ASUMMER INTERNSHIP PROJECT REPORT

ON

Co – Operative Milk Producer’s Union Ltd. (AMUL) {Financial Statement Analysis}

SUBMITTED TO

L.J. Institute of Management Studies

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

MASTER OF BUSINESS ADMINISTRATIONIn

Gujarat Technological University

UNDER THE GUIDANCE OFAkshit Gandhi

Submitted on: August 2013Submitted by: Brijesh Rana

Enrolment number: 127960592083MBA SEMESTER: III

Batch No.: 2012-2014

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Certificate

Certified that this comprehensive project report “Financial Statement

Analysis” is the bonafied work of Brijesh Rana (Enr. No.

127960592083) who carried out the research under my supervision. I also

certify further, that to the best of my knowledge the work reported herein

does not form part of any other project report or dissertation on the basis

of which a degree or a work was conferred on an earlier occasion on this

or any other candidate.

Date:Place: Signature of the student

It is certified that the work mentioned above is carried out under my guidance.

Date:Place: Signature of the faculty guide

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Students’ Declaration

I/We, Brijesh Rana (Enr. No. 127960592083) hereby declare that the

report for Comprehensive Project on “Financial Statement

Analysis(AMUL)” is a result of our own work and our indebtedness to

other work publications, references, if any, have been duly

acknowledged.

Date: Student Name:Place:

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Index

Sr No. Particular Page No.

1 Preface 42 Acknowledgement 53 Research Methodology 64 Executive Summary 285 Intro. To Organization 296 Financial Analysis 61

(a)Cost Sheet 61(b)Comparative Analysis 64(c)Ratio Summary 66(d)Graphs 68-85(e)Ratio Calculation 86

7 Working Capital Management 88(a)Working Capital Statement 91

8 DuPont Analysis 929 Common size Statement Of P&L 9510 Common size Statement Of Balance Sheet 9611 Annual Progress Of AMUL Dairy 9712 Conclusion 9913 Bibliography 100

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PREFACE

MBA is full time professional course of two year in which the student are taught about the management aspects of company. Here the student are given theoretical knowledge but this course emphasizes more on practical knowledge and skilling.

As student of first year business admin, I was given an opportunity to prepare a finance report on AMUL for the subject of financial management. The preparation of financial report at the 1st year to understand financial report and financial matter of the company.

The preparation of financial report helps the students to get a detailed about the finance related management in a company like how the funds are proved how they are utilized and many more aspects.

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ACKNOWLEDGEMENT

As we know that no book is work of its authors. There are many people who help authors to complete book. In the same way my report is not only work of myself. There are many people who have been very helpful to me in preparing this report.

To make the students familiar with the financial aspects and matter of the company. I was given an opportunity to prepare a Financial Report on “KAIRA DISTRICT CO-OPERATIVE MILK PRODUCER’S UNION LTD. (AMUL)”

So, First of all I would like to thank our Honorable Dean Siddharth Sir for given me permission to prepare the Financial Report on “KAIRA DISTRICT CO-OPERATIVE MILK PRODUCER’S UNION LTD. (AMUL)

I am also thankful to our prof. Akshit Sir who provided me with essential Information and gave his value time and helped me in the preparation of this report.

Finally, I am thankful to my collage and faculty who helped me to collect information of the company.

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RESEARCH METHODOLOGY

ABSTRACT

Accounting information provided by means of financial

statements- The income statement and the Balance Sheet are often in

summarized form. Viewed on the surface, the truths about the results and

the financial position of a business hidden in them remain veiled. To be

of optimal benefit and as well enable the users make well – informed

decisions, financial statements need to be analyzed by means of ratios.

Therefore, in order to establish the role of ratio analysis in business

decisions, this research is carried out. The researcher made use of both

primary and secondary sources of data collection. However, for the

former, questionnaires were administered, whereas for the later, relevant

were received. The data Collected via the primary data sources were

analyzed using simple averages and percentages. After ratios analysis

conducted on the chapter four, mode at 95 level of confidence (5% level

of significance). Finally, it was established that ratios analysis evils

business decision.

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INTRODUCTION

BACKGROUND INFORMATION

The two primary objectives of every business are profitability and

solvency. Profitability is the ability of a business to make profit, while

solvency is the ability of a business to pay debts as they come due.

However, the achievement of these objectives requires efficient

management of resources of the business through planning, budgeting,

forecasting, control, and decision – making. Also, the strengths and

weakness of the business need to be identified and necessary corrective

measures applied. Interestingly, accounting provides information that

facilitates these functions.

Basically, accounting measures and communicates economic

information needed for decision –making. Thus, the American

Accounting Association defined accounting as “the process of

identifying, measuring and communicating economic information to

permit informed judgments and decisions by the information”. Statement

and the Balance Sheet. The Income Statement shows the profitability or

profitability or operational result of a business, while the balance sheet

shows the solvency or financial position of a business.

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Although profiles are often used as the basis for judging the

performance of a business, such profits must be related to the various

items of the financial statements in order to be meaningful and useful for

decision making. Furthermore, owing to the summarized nature of

financial statements, a lot of truths are hidden in them. Thus, they need to

the analyzed and interpreted by means of financial ratios to enable the

users understand the meaning of the absolute amounts shown in them,

and make informed business decisions.

Financial statements carry lots of financial Information that are hidden

in the figures. The figures in financial statements become more useful

when they are related to each other or to some other relevant financial

data. Therefore, users of financial information go a further step to

establish relationships (or ratios) among selected data in financial

statements.

According to “Accounting {or financial} ratio is a proportion or

fraction or percentage expressing the relationship between one item in a

set financial statements and another item in the financial statements.

Accounting ratios are the most powerful of all tools used in analyzed and

interpreting financial statements”. Therefore, ratio analysis involves

taking stats of number (or items) out of financial statements and forming

ratios with them, to enhance informed judgments and decisions

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defined decision-making as “a conscious process of making

choices among one or more alternatives with the interior of moving

toward some desired state of affairs.” Therefore, business decisions can

be defined as choices relating to the allocation and/or use of business

resources to achieve business goals.

“Managers want information because they need to make decisions. The

proper use of information is an important part of decision-making.”

Remarkably, one of the effective ways of providing information needed

for decision-making is ratio analysis.

Yes, business dictions of make or buy, investment or divestment,

expansion or contraction, capital-organization and reconstruction, and so

on cannot be properly made without the aid of financial ratios. They give

cue to the financial strengths and weaknesses of a business, and highlight

aspects of a business requiring further investigation.

Therefore, this research is carried out to show ratio analysis help

managers, shareholders, investors, creditors, and other stakeholders make

informed judgments and decisions about the past performance, present

condition, and futures potential of a business.

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STATEMENT OF PROBLEM

Financial information provided in financial statements are useful in

business decisions. However, it must be noted that financial statements

are means to an and not an end in themselves. Thus the use of financial

statements in decision-making is not always easy owing to the following

problems:

1. In view of the summarized nature of the information contained in

financial statements, they need to be analyzed and interpreted by

means of financial ratios to enable management and stakeholders

understand them and make well-informed business decisions.

2. Many users of financial statements are not knowledgeable about

accounting ratios and how the ratios can be applied to financial

statements to aid decision-making.

3. Despite the immense benefits of ratio analysis, there are a lot of

weaknesses or limitations associated with its use.

In view of the above stated problems, this research is embarked upon to

identify the proper use of financial ratios, and the roles ratio analysis

plays in business decisions

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OBJECTIVES OF THE STUDY

In consideration of the problems identified above, the objective of

this research include.

1. To show how ratio analysis facilitates proper understanding of

information contained in financial statements.

2. To show how ratio analysis aids business decisions.

3. To examine the techniques used in analysis financial statements.

4. To identify the usefulness of financial ratios in measuring and

predicting the performance and financial position of a business.

5. To unravel the obstacles to the proper use of financial ratios in

business decisions.

6. To suggest on ways to enhance efficient use of ratio analysis in

decision-making.

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RESEARCH QUESTIONS

i. Is ratio analysis useful in evaluating and prediction the

performance of a business as well as intensifying areas that regret

improvement?

ii. Do you agree with the fact that ratio analysis facilitates proper

understanding of information contained in financial statements?

iii. Is ratio analysis useful to management investors, shareholders and

creditors in their business divisions?

iv. Does financial ratio helps to unravel the mass of truth hidden in

financial statements?

v. Are there obstacles that affect the proper use of ratio analysis in

business decisions?

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SIGNIFICANCE OF THE STUDY

The significance of this study is that on its completion, the

following benefits will be derived:

1. The study will help management of AMUL and others to know

how ratio analysis can help them understand the financial

contained in financial statements and enhance their business

decisions.

2. The findings of the research and the supportive reference materials

will be of immense help to students in tertiary institutions and other

researchers to investigate further in the area of study.

3. It is hoped that the result of the research will facilitate optimal

business decisions when the recommendations are complied with.

4. The study will encourage businessmen, investors, managers, and

government authorities to appreciate quantitative techniques like

financial ratios when making economic and business decisions.

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SCOPE OF THE STUDY

“scope of the study is the limits or boundary lines of the study. It

is the areas covered by the research or the extent the researchers would

go. Limitations of the study are hindrances or obstacles witnessed by the

researcher in the course of the study. Which could influence his

conclusions.”

In view of the impossibility of covering every type of financial

statement, this study is therefore restricted to the analysis of the income

statement and the Balance Sheet by means of financial ratios. However,

other analytical techniques such as horizontal analysis, vertical analysis

and termed analysis would also be explained and illustrated.

Finally, although University Ratio Analysis is the core of the study,

nevertheless, multivariate Ratio Analysis would be partly illustrated using

Du Pont Equations.

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LIMITATION OF STUDY

In the course of this research work, the researcher was faced with

some constraints which played a limit he the ability and performance of

the researcher encountered the following constraints among others.

Insufficient Financial: The researcher needed a lot of money to travel

as far as Aba to collect the necessary data from the firm under syudy.

Money was also required to visit secondary data sources such as the

internet, libraries, professional bodies, and so on.

Lack of Co-Operation: The employees of the firm under study were not

encouraging. Some of them were so biased and prejudiced that did not

care to understand the purpose of the research. This resulted to their

failure to provide sufficient information required for proper completion of

the study.

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DEFINITION OF TERMS USED IN THE STUDY

Accounting: The process of recording, summarizing, analysis and

interpreting financial (money-related) activities to permit individuals and

organizations to make informed judgments and decisions.

Balance Sheet: A financial statement containing assets,

liabilities, and owner’s equity or capital at a particular data or at the end

of a particular period, to show the financial position of a organization.

Business: An activity, enterprise or organization established to

provide goods and services at a profit, in order to satisfy human wants.

Business Decision: Choices made on matters relating to the

allocation and/or use of business resources for making, buying, selling, or

supplying goods or services at a profit.

Decision-Making:A mental process by which an individual or group of

individuals gather data and make a choice between two or more

alternative courses action.

Financial Ratio: A proportion, fraction, or percentage expressing the

relationship between one item ion set of financial statements and another

item in the same financial statements.

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Financial Statement: Quantitative information on the economic

activities of an organization prepared to show the result and the financial

position of the entity, often presented in terms of Balance Sheet, Income

Statement, Funds flow statement, and so on.

Income Statement: A financial statement often referred to as the

trading and profit loss account, matching revenues against expense to

show the profitability or operational results of an enterprise over a period

of time, such as a month or year.

Ratio: A fractional relationship of one number (or time) to another

Ratio Analysis: A systematic review of accounting data by

establishing relationships among various figures on the financial

statements which bring together the results of the activities a business.

Time Pressure: Time allowed was not enough for through completion

of the research, in consideration of the fact the we were also facing other

academic studies during the semester.

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REVIEW OF RELATED LITERATURE

INTRODUCTION

One of the effective ways of communicating financial information

about a business is through financial statements. Thus, the recording and

summarizing of financial data are necessary part of accounting

information system.

However, no matter how well prepared and presented, financial

statements need to be analyzed and interpreted to unveil the truths hidden

in them and enhance decision-making. Interestingly, such analysis and

interpretation can be made by means of ratios and comparisons.

Therefore, in the this chapter, expert opinion on the role ratio

analysis in business decisions with particular reference to financial

statement analysis are reviewed

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FINANCIAL STATEMENT ANALYSIS

Financial statement analysis consist of applying analysis tools and

techniques to financial statements and other relevant data to show

important relationships and obtain useful information. Therefore,

financial statement analysis can be defined as the breaking down,

interpretation, and translation of data contained in financial statements to

provide information and show important relationships among the items of

financial statements and drawing conclusion about the past performance,

current financial position, and future potentials of a business.

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PARTIES INTERESTED IN FINANCIAL STATEMENT ANALYSIS

With particular reference to business organizations, parties

interested in financial statement analysis are divided into two categories,

namely: internal users and external users.

The internal users include management and employees of an

organization, while external include shareholders, investors, creditors,

debenture/bond holders, financial analysis, etc.

Management and Employees Financial statement analysis helps management and employees to

know the operating results, financial position and future potentials of a

business.

Shareholders/OwnersThe analysis helps shareholders or owners of a business to

ascertain the profitability of the operation of the business, as well as

return on their investments.

Investors and Creditors Financial statement analysis helps investors to know the

profitability and return on investment in a business. In the other hand, it

helps trade creditors and note holders to know the liquidity or the ability

of a business to pay its debts when they fall due.

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Debenture/bond holders Those who lend money to the business would like to know the

ability of the business to repay on maturity both the interests and the

principal of the loans granted to it.

Financial analysisFinancial statement analysis enables financial analysis to offer

professional advice to their clients on investments.

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RESEARCH METHODOLOGY

INTRODUCTION

This chapter describes the methods and procedures used in geothermic data that was analyzed in chapter four, necessary to accomplish the purpose of this study. The research methodology is vital part of the research report it is the background against which the reader evaluates the findings and the contusions.RESEARCH DESIGN

This study is a surrey designed to find out the role of ratio analysis in business decisions; it is descriptive and analytical in nature.

DATA COLLECTION TECHNIQUE

The two main sources of data collection used in the study are the

primary and the secondary sources.

* PRIMARY SOURCES

Primary sources of data collection are first hand information i.e.

information that was gathered by the researcher himself directly from the

respondents. In this regains, questionnaire and oral interviews were used

to collect the requisite data from the respondents the management staff

and non-management staff of the organization under study.

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* SECONDARY SOURCES

Secondary sources of data collection are information’s that were

obtained from published maternal such text books, journals, magazines,

newspapers, articles, and so on, which were considered necessary for the

purpose of this research. They were the major sources from which the

knowledge and opinions of experts in the subject from which the.

POPULATION

population is any theoretically specified aggregation of items,

elements or things with common characteristics or interest.

The population of the study is 27 members of the management and

staff of AMUL. it cores all the departments of sales and marketing, the

purchase and supply department, the administration and personnel

department and the finance and accounts department. All the is staff of

these departments are further grouped into two groups namely;

management staff and Non management staff.

The management staff comprises of administration and personnel

department, and the finance and accounts departments. While the Non-

management staff comprises of the sales and marketing department, and

purchasing and supply department.

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INSTRUMENT FOR DATA COLLECTION

Owing to the departments collared by this study, a questionnaire

was designed for data collection and analysis. Data was also collected

through relevant journals, oral interviews, textbooks, and literature from

authors.

QUESTIONNAIRES ADMINISTRATION

The questionnaires used for the study was made up of 10 questions.

It was mainly designed in such a way that alternative answers were

produced for the respondents.

Random method was used for the distribution of the questionnaires

to the respondents.

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SUMMARY, CONCLUSION AND RECOMMENDATIONS

SUMMARY AND DISCUSSION OF FINDINGS

With particular reference to the organization under study as well as

the literature review, the research are summarize and discussed as

follows:

1. Ration analysis facilitates proper understanding of information

continued in financial statements and aids business decisions. “financial

statements carry lots of financial statements become more useful when

they are related each other or to some other relevant financial data by

means of rations.”

2. despite the obstacles to the proper use of financial ratios, there are

helpful suggestions on ways to enhance efficient use of ratio analysis in

decision-making.. Analysis have to be careful not to apply the techniques

blindly to any set of statements they come across, due to differences in

business and accounting methods.

Percentages and rations are guides to aid comparison and useful in

uncovering potential strengths and weaknesses. However, the financial

analysis should seek the basic causes behind and established trends”.

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RECOMMENDATIONS

With reference to the findings of the study, the researcher

recommends the following:

1. Users of financial statements need to have at least, a fair

knowledge of accounting so as to enable then understand and appreciate

accounting information.

2. Prospective investors should properly analyze the financial

statements of companies before deciding to invest in the companies.

3. Users of financial statement who are not knowledgeable enough to

analyze or understand the information contained in them should seek the

services of qualified financial analysts, accountants, stockbrokers,

bankers, etc.

4. In view of the remarkable influence which accounting informations

have on the decisions of the users, it is pertinent that only qualified and

honest persons should and audit financial statements.

5. Financial rations should be used with careful examination and

proper understanding of the meaning, implication and effect of the actual

figures shown in financial statements, in order to avoid making wrong

judgments, conclusions and decision.

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CONCLUSION

Financial statements contain lots of information summarized in

figures. Viewed on the surface, they do not provide enough information

about the viability of the reporting entity. Thus, they need to be analyzed

by means of financial ratios to unravel the mass of truth hidden in them,

and to enhance decision-making.

Ratio analysis helps to reveal, compare and interpret salient

features of financial statements. When applied to a set of financial

statements, financial ratios highlight significant aspects of the financial

position and operational results of a business requiring further

investigation. They help to identify the strengths and weaknesses of a

business.

In fact, ratio analysis helps to evaluate the past performance, the present condition, and the future prospects of a business. It enables us to ask the right questions about a business, and paves way to finding the useful answers. Such analysis therefore, aids planning, control, forecasting and decision- making.

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Executive summary

It is necessary to principal knowledge before doing any work

because of today’s competition world.

For the practical knowledge I have taken visit in KAIRA DISTRICT CO OPERATIVE SOCIETY MILK PRODUCERS UNION LIMITED , ANAND.

Mainly in the report the focus is on the financial department and general information relating to the organization. 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 company status in the market right now. And my topic is the financial statement analysis and then some information was provided to me by them and guidance to properly complete my works.

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INTRODUCTION OF THE ORGANIZATION

Name of Unit:KAIRA DISTRICT CO-OPERATIVE MILK PRODUCER’S UNION LTD. (AMUL).Anand-388001Gujarat, India.

Location : Kaira District Co-operative Milk Producers' Union Ltd Amul Dairy Road Anand. – 388 001.

Phone:+91 – 02692 – 256124+91 – 02692 – 256225

Nature of the company:By nature the company is registered as “Co-Operative Union Ltd.” Sector and under a “Co-Operative” Societies act,14th December 1946.

PROMOTERS: Shri Tribubvandas K. Patel

Shri Sardar Vallabhhbai Patel

Shri Morarjibhai Desai

Dr Vargnese Kurian

Dr H.M. DalayaOffice

TIME:- 10:00 am to 06:00 pm

Slogan/Punch line:“THE TASTE OF INDIA”

Website:www.amul.comwww.amuldairy.org 

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The Jingle:Utterly, butterly delicious……..AMULName of the company:KAIRA DISTRICT CO-OPERATIVE MILK PRODUCER’S UNIONLTD. (AMUL)

Chairman of company:Dr. Verghese Kurien

Chief financial officer:Rakesh Shukla

Meaning:

The relationship between two related items of financial statement is known as Ratio. It’s mathematical yardsticks that measures the relationship between two figures.

Ratio analysis is a process of comparison of one figure against another and the interpretation of the ratios to know the strengths and weakness of the firms operations and of its financial positions.

BANKERS OF AMUL

(1)Kaira district Central Co-operative Bank Limited( 2 ) S t a t e   B a n k   o f   I n d i a( 3 ) B a n k   o f   B a r o d a(4)B a n k o f M a h a r a s h t r a( 5 ) H D F C   B a n k   L i m i t e d( 6 ) C o r p o r a t i o n   B a n k(7)A x i s B a n k  

LOGO OF THE AMUL

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Logo of AMUL is a ring of four hands, which are co-coordinated each o the r .  

The   ac tua l  mean ing  o f   t h i s   symbo l   i s   co -o rd ina t i on  o f   hand  o f   different people by whom this union is now at top.

FIRST HAND: Is for farmers (producers), without whom the organization would not be existed. Farmers are the inspiration of the AMUL-taste of  India.

SECOND HAND: Is for the representatives of processors by whom the raw milk processed in to different finished products.

THIRD HAND: Is for marketers without whom the products would not been able to reach to the customers.

FOURTH HAND: Is for customers without whom the organization could not carry on because they are the people who consume the products.

ORGANIZATION BRIEF HISTORY

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A Former is Kaira district as elsewhere in India, deprived his

income almost entirely farm seasonal crops. The income from milk was

poultry and could not been depended upon. The main buyers were milk

traders of Polson Ltd. privately owned company that enjoyed monopoly

for supply of milk from Kaira to the Govt. Milk Scheme Bombay.

Farmer of Kaira district were thus at the Marcy of milk traders

with dictated the process they had nowhere to turn to this unfair system

spread widespread discontent . The farmers appeal to Shri Sardar Patel

great leader of India’s freedom movement for help Shri Sardar Patel

advised them to market the milk through a co-operative of their own. He

sent his trusted deputy Shri Morarji Desai to organise the farmers at a

meeting held Samarkha Village on January 4,1946, it was resolved that

milk co-operative society would be organised in each village of Kaira

district to collect milk from the producers and federation in to a district

union. The govt. should be asked to buy milk from the union.

When the govt. turned down the demand Kaira farmers

organised a milk strike from 15 days not a single drop of milk was sold to

the traders. The Bombay milk scheme was badly visited Anand assessed

the situated and decided to concede to the farmer’s demand.

Thus, The Kaira district co-operative milk producers union

Ltd. And came into existence. It was formally registered n December

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14,1946 in the beginning there were only few farmers supplying about

250 litres. of milk in a day. Soon the no. increased and the Bombay milk

scheme hence the customers were forces to sell the surplus milk to traders

at very few.

A plant to manufacture balanced cattle feed donated by one

foam was formally commissioned on October 31,1934 by Shri Lal

Bahadur Shastri the P.M of India. The dairy was declare open by Shri

Morarji Desai in April 1965. In 1974 the Kaira Union set up a plant to

manufacture high protein weaning food, chocolates and melted foods at

Mogar about 8 k.m. south of Anad.

MISSION OF AMUL

1. The main mission of Amul is to help farmers. Farmers were the

foundation stone of Amul The system is work only for farmers and for

consumers not for profit.

2. The main aim of Amul is to provide quality product to the consumers

at minimum cost.

3. The goal of Amul is to provide maximum profit in term of money to

the farmers.

VISION OF AMUL

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1. Vision of Amul was to provide and vanish the problems of farmers of

their livelihood.

2. AMUL’s apparition was to run the organization with the co-operative

of four hands which are the farmers, the representative, the marketers, the

customers.

Future Plans

1. Expansion distribution network, Creative, Marketing, Consumer,

Education and Product innovations, we will Leverage effective on

raising income level and growing affluences among Indian consumers.

. 2. Tapping the rising demand for new value added products.

ORGANIZATION STRUCTURE

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Amul is a biggest dairy in the Asia he is taken a steps innovative to

go ahead more and more. Amul dairy’s main work is to producing a milk

product in his work he is taken a step. He is organizing a wide and

innovative organization structure. Amul dairy’s employ are creative and

qualified to improve working condition and productivity and efficiency.

In his above organizational structure can be divided upon top level

executive to middle level executive. It is structure made by top to bottom

level authority can be divided by same power. It is empowering to taken a

decision by authority level .in his structure divided to 17 officers on same

post but given to a different authority and responsibility to a person. In

his structure called vertical organization structure and decision taken by

his formal type its decision is mutually exclusive decision can be made.

In organizational structure taken a decision are a accurate and

efficient he is taken decision based on cycle board of director to workers

and he is top level to bottom level of position can be work on level of

position of a employs and he is accurately. All decision taken by can be

approved higher authority and decision can be apply.

ORGANIZATION STRUCTURE

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B.O.D

Chairman

Vice Chairman

Managing Director 

General Manager (Dairy Plant & Technology)

Assistant General Manager 

Manager 

Deputy Manager 

Assistant Manager 

Superintendent

Deputy Superintendent

Senior Officer 

Assistant

Junior Assistant

Workers

NATURE 

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The name Amul itself indicates that it is a co-operative union. There are various types of co-operative society which are as under:

(1) Producers or manufactures co-operative society (2) Consumer co operative society (3) Housing co-operative society (4) co-operative farming (5) co-operative credit

solvency this firm is the firm of association in which person combine together to form a society for the purpose of manufacturing Goods.

  Although it  is democratic management of industrial production. This is useful where large capital is neither necessary nor much technical and expert knowledge of the management is needed. In India some of the Sugar mill and ginning mills are running under this formation. Dairies are also adopting co-operating format. Amul is the producers' co-operative society.

COMPETITORS

Competitors are the person who produce and sales the same product as produced by the unit. Competitors affect the business with several causes. The main rivals of AMUL are as following

Rich Milk  Sardar milk   Nestle Britannia Cheese of Le-Beon Gowardhan

PLANTS LOCATION

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In amul dairy mainly four plant in Gujarat first in anand second

khatraj plant third Mogar plant and fourth kanjary plant. In four plant

main handling can be handle by amul anand.

1. Anand plant:

In anand amul can producing cheese, butter and milk

powder. In his plant all four plants handling can be made here. He is big

plant from amul dairy

2. Khatraj plant:

In amul khatraj plant called satellite dairy and this plant can

be producing amul cheese and paneer

3. Mogar plant:

In amul third plant is called bal plant this amul plant

producing amul chocolate, pro powder,backery product,paneer.

4. Kanjary plant:

In amul fourth plant is called amul dan and this plant

producing a amul dan.

In Amul dairy mainly launches a new product is based on new

innovative idea can be created by to mutually agreed to what to do and

made by him. In new product development to idea screening, idea

generation, product development it is just like necessary to implement

and recovered a new product development manly.

GEOGRAPHICAL SPREAD OF FACILITIES

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The employees are prime assets of any Union AMUL DAIRY is

greatest assets is its resources of skilled and talented human resources. To

improve efficiency and effectively of employees the addition facility

provided to employees so they can do work with efficiency and zeal.

AMUL DAIRY is one of the largest and popular unions for

providing more facility to employees facility provided by AMUL DAIRY

are follow:

1. Uniform: amul providing a employs to a uniform to wearing during a

working hours and providing a safety shoes and cap for safety purposes.

2. Medical facility: AMUL providing a medical facility to a employs and

his family. Amul providing medical facility to farmers

3. Quarter facility: amul providing a quarter facility to a employs for

resident purposes.

4. Leave facility: amul providing a leave facility toa employ to spend a

time for family and his child and others like C.L, P.L

5. Canteen facility: AMUL providing a canteen facility to a employ and

his training student like employs Rs 7 and training student Rs 10

6. Accident benefit scheme: amul providing to a employ accident benefit

scheme to injury during accident like accident insurance

7. Guest house facility: amul providing a guest house facility to a main

visited guest for reputation purposes.

8. Loan facility: amul providing a loan facility to a employ for personal

reason like student education and purchasing asset.

FUNCTIONAL AREAS

AMUL Page 40

MARKETS AND MARKETING FUNCTION

Marketing department plays an imp. role in business for

accomplishment of certain goals the product which are produced in the

company how they are distributed to market. This is central function if

organization can not running business successfully without a proper mkt.

department. Today world is very competitive world.

According to knot market is not a main particular in which

things are bought and sold but whole of any reasons which buyers and

sellers are in such type in to cost with work one another that the price of

the same goods tends to equality is easily & quickly. Marketing is a link

between the producers & ultimate consumers.

Convert moving the products & services to find

consumers & users & satisfy such needs & wants of specific consumers

segment with the emphasis of probability ensuring the optimum uses of

the services available to the organisation.4

Sales Promotions

Sales promotion is one type of interact port of the marketing.

In takes place as a very important food in the competition present age is

an age of competition. We can see competition in call market.

The American marketing association defined sales promotion as

sales promotion consist of these activates that are design to bring a

company’s goods & services to the favorable attention of customers.

The AMUL DAIRY is producing a wide range of products. Its

product have been popular in the customer’s mind. All the products of the

AMUL Page 41

dairy are sold by GUJARAT CO-OPERATIVE MILK MARKETING

FEDERATION, ANAND.

Distribution Channel

Its play a very important role in advertising the market

objective of the company. The time & place utilities of product as

services in great by distribution channel. As a main element of marketing

mix. Its functions are to find out appropriate any through which goods are

to find out appropriate any through which goods are to be made available

to the market.

Distribution channel are as follows:

1. Channels without middleman – Direct sales

2. Channel with one middleman – through agents and retailers

3. Channel with two middleman – through wholesaler and retailers

4. Channel with three middleman – through wholesale

There are 37 branches of the federation in all over country and distribute

its product through them.

Advertising

There are two type of advertising

AMUL Page 42

1. Intermiative advertising

2. Money qualities’ advertising

An intermative advertisement is generally needed a

new product. Introduce in the market such advertisement are as aim at

informally the potential customers about the product, its qualities money

qualities’ advertisement is aimed to create psychological performance in

devour of the product being advertise. In both all case advertisement is

basically on instrument to create demand for the product “AMUL

DAIRY” is closely associated with the Gujarat co operative milk

marketing federation, Anand. So all marketing are done through the

above federation. So the marketing department of this dairy does not pay

any special action for this activities.

PRODUCTION/OPERATION FUNCTION

How to produce the things? How to decrease the cost of things?

How to decrease the cost of production? Means Manufacture. This matter

are important from this point we say that manufacturing process is very

important part in production process. Production is a part of the business

activities. Any business concerned with the creation of the product

require to satisfy consumers wants.

AMUL DAIRY’S production is increase by day to day. Amongst the milk

product is 32.45 cr. k.g. of powder made

milk powder, amulya, whole milk powder respectively. Moreover 11045

M.T. butter, 1250 M.T. ghee produced during this year.

Raw milk receiving on the dock

It is big open area dock where produced raw milk from the

various societies is being received by the way of tankers and cans. The

AMUL Page 43

cans are emptied in the milk tanks by the way of best system and

therefore the cans are washed in the automatic washer machine. The

average no. of cans washed per minutes are 5 to 6. Before dis filling the

cans one taken and sent to the laboratory where they are graded in the

terms of fate and SNF. Once the milk is collected in the tank the next

process will start to separate fate and SNF from the milk each will be

stored separately in tanks. So this process is continues.

Refrigeration plant

This plant is very good plant in this plant. Water is kept at 0

temp. and it is to keep butter and milk in cold storage. This plant is a

capacity of 400 N.T.

For storage there are 12 tanks in this plant. After passing

the milk and through pasteurised cream and milk storage tank. It is

spending to be stainless still and inflated tank for storage. This plants

capacity is 15000 liters each tank for storage.

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Milk product section

The first department is of milk product section. The milk is the

nutritive food. It means conversion of raw milk in to packing raw of the

village. After collection raw milk it is sent in to driller this chiller makes

cold than it is pured in to storage, after that it passes tanks to pesturide. In

pasteurized milk is hold. Slowly up to high temperature. Milk is heated to

destroy bactaria in raw milk than it is chilled up to 5 second. This milk

sent in to and it can be presented, than it is packed in to pouches after

than 500 ml milk packing is done.

Butter production section – 1

In this plant butter is made when pasteurised milk is at 50. It is

send to cream separator in cream. This cream is sent to cream pasteurised.

This cream butter is extracted and all this collected butter. They are

making two kinds of butter white butter and table butter.

Butter production section – 2

In this second butter section yellow butter is made by butter

charges from pesturised cream. Its capacity is 12 M.T. per day. It is a

used as table butter.

Butter packing section

When the butter is made then all the butter goes to butter

packing section. There the packet at weighted 100 g.m. and 500 g.m.

packed by machine and the capacity of this plant to packing butter is 200

M.T per day.

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Other product

Milk is fundamental products of this co operative society.

They are making types of milk powder whole and skimmed.

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SUPPLY CHAIN AND LOGISTICS

AMUL’s network are strongly driven by the objective of

establishing and operating an efficient supply chain from milk production

and procurement to product delivery to customers. Management of this

network is built around two key elements – (a) coordination of the diverse

elements of the network and (b) use of appropriate technology that

includes product, process and information technology and managerial

practices and systems. In what follows, we describe various features of

these elements that have contributed to the evolution of an efficient

supply chain.

Coordination for Competitiveness

Robust coordination is one of the key reasons for the success of

operations involving such an extensive network of producers and

distributors at GCMMF. Some interesting mechanisms exist for

coordinating the supply chain at GCMMF. These range from ensuring

fair share allocation of benefits to various stakeholders in the chain to

coordinated planning of production and distribution. More importantly,

the reason for setting up of this cooperative is not amiss to any one in

this large network organization. Employees, third part service providers,

and distributors are constantly reminded that they work for the farmers

and the entire network strives to provide the best returns to the farmers,

the real owners of the cooperative. It may be remembered that

coordination mechanisms have to link the lives and activities of 2.12

million small suppliers and 0.5 million retailers!

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There appear to be two critical mechanisms of coordination that

ensure that decision making is coherent and that the farmers gain the

most from this effort. These mechanisms are:

• Inter-locking Control

• Coordination Agency: Unique Role of Federation

Inter-locking Control

Each Village Society elects a chairperson and a secretary from

amongst its member farmers of good standing to manage the

administration of the VS. Nine of these chairpersons (from amongst

those VS affiliated to a Union) are elected to form the Board of Directors

of the Union. The Chairperson of the Union Board is elected from

amongst these members. The managing director of the Union,

who is a professional manager, reports to the chairperson and the board.

All chairpersons of all the Unions form the Board of Directors of

GCMMF. The managing director of GCMMF reports to its Board of

Directors. Each individual organization, the Union or GCMMF, is run by

professional managers and highly trained staff. It must be pointed that all

members of all the boards in the chain are farmers who pour milk each

day in their respective Village Societies.

A key reason for developing such an inter-locking control

mechanism is to ensure that the interest of the farmer is always kept at the

top of the agenda through its representatives who constitute the Boards of

different entities that comprise the supply chain. This form of direct

representation also ensures that professional managers and farmers work

together as a team to strengthen the cooperative25. This helps in

AMUL Page 48

coordinating decisions across different entities as well as speeding both

the flow of information to the respective constituents and decisions.

Coordination Agency: Unique Role of the Federation

In addition to being the marketing and distribution arm of the

Unions, GCMMF plays the role of a coordinator to the entire network

within the State – coordinating procurement requirements with other

Federations (in other states), determining the best production

allocation for its product mix from amongst its Unions, managing inter-

dairy movements, etc. It works with two very clear objectives: to ensure

that all milk that the farmers produce gets sold in the market either as

milk or as value added products and to ensure that milk is made available

to an increasingly large sections of the society at affordable prices. In

addition, it has to plan its production at different Unions in such a way

that market requirement matches with unique strengths of each Union and

that each of them also gets a fair return on its capacity. In this regard,

GCMMF follows an interesting strategy. GCMMF, in consultation with

all the Unions, decides on the product mix at each Union location. Some

considerations that govern this choice are the strengths of each Union, the

demand for various products in its region as well as the country, long

term strategy of each Union, procurement volumes at different Unions,

distribution costs from various locations etc.

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Technology for Effectiveness

Service to customers required the following: better and newer

“products”, “processes” that would deliver the low cost advantage to the

network and “practices” that would ensure high productivity and delivery

of the right product at the right time. Thus technology or knowledge that

was embodied in products, processes, and practices became an important

factor in delivering effectiveness to the network of cooperatives. One

distinguishing feature of AMUL (in comparison with other similar

cooperatives globally) is the large variety in their product mix. Producing

them not only requires diverse skills but also knowledge of different

types of processes. AMUL dairy led the way in developing many of these

products and establishing the processes for other member Unions.

Equally impressive are the achievements on process technology.

While several continuous innovations to equipment and processes have

been done at AMUL, the most significant one has been the development

of processes for using buffalo milk to produce a variety of end products.

Gujarat (and most of India) is a buffalo predominant area. As more

farmers joined the cooperatives, the need to develop a mechanism for

storage of increasing quantities of milk became intense. Moreover, the

cooperative was established on the promise that it would buy any quantity

of milk that a member farmer wanted to sell. The need to store milk in

powder form increases as excess milk quantities in winter seasons could

then be used in lean summer seasons. Moreover, demand for liquid milk

was not growing along with growth in milk production. No technology,

however, existed worldwide to produce powder from buffalo milk.

Engineers at AMUL successfully developed a commercially viable

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process for the same – first time in the history of global diary industry.

Subsequently, it also developed a process for making baby food out of

this milk powder. It has also developed a unique process for making good

quality cheese out of buffalo milk thereby converting a perceived

liability into a source of comparative advantage – the task was done

through process technology research. Most of its plants are state of art

and automated. Similar efforts in the area of “embryo transfer

technology” have helped create a high yield breed of cattle in the country.

AMUL’s innovations in the areas of energy conservation and recovery

have also contributed to reduction in cost of its operations. AMUL also

indigenously developed a low cost process for providing long shelf life to

many of its perishable products.

TQM at the grassroots has been a strong movement to

develop leadership, operational and strategic capabilities in the entire

network – farmers, village cooperatives, dairy plants, distributors and

wholesalers and retailers. Key elements of this TQM movement have

been:

• Friday Departmental Meetings: Each Friday, at a prescribed time, every

one in the network (from the farmers to the carry & forwarding agents)

joins their respective departmental meeting to discuss quality initiatives

and share policy related information.

• Training for Transformational Leadership so that individuals are able to

control their thoughts, feelings and behavior and take more responsibility

in one’s life and surrounding environment.

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• Application of Hoshin Kanri principles to bring about a bottom-up

setting of objectives – aligning policies for effective management of

Unions & village societies on hand with those of channel member on the

other hand. ISO/HACCP certification was obtained for all the Unions and

each village society is in the process of obtaining the same.

• Training for farmers and their families emphasizing the need for good

health care for not only cattle during its pregnancy and feeding but also

for expecting and feeding mothers and the whole family. This effort has

brought about a significant social change towards such issues in villages

that have cooperative milk societies.

• Retail Census: GCMMF undertakes a census of all retail outlets (over

500,000) to evaluate customer perceptions and distribution efficacy of

their network. Interestingly, this is being done by wholesalers in their

respective territories at their own cost. This information is used for policy

deployment exercise.

The extent of IT usage includes a B2C ordering portal, an ERP

based supply chain planning system for the flow of material in the

network, a net based dairy kiosk at some village societies (for

dissemination of dairy related information), automated milk collection

stations at village societies and a GIS based data network connecting

villages societies to markets. Milk collection information at more than

10,000 villages is available to all dairies (or Unions) to enable them make

faster decisions in terms of production & distribution planning, and

disease control in more than 6,700,000 animals. Similarly, this is linked

with information at all 45 distribution offices and 3900 distributors. This

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network is being extended to cover all related field offices in the network.

The GCMMF cyber store delivers AMUL products at the doorsteps

of the consumers in 125 cities across the country. What is remarkable

about the above is implementation of very contemporary practices in rural

areas where both education and infrastructure are generally low. One of

the key sources of competitive advantage has been the ability of the

cooperative to continuously implement good practices across all elements

of the network – the federation, unions, village societies and the

distribution channel. Whether it is implementation of small group

activities or quality circles at the

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HUMAN RESOURCE MANAGEMENT FUNCTION

Human Resource Department are essential part of today.In

all work related to company can be maintained by H.R.D. In Human

Resource mainly recruitment, selection, and performance appraisal are

component of HR.

In HR department Sr. officer has to see that all the sub

department order him function properly. He has to take reports from

them times he has to see that all the department in the organization work

smoothly and co-ordinately. It is his duty to ensure the good relation

between the organisation and its employees. In this chart we show that all

the persons have authorised and responsibility to his post and

qualification.

FUNCTION OF HRD

Some information related to the persons department of

AMUL DAIRY are as under:

1. Recruitment and Selection

2. transfer

3. job description

4. salary

5. promotion

6. training

7. demotion

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RECRUITMENT

The recruitment process is mainly connected with over all man

power system. This definition shows the importance of the recruitment

policy of the unit. Recruitment is very important function even for the

establishment of the business. Recruitment is the positive process of

employment. In AMUL DAIRY it has adopted both the sources of

recruitment if any section of department has surplus of employee then the

using internal sources if recruitment.

Sources of Recruitment:

1. Internal

2. 2. External

SELECTIONS

Selection is the process where the mgt. decides certain

terms and conditions to adhere to standards on the basis of which

discrimination between qualified and unqualified candidates can be

made. A sound selection policy will ensure the selection of the

suitable candidate selection is the process.

Selection process:

1. Application

2. Interviews

3. Physical examination

4. Final selection

5. Placement

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SALARY/ WAGES

In AMUL DAIRY Wage and Salary of the employee are

determined according to rules and regulation of Govt and payment of

salary is Made on Monthly basis payment of every Month. Also for the

extra Work they are paying certain type of allowances. Such as leave,

travelling, Medical, house Rent allowances. In AMUL DAREY Salaries

are paid according to the Motivate Job and Bonus. So AMUL DAIRY

Total Salary paid in 2011-12 is 25,18,81,000 Salary and Wages.

TRAINING AND DEVELOPMENT

Industrial visit has reached a stage of development

where it can not be challenged. Training is one of the effective instrument

which help reduce wastages of resources improve quality of the product

and lessor possibility of accident in the company. In AMUL DAIRY

there is no separate department for training mostly them adopting on the

job training method.

DEVELOPMENTS

The executive development planned systematic and

continuous process of learning and growth designed to induce

behavioural change in individuals by cultivating their method abilities

and interests qualifies through the acquisition understanding and use of

new knowledge in sight and skill as they are needed for are effective

performance.

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FINANCE FUNCTION

Finance is a prime factor in all economic activities. It is the life of

blood. One may not think progress & property without finance it is not to

impossible to margin that may carry on without sufficient financial help

finance means proper source, proper requirement , proper interest and

proper time. Thus, for effective mgt. there must be a sound finance

department.

This is know that finance is an essential part of every industrial

unit and without finance to run the business is not possible. So the

powerful financial department must be in the unit which may regulate the

financial of the unit, which may project accounts, profit & loss, balance

sheet, journal etc. At the end of the year and so as per my report is

concern “ AMUL DAIRY” has a effective and efficient finance

department. Some information about “ AMUL DAIRY’S” . Finance

department may be given as below:

OBJECTIVES:

The main objectives of finance department are as under:

1. To develop long term corporate plan to provide adequate growth

activity of the corporation.

2. To ensure maximum economy

3. Continue the make and afford in decline a cost of production

4. To generate sufficient internal resources

AMUL Page 57

LONG TERM & SHORT TERM FINANCIAL MGT

1. Share Value

In ‘AMUL DAIRY’ all share are can be given to the farmers

and milk producers. It is a Real share holder of AMUL neither other

persons can be owner of share.

In Debenture are long term fund can be issued by AMUL. In his

debenture interest rate and present rate can be make by him in present

rate is 8.5%.

AMUL DAIRY are taken a Bank loan for investment in a company.

Mainly AMUL DAIRY taken a loan from the Kaira district central co

operative bank ltd. In his loan base rate can be cut by bank. It is declared

by RBI.

In AMUL are can be invested in fixed deposits like

deposits due to societies etc. around 80 crores.

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WORKING CAPITAL MANAGEMENT

1. Operating Cycle

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Sources of Working Capital

1. Gross working capital

2. Net working capital

AMUL DAIRY are a financial company. In a many Accounting

policy AMUL are used a Mercantile Accounting Policy for daily maintain

accounts.

Budgetary control system

In budget mainly two types :

1. Revenue budget

In revenue budget mainly company’s daily expenses and incomes can

be included e.g. employees salary, stationary etc.

2. Capital budget

In capital budget mainly expenses are created capital. For e.g.

milk transportation

Three tires process

AMUL can be adopted three types of process:

1. Milk producer/ farmer

2. Village co operative society

3. AMUL

In AMUL can be adopted a monthly and yearly budget period.

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DECISION MAKING

4.1 DECISION MAKING AT AMUL

The above table explains about the decision making of Amul.

chairman and board of directors take decisions at Amul's General meeting.

Managing directors, chairman, vice-chairman, board of directors takes all

good and bad decisions about the firms production, transportation,

warehousing, sales etc...Middle management like deputy manager, Assistant

manager, superidentant, deputy superidentant, senior officer take decisions

at their limit and all decisions passed on top management and take decisions.

lower level management like assistant, junior assistant and A to G grade

employees take small decisions like machine ,food, conflict between

employees complaint to the top and middle management and solve the

problem every month there will be one meeting or paternal

meeting .Decisions at Amul are taken formally.

In this above authority are work under step by step order to

fulfilling power and position of a company on top to bottom level complete

line to line order wise. Chart of decision making of AMUL DAIRY is put in

annexure.

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FINANCIAL ANALYSIS

(5.1) COSTING OF PRODUCT

PARTICULARS( Amt. in Lacs )

2009-10 2010-11 2011-12 2012-13

Opening Stock of raw material 415.92 527.77 289.37 116.22

Add : Milk Purchase 111402.36 144763.65 159452.14 201445.06

Add: Raw Material Purchase including direct expense 26967.26 28151.9 57527.08 54312.9

Add: Oil Purchases 0 1123.63 0 0

Less: Closing Stock of raw material -527.77 -289.37 -74.21 -234.09

DIRECT MATERIALS CINSUMED

138257.77 174277.58 217194.38 201327.19

Add: Direct Labour/ wages 0 0 0 0

Add: Other direct expense 0 0 0 0

PRIME COST 138257.77 174277.58 217194.38 255640.09

Factory overhead/work overhead      

Add: Research and Extension expense 1423.57 744.39 761.18 504.78

Add: Processing Expenses 2912.69 3623.2 3260.62 6827.76

Add: Packaging Expenses 10946.73 12935.08 13813.88 17609.40

Add: Power and fuel Expenses (60% ) 2942.51 3431.49 4340.24 5913.83

Add: Salaries and wages (60%) 1183.73 1591.16 1511.29 1672.8

Add: Staff PF gratuity & other amenities (60%) 779.72 485.15 640.96 530.88

Add: Repair and Maintenance expenses (60%) 819.67 946.21 1284.07 1323.17

Add: Insurance Premium (60%) 27.77 30.44 60.24 74.86

Add: Rent, Rates, And Taxes (60%) 80.08 77.51 101.03 329.37

Add: Total Deprecation (60%) 672.85 968.78 1135.03 1355.72

Add: Opening stock of WIP 2539.55 3709.92 2618.92 4500.80

Less : Closing stock of WIP -3709.66 -2618.92 -4500.8 -8472.66

FACTORY COST 158876.98 200201.73 242221.04 287810.8

Administration overheads / expense      

Add: Audit fee 162.65 178.67 201.19 198.35

Add: Administrative expenses 255.16 355.79 266.85 484.49

Add :Postage, Telegram, Telephone, printing, and

Stationary exp.

59.39 64.93 106.24 92.85

AMUL Page 62

Add: Power and fuel Expenses (40% ) 1961.67 2287.66 2893.49 3942.55

Add: Salaries and wages (40%) 789.15 1060.78 1007.52 1115.2

Add: Staff PF gratuity & other amenities (40%) 519.82 323.43 427.31 353.92

Add: Repair and Maintenance expenses (40%) 546.44 630.8 856.05 882.11

Add: Insurance Premium (40%) 18.52 20.29 40.16 49.91

Add: Rent, Rates, And Taxes (40%) 53.39 51.68 67.35 219.58

Add: Total Deprecation (40%) 448.56 645.85 756.69 903.82

COST OF PRODUCTION / OFFICE COST :

     

163691.73 205821.61 248843.89 296053.58

Add: Opening stock of Finished Goods:      

Finished Goods stock 12583.97 11121.03 9356.68 15348.12

Stock in Transit 791.41 0 134.9 33.43

Parlour Stock 3.65 3.94 4.45 8.58

Less: Closing stock of Finnish Good :      

Finished goods stock -11121.03 -9356.68 -15348.12 -28086.05

Stock in Transit 0 -134.9 -33.43 -210.57

Parlour stock -3.94 -4.45 -8.58 -6.32

COST OF PRODUCTION OF GOODS SOLD:

     

165945.79 207450.55 242949.79 283140.77

Selling and Distribution expenses:  

   

Add: Freight and Forwarding expenses 1807.78 1839.47 818.34 1016.89

Add: Marketing expenses 136.06 149.36 106.45 119.22

COST OF PRODUCTION 1677889.63 209439.38 243874.58 284276.88

Add: PROFIT as per costing

1049.1 1203.03 2760.12 722.12

SALES 168938.73 210642.68 246634.7 284999

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In above are costing of a product is important part of studing a

costing of a main product it is specifically note a all expenditure of company

and all income of a company separately to basically. It is a one type of task

to denoted from individually. In this costing profit of a company and sales of

company can be calculated separately.

. In year 2011-12 total profit of a company is 2760.12 and total

sales of a company are 246634.7. In comparison to other year 2011-12 total

sales and profit is high compared to other year. In his position company are

profitable. It is a good situation of a company. Amul dairy’s marketing

expense total is 243874.58

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COMPERATIVE ANALYSIS

The  mos t   impor t an t   t a sk  o f   a   f i nanc i a l  manage r   i s   t o   i n t e rp r e t . The financial information in such a manner, that it can be well understood by the people, who are not well versed in financial information figures. The technique, by which it is to be calculated, is known as ‘Ratio Analysis’.

1) Percentage 2) Rate 3) Proportion

Ratio Analysis is an important technique of financial analysis. It depicts the efficiency or shortfall of the organization in the form of trend Analysis.

Different ratio appeal to different people managements, having the task of running business efficiency, will interest in all ratios.

A Supplier of goods on credit will be partially interested in liquidity ratios, which indicate the ability of the business to pay its bills.

Existing and future share holders will indicate the ability of business to purchase.

Existing and future share holders will interest in investment ratios, which indicate the level of return that can be expected on an investment in business.

Major customers, intent on having a continuing source of supply, will be interested in the financial stability, as reveled by the capital structure, liquidity and profitability ratios.

Deben tu re   and   l oan   s t ock  ho lde r s  w i l l   be   i n t e r e s t ed   i n  Ab i l i t y   o f   a  business will be interested in the ability of a business to pay interest, and ultimately to repay capital.

A  banke r ,   g iv ing  on ly   sho r t t e rm   loans ,  w i l l   be i n t e r e s t ed  ma in ly   i n   t he liquidity of the business, and its ability to repay those loans.

AMUL Page 65

STEPS IN RATIO ANALYSIS

Collection of information,  which are relevant from the financial statements and then to calculate different ratios accordingly.

Comparison of computed ratios of the same organization or with the industry ratios.

Interpretation, drawing of the inference and report-writing.

RATIO ANALYSIS

Ratio analyses are a powerful tool of financial analysis. A ratio is defined as “the indicated quotient of two mathematical expressions” and as “the relationship between two or more things”. In financial analysis a ratio is used as a benchmark for evaluating the financial position and performance of a firm.

 The relationship between two accounting figures expressed mathematically, is known as a financial ratio.

AMUL Page 66

RATIO SUMMARY

P a r t i c u l a r 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-13

G r o s s P r o f i t G.P.=""""""""×100 Net Sale

10.80% 8 . 9 1 % 8 . 6 3 % 7 . 4 0 % 10.96% 7 . 8 4 % 7 . 7 3 %

N e t P r o f i t N.P.""""""""×100Net Sale

0 . 5 0 % 0 . 4 2 % 0 . 4 2 % 0 . 4 4 % 0 . 4 8 % 0 . 4 3 % 0 . 2 5 %

C u r r e n t R a t i o C.A.= """""""" C.L.

1 . 7 4 : 1 2 .14 :1 1 .66 :1 1 . 3 9 : 1 1 . 1 1 : 1 1 .19 :1 1 . 2 4 : 1

L i q u i d R a t i o =Liquid Asset""""""""""""""Liquid Liabil.

0 . 9 5 : 1 0 .98 :1 0 .55 :1 0 . 7 6 : 1 0 . 8 0 : 1 0 .72 :1 0 . 7 3 : 1

Operating Ratio =COGS+Op.Exp"""""""""""""""×100 Net Sale

99.15% 9 2 % 1 0 0 % 1 0 1 % 105.5% 99.86% 100.05%

Ac id Tes t Ra t i o Quick Asset="""""""""""""""" Quick Liability

1 . 1 9 : 1 1 .49 :1 1 .37 :1 1 . 3 9 : 1 1 . 0 4 : 1 0 .95 :1 1 . 5 3 : 1

P r o p e r i t o r R a t i o Sh. holder Fund= """""'"'""'"''''''"'" Total Assets

1 . 7 4 1 . 2 7 1 . 2 5 0 . 8 3 0 . 8 7 0 . 7 1 0 . 6 4

Debt. Equity Ratio Debt.( Long)= """""""'"'' Equity

0 . 0 8 0 . 2 6 0 . 1 6 0 . 2 4 0 . 0 8 0 . 2 5 0 . 6 8

Return on Capital Employed = EBIT=""""""""""""""x 100 Capital Employed

2 . 5 6 % 2 . 8 6 % 4 . 0 2 % 4 . 9 8 % 5 . 9 0 % 7 . 5 2 % 6 %

AMUL Page 67

Interest CoverageRatio EBIT= """'"'"'"'""" Interest

1 . 6 0 1 . 5 7 1.61:1 1 . 7 9 1.73:1 2.42:1 1.34:1

Fixed Asset T.overRatio Sales= """'"'"""'""'" Fixed Assets

15.20 17.51 19.92 12.03 13.84 15.58 14.38

CapitalT.over Ratio Sales= "'"'"''"'''"""''"""""" Capital Employed

1 . 8 4 2 . 4 0 3 . 0 6 3 . 7 5 4 . 6 0 5 . 3 0 6 . 0 4

Stock T.over Ratio COGS= ""'""''''''""' Avg. Stock

9 . 7 5 9 . 5 6 8 . 4 1 10.49 13.55 1 4 9 . 2 7

E x p e n s e R a t i o = Admin. Exp."""""""''""""''" × 100 Net Sale

0.16% 0.16 % 0.15% 0.15% 0.17% 0.11% 0.17%

D e b t o r s R a t i o =Debtor+B/R"""'"'"'''''"'''""'× 365Credit Sale

29 days 30 days 13 days 23 days 4 days 15 days 21 days

C r e d i t o r R a t i o =Creditor+B/p""''"""'''""""'''"'×365Credit Purchase

3 days 2 days 1 days 23 days 4 days 5 days 4 days

Avg. Coll.Period =No.of Working day"''""'"""""''""''"''""''"' DTR

13 days 12 days 28 days 16 days 96 days 25 days 107days

Leve rage Ra t i o =Long Term Liablity"""''""'''""''""''""''"'""Stockholder Equity

0 . 0 8 0 . 2 5 0 . 1 6 0 . 2 4 0.078 0 . 2 3 0 . 6 8

AMUL Page 68

GrossProfit

INTERPRETATION:

A Gross profit is not good for the management. Here the gross profit

ratio of the year 2012-13 is 7.73%, is show the low profit margin of the

company, but in the year of 2011-12 it become 7.84% which show better

condition of the company in comparison with previous year 2007,2008.

AMUL Page 69

Net Profit

INTERPRETATION:

In AMUL DAIRY net profit of a company higher in 2006-07 and

lower in year 2012- 2013. This condition year 2011-12 net profit is high

compared to 2012-13 so denote that profitability can be decrease.

AMUL Page 70

Current Ratio

INTERPRITATION:

The current ratio measure the form's short term, it indicated the

availability of current assets in rupees for current liability. This ratio is

generally 2:1 it show the satisfactory position of the business or company.

Here in year 2012 it was 1.22:1 and in the year 2010 it was 1.39:1 and in

the year it was 1.65:1 it show that the company is not in good condition.

AMUL Page 71

Liquid Ratio

INTERPRETATION:

This ratio indicated the company liquidity position. The liquid ratio is

helpful to show the amount of the cash available to meet immediate

payment. Amul's liquid ratio is in compare of other year is very high in

2007-2008 around 0.98 after that the suddenly the ratio was decrease in

2008-2009. but after the company was going so good in upcoming next year

now in 2011-2012, 2012-2013 Liquid ratio of the company is 0.72, which is

so good for the company.

AMUL Page 72

Operating Ratio

INTERPRETATION:

Operating ratio indicates the level of expenses as compared to the

current year sales. this ratio shows the efficiency of the production or

operation management. this ratio suggest the higher this ratio the less

profitability. it would prove insufficient to pay divided to the shareholders.

Amul operating ratio was very low in the year2007.

AMUL Page 73

Acid Test Ratio

INTERPRETATION :

It is a ratio expressing relationship between Quick Assets and Liquid

liabilities to earned sales. It is an useful indication of the profitability of

business. This ratio is usually expressed as a percentage. This ratio shows

whether the mark up obtained on cost of standard showing reasonableness of

gross profit. In year 2009-10, 2010-11, 2011-12, 2012-2013 the Acid Test

Ratio is 1.39,1.04,0.55 and 1.53 respectively.

AMUL Page 74

Properitor Ratio

INTETPRETATION :

The ratio show the properitors funds to the total assets employed in

the business. In 2012-13 it is around 0.64 in compare of previous year it was

0.71 in 2011-2012. so, it is Bad fund level of the company.

AMUL Page 75

Debt. Equity Ratio

INTERPRETATION :

This ratio indicates amount of capital while is barred by the owner or

proprietors. In the year 2012-2013 the debt equity ratio is 0.68 but in current

the ratio of the company is around 0.25 in2011-2012.

AMUL Page 76

Return on Capital Employed

INTERPRETATION :

It helps to know much return the company gets with the capital of Rs. 100. In the year 2012-13, the ratio is 6 %. It means that the average net return of capital is Rs 6. Thus the return in the capital of the company has decreased as previous year. It shows bad situation of the company.

AMUL Page 77

Interest Coverage Ratio

INTERPRETATION :

In the year 2012-13, the ratio is 1.34 times respectively. It means the ratio has decreased as compared to previous years. In the year 2011-12, the ratio is 2.42 which can better, compared to this year.

AMUL Page 78

Fixed Asset T.over

INTERPRETATION :

This ratio measures the efficiency of the firm in managing and utilizing its assets. The higher the ratio, the more efficient ids the management and utilization of the assets. While low ratio indicates underutilization of available resources and presence of idle capacity. Here the fixed assets turnover ratio is increasing in the year 2008-09, but after that year the fixed assets turnover ratio is decreased in year in 2009-2010. In the year 2010-11 and 2011-12 the fixed assets turnover ratio is increased, but this year 2012-13 the ratio is decreased once again. So it is bad for the company.

AMUL Page 79

Capital T.over Ratio

INTERPRETATION :

In the year 2006-2007 the capital turnover ratio is very low, it is 1.84 but afterwards the ratio is increased year by year, this year the ratio is high, it is 6.04 and the ratio is increased compared to previous year. So it is good for the company.

AMUL Page 80

Stock T.over Ratio

INTERPRETATION :

The ratio shows that many times the stock has been turned out in a year. In the year 2010-2011 the ratio is 13.55 and in the year 2011-12 the ratio is 14 but this year 2012-2013 the ratio is 9.27.the stock turnover ratio has decreased this year.

AMUL Page 81

E x p e n s e R a t i o

INTERPRETATION :

In the year 2011-12 Ratio is 0.11 but in the 2012-13 the Ratio is 0.17. The ratio is increase in this year, So it is good for the Company.

AMUL Page 82

D e b t o r s R a t i o

INTERPRETATION :

This Ratio indicate the speed with which debtors are being converted or turnover in to sales .The higher the value of debtors the more efficient is the management of credit. But in the company the debtor turnover ratio is increase and decrease year to year this show that their credit policy liberal as compare to previous year.

AMUL Page 83

C r e d i t o r R a t i o

INTERPRETATION :

In signifies the credit period enjoyed by the firm in paying creditors. Account payable include both sundry creditors and B/P .higher the payable period lower the working capital requirements but on the other hand it may affects the prestige of the firm so the company has to frame the credit policy in such manner.

AMUL Page 84

Avg. Coll .Period

INTERPRETATION :

The average collection period measures the quality of the debtors and it helps in analysis the efficiency of collection efforts. It also helps to analysis the credit policy adopted by the company in the firm average collection period is increase year to year. It show that the firm has liberal credit policy. It is not good for the company.

AMUL Page 85

L e v e r a g e R a t i o

INTERPRETATION :

Leverage ratio calculated to judge the long term solvency or financial

position of the firm there should be appropriate mix of debt and owners

equity in the firms assets. The composition of capital of business and the

proportion of owners capital and capital provided by the outsides the

reflected by leverage ratios.

AMUL Page 86

RATIO SUMMARY

P a r t i c u l a r 1 0 - 1 1 1 1 - 1 2 1 2 - 1 3G r o s s P r o f i t G.P.=""""""×100Net Sale

1 9 5 3 9 5 . 0 2""'"""'''""'×100211349.04=7.54%

1 9 3 4 2 . 4 3""""""'""×100246634.70=7.84%

2 2 0 5 1 . 8 5"'"'"'"'"'"'"''×100284999.60=7.73%

N e t P r o f i t Net Profit="'"''"""''"×100 Net Sale

9 2 6 . 6 5"'"'""''"''"'×100211349.04=0.48%

1 0 7 0 . 2 9"'"""'"'''"×100246634.70=0.43%

7 2 2 . 1 2"'"'"'"'"'"'×100284999.60=0.25%

C u r r e n t R a t i oCurrent Asset="'"'"''""'"""""'"Current Liabili

3 7 4 1 8 . 2 5"'""'""''""'"'"33561.01=1.11:1

4 8 9 6 2 . 6"'"'"''"'"""41033.55=1.19:1

6 6 5 4 1 . 9 7"'"'"'"'"'"'"''53612.22=1.24:1

L i q u i d L i a b i l i tLiquid Assets"""""""'"'"''""""Liquid Liabilit

2 0 9 5 5 . 8 7"'""'"'''''"""26061.01=0.80:1

2 3 2 3 8 . 7 4""''"''""'"''"32491.98=0.72:1

2 3 8 9 5 . 7"'"'"'"'"'"'"32720.85=0.73:1

O p e r a t i n g R a t .Cogs+Ope.Ex='""'""''"'''×100 Net Sale

2 2 3 6 2 9 . 4 2="'"'"'"'''''×100211349.04=105.81%

2 6 6 2 6 4 . 0 5="'"'"'"''"×100246634.70=91.74%

2 8 5 1 4 4 . 3 1"'"'"'"'"''"'''×100284999.60=100.05%

A c i d T e s t R a t i o Quick Asset="'"'"'"'"'"'"'"' Quick Liabilit

3 5 2 3 6 . 3 1="'"'"'"'"'"'""'" 33561.01=1.04:1

3 8 9 0 1 . 7 5="'"'"'"'"'"'""' 41033.55=0.95:1

4 9 9 7 5 . 3 3="'"'"'"'"'"'"' 32720.851.53:1

P r o p e r i t o r R a t .Sh.HolderFund="'"'"'"'"'"'"'"'"'"' Total Assets

4 5 8 9 9 . 9 2="'"'"'"'"'''"'" 52689.12=0.87:1

4 6 4 6 6 . 8 2="'"'"'"'"'"'"'"' 64790.45=0.71:1

4 7 1 6 0='"'''"'"'"'" 73432.5=0.64:1

D e b t . E q u i t y R a t i o Debt.="'"'""'"'"' Equity

3 6 0 1 . 1 3="'"'"'"'"''' 42789.53=0.08:1

1 0 9 1 1 . 9 1="'"'"'"'"'"'"' 42832.15=0.25:1

3 2 0 7 5 . 0 4="'"'"'"'"'''' 47160=0.68:1

AMUL Page 87

R e t u r n O n C a p i t a lEmployed= EBIT"'"'"'"'"'"'""''''×100Capital Employed

2 7 0 8 . 8 1= "'"'"'"'""'×100 45899.92=5.90%

3 4 9 4 . 6 2="'"'"'"'"'×100 46466.82=7.52%

2 8 5 1 . 2 7="'"''''""""'×100 47160=6%

I n t . C o v e r a g e R a t EBIT="'"'"'"'"'''""' Interest

2 7 0 8 . 8 1="'"'"'"'"'"' 1569.38=1.73:1

3 4 9 4 . 6 2="'"'"'"'"'"'" 1441..25=2.42:1

2 8 5 1 . 2 7="'"'"'''""' 2129.15=1.34:1

F i x e A s s e t T . R a t i o Sales="'"'"'"'"'"'"'"'"'"' Fixed Assets

2 1 1 3 4 9 . 0 4="'"'"'"'"'"'"'"' 15270.87=13.84

2 4 6 6 3 4 . 7 0="'"'"'"'"'"'"' 15827.85=15.58

2 8 4 9 9 9 . 6 0="'"'"'"'"'"'"'" 19820.28=14.38

C a p i t a l T . R a t i o Sales="'"'"'"'"'""'"'"'"'"'''Capital Employed

2 1 1 3 4 9 . 0 4="'"'"'"'"'"'"' 45899.92=4.60:1

2 4 6 6 3 4 . 7 0="'"'"'"'"''"'"' 46466.82=5.30:1

2 8 4 9 9 9 . 6 0="'"'"'"'"'"'"'"' 471606.04:1

S t o c k T . O v e r R a t i o COGS="'"'""'"'"'"'"' Avg.Stock

1 8 8 1 7 9 . 0 9="'"'"'"'"'"'"' 13883.36=14Days

2 2 0 7 3 1 . 0 9="'"'"'"'"'"'"' 16184.73=14Days

2 6 2 9 4 7 . 7 5="'"'"'"'"'"''" 28378.97=9Days

E x p . R a t i o =Admin.Exp"'"'""'"'"'"'"'"×100Net Sale

3 5 5 . 7 9"'"'"'"'"'"'"×100211349.040.17%

2 6 6 . 8 5"''"'"'"''"'×100246634.700.11%

4 8 4 . 4 9="'"'"'"'"'×100 284999.60=0.17%

D e b t o r s R a t i o =Debtors/R"'"'"'"'"'"'"'"'"'×365Credit Sale

2 1 8 1 . 9 4 + 0"'"'"'"'"'"''"×365211349.04=4Days

1 0 0 6 0 . 8 5 + 0"'"'"'"'"'"×365246634.70=15Days

16566.64+0="'"'"'"'"'"'"'×365284999.60=21Days

C r e d i t o r R a t i o =Creditors/P"'"'""'"'"'""'"'"×365Credit Purchase

1 5 6 8 . 7 2 + 0"'"'"'"'"'"'"'×365145887.28=4Days

1 8 6 5 . 6 6 + 0'"'"'""'"'"×365159452.14=5Days

1 8 9 4 . 8 1="'"'"'"'"'"'×365201445.06=4Days

A v g . C o l l P e r i o dNo.workingDays"'"'"'"'"'"'"'"'"'"'"'"' DTR

3 6 5=''"''"""" 3.7796Days

3 6 5="'"'"'"'"' 14.6824Days

3 6 5="'"'"'"' 3.43100Days

L e v e r a g e R a t i o =Long term liability"'"'"'"'"'"'"'"'"'"'"'"Stockholder equity

3 6 0 1 . 1 3="'"'''"'"'"'"' 45899.92=0.078

1 0 9 1 1 . 9 1="'"'"'"'"'"'" 46466.82=0.23

3 2 0 7 5 . 0 4="'"'"'"'"'"'"'" 47160=0.68

AMUL Page 88

Working Capital Management

Working capital is the amount of capital that a business has available to meet the day to day cash requirement of operation or more specially, for financing the conversion of raw material in to finish d goods, which the company sell for payment. Funds are also needed for short term purpose for the purpose of raw material, payment of wage and other day to day expenses, etc. these fund are known as working capital.

In simple words, working capital refer to that part of the firms capital ,which is require for financing short term or current assets such as cash , marketable securities debtors and inventories. Working capital is a valuation metric that is calculated as CA - CL.

AMUL Page 89

TYPES OF WORKING CAPITAL

1. GROSS WORKING CAPITAL:

It refers to the firm’s investment in the entire all the assets taken together. The total of investment in all the individual current assets is the gross W.C.

2. NET WORKING CAPITAL

The term net W.C. may be defined as the excess of total CA over CL . CL refer to those liability which are payable within a period of 1 year . the net WC may either be positive or negative . if total CA are more than CL difference is known as positive WC. otherwise known as negative W.C. the greater the margin the better will be liquidity of the firms

NWC= TOTAL C.A. - TOTAL C.L.

Finance manager must consider both because they provide different interpretation. the gross WC denote the total WC or total investment in CA these will help avoiding un necessary stoppage of work or chance of liquidation due to insufficient WC and also give us an idea of total fund require for maintaining CA.on the other hand net WC refer to the amount of fund that must be invested by the firm more or less regularly in CA.

AMUL Page 90

B. ON THE BASIS OF TIME

(a) Fixed WC -

Fixed WC may be defined as the minimum level of CA which is required by the firm to carry on its business operation every firm has to maintain minimum level of RM, WIP, FG, cash balance.

(b) FLUCTUATING WC

It is the extra WC needed to support the changing production and sales activities of the firm. The amount of temporary WC keeps on fluctuating time to time on the basis of business activity both kind of WC

1. Permanent2. Fix are necessary to Facilitate production and sales through the operating cycle.

AMUL Page 91

WORKING CAPITAL STATEMENT

CURRENT ASSETS (in lacs)

Particular 2010-11 2011-12 2012-13

Stock 16462.38 25723.86 42646.27

Advances 4162.15 25723.86 5439.69

Debtors 2181.94 10060.85 16566.64

Cash & Bank 14484.14 4205.59 1889.37

Total (A) 37290.61 48815.85 66541.97

CURRENT LIABILITY

Particular 2010-11 2011-12 2012-13

Creditors 1568.72 1865.66 1894.89

Provision 1301.68 1790.38 1351.21

Adv. From Customers

31992.29 39167.89 20891.37

Total (B) 34862.09 42823.93 24137.39

W.C. (A-B) 2428.52 5991.92 42404.58

AMUL Page 92

DUPONT ANALYSIS

These give insight into overall effect of assets management and debts management on the profitability of the business. They focus on the relationship between Return on Assets (ROA), return on Sales (ROS), Total Assets Turnover (TAT), Equity Ratio and return on Equity (ROE). They indicate how the performance of a firm in these ratios reflects on the earning ability and the managerial efficiency of a firm.

In fact, DPEs draw insight into areas or aspects of the business-ROS (profitability) to be TAT (efficiency) to be regarded as responsible for any return (ROA or ROE) made from the business. For instance DPEs may help us see how a firm whose ROS is above industry average may be forced to produce a ROA which is below industry average, due to low TAT (which is below industry average).

The first Du Pont Equation is developed by writing the definition of ROA and multiplying by sakes/sales (= 1, so that the multiplication does not change the value of expression).

The equation is stated a follows: Net Income SalesROA = """"""""""""""" x """""""""" Total Assets Sales

Reversing the order of the denominator:

Net Income Sales ROA= """"""""""""""" x """"""""""""''''

Sales Total Assets

That is, ROA = ROS X TAT

AMUL Page 93

This shows that ROA is a product of ROS and TAT. Well, it must be recalled that ROA is a fundamental measure of performance indicating how well a company uses its assets to generate profits. ROS measures how well a firm keeps some of its sales naira in profit. And TAT measures the company’s ability to generate sales with the assets it has. Therefore, the above Du Pont Equation tells us that to run a business well as measured by ROA, we have to manage costs and expenses well and generate a lot of sates per naira of assets.

P A R T I C U L A R 2 0 1 0 - 1 1 2 0 1 1 - 1 2

ROA 926.65 211349.04"""""'""""''''" × """""""""""" = 211349.04 52689.12

1070.29 246634.70"""""""""""" × """""""""""" 246634.70 64790.45

0 . 0 1 6 × 1 0 0 = 1 . 6 0 % 0 . 0 1 5 × 1 0 0 = 1 . 5 0 %

The second but extended Du pont Equation is developed by writing the definition of ROE and multiplying sales/sales and by total assets/total assets. The equation is stated as follows:

Net Income Sales Total Assets ROA= ””””""""""""""""" x """"""""" x """"""""""""""""""" Equity Sales Total Assets

Re-arranging the denominators:

Net income Total Assets ROE = """"""""""""""" x """"""""""""""""""

Sales Equity

AMUL Page 94

That is, ROE =ROA x Equity Multiplier.

Then, ROE = ROA x Equity Multiplier.

It must be noted that the equity multiplier has to do with the idea of leverage, using borrowed money instead of your own to work for you. In fact, the equity multiplier is related to the proportion to which the firm is leveraged, geared or financed by other people’s money as opposed to owner’s money. The more the leverage, the larger the equity multiplier.

The extended Du Pont Equation says something very important about running a business. The operation of the business itself is reflected in ROA. This means managing customers, people, Costa, expenses and equipment. But that result, good or bad, can be multiplied by borrowing. In other words, the way you finance a business can greatly exaggerate the results of nuts and bolts operationsROEP A R T I C U L A R 2 0 1 0 - 1 1 2 0 1 1 - 1 2 ROE

926.65 52689.12"""""""""""" * """"""""=211349.04 42789.53

1070.29 64790.45"""""""""""" * """""""""""" = 246634..70 42832.15

0 . 0 0 4 * 1 . 2 3 = 0 . 4 9 % 0 . 0 0 4 * 1 . 5 1 = 0 . 6 0 %

AMUL Page 95

Common size Statement of P&L

Particular 2010-11 2011-12 2012-13 % % %Sales 211349.04 246634.7 286084.75 100 100 100-COGS 188179.09 220731.09 262947.75 89 89.49 91.91G.P 23169.95 25903.61 23137 10.96 10.50 8.08-Operating Exp.Research &devlopement

744.39 761.18 504.078 0.35 0.31 0.18

Admin.Exp 355.79 266.85 484.49 0.17 0.11 0.17Selling & Destribution Exp.

21945.82 24539.79 21929.41 10.38 9.95 7.67

23046 25567.87 22929.41 10.90 10.37 7.67+Operating IncomeOther income 395.97 274.21 435.08 0.19 0.11 0.15Dividend income 106.73 127.52 236.92 0.05 0.05 0.08Interest Income 300.02 332.77 199.83 0.14 0.13 0.07

802.72 734.5 866.83 0.38 0.29 0.30NPET 916.67 1070.29 1085.15

AMUL Page 96

Common Size Statement of Balance Sheet

Particular 2010-11 2011-12 2012-13 % % %LiabilitySh.Capital 2789.53 2832.15 2879.32 6.39 4.73 3.06Res.Surplus 3110.39 3634.68 4280.68 7.13 6.07 4.56Secure Loans 3152.92 10476.68 11607.62 7.23 17.49 12.33Unsecure Loans

448.21 435.23 20467.42 1.03 0.73 21.79

Current Liability

33561.01 41033.55 53612.22 76.94 68.49 57.07

Tax 557.78 1491.98 1100.44 1.28 2.49 1.17TOTAL 43619.84 59904.27 93947.7 100 100 100

AssetFixed Assets 15270.87 15827.85 19820.28 28.42 24.04 22.63Investment 1040.40 1040.58 1040.58 1.94 1.58 1.19Current Assets

37290.61 48815.85 66541.97 69.40 74.15 75.99

Miscellaneous Exp.

127.64 146.75 164.43 0.24 0.22 0.19

TOTAL 53729.52 65831.03 87567.26 100 100 100

AMUL Page 97

ANNUAL PROGRESS OF DAIRY HUSBANDRY ACTIVITIES

Indicators 2010-11 2011-12 2012-13Primary Milk Co-operative Societies 1,163 1,176 1,195 Members of Societies 634,675 669,546 676,349 Milk procured from Societies (in Kegs) 515,961,530 554,784,962 616,189,029 Chilling Units in Societies 741 823 886 Sale of Amuldan ( in Metric tons) 243,615 288,952 333,470 Milk Collection Centers ( Owned by Societies) 957 963 970 A.I.Centres 1,054 1,054 1,023 (a) Liquid Semen 124 99 0 (b) Frozen Semen 930 955 1,023 Artificial Insemination 882,159 898,472 904,211 Pregnancy Diagnosis 321,207 308,558 321,446 (a) Infertility 1,102 1,761 1,540 (b) No. of Cases 72,704 101,798 92,526 Veterinary First Aid Cases 117,319 116,692 97,341 Special Veterinary Visits 573,998 642,995 692,860

AMUL Page 98

CHALLENGES TO BE MET

Expans ion  upg rad ing  o f   p l an t   and   equ ipmen t   t o  me t  I nc r ea s ing demanded for quality and quantity with the help of better-qualified personnel.

Rapid increase in productivity while respecting the basic man land animal dynamic that is control to dairy and agriculture development in India

Development of new markets and expansion of old ones replacing additional system with quality packaged milk products and vegetable.

Creating a national information network to ensure that accurate timely information is available to all who need it.

Rapid progress towards the highest qualifies standard Strengthens institutions leaders, managers and members.

AMUL Page 99

CONCLUSION

AMUL is a highly successful co-operative sector in world. Which truly work for farmers, who are the members of union all departments are working well and  he lp   t he  un ion   t o   r e ach   t oward   t op  pos i t i on .   I   have   l i s t  ou t   some recommendations they are follow.

AMUL has competitive established system. The four hands of AMUL are working successfully with corporation. The people of AMUL are very co-operative and enthusiastic. AMUL is famous as “ANAND pattern” for its co-operative organization in world. So it’s a matter proud for people of ANAND as well as India. AMUL is really “The Taste of India”.

By this summer internship report  anybody can get the overview of the condition of the financial statement and the organization’s past and present s i t ua t i on .

The   r a t i o   ana ly s i s   shows   t he  d i r ec t i on  o f   t he  Organ i za t i on ’ s growth. According to my point, success factor being AMUL are hard work discipline, co-operative structure, production technology development, and the proper method for paying the debt and collecting the payment. The main cost for AMUL is transportation cost for collecting the milk from different villages. But now AMUL have the chilling facilities  to some big villages (milk collection centre). So that the milk is stored up to 2-3 days. Then AMUL collect the milk from there after 3 days.

AMUL Page 100

BIBLIOGRAPHY

(1)Company’s Annual Reports (last 6 years)(2)www.Google.com(3)www.Amuldairy.com(4)Prasanna Chandra, Financial Management Fourth Edition.

AMUL Page 101

AmulAMUL Page 102

AMUL Page 103