INTRODUCTION
As for a commerce student theoretical knowledge is not enough to achieve success
in his career.
India is known the world over as `The Home of Spices. The climate of the country
is ideal for the growth of almost all spices. Spices are an important group of
agricultural goods, which are virtually indispensable in the culinary art. They also
play a significant role in our national economy and also in the economies of several
spice producing, exporting and importing countries. India accounts for about 45%
of the global spice exports. Eastern Condiments Pvt Ltd. manufactures spices and
masalas. It sells South Indian powders, such as rasam, sambar, curry, pickle
powder, and other spice powders through its shops. And it was a growing company
in India and also it was a largest manufacturer condiment and it is one of the
leading brands among the South India. The company sells its products in Kerala
and outside Kerala.
The study helps to get awareness about the organizational structure and functioning
of successful organization, and also financial analysis of the company. It gives an
opportunity to interact with the people working in the organization and financial
structure of the company. The study has been carried out to get an understanding of
the financial structure and performance of the company and departmental
functioning of the company.
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STATEMENT OF THE PROBLEM
Finance is the lifeblood and nerve centre of a business, just as circulation of blood
is essential in the human body for maintaining life, finance is a very essential to
smooth running of the business. There for financial analysis is very significant as
far as present day trend is concerned. Spices industry and business is fast growing
one. The study is very important for knowing the following:
Financial statement analysis of the company.
The departmental functions of the company.
The products of the company.
SWOT analysis of the company.
OBJECTIVES OF THE STUDY
To have an overall study of the company.
Financial statement analysis of the company.
To know about various departments and its functions.
To study the products of the company.
To find out the various aspects of SWOT analysis in the company.
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METHODOLOGY
The study is made personally visiting the company. The data were collected
through various methods. The methods adopted mainly are:
1) Observation
By observing the general surrounding, the functional process, Interactions of
employees etc.
2) Data collection
Primary data
Primary data collected through discussion with manager, officers and employees.
And also some practical experience.
Secondary data
Secondary data for the study was collected from internal annual reports, website,
and office records were used for collecting relevant information for this study.
The data needed to prepare this report was obtained from other published sources
like internet, News paper, magazines, business dailies and journals.
The following tools are used with the analysis and interpretation of financial
statements: Ratio analysis:
1) LIQUIDITY RATIOS
Current ratio
Quick ratio
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2) LEVERAGE RATIOS
Debt-Equity ratio
Proprietary ratio
Fixed asset to net worth
3) PROFITABILITY RATIOS
Net profit ratio
Return on total asset ratio
Return on net capital employed
Earning per share (EPS)
Dividend pay out ratio
4) ACTIVITY RATIO/ TURNOVER RATIOS
Stock turnover ratio
Debtors’ turnover ratio
Working capital turnover ratio
Fixed asset turnover ratio
LIMITATIONS OF THE STUDY
The limitations of the study are as follows:
The company won’t disclose their financial matters.
Lack of co-operation from certain departments due to their work load.
The study was restricted only with available information and it may not be
authentic one.
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CHAPTERISATION SCHEMA
The project has been articulated with the help of six chapters as follows:
Chapter 1 - Introduction
This chapter focuses on the introduction, importance of project, objectives,
methodology used and the limitations of the study.
Chapter 2 - Literature review - Financial performance analysis: A theoretical
framework
This chapter focuses on the literature review where project details the evolution of
the concept and its associated contributories.
Chapter 3 - Profile of the industry
This chapter specifies the industry details.
Chapter 4 - Profile of the company
This chapter focuses on the brief history of the organization, History and growth,
product profile, department profile, mission and vision of the company
Chapter 5 - Analysis and interpretation
This chapter includes the analysis and interpretation made after the study of the
project and gives the result of analysis. And SWOT analysis of the company.
Chapter 6 - Findings, Conclusion and Suggestions
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This chapter includes the findings, conclusion and suggestions made after the
study.
LITERATURE REVIEW
Accounting is a very serious activity. One of its functions is communication
of information at a specific interval, usually at the yearend by the financial
statements.
Financial Analysis originated and it passed through several stages of
development and attained the present position. Evolution of financial analysis helps
us to understand the circumstances leading to growth of the system.
The Financial Statements provide a summary of the accounts of a business
enterprise, the Balance Sheet reflecting the assets and liabilities and the Income
Statement showing the result of operations during a certain period.
Smith & Ashburne defines Financial Statements as “The end product of Financial
Accounting is a set of Financial Statements that purports to reveal the financial
position of the enterprise the result of its recent activities and an analysis of what
has been done with earnings;”
According to Myer, Financial Analysis is largely a study of relationship
among the various financial factors in a business as disclosed by a single set of
statements and a study of the trend of these factors as shown in a series of
statements.
Financial Statements Analysis is defined as “the process of identifying
financial strength and weakness of the firm by properly establishing relationship
between the items of the Balance Sheet and the Profit and loss Account.”
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In other words, Financial Statement Analysis is largely a study of
relationship among the various financial factors in a business as disclosed by a
single set of statements and a study of the trend of these factors as shown in a series
of statements.
Amir et al. (1993) were the first to use the term “value relevance”
in the context of information content of accounting figures. An accounting
figure/ratio is value relevant as it has significant strong predicted association with
the stock prices and stock market indicators such, Price-Earnings (P/E) or Price-
Book (P/B) ratios. Misund et al. in their study on the value relevance of accounting
figures in the international oil and gas industry concluded that all accounting
figures are value relevant, be it cash or accrual based.
Mingyi Hung (2000) in his paper on “Accounting Standards and Value Relevance
of Financial Statements: An International Analysis” concluded that the use of
accrual accounting (versus cash accounting) negatively affects the value relevance
of Financial Statements in countries with weak shareholder protection. This
negative effect, however, does not exist in countries with strong shareholder
protection.
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INDUSTRIAL PROFILE
India is known the world over as `The Home of Spices. The climate of the country
is ideal for the growth of almost all spices. Spices are an important group of
agricultural goods, which are virtually indispensable in the culinary art. They also
play a significant role in our national economy and also in the economies of several
spice producing, exporting and importing countries. India accounts for about 45%
of the global spice exports. In India, from the point of view of both domestic
consumption and export, spices are important commercial crops.
According to the International Organization for Standardization [ISO], there are
about 109 spices and India produces as many as 75 in its various agro climatic
regions. The term ` spices and condiments` applies to `natural plant or vegetable
products or mixtures in whole or ground form, which are used for imparting flavor,
aroma and piquancy to the food items`. Spices are also being used within the
country for flavoring foods and in medicines, pharmaceutical, perfumery,
cosmetics and several other industries.
Spice industry has been witnessing phenomenal growth rate both in the
international and domestic sector. The growth in this sector can be attributed to
the change in the life style patterns of the consumers all over the world. The
shift in the consumption trend towards natural products has also contributed to
the increased global demand of spices and culinary herbs. Spice and derivatives
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market is booming because these products find applications in a number of
industries including pharmaceutical, medicine, beverages, food processing, etc.
A few developing countries especially in the Asian continent are the major
producers of variety of spices. A large percentage of international and domestic
trade takes place in the dried form. India, Indonesia, China are few of the prime
producers of a variety of high quality spices and also significant contributors to
the global spice market.
INDIA AND SPICES
India produces 2.5 million tons to 3 million tons of spices annually. India
produces spices of different categories worth around US$ 3 billion. In terms of
volume and value, India accounted for 46 percent and 23 percent in value of
global spice trade. (Source: Spices Board India) India accounts for 25-30 per
cent of world’s pepper production, 35 per cent of ginger and about 90 per cent
of turmeric production.
Indian spices played important role in the history of various lands discovered or
destroyed. Spices have also played a political role in the history. The use of
spices from the east became a status symbol by the year 1200 and the European
preoccupation with the world of spices was born. The use of spice in food mean
money and power and the desire to acquire these precious status symbols led to
world exploration, global communication, trade, alliances and wars.
Indian spices also fitted into philosophic concepts of improving health, since it
was understood that they could affect the four humors blood, phlegm, yellow
bile and back bile) and influencing the corresponding moods, (phlegmatic,
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choleric and melancholic). Thus, ginger would be used to heat the stomach and
improve digestion; clove was believed to comfort the sinus, mace would prevent
colic and bloody flaxes or diarrhea; nutmeg would benefit the spleen and relieve
any bad cold.
Among the Indian Federal states, Kerala tops in pepper (96 percent), Cardamom
(53 percent) and Ginger (25 percent) production in the country. Andhra Pradesh
leads in Chilly and Turmeric production in the country with 49 per cent and 57
per cent. In coriander, cumin and fenugreek production
in the country, Rajasthan emerges as the largest producer with 63 per cent, 56
per cent and 87 per cent. The world spice trade is estimated at US$ 1.5-2 billion
in terms of value and 500,000tonnes in terms of quantity.
THE INDIAN SHARE
At present India produces around 2.5 million tons of different spice valued at
approximately 3 million US dollar, and hold the premier position in the world.
Because of the varying climate suitable for the spice cultivation almost all spices
are grown in this country. In almost all the 28 states and six union territories of
India, at least one spice is grown in abundance. No country in the world
produces as much variety of spices as India.
SPICES BUSINESS IN KERALA
Kerala is a land of spices considering the large variety of spices grown in the
state. The most popular among the spices are pepper, cardamom, turmeric,
chilies and ginger. Pepper known as the ‘king of spices’ is perhaps the world’s
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oldest known spice and is cultivated in over 15800 hectares in Kerala, which
account for 96% of the total production in the country.
There are a lot of opportunities for investors in spice sector and spices board.
The care taking of the sector in India is based in the state.
ABOUT THE COMPANY
Eastern was spearhead by late Mr. M.E MEERAN, who founded Eastern
Trading Company as a whole sale provision business in 1969 in Adimali,
Kerala. He expanded it to a trading business in 1975 as Eastern Agencies and set
up Eastern Condiments in 1983. A proactive visionary with a distinctive talent
in decision making, he steered the company from success to success. His legacy
lives on.
The “Eastern Condiments Pvt. Ltd” started in 1991 with a dream, making good
products available to the common man at the right prices., is a pioneer in the state
to produce packaged curry powders, Masala powders, spices and coffee powder.
Eastern Condiments Pvt Ltd. manufactures spices and masalas. It sells South Indian
powders, such as rasam, sambar, curry, pickle powder, and other spice powders
through its shops. And it was a growing company in India and also it was a largest
manufacturer condiment and it is one of the leading brands among the South India.
The company sells its products in Kerala and outside Kerala. In the early stages the
company exports its products Saudi Arabia and Arab Emirates and now the
company exports its products in various parts of the world like Gulf & Western
countries Middle East, U.K, U.S.A, Australia, Germany etc.
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Eastern Condiments Pvt.ltd. is a well established name and Kerala’s
largest manufacturer and market leaders with a market share of 78 % in Kerala and
one of the leading brands in south India. A name that will hold its own for years to
come as the worthwhile manufacturer, distributers and exporters of the quality
network and the blended spice powders and spices. .
And now the Eastern Condiments Pvt Ltd have a tie-up with an American
company “MECORMIC” and Eastern condiments given their 26% share to that
company.
HISTORY AND GROWTH
The story of Eastern curry powders began in a small mountain township called
Adimali. Mr. M.E Meeran, the Managing Director of Eastern Group of
Companies, started his career as a businessman with a marketing division named
Eastern Trading Company at Adimali. The capacity of the firm was 100 kg per
day at the starting time. He could establish a sales network in Idukki district. It
was done with the support of KSFE. He planned to increase the capacity of the
plant to 2000 kg. It is the first company in Kerala which installed the IMPEX
pulverizes. The company got the SSI registration in 1983-1984.
From the beginning of the company Mr. M. E. Meeran is the managing Director
of the company. Eastern Condiments was established in 1991, an expanded form
of Eastern Coffee and Curry Powder with 400 employees. The production at the
initial period was only 100kg per day, now it has the capacity to produce around
130 tons per day. In 1993 the company got spice board approval for starting
export.
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In 1995 a new plant was started at Theni and also the exporting unit called
Eastern spice and export was launched. The period between 2003 and 2005 was
the period of plant expansion and unification. In 2003 the company got ISO
9001 certification. In 2007 the company got ISO 22000 certification. In 2008 the
company achieved the target of 10 crore sales. In 2008 the company launched
tea powder in the name of ‘Eastea’. Presently the company is running with a
turnover of 650 crore (2011-2012).
The purity and freshness of Eastern Curry Powder made “Eastern” a house hold
name in India and abroad. The company exports its product to kingdom of Saudi
Arabia and United Arab Emirates for the past four years and now its export the
product to Gulf & Western countries Middle East, U.K, U.S.A, Australia and
Germany etc...
Eastern Condiments Pvt. Ltd. is a well-established name as Kerala’s largest
manufacturer of curry powder and masala one of the leading brand among the
south India. An expertise and experience collated over a period of 30 years has
borne fruit. Nationwide branches, two well-equipped factories situated in the
Eastern high range of South India and over two million satisfied household all
over stand as solid evidence of its exceptional repute. A name that will hold its
own for years to come as the worthwhile manufacturers, distributors and
exporters of the quality natural and blended spices powders and spices.
MANAGEMENT
The group is managed by a team of professional and family members. From the
very beginning Mr. M.E. Meeran has been the chairman and managing director
of the company. Now Mr. Navas Meeran is the managing director. In addition
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Mr. S.M. Muhammad, Mr. M.E. Muhammad, Mr. Firoz Meeran holds the chain
of Directors and Mrs. Nabeesa Meeran. For administration there is corporate
office at Ernakulum. As head of administration there is chairman and below that
vice chairman. The company started functioning only with 25 employees. Now
it is grown to more than 2500 employees, they are working with one heart and
soul for the achievement of the goals of the organization .Mrs. Nabeesa Meeran
playing a key role behind the success of the Eastern Group; she has been the
principal of the Eastern Newton School Adimali.
AWARDS AND RECOGNITIONS
Stringent quality control techniques has got Eastern several quality certifications
and accreditations, including the HACCP and ISO 22000. Moreover, the
Spices Board of India has awarded Eastern for being the 'Largest Exporter of
Spice Powders' in consumer packs, continuously for 13 years. ISO: 22000
2005 - Eastern is the first company in India to get the ISO 22000 certification.
HACCP - This was the certificate issued by food cert BV Netherlands
accredited by RVA the first body in the world for food safety accreditation. It is
Hazard Analysis Critical Point Certification.
LEGAL FRAMEWORK OF THE COMPANY
Eastern Condiments Pvt Ltd is incorporated under THE COMPANIES ACT
1956 on 26th Feb 1991 having its registered office at Eastern condiments Pvt
Ltd, P. B No: 15, Eastern Valley - Adimali, Idukki-Kerala.
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MISSION OF THE COMPANY
“Winning the trust of the customer through commitments to quality at
the right price in all our products”
THE EASTERN GROUP OF COMPANIES
Eastern group of companies is a group with diverse interest and a world leader
in Indian spices Eastern has ventured in to various areas like tires, retreads
mattresses, garments, packaged food , mineral water , public school and has
many more projects in the vision.
1. Eastern Condiments Pvt Ltd
2. Eastern Treads Ltd
3. Eastern Mattresses Pvt Ltd
4. Eastea Chai Pvt Ltd
5. Eastern Clothing Company
6. Eastern Aqua Mineral
7. Eastern Newton School
Eastern Condiments Pvt Ltd
The “Eastern Condiments Pvt. Ltd” started in 1991 with a dream, making good
products available to the common man at the right prices, is a pioneer in the
state to produce packaged curry powders, Masala powders, spices and coffee
powder. Eastern Condiments Pvt Ltd. manufactures spices and masalas. It sells
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South Indian powders, such as rasam, sambar, curry, pickle powder, and other
spice powders through its shops. And it was a growing company in India and
also it was a largest manufacturer condiment and it is one of the leading brands
among the South India.
Eastern Treads Ltd
An ISO 9001-2000 certified public limited company; Eastern Treads Ltd. is
engaged in the manufacture of quality pre-cured tread, cushion/bonding, gum and
black vulcanizing cement. Eastern tread ltd is an ISO 9001-2000 certified company
and it entered into the industry in the year 1986. And the Eastern Treads
manufacture conventional treads and the company firstly started at a private ltd
company and it was changed into a public ltd company. And also the company
went for public issue and the shares listed in Indian Stock Exchange. Eastern
treads is managed by Mr. Navas M.Meeran he was a youngest person and he has a
vision for the development of the group and also he has 12 years future experience
in the industry. Eastern Treads design produced suit tyres for all types of vehicles
from heavy trucks to passenger cars. It is not only a cost effective product but also
they are dependable, reliable and safe.
Eastern Mattresses Pvt Ltd
Sunidra mattresses Pvt.Ltd. was set up in 1999. Nidra’ means sleep in Sanskrit.
The promise of good sleep and rest is ensured by Eastern Mattresses Pvt.
Limited which manufactures and sells the Sunidra range of mattresses, cushions
and pillows. The world-class rubberized coir mattresses are manufactured at
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Thodupuzha in Idukki district, Kerala. Coir, a natural fibre derived from coconut
husk adds to comfort and luxury of the mattress. Eastern Mattresses Pvt Ltd.
manufactures quality mattresses at a state-of-the-art facility. Sunidra rubberized
coir mattress uses the UNICOM technology to combine the resilience of coir for
contoured support with the sensuous comfort of foam that ensures blissful,
comfortable and healthy sleep. Excellent quality at right pricing has made
Sunidra popular inside and outside Kerala. Exported to many countries, Sunidra
has notched a significant position in the mattress market. Eastern Mattresses
Also Manufactures Soft And Comfortable Pillows And Cushions.
Eastea Chai Pvt Ltd
In recent time the company launched a new product ‘Eastea’ from its product line.
“Taste and Strength in every sip”, Eastea - Premium blended tea, from Eastern has
just entered the market with its signature promise of taste and strength. From the
rolling hills of the Nilgris where the nip of the frost deepens the flavour of fresh
green leaves comes Eastea. Carefully picked, processed and packaged to seal in its
flavours and freshness Eastea is cup worth waking up to.
Eastern Clothing Company
Eastern Clothing Company (An ISO Certified Company) belongs to Eastern
Group,. Eastern Clothing Company introduced their products like shirts & trousers
in the brand name of King Richard in 1999. This brand was targeted at the middle
class. Top quality fabrics are used in the manufacture of KING RICHARD brand
(Utilizing 100 % cotton fabrics from leading Indian mills like Aravind,
Vardhaman, BVM, and also Italian brands like Morarjee Brembana. The shirts are
of semi cauals and formals and casual Trousers.
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Eastern Aqua Mineral
Eastern Aqua Mineral, a recently launched company was set up in the year
2002.Eastern Aqua Mineral entered the area of packaged drinking water with
the state of art plant located at Ernakulum district. Eastern packaged drinking
water is of highest purity standard, high quality with control 1286 testing
facilities and quality product with international standards. It is available in
convenient sizes. Eastern packed drinking water is also priced attractively in
keeping with Eastern’s view of bringing high quality products to the common
man at the right price.
Eastern Retreads Pvt Ltd
Eastern Retreads Pvt. Ltd. was set up in 1993 is engaged in retreading of tyres.
The factory is located at Vazhakulam; Thodupuzha in Kerala is equipped with
hot and cold retreading process. . Retreads are not only cost effective but they are
also dependable, reliable and safe. Retreads are used by truckers with scheduled
delivery times and small package delivery companies with guaranteed delivery
times. Retreads are also environment friendly tyres which are basically petro-
chemical products. It takes 22 gallon of oil to manufacture one new truck tyre
most of the oil is found in the casing which is renewed in the retreading
processes. As a result it takes only 7 gallons of oil to produce a retread. Because
of the competitive nature of the retreading industry truckers can expect to see
continuous improvement in quality, durability and reliability.
Eastern Newton School
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The mountain township of Adimali, home to the Eastern Group, with its natural
abundance and moderate climate has all the potentials to become a major
tourist destination and a centre of learning in the hilly district Idukki and in the
State of Kerala at large. Eastern Newton School a prestigious venture from Eastern
Group promoted and managed by M.M.IBRAHIM MEMORIAL
EDUCATIONAL CHARITABLE TRUST believes strongly in the
aspect of providing quality education to the needy and pragmatic children of the
high ranges at an affordable fee structure. The school, launched in the year June
2001 is affiliated with CBSE- Delhi and has classes up to 12. The main objective of
the school is to become a role model in the field of education, bringing out the
untapped talents of the children entrusted to our care and enabling them to grow as
intellectually enlightened, morally upright, socially committed, emotionally
balanced, patriotic and productive citizens of our Great Nation.
PRODUCT PROFILE
In our national economy spices play a very virtual role and our country India is
considered to be the home of spices. The freshness and the purity of Indian spices
and spice powders have made it a favourite in India and all over the world. Spices
are used as flavouring agents in many countries. They improve the flavour and
acceptability of cooked food and make them more delicious. Eastern Condiments
Pvt. Ltd. has varieties of spices, curry powders and pickles in its product mix. The
purity and freshness of Eastern curry powders has helped to enter the customers
mind and the products will become a leading brand in Kerala.
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Eastern curry powders popularly known as ‘Strong Masala’ is processed using the
unique flavour-lock technique. The best quality spices are powdered under
stringent temperature control, using micro pulverisers ensuring that the precious
volatile oils that give the flavour to the spice are preserved. Eastern curry powders
are so pure and fresh so that use just half as much as any other for excellent taste.
Eastern curry powders export to various countries like Middle East, U.K, U.S.A,
Australia and Germany. Eastern has grown into a favourite in Indian home across
the world. Excellent quality and right pricing has become the winning formulae of
the Eastern Group. Eastern curry powder is fast growing into an all India brand
with its entry into new India is considered to be the home of spices. Spices play a
very vital role in our national economy. The purity and freshness of Indian spices
markets and the introduction of market specific new variants.
Eastern condiments have different kinds of spices, curry powders, blended
masalas, pickle powders, pickles, rice powders, etc. Now Eastern Condiments
Pvt Ltd has 144 products. The company concentrated on pickles in exporting.
The spices are produced from the plantations of Kerala. Products are produced
under strict conditions and pure quality is assured.
Different categories of products are as follows:
Spice Powders
Eastern Turmeric Powder
Eastern Chilly Powder
Eastern Coriander Powder
Eastern Black Pepper Powder
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Eastern Ginger Powder
Eastern Kashmiri Chilly Powder
Eastern Chilly Powder With Oil
Eastern Coriander Cumin Powder
Eastern Cumin Powder
Eastern Fenel Powder
Eastern Fenugreek Powder
Eastern White Pepper Powder
Blended Spice Powder
Eastern Garam Masala
Eastern Sambar Powders
Eastern Rasam Powders
Eastern Madras Sambar Powders
Eastern Vegetable Masala
Eastern Chana Masala
Eastern Dal Fry Masala
Eastern Egg Masala
Eastern Chicken Masala
Eastern Fish Masala
Eastern Meat Masala
Eastern Mutton Masala
Eastern Tandoori Masala
Eastern Meen Mulaku Masala
Eastern Belesaru
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Eastern Super Garam Masala
Eastern Rajma Masala
Eastern Kulambu Masala
Eastern Pickle Powders
Eastern Chicken Biryani Masala
Eastern Mutton Biryani Masala
Eastern Fish Biryani Masala
Eastern Chicken Fry Masala
Eastern Chat Masala
Eastern Kabab Masala
Eastern Panipuri Masala
Eastern Pavbhaji Masala
Eastern Puliogare Masala
Eastern Seekh Kabab Masala
Eastern Vangi Bhath Mix
Eastern Palada Mix
Eastern Payasam Mix
Eastern Coconut Chutney Powder
Eastern Prawn Chutney Powder
Eastern Pepper Chicken Masala
Eastern Beef Ularthu Masala
Eastern Chilly Chicken Masala
Eastern Pickles
Eastern Garlic Pickle
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Eastern Garlic (In Brine) Pickle
Eastern Bitter Gourd Pickle
Eastern Ginger Pickle
Eastern Mango Pickle
Eastern Mango ( In Brine) Pickle
Eastern Tender Mango Pickle
Eastern Tender Mango ( In Brine) Pickle
Eastern Mango Ginger Pickle
Eastern Dates Pickle
Eastern Fish Pickle
Eastern Tomato Pickle
Eastern Goosberry Pickle
Eastern Goosberry (In Brine) Pickle
Eastern Lemon Pickle
Eastern Hot & Sweet Lemon Pickle
Eastern Lemon (In Brine) Pickle
Eastern White Lemon Pickle
Eastern Mixed-Veg Pickle
Eastern Nutmeg Pickle
Eastern Prawns Pickle
Eastern Green Chilly Pickle
Eastern Pineapple Pickle
Eastern Rice Based Products (For Breakfast)
Eastern Puttu Powder
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Eastern Idli Powder
Eastern Dosa Powder
Eastern Pathiri Powder
Eastern Appam Powder
Eastern Chamba Puttu Powder
Eastern Easy Palappam Mix Powder
Eastern Appam Powder
Eastern Ragi Puttu Powder
FUNCTIONAL DEPARTMENTS OF THE COMPANY
1. Finance And Accounts Department
2. Marketing Department
3. Export Department
4. Human Resource Department
5. Production Department
6. Maintenance Department
7. Quality Control Department
8. Purchase Department
9. IT Department
10. Production Planning And Control Department
11. Taxation Department
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ORGANISATION CHART
DIRECTOR MANUFACTERING
DGM MKTG
MANAGER MKTG
ASST MANAGER
SR.SALES OFFICERS
SALES TEAM
OFFICERS PPC
MANAGER -PPC
OFFICER
MANGER EXPORTS
SR OFFICER PPC
MANAGER PRDN
SR OFFICER HR
ASST MANAGER PRODUCTION MPD
OFFICERS
SR MANAGER HR& ADMIN
ASST MANAGER PURCHASE
PRODUCTIONSUPERS
ASST MANAGER TAXATION
FINANCE CONTROLER
MANAGER ENGINEERING
SR MANAGER TECHNICAL
SR OFFICER TECHNICAL
OFFICER TECHNICAL
OFFICERS
OFFICER ENGINEERING
Director –M&T Director –F&A Director –P&O Director -It
Chairman - Board of Directors
Executive Committee
Head- Hr Head - Production Head-Purchase Head-Sales Dgm Technical Secretary Head It
AGM FINANCE
DY MANAGER
SR OFFICERS
OFFICERS
WORK SHOP IN CHARGE
OFFICER PURCHASE
OFFICERS IT
Page - 25
1. FINANCE AND ACCOUNTS DEPARTMENT
Finance is the lifeblood and nerve centre of a business, just as circulation of blood
is essential in the human body for maintaining life, finance is a very essential to
smooth running of the business. It has been rightly termed as a universal lubricant
which keeps the enterprise dynamic. Finance department deals with planning,
organizing directing and controlling financial activities like procurement and
utilization of fund and distribution and distribution of earning to owners.
The authorized equity share capital of the company is Rs. 150000000/- divided in
to 15000000 shares of Rs. 10 each (as at 31/03/2011). General reserve of the
company is Rs.88045000 (as at 31/03/2011). The company has a daily working
capital of Rs.3 crore and the banking partners is FEDERAL BANK. Company has
no debentures. The yearly turnover of the company is 500 crore.
Important books/records maintained by the company
1. Monthly Trail balance, Profit and loss account & Balance sheet.
2. Stock statements
3. Purchase register
4. Sales register (weekly)
5. Stock register
6. Asset register
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7. Fund Flow Statement
8. Cash flow statement
9. Bank reconciliation statement (weekly)
10. Cost sheet
11. Budgets
12. Cash and bank books etc...
The finance & accounts department consists of fourteen (14) staffs in Adimali
division, DY. Manager Finance, DY. Manager accounts, Junior officers, Data entry
officers, Senior Petty casher & petty cashers, who manage and process its functions
by using ORION Accounting software.
There are lots of routine functions which accounting department has to do.
To record the transaction on the basis of invoice, bills and vouchers, keep
bills and vouchers in safe place after including them in files.
Collect amount from debtors and monitor debtors.
To reconcile the bank statements with his company's bank account.
Checking and passing the bills of supplier for the payment. A typical business
makes many purchases during the course of a year, many of them on credit,
which means that the items bought are received today but paid for later. So
this area of responsibility includes keeping files on all liabilities that arise
from purchases on credit so that cash payments can be processed on time.
Maintain sales register.
Maintain cash and bank books.
Daily cash tally and withdrawal.
Drawing monthly trial balance.
Page - 27
Preparation of monthly profit and loss account and balance sheet.
Preparation of Stock statements (monthly).
Preparation of purchase registers (monthly).
Preparation of sales registers (weekly).
Preparation of stock register (monthly).
Preparation of Asset registers,
Preparation of Fund Flow Statement.
Preparation of Cash flow statement.
Preparation of Bank reconciliation statement (weekly).
Preparation of Cost sheet.
Preparation of Cash and bank books.
Preparation of annual accounts.
Maintain the general and subsidiary ledgers.
Distribution of pay cheques.
Monitoring the process of budget achievement providing taxation pinning and
advisory service to the company.
Evolve an audit manual.
Advising management on funds, utilization and implementation.
Preparation of corporate plans annual plans and budget.
The finance and accounts department is divided in to four working sections:-
1. Receipt data entry section
2. Payment processing & data entry section
3. Bank/Cash section
Page - 28
4. Cash counter &Petty cash section
1. Receipt - data entry section
This section handled all receipts of the company and also some payments. An
important and frequent transaction in this section is route sales data entry work.
Route sales are handled by receipt data entry section. Eastern have more than 80
route sales. 98 % of sales are cash sales, only 2% Credit sales, credit provided to
only 200 parties. An important document filed in this section is ‘Route Sales
Statement’ and route traveling expenses documents submitted by sales executives
every Saturday. Route sales statement contains route name, period, total sales, cash
sales, cash deposited into companies bank account, cash deposited into companies
cash counter and also route expenses and sales summary. Sales summaries are
uploaded from PAM-Tech machines; it is done by separate section.
Some frequent Journal entries in this section:-
When route sales amount deposited in to bank (supporting document-bank
deposit slip)
By Federal Bank A/c Dr.
To Sales route
When route sales amount deposited in to company cash counter (supporting
document-slip provided by the company cash counter )
By Cash A/c Dr.
Page - 29
To Sales route
Route sales expenses, sales team those expenses taken from route collection
(supporting document-expense bills)
By Expenses A/c Dr.
To Sales route
Other important functions of this section:
Preparation of bank reconciliation statement for finding any difference in
companies receipts, between bank account and companies records.
Preparation of sales statement for finding out any increase or decrease in
route sales, if sales is below targeted sales, some portion of amount deduct
from sales executives salary.
Preparation of sales registers (weekly).
Preparation of stock register (monthly).
2. Payment processing & data entry section
This section handled all payments of the company and also other functions. An
important and frequent transaction in this section is data entry work to payment due
for a wide variety of purchases. The accounting department keeps all the
supporting business documents and files. For payment due only if all terms are
correct.
Page - 30
Important and frequent transaction in this section:
Receive supper’s bills for making payments. Purchase department send
suppers bills, copy of goods received note and copy of purchase order to
accounts department for making payment.
Suppler bill contain details such as: suppler address, to address, fright paid
or not, (if not, company pay the fright, as per agreement), quantity of
material, rate of material, amount of material etc…
Goods received note (G.R.N) contains details such as: date, suppers invoice
number & date, from address of suppers, quantity accepted, quantity
rejected, its rate and amount etc…
Purchase order contains details such as: Supplier code, supplier name,
supplier address, purchase order no, purchase order date, purchase item
name & code, quantity, rate, amount, price basis, payment term, mode of
dispatch, warranty, our bank, CST No./ST No., remarks, Tin No., delivery
schedule etc…
Company pays only the amount on the basis of purchase order rate.
After verification of suppers bills, copy of goods received note and copy of
purchase order, officer pass a journal entry for payment due
I.e.: Raw material A/c Dr.
Page - 31
To party
And prepare a payment advice, it is send to Bank/cash section
3. Bank/Cash section
This section handles all bank payment and receipts, and cash provide to petty cash
section of the company. Company’s payments through issuing cheques (account
payee only), Company’s bank provide only 5 cheque leaf to Adimali division, and
it contain 500 cheques. Cash transitions limited only up to 5000.
Important and frequent transaction in this section:-
Receive payment advice from Payment processing & data entry section,
payment advice contain details such as: Name of the payee, Vender code,
Nature of payment, Request for payment-Cheque or cash, Due date for
payment, Remarks by preparer:-doc.no. Invoice no & date, invoice amount
& rate variation if any. Payment advice is prepared by an accounts officer
& approved by senior officer.
Prepare a cheque for parties name ‘Account payee only’
Pass journal entry for payment
I.e. Party A/c Dr.
To Federal Bank. (Also record cheque number)
Prepare bank payment voucher & print and also signed by the preparer.
‘Bank Payment Voucher + Payment advice + Cheque’ submitted to
DY.Accountant.
Payment voucher and cheque is signed by DY.Accountant after verification.
Page - 32
Senior Officers
Deputy Manager Finance& Accounts
Officers
Data Entry Officers
After that, the cheques are submitted in to bank, or parties directly collect
the cheque.
This section files documents such as: Bank payment, General journal,
contract bills, cash receipt, medical claims, mobile bills, cash payments
etc…
4. Cash counter & Petty cash section
This section handles all cash payments and receipts, collect bills and verifying the
bills and send to concerned department, receive cheque and verifying that, collect
cash, cheque, and bank slips from sales executives, and provide salary & wages to
employees etc…
STRUCTURE OF FINANCE DEPARTMENT
Chart 4.2 [source: from dy.accounts manager]
Page - 33
2. HUMAN RESOURCE MANAGEMENT DEPARTMENT
Human resources are the real assets of an organization. If treated well, they can
take organizations to commanding heights. Organizations are generally driven by a
set of pre-determined goals. They employ physical, financial and human resources
in order to achieve goals. Organizations thus depend on people for their survival
and growth. In a similar way people need organizations. The success and failure of
every company depends upon its human resource. The vast majority of people
work to support themselves and their families. But people work for many other
reasons other than economic security, they want to gain recognition and achieve
status or to test and stretch their capabilities. It is a fact that the people are vital for
the effective operations of a company as human effort and brains are the main
driving force behind the organization.
Employment of competent and specialized persons at various levels is one
important reason for the continuous success of Eastern. Moreover employment of
women at certain key areas of operations avoids unreasonable labour problems to
an extent.
The key factor in the growth of Eastern is mainly the good and healthy employer-
employee relationship. About 2500 employees are working with a mutual
relationship in the organisation. In eastern maximum 80% people are women
workers. The workers keep discipline in the organisation and also they do the
works very carefully.
Page - 34
OBJECTIVES OF HUMAN RESOURCE DEPARTMENT
1. To procure right type of personnel for right job at the right time
2. To provide right kind of training to personnel to increase their productivity
3. To ensure effective utilization of human resources
4. To ensure development of human resources by offering opportunities for
learning and advancement
5. To achieve and maintain high morale among employees in the organization
by securing better human relation
6. To identify and satisfy the needs of the individuals by offering various
monetary and non-monetary rewards
SCOPE AND ACTIVITIES OF HUMAN RESOURCE DEPARTMENTS
Human resource or Manpower planning
Recruitment, selection and placement of personnel
Training and Development of employees for their efficient performance and
growth
Appraisal performance of employees and taking corrective steps
Motivate the workforce
Wage and salary administration
Personal counseling
Compensation and benefits
Page - 35
RECRUITMENT PROCEDURES ARE:
In eastern they are following two types of recruitment procedures direct
recruitment and internal recruitment.
A) DIRECT METHOD
Direct method means they are directly gives advertisements in Medias. In Eastern
this method is frequently used for recruitment. The firm places jobs advertisements
in Malayalam, English news papers and T.V media tries to attract as much capable
people from outside its company service.
B) INTERNAL RECRUITMENT
The company for filling the post by efficient and skilled workers from the rank,
promotion and panchayat has preferred local candidates who belong to
surroundings.
SELECTION PROCESS
The selection process is only through direct interviews. The employees are
transferred to different departments on the basis of their skills and abilities. They
conducted a test also but the test conducted only for senior position.
1) Tests are conducted only for senior position
2) Interview
Page - 36
After the test the managers conduct face-to-face interview with candidates and
select the best person based on his qualification and ability.
But in Adimali branch selection is done only for the posts of sales executive and
drivers. The executives from the Ernakulam branch are directly doing the
selection procedure of remaining all posts.
PERFORMANCE APPRAISAL
Eastern is following a special type of system for appraising the workers that is
KRA system i.e., the KEY RESULT AREA. Here the performance of individual
employee is evaluated by his superior officer. The officer will evaluate the
employee’s performance on the basis of result produced by them and gives a report
to the board for a particular period of time. If the board is satisfied he/ she will
forward it to the top management by recommending incentive or promotion
WAGES AND SALARY
The workers are paid in two types of wage system:
Piece rate system: Under piece rate system of payment, wage is paid on the output
produced and not on time. In the packing section they are following the piece rate
system.
Salary system: This mode of payment is applicable for the rest of the workers,
which also includes the loading and unloading workers.
NON MONITARY BENEFITS
The company provides a lot of non monitory benefits to their employees. Some of
them are as following
Page - 37
Vice president
Senior manager hr & administration
Senior officer
Officers
Transportation
Personal protective equipments
Medical insurance
Pension scheme
Annual medical check up
Canteen facilities
Tours and picnics
Structure of human resource & administration department
Chart 4.3 [source: from senior officer H.R]
Page - 38
3. PRODUCTION DEPARTMENT
The production department is the backbone of a manufacturing organization.
Production is a process of converting input in to output. Technically speaking, a
production is concerned with step by step process of raw material into finished
goods.
OBJECTIVES
a. Design of the product
b. Design of the production system
c. To ensure production according to the plan and requirement.
FUNCTIONS OF PRODUCTION DEPARTMENTS
a. Product selection and design
b. Production planning
c. Quality control
d. Inventory control
e. Plant layout and material handling
f. Cost control
The first step in the production takes place both at Adimali and Theni where the
raw material (chilly, turmeric, coriander) needed are purchased in bulk are
Page - 39
cleared, roasted, crushed, powdered and packed and dispatched to Adimali for
further packing. The distribution is handled by the company itself.
Eastern Condiment deals with production and packing of curry powders,
masalas, instant pickle powder and processing of pickles. The company has a
production capacity of 12 tons per day. To ensure that the spices reach the
consumer at fresh conditions at a minimal cost, the company follows
international packing standards to protect, preserve and present its products. For
bulk packing, the VACCUPAC system is used where in products are packed in
vacuum, thus protecting the powders from fungal infection, moisture, oxidation
etc.
Production function performs according to instructions from the PPC. PPC gives
monthly indent which is converted in to weekly plans by the production
department. A stock of goods for 3 days production is kept with the department
in case of contingencies. All details regarding production are given to PPC
daily. The department has 14 vehicles for the purpose of transferring raw
materials. The department has around 750 workers. The production is dependent
on the skill and experience of the workers. The productivity is around 75%.
QUALITY ASSURANCE
The company follows stringent measures which are applied with regular
laboratory testing. The Indian spices board with their spice house certification
has recognized the company’s obsession with quality and hygiene. Eastern has
also achieved the highest ranked approvals for quality, the Hazard Analysis
Critical Control Point (HACCP), ISO 9002 certification and ISO 22000
certification.
Page - 40
Chilies, coriander, turmeric &spicesCleaning Drying Roasting
PowderingMixing
Packing
Marketing
MANAGER PRODUCTION
AST.MANAGER
SR.SUPERVISORS
SUPERVISORSRosting, Powdering,
Hnd.paking, Mach. pking
Workers
PRODUCTION FLOW CHART
Chart 4.4 [source: from officer production]
STRUCTURE OF PRODUCTION DEPARTMENT
Page - 41
Chart 4.5 [source: from officer production]
4. MAINTENANCE DEPARTMENT
Maintenance department of Eastern are responsible for keeping the plant and
equipments in good condition. Maintenance Department of Eastern has four
sections.
1. Electrical
2. Mechanical
3. Technical
4. Automobile
FUNCTIONS OF MAINTENANCE DEPARTMENT
1. PREVENTIVE FUNCTION
Preventive function done to alert breakdowns, improve efficiency of working to
keep a routine monitoring of the machineries. There is a routine maintenance
schedule and the preventive maintenance is done according to it. This is done in
weekly or monthly basis according to the condition of the machine.
2. BREAKE DOWN MAINTENANCE
Page - 42
Maintenance Manger
Maintenance Team
Automobile in charge
Workers
This is done to restore the machine back to the work if it undergoes a break down.
It is done according to the priority of the machine. This is done in minimum
possible time, so that production of the plant is not affected.
3 PERIODICAL MAINTAINCE
This is done on a specific period of time it is like routine happens in fixed time to
ensure proper working of machines.
OBJECTIVES OF MAINTENANCE DEPARTMENT
a. Optimize the use of available funds, personnel and facilities and
equipment through the effective maintenance management methods
b. Systematically identify maintenance needs and deficiencies and capital
improvement needs at all field stations
c. Enable preparation of service maintenance and construction budget
request using systematic, standardized procedure
d. Monitor and document corrective actions , project expenditure and
accomplishment
STRUCTURE OF MAINTENANCE DEPARTMENT
Chart 4.6 [source: from officer maintenance]
Page - 43
5. MARKETING DEPARTMENT
Marketing is considered to be the head of an organization. It is the most important
department in an organization. One of the important reasons behind the success of
the company is its marketing strategy compared to their rivals. The system
followed by Eastern is very unique and it has been very effective. They deal with
the wholesalers and retailers directly at their door step with the help of around 80
direct selling regions in all around the state.
OBJECTIVES MARKETING DEPARTMENT
Developing marketing strategies
Capturing marketing insights
Building strong brand image
Delivering value to consumers
Connecting with customers
DIRECT SALES
This peculiar feature of Eastern curry powders helped it to vary from order
companies. The group directly distributes the products to retailers in Kerala. The
Page - 44
company has around more than 100 vehicles which go on around 80 strong routes
covering the entire state. A sales executive, sales assistant and driver will be on
each van to go for the sales. 22 lakh kg sales in Kerala per month. The company
has 144 products.
The various sales techniques consist of:-
1. Route Sales
2. Factory Fresh Outlet
3. Inter Company Sales
4. Export Sales
5. 30 Reverse vehicles
6. Performance awards
7. Sales executives classified in to three A, B , C on the basis of their
performance.
Company has four depots, which are at Kozhikode, Kottayam, Trivandrum, and
Trissur. Sales target is fixed only after looking the previous 3 months sale. More
sales are done in Kottayam (Dts) .The sales executives for each route give the
orders to be dispatched to each sale depot. He also takes care of the billing and cash
transactions. After making a sale, a sale invoice is made and the summary is given
to the cash department. The assistant places the order to different shops. After the
delivery of goods, the vans return after verifying the order form and checking the
stock. The accounts are maintained on a weekly basis. The company has around
Page - 45
40000 retailers and 15 dealers. Mainly, cash transactions are undertaken and credit
facilities is given to only around 200 parties.
Meetings of the sales executives are held every week after they return from their
different routes. Here every aspect of the weekly sales will be discussed and any
problems arising can be brought to the notice of the management.
By the direct distribution the company has achieved a lot of benefits. Some
of them are as follows;
1. They can deal with the wholesalers and retailers directly at their door step.
2. The company can maintain a good relationship with the wholesalers and
retailers.
3. The company can avoid the role of intermediaries in the distribution of the
product. It helps to avoid unnecessary commission, brokerage and other
related expenses.
4. The company’s own vehicles used for distribution aid to give an important
mode of advertisement in addition to the other media advertisements. This
incurs no additional cost.
Eastern Condiment has entered in to world market in the recent years. In India it
is capturing both urban and rural markets. In Kerala it is the market leader with
more than 78% market share to almost all its products.
MARKETING OUT SIDE KERALA
Page - 46
Factory
Dippo or carry forward ag
ent
Super stockist
Distributers
Retailers
CHAIRMAN
DGM MANAGER
MANAGER
ASSISTANT MANAGER
SR.SALES EXECUTIVES
SALES ADMNI.STAFFS
Eastern also deals with sales of their products outside Kerala by using well
established channel for over 9 years.
Outside marketing:
Chart 4.7 [source: from marketing manager]
STRUCTURE OF MARKETING DEPARTMEMT
Page - 47
Chart 4.8 [source: from marketing manager]
6. QUALITY CONTROL DEPARTMENT
Eastern have well equipped quality control department maintained by qualified
professionals and new technology oriented machines. Laboratory in Adimali is
central laboratory of eastern condiments pvt.ltd because all critical and major
decisions are taken from this laboratory itself. Functions of this department is to
ensure that the quality objectives of the firm are relevant to meet the requirements
of the product quality and are periodically measured and compared against product
quality requirement. Before packing each sample of products are tested in the lab
and will pack only if they get the good quality certification from the lab. And if any
products are returned by the customers, they will be tested to find out the reason for
rejection.
MAJOR FUNCTIONS
Checking the quality of raw material
Checking the quality of semi finished goods
Checking the quality of finished goods
Page - 48
HEAD TECHNOLOGY & ENGINEERING
TECHNICAL MANAGER
ASST MANAGER MICROBIOLOGY
SENIOR OFFICER TECHNICALMICROBIOLOGIST
Perform new research and development process
Helping to purchase department to procure right supplier
Help production department in actual quality production
Maintain standard for ISO 22000
Eastern condiments laboratory is function at three level
Microbiology
Chemical
Instrumental
Eastern has the first fully automated microbiology laboratory in India in food
industry. Microbiology lab is used to find out the bacteria, microbes etc. present in
the raw materials. It has 2 divisions-conventional method and automation method.
Chemical test helps to detect stones, moisture, oil percentage etc… The strict
quality control techniques has got Eastern several quality certifications and
accreditations, including the HACCP and ISO 22000.
Research and development function is also performed by quality control
department.
STRUCTURE OF QUALITY CONTROL DEPARTMENT
Page - 49
Chart 4.9 [source: from H.R dept]
7. PURCHASE DEPARTMENT
The purchasing department will be responsible for providing the materials,
components and equipment required to keep the production process running
smoothly. A vital aspect of this role is ensuring stocks arrive on time and to the
right quality. Performance of a manufacturing firm always depends on the
efficiency of its purchase department. The various raw materials needed for the
production is purchased by this department.
OBJECTIVES OF PURCHASE DEPARTMENT
To provide uninterrupted flow of materials and service for company
operations
To procure materials economically at a cost consistent with the quality and
service required. However, generally all purchases may be attempted at the
lowest cost.
To find reliable alternative source of supply
Page - 50
To buy at the most economic order quantities
To buy the best value, a combination of right quality at the best price with
the best supplier service
To maintain good relations with vendors
To promote source development
To develop and maintain good buyer-seller relationship
FUNCTIONS OF PURCHASE DEPARTMENT
The main functions of the Purchase Department are defined as follows:
Procurement of stores through indigenous and foreign sources as required
in accordance with the rules in force.
Checking of requisitions
Selection of suppliers for issue of enquiries.
Issuing enquiries/tenders and obtaining quotations.
Issue of Purchase Orders.
Follow-up of purchase orders for delivery in due time
Verification and passing of suppliers’ bills to see that payments are made
promptly.
Correspondence and dealing with suppliers, carriers etc., regarding
shortages, rejections etc., reported by the Stores Department.
Maintenance of purchase records.
Page - 51
Board of Directors
AGM Purchase
Asst Managers
Senior Officers
Officers
Purchase of raw materials , items such as dry chilies, coriander, turmeric, cumin,
fenugreek, fennel, rice, fruits and vegetables, preservatives, salt etc and outsourced
etc, purchased at Ernakulam, Adimali, and Theni.
Evaluation of existing suppliers
STRUCTURE OF PURCHASE DEPARMENT
Chart 4.10 [source: from H.R Dept]
Page - 52
8. EXPORT DEPARTMENT
Eastern Condiments Pvt Ltd started exporting in the year 1995. Today the company
is exporting its products to almost all gulf countries, and to the different parts of the
world, like USA, UK, UAE and AUSTRALIA. The Company has its own
distributors. 30 % of total production is export. The company exports above 600
tonnes per month (60 containers), export through ship. Eastern exports all their
products into the foreign market. Company exports mainly to gulf countries about
75% of export take place in gulf countries. 25 % of profit portion through export.
Export policies
Separate packing –bottles and duplex packet
More quantity products
Based on country standards
Page - 53
MANAGER
SENIOR OFFICER
JOUNIOR OFFICER
Quality checking under each stage
Mode of transportation in export business
Production at Adimali stuffing and packing is carried at kothamangalum
Packed materials are transferred using containers each have 10 tone capacity
monthly 60 containers are exported.
Company takes containers through his on vehicles to Cochin port.
From Cochin port containers are transferred other countries by sea.
Exported products are reaching the hands of distributers from there it reach the
customers.
The dealers are working on commission basis.
ACHIEVEMENTS
Eastern is the leading exporter of condiments from India. Eastern has
received the spices board award for the best exporter continuously for the
last 14 years.
STRUCTURE OF EXPORT DEPARTMENT
Page - 54
Chart 4.11 [source: from Export manager]
9. IT DEPARTMENT
Eastern condiments limited are fully automated ERP installed factory. Computer
system enables each process to do faster and safe manner. Artificial intelligence
is necessary for development of mankind. Today the term information
technology has bellowed to encompass many aspects of computing and
technology, and the term is more recognizable than ever before. The information
technology umbrella can be quite large, covering many fields. IT professionals
perform a variety of duties that range from installing applications to designing
complex computer network and information data bases.
The Eastern is a fully computerized. Adimali division has 140 machines. The
company has centralized data base password control to restrict unauthorized
access. All the departments are connected via networks. Eastern uses oracle
based software called ORION, which has been customized to suit the needs of
their particular organization. The networking is done through BSNL Broadband
line.
Page - 55
FEATURES
Well functioning ERP system.
DATA BASE BackUp
High Speed Internet facility.
Intel Pentium4 processer, 512 MB RAM and 80 GB Hard disc.
Windows 7 Operating system.
Online conference facility.
Best H.P Printers.
Wi-Fi Facility etc…
MAIN FUNCTIONs OBJECTIVES OF IT DEPARTMENT
Help in day to day process.
Timely access to data.
Proper communication with departments and out side.
Ensure the protection and security of data.
System maintenance & Repairing.
Software installation and updating.
Facilitating good communication system.
Data management.
Computer networking.
Computer engineering.
Data base system design.
Software design.
Management of information system.
Page - 56
Boar
d of
dire
ctor
s
IT M
ange
rs
Seni
or O
ffice
rs
Offi
cers
The company has a good IT team for implementing the ERP(Enterprise
Resource Planning) which was started in the year 2001 and was centralized in
the year 2005. ERP enables fast transactions and systematic in all its functions.
ERP also helps in generating MIS reports which help in decision making. The
package used is ORION 7.4 and ORION 10.x.
STRUCTURE OF IT DEPARTMENT
Table 4.12 [source: from H.R Dept]
10. PRODUCTION PLANNING AND CONTROL DEPARTMENT
This department mainly focuses on easy and smooth going of manufacturing unit
from purchase, production, and marketing. They make plans according to the data
provided by the marketing department (The requirements for coming period) Based
on this they give instruction to the purchase dept and the production department.
They plan for 3 months later it divided on monthly basis and finally supervisors in
production scheduling on weekly basis. Production is according to the requirements
and will depend on seasonal demands.
Based on the marketing forecast PPC department makes free zed plan then they
check with purchase department about raw material availability in case if there is
no adequate stock the procurement process take place after this production plan is
transferred into production department.
Production planning and control is the department which plans everything
regarding production. It find out what is to be produced, when, what quality and it
Page - 57
MANAGER PPC
SENIOR OFFICER
OFFICERS
SUPERVISOR
even informs the purchase department about what raw materials to be purchased
for production.
PPC regulates stock inflow and out flow with the help of ORION software so the
amount stock will be readily available. They make plans according to the data
provided by the marketing department. Based on this, they give instruction to
purchase department and the production department. Production is according to the
requirement and will depend on the seasonal demand. The monthly production of
Eastern is 240000 tons. This is based on monthly demand. Every sales executive
gives the order from retailers, Based on this PPC give instruction to both
production and purchase.
OBJECTIVES OF PPC DEPARTMENT
Increase profitability of the company
Quality control
Minimize cost
Coordination between men and machines
Maximize output with minimum input
Ensure operations are run efficiently and as planned
Optimize the use of resource, material, machines etc.
STRUCTURE OF PPC DEPARTMENT
Page - 58
Table 4.13 [source: from H.R dept]
11.TAXATION DEPARTMENT
Eastern condiments Pvt ltd has separate department for taxation purpose
performing under the finance department. Eastern deals with spices related
products so some item have tax on state wise. Eastern follows one month advanced
tax payment thorough E-filing with government of Kerala. Taxes are majorly paid
on the basis of sales.
For actual tax Payment Company follows: Internal audit, Statuary audit & Macro
audit.
Mainly company follows: Vat, Central Excise & Service Tax.
STRUCTURE OF TAXATION DEPARTMENT
Page - 59
MANAGER
Deputy Manager
Senior manager
WORKERS
Chart 4.14 [source: H.R dept]
Introduction
Financial Analysis is the process of determining the operating & financial
characteristics of a firm from accounting data & financial statement. The goal of
such analysis is to determine efficiency & performance of the firm management, as
reflected in the financial records and reports. Its main aim is to measure the firm’s
liquidity, profitability and other indications that business is conducted in a rational
and orderly way.
RATIO ANALYSIS
Ratio analysis is a powerful tools a financial analysis. Financial ratio analysis is an
arithmetic relationship between two figures.
Financial ratio analysis is a study of ratio between various items of groups of items
in financial statement. It also based upon various financial ratios, which are
Page - 60
calculated from the data provided in company’s balance sheet & profit and loss
account.
As per I.M. Pandey “Financial ratio in the relationship between two accounting
figures, expressed mathematically”.
A financial ratio is the relationship between two accounting figures expressed
mathematically. Ratios provide clues to the financial position of a concern. These
are the indicators of financial strength, soundness, position or weakness of an
enterprise. One can draw conclusions about the financial position of a concern with
the help of accounting ratios.
The following categories of some ratios calculated from the books of eastern
condiments private limited (ECPL) as under:
1. Liquidity Ratios
2. Leverage Ratio
3. Activity Ratios / Turnover Ratios
4. Profitability Ratios
1. PROFITABILITY RATIOS
The main aim of an enterprise is to earn profit which is necessary for the survival
and growth of the business enterprise. It is earned with the help of amount invested
in business. It is necessary to know how much profit has been earned with the help
of the amount invested in the business. This is possible through profitability ratio.
These ratios examine the current operating performance and efficiency of the
Page - 61
business concern. These ratios are helpful for the management to take remedial
measures if there is a declining trend.
a. Net Profit Ratio
b. Return On Total Assets
c. Return On Net Capital Employed/ Investment
d. Earning Per Share (EPS)
e. Dividend Pay Out Ratio
f. Return On Equity
a. NET PROFIT RATIO
A ratio of net profit to sales is called Net profit ratio. It indicates sales margin on
sales. This is expressed as a percentage. The main objective of calculating this ratio
is to determine the overall profitability. Net profit ratio determines overall
efficiency of the business. It indicates the extent to which management has been
effective in reducing the operational expenses. Higher the net profit ratio, better it
is for the business. Net profit ratio = Net profit / Net sales x 100
TABLE: 5.1 NET PROFIT RATIOS
Financial Year Net Profit Net SalesNet Profit
Ratio (%)
2006-2007 1385.4 16019.05 8.65
2007-2008 591.85 19487.84 3.04
2008-2009 1210.42 27514.45 4.40
2009-2010 3190.54 32026.17 9.96
Page - 62
2010-2011 1043.62 37590.3 2.78
[source: financial statements]
Chart 5.1 Net Profit Ratio
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
2
4
6
8
10
12
[source: table 5.1]
Interpretation
This ratio helps in determining the efficiency with which affairs of the business are
being managed. The net profit ratio rises till 2010; the net profit ratio was 9.96. The
net profit ratio decreased during 2011; the ratio was 2.78. But the income of the
company in 2011 is greater than 2010. Provision for doubtful loan and loss on
slump sale of tea division was the main reason for decreasing net profit of the
company during 2011.
b. RETURN ON TOTAL ASSETS
It calculates or measures the productivity of total assets. It is to ascertain whether
assets are being utilized properly or not.
Page - 63
Return on Total Assets = Net Profit / Total Assets x 100
TABLE: 5.2 RETURN ON TOTAL ASSET
Financial Year Net Profit Total AssetReturn on total
assets (%)
2006-2007 1385.4 11195.88 12.37
2007-2008 591.85 21118.45 2.80
2008-2009 1210.42 15471.16 7.82
2009-2010 3190.54 16847.31 18.94
2010-2011 1043.62 18975.33 5.50
[source: financial statements]
Chart: 5.2 Return On Total Asset
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
2
4
6
8
10
12
14
16
18
20
[source: table 5.2]
Interpretation
In the year 2010 return on total asset ratio was 18.94. But in the year 2011 the ratio
was 5.50, there has been a sharp decline which means that they are not effectively
utilizing the assets effectively.
Page - 64
c. RETURN ON NET CAPITAL EMPLOYED
This ratio is also known as return on investment (ROI). The primary objective of
making investment in any business is to obtain satisfactory return on capital
invested. It indicates the return on capital employed in the business and it can be
used to show the efficiency of the business as a whole. The higher the ratio, the
more efficient use of the capital employed.
Return on Net Capital Employed = EBIT / Net Capital Employed x 100
Net capital employed = FA+CA-CL
TABLE: 5.3 RETURN ON NET CAPITAL EMPLOYED
Financial YearPBT (Profit Before
TAX)Net capital Employed
Return on Net Capital Employed
(%)
2006-2007 2190.62 10498.58 20.86
2007-2008 1069.55 14369.54 7.44
2008-2009 1837.73 14701.89 12.50
2009-2010 4684.38 16281.3 28.77
2010-2011 2533.23 18662.3 13.57
[source: financial statements]
Chart: 5.3 Return On Net Capital Employed
Page - 65
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
5
10
15
20
25
30
35
[source: table 5.3]
Interpretation
A good return on investment indicates that the business is generating enough
returns to pay for its cost of capital. In the year 2010 return on investment shows
high return. In the year 2011 return on investment is satisfactory by comparing the
years 2008 and 2009.
d. EARNING PER SHARE (EPS)
This ratio helps in the assessment of the profitability of a firm from the stand point
of equity shareholders. This measures the profit available to the equity share
holders per share. The earning per share helps in determining the market price of
the equity shares of the company. A comparison of E.P.S of the company with
another will also help in deciding whether the equity share capital is being
effectively used or not. It also helps in estimating the company’s capacity to pay
dividend on its equity share holders.
Page - 66
E.P.S = Net Profit after Tax, Pref.Dividend / No. Of Equity Shares
TABLE: 5.4 EARNING PER SHARE
Financial YearNet Profit after
Tax, Pref.DividendNo. Of Equity
SharesE.P.S (times)
2006-2007 1385.4 8400000 16.492007-2008 591.85 8400000 7.042008-2009 1143.46 8400000 13.612009-2010 3123.58 8400000 37.182010-2011 1043.62 9656900 10.81
[source: financial statements]
Chart: 5.4 Earning Per Share
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
5
10
15
20
25
30
35
40
[source: table 5.4]
Interpretation
In the year 2010 EPS of the company is very high, because net profit of the
company is very high. EPS of the company during that year was 37.18 times. But
in the year 2011 EPS of the company is very low (10.81 times) because net profit
of the company is very low.
e. DIVIDEND PAY-OUT RATIO
Page - 67
This ratio is also known as pay out ratio. It measures the relationship between the
earnings belonging to the equity share holders and dividend actually paid to them.
This ratio is computed by dividing the total dividend paid to the equity
shareholders by the total profit belonging to them.
Dividend Pay-Out Ratio = Dividend per Equity Share / Earning Per Share x 100
TABLE: 5.5 DIVIDEND PAYOUT RATIO
Financial YearDividend per Equity Share
E.P.SDividend Pay-Out
Ratio (%)2006-2007 5.3 16.49285714 32.13
2007-2008 5.3 7.045833333 75.22
2008-2009 0 13.61261905 0
2009-2010 4.5 37.18547619 12.10
2010-2011 4.5 10.80698775 41.64
[source: financial statements]
Chart: 5.5 Dividend Payout Ratio
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
10
20
30
40
50
60
70
80
[source: table 5.5]
Page - 68
Interpretation
It indirectly shows the financial policy of the management as to what proportion of
earnings per share has been used for paying dividend and what has been retained
for ploughing back. In the year 2009 the company has not providing dividend. In
the year 2008 Dividend pay-out ratio was higher: the pay-out ratio was 75.22%. in
the year 2011 the pay-out ratio was 41.64 %.
f. RETURN ON EQUITY
It signifies the return on equity shareholders funds. The profit considered for
computing the ratio is taken after payment of preference dividend.
It is calculated by using the following formula:
TABLE: 5.6 ROE
Financial YearNet Profit after
Tax, Pref.DividendEquity
shareholders fundsReturn On Equity (%)
2006-2007 1385.4 7474.3 18.53
2007-2008 591.85 7523.08 7.87
2008-2009 1143.46 8212.86 13.92
2009-2010 3123.58 10884.53 28.70
2010-2011 1043.62 11424.81 9.13
[source: financial statements]
Chart: 5.6 ROE
Page - 69
Return on equity = Profit after interest, tax & Pref.Dividend x 100
Equity shareholders funds
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
5
10
15
20
25
30
35
[source: table 5.6]
Interpretation
It signifies the return on equity shareholders funds. The profit considered for
computing the ratio is taken after payment of preference dividend. Graph shoeing
fluctuating trend in return on equity. In the year 2010 return on equity is very
higher. But in the year 2011 there has been a steep decline which means that the
return which the shareholders get is reduced.
2. ACTIVITY RATIOS / TURNOVER RATIOS
Activity ratios measure the efficiency or effectiveness with which a firm manages
its resources. These ratios are also called turnover ratios because they indicate the
speed at which assets are converted or turned over in sales. These ratios are
expressed as ‘times’ and should always be more than one.
a. WORKING CAPITAL TURNOVER RATIO
Page - 70
Working capital of a concern is directly related to sales. The current assets like
debtors, bill receivables, cash, stock etc, change with the increase or decrease in
sales. Working capital turnover ratio indicates the speed at which the working
capital is utilized for business operations. It is the velocity of working capital ratio
that indicates the number of times the working capital is turned over in the course
of a year. This ratio measures the efficiency at which the working capital is being
used by a firm. A higher ratio indicates efficient utilization of working capital and a
low ratio indicates the working capital is not properly utilized.
Working Capital Turnover Ratio = Net Sales / Net Working Capital
*Net W.C = C A - C L
TABLE 5.7 WORKING CAPITAL TURNOVER RATIO
Financial
Yearnet sales Working Capital
Working Capital
Turnover Ratio (Times)
2006-2007 16019.05 4430.27 3.61
2007-2008 19487.84 6593.37 2.95
2008-2009 27514.45 5993.29 4.60
2009-2010 32026.17 5794.48 5.53
2010-2011 37590.3 8243.21 4.56
[source: financial statements]
Chart 5.7 WCTR
Page - 71
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
1
2
3
4
5
6
[source: table 5.7]
Interpretation
Working capital ratio of the company is satisfactory. The graph shows fluctuating
trend in working capital ratios. But in the year 2011 a small decline in working
capital ratio can be viewed. Operating efficiency of the company is good.
b. FIXED ASSET TURNOVER RATIO
This ratio indicates the extent to which the investments in fixed assets contribute
towards sales. If compared with a previous year, it indicates whether the
investment in fixed assets has been judicious or not.
Fixed Asset Turnover Ratio = Net Sales / Fixed Assets
Page - 72
TABLE 5.8 FIXED ASSET TURNOVER RATIO
Financial Year Net sales Fixed AssetFixed Asset
Turnover Ratio2006-2007 16019.05 6068.31 2.64
2007-2008 19487.84 7776.17 2.51
2008-2009 27514.45 8708.6 3.16
2009-2010 32026.17 10486.82 3.05
2010-2011 37590.3 10419.09 3.61
[source: financial statements]
Chart 5.8 Fixed Asset Turnover Ratio
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
0.5
1
1.5
2
2.5
3
3.5
4
[source: table 5.8]
Interpretation
Fixed asset turnover ratio of the company shows increasing trend. It is a positive
trend which shows the effective utilization of fixed assets. In the year 2011 the
fixed asset turnover ratio was 3.60 (times). Net sales of the company every year is
increasing trend.
Page - 73
c. TOTAL ASSET TURNOVER RATIO
This ratio is calculated by dividing the net sales by the value of total assets. A high
ratio is an indicator of over trading of total assets while a low ratio reveals idle
capacity. The traditional standard for the ratio is two times.
Total Assets Turnover Ratio = Net sales / Total assets
TABLE 5.9 TOTAL ASSETS TURNOVER RATIO
Financial Year Net sales Total assetTotal assets
turnover ratio
2006-2007 16019.05 11195.88 1.43
2007-2008 19487.84 21118.45 0.92
2008-2009 27514.45 15471.16 1.78
2009-2010 32026.17 16847.31 1.90
2010-2011 37590.3 18975.33 1.98
[source: financial statements]
Chart 5.9 Total assets turnover ratio
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
0.5
1
1.5
2
2.5
[source: table 5.9]
Page - 74
Interpretation
The total asset turnover ratio of the company shows increasing trend from the year
2008 to 2011. It reflects a company’s efficiency in managing its significant assets.
in the year 2011 the ratio was 1.98 (times).
d. CAPITAL TURNOVER RATIO
Managerial efficiency is calculated by establishing the relationship between cost of
sales or sales with the amount of capital invested in the business.
Capital Turnover Ratio = Sales / Capital Employed
CE = FA+CA-CL
TABLE 5.10 CAPITAL TURNOVER RATIO
Financial Year Net salesNet capital
Employed
Capital turnover
ratio (times)
2006-2007 16019.05 10498.58 1.52
2007-2008 19487.84 14369.54 1.36
2008-2009 27514.45 14701.89 1.87
2009-2010 32026.17 16281.3 1.97
2010-2011 37590.3 18662.3 2.01
[source: financial statements]
Page - 75
Chart 5.10 Capital turnover ratio
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
0.5
1
1.5
2
2.5
Capital turnover ratio (5 years)
[source: table 5.10]
Interpretation
Capital turnover ratio of the company shows increasing trend from the year 2008 to
2011. This means that they are utilizing the capital effectively. In the year 2011 the
capital turnover ratio of the company was 2.01.
Page - 76
3. LIQUIDITY RATIOS
The term liquidity refers to the ability of the company to meet its current liabilities.
Liquidity ratios assess capacity of the firm to repay its short term liabilities. Thus,
liquidity ratios measure the firms’ ability to fulfill short term commitments out of
its liquid assets.
a. CURRENT RATIO
This ratio establishes a relationship between current assets and current liabilities. It
indicates the amount of current assets available for repayment of current liabilities.
Higher the ratio, the greater is the short term solvency of a firm and vice a versa.
However, a very high ratio or very low ratio is a matter of concern. If the ratio is
very high it means the current assets are lying idle. Very low ratio means the short
term solvency of the firm is not good. Thus, the ideal current ratio of a company is
2: 1 i.e. to repay current liabilities; there should be twice current assets.
Current ratio = Current Assets / Current liabilities
TABLE 5.11 CURRENT RATIOS
Financial YearTotal of Current
asset
Total of current
liabilities
Current ratio
(times)
2006-2007 6503.76 2073.49 3.14
2007-2008 9404.63 2811.26 3.344
2008-2009 7709.53 1716.24 4.494
2009-2010 8492.35 2697.87 3.15
2010-2011 10204.61 1961.4 5.20
[source: financial statements]
Page - 77
Chart 5.11 Current ratio
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
1
2
3
4
5
6
[source: table 5.11]
Interpretation
Current ratio of the company shows fluctuating trend. Current ratio of the company
is greater than the idle ratio 2:1, which means the current assets are lying idle. In
2011 the current ratio is 5.20.
b. QUICK RATIO
Quick ratio is also known as Acid test or Liquid ratio. This ratio establishes a
relationship between quick assets and current liabilities. The main purpose of this
ratio is to measure the ability of the firm to pay its current liabilities. A quick ratio
of 1 : 1 is considered good / favorable for a company.
Liquid ratio = Liquid or quick assets / Current liabilities
Page - 78
TABLE 5.12 LIQUID RATIO
Financial YearTotal of liquid
assets
Total of current
liabilities
Liquid ratio
(times)
2006-2007 4351.02 2073.49 2.10
2007-2008 7088.28 2811.26 2.52
2008-2009 5572.95 1716.24 3.25
2009-2010 4820.3 2697.87 1.79
2010-2011 3719.94 1961.4 1.90
[source: financial statements]
Chart 5.12 Liquid Ratio
[source: table 5.12]
Interpretation
Liquid ratio of the company shows fluctuating trend. A quick ratio of 1 : 1 is
considered good / favorable for a company, but last five years liquid ratios is
greater than 1:1. This means that the company is liquid. And the company has
ability to meet its current or liquid liabilities in time.
Page - 79
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
0.5
1
1.5
2
2.5
3
3.5
4. LEVERAGE RATIO
These ratios are also called efficiency ratios. These ratios measure the owner’s
stake in the business vis-à-vis that of outsiders. The long term solvency of the
business can be examined by using leverage ratios.
a. DEBT-EQUITY RATIO
It is also otherwise known as external to internal equity ratio. It is calculated to
know the relative claims of outsiders and the owners against the firm’s assets. This
ratio establishes the relationship between the outsider’s funds and the shareholders
fund. In India, this ratio may be taken as acceptable if it is 2 : 1. If the debt-equity
ratio is more than that, it shows a rather risky financial position from the long term
point of view. This ratio is very useful to assess the soundness of long term
financial position of the firm. It also indicates the extent to which the firm depends
upon outsiders for its existence.
Debt-Equity Ratio = Outsiders Fund / Shareholders Fund
TABLE 5.13 DEBT-EQUITY RATIO
Financial Year Outsiders fundShareholders
Fund
Debt-Equity
Ratio (times)
2006-2007 5795.07648 7474.3 0.77
2007-2008 10098.75125 7523.08 1.34
2008-2009 8974.54 8212.86 1.09
2009-2010 8660.65 10884.53 0.79
2010-2011 9511.92 11424.81 0.83
[source: financial statements]
Page - 80
Chart 5.13 Debt-Equity Ratio
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
[source: table 5.13]
Interpretation
Debt-equity ratio of the company shows fluctuating trend. A ratio of 1:1 is usually
considered to be satisfactory ratio although there cannot be rule of thumb or
standard norm for all types of businesses. Theoretically if the owner’s interests are
greater than that of creditors, the financial position is highly solvent.
b. PROPRIETARY RATIO
This ratio establishes the relationship between shareholders’ funds to total assets of
the firm. A high ratio shows that there is safety for creditors of all types. Higher the
ratio, the better it is for concerned.
Proprietary Ratio = Shareholders' Funds / Total Assets
Page - 81
TABLE 5.14 PROPRIETARY RATIO
Financial YearShareholders
FundTotal Asset
Proprietary Ratio
(times)
2006-2007 7474.3 11195.88 0.67
2007-2008 7523.08 21118.45 0.36
2008-2009 8212.86 15471.16 0.53
2009-2010 10884.53 16847.31 0.65
2010-2011 11424.81 18975.33 0.60
[source: financial statements]
Chart 5.14 Proprietary Ratio
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
[source: table 5.14]
Interpretation
Higher the ratio or the share of shareholders in the total capital of the company
better is the long-term solvency position of the company. A low proprietary ratio
will include greater risk to the creditors.
Page - 82
c. FIXED ASSET TO NET WORTH
This ratio shows the relationship between fixed assets and shareholders fund. The
purpose of this ratio is to find out the percentage of the owners fund invested in
fixed assets. If the ratio is greater than one, it means that creditor’s funds have been
used to acquire a part of the fixed assets.
Fixed Asset to Net Worth = Fixed Asset / Shareholders Fund
TABLE 5.15 FIXED ASSET TO NET WORTH
Financial Year Fixed Asset Shareholders Fund
Fixed Asset To
Net Worth
(times)
2006-2007 6068.31 7474.3 0.81
2007-2008 7776.17 7523.08 1.03
2008-2009 8708.6 8212.86 1.06
2009-2010 10486.82 10884.53 0.96
2010-2011 10419.09 11424.81 0.91
[source: financial statements]
Chart 5.15 Fixed Asset to Net Worth
2006-2007 2007-2008 2008-2009 2009-2010 2010-20110
0.2
0.4
0.6
0.8
1
1.2
[source: table 5.15]
Page - 83
Interpretation
In the year 2008 and 2009 the ratio is greater than one, which means that creditor’s
funds was used to acquire a part of the fixed assets. In the year 2007, 2010 and
2011 the ratio is below one which means that only shareholders fund was used to
purchase fixed assets.
Page - 84
SWOT ANALYSIS
SWOT is an acronym for internal strength and weakness of a firm and the
environmental opportunities and threats facing the firm. SWOT analysis is widely
used technique through which managers create a quick overview of the company’s
strategic situation. The technique is based on the assumption that effective strategy
derives a sound ‘fit’ between a firm’s internal resources (strength and weaknesses)
and its external situation (opportunities and threats).
STRENGTHS
Eastern holds more than 78% of the market share in all its products in
Kerala.
It has a good customer relationship because of its product quality and
freshness.
Eastern is the largest exports of spice powders in consumer pack from
India that export mainly to middle East, U.K, Australia and Germany.
Presently the company is exporting 30% of its products.
The quality of the products is up to International standards.
First company in India to get ISO 22000 and second in Asia.
Eastern is only doing direct sales. It helps the company to avoid
intermediaries and so unnecessary commissions can be avoided.
It has direct sales to more than 40000 shops in Kerala.
Page - 85
Eastern was selected as second most popular brand in Kerala by the
Dhanam Business survey in 2008.
It has the facilities for controlling pollution and also for excellent
productivity.
All departments are computerized and it helps to easy handling of jobs.
Eastern is the leading exporter of condiment. Best spice export award
from spice board for the last 10 year.
HACCP- Hazardous Analysis Critical Control Point Certificate issued
by food cert Bv Netherland.
98% of the sales are cash sales.
Best spice export award from spice board for the last 14 year.
It has a good employee – employer relationship.
Grievance handling is done in weekly basis.
Well established quality control lab checks the raw material thoroughly
and it helps to assure the quality of the products.
Page - 86
WEAKNESS
Lack of advertisement in Medias.
Location of factory is not perfect for easy transportation.
Only aware about curry powder
Not enough market share in outside Kerala
Cash carrying method is so expensive and risk
Less availability of labours
Some products are not available in rural areas.
Problems in install a new system adopted in the company.
OPPORTUNITIES
Extend the exporting to other countries also.
Extend the product line.
Make the pickles available in local market also.
North Indian market will give more growth to the company.
Possibility of get listed as a public limited company.
Starting a spices garden – it gives two opportunity.
1) Can be used for research activities
2) Can be promoted as a tourist spot
Implementation of new machineries to company for more production.
Page - 87
THREATS
High competition in local market due to the low investment
requirement for the entering this industry.
Upward trend in material price.
Each year hundreds of new curry powder companies arising in whole
market.
Change in consumer taste and preference.
Availability of raw-materials from the local market is very less.
Appreciation in money value.
Upcoming retailers and their product
Page - 88
INTRODUCTION
The study helps to get awareness about the organizational structure and
functioning of successful organization, and also financial analysis of the
company. It gives an opportunity to interact with the people working in the
organization and financial structure of the company. This study with financial
statement analysis is carried out at Eastern Condiments Pvt.Ltd, The study has
been carried out to get an understanding of the financial structure and
performance of the company and departmental functioning of the company.
My findings and suggestions after this study as given below:-
FINDINGS
In the year 2010 company shows good performance, sales was high and net
profit was also high.
The turnover of the company shows increasing trend.
In the year 2011 gross profit of the company was high, but net profit of the
company was low by comparing previous year.
Loss on slump sale of tea division was the main reason for decreasing net
profit of the company during 2011.
The authorized equity share capital of the company is Rs.150000000 divided
in to 15000000 shares of Rs.10 each.
In the year 2010 return on total asset ratio was 18.94. But in the year 2011
the ratio was 5.50, there has been a sharp decline which means that they are
not effectively utilizing the assets effectively during that year.
Page - 89
In the year 2010 return on total asset ratio was 18.94. But in the year 2011
the ratio was 5.50, there has been a sharp decline which means that they are
not effectively utilizing the assets effectively during that year.
In the year 2008 Dividend pay-out ratio was higher: the dividend pay-out
ratio was 75.22%.
Fixed asset turnover ratio of the company shows increasing trend. It is a
positive trend which shows the effective utilization of fixed assets.
In the year 2008 and 2009 the ratio is greater than one, which means that
creditor’s funds was used to acquire a part of the fixed assets.
Eastern curry powder is a household name in India and is the largest
exporter of Spice powders in consumers. Pack from India those exports
mainly to Middle East, U.K, U.S.A, Australia & Germany.
25 % of profits from export.
Presently the company is exporting 60% of its products.
Presently the company export 30% of total production.
The total number of employees in the company is above 2500.
The company won prestigious award for the outstanding export performance
by spices board India, for 14 continuous years.
The company has well organized and coordinated organizational structure.
The company’s own vehicles undergoing distribution aids to give an
important mode of advertisement.
The company has fully computerized departments.
The company ensures high quality and taste to all its products.
The companies have around 200 vehicles for the delivering purpose.
Company has total 500 active vehicles.
Page - 90
The company always tries to maintain good customer relationship.
The companies have better chance to extend the market to other countries
also.
Page - 91
SUGGESTIONS
Company can start new plants to cover outside Kerala market accordance
with availability of raw material preference.
Company can give more advertisement on mass media for outside Kerala
market.
For reducing the cost company can install new automated machineries.
Company can develop new product related with food sectors.
Company can maintain proper day by day market research programs to
know movements in the markets.
Company can take direct feedback from customers for development of new
products.
Company can participate more actively in cooperate social responsibility
area.
Company can try to extend the market to other foreign countries also.
Company can introduce pickles in the local market.
Company can take direct feedback from employees for development of
their personality, motivation level also for new product development.
Increasing the exports also helps the company to increase its profit level.
Page - 92
Conclusion
Eastern condiments Pvt. Ltd is an ISO 22000-2005 company. Company aim is
1000 crore turnover in coming 3 years.
Financial statement analysis of the company was very helpful to identify the
financial performance of the company and financial position of the company.
The study conducted at Eastern Condiments Pvt. Ltd., which is one of the pioneer
in Condiment industry and the market leader in variety of packed curry powders in
South India. Eastern has achieved these enviable heights mainly due to the hard
work and commitment of quality besides bringing a good product at right prices to
the consumers .The study helped me to understand that how the company identifies
the right taste of the consumers and how it became the leading brand in south India
and largest exporter of spice powders in consumer pack from India. I was also able
to understand some of the opportunities and threats of the company. .
Being a Commerce student the internship training in EASTERN CONDIMENTS
PVT LTD.’ has benefited me with so much of confidence and awareness, so as to
be capable of myself to work in a firm. The study gave me an opportunity to
experience and improves my practical knowledge besides my theoretical
knowledge about an organization.
Page - 93
BIBLIOGRAPHY
NEWS PAPER
Mathrubhumi News Paper (on: 12 July 2012, 7 June 2012)
BOOKS
Business studies - K.G.C Nair
Cost Accounting - K.G.C Nair
Corporate Accounting - K.G.C Nair
Company Albums
WEBSITES
http://www.accounting4management.com
http://www.businessstudies.co.uk
http://www.eastern.in
http://www.indianspices.com
http://www.spicesboard.org
Page - 94
APPENDIX
EASTERN CONDIMENTS PRIVATE LIMITED
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2011
Schedule No.
For the year ended 31st March 2011
For the year ended 31st March 2010
(Rs. In Lakhs) (Rs.in Lakhs)
Income
Gross Turnover 8 37,591.16 32,026.17
Less: Excise Duty Paid 0.86 _
Net Sales 37,590.30 32,026.17
Other Income 9 971.4 606.19
38,561.70 32,632.36
Expenditure
(Increase)/Decreasein Finished Goods and Work_in_Process
10 786.74 552.77
Manufacturing and Other Expenses 11 33,954.09 26,940.16
Provision for Diminution in Value of Investments 207.5 203.51
Provision for Doubtful Loan 724.28 _
Loss on Slump Sale of Tea Division (See Schedule 12,Note No. 18)
124.82 _
Interest and Finance Charges (see Schedule 12,Note No. 3)
512.83 501.61
Depreciation 4 1,291.69 855.47
36,028.47 27,947.98
Profit Before Tax 2,533.23 4,684.38
Less: Provision for
Current Tax 1,450.00 1,780.00
Tax relating to Earlier year 2.43 _
Deferred Tax 37.18 286.16
1,489.61 1,493.84
Profit After Tax 1,043.62 3,190.54
Add:Surplus brought forward from previous year 5,548.53 3,195.91
Profit Available for Appropriation 6,592.15 6,386.45
Less: Appropriation:
General Reserve 104.45 319.06
Dividend on Preference Shares 66.96
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_Interim Dividend @Rs.4.50(Previous Year Rs.4.50)per Equity Share of Rs.10/-each
434.56 378
Tax on Dividends 68.78 73.9
607.79 837.92
Balance Carried to Schedule 2 5,984.36 5,548.53
Earnings per Share (in Rs.)(Face Value Rs.10/-)Basic &Diluted Earnings Per Share (see schedule 12,Note No.13)
11.69 37.05
EASTERN CONDIMENTS PRIVATE LIMITED
BALANCE SHEET AS AT 31st MARCH, 2011Schedule No.
As at 31st March 2011 As at 31st March 2010
(Rs.in Lakhs) (Rs.in Lakhs)
1.SOURCES OF FUNDS
(1) Shareholder's Funds
(a) Share Capital 1 965.69 4,560.00
(b) Reserves and Surplus 2 10,459.12 6,324.53
11,424.81 10,884.53
(2) Loan Funds 3
(a) Secured Loans 4,805.10 4,004.54
(b) Unsecured Loans 2,476.23 1,726.23
(3) Deferred Tax Liability(Net) 269.19 232.01
18,975.33 16,847.31
2. APPLICATION OF FUNDS
(1) Fixed Assets 4
(a) Gross Block 14,645.04 11,507.45
(b) Less : Depreciation 4,707.12 3,713.33
(c ) Net Block 9,937.92 7,794.12
(d) Capital Work-in- Progress 481.17 2,692.70
10,419.09 10,486.82
(2) Investments 5 313.03 566.01
(3) Current Assets, Loans and Advances 6
(a) Inventories 6,484.67 3,672.05
(b) Sundry Debtors 2,019.62 2,125.15
(c ) Cash and Bank Balances 553.52 280.95
(d) Loans and Advances 1,146.80 2,414.20
10,204.61 8,492.35
Less : Current Liabilities and Provisions 7
(a) Current Liabilities 1,150.94 1,537.88
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(b) Provisions 810.46 1,159.99
1,961.40 2,697.87
Net Current Assets 8,243.21 5,794.48
18,975.33 16,847.31
Significant Accounting Policies and Notes on Accounts
12
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