RATIO ANALYSIS

A
PROJECT REPORT UNDER THE GUIDANCE OF MISS. CHHAYA CHAVDA (INCHARGE) SUBMITTED BY

Gamara Prakash V. ROLL NO. 520910204

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE
OF

MBA IN

FINANCE

BONAFIDE CERTIFICATE

Certified that this project report titled Ratio Analysis is the bonafide work of Gamara Prakash V. who carried out the project work under my supervision.

SIGNATURE HEAD OF THE DEPARTMENT

SIGNATURE FACULTY IN CHARGE

Manipal
INSPIRED BY LIFE

ACKNOWLEDGEMENT

Industrial Training is not only part of our syllabus but it is the golden opportunities for our knowledge enrichment. With the great pleasure, here I take the opportunity to express my towards all who have helped me at various stage of my practical training. At the once, I would like to place on record my thanks to the management of The KAIRA DISTRICT CO-OPERATIVE MILK PRODUCER UNION LIMITED company for their kind co-operative in providing the required data. In a special ways, I would like to place on record my special and sincere thanks our Head Of The Department Mr. Samir Patel & my training incharge Miss. Chhaya Chavda who throughout the preparation of the report. My special thanks go to Mr.J.K.Joshi manger of administration, and Mr. Manoj Chauhan for his kind support and acknowledgement. Lastly, I would like to thanks the management, officers and staff of different departments who spend their important time in expressing us the various aspects of unit and provided insight for the preparation of this report. I would like to acknowledge the valuable help offered by the persons directly or indirectly to me to connect to this report throughout my training period.

Index
Sr.no. 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) Particulars Preface Executive Summary About Dairy Industry About Amul Dairy Financial Manangement Ratio Analysis Literature Review Research Methodology Findings Limitations Recommendations Conclusion Bibliography Annexure Page no. 5 6 7 38 62 77 117 126 141 144 145 148 153 155

PREFACE

Any industrial training is very helpful aid to get idea about management and working of the industrial undertaking. MBA is one of the master courses which has its own unique role clarify likely others. But unlike the other professional courses one of its basic requisite for the students of IV semester MBA during the study terms is to undertake practical training in any one public limited industry. From this industrial training, I can visualize that there is much difference between theory and practical life. After training period, we have good management student. The industrial training is very important for MBA program. In industry or company, there are many problem arises. Often during the time period of industry training, I come to know that how successful management team solves this entire problem. Once, I visited KAIRA DISTRICT CO-OPERATIVE MILK PRODUCER UNION LIMITED (AMUL), ANAND for 3 months. This industrial training offers me to blend the practical knowledge of the company of industry.

EXECUTIVE SUMMARY

It is necessary to principal knowledge before doing any work because of todays competitive world. For the practical knowledge I have taken visit in KAIRA DISTRICT COOPERATIVE MILK PRODUCER UNION LIMITED, ANAND. Mainly in this report the focus is on financial department and general information relating to the organization. The project was done in financial position of AMUL DAIRY. The source of getting data was annual report. In this analysis I have first given the company profile that gives all the information about the company that what is the companys status in the market right now. I am over whelmed with pleasure while presenting this report on KAIRA DISTRICT CO-OPERATIVE MILK PRODUCER UNION LIMITED. An oasis in the desert founder chairman was a simple person with great farsightedness who had a dream to provide respectable facilities to the people.

ABOUT DAIRY INDUSTRY

-: INTRODUCTION:Dairy industry is best suited industry for the growth of the India, because India is a country that is mainly depend on the agriculture and cattle feed product, that is nearly 70% and also Indian people will prefer more dairy products than other food products. This is the main reason for the development of dairy industry in Indian economy. Reportedly, world demand for the dairy products is growing by 2% per year. The largest consumers of dairy products are high income developed countries like U.S.A., EUROPE, AUSTRALIA, NEWZEALAND, JAPAN and all the GULF countries. Global prices are at its peak due to drought in Australia and lower than projected milk volumes in Newzealand along with the phased reduction in subsidized by the Europe. Global liberalization of dairy policies is eliminating all tariffs, quotas export subsidized, and domestic supports. At the same time, novel trade opportunities are emerging from the rapid economy growth, changing directly patterns and rising urban populace in developing countries. At this juncture, competition among firms has grown. However to stay in market. Firms that respond quickly to changing economic forces, changing policies and swifts in milk supply and demand forces. The Amul is the group of unity of four hands which implies that the co-ordinate hands of different groups of people, united together from Amul which is now the HIGHEST MILK PRODUCER IN SECOND HIGHEST IN THE WORLD.
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ASIA and

NATURE OF DAIRY INDUSTRY

In the early seventeenth century, the first English and Dutch colonists brought cattle with them. Despite the rigors of the environment, cattle proliferated in all the settled areas. Although shelter and feed were in short supply and native grasses were not satisfactory for haymaking, pasture was usually adequate through the summer months. Settlers initially substituted wild marsh hay, straw, and corn fodder for winter feed but later brought over from Europe better pasture grasses and tame hays. The cattle came primarily from England and Holland. There were no specific dairy breeds, and the unimproved stock soon lost weight and shape through poor management and interbreeding. Only in New England, where animals grazed under the care of a town cowherd, was there much supervision. There the towns-people even exercised some control over breeding through communal choice of sires. Elsewhere the cattle usually identified through earmarks or brands, mostly fended for them. Almost every farm and most town households kept one or two cows. Women and children customarily milked the animals, except in winter when the cows dried up. They also manufactured the butter and cheese. Before 1700 some producers regularly exported dairy goods from New England.

By the mid-eighteenth century some areas, such as the Narragansett district, the lower Hudson Valley, and the counties around Philadelphia, had earned reputations for producing prime butter or cheese. Exports had stimulated better management even before the American Revolution, at which time dairies of a dozen or more cows were no longer uncommon. Between 1790 and 1805, cheese exports exceeded one million pounds annually, and by 1812, New York butter wagons regularly traveled as far south as Charleston, South Carolina. In the early 1820s, some Ohio cultivators were peddling cheese and butter in small
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towns along the Ohio River from Wheeling to Louisville. The dairy, nevertheless, remained a seasonal and a household undertaking, a by-product of "general" farming, until the mid-nineteenth century. Commercial growth was rapid from the late 1820s. In 1840 dairy manufactures, valued at $33.8 million, took place in all thirty states. New York (31 percent), Pennsylvania (9.4 percent), and Massachusetts (7.1 percent) were the largest producers, but relative to population, Vermont and New Hampshire were the most specialized. Outside the northeastern United States, only Ohio and Virginia were large producers. By 1860 American butter output had greatly increased, notably in Vermont, New York, Pennsylvania, and Ohio, and Illinois was a sizable newcomer to the industry. Cheese output, heavily concentrated in Vermont, New York, and Ohio, lagged after 1850. New York produced a quarter of the nation's butter and almost half the cheese in 1860. It also contributed the greater part of cheese exports, which had doubled between 1845 and 1850 to about 15 percent of the national output.

Advances in dairy husbandry began in the 1880s with the practice of feeding the animals ensilage, such as unripened corn, clover, and alfalfa. Farmers preserved the green feed in closed pits or tower structures called silos. Silage feeding lengthened the milking season up to 10 weeks, which allowed manufacturing plants to stay open throughout the year. Adaptation of German scientific feeding principles resulted in a balanced dairy ration that combined the nutritive components of various feeds in the proportions required by a cow's flow of milk. The Babcock test helped farmers cull their low-fat producers. Beginning with the rivalries of breed associations in the 1880s, emphasis shifted to raising milk output through official cow testing, extension activity on the part of the agricultural colleges, cooperative herd improvement associations, and

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disease-eradication and sire-proving programs. Purebred HolsteinFriesians, Jerseys, Guernseys, Ayrshires, Brown Swiss, and, from the 1930s, Red Danish all proved to be excellent dairy cattle, while the dual-purpose breeds, such as Devons, Shorthorns, and Red Polls, lost ground on specialized dairy farms. These farms adopted milking machines in the 1920s and installed cooling equipment later.

Average annual yield per cow climbed from 3,050 pounds of milk in 1890 to 4,508 in 1950, 9,609 in 1970, and 18,204 in 2000. The greatest relative increases occurred on farms with fifty or more cows in new dairy states, such as Florida, Arizona, and California. In 1993 California replaced Wisconsin as the nation's top dairy state and currently produces one-third more milk annually than Wisconsin does. The number of milk cows reached 25.8 million in 1944 but fell to 12.4 million by 1970 and to 9.2 million by 2000. Between 1950 and 1970, the numbers of farms reporting milk cows fell by 80 percent, and thousands of small dairy farmers went out of business. This trend has continued into the twenty-first century as large-scale producers replace small, family-run operations. Nevertheless, milk products, worth more than $21 billion in 2000, were second only to sales of cattle and calves in cash value to American farmers, and that income included the culling of some dairy cattle. In 1997 the dairy was the largest single source of farm income in six states and second largest in five others.

Small-scale dairy manufacturing also went into eclipse. When insulated cars and trucks led to much larger milk sheds at processing plants, high-volume plants began to achieve the substantially lower unit costs hitherto enjoyed only
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by condenseries and "centralizer" creameries. As average size of output increased, however, the number of plants declined, especially since the 1930s. By 1945 over 100 large "flexible" plants already made multiple products, most frequently evaporated milk, butter, and cheese, as cost and price relationships changed.

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FEATURES OF DAIRY INDUSTRY

India has maintained the unbeatable spot of being the top milk producer in the world. Thanks to the far sightedness of thinkers like Dr Kurien that mechanisms like white revolution and cooperatives have stead fast India's growth in the dairy industry. Little wonder that shanties with buffaloes tied up in the yard is not a rare sight in India. Going by the statistics, India has shown almost nil signs of slowdown with milk consumption envisaged to rise by 2.6% in 2009 and milk production forecast to sustain its normal growth of about 3%. India is the world's largest milk producer with 104.9 million tonnes per year. Milk production in India is growing at 4% per year, and at present India contributes 15% of the total global milk production. The country boasts of some 300 million dairy cattle. India's dual distinction in the dairy segment comes from the fact that it is both the world's top milk producer and the world's largest milk consumer.

According to a dairy report released by the Tetra Pak, since 1999, India has produced more milk than any other country in the world. Over the last four years, milk production in India has increased by a compound annual growth rate of 4.3%.

India also tops the charts in terms of milk consumption, consuming 51.5 billion litters of milk and other liquid dairy products in 2008, with a compound annual growth rate of 2.7% over the last four years. That's almost double the volumes consumed by the number two milk consumer, China. Dairy sector contribution is around 65-70% to livestock sector. However, we have less than 1000 milk processing centres in India. The level of processing is expected to be around 15% in the short term, 20% in the medium term and 30% in the long
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term. We need to empower the farmers so that large and modern commercially viable units enter into the indigenous dairy products manufacturing by bringing improved quality standards, commercially viable technologies, nano technology based packing and refrigerated transportation system for hygienic distribution and increased shelf-life.

Amul has been ranked amongst the top 21 largest dairy businesses in the world as per the findings published by International Farm Comparison Network (IFCN) at the 10th IFCN Dairy Conference 2009 at Stockholm. Domestically Amul leads the rest in terms of milk production followed by Karnataka Milk Federation.

The exports of Dairy Products from India reached 69415.44 million tonnes with the value of Rs 866.58 crore in 2007-08 as against Rs 434.58 crore in 2006-07. GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House" status.

Amul GCMMF, Mother Dairy India Ltd, and Nestle India Ltd represent the 3 active competitors in the probiotic dairy market. New entrants for future include Yakult, the global leader in yoghurts, with its partnership with DANONE.

BENEFITS OF INDUSTRY MILK PRODUCTS FOR YOUR HEALTHY WEIGHT.

Consuming the recommended servings of milk products every day could help you manage your weight in a healthy way.

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According to more than 30 scientific research studies, a diet rich in calcium or in milk products could make it easier to maintain a healthy weight or lose excess weight. In fact, it appears that calcium could make the body use fat as an energy source more efficiently and reduce fat storage in cells. Also, it seems that milk products could achieve this more effectively than calcium supplements, which suggests that other milk ingredients, such as protein, could play an important role, perhaps by reducing appetite. This weight loss could be even more effective in people who generally have a low milk products intake. Conclusion: Although not a magic formula, milk products in adequate amounts may have added benefits for weight management.

FEATURES OF INDUSTRY
Dairy industry is of crucial importance to India. The country is the worlds largest milk producer, accounting for more than 13% of worlds total milk production. It is the worlds largest consumer of dairy products, consuming almost 100% of its own milk production. Dairy products are a major source of cheap and nutritious food to millions of people in India and the only acceptable source of animal protein for large vegetarian segment of Indian population, particularly among the landless, small and marginal farmers and women. Dairying has been considered as one of the activities aimed at alleviating the
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poverty and unemployment especially in the rural areas in the rain-fed and drought-prone regions. In India, about three-fourth of the population live in rural areas and about 38% of them are poor. In 1986-87, about 73% of rural households own livestock. Small and marginal farmers account for threequarters of these households owning livestock, raising 56% of the bovine and 66% of the sheep population. According to the National Sample Survey of 1993-94, livestock sector produces regular employment to about 9.8 million persons in principal status and 8.6 million in subsidiary status, which constitute about 5% of the total work force. The progress in this sector will result in a more balanced development of the rural economy.
POLICY

The total amount of milk produced has more than tripled from 23 million tonnes back in 1973 to 74.70 million tonnes 26 years later in 1998. The tremendous rise in milk production is primarily the fallout of the dairy farming policy reflected in .Operation Flood.. Following the success of dairy farming policy, the Government has set up a dairy processing policy, reflected in the .Milk and Milk Products Order.. In addition, the Government uses a variety of import restrictions to protect its domestic dairy market.
MILK PROCESSING

The milk processing industry is small compared to the huge amount of milk produced every year. Only 10% of all the milk is delivered to some 400 dairy plants. A specific Indian phenomenon is the unorganized sector of milkmen, vendors who collect the milk from local producers and sell the milk in both, urban and non-urban areas, which handles around 65-70% of the national milk production. In the organized dairy industry, the cooperative milk processors have a 60% market share. The cooperative dairies process 90% of the collected milk as liquid milk whereas the private dairies process and sell
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only 20% of the milk collected as liquid milk and 80% for other dairy products with a focus on value-added products.
DOMESTIC CONSUMPTION

The huge volume of milk produced in India is consumed almost entirely by the Indian population itself, in a 50-50 division between urban and nonurban areas. Increasingly, important consumers of the dairy industry are fast-food chains and food and non-food industries using dairy ingredients in a wide range of the product.

TRADE
In spite of having largest milk production, India is a very minor player in the world market. India was primarily an import dependent country till early seventies. Most of the demand-supply gaps of liquid milk requirements for urban consumers were met by importing anhydrous milk fat / butter and dry milk powders. But with the onset of Operation Flood Programme, the scenario dramatically changed. OPPORTUNITIES AND CHALLENGES IN THE INDIAN DAIRY INDUSTRY Commercial imports of dairy products came to a halt except occasional imports of very small quantities. In the 1990s, India started exporting surplus
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dairy commodities, such as SMP, WMP, butter and ghee. The Agricultural and Processed Food Products Export Development Authority (APEDA) regulated the export and import of dairy products till early 1990s. However, in the new EXIM Policy announced in April 2000, the Union Government has allowed free import and export of most dairy products. The major destinations for Indian dairy products are Bangladesh (23.1%), UAE (15.4%), US (15.6%) and Philippines (8.9%). In terms of products, SMP is the most important product accounting for about 63% of total export volume, followed by ghee and butter (11.7%) and WMP. Export figures clearly demonstrate that the Indian dairy export is still in its infancy and the surpluses are occasional. Indigenous milk products and desserts are becoming popular with the ethnic population spread all over the world. Therefore, the export demand for these products will increase and hence, there is a great potential for export. On the other hand, there has been a sharp increase in import of dairy products (especially milk powders) after trade liberalization. As per the latest report of Foreign Trade Statistics of December 2004, the imports of dairy products (milk and cream) has reached a cumulative total of 22.145 million tones for the period April - March 2004, as compared to only 1473 million tonnes for the same period during the previous year. The main reasons for sharp rise in imports are huge export subsidies given by developed countries (mainly the US and EU). India has recently concluded a tariff rate quota to deal with US, EU and Australia on imposing custom duty of 15% on imports of SMP and WMP up to 10,000 tonnes and 60% on imports beyond this level.

KEY AREAS OF CONCERN IN THE DAIRY INDUSTRY:(I) COMPETITIVENESS, COST OF PRODUCTION, PRODUCTIVITY OF

ANIMALS ETC.

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The demand for quality dairy products is rising and production is also increasing in many developing countries. The countries which are expected to benefit most from any increase in world demand for dairy products are those which have low cost of production. Therefore, in order to increase the competitiveness of Indian dairy industry, efforts should be made to reduce cost of production. Increasing productivity of animals, better health care and breeding facilities and management of dairy animals can reduce the cost of milk production. The Government and dairy industry can play a vital role in this direction.

(II) PRODUCTION, PROCESSING AND MARKETING

Infrastructure If India has to emerge as an exporting country, it is imperative that we should develop proper production, processing and marketing infrastructure, which is capable of meeting international quality requirements. A comprehensive strategy for producing quality and safe dairy products should be formulated with suitable legal backup.
(III) FOCUS ON BUFFALO MILK BASED SPECIALTY

Dairy industry in India is also unique with regard to availability of large proportion of buffalo milk. Thus, India can focus on buffalo milk based specialty products, like Mozzarella cheese, tailored to meet the needs of the target consumers.

(IV) IMPORT OF VALUE-ADDED PRODUCTS AND EXPORT OF LOWER VALUE PRODUCTS

With the trade liberalization, despite the attempts of Indian companies to develop their product range, it could well be that in the future, more value19

added products will be imported and lower value products will be exported. The industry has to prepare themselves to meet the challenges.

TECHNOLOGY USED IN DAIRY INDUSTRY

Milk is as ancient as mankind itself, as it is the substance created to feed the mammalian infant. All species of mammals, from man to whales, produce milk for this purpose. Many centuries ago, perhaps as early as 6000-8000 BC, ancient man learned to domesticate species of animals for the provision of milk to be consumed by them. These included cows (genus Bos), buffaloes, sheep, goats, and camels, all of which are still used in various parts of the world for the production of milk for human consumption. Fermented products such as cheeses were discovered by accident, but their history has also been documented for many centuries, as has the production of concentrated milks, butter, and even ice cream. Technological advances have only come about very recently in the history of milk consumption, and our generations will be the ones credited for having turned milk processing from an art to a science. The availability and distribution of milk and milk products today in the modern world is a blend of the centuries old knowledge of traditional milk products with the application of modern science and technology. The role of milk in the traditional diet has varied greatly in different regions of the world. The tropical countries have not been traditional milk consumers, whereas the more northern regions of the world, Europe (especially Scandinavia) and North America, have traditionally consumed far more milk and milk products in their diet. In tropical countries where high temperatures and lack of refrigeration has led to the inability to produce and store fresh milk, milk has traditionally been preserved through means other than refrigeration,

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including immediate consumption of warm milk after milking, by boiling milk, or by conversion into more stable products such as fermented milks.

WORLD-WIDE MILK CONSUMPTION AND PRODUCTION

The total milk consumption (as fluid milk and processed products) per person varies widely from highs in Europe and North America to lows in Asia. However, as the various regions of the world become more integrated through travel and migration, these trends are changing, a factor which needs to be considered by product developers and marketers of milk and milk products in various countries of the world. Even within regions such as Europe, the custom of milk consumption has varied greatly. Consider for example the high consumption of fluid milk in countries like Finland, Norway and Sweden compared to France and Italy where cheeses have tended to dominate milk consumption. When you also consider the climates of these regions, it would appear that the culture of producing more stable products (cheese) in hotter climates as a means of preservation is evident.

MILK COMPOSITION

The role of milk in nature is to nourish and provide immunological protection for the mammalian young. Milk and honey are the only articles of diet whose sole function in nature is food. It is not surprising, therefore, that the nutritional value of milk is high. At the international level, we have to ensure that provisions of SPS and TBT are based on application of sound scientific principles and should become defectors barriers to trade.
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Dairy sector witnessed a spectacular growth between 1971-1996, i.e. Operation Flood era. An integrated cooperative dairy development programme on the proven model of Anand pattern was implemented in three phases. The National Dairy Development Board was designated by the Government of India as the implementing agency. The major objective was to provide an assured market round the year to the rural milk producers and to establish linkage between rural milk production and urban market through modern technology and professional management. Milk production grew from 21 million tonnes in 1970 to nearly 69 million tonnes in 1996 - more than three fold, at the compound growth rate of 4.5 per cent. Some ten million farmers were enrolled as members in about 73000 milk cooperative societies. By 1996, milk cooperatives attained a dominating share of the Indian dairy market - butter 96%, pasteurized liquid milk over 90%, milk powder 59% and processed cheese 85%. India was reckoned as a major threat in the dairying world. In retrospect, it was by no means an easy task. Let us all salute the visionary and the architect of the white revolution in India, Dr. Verghese Kurien, without whose dynamic leadership all this may not have been possible. The dairy cooperative movement has continued to grow in the post Operation Flood-era.

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MARKET OF DAIRY INDUSTRY

The NDDB has recently put in place .Perspective 2010. to enable the cooperatives to meet the new challenges of globalization and trade liberalization. Like other major dairying countries of the world, the Indian cooperatives are expected to play a predominant role in the dairy industry in future as well. However, India is in the mean time, attaining its past glory and is once again becoming .DOODH KA SAGAR.. But, what percentage of this SAGAR is handled by the cooperatives - just a little over 7%. Since liberalization of the dairy sector in 1991, a very large number of private sector companies / firms have, despite MMPO, established dairy factories in the country. The share of the total milk processing capacity by private sector is 44% of total installed capacity of 73 MLPD (Million Litres Per Day) in the country. Therefore, the total share of the organized sector, both cooperatives as well as the private sector is barely 12%. What is, therefore, disquieting is that as much as 88% share of the total milk production is commanded by the unorganized sector - who specializes in selling sub-standard, unpasteurized milk more often than not adulterated with harmful chemicals. Besides, growth in milk production is likely to continue at the present rate of 4.4% in the near future. Who is going to handle this incremental milk? We must bear in mind is both income and price what we must bear in mind both income & price elasticity account for approximately 15% of the total expenditure of food. Demand for milk, at current rate of income growth is estimated to grow at 7% per annum. Interestingly, demand for milk is expected to grow steadily over the next two decades as the low income rural and urban families who have higher expenditure elasticity would also increase their income due to new economic environment. Let us now look at some other economic indicators. According to the World Bank, India is the fourth largest economy in the world going by the purchasing power parity estimates. Further, India has been
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identified as among the first 10 emerging markets in the world. India has the vastest domestic market in the world with over one billion consumers - a majority of whom are vegetarians with drinking of milk as habit. The untapped potential of the dairy sector is immense and opportunity to set up a new dairy venture is great. In the works of Dr. Amrita Patel, Chairperson, NDDB, there is enough place under the scheme for both private and cooperative sectors. Notwithstanding the above potential it is cautioned that, entering dairy sector is not going to be a cakewalk.

Globalization and Liberalization are the Mantras of the new economy today, which is now on the fast track. Industrial production is rapidly moving forward. The dairy industry is no exception. With the World Trade Organization (WTO) coming into effect, from 01 April 2001 and the imports and exports getting liberalized in the global economy, the dairy industry, which includes dairy products, faces both an opportunity for growth as well as a threat for its growth. There is no doubt that there is tremendous scope for the growth of the dairy industry in the new millennium. The product mix of world dairy trade is likely to shift further towards cheese. This has been developed in the world markets. As the market opens up, consumption trends associated with these markets will have increasing influence on the world trade. Whole milk powder is likely to continue to be a substantial beneficiary and growth substantially in the middle eastern countries. As standards of living in the importing country rises, exporting countries will increasingly concentrate on whole milk powder and cheese with the assistance of butter and skimmed milk powder. There is vast potential for the export of dairy products, the cost of milk production in India being the lowest. The major factor influencing production of bye products is the newer uses that may be developed through R & D support. Milk proteins are being utilized increasingly replacing animal and vegetable proteins in special bakery products and instant foods. Through the application of membrane
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proven process, milk proteins isolates are being produced. These are being utilized for ice milk mixes and other such applications. Most of the dairy plants in the Government, Cooperatives and Private Sector produce almost similar dairy products like varieties of milk, butter, ghee, skimmed milk powder and whole milk powder.

There are 7 large-scale cheese manufacturers and 14 manufacturers are producing infant foods and malted milks. There is immense scope for the broadening of the products range and some of the products, which are likely to have considerable demand in the coming decade, have been identified. Pizza is becoming a very popular item in the market. This segment alone commands 5% of the share in the cheese market and other area is fermented milk products. Dahi (curd) even though is a Rs.15000 crore market, the share of the organized sector is only around 10%. This product has immense potential for growth. Varieties of milk shakes are also increasing wherein milk and fruit pulp are mixed in different proportions to produce different beverages. Some of the milk and fruit based beverages which are likely to have demand are a combination of milk with mango, banana, sapota, strawberry, papaya, etc. Some of these beverages can also be produced in dehydrated form and can be an excellent health food.

There are varieties in traditional milk based sweets, manufactured in the country. The market size is around Rs.12000 crore. However, there are very few nationally known brands in this category. Many of the organized dairies are involved in the manufacture of varieties of milk based sweets: pedha, paneer, shirkhand, etc. These are now restricted to certain areas only but can go
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national. As the world is getting integrated into one market, quality certification is becoming essential in the market. However, there are very few plants in the country, which have successfully obtained ISO, HACCP certification. There is scope for introducing newer plants adopting newer processes by the dairy industry in the country. Packaging of dairy products is also another very promising area. NRI and overseas investments can take place in manufacturing dairy processing equipment, fruit packaging equipment and equipments for biotechnology related dairy industry.

OVERVIEW OF THE INDIAN DAIRY SECTOR

The country is the largest milk producer all over the world, around 100 million MT Value of output amounted to Rs. 1179 billion (in 2004-05) (Approximately equals combined output of paddy and wheat!!) 1/5 th of the world bovine population Milk animals (45% indigenous cattle, 55 % buffaloes, and 10% cross bred cows) Immensely low productivity, around 1000 kg/year (world average 2038 kg/year) Large no. of unproductive animals, low genetic potency, poor nutrition and lack of services are the main factors for the low productivity There are different regions developed, average, below average (eastern states of Orissa, Bihar and NE region) in the dairy industry.

POTENTIAL FOR INVESTMENT IN THE DAIRY INDUSTRY Some areas of Indian dairy industry can be toned up by the evocation of differentiated technologies and equipment from overseas. These include:
RAW MILK HANDLING:

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The raw milk handling needs to be elevated in terms of physicochemical and microbiological properties of the milk in a combined manner. The use of clarification in raw milk processing can aid better the quality of the milk products.

MILK PROCESSING:

Better operational ratios are required to amend the yields and abridge wastage, lessen fat/protein losses during processing, control production costs, save energy and broaden shelf life. The adoption of GMP (Good Manufacturing Practices) and HACCP (Hazard Analysis Critical Control Points) would help produce milk products adapting to the international standards.

PACKAGING:

Another area that can be improved is the range of packing machines for the manufacture of butter, cheese and alike. Better packaging can assist in retaining the nutritive value of products packed and thus broaden the shelf life. A cold chain distribution system is required for proper storage and transfer of dairy products.

VALUE-ADDED PRODUCTS:

There's vast scope for value-added products like desserts, puddings, custards, sauces, mousse, stirred yoghurt, nectars and sherbets to capture the dairy market in India.

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The Indian dairy industry has aimed at better management of the national resources to enhance milk production and upgrade milk processing involving new innovative technologies. Multinational dairy giants can also make their foray in the Indian dairy market in this challenging scenario and create a winwin situation for both.

Indian (traditional) milk products

There are a large variety of tradition Indian milk products such as Markham- unsalted butter. Ghee-butter oil prepared by neat clarification, for longer shelf life cheer-a sweet mix of boiled milk, sugar and rice. Burundi- milk and sugar boiled down till it thickens. Rabbi- sweetened cream. Dahl- a type of curd. Lassi- curd mixed with water and sugar/salt. Channa/paneer milk mixed with lactic acid to coagulate. Khoa- evaporated milk, used as a base to produce sweet meats. Brading of Trading of milk produce.

MAJOR DAIRY PRODUCTS MANUFACTURERS:

company brands Major products
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Nestle India limited

Milkmaid,cerelac, Lactogen Milo, Everyday

Sweetened

condensed

milk, malted foods, milk power and Dairy whitener

Milk food limited

Milk food

Ghee, ice cream, and other milk products Malted Milkfood, ghee, butter, powered milk, milk fluid and other milk

Smith line beech am Horlicks, Maitova, Viva limited

Indodan limited

industries Indana

based baby foods. Condensed skimmed milk

milk, power,

whole milk power, dairy milk whitener, chilled and processed milk. Gujaratco-operative milk-marketing Federation limited H.J. Heinz limited Farex,complain Glactose,Bonniemix, Britannia cadbury Viamilk Milkman Bournvita Amul Butter, cheese and other milk productss Infant Milkfood, malted Milkfood Flavoured milk, cheese, milk power,ones Malted food

PRODUCTION PROCESS
Milking the cow manually. Milk producers co-operative lid. Collects the milk from villages. [1113 villages and 173 chilling centres].
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 The collected milk is tested against the set standards that ensure quality of milk being received from the root level. Milk dispatched at AMUL dairy plant for further processing. Milk is pasteurized, clarified and standardized using latest technological machines and equipments. Generally about 85% of milk is the buffalos milk and rest is cows. Currently AMUL receives 11 lakhs liters of milk (Dairy). It has the capacity of handing of 15 lakhs liters of milk. Milk is received first at the raw milk SILO. Its temperature is generally 8 to 9 degree C. This process kills the germs and bacteria from milk. Then milk is chilled at 3 to 4 degree C to protect from getting spoiled. Then the pasteurized milk is stored in pasteurized milk SILO. AMUL has also 8 such SILOs having capacity maintaining 35000 liters each.
This silo milk is distributed for production of various products as per their

requirements.

PRODUCTS

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1. Bread Spreads: - Amul Butter - Amul Lite Low Fat Bread Spread. - Amul Cooking Butter. - Delicious Margarine. 2. Pure Ghee: - Amul Pure Ghee. - Sagar Pure Ghee. - Amul Cow Ghee.

3. Milk Powders: - Amul Full Cream Milk Powder. - Amulya Dairy Whitener. - Sagar Skimmed Milk Powder.
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- Sagar Tea and Coffee Whitener. 4. Sweetened Condensed Milk: - Amul Mithaimate. 5. Sweets: - Amul Shrikhand. - Amul Mithaee Khoya Gulabjamaun. - Amul Basundi. 6. Chocolate and Confectionary: - Amul Milk Chocolate. - Amul Fruit and Nut chocolate. - Amul Bindazz. - Amul Rejoice. 7. Fresh Milk: - Amul Taaza Toned Milk 3% Fat. - Amul Gold Full Cream Milk 6% Fat. - Amul Shakti Standardised Milk 4.5% Fat. - Amul Slim and Trim Double Toned Milk 1.5% Fat. -Amul Saathi Skimmed Milk 0% Fat. -Amul Cow Milk. 8. Curd Products: - Yogi Sweetened Flavoured Dahi (Dessert). - Amul Masti Dahi (Fresh Curd). - Amul Lit Dahi. - Amul Prolife Probiotic Dahi. - Amul Masti Spiced Butter Milk. - Amul Lassee.

9. Brown Beverage: - Nutramul Malted Milk Food.

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10. Milk Drink: - Amul Cool Flavoured Milk (Mango, Strawberry, Saffron, Cardamon, Rose, Chocolate Butterscotch). - Amul Cool Caf. - Amul Cool Koko. 11. Health Beverage: - Amul Shakti White Milk Food. 12. Amul Ice creams: - Royal Treat Range (Butterscotch, Rajbhog, Malaikulfi). - Nut-O-Mania Range (Kaju Draksh, Kesar Pista, Royale, Fruit Bonanza, Roasted Almond). - Natures Treating (Alphanso Mango, Fresh Litchi, Shahi Anjur, Fresh Strawberry, Black Currant, Santra Mantra, and Fresh Pineapple). - Sundae Range (Mango, Black Currant Sundae Magic, Double Sundae). - Assorted Treat (Choc-bar, Dollies, Frostik, lce-candies, Tricone, choco crunch, megabite, cassata). - Utterly Delicious (Vanilla, Strawberry, Chocolate, Choc chips, Cake Magic). - Amul Sugar Free Icecream Range. - Amul Prolife Probity Ice cream.

AMUL PRODUCTS
Amul has large variety of products in the market. The AMUL produces two types of products for the selling purpose. The first one is consumer product and other one is an industrial product.

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Today Amul produces more than 21 types of products. The product manufactured by AMUL are as follows :
CONSUMER PRODUCTS

1. Pasteurized Milk 2. Cheese 3. Butter 4. Amul Milk Powder 5. Amul Spray 6. Condensed Milk 7. Amul baby food 8. Amul Ghee 9. Amul Nutramul 10. Amul Dan i.e. Cartel Feed 11. Chocolates 12. Amul Masty Dahi [Curd] 13. Amul Buttermilk 14. Amul lassies 15. Amul Gathiya [Munch Time] 16. Amul Mithayee 17. Amul Ice-Cream 18. Amul Flavored Milk 19. Amul Paneer 20. Amul Fresh Cream 21. Amul Shrikhand

MAJOR DAIRY PRODUCTS MANUFACTURERS:

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company Nestle India limited

brands Milkmaid,cerelac, Lactogen Milo, Everyday

Major products Sweetened condensed milk, malted foods, milk power and Dairy whitener

Milk food limited

Milk food

Ghee,

ice

cream,

and

Smith line beech am Horlicks, Maitova, Viva limited

other milk products Malted Milkfood, ghee, butter, powered milk, milk fluid and other milk

Indodan limited

industries Indana

based baby foods. Condensed skimmed milk

milk, power,

whole milk power, dairy milk whitener, chilled and processed milk. Gujaratco-operative milk-marketing Federation limited H.J. Heinz limited Farex,complain Glactose,Bonniemix, Britannia cadbury Viamilk Milkman Bournvita Amul Butter, cheese and other milk productss Infant Milkfood, malted Milkfood Flavoured milk, cheese, milk power,ones Malted food

PRODUCTION PROCESS Milking the cow manually.

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 Milk producers co-operative lid. Collects the milk from villages.

[1113 villages and 173 chilling centres].

The collected milk is tested against the set standards that ensure quality
of milk being received from the root level.

Milk dispatched at AMUL dairy plant for further processing. Milk is pasteurized, clarified and standardized using latest technological
machines and equipments.

Generally about 85% of milk is the buffalos milk and rest is cows. Currently AMUL receives 11 lakhs liters of milk (Dairy). It has the capacity of handing of 15 lakhs liters of milk. Milk is received first at the raw milk SILO. Its temperature is generally 8 to 9 degree C. This process kills the germs and bacteria from milk. Then milk is chilled at 3 to 4 degree C to protect from getting spoiled. Then the pasteurized milk is stored in pasteurized milk SILO. AMUL has also 8 such SILOs having capacity maintaining 35000 liters
each.

This silo milk is distributed for production of various products as per

their requirements.

36

ABOUT AMUL DAIRY

INTRODUCTION

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India is a country connected with agricultural and cattle rearing from ancient time nearly more than 70 % on agriculture and cattle rearing. So dairy industry is the best suited for the growth of India. And Indian people prefer more milk and milk products than any other food. Due to liberalization, globalization inexpensive, labor, large market and democracy India has best opportunity for dairy industry. The full form of Amul is Anand Milk Union Limited that is the brand name of Kaira District Co-operative milk producers union Ltd. for its product range since 1955. Amul is Asias no. 1 and worlds second number co-operative dairy. It has large market and dairy network in every states of India and across the India, like central Asian countries, Bandlasesh, Thiland, Indonesia, Malysia, Singapur, etc. It was started 250 liters milk and 2 societies and Now. It produces 9 lakes litter milk per day and has 1084 societies and more than 6 lakes farmer members. It produces more than fifteen types milk and milk products. Amul was started with little machinery and now all the production of Amul are produced by latest fashioned machineries. Which run by computer system. Amul has completed 59 year and entered in 60th year on 14 December 2007. Amul has a three level structure. The first level is called primary level. Here village societies are placed. The second level is district level where NDDB placed and the third level is state level where Federation placed. Co-operation among these levels is necessary for achievement of goal.

HISTORY
In the year 1946, the first milk union was established. This union was started with 250 liters of milk per day. In this year, 1946, the union was called THE
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KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION. The union selected the brand name AMUL for its product range in 1955. The brand name Amul means AMULYA. This world is derived from the Sanskrit word AMULYA which means PRICELESS. A quality control expert in Anand suggested it. The very concept of kaira union system of cooperative dairying was to become priceless for millions of farmers all aver India. The word AMUL stands for: A Anand M Milk U Union L Limited In the early 40s the main source of earnings for the farmers and selling of milk. However, the income from selling of milk was not dependable since milk marketing system was controlled by private traders and intermediaries who exploited the farmers and gave them very less returns on the milk products. Many a times they had to sell cream and ghee at throwaway prices. In those times, there was a great demand for milk in Bombay. The main suppliers of the milk were Polson Dairy limited which was a privately owned company and held monopoly over the supply of milk at Bombay from the kaira district. This again led to the exploitation of poor and illiterate farmers. However, this exploitation becomes intolerable and the farmers became frustrated. Therefore, they collectively appealed to Sardar Vallabhbhai Patel, who was a leading activist in the freedom co-operatives as early as in 1940. He
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advised the farmers to sell the milk on their own by establishing a co-operative union instead of supplying milk to provide traders. Sardar Patel sent the farmers to Shri Morarji Desai in order to gain his co-operation and help. Shri Desai held a meeting at samarkha village near Anand, on 4th Jan 1946. He advised the farmers to form a society for collection of the milk. These villages societies would collect the milk on their own and would decide the prices at which they could sell the milk. The district union was also formed to collect the milk from such village co-operative societies and to sell this milk. It was also resolved that the government should be asked to buy milk from the union.

However, the government did not help the farmers by turning down the demand for the milk. The farmers responded by going on a strike. For nearly 15 days, not a single drop of milk was sold to the traders. As a result, the Bombay milk scheme was severely affected. The milk commissioner of Bombay then visited Anand to assess the situation. Having seen the farmers condition and studying their demands the commissioner decided to fulfill the farmers demand. In this manner, the co-operative unions were formed at the villages and district levels to collect and sell milk on a co-operative basis, without the interventions of government. Mr Varghese Kurien showed main interest in establishing unions and he received support from Mr. Tribhovandas Patel who educated the farmers about the co-operation unions at the villages levels. The kaira district milk producers union was thus established in Anand and was formally registered on 14th December 1946. Since farmers sold all the milk in Anand through a co-operative union, it was commonly resolved to sell the milk under the brand name AMUL. Dr. Rajendra Prasad who was the first president India laid the foundation stone for AUML on 12/09/1948. Late Shri Jawaharlal Nehru, the then prime minister of India, inaugurated it on 31/10/1955.
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In the initial stage only 250 liters of milk was collected on an everyday basis. However, with the growing awareness of the benefits of the co-operatives ness, the collection of milk has increased considerably. Today, Amul collects about 15 lakhs liters of milk everyday. Since milk is a perishable commodity it became difficult to preserve milk for a longer period. Moreover, when the milk was to be collected fro the far off places, there was a fear of spoiling of milk. To overcome the problem the union thought out to develop chilling units at various junctions, which would collect the milk, and could chill it and thus able to preserve it for a longer period. Thus, today Amul has more than 150 chilling centre in various villages. Milk is collected from almost 1232 societies. From the late fifties kaira union has been investing heavily in schemes to improve the milk yield in animals. The union has built up a full-fledged infrastructure for breading animals and ensuring animal health care. Semen frohigh pedigree bulls are being made available. An efficient insemination service was also put into place through village society workers. A mobile veterinary service rendered animal health care at the doorstep of the farmer. The veterinary first aid programmer organized by the union through trained village society workers was probably the first of its kind in India. Today, twelve dairies are producing different products under the brand name AMUL. AMUL Dairy has become no. 1 dairy in Asia and no. 2 in the world. It has become a symbol of many things such as: Of high quality products sold at reasonable price. Of the genesis of a vast co-operative network. Of the triumph of indigenous technology. Of the marketing shrew dress of a farmers organization.
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 Of a proven model for dairy development GCMMF is a part of Amul. GCMMF is performed all the marketing activity foamed. GCMMF was established in 1972 by Dr Varghese Kurien. Till 1965 Amul marketed all products but due to progress and increasing demand many problem emerged. It was necessary to create separate department. The word of GCMMF stands for: G Gujarat C Co-operative M Milk M Marketing F Federation

DEVELOPMENT AND GROWTH

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The Amul is the co-operative union which success with the slow and steady growth. The Amul has start with one society and now it is converted into a union with 1073 societies. At the beginning Amul collect only 250 liters of milk per day. Now, Amul collect lakhs of liters of milk perks of liters of milk per day. The excess of milk leads the Amul to develop the milk products. The Amul developed step by step. The main stages of development are as follow:

YEARS 1954

PARTICULARS In the year 1954 UNICEF provide the financial help worth of Rs 50 million to the Amul. This financial help lead Amul to established fully automatic plant for producing milk and milk powder. In this year Amul expand the plant and started to produce sweetened condensed milk. The excess supply of milk in the winter season and huge amount of profit make possible the expansion of Amul. The Amul established new units for producing cheese and baby food. This creates history in the dairy products, because it was the first time where cheese and baby food is produced from the buffalo milk. The new cattle feed plant were established at kanjari. For getting the benefits of excess supply of milk, Amul established another plant named Amul-3. This plant has capacity of producing 14 lakhs litters of milk everyday. The new cheese plant was established at khatraj and chocolates plant established at Mogar. These two plants started with help of NDDB. For providing the quality milk at any time, Amul launch the new flavored milk. This flavored milk available in four different tastes. For expanding the market share Amul launch the SNOWBALI pizza and flavored lassie. This gives the new market share to Amul in the area of fast food. The Amul keeps on achieving new highs in this competitive world. It
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1958 1960

1981 1992

1994 2001 2003

2004

has launch CHOCOZOO [Chocolate], MUNCHTIME [Gathiya]. Amul also started the now satellite dairy at PUNE and CALAUTTA. This 2005 will help Amul in expanding milk marketing in other state. GCMMF donates 6 lakhs packs of Tetra pack for the flood victims. As in earlier occasions, the Gujarat Co-operatives Milk Marketing federation Ltd has once again come to the aid of the victims of the worst ever floods in Gujarat. It will supply 6 lacks packs of Amul milk in 200ml tetra pack for the floods relief operations. The approximate 2006 2007 cost of the milk would come to Rs 28.00 lacks. Start of automatic dairy. Cheese plant (Asias largest) Amul Pro-Biotic ice cream gets no.1 Award at world Dairy summit. Announcing the award on October 03, at Dublin, Ireland on the occasion of the world Dairy summit, Mr. Jim Begg the IDF president commented There campaigns are excellent example of best practice in branded and generic marketing fro around the world. In markets around the world that that are volatile and highly competitive, dairy products have a role in health balanced diets, and these campaigns have demonstrated the ability of well planned and executed marketing investments.y competitive, dairy products have a role in health 2008 balanced diets, and GCMMF bags APEDA AWARD for 11th year in a row. GCMMF has bagged award for excellent performance in exports of dairy products for the year 2006-2007 from Agriculture and processed food Exports Development Authority, Minister Of Commerce, New Delhi. GCMMF has the award for 11th time. The award was received by Mr. Raveen Choudhary, our AGM (z-1) Delhi, from Hon able Minister of commerce, Shri Kamalnath, in a glittering ceremony held at sire fort auditorium on 3rd June 2008. ister of commmerce from Honable exports of dairy products for the year 2006-2007 from Agriculture and
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processed food Exports

VISION The main Motto of Amul is to help farmer. Amul system works under objective of highest possible price to the milk producers and lowest possible price to consumer. Farmers are paid money in cash payment for the milk. Milk gives them money for daily necessities. Amul is the one who started using their profit for the milk producer common good.

OBJECTIVE Amul union is one of the pioneers, which started using their profit for the milk suppliers welfare. The main goal of Amul is to improve the economic condition of milk procedure especially that of weaker
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section in rural areas by providing them on ensured and produceroriented market for their surplus milk. The main objectives of AMUL are as below:
One of the major objectives is to exceed an activity in co-operative way that enables the maximum participation of the numbers of society. The second other objective is to help producers of milk to increase their yields and profit and to obtain for producers a greater share of the prices paid by consumers of the milk. To provide good market for all the milk producers. To provide fresh milk to the people at the reasonable price.

MOTTO
The main motto of Amul is to help farmers i.e Milk producers. Amul system works under objective of highest possible compensation for the milk producers and lowest possible price to consumers. Farmers are paid money in cash for the milk. Milk gives them money for the daily necessities. Amul is the one who started using their profits for the milk producers common good.

LOGO OF AMUL

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Symbol of AMUL is a ring of four hands, which are coordinated each other. The actual meaning of this symbol is Coordination of hand of different people by whom this Union is now at top. First hand : It is for the Farmer (Producers), without whom the organization would does not existed

Second hand : It is for the Representative of processor by whom the raw milk processed into different finished products Third hand : It is for Marketer without whom the product would have not be able to reached to the customer Fourth hand : It is for Customers without whom the organization could not carry on because they are the people who consume the product By co-ordination of this four people the Union runs successfully.

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 COMPANY PROFILE

NAME: Kaira District Co-operative Milk Producers Union Limited widely known as AMUL. FROM: Co-operative sector registered under the co-operative society act. LOCATION: Amul Dairy, Nr. Railway station, Amul Dairy Road, ANAND 388001. REGISTRATION: 14TH December 1946. REGISTERED OFFICE: Karia District Co-operative Milk Producers Union Limited, Anand 388001. AUDITORS: - R. N. Shah Special Auditor Milk Union, Anand. - Dipak Roy Manager (Accounts). - Rahul Kumar Managing Director.

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 BANKERS: - The Karia District Central Co-operative Bank Limited. - Axis Bank Limited. - State Bank of India. - Axis Bank. - Bank of Baroda. - Corporation Bank. - Bank of Maharashtra. INTERNAL AUDITOR: C. C. Choksi. SALES OFFICE: Gujarat Co-operative Milk Marketing Federation, Anand. CERTIFICATES: - ISO 9001: 2000 Certificates. - ISO 2000: 2005 Certificates. INITIAL PROMOTERS: - Shri Tribhuvandas K. Patel. - Shri Sardar Vallabhbhai Patel. - Shri Morarjibhai Desai. - Dr. Varghese Kurien. - Dr. H. M. Dalaya.

SIZE: Production of different products on large scale, collecting 9 to 15 lakhs liters milk every day and producing milk products. VILLAGE CO-OPERATIVE SOCITIES: 1073 TOTAL NO. OF SOCITEY MEMBER: 6, 15,415
E-MAIL ADDRESSES: - www.amul.com

-www.amuldairy.com - www.amuldairy@kairaunion.co.op

ORGANIZATION STRUCTURE
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BOD Chairman Vice Chairman Managing Director General Manager (Dairy Plant & Technology) Deputy Manager Assistant Manager Superintendent Deputy Superintendent Senior Officer Assistant Junior Assistant Workers

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 BOARD OF DIRECTORS

1. Shri Ramsingh P. Parmar 2. Shri Rajendrasinh D. Parmar 3. Shri Shivabhai M. Parmar 4. Shri Maganbhai G. Zala 5. Shri Chandubhai M. Parmar 6. Shri Pravinbhai F. Solanki 7. Shri Dhirubhai A.Chavda 8. Shri Bhaijibhia A. Zala 9. Shri Mansinh K.Chauhan 10. Shri Bipinbhai M.Joshi 11. Smt. Madhuben D. Parmar 12. Smt. Sarayuben B. Patel 13. Shri Ranjitbhai K. Patel

Chairman Vice Chairman Director Director Director Director Director Director Director Director Director Director Director

Shri B. M. Vyas (M.D. of GCMMF, Anand)

Shri Rahulkumar Shrivastav (M.D. of KDCMPUL, Anand)

Shri Deepak Dalai (District Registrar)

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Kaira District Central Co-operative Bank U.T.I. Bank State Bank of India Bank of Baroda Bank of Maharastra Corporation Bank

AUDITOR Special Auditor (Milk), Milk Audit Office, Anand Shri R. N. Shah Special Auditors Milk Union Anand Bankers The Kaira District Central Co-operative Bank Ltd. UTI Bank State Bank of India Bank of Baroda Corporation Bank Bank of Maharastra

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 SISTER CONCERNS

Plants of AMUL
Anand Plant: The products are Milk, Buttermilk, Milk Powder, Butter, Ghee, Cheese, and Flavored Milk etc. It is establish in 1973

Mo gar

Plant: It is situated on Anand Vadodara Highway No.8. Its production is chocolates, Nutramul, Amul Lite and Amul Ganthia. This plant establish in 1998.

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 Kanajari Plant: The product is a cattle feed. Old plant establish in 1964 and new plant in 1980.

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 Khatraj Plant: It is situated between Nadiad Mahemdabad. The product is cheese.

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 Chilling Center: Kapadvanj, Undel and Balasinor. Satellite Dairy: Balasinor, Undel.

CO-OPERATIVE CONCEPT:

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 CO-OPERATIVE SOCIETY: Co-operative society is the most democratic form of the business organization for the betterment of general public. These Co-operative societies help to protect the interest of the consumers, smail and independent producers, and of the workers while fighting against the monopolists and capitalists. Members supply the capital, manage the business and share all its profits and losses. In economic field, those do not have the idea of earning profits but to benefits the members. Co-operative society is an association of individuals formed for the purpose of obtaining goods, specially the articles of daily use at rates lower that that of market. Thus, it is a means to level the inequality of wealth which had come into existence as a result of private individual form of ownership. The idea of Co-operative society is to benefits the shareholders who arc the consumers or producers. Mr. M. Barovv defined Co-operative society as "voluntary organization" of persons with unrestricted membership and collectively owned fund, consisting of wage earners and small producers, united on a democratic basic for the establishment of enterprises under joint management for the purpose of improving their household or business economy. To start a Co-operative society an application is submitted to the registrar of Co-operative societies. The officials of this department will attend the first general board meeting in which bye-laws arc framed to govern the society and the directors arc elected by the shareholders. Then the authorities are satisfied about its soundness.

OBJECTIVE:
The main objectives of the Co-operative society are following:
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It is a voluntary organization. A member can continue his membership as long as he desires, and can by giving a notice, withdraw his capital and cease to be a member. There is no limit to its membership. Face value of one share is generally kept in between Rs. 1 to Rs. 10. Thus small value of share makes it possible to enroll a large number of persons because even a poor man can afford this much amount. Its management is based on democratic basis of equality. Therefore, every member can cast only one vote, whatsoever the number of shares he has.

SERVICES PROVIDED BY AMUL :

ANIMAL INSEMINATION :

This service was started way back in the year 1949. Amul has established AI Center at ODE. Due to two significant reasons AI is helpful in Numbers of bulls is inadequate. The bulls are of poor health.

VETERINARY SERVICES :

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For high productivity of milk better health of animals is necessary. So, AMUL has started veterinary services in the year 1950. For this purpose there are 125 veterinary doctors. They take an average of 650 visits daily. The doctors have a minimal charges of Rs.50 and they are also provided with mobiles and wireless along with jeep and ambassador for visits.
CATTLE FEED FACILITY :

AS Roti is the food for human beings, same way DAN(Cattle feed) is cattles food. And for better health of animals, reduction in the milk production expenses, AMUL provide cattle feed at BEP rates. Cattle feed Factory is situated at kanjari. The opening ceremony was done on 31st October, 1964.
ANIMAL HEALTH CARE :

AMUL provides the following health care services : First Aid services Emergency veterinary Services. Preventive Measures for disease control. Sexual heath control for animals.
FARMER EDUCATION PROGRAMS :

Generally the farmers are superstitious. He is often not aware about how the animals should be taken care. Which things should be given prime concern while milking animals. AMUL provides guidance and education through seminar. AMUL also arranges women awareness programme.

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 RURAL HEALTH SERVICES :

This programme provides health support especially to the women and the infants in the Kaira Village. And this trust emphasis on : Preventive rather than on curative aspects of disease. Infant of pregnant mothers. Children nutrition.

LEVEL OF MANAGEMENT: Each Organization is made up of several levels. This could be classified broadly in three categories. There are Top, Middle, and Junior Levels. Amul has also three levels of Management. 1. TOP MANAGEMENT: Top level develops strategy for deciding the objectives of organization planning resource to be sassed in order to attain those objectives formulating policies to govern, use and disposition of resources. In Amul conceptual and human skill persons handle top management activity. There are 19 persons at the top level. 2. MIDDLE MANAGEMENT : It is required by managers of various departments to measure the performance, decide on control actions, formulate new decision rules and also allocate resources. In Amul there are 210 employees at middle level generally human skilled person management level. 3. JUNIOR MANAGEMENT :-

60

It is the process of ensuring that operational activities are carried out to achieve optimum use of resources. There are 1049 employees at this levels perform operational control. Generally technicians, superintendents, workers. Perform their functions at this level.

FINANCIAL MANAGEMENT

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FINANACIAL MANAGEMENT

INTRODUCTION:Management of funds is a critical aspect of financial management. Management of funds acts as the foremost concern whether it is in a business undertaking or in an educational institution. Financial management, which is simply meant dealing with management of money matters.

DEFINATION:Financial management was considered a branch of knowledge with focus on the procurement of funds. Instruments of financing, formation, merger & restructuring of firms, legal and institutional frame work invaded therein occupied the prime place in this traditional approach. Financial management is that managerial activity which is concerned with the planning and controlling of the firm financial resources. Financial management deals with procurement of funds and their effective utilization in the business.
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 MEANING:Financial management is concerned with the management decisions that result in the acquisition and financing of short term and long term credits for the firm. Financial management constitutes risk, cost and control. The cost of funds should be at minimum for a proper balancing of risk and control. Financial management is that managerial activity which is concerned with the planning and controlling of the firm financial resources. Financial management is essential in a planned Economy as well as in a capitalist set-up it involves efficient use of the resources. Financial management is very important in case of non-profit organizations, which do not pay adequate attentions to financial management

OBJECTIVES OF FINANCIAL MANAGEMENT Efficient financial management requires the existence of some objectives, which are as follows:

1) PROFIT MAXIMIZATION: 63

The objective of financial management is the same as the objective of a company which is to earn profit. But profit maximization alone cannot be the sole objective of a company. It is a limited objective. If profits are given undue importance then problems may arise as discussed below:

The term profit is vague and it involves much more contradictions.

Profit maximization must be attempted with a realization of risks involved. A positive relationship exists between risk and profits. So both risk and profit objectives should be balanced.

Profit maximization fails to take into account the time pattern of returns.

Profit maximization does not take into account the social considerations.

2) WEALTH MAXIMIZATION:

It is commonly understood that the objective of a firm is to maximize value of a firm is represented by the market price of a the companys stock. the market price of a firms stocks represent the assessment of all market particular firm is. It takes in to account present and prospective future earning per share, the timing and
64

risk of these earning, the dividend policy of the firm and many other factors that bear upon the market price of the stock. Market price acts as the performance index or report card of the firms progress and potential.

Prices in the share markets are affected by many factors and even mass psychology. Normally this value is a function of two factors:

The anticipated rate of earning per share of the company.

(A)

The capitalization rate.

(B)

The likely rate of earning per shares depends upon the assessment

of how profitable a company may be in the investors for the company.

Scope of financial management : -

The approach to the scope and functions of financial management is divided for purpose of exposition into two broad categories: [1] The Traditional Approach, and [2] The Modern Approach.

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[1] Traditional Approach:

The traditional approach which was popular in early stage, limited the role of financial manager to rising and administrating of fund needed by corporate enterprise to meet their financial needs. It deals with the following aspects:

- Arrangement of fund from financial institution. - Arrangement of funds through financial instruments like share, bonds, etc. - Looking after the legal and accounting relationship between a corporation and its sources of funds. The traditional approach to the scope of finance function evolved during the 1920 and the 1930 dominated the academic during the forties and through the early fifties. It has now been discarded as it suffers from serious limitations, following are main limitations:

External approach. Ignored routine problems. Ignored non-corporate enterprise. Ignored working capital financing. No emphasis on allocation of funds.

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The conceptual framework of the traditional treatment ignored what soloman aptly describes as the central issues of financial management these are: 1) Should an enterprise commit capital funds to certain purpose? 2) Do the expected returns meet financial standards of performance? 3) How should these standards be set and what is the cost of capital funds of the enterprise? 4) How does the cost very with the mixture of financing method used?

[2] Modern Approach:

According to modern approach the term financial management provides a conceptual and analytical framework for financial decision making. That means, the finance function covers both acquisition of funds as well as their allocations. The new approach is an analytical way of viewing the financial problems of a firm. The main contain of the modern approach are as follows: What is the total volume of funds an enterprise should commit? What specific assets should an enterprise acquired? How should the funds required be financed?

Thus, the financial management, in modern sense of the term, can be divided into four major decisions as functions of finance.
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They are: a. The investment decision. b. The financial decision. c. The dividend policy decision. d. The liquidity decision.

IMPORTANCE OF FINANCIAL MANAGEMENT

Proper finance is the real key to the success of any business enterprise. Without finance a business neither survives nor expands and modernizes. it is the finance, which works like a lubricant, which keeps the organization dynamic. keeps men and machine at work. The following are the points highlight the importance of finance. Financial management is concerned with the management decisions that result in the acquisition and financing of short term and long term credits for the firm. Financial management constitutes risk, cost and control. The cost of funds should be at minimum for a proper balancing of risk and control. Finance for business promoting.

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 Finance management for optimum use of firm.

Use for co-operation in business activities.

Useful in decision-making.

Determinant of business success.

Measurement of performance.

Basis of planning, co-operation and control.

Principle of Finance: -

The Knowledge of these eight principles is essential for understanding the field of finance. Make sure that you master each of them. 1. Risk-Return Tradeoff: The higher the risk of an investment, the higher the expected return must be. 2. Liquidity vs. Profitability: There is a trade-off between liquidity and Profitability; gaining more of one ordinarily means giving up some of the other.

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3. Matching Principle (or the Principle of Suitability): The maturity of a firms assets should match the maturity of the firms liabilities, i.e. shortterm assets should be financed with short term liabilities; long- term assets should be financed with long-term sources of financing. If you violate the matching principle, you create a problem either of too little liquidity or too little profitability. 4. Leverage: Leverage is a magnification of earnings that results from having fixed costs in the company. Simply put, leverage is a measure of the degree of sensitivity of earnings to some other measure.

(a) Operating leverageA magnification of earnings (Net Operating Income or EBIT) that results from having fixed operating costs in the company. (Examples of fixed operating expenses are salaries, utilities, depreciation, and property taxes.) (b) Financial leverageA magnification of earnings (E.A.T.) that results from having fixed financial costs in the company. considered here is interest expense.) (The only type of fixed financial cost

(c) Total or combined leverage70

A magnification of earnings that results from having fixed costs of any type in the company. Total Leverage = Operating Leverage x Financial Leverage

Formulas:Operating leverage is equal to the percentage change in operating income divided by the percentage change in sales. Financial leverage is equal to the percentage change in net income divided by the percentage change in operating income. Total leverage measures the percentage change in net income divided by the percentage change in sales. 5. Time Value of Money:- Money has a time value. A rational person is Not indifferent between having a dollar today or a dollar in the future. Regardless of inflation, a dollar today can be invested and will earn a return over a period of time. 6. Valuation:The value of an asset is equal to the present value of its

Future cash flows. The rate used for the present value calculations (the capitalization rate) should be the minimum acceptable return, given the risk of the investment. Value = Present Value of Future Cash Flows Or
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Value = Future Cash Flows x Present Value Factor 7. Bond Prices vs. Interest Rates: There is an inverse relationship between market interest Rates and the price of existing fixed income securities. e.g., as interest rates rise, prices of existing bonds will fall.

8. Portfolio Effect (or Diversification): As assets are added to a group (portfolio), the risk of the total portfolio decreases. This will be true as long as the correlation of the asset being added and the portfolio is less than +1.0.

NEED OF FINANCIAL MANAGEMENT: -

With sound financial management, every entrepreneur can answer these questions. Financial management helps you:

1. Obtain the financial statements you need to measure company success, meet government requirements and gather information to use in making management decisions.

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2. Perform analyses to find profitable directions and eliminate unprofitable ones.

3. Arrangement of funds through financial instruments like share, bonds, etc.

4. Handle company finances to maximize profits and maintain liquidity and financial stability, with or without increased sales.

5. Plan financially to achieve company and personal goals, including nonfinancial company goals such as having the best place to work or offering the best quality products and owner goals such as security, retirement or leisure activities. 6. Protect company assets. Function of financial management :-

The function of financial management may be classified on the following bases: I. Liquidity :- It is ascertained on the basis of three important considerations:

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(a) Forecasting cash flows: i.e. matching the inflows against cash outflows. (b) Raising funds: i.e. financial manager will have to ascertain the sources from which funds may be raised at the time when these funds are needed. (c) Managing the flow of internal funds.

I.

Profitability :- While ascertaining profitability, the following factors are taken into account : (a) Cost control. (b) Pricing. (c) Forecasting future profits. (d) Measuring cost of capital.

II.

Management :- asset management has assumed an important role in finance management it includes : (a) The management of long term funds, (b) The management of short term funds.

The finance function can be broadly classified in to two parts: - Routine financial matter like custody of cash & bank a/cs, collection or loans, payments of cash etc. - Special financial function like financial planning and budgeting, profit analysis, investment decision, etc.

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Technique of Financial Management : -

The term financial method or financial tools refers to any logical method or technique to be employed for the purpose of accomplishing the following two goals: Measuring the effectiveness of firms actions decisions. Measuring the validity of the decisions regarding accepting or rejecting future projects. Following are the important financial technique or method used by the financial manager in performance of his job: 1. Cost of capital: Cost of capital helps the finance manager in deciding about the sources from which the funds are to be raised. In cases of different sources of finance, shares, debentures, loan from financial institutions, banks, public deposit, etc. 2. Trading in Equity: Trading on equity is another tool which helps the finance manager increasing the return to shareholders. 3. Ratio analysis: This is another method for evaluating different aspects of the firm. Different ratio serves different purposes. 4. ABC analysis: Cash management model, debtors turnover ratio etc., helps the finance manager in effective management of current assets.
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5. Fund flow analysis and Cash flow analysis: These techniques help the financial manager in determining another fund have been procured from the best available sources and they have been utilized in the best possible way.

RATIO ANALYSIS
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RATIO ANALYSIS
Meaning of Ratio Analysis: The dictionary meaning of Analysis is separation of breaking up of anything into its elements or component parts. Ratio analysis is therefore a technique of analysis and interpreting various ratios for helping in making certain decisions. It involves the methods of calculating and interpreting financial ratios to assess the firms performance and status. Definition of Ratio Analysis:

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A Ratio is simply one number expressed in terms of another. It is a means of highlighting in arithmetical terms the relationship between two figures drawn from various financial statements. The term Ratio refers to the numerical or quantitative relationship between two variables or items. A ratio express simply in one number the result of comparison between two figures. It is calculated by dividing one figure by the other. The quotient so obtained is the ratio of figures. Ratio can be expressed in the following three terms:

a) As Proportion b) As Percentage c) As Turnover or Rate

Ratio normally pinpoint a business strengths and weakness in two ways: Comparison of present performance with past performance. Comparing ratios of those of other business of the same size within the same industry.

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79

 LIQUIDIY RATIO
Liquidity refers to the ability of a concern to meet its current obligations as & when there becomes due. The short term obligations of a firm can be met only when there are sufficient liquid assets. The short term obligations are met by realizing amounts from current, floating (or) circulating assets The current assets should either be calculated liquid (or) near liquidity. They should be convertible into cash for paying obligations of short term nature. The sufficiency (or) insufficiency of current assets should be assessed by comparing them with short-term current liabilities. If current assets can pay off current liabilities, then liquidity position will be satisfactory. To measure the liquidity of a firm the following ratios can be calculated Current ratio Liquid ratio Quick or Acid test ratio

1) CURRENT RATIO :Current ratio may be defined as the relationship between current assets and current liabilities. This ratio also known as Working capital ratio is a measure of general liquidity and is most widely used to make the analysis of a short-term financial position (or) liquidity of a firm. The standard Current Ratio is 2:1. CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITY
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TABLE 1 YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 Graph 1 RATIO 2.119 1.64 2.087 1.622 1.332

INTERPRETATION :From above graph we can see that current ratio of Amul for the year 200607, 2008-09 and 2009-10 are lower than previous year and also lower than standard ratio. This happened because of increase in current liabilities. This ratio can be improved by (a) Increase in equity share capital. (b)Retaining profits in business.
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2) LIQUID RATIO :Although receivable, debtors and bills receivable are generally more liquid than inventories, yet there may be doubts regarding their realization into cash immediately or in time. Hence, absolute liquid ratio should also be calculated together with current ratio and quick ratio so as to exclude even receivables from the current assets and find out the absolute liquid assets.

The standard Liquid Ratio is 1.5:1.

LIQUID RATIO

LIQUID ASSETS LIQUID LIABILITY

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TABLE 2

YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 Graph 2

RATIO 1.228 1.067 1.117 0.705 0.827

INTERPRETATION :-

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This ratio shows that the liquidity position of the AMUL is rising slowly in 2009-10.And from graph we can see that the liquidity position of the Amul is declining in 2008-09 as compared to previous year but this year though it is higher than previous year, it is not up to standard ratio. This ratio can be improved by reducing proportion of inventories and increasing proportion of bank borrowings for working capital in current liabilities.

3) QUICK OR ACID TEST RATIO:Quick ratio is a test of liquidity than the current ratio. The term liquidity refers to the ability of a firm to pay its short-term obligations as & when they become due. Quick ratio may be defined as the relationship between quick or liquid assets and current liabilities. An asset is said to be liquid if it is converted into cash with in a short period without loss of value. The standard Liquid Ratio is 1:1. QUICK RATIO = QUICK ASSETS LIQUID LIABILITY

TABLE 3
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YEAR 2005-06 2006-07 2007-08 2008-09 2009-10

RATIO 1.187 1.037 1.088 0.675 0.817

Graph 3

INTERPRETATION :Form above graph we can summarize that the quick ratio for the 2008-09 is lowest but in 2009-10 again it rises slowly.In 2005-06 Amul has strongest position in terms of liquidity. During 2005-06, 2006-07 and 2007-08 , this ratio is good as compared to standard ratio but in last two years, i.e. in 2008-09 and 2009-10, it is below the standard ratio. To improve this ratio, Amul should retain its profit in business.

PROFITABILITY RATIO
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The primary objectives of business undertaking are to profits. Because profit is the engine, that drives the business enterprise. Gross Profit Ratio Net Profit Ratio Operating Ratio Return On Capital Employed Return On Shareholders Fund

1) GROSS PROFIT RATIO:This ratio measures the gross earning of the company as compare to its net sales .If the ratio is less it shows the in efficiency of companies management. The ratio shows whether the makeup obtained on cost of production is sufficient. There is no standard showing reasonableness of gross profit ratio.

The standard Gross Profit Ratio is 25% GROSS PROFIT RATIO = GROSS PROFIT NET SALE * 100

TABLE 4

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YEAR 2005-06 2006-07 2007-08 2008-09 2009-10

RATIO 20.53 20.29 18.68 18.55 17.52

Graph 4

INTERPRETATION:

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Gross profit ratio shows the declining position of Amul year by year. During all five years it is not satisfactory level. This happened because of decline in gross profit year by year. To improve this ratio, Amul should try to reduce sales price of its products.

2) NET PROFIT RATIO :Net Profit Ratio measures the net earnings of the company as compared to net sales of the company. The ratio is valuable for the purpose of ascertain the overall profitability of business and shows the efficiency or otherwise of operating the business. The higher the ratio the better will be the profitability.

The standard Net Profit Ratio is 10 to 12 Net Profit Ratio = Net Profit x100 Net Sales

TABLE 5
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YEAR 2005-06 2006-07 2007-08 2008-09 2009-10

RATIO 0.46 0.5 0.42 0.42 0.44

Graph 5

INTERPRETATION:Net profit ratio is very low of Amul then the ideal ratio.Net Profit Ratio is rises for the year 2009-10. Amul is a co-operative society and so it distributes its profit to farmers. So the net profit of Amul is not very high in all five years and because of this net profit ratio shows declining position of the Amul. Favorable change can take place due to reduction in tax rate, obtaining of some relief/allowance/reduction in tax liability.
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3) OPERATING RATIO It is ratio showing relationship between cost of goods sold, operating expense and net sales. It shows the efficiency of the management. The standard Operating Ratio is 75 to 85%. Operating Ratio= cost of goods sold + operating expenses x100 Net Sales TABLE 6 YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 RATIO 98.52 98.53 99.09 98.8 97.66

Graph 6

INTERPRETATION :90

Operating expense of the Amul is more than the ideal ratio for the all five years. Amul has also reduced its operating expense for this year. It is nearer to 100% for all five years. 4) RETURN ON CAPITAL EMPLOYED This ratio shows the relationship between net profit before interest to capital employed of the company.The term capital employed includes all assets except fictitious assets. RETURN ON CAPITAL EMPLOYED = X 100

NET PROFIT BEFORE INTEREST & TAX CAPITAL EMPLOYED

TABLE 7

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YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 Graph 7

10 9 8 7 Ratio 6 5 4 3 2 1 0 2005-06 2006-07 7.12

RATIO 7.12 8.18 8.38 9.11 8.01

Return on Capital Employed

9.11 8.18 8.38 8.01

2007-08 Year

2008-09

2009-10

INTERPRETATION :Return on Capital Employed increases from year to year. This ratio shows the better position to give return to is share holders and borrowed capital. The improvement in ratio can be brought about by improving profit before tax, reduction in tax rate, reduction in long term funds including equity.

5) RETURN ON SHARE HOLDERS FUND :92

It measures the return that the share holder gets as compared to their investment. It obtained by dividing return of net profit after tax by share holders fund. It is measured in percentage. This ratio explains the relationship between the total profits earned by the business and total assets employed. This ratio thus measures the overall efficiency of the business operations. Return on Shareholders fund = Net profit after tax x100 Shareholders fund

TABLE 8
YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 RATIO 8.79 9.94 10.06 12.44 15.02

Graph 8

INTERPRETATION :-

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From above graph we can see that every year Return on Shareholders Fund increases. It shows that every year Amul is giving more and more return to its shareholders. It helps to create goodwill in the market. LEVERAGE RATIO The second category of financial ratio is leverage or capital structure ratio is leverage or capital structure ratio. The long term lenders / creditors would judge the soundness of a firm on the basis of long term financial strength measured in term of its ability to pay the interest regularly as well as repay the instalment of the principal on due dates or in one limp sum at the times of maturity. The long-term solvency of a firm can be examined by using leverage or capital structure ratios. The leverage or capital structure ratios may be defined as financial ratio, which throws light on the long-term solvency of firm as reflected in its ability to assure the long-term lenders with regard to: Periodic payment of interest as during the period of loan and Repayment of principal o maturity or in predetermined instalment at due dates. Debt Equity Ratio Proprietary Ratio Interest Coverage Ratio a) DEBT EQUITY RATIO :This ratio is only another form the proprietary ratio and establishing relationship between outside long term Liabilities and owners fund. It shows the proportion of long term external liabilities and owners fund. The higher the ratio means that outside creditors have a larger claim than the owners of the business. This ratio shows the proportion of long term
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external liabilities and equities i.e. proportion of funds provided by share holder or proprietors.

Debt equity Ratio

Debt Equity

TABLE 9
YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 RATIO 3.14 2.18 3.77 3.41 3.6

Graph 9

INTERPRETATION:95

There are ups and downs in five years in Debt Equity ratio. The ratio shows that for every ownership capital of re.1, there is 3.14 Rs. Borrowed capitals in 2005-06 and likewise. This does not shows the good position of the company. It increases the financial risk of the Amul.

b) PROPRIETARY RATIO:This ratio indicates the relationship between proprietors fund and total assets. The proprietors fund includes equity share capital, preference share capital, reserves and accumulated surplus. Total assets include fixed, current and fictitious assets. This ratio is very important for creditors because they know the share of proprietors fund in the total assets and how fair their loan is secured. The highest ratio the more safety will be to the creditors.

Proprietary Ratio

= Proprietors fund x 100 Total assets

TABLE 10
YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 RATIO 15.02 16.12 12.55 12.74 8.88

Graph 10

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INTERPRETATION:There is ups and downs in the propritory ratio during last five years. During 2009-10, this ratio is much less than the previous years. This ratio means that for every 100 Rs. Total assets, there is 8.88 shareholders fund employed for fixed assets in 2009-10.this give less security to the creditors.

c) INTEREST COVERAGE RATIO :-

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The ratio indicates as to how many times the profit covers the payment of interest on debentures and other long-term loans.It measures the debt service capacity of the firm in respect of fixed interest on long-term debts.Higher the ratio more sound is the financial strength of the company.

INTEREST COVERAGE RATIO

NET PROFIT BEFORE INTEREST AND TAX INTEREST

TABLE 11
YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 RATIO 1.41 1.58 1.55 1.51 1.59

Graph 11

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INTERPRETATION:-

This ratio is better in this year than last four years. This shows good position of the Amul. This means that Amul is able to pay interest on borrowed capital. This shows financially strong position of the company.

ACTIVITY / TURNOVER RATIO

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ACTIVITY RATIOS :Funds are invested in various assets in business to make sales and earn profits. The efficiency with which assets are managed directly effect the volume of sales. Activity ratios measure the efficiency (or) effectiveness with which a firm manages its resources (or) assets. These ratios are also called Turn over ratios because they indicate the speed with which assets are converted or turned over into sales. Inventory Turnover Ratio Receivable Ratio Debtors Turnover ratio Fixed Assets Turnover Ratio Payable Ratio

1) INVENTORY TURNOVER RATIO :-

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The number of times the average stock is turned over during the year is known as stock turnover. It is computed by dividing the cost of goods sold by average stock in the business.

TABLE 12
YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 RATIO 7.75 8.75 8.53 7.5 8.79

Graph 12

INTERPRETATION :101

There are no far changes in the inventory turnover ratio. It is lowest in 2008-09. This year means in 2009-10 it has been increased. This means that inventory is turned over for 8.79 times during this year. This shows increase in sales of products so it is good position of the Amul.

2) RECEIVABLE RATIO :This ratio gives us idea about in how many days we are able to collect the payment from our debtors.This ratio can be obtained dividing debtors by credit sales and also multiplied by 365 days. So our answer will come in days. RECEIVABLE RATIO = Debtors Credit Sales x 365 days

TABLE 13
YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 RATIO 37 29 30 13 23

Graph 13

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INTERPRETATION :This ratio shows the average days in which we will able to get a payment from our debtors. The lower the days, it shows good position of the company. It is lowest in 2008-09. In 2009-10, it increases by10 days i.e. 23 days. Compared to previous year it is not the good position but comparing with 2005-06, 2006-07 and 2007-08, this year the position of the company is good.

3) FIXED ASSETS TURNOVER RATIO : To ascertain the efficiency and profitability of business the total fixed assets the more 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 indicates higher efficiency.

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If sales are less as composed to investments in fixed assets it means that fixed asset are not adequately utilized in business. An excessive sale is an indication of over trading which is dangerous. Fixed assets turnover Ratio = sales Total assets

TABLE 14
YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 RATIO 14.13 15.2 17.51 19.92 12.03

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Graph14

INTERPRETATION :The Fix Assets Turnover ratio was consequently increasing during the last four years but this year has been declined. This does not show a good position of Amul. It causes because of either increase in total assets or decrease in net sales.

4) PAYABLE RATIO :-

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The number of days within which we make payment to our creditors for credit purchase its obtained by creditors ratio. PAYABLE RATIO = CREDITORS X 365 DAYS CREDIT PURCHASE

TABLE 15
YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 RATIO 30 27 23 16 33

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Graph 15

35 30 25 Ratio 20 15 10 5 0 2005-06 2006-07 30 27

Payable Ratio

33

24

16

2007-08 Year

2008-09

2009-10

INTERPRETATION:Payable ratio shows that how many days the creditors are giving us for payment. During last four years it was much lesser but in this year, it has been tremendously increased. This shows good position of Amul. This may happen because of increase in the goodwill of Amul.

UTILITY OF RATIO ANALYSIS

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The use ratio was started by banks for ascertaining the liquidity and Profitability of companies business for the purpose of advancing loans to them. It gradually became popular and other creditor began to them. It gradually became popular and other creditors began to use them profitably. Now even the investors calculate ratios from the published accounts of the company in order to have an idea about the solvency and profitability of the company before investing their savings. The ratio analysis provides useful data to the company before investing their saving. The ratio analysis provides useful data to the management, which groups of people make use of ratios, to determine a particular aspect of the financial position of the company, in which they are interested. 1) PROFITABILITY: Useful information about the trend of profitability is available from profitability ratios. The gross profit ratio, net profit ratio and ratio of return on these ratios, investment give a good idea of the profitability of business, on the basis of these ratios, investors get an idea about the overall efficiency of business as well as other creditors draw useful conclusions about repaying capacity of the borrowers.

2) LIQUIDITY: In fact the use of ratios was made initially to ascertain the liquidity of business. The current ratio, liquid ratio and acid-test ratio will liquidity of business. The current ratio, liquid ratio and acid-test ratio will tell whether the business will be able to meet current liabilities as and
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when they mature. Banks and other lenders will be able to conclude from these ratios whether the firm will be to pay regularly the interest and loan instalments. 3) EFFICIENCY: The turnover ratios are excellent guides to measure the efficiency of managers. E.g. the stock turnover will indicate how efficiently the sale is being made, the debtors turnover will indicate the efficiency of collection department and assets turnover shows the efficiency with which the assets are used in business. All such ratios related to sales present a indicate corrective measures. 4) INTER-FIRM COMPARISON: The absolute ratios of a firm are not of much use, unless they are compared with similar ratios of other firms belonging to the same industry. This is inter-firm comparison, which shows the strength and weakness of the firm as compared to other firms and will indicate corrective.

5) INDICATE TREND : The ratios of the last three to five year will indicate the trend in the respective fields. For example, the current ratio of a firm is lower than the industry average but if the ratio of last five years shows an improving trend it is an encouraging trend. Reverse may also be true.
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A particular ratio of a company for one year may compare favourably With industry average but, if its trend shows a deteriorating position, it is not desirable. Only ratio analysis will provide this informationn. Advantages of Ratio Analysis:

The various advantages of ratio analysis are as follows: A) Financial Forecasting and Planning:

Ratio analysis helps in the financial forecasting and planning activities. Ratios based on the past sales are useful in planning the financial position. Based on this, future trends are set. B) Decision Making:

Ratio analysis throws light on the degree of efficiency. It is also concerned with the management and utilization of the assets. Thus, it enables for making strategic decision. C) Comparison:

With the help of ratio analysis, ideal ratios can be composed. These can be used for comparison in respect of the firms progress and performance, inter-firm comparison with industry average.

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D) Financial Solvency:

Ratios are useful tools. It indicates the trends in the financial solvency of the firm. Long term solvency refers to the financial ability of a firm. It can also evaluate the short term liquidity position of the firm.

E) Communication:

The financial strength and weaknesses of a firm are communicated in a more easy and understandable manner by the use of ratios. The information contained in the financial statements is conveyed in a meaningful manner. It thus helps in the communication and enhances the value of the financial statements. F) Efficiency Evaluation:

It evaluates the overall efficiency of the business entity. Ratio analysis is an effective instrument which, when properly used, is useful to assess important characteristics of business liquidity, solvency, profitability. A critical study of these aspects may enable conclusions relating to capabilities of business. G) Control:

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It helps in making effective control of the business. Actual results can be compared with the established standard and to take corrective action at the right time. H) Other Uses:

Financial ratios are very helpful in the early and proper diagnosis and financial health of the firm.

Importance & Uses of Ratio Analysis:-

The importance of ratio analysis ties in the fact that it presents on a comparative basis and enables the drawing of inference or conclusions regarding the performance of a firm with respect to the following aspects: Liquidity Position:

With the help of ratio analysis, conclusions can be drawn regarding the liquidity position of a firm. The firm would be considered in a good liquidity position, if it were able to meet its current obligation when they become due. The firm should maintain enough liquid funds with it so that it can pay off the short term liquidity without affecting its creditability.

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 Long Term Solvency:

Ratio analysis is equally useful for assessing the long term financial need of a firm. This aspect of the financial of a borrower is of concern to the long term creditors, security analysis and the present and potential investor. However, the measure of this ratio highly depends on the sales generated by the use of a assets of the firm. Operation Efficiency: The long term solvency is measure by the leverage, capital structure and profitability ratios which focus on earning power and operating efficiency. Ratio analysis shows the strength and weaknesses of a firm in the respect. Ratio analysis enables a firm to the dimensions in to account. In the words, whether the financial position of the firm is improving or not over the years. This is made possible by the use of trend analysis lies in the fact that the analysis can know the direction of the movement. Over All Profitability:

Unlike the outside parties that are interested in one aspect of the financial position of a firm the management is constantly about the overall profitability of the enterprise. Inter-Firm Comparison: One of the popular techniques is to compare the industry average. It should be in broad conformity with that of the industry to which it
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belongs. An inter firm comparison would demonstrate the relative position vis--vis its competitors. Analysis provides data for inter-firm comparison. Patios high light the factors associated with successful and unsuccessful firms. They also show strong firms and weak firms overvalued & undervalued firms. Trend Analysis:

The significance of a trend analysis of ratios lies in the fact that the analysis can know the direction of movement i.e. whether the movement is favorable or unfavorable.

Simplifies Financial Statements:

Ratio analysis simplifies the comprehension of financial statements. Ratios tell the whole story of change in the financial condition of the business.

Limitations of Ratio Analysis:

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1. The user should possess the practical knowledge about the concerns and the industry in general.

2. Ratios are not an end. They are only means to an end.

3. A single ratio in itself is not important. The trend is more significant in the analysis. Comparison of ratios should be made.

4. For comparative purposes, there should be a standard ratio. There is no such standard prescribed for the ratios.

5. The accuracy and correctness of ratios are totally dependent upon the reliability of the data contained in the financial statement on the basis of which ratios are calculated.

6. To use ratios, first of all there should be uniformity in the accounting plan used by both the firms. 7. Ratios become meaningless if detached from the details from which they are derived. They should be used as supplementary and not substitution of the original absolute figures.

8. Time lag in calculation and communicating the same should not be unnecessarily too much.

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9. The method of presentation should be precise and without any ambiguity.

METHODS AND CLASSIFICATION OF RATIOS

Accounting ratios are generally classified as follows: A) Traditional classification or classification according to the type of financial statements.

B) Functional classification.

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A) Traditional Classification:

The ratio are grouped into three categories the on the basis of the statements from which the figures are taken for computing the ratios. It is well-known traditional classification and has been so grouped since the ratio analysis. The ratios according to this classification are: 1. Revenue Statement Ratios:

These are the ratios computed on the basis of items taken from revenue statement i.e. Profit and Loss Account. E.g. Net Profit Ratio is computed by dividing net profit by sales. Here both net profit and sales are items appearing in profit and loss account. 2. Balance Sheet Ratios:

When two items or groups of items appearing in the balance sheet are compared the ratio so obtained is balance sheet. E.g. A ratio establishing relationship between current assets and current liabilities is a balance sheet ratio. 3. Composite Ratios:

A ratio showing the relationship between one item taken from balance sheet and another taken from profit and loss account is a composite ratio or a combined ratio knows as balance sheet and
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revenue statement ratio. A return on capital employed shows the proportion of net profit to capital employed and it is a composite ratio.

B) Functional Classification:

Ratios are also grouped in accordance with the certain tests. On this basis there are four categories: 1. Liquidity Ratios:

These ratios indicate the position of liquidity. They are computed to ascertain whether the company is capable of liquidity. For example, current ratio shows the capacity firm to meet its current liabilities as and them when mature. E.g. (1) Current Ratio (2) Liquidity Ratio (3) AcidTest Ratio 2. Profitability Ratio:

A number of ratios are designed to indicate the profitability ratio. 3. Leverage Ratios:

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The composition of capital of business and the proportion of owners capital and capital provided by outsiders are reflected by leverage ratios. 4. Activity or Efficiency Ratios: These are the ratios showing the effectiveness with which the resources of the business are employed. It signifies the efficiency of the management.

LITERATURE REVIEW

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 Financial Management

Financial management is that managerial activity which is concerned with the planning and controlling of the firm financial resources.

Financial management deals with procurement of funds and their effective utilization in the business. Financial management is concerned with the management decisions that result in the acquisition and financing of short term and long term credits for the firm. Financial management constitutes risk, cost and control. The cost of funds should be at minimum for a proper balancing of risk and control. PHILIPPATUS has given a more elaborate definition of the term financial management. According to him Financial management is concerned with the managerial decision that results in the acquisition and financing of long-term and short-term credits for the firms. As such as it deals with the situations that require selection of specific assets, the selection of specific liability as well as the problem of size and growth of an enterprise. The analysis

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of these decisions is based on the expected inflows and outflows of funds and effects up on managerial objectives. Thus, Financial management is mainly concerned with the proper management of funds. Above information I collected from the book Financial management principles & practise. By Dr. S.N.Maheshwari. The revised and enlarged second edition of the book under review is exhaustive in every sense and covers a large spectrum of financial management.

Financial management principles & practice. Book is written by Dr. S.N.Maheshwari. And this book is published by sultan chand & sons from New Delhi Dr. S.N.Maheshwari are director of Delhi Institute of Advanced Studies, Delhi.

The management accountant may 1992 having introduced the subject the author moves on the various financial tools available such as ratio analysis, cash flows analysis, fund flow analysis etc and their uses in financial management. His approaches to the tool of analysis and their application prove his mastery over the subject.

Finance is one of the most primary requisitions of a business and the modern management obliviously depends largely on the efficient management of the finance. The theory and practice are copiously illustrated with all sorts of anticipated problems. The book is divided in to seven section namely, foundations of finance; financial analysis, cost analysis, funds management; miscellaneous; advanced solved problems; and advanced unsolved problem. All
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relevant topics are analysed in every lucid and understandable language, required no further clarification..

Economic and social sciences review, vol-1, no.2, act 1992.

This is a comprehensive text book for students studying various coerces. The readers for whom this book is meant will find this publication comprehensive and useful. The author and the publishers deserve our heartly congratulations for a job well done. - International Review of Finance, July Dec., 1992 (vol-5, No.2)

About the three decades ago, the scope of financial management was confined to the raising of funds, whenever needed and little significance used to be attached to financial decision-making and problem solving. As consequences, the traditional finance texts were structured around this theme and contained description of the instruments and institutions of raising funds and of the major events, such as promotions, reorganisations, readjustment, merger, consolidation etc., when funds were raised.

In the mid-fifties, the emphasis shifted to the judicious utilization of funds. The modern thinking in financial management accords a far greater importance to management decision making and policy. Today, financial manager do not perform the passive role of store keeper of financial data and
122

information, and arranging funds, whenever directed to do so. Rather they occupy key positions in top management areas and play a dynamic role in solving complex management problems. They are now responsible for shaping the fortunes of the enterprise and are involved in the most vital management decision of allocation of capital. It is their duties to ensure that the funds are raised most economically and used in the most efficient and effective manner because of this change in emphasis, the descriptive treatment of the subject of financial management is being replaced by a grouping analytical content and sound theoretical understandings.

Above description and researchers explained in the Book of I.M.Pandey, is Financial management in its eight editions like in its previous editions high light the modern approach to financial decision-making. The book discusses the theories, concepts, assumptions and mechanics underlying financial decisions, viz. Investment financing dividend and working capital management. It also discusses sources and instruments of short-term and longterm financers, mergers and acquisitions, international financial management and the corporate policies.

Financial management in eight editions is written by I.M.Pandey. I.M.Pandey holds a PhD (1977) from the Delhi School of economics, university of Delhi. He joined the Indian Institute of management, Ahmadabad (IIMA) in 1980. Where he was a professor of finance. He has also taught at the school of management. Asian institute of technology, Bangkok, Thailand (199496); college of Business Administration, Kans as state university, Kansas, USA (1984-85); Paris school of management ESCP, Paris, France; and graduate

123

school of management ESSFC, clergy, France. He was also a visiting scholar at the Department of finance, university of Birmingham, UK.

Ratio Analysis
According to westom and Birmingham, in their Book managerial finance, 5th edition P.172 and Smith K.V.S. Book management of ratio analysis is concerned with the term ratio analysis I concerned with the term ratio refers to the number or quantitative relationship between two item and variables.

Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratio to interpret the fined statement, so that the strengths & weaknesses of the forms as well as its historical performance & current financial condition can be determined.

The importance of ratio analysis ties in the fact that it presents on a comparative basis and enables the drawing of inference or concussions regarding the performance of a firm with respect to the ratio analysis.

124

The firm would be considered in a good liquidity position, if it were able to meet its current obligation when they become due. The firm should maintain enough liquid funds with it so that it can pay off the short term liquidity without affecting its creditability.

According to Horne James.c.van in his book financial management & policy 3rd edition P 445. The relationship of one item to another expressed in a sample mathematical from is known as Ratio Ratio analysis is the method to studying the performer of the firm over a number of years on the basis of ratio. Ratio analysis is equally useful for assessing the long term financial need of a firm. This aspect of the financial of a borrower is of concern to the long term creditors, security analysis and the present and potential inventors. However, the measure of this ratio highly depends on the sales generated by the use of a assets of the firm.

With the help of ratio analysis, conclusions can be drawn regarding the liquidity position of a firm. The firm would be considered in a good liquidity position, if it were able to meet its current obligation when they become due. The firm should maintain enough liquid funds with it so that it can pay off the short term liquidity without affecting its creditability
125

Analysis of statement means such a treatment of information contained is two defined financial statement of methodical classification, comparison raising pertinent operation and seeking answers of them.

Research
Research extends knowledge of human beings, social life and environment. The search is for answers for various types of questions: What, Where, How and Why of various phenomena, and enlighten us.

Research brings to light information that might never be discovered fully during the ordinary course of life.

D.slesinger and M.Stephenson in the Encyclopedia of social sciences define research as the manipulation of things, concepts or symbols for the purpose of generalizing to expand, correct or verify knowledge, whether that knowledge aids in construction of theory or in the practice of an art. Research simply means a search for facts- answers to questions and solutions to problems. Research as a scientific undertaking which, by means of logical and systematic techniques, which aims to:

126

Research establishes generalizations and general laws and contributes to theory building in various fields of knowledge. Research verifies and tests existing facts and theory and these help improving our knowledge and ability to handle situations and events.

It is a fact-finding study. It is a method of research involving collection of data directly from a population or a sample thereof at particular time. its purpose is to provide information, explain phenomena, to make comparisons and concerned with cause and effect relationships can be useful for making for predications. It is a study of past records and other information sources with a view to reconstructing the origin and development of an institution or a movement or a system and discovering the trends in the part. Research aims to analyze interrelationship between variables and to derive casual explanations and thus enables us to have a better understanding of the world which we live. Applied research aims at finding solution to problems socioeconomic problems, health problems, human relations problems in organization and so on.

127

RESEARCH METHODOLOGY

128

 Introduction

Research extends knowledge of human beings, social life and environment. The search is for answers for various types of questions: What, Where, How and Why of various phenomena, and enlighten us. Research brings to light information that might never be discovered fully during the ordinary course of life. Research establishes generalizations and general laws and contributes to theory building in various fields of knowledge. Research verifies and tests existing facts and theory and these help improving our knowledge and ability to handle situations and events. General laws developed through research may enable us to make reliable prediction of events yet to happen.

129

Research aims to analyze inter-relationship between variables and to derive casual explanations and thus enables us to have a better understanding of the world which we live. Applied research aims at finding solution to problems socio-economic problems, health problems, human relations problems in organization and so on.

RESEARCH METHODOLOGY

1. Experimental research

It is designed to asses the effects of particular variables on a phenomenon by keeping the other variables constant or controlled.

2. Analytical study

It is a system of procedures and techniques of analysis applied to quantitative data.

130

3. Historical research

It is a study of past records and other information sources with a view to reconstructing the origin and development of an institution or a movement or a system and discovering the trends in the part.

4. Survey

It is a fact-finding study. It is a method of research involving collection of data directly from a population or a sample thereof at particular time. its purpose is to provide information, explain phenomena, to make comparisons and concerned with cause and effect relationships can be useful for making for predications.

MODE OF ANALYSIS

As stated earlier by analysis we mean the computation of certain indices or measures along with searching for patterns of relationship. That exists among the data groups. Analysis, particularly in case of survey or experimental data, involves estimating the values of unknown parameters
131

of the population and testing of hypotheses for drawing inferences. Analysis may, therefore, be categorized as often known as statistical and inferential analysis descriptive analysis is largely the study of distributions of one variable. This study provides us with profiles of companies, work groups, persons and other subjects on any of a multitude of characteristics such as size, composition, efficiency, preferences, etc. this sort of analysis may be in respect of one variable or in respect of two variables or in respect of more than two variables.

(A) Multiple regression analysis:

This analysis is adopted when the researcher has one depending variable which is presumed to be a function of two or more independent variables. (B) multiple discriminate analysis:

This analysis is appropriate when the research has a single dependent variable that cannot be measured, but can be classified into two or more groups on the basis of some attribute. (C) multivariate analysis of variance:

This analysis is an extension of two-way ANOVA.

132

(D) canonical analysis:

This analysis can be used in case of both measurable and non-measurable variables for the purpose of simultaneously predicting a set.

SAMPLING DESIGN

1. Type of universe: The first step in developing any sample design is to clearly define the set of objects, technically called the universe, to be studied. 2. sampling unit: A decision has to be taken concerning a sampling unit before selecting sample. Sampling unit may be a geographical one such as state, district, village, etc. 3. source list:

It is also knows as sampling frame from which sample is to be drawn. It contains the names of all items of a universe. If source list is not available, researcher has to prepare it.
133

4. size of sample:

This refers to the number of items to be selected from the universe to constitute a sample. This is a major problem before a research. The size of sample should neither be excessively large, nor too small. 5. parameters of interest:

In determining the sample design, one must consider the question of the specific population parameters which are of interest. For instance, we may be interested in estimating the proportion of persons with some characteristic in the population, or we may be interested in knowing some average or the other measure concerning the populat 6. budgetary constraint:

134

Cost considerations, from practical point of view, have a major impact upon decisions relating to not only the size of the sample but also to the type of sample.

RESEARCH DESIGN

A research design is the arrangement of condition for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure.

a. Keeping in view the above stated design decisions, one may split the overall research design into the following parts:

b. The sampling design which deals with the method of selecting items to be observed for the given study. c. The observation design which relates to the condition under which the observations are to be made.

135

d. The statistical design which concerns with the question of how many items are to be observed. e. The operational design which deals with the techniques by which the procedures specified in the sampling, statistical and observational design can be carried out.

Important features

Form what has been stated above, we can state the important features a research design as under: I. It is a plan that specifies the source and types of information relevant to the research problem.

II.

It is a strategy specifying which approach will be used for gathering and analyzing the data.

III.

It also includes the time and cost budget since most studies are done under these two constraints.

136

 DATA COLLECTION SOURCES

(a) Primary sources and (b) Secondary sources.

A. PRIMARY SOURCES OF DATA

Primary sources are original sources from which the researcher directly collects data that have not been previously e.g. collection of data directly by the researcher on brand awareness, brand preference, brand loyalty and other aspects of consumer behaviour from a sample of consumers by interviewing them, primary data are information collected through various method such as observation, interviewing, mailing etc. Primary data are directly collected by the researcher from their original sources. In this case, the research can collect the required data precisely according to his research needs, he can collect them when he wants them and in the from he needs them.

B. SECONDARY SOURCE OF DATA

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There are sources containing data have been collected and compiled for another purpose. The secondary sources consists of readily compendia and already compiled statements and reports whose data may be used by researchers for their studies. Secondary sources consist of not only published records and reports but also unpublished. The letter category includes various and registers maintained by the firms and organizations.

SAMPLING METHOD

Probability or random sampling:

Probability sampling is based on the theory of probability. it is also known as random sampling. It provides a known nonzero chance of selection for each population element. It is used when generalization is the objective of study, and a greater degree of accuracy of estimation of population parameters is required. The cost and time required is high hence the benefit derived from it should justify the costs.

1. Simple random sampling:

138

This sampling technique gives each element an equal and independent chance of being selected. an equal chance means equal probability of selection. An independent chance means equal probability of will not affect the chances of other elements being selected. The procedure of drawing a simple random sampling consists of enumeration of all elements, in the population.

Suitability: This type of sampling is suited for a small homogeneous population.

Advantages:

The advantage of this is that it is one of the easiest methods, all the elements in the population have an equal chance of being selected, simple to understand, does not require prior knowledge of the true composition of the population.

Disadvantages:
139

It is often impractical because of non-availability of population list or of difficulty in enumerating the population, does not ensure proportionate representation and it may be expensive in time and money. The amount of sampling error associated with any sample drawn can easily be computer. But it is greater then that in other probability samples of the same size, because it is less precise than other methods.

2. STRATIFIED RANDOM SAMPLING:

There is improved type of random or probability sampling. In this method, the population is sub-divided into homogenous groups or strata, and from each stratum, random sample is drawn. . stratification is necessary for increasing a sampling sub population and applying different method to different strata. The stratified random sampling is appropriated for a large heterogeneous population. Stratification process involves three major decisions. They are stratification base or bases. Number of strata and strata sample sizes. Stratified random sampling may be classified into:

A) proportionate stratified sampling:

140

This sampling involves drawing a sampling from stratum in proportion to the latters share in the total population. it gives proper representation to each stratum and its statistical efficiency is generally higher. This method is therefore very popular.

B) Disproportionate stratified random sampling: This method does not give proportionate representation to strata. it necessarily involver giving over-representation to some and under representation to other. The desirability of disproportionate sampling is usually determined by three factors.

3. Systematic random sampling: This method of sampling is an alternative to random selection. It consists of taking Kth item in the population after a random starts with an item form 1 to k. it is also knows as fixed interval. It possesses characteristics of randomness and some non-probability traits.

SAMPLE SIZE In sampling analysis the most ticklish question is: what should be the size of the sample or how large or small should be n ? if the sample size is
141

too small, it may not serve to achieve the objectives and if it is too large, we may incur huge cost and waste resources. As a general rule, one can say that the sample must be of an optimum size i.e., it should neither be excessively large nor too small. Technically the sample size should be large enough to give a chosen by some logical process before sample is taken from the universe.

SAMPLE AREA

This is an important from of cluster sampling. In larger field surveys cluster consisting of specific geographical areas like districts, talus, villages or blocks in a city are randomly drawn. as the geographical areas are selected as sampling units in such cases their sampling is called area sampling. It is not a separate method of sampling, but form part of cluster sampling

SAMPLE UNIT:

In the sample unit would include the customers of anand and other areas also those who use it products sample.
142

FINDINGS

143

 FINDINGS

After completion of my project there is no doubt that Amul is a very good co-operative sector in India that truly work for farmer who attached with the union and who are the members of union. Union is also linked with social services and it department are working well and help to union to reach towards top position. From working capital and operating cycle the following conclusion can be drawn. The working capital requirement of Amul is financed through raising the cash credit loans and the short term loans. Amul is following conservative policy to finance its current assets. A large operating cycle due to high working in process conversion period, high finished goods conversion period and lower payable deferral period A company has not arranged proper C.A. is increase not due to one element. But it is due to more increase in inventory or due to more increase in cash and bank.

144

Amuls G.W.C. is made up of three current assets stock, advances & debtors, cash & bank balance, investment in current assets is increasing with the increasing level of business activities. There is a significant increase in investment in 2007-08. The margin by which current assets cover short term obligation i.e. current liabilities are more in year 2008-09 and while it was relative less in 2007-08. The position of current assets which can be finance through long term sources has increased by 42% as compare to previous year. There is a significant change in the W.I.P. conversion period as well as finished goods conversion period increase 2 days in 2007-08. The company has efficient in reducing WIP conversion period. But the F.G.C.P. is larger. This result into larger operating cycle of Amul.

145

LIMITATION OF STUDY

The study is based on the information received and analysis done during this training period only. The study is based on the available data of last 3 Years.

The study is fully based on secondary data.

146

RECOMMENDATIONS

147

RECOMMENDATIONS

Amul is following conservative policy to finance its current assets. The firm should increase the investment in current assets to improve on its credit standing. Amul should try to reduce raw materials and finished goods period by reducing inventory level. Amul should try having to collect debtors quickly. Amul should control the inventory level. It should increase C.A. and decrease the level of CL, because the quick ratio taking too much time. Amul has big consumer market in overall country as well as abroad increase in product mix will give more privileges to Amul.

Transpiration of the milk should be accurate that wastage of milk can be avoided.

Amul should increase the procurement of milk by increasing the number of village societies.

148

 Amul should concentrate more on inventory or we can say that stock because in the CA, inventorys demand has higher position.

Amul should increase its sales by different sales promotion scheme. It organization can not decrease the lead time period. It should pay attention on sales side and promote.

The local milk producers should receive price for the milk to retain him. In this industry, also motivate him to increase the daily production as most of the milk producers are marginal farmers. At the same time the retailer price of the milk and milk producer should be maintained at an affordable price.

149

CONCLUSION

150

CONCLUSION

Amul is a successful co-operative dairy and it becomes a household name in India and abroad, we visited this unit. So we feel satisfactory on our modest efforts. During my visit in this unit. I observed the Amul is more progressive sector; at present its biggest dairy in Asia. The unit has bright future because if its scientific and flexible management. The unit turnover is increase day by day. Amul has a symbol of Tie of four hands which means co-operation of success. Producers. Processors. Marketers. Customers.

India has emerged as the highest Milk Producing Country in the world.

The Dairy Industry in India is considered to be a category, which has been Growing & Profitable.

151

 The Major Markets for Export of Dairy products from India include Germany, USA, UAE, & Nepal.

Indian Dairy Products play a significant role in the socio Economic & Religious activities of our population.

AMUL is well poised to steer the Dairy Co- operative Sector into an era of further prosperity & Growth.

AMUL have been serving as the ROLE MODEL for Dairy Cooperatives across the world.

Since inception of Co operative movement 1946, AMUL is having Flag bearers of a uniquely successful experiment which provides stability to marginal farm incomes & lends security to the socio economic future of the nation.

152

 India is progressing day by day to achieve the highest position of MAHA SATTA in near future.

Amul is really a great organization which distributes all its profit among its members. Those who supply milk to Amul. It would perhaps be the first organization in the India to run successfully on the co-operative basis.

Amul is a highly successful co-operative sector in world since last 60 years Amul has built up its own personality that portrays its true image. But still there are certain avenues which it taken care can take the organization to higher standards.

Special seminar should be arranged in village for guiding the village people in proper take care of animal. Amul should do research activity in animal husbandry practice to increase the milk production.

Amul has competitive established system. The four hands of Amul are working successfully with corporation. The people of Amul are very cooperative and enthusiastic. Amul is famous as Anand Pattern for its co-

153

operative organization in world. So its a matter proud for people of Anand as well as India Amul are really The taste of India.

Thus, Amul is the successful co-operative organizations running with automation still providing full employment opportunities. Amul because of its efforts has obtained the HACCP ISO 9002 certificate.

Working capital management or current assets management is one of the most important aspects of the overall financial management. There are many determined which affect the working capital requirements of the firm like nature of business, technology and manufacturing policy, market and demand condition etc.

According to my point success factor being Amul is hardworking, disciplinary, co-operative structure, production, technology, development.

154

BIBLIOGRAPHY

155

BIBLIOGRAPHY

PERSONAL DISCUSSION WITH VARIOUS DEPARTMENT HEAD. ANNUAL REPORTS OF LAST FIVE YEARS FINANCIAL MANAGEMENT BY PRASSUN CHANDRA,5TH EDITION. M. Pandey FINANCIAL MANAGEMENT - VIKAS PUBLISHING HOUSE PVT.LTD. 9TH EDITION. M.Y. KHAN and P.K. JAIN, FINANCIAL MANAGEMENT VIKAS PUBLISHING HOUSE PVT.LTD. NEW DELHI. OLD REPORTS OF PREVIOUS TRAINEES.

WEB-SITES

www.amul.com www.amuldairy.com www.amuldairy@kairaunion.coop

156

ANNEXURE

157

ACCOUNTS
Trading, Profit & Loss Account for the year ended 31st March, 2010 2007-08 Rs. To Opening Stock Finished Goods Stock Stock in Process Milk Stock Stock in Transit Parlour Stock By Milk Sales 4699.15 By Product Sales 1902.08 By Parlour Sales 207.39 Total Sales 143.08 Less: Excise 1.10 Net Sales 6952.79 By Interest 77965.56 Income By Dividend 15725.31 Income 1182.62 By Other Income By Prior Period 1089.17 Income By Closing 8363.90 Stock: Finished Goods 3807.86 Stock 1676.98 Stock in Process Milk Stock 480.10 Stock in Transit 1063.55 Parlour Stock 1015.17 10204.15 2319.85 266.58 683.27 3.00 13476.86
158

Rs. In Lacs 2007-08 Rs. 37808.65 69794.44 108.75 107711.8 4 524.55 107187.2 9

To Milk Purchases To Raw-Material Consumption To Research & Extension Expenses To Processing Expenses To Packaging Expenses To Power & Fuel Expenses To Salaries and Wages To Staff Provident Fund,Gratuity, & Other Amenities To Repairs & Maintainance Expenses To Freight & Forwarding

260.18 76.56 754.02 1.61

Expenses To Marketing Expenses To Postage, Telegram, Telephone Printing & Stationary Expenses To Insurance Premium To Rent, Rates & Taxes To Audit Fees To Administrative Expenses To Interest & Bank Commission To Depreciation Total Depreciation Charged : 633.70 Less Adjusted against Grants: 59.92

109.99

56.14 60.52 43.62 99.66 166.77 814.81

To FBT Provision To Bad Debts Provision To Leave Encashment Provision To Provision for Gratuity To Prior Period Expenses To Net Profit Total

573.78 9.00 0.00 0.00 0.00 47.71 451.51 121756.5 1 Total

121756.5 1
Rs. In Lacs 31.3.200 8 Rs.

BALANCE SHEET as at 31st MARCH 2008

LIABILITIES Rs. Authorised Share Capital : (40,00,000 Shares of Rs. 100 each) Share Capital : (Fully Paid Up) Reserve Fund & Other Funds : 31.3.200 8 Rs. Assets: 4000.00 2229.18 Gross Value: As per Schedule-3 Col -5 ASSETS Rs.

27453.2 9

2362.18

Less Depreciation Fund:

21330.3 2

159

(as per Schedule 1, Col. 5) Grants: (as per Schedule 2, Col. 6) Loans (Secured): Axis Bank Long Term loan HDFC Bank Short Term Loan NCDC BMC Project Loan

1554.28

As per Schedule-3 Col -9 Net Assets: Capital Work in Progress:

6122.97 125.75

0.00 9500.0 0 501.63 10001.6 3

Investments : National Saving Certificates Share Investments 0.18 514.65 514.83 Stock : Trading Stock Stores 13476.8 6 2261.02 15737.8 7

Redeemable Debentures :

1039.51

Fixed Deposits:

4333.81

Current Liabilities: Deposits Due to Societies Outstanding Against Expenses Outstanding Against Purchases Sundry Creditors

168.24 7223.3 1 1423.5 9 4298.3 1 459.06 13572.5 1

Advances & Debtors : Deposits Due from societies Advance Trade Debtors Sundry Debtors Income-Tax Deposits Cash & Bank Balances : In Bank Current Accounts NCDC BMC Project Account Fixed Deposits in Banks Cash on Hand 319.91

214.05 0.11 777.80 8458.69 404.62 91.53 9946.80

Provisions: Fringe Benefit Tax Doubtful Trade Debtors Decline in Investments Leave Encashment Gratuity Profit & Loss A/c: Net Profit for the year

54.00 58.95 1.50 0.00 205.45

159.84 501.63 2649.03 0.71 3311.22

451.51 35864.5 1

Deferred Revenue Expenditure (to the extent not written off) Total

105.06 35864.5 1

Total

160

Trading, Profit & Loss Account for the year ended 31st March. 2009
2008-09 Rs. To Opening Stock Finished Goods Stock Stock in Process Milk Stock Stock in Transit Parlour Stock By Milk Sales By Product 10204.15 Sales By Parlour 2319.85 Sales 266.58 Total Sales 683.27 Less: Excise 3.00 Net Sales 13476.86 By Interest 94284.94 Income By Dividend 20332.86 Income By Other 910.43 Income By Prior Period 1581.04 Income By Closing 10477.66 Stock: Finished 5004.98 Goods Stock 1779.52 Stock in 12583.97 2539.55
161

Rs. In Lacs 2008-09 Rs. 54187.46 83487.54 131.88 137806.8 7 594.52 137212.3 5

To Milk Purchases To Raw-Material Consumption To Research & Extension Expenses To Processing Expenses To Packaging Expenses To Power & Fuel Expenses To Salaries and Wages

258.93 77.37 624.15 0.00

Process To Staff Provident Fund,Gratuity, & Other Amenities To Repairs & Maintainance Expenses To Freight & Forwarding Expenses To Marketing Expenses To Postage, Telegram, Telephone Printing & Stationary Expenses To Insurance Premium To Rent, Rates & Taxes To Audit Fees To Administrative Expenses To Interest & Bank Commission To Depreciation Total Depreciation Charged : 853.06 Less Adjusted against Grants: 50.88 To IT/FBT Provision To Bad Debts Provisionzz To Leave Encashment Provision To Provision for Gratuity To Prior Period Expenses To Net Profit Total 802.18 105.00 0.00 0.00 0.00 0.00 575.53 154507.3 0 Total 63.05 45.11 110.65 103.79 198.96 1122.07 Milk Stock Stock in 571.92 Transit 1280.76 Parlour Stock 1554.12 125.87 415.92 791.41 3.65 16334.50

154507.3 0

162

BALANCE SHEET as at 31st MARCH 2009

LIABILITIES Rs. Authorised Share Capital : (40,00,000 Shares of Rs. 100 each) Share Capital : (Fully Paid Up) Reserve Fund & Other Funds : (as per Schedule 1, Col. 5) Grants: (as per Schedule 2, Col. 6) Loans (Secured): HDFC Bank Short Term Loan NCDC BMC Project Loan 31.3.200 9 Rs. Assets: 4000.00 2265.99 Gross Value: As per Schedule-3 Col -5 ASSETS Rs. 31.3.200 9 Rs.

29036.1 6

2485.24 1498.42

Less Depreciation Fund: As per Schedule-3 Col -9 Net Assets: Capital Work in Progress:

22147.9 2 6888.24 20.72

5000.00 1111.07 6111.07

Investments : National Saving Certificates Share Investments

0.18 514.65 514.83

Redeemable Debentures :

856.58 Stock : 16334.5 0 3106.47 19440.9 7 232.99 12017.6 0 1828.48 3058.15 336.56 17473.79 Advances & Debtors : Deposits Dues from Societies Society Loans- BMC Project Advance Trade Debtors Sundry Debtors Income-Tax Deposits Cash & Bank Balances : In Bank Current Accounts NCDC BMC Project Account Fixed Deposits in Banks Cash on Hand 277.29 5.06 1036.45 960.91 4435.10 534.52 130.68 7380.01 583.65 128.00 1340.76 1.00 2053.41

Fixed Deposits:

4832.87

Trading Stock Stores

Current Liabilities: Deposits Due to Societies Outstanding Against Expenses Outstanding Against Purchases Sundry Creditors

Provisions: Income Tax Fringe Benefit Tax Doubtful Trade Debtors Decline in Investments Gratuity

90.00 69.00 58.95 1.50 105.45 324.91

Profit & Loss A/c: Net Profit for the year 575.53 575.53 Deferred Revenue Expenditure (to the extent not written off) Total 126.20 126.20 36424.3 9

Total

36424.39

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Trading, Profit & Loss Account for the year ended 31st March, 2010
2009-10 Rs. To Opening Stock Finished Goods Stock Stock in Process Milk Stock Stock in Transit Parlour Stock By Milk Sales By Product 12583.97 Sales By Parlour 2539.55 Sales 415.92 Total Sales 791.41 Less: Excise 3.65 Net Sales 16334.50 111402.3 By Interest 6 Income By Dividend 26967.26 Income By Other 1423.57 Income By Prior Period 2912.69 Income By Closing 10946.73 Stock: Finished Goods 4904.18 Stock Stock in 1972.88 Process Milk Stock 1299.54 Stock in Transit

Rs. In Lacs 2009-10 Rs. 73668.13 95659.53 161.30 169488.9 6 550.23 168938.7 3

To Milk Purchases To Raw-Material Consumption To Research & Development Expenses To Processing Expenses To Packaging Expenses To Power & Fuel Expenses To Salaries and Wages To Staff Provident Fund,Gratuity, & Other Amenities

352.26 106.61 713.53 7.14

11121.03 3709.66 527.77 0.00

164

To Repairs & Maintainance Expenses To Freight & Forwarding Expenses To Marketing Expenses To Postage, Telegram, Telephone Printing & Stationary Expenses To Insurance Premium To Rent, Rates & Taxes To Audit Fees To Administrative Expenses To Interest & Bank Commission To Depreciation Total Depreciation Charged : 1167.89 Less Adjusted against Grants: 46.48 1121.41 255.00 0.00 0.00 0.00 (14.69) 735.75 185480.6 7 Total 59.39 46.29 133.47 162.65 255.16 1252.58 1366.11 Parlour Stock 1807.78 136.06 3.94 15362.40

To IT/FBT Provision To Bad Debts Provision To Leave Encashment Provision To Provision for Gratuity To Prior Period Expenses To Net Profit Total

185480.6 7

BALANCE SHEET AS At 31st MARCH 2010

LIABILITIES Rs. Authorised Share Capital : 31.3.201 0 Rs. Assets: ASSETS Rs.

Rs. InLacs 31.3.201 0 Rs.

165

(40,00,000 Shares of Rs. 100 each) Share Capital : (Fully Paid Up) Reserve Fund & Other Funds : (as per Schedule 1, Col. 5) Grants: (as per Schedule 2, Col. 6) NCDC BMC Project Interest Free Loan Loans (Secured): HDFC Bank Short Term Loan NCDC BMC Project Loan Axis Bank Long Term loan I Axis Bank Long Term loan II

4000.00 2300.73 2720.13 1452.21

Gross Value: As per Schedule-3 Col -5 Less Depreciation Fund: As per Schedule-3 Col -9 Net Assets:

0.00

0.00 0.00

647.80 5000.00 893.96 2108.93 2378.19 10381.0 8

Capital Work in Progress: Investments : National Saving Certificates Share Investments

83.32 83.32 0.18 515.15 515.33

Redeemable Debentures :

594.96 Stock : 15362.4 0 3023.40 18385.8 0 297.31 16146.4 4 2319.21 3391.90 6919.35 29074.2 1 Advances & Debtors : Deposits Dues from Societies Society Loans- BMC Project Advance Trade Debtors Sundry Debtors Income-Tax Deposits 383.95 10.40 1553.98 1457.91 10324.7 4 303.20 152.20 14186.3 8 Cash & Bank Balances : In Bank Current Accounts NCDC BMC Project Account Fixed Deposits in Banks 1348.43 Cash on Hand 5920.82 2028.58 2.69 7952.09

Fixed Deposits:

6035.52

Trading Stock Stores

Current Liabilities: Deposits Due to Societies Outstanding Against Expenses Outstanding Against Purchases Sundry Creditors

Provisions: Income Tax Fringe Benefit Tax Doubtful Trade Debtors Decline in Investments Gratuity Leave Encashment 345.00 69.00 58.95 1.50 684.53 189.45

Profit & Loss A/c: Net Profit for the year 0.00 54555.0 7 Deferred Revenue Expenditure (to the extent not written off) Total 121.66 41244.5 8

Total

166