledged money changer (FFMC) services, offering
non-banking financial services.
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5.1 INTRODUCTION
Board of Directors:
Ramchandra R Gandhi
Chairman
Virendra R Gandhi
Vice-Chairman, & Managing Director
Rajesh R Gandhi
Devanshu L Gandhi
Managing Directors
C M Maniar
M N Vora
Kshitish M Shah
Rohit J Patel
Directors
Nikhil Patel
Company Secretary.
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Factories:
Ice-cream Division
Dudheshwar Road, Ahmedabad. (Gujarat)
Village Pundhra, Mansa, Mehsana. (Gujarat)
Parsakhera Industrial Area, Bareilly, (Utter Pradesh)
Processed Food Division
Dharampur, Valsad, (Gujarat)
Forex Division:
Vadilal House, Navrangpura, Ahmedabad.
Any organization, whether it is small or large
scale, clears with financing every businessman keeps
separate records of financial matters. Finance and
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account department of the business depends upon the
financial policy of the firm.
Financial management is mainly concerned
with finding out rational basis through answering
following three questions.
1) What total value of funds should be
invested in the business?
2) What specific assets should the business
require?
3) How should the required funds be raised?
The scope of financial management comprises
traditional approach on procurement of funds rather
than its allocation and use. While modern approach
covers not only acquisition but also allocation and
utilization of funds.
The firm may have any objectives but
financial management has the objectives of profit
maximization or weather maximization. Keeping in
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mind this particular objectives only major 3 decisions
are taken that are:
Investment Decision
Financing Decision
Dividend Policy Decision
5.2 FUNCTIONS OF F & A DEPARTMENT
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o To make payment
o To receive payment
o Accounting of transactions as per
o Accounting standards published by
institutive of chartered accountant.
o Company’s significant accountancy policy
o Master chart of account
Preparation of Budget viz.,
Revenue
Consumption/
Expenditure Budget
Procurement of Raw
material, Packaging
materials, general
stores, spare parts
etc. budget
o Capital Budget
Advances to employees for HBL &
Conveyance advance Budget
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Submission of Management Report
Provisional Monthly Report
Inventory Report
Standard cost vs. Actual Cost Variance Report
Revenue / Capital Budget Status Report
Monthly, Quarterly, Yearly Balance Sheet, P
& l account, etc.
o To get the account audited by
Internal auditors
Statutory auditors
o To arrange fund
Daily forecast
Weekly forecast
Monthly forecast
Quarterly forecast
Yearly forecast
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Various sections of F & A department and their
roll of function
o Bill section
Making of Payment
Accounting of Transaction i.e.
Bill inward register
SRV register
W.O. adjustment register
CWIP register
MIC register etc.
o Stores section
Control of inventory
Booking of receipt of inventory based or
SRVs
Booking of consumption based on SRVs
Physical verification as per
A, B, C, Analysis
Maintaining of PSL
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Review of slow / non-moving items,
identification of obsolete items and adjustment
there of as per H.O. guidelines.
Pay roll & Establishment section
Employees related payments like salary &
wages advance for expenses, TA / DA Medical
Reimbursement, LTC, HBL, Conveyance
Achievement etc.
o Cash & Bank section
Arranging of fund as per the requirement of
different sections.
Preparation of cherub.
Writing of cashbook / bankbook / bank
reorganization etc.
o Insurance section
To renew policies from time to time.
To ledge the claim in the event of
occurrences.
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To purchase the claim and get the settlement.
o Books
Preparation of monthly / quarterly / yearly
accounts.
Getting the audit of accounts.
Co-ordination with auditors.
Submitting of actual cost data on yearly
basis.
Getting of tax audit etc.
Analysis of financial ratios and Pay back
period.
o Books of accounts
1. Accounts manual
2. Significant accounting policy
3. Guideline on closing of accounts
4. General guideline
5. Power of officers
6. Master chart of accounts
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7. Maintaining chart of accounts
8. Maintaining of primary books
9. Cash-books
10. Bank-books
11. Journal Books
12. Ledger
a) Financial reports
b) Trial balance
c) Bank reconciliation
d) Profit & Loss account
e) Balance sheet
f) Cost of production
g) Actual vs. Budget/Standard cost
variance report with reason for
variation.
h) Review of ratios
i) Solvency ratios
j) Profitability ratios
k) Turn over ratio (stock ratio)
l) Service ratio
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5.3 FINANCIAL PLANNING
Planning is pre-requisite for managing any
little things too. When we think about fund, financial
planning comes at first. Financial planning answers
the following questions: -
o What should be funds requirements?
o How should procure funds?
o From where to procure the funds?
o How to utilize the fund at maximum
level?
Head office deals with the arrangement of
raising the funds and provides funds required by any
of four plants.
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In IFFCO, they make weekly forecast of funds
in which requirement of each department is
mentioned. After that the proposal is sent to head
office and got sanction from there.
So, financial planning has a significant place
for making decision of requirement and utilization of
funds.
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5.4 RATIO ANALYSIS
Current Ratio
Current ratio is the relationship between current assets and current
liabilities. Current assets are assets held on a short-term basis. These
assets include cash and bank balances, prepaid expenses, debtors, bills
receivables, inventory (finished goods, work-in-progress and raw
material), short term investment in treasury accounts and accrued
income. Normally short-term refers to an accounting period. Current
liabilities are obligations that are payable within an accounting period.
Current liabilities include, creditors, bills payable, cash credit and
overdraft from a bank for a short period and liability for expenses,
income recorded in advance, and any other liability due for payment
during the current accounting period. Current ratio is calculated by
dividing current assets by current liabilities.
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Current Assets
Current Liabilities
2007-08 = 576.9 508.0
= 1.136
2006-07 = 494.6397.5
= 1.244
2005-06 = 502.5273.3
= 1.839
Interpretation:
A current ratio of 2:1 is generally considered to be acceptable.
However, this rule of the thumb varies from industry to industry.
Higher the current ratio better it is as it signifies higher liquidity. In
2005-06 it was 1.839:1 whereas in 2006-07 it decreased to 1.244:1
and further reduced to 1.136:1 in 2007-08. Though it is showing
reduction Y-O-Y, but the current ratio is still on a satisfying position
for the investor.
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Quick Ratio
Measures assets that are quickly converted into cash and they are
compared with current liabilities. This ratio realizes that some of
current assets are not easily convertible to cash e.g. inventories.
The quick ratio, also referred to as acid test ratio, examines the ability
of the business to cover its short-term obligations from its “quick”
assets only (i.e. it ignores stock). The quick ratio is calculated as
follows
Current Assets – Inventory
Current Liabilities
2007-08 333.1508.0
0.655
2006-07 317.3397.5
0.798
2005-06 306.8273.3
1.125
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It is clear that this ratio will be lower than the current ratio, but the
difference between the two (the gap) will indicate the extent to which
current assets consist of stock.
Interpretation:
This ratio indicates the ability to meet short term payment, using only
the most liquid assets; the standard ratio is 1:1.though it shows
negative trend from 2005-06 to 2007-08 which reduced from 1.125 to
0.655 almost 50%. In the year 2005-06 it was above standard but in
the next two years it had fallen below the standard consecutively. This
is shows risk for the investors who are ready to invest in the company.
Net Working Capital
Working Capital is more a measure of cash flow than a ratio. The
result of this calculation must be a positive number. It is calculated as
shown below:
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Net Working Capital Total Assets
Bankers look at Net Working Capital over time to determine a
company's ability to weather financial crises. Loans are often tied to
minimum working capital requirements.
2007-08 174.9976.7
0.18
2006-07 (80.2)821
(0.098)
2005-06 33.5846.1
0.04
Interpretation:
The Net Working Capital Ratio in the year 2006-07 was in negative, -
0.098 due to more current liabilities than current assets but in the year
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2007-08 it raised to 0.04, which shows a positive move of the
company by reducing the current liabilities.
GROSS MARGIN RATIO
This ratio is the percentage of sales left after subtracting the cost of
goods sold from net sales. It measures the percentage of sales
remaining (after obtaining or manufacturing the goods sold) available
to pay the overhead expenses of the company.
Comparison of your business ratios to those of similar businesses will
reveal the relative strengths or weaknesses in your business. The
Gross Margin Ratio is calculated as follows:
Gross Margin Ratio = Gross Profit / Net Sales
2007-08 366.7 / 1210.1
0.3030
2006-07 284 / 982.2
0.290
2005-06 71.8 / 1049.4
0.068
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Interpretation:
The gross margin ratio is showing increase Y-O-Y which means the
COGS of company is reducing every year, i.e.; company is
concentrating on the cost reduction. It means the profit of the
company will increase in the near future too.
NET PROFIT MARGIN RATIO
This ratio is the percentage of sales dollars left after subtracting the
Cost of Goods sold and all expenses, except income taxes. It provides
a good opportunity to compare your company's "return on sales" with
the performance of other companies in your industry. It is calculated
before income tax because tax rates and tax liabilities vary from
company to company for a wide variety of reasons, making
comparisons after taxes much more difficult. The Net Profit Margin
Ratio is calculated as follows:
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Net Profit Margin Ratio = Net Profit before Tax / Net Sales
2007-08 91.9/ 1210.1
0.076
2006-07 52.3 / 982.2
0.053
2005-06 12.5 / 1049.4
0.012
Interpretation:
The net margin ratio shows that the margin is increasing year on year
which shows that the increase on sales had too increased the EBT of
the firm. It was only 0.12 in the year 2006-07 which increased to
0.053 in the year 2007-08 which further increased to 0.076 in the year
2007-08.
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RETURN ON INVESTMENT (ROI)
Income is earned by using the assets of a business productively. The
more efficient the production, the more profitable the business. The
rate of return on total assets indicates the degree of efficiency with
which management has used the assets of the enterprise during an
accounting period. This is an important ratio for all readers of
financial statements.
Investors have placed funds with the managers of the business. The
managers used the funds to purchase assets which will be used to
generate returns. If the return is not better than the investors can
achieve elsewhere, they will instruct the managers to sell the assets
and they will invest elsewhere. The managers lose their jobs and the
business liquidates.
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ROI = PAT / TOTAL ASSETS
2007-08 57.6 / 976.7
0.059
2006-07 32.1 / 821
0.039
2005-06 13.0 / 846.1
0.015
Interpretation:
The ROI chart shows the positive trend which shows that the
management is using the assets efficiently. In the year 2005-06 it was
only 0.015 which increased to 0.059 in the year 2007-08. Almost 4
times in the time period of two years.
SOLVENCY RATIO
The term solvency implies the ability of the enterprise to meet its
obligations on the due date. Some payments have short-term maturity
and some have long-term maturity. The firm has to plan for both
short-term and long-term obligations. We have analyzed short-term
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liquidity of a business enterprise in the previous section. Now we
extend an analysis to long-term liquidity. Long-term liquidity means
ability to meet long-term commitments or obligation. Long-term
lenders are primarily interested in this type of analysis.
DEBT TO EQUITY RATIO:
The term solvency implies the ability of the enterprise to meet its
obligations on the due date. Some payments have short-term maturity
and some have long-term maturity. The firm has to plan for both
short-term and long-term obligations. We have analyzed short-term
liquidity of a business enterprise in the previous section. Now we
extend an analysis to long-term liquidity. Long-term liquidity means
ability to meet long-term commitments or obligation. Long-term
lenders are primarily interested in this type of analysis. Much is the
stake of owner’s as compared to those who have given long- term
loans. Debts are long-term liabilities having maturity after one year. It
includes debenture, long-term loans from banks and financial
institutions and public deposits. Equity (also called shareholder’s
funds) includes equity share capital, preference share capital, general
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reserves, capital reserves, securities premium account balance and all
other reserves and surplus available for equity share holders. For the
computation of equity, miscellaneous expenses and debit balance of
profit and loss account, if any, are to be deducted.
Debt to equity ratio Debt
Equity
2007-08 129 / 329
0.392
2006-07 100.5 / 283.7
0.354
2005-06 131.9 / 263.5
0.5
Interpretation:
This ratio as discussed earlier gives the idea of having employed the
number of times debt against each rupee of equity. If it is higher it
shows the debt employed by the firm is more than equity which
increases the interest burden and reduces the profit of the company as
well as the shareholders too. In the year 2005-06 the debt employed
by the firm was almost half of the equity but it reduces to 0.392 in the
year 2007-08.
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Proprietary Ratio:
The ratio shows the probation of proprietors funds to the total
assets employed in the business.
Proprietary Ratio: Proprietary Assets x 100 Total Assets
5697.59
3300.81
=57.93%
Interpretation:
In 2006-07 the proprietary ratio was 58.77% and in 2007-08 the
proprietary ratio was 57.93%. The higher the ratio, the stronger the
financial position of the company, so it is desirable for the company,
but company need to improve this ratio
Debtors Ratio:
The ratio shows the number of days taken to collect the dues of
credit sales. It is a measure of credit period enjoyed by the customer.
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DEBTORS RATIO
55
58
53545556575859
1 2
Proprietary Ratio: Debtors + Bill Receivable x 365 Credit Sales
Credit Sales
2006-07 = 280178687 x 365 1864885457= 55 days
2007-08 = 362848990 x 365
2288612585
= 58 days
Interpretation:
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A shorter collection period indicates prompt payment and
reduction of bad debt. Similarly a longer collection period indicates
the risk of bed debt.
In 2006-07 the debtor’s ratio was 55 days and in 2007-08 the
ratio was 58 days. The ideal debtor’s ratio is 45 days. This indicates
the efficiency of the collection department. As compare to the ratio of
2006-07, the ratio of 2007-08 increased so it is unfavorable situation
for the company.
Creditors Ratio:
In indicates the months, days or week in which the amount is
given to creditors and bills payable. It is a measured of credit period
enjoyed by the producer. The number of days within which we make
payment to our creditors of credit purchases is obtained from
creditor’s ratio.
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CREDITORS RATIO
148
158
140
145
150
155
160
1 2
Proprietary Ratio: Creditors + Bill Receivable x 365 Credit Purchases
2006-2007 = 270464462 x 365 665132302= 148 days
2007-08 = 362462500 x 365 838357005= 158 days
Interpretation:
In 2006-07 the creditor’s ratio was 148 days and in 2007-08 the
creditor’s ratio was 158 days. As compare to the ratio of 2006-07 is
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148 days, and the ratio of 2007-08 is increased by 158 days. So it is
good for the company.
Return on capital employed:
It is an index of profitability of business and it obtained by
comparing net profit with capital employed. It is the most important
ratio from the view point of mgt.
Return on capital employed: Net Profit (before) x 100 Capital employed
2007-2008 = 33726866 x 100 1690654599= 1.99%
Fixed Assets turnover ratio:
To ascertain the efficiency and profitability of business, the
total fixed assets are compared to sales. The more the sales in relation
to the amount invested in fixed assets, the more efficient is the use of
fixed assets. It the sales are less as compared to investment in fixed
assets, it means that fixed assets are not adequately utilized in
business.
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FIXED ASSESTS TURNOVER RATIO
1.311.6
0
0.5
1
1.5
2
1 2
Fixed assets turnover ratio: Sales
Fixed Assets
2006-2007 = 1864885457 1419705869= 1.31 Times
2007-2008 = 2288612585 1354221542
= 1.69 Times
Interpretation:
In 2006-2007 the fixed assets turnover ratio was 1.31 times and
in 2007-2008 this ratio was 1.69 times. As compared to 2006-2007 the
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fixed assets turnover ratio was increased, in 2007-2008. So it is
favorable situation for the company.
Earning per share:
It is ratio expressed in monetary value that is rupees and paisa.
It indicates the amount of earning per share. Higher the amount, better
it is for the firm.
Earning per share: Net Profit (PAT) No. of shares 0/5
2007-2008 = 30965192 6899400
= 4.49 Rupees
Interpretation:
In 2007-2008 the ratio was 4.49 Rupees so it is good for the
company.
FINANCIAL LEVERAGE: -
Financial leverage is related to the financing activities of a firm. It
results from the presence of fixed financial charges. Such expenses do
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not very with the operating profits. They have to be paid regardless of
the amount of EBIT available to pay them. After paying them, the
EBIT belongs to the shareholders. Financial leverage is concerned
with the effect of changes in ability of a firm to use fixed financial
charges to magnify the effect of changes in EBIT on EPS.
2007 D.F.L
EBIT
EBT
74700000
12300000
= 6.07
Implication of D.F.L.
VADILAL has 6.07 D.F.L. during 05 year, which is less in compare
of 9.38 for 04. It show VADILAL eliminate them liability so it is sign
of good sound condition of the company in present.
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Balance Sheet
Currency in Millions of Indian Rupees
31-Mar-06 31-Mar-07 31-Mar-08
Assets
Cash & Equivalents 11.6 26.7 10.5
Total cash & short term investment 11.6 26.7 10.5
Accounts Receivable 198.3 196.1 219.8
Notes Receivables 7.6 13.7 13.5
Other Receivables 2.8 3 4.1
Total Receivables 208.7 212.8 237.4
Inventory 195.7 177.3 243.8
Other Current Assets 86.6 77.8 85.2
Total Current Assets 502.5 494.6 576.9
Gross Property Plant & Equipment 604.7 619 719.5
Accumulated depreciation -290.2 -315.1 -340.9
Net Property Plant & Equipment 314.6 303.8 378.5
Long - Term Investments 21.2 16.3 18.1
Deferred Charges, Long Term 7.8 6.2 3.2
Total Assets 846.1 821 976.7
Liabilities & Equity
Accounts Payable 90.2 68.1 95
Accrued Expenses 15.5 16.4 12.6
Short Term Borrowings 16.8 177.5 199.5Current Portion of Long Term Debt / Capital Lease 88.1 64.8 65.4
Current Income Taxes Payable 10.8 8.8 32.3
Other Current Liabilities 51.9 61.8 103.2
Total Current Liabilities 273.3 397.5 508
Long Term Debt 268.9 88.3 92.7
Minority Interest 0.5 0.5 0.6
Unearned Revenue, Non-Current 0 4.5 4.2
Deferred Tax Liability Non -Current 39.5 46.5 42.3
Total Liabilities 582.3 537.2 647.7
Common Stock 71.9 71.9 71.9
Additional Paid in Capital 48.7 48.7 48.7
Retained Earnings 114.2 138.1 185.6
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Comprehensive Income & Other 29 25.1 22.8
Total Common Equity 263.8 283.7 329
Total Equity 263.8 283.7 329
Total Liabilities & Equity 846.1 821 976.7
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INCOME STATEMENT
Currency in Millions of Indian Rupees
31-Mar-06 31-Mar-0731-Mar-
08 Revenues 1049.4 982.2 1210.1Other Revenues 0 0 0TOTAL REVENUES 1049.4 982.2 1210.1Cost of Goods Sold 977.6 698.3 843.4GROSS PROFIT 71.8 284 366.7
Selling General & Admin Expenses 0 172.5 205.7R & D Expenses 0 0.7 0.3Depreciation & Amortization
25.8 25 29.6Other Operating Expenses -15.2 1.8 20.6
OTHER OPERATING EXPENSES, TOTAL 10.6 200 256.3OPERATION INCOME 61.2 84 110.4Interest Expense
-46.6 -29.7 -31.1Interest & Investment Expense 4.4 5.5 8.2NET INTEREST EXPENSE -42.5 -24.2 -22.9
Income (Loss) on Equity Investments -1.1 -4.9 1.7
Currency Exchange Gains (Loss) 0 1.7 7.7
Other Non Operating Income (Expenses) -0.3 -4.6 -6.5
EBT, EXCLUDING UNUSUAL ITEMS 16.7 52 90.3
Gain (Loss) on Sale of Investments 0.7 0 0Gain (Loss) on Sale of Assets 0 0.2 1.6Other Unusual Items, Total -4.9 0 0Other Unusual Items -2.2 0 0
EBT, INCLUDING UNUSUAL ITEMS 12.5 52.3 91.9Income Tax Expense -0.6 20.2 34.3Minority Interest in Earnings 0 0 0
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Earnings from Continuing Operations 13 32.1 57.6NET INCOME 13 32.1 57.6
NET INCOME TO COMMON INCLUDING EXTRA ITEMS 13 32.1 57.6
NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 13 32.1 57.6
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LEARNING VALUE
By doing the project on Vadilal limited, I have come to know about
the history and also about the reason behind their success.
In the competitive world, there are so many competitors of this
company in their fields but due to their qualitative products, better
pricing policy, and expansion in the whole country, very large amount
of production & sales and great objectives of VADILAL limited is on
the top most level in India in their fields.
This company has achieved several or I can say lots of awards
far their brilliant success in different areas. The distribution channel,
marketing popularity of their brands is in very vast term that it is
spread over whole nation or world.
By doing this project I have got an opportunity to examine
myself and compare my knowledge about management industries etc.
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CONCLUSION
I have visited the VADILAL limited. The response of each & every
department of company was very appreciable the department heads
have provided the best possible information & have helped me by
their best efforts. Practical experience is very essential for any of the
management student, and by this industrial visit, I have learnt much
about the industrial process, which many not are gained by the books
only.
As a BBA Student it is compulsory for me to have the best possible
knowledge about industries and about its internal affairs. Due to this
industrial visit only I can get the benefit of visiting and adopting the
knowledge by the famous and no: 1 company is very effective and
good, their products are of best quality, and pricing policy is also very
much appreciable and done after the study of each & every class of
people
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BIBLIOGRAHPY
Books:
Growth and Structure of Industry
Marketing management
By: Philip kotler
Fundamentals of financial management
By: James C. Vanhorne
John M. Wachowiez
Human resource management
By: Gary Dessler
Magazine:
Business world
Search Engine:
www.google.com
Web sites:
www.vadilalgroup.com
www. investing.businessweek.com
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