PROJECT REPORT

ON
MARKET RESEARCH
AT

SUBMITTED TO: -
SIKKIM MANIPAL UNIVERSITY
CENTER CODE: 02914

SUBMITTED BY:
Malhan Nareshsingh B
510824594

1
 ANNEXURE –A

Shri Krishna Infotech

Ahmedabad
Center Code No.02914
“Market Research”

AT

BY

Malhan Nareshsingh B

A project report submitted in partial fulfillment of the

requirement
for
Master Of Business Administration
Of
Sikkim Manipal University
India

SIKKIM MANIPAL UNIVERSITY

OF HEALTH MEDICAL AND TECHNOLOGICAL SCIENCE
DISTANCE EDUCATION WING
SYNDICATE HOUSE
MANIPAL-576104

2
 ANNEXURE –B

I here by declare that the project report entitled

Study on

“Market Research”
AT

Submitted in partial fulfillment of the requirement for

the degree of
Master of Business Administration

To, Sikkim Manipal University, India is my original work

and not submitted for the award of any degree,
diploma, fellowship, or any other similar titles or prizes

Place: Ahmedabad Malhan Nareshsingh

Date: 30th Nov. 2009 Reg.No.520575669

3
 ANNEXURE –C

The project report of

Malhan Nareshsingh B
Study on
“Market Research”
AT

Is approved and is acceptable in quality and form.

Internal Examiner External Examiner

4
 ANNEXURE –D

This is to certify that the project report entitled

Study on

“Market Research”
at

Submitted in partial fulfillment of the requirement for the degree

of
Master Of Business Administration
Of
Sikkim Manipal University
Of
Health, Medical & Technological Science

Malhan Nareshsingh B.

Has worked under my supervision and guidance and that no part

of this report has been submitted for the award of any other
degree, diploma, fellowship or any other similar titles or prizes
and that the work has not been published in Journal or Magazine.

(Reg. No.) Certified

5
 PREFACE

MBA is a course where on one can learn

effectively with theory and concepts. One has to
learn the practical application by working in the
filed and doing live projects. The actual learning
is where the actual work is, not in the
classrooms.
The main aim & objective behind this training is
to integrate the knowledge & analysis of
mentioned project. Its really a great learning
session for me as for the first time I have made
such long project after gathering datas.

6
 ACKNOWLEDGEMENT

I would like to express our gratitude to the Sikkim Manipal

University of health medical and techno sciences for
providing us the great opportunity of working on this project.

I express my sincere gratitude to all members of library of the

institute for their wholehearted support and providing the
latest information from books, journals, periodical, and
Internet to us.

Although my project began on a slow footing, the past few

days have been a stimulating learning experience and I shall
always be indebted to all the people whose role has been
instrumental in making this project successful.

7
 Table of Contents
1. Company Profile
2. Market research at Amul
3. Introduction of the Topic

8
9
 INTRODUCTION TO VADILAL

Today, the name Vadilal conjures images of lip-smacking ice

cream in a whole gamut of flavors. Vadilal spells quality,
availability, variety and state-of-the-art machinery and
equipment. It has, however, been a long journey for the
group, which traces its origins way back to 1907, when a
certain unassuming gentleman, by the name of Vadilal
Gandhi, the great-grand father of Virendra R Gandhi, Rajesh
R Gandhi and Devanshu L Gandhi, started a soda fountain.

10
He passed on the business to his son, Ranchod Lal, who ran a
one-man show, and, with a hand cranked machine, started a
small retail outlet in 1926. Eventually, Ranchod Lal's sons,
Ramchandra and Lakshman, inherited the business and they
were instrumental in giving a new direction to the company.
The duo imparted a new vision to the venture and infused a
spirit of calculated risk-taking into the company. As a result,
by the 1970s, the Vadilal Company had already evolved into
a modern corporate entity.

"In 1972-73, the company had 8-10 outlets in Ahmedabad.

Gradually, we moved from the city to other parts of Gujarat.
By 1985, the company moved towards neighboring states like
Rajasthan and Madhya Pradesh.

But the expansion was undertaken very methodically and we

spent five to six years in spreading our business and then
consolidating it" says Shri Ramchandrabhai Gandhi
(Chairman).

11
12
1.1 INTRODUCTION TO VADILAL GROUP

Vadilal, the name conjures up images of ice cream laden bowls and a

plethora of new flavors. Starting from one man show with a hand

cranked machine in 1926 as a small retail outlet, the ice cream

division now has a production capacity of 1 lac ltrs/day at 3

sophisticated plants, located at Ahmedabad, Pundhra and Bareilly.

These ISO 9002 certified plants for Pundhra and Bareilly are

established in such a way that they are in consonance with the market

expansion strategies of the division.

13
Vadilal has one of the largest cold chain networks in India,

comprising of 12 C&F agents, 250 distributors and 15,000 retailers.

The network is kept alive by a large fleet of refrigerated vehicles.

Refrigeration equipments and retail freezers are sourced from world

leaders in the technology so as to deliver quality products to the

consumers, which is a commitment at Vadilal.

Vadilal has 25% of the Indian ice cream market as its share. But that's

no surprise considering that the group has the largest range of ice

creams in the country in a variety of flavors, packs and forms. The

group has a product matrix of over 200 SKUs comprising of cones,

cups, candies, family and party bricks and bulk packs. Vadilal

introduced the concept of "flavor of the month" under which the

company develops and markets one new flavor every month for its

customers delight.

14
1.2 HISTORY & DEVELOPMENT OF
VADILAL

Vadilal – a company established in 1926 was started by Late Shri

Vadilal Gandhi who commenced the business of making ice cream

with the help of a hand-cracked machine in a small retail outlet.

Today, Vadilal is a name familiar in partially every Indian household.

Well-known umbrella brands, covering a diverse range of products

and activates which have one thing in common: a vibrant present ad a

bright future. Accompany that has a simple yet straight forward

mission:

15
 “To provide quality products and

Services at an affordable price.”

What started as a one-man show with a hand-cranked Ice-cream

maker in a small retail outlet has today grown to apply over 700

people. What started with earnings that could easily fit into a pocket,

has today risen to an annual turnover of Rs.1800 million (USD 41

million) and still rising of which around 25% is contributed by the

experts. What started as a home-made ice –cream has today branched

out include processed Foods, chemicals and specially Gases,

construction and Real Estate, Forex advisory Services.

Vadilal Enterprise Ltd. is the marketing arm of Vadilal Industries Ltd.

They have a dynamic sales force of over 150 sales and marketing

professionals. The company has affected hangs in its organizational

structure and training inputs from time to time, in order to infuse a

competitive spirit amongst peers and build a consolidated force of

live-wire professionals.

16
In 1997 ‘Vadilal’ was converted from private limited to public limited

company. It is listed on Mumbai and Ahmedabad stock exchanges.

Vadilal has stood the challenge of time and held its own in the country

even in the presence of global giants.

YEAR EVENT
Vadilal Ice-cream Pvt. Ltd. was Incorporated on 12th June,

1961 to carry on the business of manufacture of ice cream candy.

The Company was incorporated in the name of Vadilal

Oxygen Pvt. Ltd., on 28th April to carry on the business of

purification and refilling of oxygen gas and selling the same.

The Company's objects in Processing of frozen fruits and

1982 vegetables and manufacture of ice cream.

The Company was amalgamated with Vadilal Oxygen Pvt.

1985 Ltd. effective 1st July.

17
 The company issued 3,00,000 - 14% secured redeemable

convertible debentures of Rs.130 each as follows.

(i) 30,000 Debentures to UTI,
(ii) 15,000 debentures to Employees
Balance 2,25,000 Debentures along with 1,15,550 debentures

not taken up under preferential quota was issued to the

public.
Additional 45,125 debentures were allotted to retain over

subscription.
Part A of Rs.100 of each debenture was to be converted into

4 equity shares of Rs.10 each at a premium of Rs.15 per

share on the date of allotment of debentures. Accordingly

13,80,500 shares were allotted.

Part B of Rs.30 of each debenture was to be redeemed on

three full installments of Rs.10 each at the end of 7th, 8th

and 9th year respectively from the date of allotment of

debentures.
Name of the Company was subsequently changed to Vadilal

Industries Pvt. Ltd. and it became a Public Ltd., company

from 4th August. It was promoted by Ramchandra R.

1989 Gandhi and Laxmanbhai R. Gandhi.

The processed foods and frozen vegetable division

1991 commenced activities in May.

18
 The products such as canned/frozen tropical fruit juices and

pulp canned/frozen vegetables are mainly exported. The

commodities division comprises HPS groundnuts, soya bean

extraction, sesame seeds, non-basmati rice etc.

The ice-cream division had introduced 300 flavors in 600

different packs. The company entered into a marketing

arrangement with a leading Company in U.P. to manufacture

and sell the products under the brand name and as per the

quality stipulated. Similar arrangements are to be entered

into with Companies in Tamil Nadu, Punjab, M.P., and

1993 W.Bengal.
In future, it was proposed to include extruded products,

frozen desserts, low priced varieties like milk, lollies, mini

milk fingers, fruit based ice creams etc.

The Company proposed to manufacture concentrated fruit

juices/ pulps aseptically packed with an annual capacity of

16,200 TPA.
Also frozen dessert an item containing vegetable fat and in

low cholesterol was to be manufactured in novelty shapes

and bulk packs in various flavors.

2,46,500 No. Of equity shares of Rs.10 each, issued,

subscribed and paid up. 15,53,000 bonus equity shares issued

in prop.

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 3107:493 shares held on 25th November 1989. 13,80,500

shares allotted in part conversion of 14% second redeemable

partly convertible debentures.

Exports of agricultural commodities such as HPS, soya bean

natural and hulled sesame seeds and also vegetable and fruit

pulps rose by 61% to Rs.18.46 cr when compared on an

annualized basis and the overall working was reported to be

1994 satisfactory.
The company launched low fat calorie ice cream `Vadilal

Lite' in different flavors manufactured at Ahmedabad,

Gujarat.
The Company undertook to install new machineries for IQF

project (for manufacturing frozen vegetables and fruits) at

Dharampur, Dist. Valsad, and Gujarat.

The Company launched mango pulp, mixed fruit and

pineapple jam, tomato ketchup sauce, sweet corn soup

(cream style) and baked beans.

The Company installed wind farm unit with total capacity of

1.28 MW consisting of 4 Wind Turbine Generators (WTG)

of 320 KW each and 400 KVA transformers at village

Lamba, Dist. Jamnagar, and Gujarat.

During July, the company issued 15,00,000 No. Of equity

shares of Rs.10 each at a prem. of Rs.42.50 per share to

20
 promoter group of companies.
On 23rd July, the company allotted 20,00,000 No. Of equity

shares of Rs.10 each at a premium of Rs.37.50 per share to

promoters on private placement basis.

The Company was on the look out for a foreign

1995 collaboration.
Additional WTGs of 320 KW each was installed at village

Bhogat, Dist. Jamnagar, Gujarat.

The company received necessary permission for developing

commercial building project name `Mahalay' off C.G. Road,

Navrangpura, and Ahmedabad at a cost of Rs.9 cr.

The company has installed IQF facilities at Dharampur plant

at a total cost of Rs.6 cr by using fluidized bed-belt type

continuous freezing technology imported from U.K. with a

1996 capacity of process 2 MT of fruits and vegetables per hour.

The Company has launched Mango/Pulp/Ral, frozen green

peas into domestic market.

21
1.3 VISION & MISSION STATEMENT

MISSION

“To provide quality products and Services at an affordable

price.”

Quality Policy:
Vadilal Industries Limited firmly believes in providing quality
products with innovative features at competitive prices for customers’
satisfaction.

22
We shall strive to achieve our Goals by continuously improving and
upgrading Technology, selecting appropriate process and providing
vibrant environment with help of High Quality standards and
emphasis on Hygiene.

We aim to be industry leader by recognizing the changing needs of

customer and ensuring full commitment towards implementing
Quality Management System as per ISO 9002.

Quality Assurance

Pundhra:
Our Pundhra Plant is ISO: 9001:2000 and HACCP Certified. The
certification of this plant has been carried out by BVQI under the
latest regulations of food safety system, September 2002. BVQI is a
wholly owned subsidiary of Bureau Veritas, a France-based
multinational organization.

The plant has recently received the Export Inspection Council of

India, Ministry of Commerce and Industry, Government of

23
India certification for exports that in it is a benchmark for hygiene and
quality.

Bareilly:

Bareilly plant is also having ISO 9001: 2000 & HACCP certification
as per IS/ISO 9001: 2000 & IS 15000: 1998 respectively from Bureau
of Indian Standards (BIS) which is the largest certification authority in
India.

Vadilal Industries Limited, Bareilly was established in 1996 for ice

cream manufacturing with an installed capacity of 15000 liters per
day. To cater to the increasing demand of ice cream in India the
company expanded the capacity to 60,000 liters per day in 2005. We
plan to enhance the capacity by 1,00,000 liters ice cream per day in
near future. This shall be supported by state-of-the-art machineries
from China, Denmark and other foreign countries.

24
1.4 SIZE OF THE UNIT & FORM OF
ORGANIZATION

• Size of the unit

Large-scale unit

• Forms of the organization

1. Vadilal Enterprise Ltd.

2. Vadilal chemical Ltd.

25
 3. Processed food division

4. Forex advisory division

5. Construction division

1.5 ORGANIZATION STRUCUTRE

Chairman

Managing Director

General Manager

Finance Production Marketing Personnel

Department Department Department Department

Senior Senior Senior

Manager Manager Manager
26
Accountant
Manager Assistant
Executive Manager
Sales &
Manager Assistance
Labor
Manager Salesman
Executive
Senior
Manager

Deputy
Manager

Assistant

27
2.1 ORGANIZATION CHART

PRODUCTION MANAGER

SENIOR MANAGER

ASSISTANT MANAGER

EXECUTIVE MANAGER
28
 ASSISTANCE

LABOUR

2.2 TYPES AND SOURCES OF RAW

MATERIAL

The following are the raw materials are used in the manufacturing of
the ice cream
1. Milk
2. Cream and butter
3. CMC powder
4. GMC powder
5. Sugar
6. Different flavors
7. Nuts
8. Vegetable oil

29
Here is milk purchased in bulk. The main suppliers of milk are

Mahalaxmi dairy, Kamdhenu dairy and the other local suppliers like

farmers.

All the raw material is analyzed by quality assurance department. In

this department various types of tests are done in raw material. In this

department quality of milk is checked by microbiological technique.

2.3 PRODUCTION PROCESS

Milk

Add sugar

GMC/CMC powder

Cream

Flavors

Freezing process

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  Boil milk in high temperature add in the milk’s.

 After boiling process, add GMC & CMC powder.

 GMC & CMC powders are useful to maintain in thickness.

 When milk becomes cold then cream, flavors and nuts is added.

 Then this mixture is put into refrigerator for freezing process at-
18 c.

Production facility available at Pundhra Plant.

A- Mix plant ( pundhra)

Mixing tank -2 no., online duplex filter, HTST , flow diversion valve,
two stage Homoginiser,
Turbo blender for dry mixing, storage tanks ( storage cap. 50000 ltr.
at pundhra )

31
B- ICE CREAM Freezing-pundhra
8 cont. freezer for ice cream and novelties production having different
capacity.
2 fill and cap machine for cone and cup production.
5 Hardening tunnel for quick hardening of ice cream, novelties, cone,
etc.

C- CANDY PRODUCTION-pundhra

2 Brine tank for manual candy production

1 cont. freezer
1 candy hardening tunnel

candy mould having diff. shape and volume- 125 no.

Candy wrapping machine for pillow packing

D- AUTOMATIC CANDY MAKING MACHINE- pundhra

Neumatic candy making machine
cont. freezer wrapping machine for pillow packing with conveyor.

E- SEMI AUTOMATIC CLEANING SYSTEM- CIP ( cleaning

in place)

F- RAW MATERIAL PROCESSING - pundhra

Seiveing machine, nut cutting machine, Hot air oven, fruit processing

32
machinery, choclate preparation tank, chikky making machine, cake
production facility.

Bareilly plant details:

In our unit we use modern sophisticated machinery for making high
quality ice cream. We take utmost care during selection and
processing of ingredients. In our mix preparation section we use
latest machinery like Homogenizer and Pasteurizer, which ensure our
commitment of producing good quality ice cream. We have very
sophisticated imported homogeniger (capacity 3000 ltr /hr) and a
automatic panel based Pasteurizer, which ensure food safety.

In freezing section we have automatic continuous freezers of capacity

ranging from 300 lts/hr to 2000 lts/hr ice cream.

We have our own raw material processing section which provide very
pure and processed raw material to freezing section .In our raw
material processing section we use ultramodern oven and machinery
for heating and other treatment of fruits and nut which make all these
very much safe for human consumption.

For cone production we have fully automatic cone filling machine .

We produce fully untouched cones.

33
As we are producing a very sensitive food product we take utmost
care about cleanliness and hygiene of our plant. For cleaning we have
a central. CIP system. We used to take plant for total CIP before and
after every production shift and sterilize each and every pipeline
,pasteurizer, homozenizer, storage tank, freezer, balance tank and ice
cream filler using steam.

Every workers are trained for their work and they follow strict norms
for cleanliness and hygiene during production of ice cream.

All staff that work in production area is being daily checked for their
personal hygiene.

Every staff use to pass through a thorough medical check up after a

fixed time interval to ensure whether he/she is fit for working in
production department or not.

Ice Cream is shifted from production section to dispatch section using

FIFO SYSTEM.

1. Mix Section : Automatic homogenizer and pasterizer with

capacity of 3000 liters of mis per hour.
2. Freezing Section : 9 Automatic continuous freezer capacity
city ranging from 300 to 2000 liters of ice cream per hour.
3. Fruit Feeder : 3 Automatic fruit feeder for proper nut addition.
4. Raw material process: Cake production as well as a fully
automated oven for proper heat treatment of nuts.

34
2.4 VARIOUS PRODUCTS OF
VADILAL

BIG CUPS

Vanilla

Ripe Strawberry

2 – in –1

Chocolate Chips

Tuti Fruity

Real Mango

35
 Rainbow

Fruit Bonanza

Kaju Draksh

Butter Scootch

Kewra

Jafrani Badam Pista

Rajbhog (Ice Mithai)

SMALL CUPS

Vanilla
Ripe Strawberry
Super Vanilla
Strawberry Special

FAMILY PACKS

36
PLAIN FAVOURTIES
• Vanilla
• Ripe Strawberry
• 2-in-1

CHOCOLATE ECSTASIES
• Chocolate Chips/

FRUIT FANTASIES

• Real Mango
• Fresh Strawberry

NUTTY DELIGHTS

• Kaju Draksh
• Butter Scotch
• Real Kesar Pista
• Jafrani Badam Pista

ICE MITHAI

• Rajbhog

FROZEN DESSERTS

• Snowy
• Yummy Kesar Pista

37
 • Yummy Mango Munch

KING KONES

• Pineapple Delight
• Chocolate Drip
• Yummy Butter Scotch
• Chashmeshahi
• Prime Kesar Pista
• Almond Kulfi Cone

KULFIES

KULFI CORNER

• Kesar Pista Kulfis

• Chowpati Kulfi
• Kewra Kulfi
• Pista Kesar Roll Cut

38
 DANDY CANDIES

Pencil

39
 Mango Juicy

Juicee Orange

Kaju Candy

Litchee Dolly

Orange Dolly

Raspberry Dolly

Mango Dolly

One-up Chocobar

Nutty Chocobar

Chocolate Chocobar

Soft Spot (Chocolate)

Fantastic

FROZEN DESSERT

Bargain

Best Chocobar

Mango Tango Dolly

40
Fun Bhari Raspberry

VADILAL SPECIALS

Heart Throb

Mini Sandwich

Sajan Sajani (Roll Cut)

Quik Sundae

Easy Sundae

August - 15

Cassatta Slice

Cassatta (Cut)

Sajan Sajani (Roll)

Vanila Magic

Strawberry Magic

Mango Magic

41
NEW INTRODUCTIONS

1. Tiranga Candy:

2. Party pack of Swiss Cake

42
3. Chocochips Cookies

4. Cookies & Caramel

5. Choco Rocherr

6. Choco Cream (Chocolate Candy)

43
2.5 INSTALLED AND UTILIZED CAPACITY

Vadilal industries Ltd has informed the Company has embark upon

further expansion and new project in its Ice-cream Division as under:

 The company has proposed to set up a new ice-cream

manufacturing plant at Kolkata in the state of west Bengal

( instead of at Uttranchal as decided earlier ) with an installed

capacity of 32000 Liters per day with a project cost around Rs

97.40 million.

 The company to incur capital expenditure to the extent of Rs

75.60 million for its ice-cream plant situated at Bareilly in the

State of Uttar Pradesh towards purchase of new automatic

44
Candy machine and others machine for its various sections in

the plant.

45
3.1 Organization chart of personal department

Managing Director

General Manager

Senior Manager

Deputy Manager

Executive officer

Assistant

46
3.2 Introduction to Personnel Department

a lot in terms of money but may generate alienation and frustration

among employee Effective organization are not built merely on

investment and but more so on the quality of their workforce, their

commitment to the goals of the investment made to organization and

attract, train and retain superior human resources.

Management of organization is management of human resources.

In modern business organization employee hold a key place in

business. No business enterprise can exist and function without

employees. The success of business enterprise depended to a large

extent on the willingness and ability of the organization yeas.

47
 3.3 Recruitment and selection

Recruitment is an important part of any business’ human resource

planning and Vadilal industries Ltd. is no exception. Rather

Recruitment and selection forms the most important at vadilal group.

In all business, people are a vital resource and they need to be

managed as such. Effective recruitment is central and crucial to the

successful day-to-day functioning of any organization. Successful

recruitment depends upon finding people with the necessary skills,

expertise and qualification to deliver organizational objectives and the

ability to make a positive contribution to the values and aims of the

organization.

The overall aim of the recruitment and selection process here is to

obtain the number and quality of employees that are required in order

48
for the business to achieve its objective. After all having the right

person, in the right place, at the right time, is crucial to organizational

performance.

Recruitment and selection process consists of identifying the need for

a job, defining

The requirements of the most position and the jobholder, advertising

the position and choosing the most appropriate person for the job.

Undertaking this process is one of the main objectives of

management. Indeed, the success of any business depends to a large

extent on the quality of its staff. Recruiting employees with the correct

skills can add value to a business and recruiting workers at a wage or

salary that the business can afford, will reduce costs. The management

understands this and therefore they believe that employees should be

carefully selected, managed and retained, just like any other resource.

49
3.4 Training and Development

In this fast moving world with constant changes and

innovations in technology, increasing career aspirations of employees

and cut throat competition in the market, the training and development

of employees have become necessary equipment in the overall

development of the entire organization. It is the dire need for any

organization today to have well-trained and experienced personnel

and therefore it becomes necessary to provide training to both new

entrants as well as existing employees.

Training and development function is definitely carried out in vadilal

but on a small scale. The new employees are given some basic

training and existing employees are given training after certain time

period has passed. However this time interval is not fixed. The most

50
commonly used method of training employees is – On the job

Training. This training is given to both new as well as existing

employees. The new entrants are trained on the job during their

probation period ranges from three to six months depending upon the

post and the job.

There is no formal provision of budget for training and development.

Training of existing employees consists of training for those of sales

force people only. Sales force people are trained by their Head of the

department for two to three days but it is not systemic and is a kind of

informal training given.

At VADILAL in-house training is not given rather the employees are

sent outside the organization for their training. For the development of

executives, they are allowed to attend various seminars, lectures

professional meeting of national level, special training programs,

study special courses etc. organized by any organization like A.M.A,

academic institution like IIM, Nirma institute, etc. The company

sponsors such training courses for them.

51
3.5 Employee services

Canteen facilities
Canteens have been provided lunch, tea and snacks. Canteen

management committees consisting of the employees also monitor the

menus, cleanliness, and quality of food.

Dress facility

Vadilal has an in dress facility, provide pent, shirt and helmet. All

such types of safety clothing facility provide to own employee for a

doing a particular job.

Medical facility

When some making a accident in operational level and managerial

level or other department in that case, vadilal has paid some amount
given to the employee.

Transportation facility

52
For the convenience of the employees to reach and depart from the
company. The Vadilal is providing the transportation facility.

3.6 Time keeping system

Time is also an important factor for the organization; all the activities

and job are to be performed in a particular pre decided time. So good

time keeping system play a main role in the organization efficient and

also for achieving its targets.

The corporate office and all the other branch of vadilal limited will

have the following office timings:

1. Monday to Saturday 9:15 a.m. to 6:30 p.m. with 30 min

lunch break from 1:00 pm to 1:30 pm.

2. Second and fourth Saturday’s shall be observed as a holiday

and other Saturday’s working hours are 9:15 am to 6:30 pm

3. Weekly off’s shall be observed on Sunday.

53
3.7 Performance appraisal

Performance appraisal is a useful tool to strength and weakness of the

organizations of people. It proves very harmful to the H.R department

of any organization in taking important decisions as to who should be

promoted, whatever any employee is to be considered for promotion,

increment, incentives etc. it helps to identify the underperformers as

well as star performers of the organizations on the basis of which the

strength and weakness of the entire organization can be known.

It depends on the organization at what intervals (yearly, half yearly,

quarterly) should the performance appraisal like self-appraisal, rating

54
scale method ranking method narrative method or the latest 360-

degree performance.

Performance Appraisal, at Vadilal, is conducted on yearly basis. It

takes place in the month of the September-October every year.

However this is applicable for the existing employees. For the new

recruits, performance appraisal is undertaken at the end of their

probation period or at the end of six months from the date of their

joining in the organization which ever is earlier.

The method of performance appraisal adopted by the management

here is 180-degree performance appraisal. This 180 degree appraisal

includes self appraisal as well as appraisal by the superiors of the

employee. Also rating scale method of appraisal is used. But self-

appraisal governs the other methods i.e. appraisal by superiors and

rating of employees is done in few cases. So ultimately the

employee’s performance is judged on the basis of their self-appraisal.

The employees are given appraisal forms to be filled by them as well

as to be filled by their superiors in which one make their comments

for the consideration by the H.R department these forms can also

contains factors like productivity, Job knowledge interpersonal

55
relations decision making leadership etc. on which each employee is

rated accordingly on parameters like-outstanding , very good, good,

Fairly good average below average. This performance appraisal

forms are narrative nature it asks the employee questions like-

Assignment that gave satisfaction or dissatisfaction from the job etc. it

also includes comments or suggestions of the superior on the

responses given by employees.

The main objectives of the performance Appraisal are:-

• To review the performance and set the goals for future

• To provide the feed back if it is necessary counseling

• To asses the capabilities and provide guidance

However performance appraisal is mainly conducted for making

decisions about pay rise of existing employees and to decide upon

weather to confirm the new recruits after their completion of their

probation period.

56
3.8 Grievance handling process

Grievance handling is the most important task in any of the

organization its needs a healthy and peaceful atmosphere for the

success of the organization all the type of the grievances are taken

very delicately in the company firstly the grievance is communicated

to the supervisor then the supervisor to the manager and if the

problem is not solved then it is communicated to the union leader of

the company and after the keen observation of the matter the decision

is taken on the basis of facts efforts are made to find a sober way and

in this way the problem is solved without harming the organization

and fair justice is done to the employees.

57
3.9 Salary & Wages Administration

WAGES: The wage and salary determination is fixing per unit (per

day, per month or per annum) and calculate the total wages by

multiplying the number of unit with the rate per unit time.

“Wages” usually refers the hourly rate of daily paid for the service of
labors in the production.

SALARY: In Vadilal industries ltd, they need more labors. If it is the

peak season company needs extra labors. They are giving as per the

regulations of government

“Salary “normally refers to the weekly or monthly rates paid to

derive.

58
3.10 PROMOTION & TRANSFER

 PROMOTION
“Good promotion is the perfect way to motivate the employees.”

Generally in any organization promotion is based on two ways.

1. Seniority

2. Merit

In Vadilal industries ltd promotion decision taken by

management.

Management of company observes the performance of employees,

past data about the work. After that if management feels that

59
employee for that is perfect for the promoted job then only company

gives promotion.

Generally in Vadilal industries ltd after three-year promotion will be

gives to the employees.

 TRANSFER:

In Vadilal industries ltd. transfer policy is based on three conditions.

1. When there is storage of manpower

2. When there is recognition

3. When there is an over staffing

Company gives transfer to one department to another department, one

section to another section. One shift to another shift, one plant to

another as per company’s requirement and employee’s demand.

60
61
4.1 ORGANIZATION CHART

MARKETING MANAGER

ASSISTANT MANAGER

AREA MANAGER

SALES EXECUTIVE

62
4.2 MEANING

“Marketing is an organizational function and a set of process for

creating, communicating, and delivering value to customer and for

managing customer relationship in ways that benefit organization and

its stake holder.”

“Marketing is a societal process by which individuals and groups

obtain what they need want through creating, offering and freely

exchanging product and service of value with each other.”

Brand Promotion:

Basically, these are very well known brand in every nook & corner of
the country with a strong brand image and high brand recall.

63
They generally promote their brand through various ways like,
Advertisement, Sponsoring Events, and by providing Publicity
material (Glow signs, Danglers, Posters, Banners etc.) at our Retail
Outlets. They basically look forward to print media as main stay to
promote our brand & for the advertisement of our products as well as
schemes / offers, as well as TV commercial to cover maximum
consumers. Here advertisement in leading National (Hindustan Times,
Times of India etc.) as well as popular Vernacular Dailies (like,
Gujarat Samachar, Divya Bhaskar & Sandesh in Gujarat, Rajasthan
Patrika & Dainik Bhaskar in Rajasthan, Dainik Jagran & Amar Ujala
in U.P. & Uttranchal, etc.) and done TVC in leading TV channels like
Star Plus, Star News, Cartoon Network, Nick, UTV and Hungama
etc,.

At present no any celebrity connected with Ad Campaigns. However,

they take Models for our Product & Brand Promotion.

Sales Network:

Vadilal has very strong sales network, they have a sales team network,
which covers our entire distributor network.

They have a state wise sale team, which generates sales through retail
outlets, institutions, Hotels & restaurants, Functions. Here for Sales
Company’ management plays major role like providing various
Dealer schemes, consumer schemes etc. Vadilal has one of the widest

64
ranges of consumer schemes in the industry. More sales are generated
through new product developments, schemes and lucrative dealer
margins.

Network: Plant - C&F – Distributor – Dealers – Consumers

With supply chain of about 23 C&FA, more than 500 Distributors

and over 40,000 Retailers ice cream is widely accessible in most parts
of India. Ice cream can be purchased in big tubs and surrounds from
supermarkets/grocery stores, in smaller quantities from ice cream
shops, convenience stores, and milk bars, and in individual serves
from small carts or even at public events and places.

Plants:
Ahmedabad
Pundhra, Gujarat and
Bareilly, UP

Above three plants are located in geographically favorable areas with

ultra modern production facilities. It is our quality traditions and
stringent norms only due to which our plants are accredited with
world’s most trusted quality standards like ISO 22000:2005, ISO
9001:2000 and BRC Global Standard.

Distribution Network/ C & F Agents:

The reason for having strong distribution and dealer network is due to

the lucrative margin and returns that Vadilal provides to them. Vadilal

65
provides them deep freezers for storage of ice creams, Display sing

broads, POP, etc promotional material that helps for in boosting

business.

4.3 PRODUCT PLANNING

Product planning is one of the most effecting factions in

marketing department. The certain product planning refers the product

should be marketed in which manner and style and what quantity this

determine the market share and earning.

VADILAL is doing the product planning by collecting the

information from the market they get information from the two type

of customer.

 Primary customers

 Secondary customers

66
 The primary customer’s means that purchase the product

directly from the VADILAL like dealer, agent.

The secondary customer’s means that purchase the product from the

primary customers.

For the product planning the VADILAL is taking the data

given by the primary customers.

67
4.4 ADVERTISING

Advertising is play very important role in any unit of business.

Advertising is paid from of communication. It includes the reader’s

buyer’s viewer and listeners to buy a product or to get favorable upon

products.

Today more popular media to give advertising news paper,

magazines, radio, television, cinema, film, outdoor, holdings, postage

and direct E-Mail success of marketing programmed legally depend

on advertisement.

The advertising is done by mainly 2 ways.

68
  Television

 News paper

Since last two years, the television-advertising share has been shared

and Advertising through Newspaper has spurted. The reason is that

now days, Companies are coming with different promotional schemes

in different states.

The Newspaper is the easier and cheaper way to convey the

promotional schemes. VADILAL prefers Newspaper for their

advertising.

69
4.5 MARKET SEGMENTATION &
TARGETING

A company cannot serve the entire customer. In the

marketing as they are too numerous and diverse in their buying

requirements. Instead if competing everywhere. The company has to

identify the marketing segment that it can serve must effectively, and

then target on o more of there segment and develop a product and

marketing process tailored to those segments. Thus instead of

scattering their marketing effort, the cost can focus on the buyer

whom they have the greatest chance if satisfying.

Company has segment and targeted consumer marketing on

the basis of the following variable.

70
  Geographical segmentation

 Demographic segmentation

 Psychological segmentation

 Behavioral segmentation

4.6 PRICING POLICES

The pricing polices followed by the Vadilal are as below.

1) Policy on pricing relative cost:

Vadilal follows full cost / cost plus pricing, for states where their

manufacturing plants are situated. Under full cost pricing no scale is

made at a price lower then the covering total cast including the

variable cost including the fixed cost.

For example:

X Cost of production

X+Y Cost of goods sold to VEL

71
X+Y+6% cost of good sold+ Distributor

Margin

X+Y+6 %+( 12%TO20%) Dealer margin added to above

Value

= MRP (consumer price)

2) Geographical Pricing:
Vadilal charges extra penny as geographical pricing from the state

where the manufacturing plants are not located. Here, the margin of

the C & F agent added to the MRP of the ice cream. Also the

distribution cost is higher for such states so these states have to pay

somewhat higher charges for the vadilal ice cream.

Example:

X+Y+Z Cost of goods sold + C& F agent’s

margin

X+Y+Z (12% to 20%) Cost of goods sold + C & F agent’s

margin

Distributor’s margin + dealer’s

margin

72
4.7 CHANNEL STRATEGY

The above channel strategy defines the channel member and whether

they are part of VEL. As shown the manufacturer and C & F agents

are handled by the VIL, where as serving the distributor, dealers and

customers are the responsibility of the VEL.

73
4.8 ORGANIZATION CHARTS OF
DISTRIBUTION CHANNEL

Factory Production

C & F agents

Distribution

Wholesalers

Retailers

Customers

74
4.9 DISTRIBUTION INTENSITY

There are basically three types of distribution intensity.

1) Selective distribution: Selective distribution means

selection only those outlets/retailers that can best serve

the manufacture’s interest.

2) Exclusive distribution: Exclusive distribution means

distribution of manufacturer’s product or products within

particular area is to be confined solely to the retailer with

whom the manufacturer had made written or oral

agreement of distributing the product/products.

3) Intensive distribution: The manufacturer following the

policy of mass distribution or intensive distribution aims

for the maximum sales exposure by securing distribution

75
 through all those outlets from which customers might

expect to purchase the product/products.

VADILAL has adopted the intensive distribution to have

maximum sales by availing ice cream at the nearest location

to the customer. This way Vadilal is getting maximum

business.

Following are the different tips for distribution by the company.

Storing Tips
Vadilal products are best stored unopened at (-)18 deg C or below.

Serving Tips
Before serving, Vadilal ice creams should be allowed to soften
slightly for best results.

Scooping Tips
For perfect scooping, start from back edge and draw the scoop toward
you as you skim the surface. When a well-shaped ball has formed,
turn and lift the scoop away from the pack and gently press it against a
dish or cone to release it.

Health Tips

76
 • Frozen desserts to keep you slim and trim:
Bilumia and anorexia are as common words as "Samosas and
Rasgulla" in this health conscious world. New generation is
becoming slim and slimmer and everyone is counting the

• calories of food intake. Now you can have frozen dessert

product and can keep your body slim and trim.

If required, one should drink pot water only after having ice cream.

Safe storage and handling

• All Ice-Cream manufactures and retailers have to carefully

control the temp. of ice cream throughout the distribution chain
so that it maintains excellent quality up to the point of sale.
• After this the consumer has a part to play in ensuring that their
Ice cream is in peak condition when served.
• Follow the guidelines below to ensure that to keep your Ice
Cream at it best.
• Always make ice-cream the last item you choose in the
supermarket so it does not melt while you choose the rest of
your goods
• Take a thermal bag or picnic box with ice pack when you shop-
this will protect the product until you get it home.
• Make sure you take ice-cream home as soon as possible do not
plan other shopping when you have ice cream on board.

77
 • When arriving home give ice cream priority when unpacking
the shop put it straight in to the freezer and make sure your
freezer reaches low enough temperatures to keep the product.

• When you serve ice-cream and only take a few scoops from a
large tub, make sure to return the tub to the freezer as soon as
possible before it has chance to melt. If you wish to protect the
quality of the ice cream by preventing air getting to it, scrunch
up a few pieces of greaseproof paper and put these on top
before replacing the lid.
• Ice cream should not be kept indefinitely. Follow the star
marking in relation to the freezer you have.
• >Ice crystals in ice cream show that it has been badly kept i.e..
it has been allowed to thaw and then been re- frozen.
• If you detect ice crystals you should throw the ice cream away
and buy more.

Current Trend:

CUSTOMARILY, Gujarat and monsoons do not go

hand-in-hand though the State is still chary of admitting that it is faced
with a drought-like situation. But, the scant rains have not stopped the
ice-cream majors from declaring the arrival of monsoon here, in the

78
process signaling a price war of unparalleled intensity, much to the
delight of the customers.

The Rs 525-crore Indian ice-cream market with a sale of 80.8 million

liter per annum in the organized sector has reasons to put the turf war
in Gujarat under the microscope. Amul, with a 24.75 per cent share of
the all-India market at 20 million liters and Vadilal, with 13.61 per
cent market share at 11 million liters, may not be an even match
elsewhere.

However, competition between the two could not have got any closer
in Gujarat. Here, it is 22 per cent of Amul's volumes that is pitted
against 40 per cent of Vadilal's — both fetching up at 4.4 million
liters each. With HLL's Kwality Walls (22.8 million liters sales and
28.22 per cent market share) having virtually opted out of Gujarat, it
is no wonder that Vadilal and Amul are engaged in a slugfest in the
State.

Naturally, neither of the brands has actually reduced prices, but the
freebies have been coming thick and fast. Taking a leaf out of the
goodies on offer from the branded apparel sector and footwear to
name a few items, most of the flavors are now available in `twos'. One

79
would now get two units of quite a few flavors for the price of one, in
effect cutting the price by half.

Thus, Vadilal has offered `one plus one' in the liter versions of mango,
butterscotch and kaju draksh (nuts 'n grapes), while offering 50 per
cent extra on pineapple, chocochips, butterscotch and fruit bonanza.

According to Mr S. Keraleeyan, Product Manager, Vadilal Ice cream,

the freebies have ensured that the monsoon months will not be bad
after all.

"Normally, there is a major dip in ice-cream sales during July and

August. The schemes on offer this year have ensured that we reverse
the slide by over 50 per cent. Vadilal has targeted a turnover of Rs 96
cr for this fiscal as against Rs 77 cr in 2000-01. Gujarat is our single
largest market, accounting for 40 per cent of total sales," Mr
Keraleeyan said.

Amul, already competitively priced at Rs 60 per liter for vanilla, has

now brought it down to Rs 45 for the monsoon season. The other
goodies on offer include a `combo-pack' of vanilla (1 liter) and kaju
draksh (1 liter) at Rs 100, Rs 5 off on cones, and Rs 3 each off on
Chocobar and 100 ml cups. The main pitch by Amul, of course, is that
its ice cream has a milk fat base as against vegetable fat used in the
`frozen dessert' by its competitor, which is one-third cheaper.

80
Clearly, the price war seems to have rejuvenated the Gujarat market,
not known for brisk ice-cream sales in the wet season.

Ahmedabad, the ice-cream capital of India and the other major cities
of Vadodara, Surat and Rajkot - remember, here you do not step out
for a drink in a pub or bar, instead you console yourself by having one
more ice-cream, be it day or night - is sitting up in anticipation of a
long `monsoon season' ahead.

Expansion Planning:

Vadilal to invest Rs 40 cr to expand ice cream, food

biz

Vadilal Industries Ltd will invest Rs 40 cr this year to expand existing

manufacturing capacities at its two ice-cream and processed food
plants in Gujarat and Uttar Pradesh and the proposed third unit in
West Bengal before the year end.

The company earlier planned to set up a new manufacturing facility in

Uttranchal, as it was a no-excise region. But after the Union Budget
scrapped excise duty on ice-cream, the company recently decided to
set up the plant at Kolkata. "Under the changed circumstances, it
would not be prudent to have a new manufacturing facility so close to
Bareilly in Uttar Pradesh," Vadilal's Managing Director Mr Rajesh
Gandhi said.

81
Expansion

He told Business Line that the company has instead decided to expand
the Bareilly plant's capacity from 60,000 liters to 90,000 liters a day.

The Rs 200-crore Vadilal Group's second plant at Pundhra, near

Gandhinagar in Gujarat, has a capacity of 85,000 liters per day.

The Kolkata plant, with a capacity of 35,000 liters a day, is being set
up at a cost of about Rs 9.75 cr, he said.

Processed food biz

The company is also expanding capacity at its processed and frozen

food plant at Dharampur in Valsad district of South Gujarat to one lac
kg per day. This plant, started as a horticulture processing industry in
1991, manufactures ready meals and fruit pulp, besides preserved
vegetables and fruits, the majority of which is exported to fetch about
Rs 25 cr per annum, Mr Gandhi said.

The total investments in the Bareilly, Dharampur and Kolkata plants

would amount to Rs 40 cr, he said. The company has been awarded
the ISO 9002 certification for quality systems.

Although Amul recently emerged as the largest ice-cream brand in

India, Vadilal claims to be the largest brand in Gujarat, with about 80

82
flavors and 70 per cent market-share; its national share is 25 per cent
in an industry worth about Rs 800 cr.

If Amul turned Anand into the `milk capital of India', Ahmedabad has
emerged as the ice-cream capital over the last two decades with
several players entering the fray. Ice-cream is consumed across all
age-groups in the city round the year.

The 70-year-old Vadilal Group has three companies listed on the

Bombay Stock Exchange (BSE) — Vadilal Industries Ltd, which
manufactures ice-cream and frozen food, Vadilal Enterprises that
markets food products and Vadilal Chemicals Ltd dealing with
specialized industrial gases and other chemicals. The group is also
involved with real estate and construction business, forex advisory
services and full-fledged money changer (FFMC) services, offering
non-banking financial services.

83
84
5.1 INTRODUCTION

Board of Directors :

Ramchandra R Gandhi
Chairman

Virendra R Gandhi
Vice-Chairman, & Managing Director

Rajesh R Gandhi
Devanshu L Gandhi
Managing Directors

C M Maniar

85
 M N Vora
Kshitish M Shah
Rohit J Patel
Directors

Nikhil Patel
Company Secretary .

Factories:

Ice-cream Division

Dudheshwar Road, Ahmedabad. (Gujarat)

Village Pundhra, Mansa, Mehsana. (Gujarat)
Parsakhera Industrial Area, Bareilly, (Utter Pradesh)

Processed Food Division

Dharampur, Valsad, (Gujarat)

Forex Division:
Vadilal House, Navrangpura, Ahmedabad.

86
 Any organization, whether it is small or large

scale, clears with financing every businessman keeps

separate records of financial matters. Finance and

account department of the business depends upon the

financial policy of the firm.

Financial management is mainly concerned

with finding out rational basis through answering

following three questions.

1) What total value of funds should be

invested in the business?

2) What specific assets should the business

require?

3) How should the required funds be raised?

The scope of financial management comprises

traditional approach on procurement of funds rather

than its allocation and use. While modern approach

87
covers not only acquisition but also allocation and

utilization of funds.

The firm may have any objectives but

financial management has the objectives of profit

maximization or weather maximization. Keeping in

mind this particular objectives only major 3 decisions

are taken that are:

• Investment Decision

• Financing Decision

• Dividend Policy Decision

88
5.2 FUNCTIONS OF F & A DEPARTMENT

o To make payment

o To receive payment

o Accounting of transactions as per

o Accounting standards published by

institutive of chartered accountant.

o Company’s significant accountancy policy

o Master chart of account

Preparation of Budget viz.,

Revenue
Consumption/ Procurement of Raw

Expenditure Budget material, Packaging

materials, general

stores, spare parts

89
 etc. budget

o Capital Budget

Advances to employees for HBL &

Conveyance advance Budget

Submission of Management Report

Provisional Monthly Report

Inventory Report

Standard cost vs. Actual Cost Variance Report

Revenue / Capital Budget Status Report

Monthly, Quarterly, Yearly Balance Sheet, P

& l account, etc.

o To get the account audited by

Internal auditors

Statutory auditors

o To arrange fund

Daily forecast

Weekly forecast

Monthly forecast

Quarterly forecast

Yearly forecast

90
Various sections of F & A department and their
roll of function

o Bill section
Making of Payment

Accounting of Transaction i.e.

Bill inward register

SRV register

W.O. adjustment register

CWIP register

MIC register etc.

o Stores section
Control of inventory

Booking of receipt of inventory based or

SRVs

Booking of consumption based on SRVs

Physical verification as per

91
 A, B, C, Analysis

Maintaining of PSL

Review of slow / non-moving items,

identification of obsolete items and adjustment

there of as per H.O. guidelines.

Pay roll & Establishment section

Employees related payments like salary &

wages advance for expenses, TA / DA Medical

Reimbursement, LTC, HBL, Conveyance

Achievement etc.

o Cash & Bank section

Arranging of fund as per the requirement of

different sections.

Preparation of cherub.

Writing of cashbook / bankbook / bank

reorganization etc.

o Insurance section

To renew policies from time to time.

92
 To ledge the claim in the event of

occurrences.

To purchase the claim and get the settlement.

o Books
Preparation of monthly / quarterly / yearly

accounts.

Getting the audit of accounts.

Co-ordination with auditors.

Submitting of actual cost data on yearly

basis.

Getting of tax audit etc.

Analysis of financial ratios and Pay back

period.

o Books of accounts
1. Accounts manual

2. Significant accounting policy

3. Guideline on closing of accounts

93
4. General guideline

5. Power of officers

6. Master chart of accounts

7. Maintaining chart of accounts

8. Maintaining of primary books

9. Cash-books

10. Bank-books

11. Journal Books

12. Ledger

a) Financial reports

b) Trial balance

c) Bank reconciliation

d) Profit & Loss account

e) Balance sheet

f) Cost of production

g) Actual vs. Budget/Standard cost

variance report with reason for

variation.

h) Review of ratios

i) Solvency ratios

94
 j) Profitability ratios

k) Turn over ratio (stock ratio)

l) Service ratio

5.3 FINANCIAL PLANNING

Planning is pre-requisite for managing any

little things too. When we think about fund, financial

planning comes at first. Financial planning answers

the following questions: -

o What should be funds requirements?

o How should procure funds?

o From where to procure the funds?

o How to utilize the fund at maximum

level?

95
 Head office deals with the arrangement of

raising the funds and provides funds required by any

of four plants.

In IFFCO, they make weekly forecast of funds

in which requirement of each department is

mentioned. After that the proposal is sent to head

office and got sanction from there.

So, financial planning has a significant place

for making decision of requirement and utilization of

funds.

96
5.4 RATIO ANALYSIS

Current Ratio
Current ratio is the relationship between current assets and current

liabilities. Current assets are assets held on a short-term basis. These

assets include cash and bank balances, prepaid expenses, debtors, bills

receivables, inventory (finished goods, work-in-progress and raw

material), short term investment in treasury accounts and accrued

income. Normally short-term refers to an accounting period. Current

liabilities are obligations that are payable within an accounting period.

Current liabilities include, creditors, bills payable, cash credit and

overdraft from a bank for a short period and liability for expenses,

income recorded in advance, and any other liability due for payment

97
during the current accounting period. Current ratio is calculated by

dividing current assets by current liabilities.

Current Assets
Current Liabilities

2007-08 = 576.9
508.0

= 1.136

2006-07 = 494.6
397.5

= 1.244

2005-06 = 502.5
273.3

= 1.839

Interpretation:

A current ratio of 2:1 is generally considered to be acceptable.

However, this rule of the thumb varies from industry to industry.

Higher the current ratio better it is as it signifies higher liquidity. In

2005-06 it was 1.839:1 whereas in 2006-07 it decreased to 1.244:1

98
and further reduced to 1.136:1 in 2007-08. Though it is showing

reduction Y-O-Y, but the current ratio is still on a satisfying position

for the investor.

Quick Ratio

Measures assets that are quickly converted into cash and they are

compared with current liabilities. This ratio realizes that some of

current assets are not easily convertible to cash e.g. inventories.

The quick ratio, also referred to as acid test ratio, examines the ability

of the business to cover its short-term obligations from its “quick”

assets only (i.e. it ignores stock). The quick ratio is calculated as

follows

Current Assets – Inventory

Current Liabilities

2007-08 333.1
508.0

0.655

2006-07 317.3

99
 397.5

0.798

2005-06 306.8
273.3

1.125

It is clear that this ratio will be lower than the current ratio, but the

difference between the two (the gap) will indicate the extent to which

current assets consist of stock.

Interpretation:

This ratio indicates the ability to meet short term payment, using only

the most liquid assets; the standard ratio is 1:1.though it shows

negative trend from 2005-06 to 2007-08 which reduced from 1.125 to

0.655 almost 50%. In the year 2005-06 it was above standard but in

the next two years it had fallen below the standard consecutively. This

is shows risk for the investors who are ready to invest in the company.

Net Working Capital

100
Working Capital is more a measure of cash flow than a ratio. The

result of this calculation must be a positive number. It is calculated as

shown below:

Net Working Capital

Total Assets

Bankers look at Net Working Capital over time to determine a

company's ability to weather financial crises. Loans are often tied to

minimum working capital requirements.

2007.8 174.9
976.7

0.18

2006-07 (80.2)
821

(0.098)

101
 2005.6 33.5
846.1

0.04

Interpretation:

The Net Working Capital Ratio in the year 2006-07 was in negative,

-0.098 due to more current liabilities than current assets but in the

year 2007-08 it raised to 0.04, which shows a positive move of the

company by reducing the current liabilities.

GROSS MARGIN RATIO

This ratio is the percentage of sales left after subtracting the cost of

goods sold from net sales. It measures the percentage of sales

remaining (after obtaining or manufacturing the goods sold) available

to pay the overhead expenses of the company.

Comparison of your business ratios to those of similar businesses will

reveal the relative strengths or weaknesses in your business. The

Gross Margin Ratio is calculated as follows:

Gross Margin Ratio = Gross Profit / Net Sales

102
2007.8 366.7 / 1210.1

0.3030

2006-07 284 / 982.2

0.290

2005-06 71.8 / 1049.4

0.068

Interpretation:

The gross margin ratio is showing increase Y-O-Y which means the

COGS of company is reducing every year, i.e.; company is

concentrating on the cost reduction. It means the profit of the

company will increase in the near future too.

NET PROFIT MARGIN RATIO

This ratio is the percentage of sales dollars left after subtracting the

Cost of Goods sold and all expenses, except income taxes. It provides

a good opportunity to compare your company's "return on sales" with

the performance of other companies in your industry. It is calculated

before income tax because tax rates and tax liabilities vary from

103
company to company for a wide variety of reasons, making

comparisons after taxes much more difficult. The Net Profit Margin

Ratio is calculated as follows:

Net Profit Margin Ratio = Net Profit before Tax / Net Sales

2007.8 91.9/ 1210.1

0.076

2006-07 52.3 / 982.2

0.053

2005-06 12.5 / 1049.4

0.012

Interpretation:

The net margin ratio shows that the margin is increasing year on year

which shows that the increase on sales had too increased the EBT of

104
the firm. It was only 0.12 in the year 2006-07 which increased to

0.053 in the year 2007-08 which further increased to 0.076 in the year

2007-08.

RETURN ON INVESTMENT (ROI)

Income is earned by using the assets of a business productively. The

more efficient the production, the more profitable the business. The

rate of return on total assets indicates the degree of efficiency with

which management has used the assets of the enterprise during an

accounting period. This is an important ratio for all readers of

financial statements.

Investors have placed funds with the managers of the business. The

managers used the funds to purchase assets which will be used to

generate returns. If the return is not better than the investors can

achieve elsewhere, they will instruct the managers to sell the assets

105
and they will invest elsewhere. The managers lose their jobs and the

business liquidates.

ROI = PAT / TOTAL ASSETS

2007.8 57.6 / 976.7

0.059

2006-07 32.1 / 821

0.039

2005-06 13.0 / 846.1

0.015

Interpretation:

The ROI chart shows the positive trend which shows that the

management is using the assets efficiently. In the year 2005-06 it was

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only 0.015 which increased to 0.059 in the year 2007-08. Almost 4

times in the time period of two years.

SOLVENCY RATIO

The term solvency implies the ability of the enterprise to meet its

obligations on the due date. Some payments have short-term maturity

and some have long-term maturity. The firm has to plan for both

short-term and long-term obligations. We have analyzed short-term

liquidity of a business enterprise in the previous section. Now we

extend an analysis to long-term liquidity. Long-term liquidity means

ability to meet long-term commitments or obligation. Long-term

lenders are primarily interested in this type of analysis.

DEBT TO EQUITY RATIO:

The term solvency implies the ability of the enterprise to meet its

obligations on the due date. Some payments have short-term maturity

and some have long-term maturity. The firm has to plan for both

short-term and long-term obligations. We have analyzed short-term

liquidity of a business enterprise in the previous section. Now we

extend an analysis to long-term liquidity. Long-term liquidity means

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ability to meet long-term commitments or obligation. Long-term

lenders are primarily interested in this type of analysis. Much is the

stake of owner’s as compared to those who have given long- term

loans. Debts are long-term liabilities having maturity after one year. It

includes debenture, long-term loans from banks and financial

institutions and public deposits. Equity (also called shareholder’s

funds) includes equity share capital, preference share capital, general

reserves, capital reserves, securities premium account balance and all

other reserves and surplus available for equity share holders. For the

computation of equity, miscellaneous expenses and debit balance of

profit and loss account, if any, are to be deducted.

Debt to equity ratio Debt

Equity

2007.8 129 / 329

0.392

2006-07 100.5 / 283.7

0.354

2005-06 131.9 / 263.5

0.5

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Interpretation:

This ratio as discussed earlier gives the idea of having employed the

number of times debt against each rupee of equity. If it is higher it

shows the debt employed by the firm is more than equity which

increases the interest burden and reduces the profit of the company as

well as the shareholders too. In the year 2005-06 the debt employed

by the firm was almost half of the equity but it reduces to 0.392 in the

year 2007-08.

Proprietary Ratio:
The ratio shows the probation of proprietors funds to the total

assets employed in the business.

Proprietary Ratio: Proprietary Assets x 100

Total Assets
5697.59
3300.81
=57.93%

Interpretation:
In 2006-07 the proprietary ratio was 58.77% and in 2007-08 the

proprietary ratio was 57.93%. The higher the ratio, the stronger the

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financial position of the company, so it is desirable for the company,

but company need to improve this ratio

Debtors Ratio:
The ratio shows the number of days taken to collect the dues of

credit sales. It is a measure of credit period enjoyed by the customer.

Proprietary Ratio: Debtors + Bill Receivable x 365

Credit Sales

Credit Sales

2006-07 = 280178687 x 365

1864885457
= 55 days

2007.8 = 362848990 x 365

2288612585

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 = 58 days

DEBTORS RATIO

59 58
58
57
56 55
55
54
53
1 2

Interpretation:

A shorter collection period indicates prompt payment and

reduction of bad debt. Similarly a longer collection period indicates

the risk of bed debt.

In 2006-07 the debtor’s ratio was 55 days and in 2007-08 the

ratio was 58 days. The ideal debtor’s ratio is 45 days. This indicates

the efficiency of the collection department. As compare to the ratio of

2006-07, the ratio of 2007-08 increased so it is unfavorable situation

for the company.

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Creditors Ratio:

In indicates the months, days or week in which the amount is

given to creditors and bills payable. It is a measured of credit period

enjoyed by the producer. The number of days within which we make

payment to our creditors of credit purchases is obtained from

creditor’s ratio.

Proprietary Ratio: Creditors + Bill Receivable x 365

Credit Purchases

2006-2007 = 270464462 x 365

665132302
= 148 days

2007-08 = 362462500 x 365

838357005
= 158 days

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 CREDITORS RATIO

160 158

155
150 148

145
140
1 2

Interpretation:
In 2006-07 the creditor’s ratio was 148 days and in 2007-08 the

creditor’s ratio was 158 days. As compare to the ratio of 2006-07 is

148 days, and the ratio of 2007-08 is increased by 158 days. So it is

good for the company.

Return on capital employed:

It is an index of profitability of business and it obtained by

comparing net profit with capital employed. It is the most important

ratio from the view point of mgt.

Return on capital employed: Net Profit (before) x 100

Capital employed

2007-2008 = 33726866 x 100

1690654599

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 = 1.99%

Fixed Assets turnover ratio:

To ascertain the efficiency and profitability of business, the

total fixed assets are compared to sales. The more the sales in relation

to the amount invested in fixed assets, the more efficient is the use of

fixed assets. It the sales are less as compared to investment in fixed

assets, it means that fixed assets are not adequately utilized in

business.

Fixed assets turnover ratio: Sales

Fixed Assets

2006-2007 = 1864885457
1419705869
= 1.31 Times
2007-2008 = 2288612585
1354221542

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 = 1.69 Times

FIXED ASSESTS TURNOVER RATIO

2 1.6
1.5 1.31

1
0.5
0
1 2

Interpretation:
In 2006-2007 the fixed assets turnover ratio was 1.31 times and

in 2007-2008 this ratio was 1.69 times. As compared to 2006-2007 the

fixed assets turnover ratio was increased, in 2007-2008. So it is

favorable situation for the company.

Earning per share:

It is ratio expressed in monetary value that is rupees and paisa.

It indicates the amount of earning per share. Higher the amount, better

it is for the firm.

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Earning per share: Net Profit (PAT)
No. of shares 0/5

2007-2008 = 30965192
6899400

= 4.49 Rupees

Interpretation:

In 2007-2008 the ratio was 4.49 Rupees so it is good for the

company.

FINANCIAL LEVERAGE: -

Financial leverage is related to the financing activities of a firm. It

results from the presence of fixed financial charges. Such expenses do

not very with the operating profits. They have to be paid regardless of

the amount of EBIT available to pay them. After paying them, the

EBIT belongs to the shareholders. Financial leverage is concerned

with the effect of changes in ability of a firm to use fixed financial

charges to magnify the effect of changes in EBIT on EPS.

2007 D.F.L

EBIT

EBT

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 74700000

12300000

= 6.07

Implication of D.F.L.

VADILAL has 6.07 D.F.L. during 05 year, which is less in compare

of 9.38 for 04. It show VADILAL eliminate them liability so it is sign

of good sound condition of the company in present.

Balance Sheet

Currency in Millions of Indian Rupees

31-Mar-06 31-Mar-07 31-Mar-08
Assets
Cash & Equivalents 11.6 26.7 10.5
Total cash & short term investment 11.6 26.7 10.5
Accounts Receivable 198.3 196.1 219.8
Notes Receivables 7.6 13.7 13.5
Other Receivables 2.8 3 4.1
Total Receivables 208.7 212.8 237.4
Inventory 195.7 177.3 243.8

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 Other Current Assets 86.6 77.8 85.2
Total Current Assets 502.5 494.6 576.9
Gross Property Plant & Equipment 604.7 619 719.5
Accumulated depreciation -290.2 -315.1 -340.9
Net Property Plant & Equipment 314.6 303.8 378.5
Long - Term Investments 21.2 16.3 18.1
Deferred Charges, Long Term 7.8 6.2 3.2
Total Assets 846.1 821 976.7

Liabilities & Equity

Accounts Payable 90.2 68.1 95
Accrued Expenses 15.5 16.4 12.6
Short Term Borrowings 16.8 177.5 199.5
Current Portion of Long Term Debt / Capital
Lease 88.1 64.8 65.4
Current Income Taxes Payable 10.8 8.8 32.3
Other Current Liabilities 51.9 61.8 103.2
Total Current Liabilities 273.3 397.5 508
Long Term Debt 268.9 88.3 92.7
Minority Interest 0.5 0.5 0.6
Unearned Revenue, Non-Current 0 4.5 4.2
Deferred Tax Liability Non -Current 39.5 46.5 42.3
Total Liabilities 582.3 537.2 647.7
Common Stock 71.9 71.9 71.9
Additional Paid in Capital 48.7 48.7 48.7
Retained Earnings 114.2 138.1 185.6
Comprehensive Income & Other 29 25.1 22.8
Total Common Equity 263.8 283.7 329
Total Equity 263.8 283.7 329
Total Liabilities & Equity 846.1 821 976.7

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 INCOME STATEMENT

Currency in Millions of Indian Rupees

31-Mar-
31-Mar-06 31-Mar-07 08

Revenues 1049.4 982.2 1210.1

Other Revenues 0 0 0
TOTAL REVENUES 1049.4 982.2 1210.1
Cost of Goods Sold 977.6 698.3 843.4
GROSS PROFIT 71.8 284 366.7

Selling General & Admin Expenses 0 172.5 205.7

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R & D Expenses 0 0.7 0.3
Depreciation & Amortization
25.8 25 29.6
Other Operating Expenses -15.2 1.8 20.6

OTHER OPERATING EXPENSES, TOTAL 10.6 200 256.3

OPERATION INCOME 61.2 84 110.4
Interest Expense
-46.6 -29.7 -31.1
Interest & Investment Expense 4.4 5.5 8.2
NET INTEREST EXPENSE -42.5 -24.2 -22.9

Income (Loss) on Equity Investments -1.1 -4.9 1.7

Currency Exchange Gains (Loss) 0 1.7 7.7

Other Non Operating Income (Expenses) -0.3 -4.6 -6.5

EBT, EXCLUDING UNUSUAL ITEMS 16.7 52 90.3

Gain (Loss) on Sale of Investments 0.7 0 0

Gain (Loss) on Sale of Assets 0 0.2 1.6
Other Unusual Items, Total -4.9 0 0
Other Unusual Items -2.2 0 0

EBT, INCLUDING UNUSUAL ITEMS 12.5 52.3 91.9

Income Tax Expense -0.6 20.2 34.3
Minority Interest in Earnings 0 0 0

Earnings from Continuing Operations 13 32.1 57.6

NET INCOME 13 32.1 57.6
NET INCOME TO COMMON INCLUDING
EXTRA ITEMS 13 32.1 57.6
NET INCOME TO COMMON EXCLUDING
EXTRA ITEMS 13 32.1 57.6

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 LEARNING VALUE

By doing the project on Vadilal limited, I have come to know about

the history and also about the reason behind their success.

In the competitive world, there are so many competitors of this

company in their fields but due to their qualitative products, better

pricing policy, and expansion in the whole country, very large amount

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of production & sales and great objectives of VADILAL limited is on

the top most level in India in their fields.

This company has achieved several or I can say lots of awards

far their brilliant success in different areas. The distribution channel,

marketing popularity of their brands is in very vast term that it is

spread over whole nation or world.

By doing this project I have got an opportunity to examine

myself and compare my knowledge about management industries etc.

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 CONCLUSION

I have visited the VADILAL limited. The response of each & every

department of company was very appreciable the department heads

have provided the best possible information & have helped me by

their best efforts. Practical experience is very essential for any of the

management student, and by this industrial visit, I have learnt much

about the industrial process, which many not are gained by the books

only.

As a BBA Student it is compulsory for me to have the best possible

knowledge about industries and about its internal affairs. Due to this

industrial visit only I can get the benefit of visiting and adopting the

knowledge by the famous and no: 1 company is very effective and

good, their products are of best quality, and pricing policy is also very

much appreciable and done after the study of each & every class of

people

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 BIBLIOGRAHPY

Books:
Growth and Structure of Industry

Marketing management

By: Philip kotler

Fundamentals of financial management

By: James C. Vanhorne

John M. Wachowiez
Human resource management

By: Gary Dessler

Magazine:
Business world

Search Engine:
www.google.com
Web sites:
www.vadilalgroup.com

www. investing.businessweek.com

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