Resh Report

8/3/2019 Resh Report

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DECLARATION

I hereby declare that the report of the project work entitled An organizational study on

Sobha Developers Limited, is based on my own work carried out during the course of my

study under the supervision of Mrs. Bindu Krishnakumar.

I assert that the statements made and conclusions drawn are an outcome of the project work. I

further declare that to the best of my knowledge and belief that the project report does not

contain any part of any work which has been submitted for the award of any other

degree/diploma/certificate in this University or any other University.

Reshma K.M

108001151039

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ACKNOWLEDGMENT

I owe a great many thanks to a great many people who helped and supported me during thewriting of this report.

My deepest thanks to Mrs Bindu Krishnakumar, the Guide of the project for guiding and

correcting various documents of mine with attention and care. She has taken pain to go

through the project and make necessary correction as and when needed.

My deep sense of gratitude to Mr. Srinivas Shetty Assisstant General Manager-HR, Sobha

Developers for his support and guidance.

Thanks and appreciation to the helpful people at Sobha Developers Limited, for their

support.

I would also thank my Institution and my faculty members without whom this project would

have been a distant reality. I also extend my heartfelt thanks to my family and well-wishers.

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CONTENTS

COMPANY PROFILE 4-5

MANAGERIAL ORGANIZATIONAL STRUCTURE 6-7

HR DEPARTMENT 8-29

FINANCE DEPARTMENT 30-42

MARKETING DEPARTMENT 43-56

CASE STUDY 57-64

SUGGESTIONS 65-66

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COMPANY PROFILE

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COMPANY PROFILE

Mr. PNC Menon is the founder and the chairman of the Sobha Group companies. Set up in

1995, this company has unique value systems that have created an unparalleled name in the

real estate industry. A company where quality meets consistency, technology meets aesthetics

and passion meets perfection.

As of December 31 st, 2009, in the past 14 years since its inception, Sobha has completed 57

residential projects and 158 contractual projects covering about 35.56 million square feet of

area in 17 cities across India. The company currently has 27 ongoing residential projects

aggregating to 8.55 Mn. Sq.ft, while 5.48 Mn sq.ft volumes of contractual projects are undervarious stages of construction and design. The company is constantly executing about 6

million sq.ft of work for the past 3 years. This clearly puts Sobha on the top of the execution

chart.

Of the many accolades it has received the Best Executed Project in India award for Sobha

Malachite, Bangalore in 2007 at the CNBC Real Estate Awards is proof of its credentials as a

brand synonymous with quality.

In order to fuel its growth plans Sobha Developers went public through its initial public

offering in December 2006, an event that created history when the issue got over subscribed arecord of 126 times. On this strong foundation is based the business plan for the future. Sobha

is already developing integrated townships in Kerala with diversification into Retail and

Hotels bringing Sobha Lifestyle Products like the Sobha Restoplus Spring Mattresses and

furniture to suit discerning tastes of a niche group of customers.

The strength of Sobha lies in a sustained quality edge, backward integration, the trust it has

earned from its clients, transparency in all dealings at every stage and excellent customer

service. Mr. Menon encourages every member of his team to be a specialist in his/her own

field of expertise and core capability. He says, Let the drive for perfection start from

within.

Sobha brings to its clientele, signature projects with world-class infrastructure

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MANAGERIAL ORGANIZATIONAL

STRUCTURE

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MANAGERIAL ORGANIZATIONAL STRUCTURE

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HR DEPARTMENT

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JOB DESCRIPTION

VP-HR

HR policies and procedures.

Assessment of department resources.

Recruitment.

Training and Development.

Performance Management/Promotion process.

Compensation management.

HR initiatives.

Employee relations.

Grievance handling.

System improvement (ISO compliance).

Assistant General Manager

To implement statutory compliance in contractual projects and LMS (Lotus

Manpower Services).

Training on social security schemes.

Statutory Administration.

Benefits Administration.

Liaison with Government bodies.

Interaction with labor contractors.

Handling Industrial Relations.

Manager HR

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Recruitment and selection.

Compensation.

Reference checks for managers and above.

Cost control.

Preparation and release of recruitment and advertisement.

Custody of personnel records (Managers).

Co-ordination with placement consultant.

Deputy Managers HR

Training in house and external for soft skills.

Performance Management.

Induction.

ISO Documentation and compliance.

Exit Interview.

Assistant Manager HR

Recruitment and selection.

Campus Interview Scheduling.

Database creation.

Co-ordination with placement consultants.

Induction.

Web posting and maintenance.

Cost control.

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Senior Executive/Executive HR

Preparation of Interview call letters, appointment orders, promotion letters, increment

letters.

Joining formalities.

Updating of records.

Follow up for conformations, increments.

Maintainenace of HR files.

Staff attendance of all offices and projects (HRD/F/15, HRD/F/16 and HRD/F/19).

MIS for various heads.

ERP entry and updation.

Reference Checks for below managerial level.

Coordination with accounts department in all routine matters related to HR.

Statutory compliances ESI nomination etc.

Conformations, transfers movements, service letters, address proof letters,

termination.

Custody of employees files (other than managers).

Database maintenance.

Posting of jobs in websites.

Sorting of application and scheduling of interviews coordination.

Separation activities final clearance, Exit interviews.

Coordination with bank in opening of saving bank A/c for salary purpose.

Keeping of HR stationery.

Training documentation.

ESI card, ATM card, ID card distribution.

Coordination for salary inputs.

Payroll.

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.

RECRUITMENT PROCESS

The goal of recruitment is to assists in the building of business capabilities for the present and

future by:-

Providing resources with the appropriate skills, mindset, and competencies needed bythe business.

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Providing the business with world class leaders.

Selection policy

Recruitment in Sobha group is merit based programme and the requirements of the

job and suitability of the candidate alone shall be determining factor in the selection

and placement of applicants.

Candidates should be assessed not only for their technical/professional competence,

experience and knowledge demand by the job but also due weightage shall be given

for the personal attributes and qualities.

In order to speed up the recruitment process and reduce process time, the following

authority schedule will be followed for granting final approval for shortlistedcandidates.

Posting within India

o GMs and above: chairman

o Sr.Managers Asst.GMs: MD

oBelow and up to Managers :ED(S)

Posting Abroad

o Managers and above : chairman

o Others : ED(S)

Ex-employees may be re-employed provided their service in the company and nature

of separating was without blemish and care is taken that no disparity is created with

the existing employee in terms of level, emoluments etc.

Hiring new employee shall not be made where needs can be filled through transfer of

qualified and deserving employees.

Candidates for technical positions like fresh engineers and fresh site supervisors shall

require to undergo a written test and those scoring a minimum of 60% shall only beconsidered for further screening.

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The educational qualifications specified for each relevant categories is indicated in the

Annexure 1.

Annexure -1

Educational specification for recruitment

Office staff

Sr.No Category Education

1. Vice - president Graduation from a recognized

university/Graduation in engineering

preferably with a post-graduation in

management/professional

qualification in the respective field

of operation.

2. General Manager Same as above

3. Dy.GM/Asst.GM Same as above

4. Senior Manager Same as above

5. Manager Same as above

6. Asst.Manager/Dy.Manager Same as above

7. Sr.Executive Same as above

8. Executive Same as above

9. Junior Executive Graduation from a recognizeduniversity

10. Assistant Same as above

11. Trainee Same as above

Projects

Sr. No. Category Education

1. Vice-president Graduation in engineering from arecognized university in the

relevant discipline preferably with

a P.G in management/professional

qualification in the respective field

of operation.

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2. General manager Same as above

3. Assistant Manager Same as above

4. Senior Manager Same as above

5. Manager Same as above

6. Assistant

Manager/Dy.Manager

Graduation in engineering from a

recognized university in the

relevant discipline

7. Project Engineer Same as above

8. Senior site Engineer Same as above

9. Site Engineer Same as above

10. Engineer Same as above

11. Senior supervisor Diploma in engineering from a

recognized university in the

relevant discipline

12. Site supervisor Same as above

13. Storekeeper Graduation from a recognized

university/diploma in engineering

14. Store assistant Same as above

Resourcing

The following sources of recruitment may be used based on:

Maximizing coverage

Ensuring the best quality and

Minimizing time and cost

a) Web based recruitment

HR department shall develop relationships with identified websites to ensure

business specific and cost effective sourcing.

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b) Existing database

All applications received shall be entered in to a candidate database

maintained by HR and shall be considered for current and future requirements.

c) Recruitment advertisements

If the number of positions is very large and heterogeneous in nature, then

advertisements shall be considered as a mode of recruitment.

d) Placement agencies

HR will develop long term relationships with identified placement agencies toensure business specific sourcing. Sourcing shall be initiated only after a service

contract is executed with the identified placement agencies by HR.

e) Campus recruitment

The list of campuses for specific categories shall be compiled by HR including

discipline to be considered in each institute.

f) Employee referrals

The employee referral scheme will be open during specific period announced by

HR and will be applicable only to those specifically announced.

All referred candidates will be required to go through the regular company

selection process. The designated employee referral coordinator in HR will confirm the final

status to the employee as soon as the interview process is complete. In case the employee

does not hear from the designated employee referral coordinator within 30 days, the

employee can contact HR.

Selection process

The recruitment process shall start with a manpower requisition for all

replacement vacancies and for all manpower requirements exceeding the yearly approved

manpower members.

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GREIVANCE REDRESSAL

Sobha strives to recruit and promote employees solely on the basis of the qualifications and

abilities required for the job. They are an equal opportunity employee that is committed to

hire hiring employees regardless of gender, race, creed or origin. It is their intention to

provide a fair and equitable treatment to our employee at levels.

Sobha is also committed to providing a safe and healthy of work

environment that preserves and protects the dignity of our employees and is free from abuse

and harassment in our offices or sites, wherever they are located.

At the same time, it is also expected that their employees will avoid activities which are in

conflict with their commitments to their jobs. Infringements of this code of conduct will

constitute a serious breach of the contract of employment and will result in termination of

employment. It is the duty of every employee to uphold this doctrine with a high standard of

corporate conduct.

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An independent grievance committee has been set up to monitor compliance with the above

policy. The committee comprises of chairman, managing director, executive director (in

charge of HR) and executive director (in charge of corporate audit).

A staff member who feels that he/she has been subjected to harassment may forward a

written complaint in strict confidence through courier in a sealed envelope, to any member of

the Grievance committee who will endeavor to ensure that the complaint is investigated and

suitable action is taken. No anonymous complained will be entertained.

It is assured that no employee will suffer as a consequence of bringing to the attention of the

committee, a breach or suspected breach of these principles.

Employees are also encouraged to write to the committee on any matter of importance

including process breach, omissions and commissions which has a direct or indirect impact

on the organization.

Grievance handling

Sl.No Activity Responsibility Time frame

1. Individual employee tocontact HR dept. in case

of any grievance.

Employee Immediate

2.Representative of

employee relations team

from HR dept. would

interact with employee

and discuss with VP-HR.

Deputy manager-HR Within 1 day of grievance

3. Representative of employee relations team

would provide solution as

per VP-HR direction.

Deputy manager-HR Within 3 days of

grievance

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PERFORMANCE APPRAISAL AND DEVELOPMENT REVIEW

Performance Assessment

At least once a year, performance will be formally assessed against the agreed

targets. Where feasible 360 degree feedback may be introduced at an appropriate stage. An

integral part of this assessment will be an evaluation of the targets achieved in terms of both

the quality of the results and the specific value and business behavior displayed. The

assessment should be discussed with the manager. Honesty, fairness, courage and openness

are crucial for this process.

Personal development plan

Performance assessment will review how far the agreed personal development

targets have been met. Based on analysis of the gaps and skills and competencies, managers

will agree on learning, training and development action plans. The organization will provideopportunities; the individual is expected to take advantage. The process will encompass all

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managers. Where the performance is below standard, actions will be agreed jointly. Long

term potential will be assured and the outcome is shared.

Performance appraisal reports

All permanent employs will be appraised as per plan set by HR.

It is the responsibilities of Human Resource Department to initiate process of

periodical appraisal process are circulated by HR.

All appraisal reports shall be received back in Human Resources Department

which will form one of the basis for deciding annual increments, in addition to

initiating action on training and development needs for individual and teams.

Diverse Performance Reports

If an employees performance is found unsatisfactory during the performance and

development review, the following steps must be taken:

The employee will be advised of the shortfalls in his/her performance and be

placed on a performance and skills improvement program.

The improvement programmed will specify the performance and skills standards

that must be achieved and will set a time for an interim review. This will normally

take 6 months.

At the end of stipulated period, a performance and development review will be

under taken. If the employees performance still fails to meet standards, the

employment contract may be terminated.

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PROMOTIONS

General principles

Company believes in providing growth opportunities to internal candidates. It also

invests its resources in developing internal talent to avail these opportunities.

Promotions do recognizes the performance in the current job. However, promotion is

an outcome of performance of certain defined quality in the current job as well as the

potential to handle high level jobs.

Promotions are not time bound.

While promotions take in to consideration the performance as assessed by the

superiors in the current job, the policy ensures that these decisions are not subjective

and are not unduly in favor to someone. Therefore, while justification for promoting

someone is important. The need to justify no promotion to someone else of similar

background is also necessary.

There shall be an apex Review committee which acts as moderator and balance

promotions across the company discipline wise, function wise which also ensures

that there is equity and parity in promotions in different departments/locations. The

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review committee currently comprises of managing director and executive director in

charge of HR and corporate audit.

Process

It shall be the responsibility of HR to provide the committee relevant data about employees

background/performance rating/previous experience if any, etc.

The process will start in December every year and must conclude by April. In April, the

promotions will be announced and the letters issued department heads are required to submit

their recommendations as a part of the appraisal process to the committee not later than

January end.

The Review Committee is expected to analyze the data in the following manner:

A list of people recommended V/s list of people not recommended who otherwise

meet the criteria.

Discipline wise/function wise/grade wise list of people recommended/not

recommended who otherwise meet the criteria.

List of people recommended against vacancy.

List of people recommended against no vacancy.

Guidelines

Department heads make the recommendation, then if found necessary they will require

meeting the committee separately and justifying their recommendation. However, the

decision of the committee shall be binding. Broadly the recommendations are classified as

against the vacancy or the man has the high caliber but no vacancy or there is neither

vacancy nor caliber. But the department head wants to recommend him as a stagnatedfrustrated case.

After meeting the department heads and understanding from them their justification for each

case. The review committee arrives at a consensus and makes its final decision.

Even if one of the members of the committee has a dissenting view, the recommendation will

be dropped.

In exceptional cases, the committee may consult Chairman for decision.

In all cases involving managers reporting directly to chairman, the decision will be taken byhim.

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Approval process

As regard the promotions up to Assistant Manager Level the committee will go purely by

guidelines, views, justification given by the department heads. Normally, in such cases thereis no need for the committee to meet individual concerned. However in a rare case, they may

call a person for personal feedback. However the employees proposed to enter the Manager

cadre will have a personal discussion with the committee. Purpose of the discussion is to

ensure that the person entering management cadre ha a potential for further growth and is

evaluated for his development needs.

The committee will also probe and ascertain the career interest of the employee towards his

operation job/technical job/specialized job etc. it will also validate these aspirations and

provides reality check if necessary.

EMPLOYEE TERMINATION

Resignation

Managers and above

An employee wishing to resign from employment with the company may do

so in writing to the concerned director/ head of the department giving three months notice to

expire on any day of the month or pay three months basic salary in lieu of notice.

Deputy managers and below

An employee wishing to resign from employment with the company may do

so in writing to the concerned head of the department, giving one month notice to

expire on any day of the months or pay one months salary in lieu of notice.

Exit interviews

An exit interview will be conducted before the expiry of the notice period. It will be

conducted between the employee and human resource manager. In case of senior managers

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above the rank of general manager the interview shall be conducted on or before the last

working day of the resigned employee.

Guidelines for conducting Exit interviews

a. Before the interview

Meeting the reporting person and communicate your intention to conduct an exit

interview. Keep the superior informed of the time and place of the same.

Go through the personal file of the individual as a memory refreshing exercise.

Gather data regarding past appraisals/increments/family details etc. from the personalfile or from very trusted sources.

b. During the interview

The session should start with an attempt to get the atmosphere right. Make sure that

the person is comfortable.

It may be helpful to have recapitulation of what the employee has been engaged in

since his date of joining focusing on the positive aspects.

Ask open ended questions as they call for descriptive answers which create openings

for further questioning.

Avoid making copious notes during the interview.

The interview can decide when to get the exit interview form filled by the employee.

He may do it as a part of the interview or after the interview.

Summarize the session at the end of the interview to clarify the gathered information.

c. After the interview

Record the observations and findings in the form and file exit interview report in the

personal file.

It is important to bring up the findings of the interview in future.

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Termination of employment contracts

An employees appointment may be terminated on any of the following grounds:

a. Gross misconduct

b. For cause

c. Continued unsatisfactory performance

a. Gross misconduct

Where in the opinion of the terminating authority action or actions taken by an

employee is/are so grave as to constitute gross misconduct ; his appointment may

be terminated summarily.

b. For cause

An employee may be terminated for cause other than gross misconduct.

Where an investigation may be necessarily before cause can be definitely

established. E.g. misappropriation of company funds, an employee may be suspended

from duty with full pay.

Legal opinion, if necessary may be sought as before termination of employment for

cause.

Terminal payments

Any employee whose employment is terminated for cause and or gross misconduct

will be entitled to:

Full salary up to the date of termination.

Own contribution to the provident/pension fund plus accrued interest.

Severance allowance, as per statutory provisions, if applicable.

Payment in lieu of accrued leave.

Repatriation costs, if applicable.

No other payment shall be made whatsoever.

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In case of misappropriation, all steps will be taken to ensure recovery of the

amount and terminal payments will be paid only after recovery.

c. Continued unsatisfactory performance

An employees appointment may be terminated due to unsatisfactory performance.

Overall responsibility for handling a case lies clearly with human resource manager,

however with written authorization from managing director/ executive director, before

any action is finalized. The human resource manager will have responsibility for the

collection of all information and consultation with other departments. The concerned

employee will be given every opportunity to defend him/herself.

Evidence of termination must be fully documented so as to present a well prepared,

sound and clear cut case to the employee. Evidence should include:

Written performance development reviews.

Properly recorded interviews, signed by appraiser and employee.

Recorded warning, giving details of unsatisfactory performance and likely

consequences.

Letters of termination

Upon termination an employee will receive:

A letter from the human resource department modifying him of the decision to

terminate his service.

This letter will also give details of the terminal payments due to the employee.

In all cases of termination, a copy of the letter notifying the employee of the decisiontogether with the employees acknowledgement thereof will be filled in human

resource department.

Retirement

Normal retirement

The normal retirement age is 60 years.

Early retirement

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Early retirement may be allowed on medical grounds at the discretion of the

management after attaining 50 years of age.

Retirement benefits

The retirement benefits include such as provident fund and gratuity.

Provident fund

Company has a potential fund operated by P.F commissioner under the Employees

provident fund act.

Contribution: Every month employee contributes 12% of his salary. This amount is

deducted from employees salary every month and deposited in the fund. Company

makes the matching contribution out of which 8.33% of salary goes to the Employeesto Pension Scheme and balance to provident fund A/c employees contribution.

Interest: Interest is calculated at the rate announced by the government under the

Provident fund act.

Voluntary contribution: Members can make voluntary contribution over and above

12% up to a maximum of 8%.

Annual statements: Every year the fund distributes the annual statement of the balance

including the contribution and the interest to the members

Gratuity

Company makes the gratuity payment to the employee on his separation from the

company based on the terms and condition, defined under the payment of Gratuity

act. Gratuity is paid to all the employees irrespective of the cadre.

Gratuity is computed on the basis of the last drawn basic salary of the employee.

Gratuity is paid for any employees separating from the services of the company with

the company who has completed minimum 5 years of continuous service with the

company.

Gratuity is calculated on the basis of 15 days salary for every completed year of

service and for the period of 6 months or more.

To calculate the 15 days salary the per day salary is calculated by dividing the

monthly salary by 26. All the other terms and conditions of the act apply to the

gratuity payment.

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Gratuity payment is taxed as per the provisions of Income Tax Act and payment of

gratuity act in force.

Benefits are not payable one is still in service. An employee who is in service will not

be allowed to withdraw or discontinue contributions.

.

REMUNERATION

Reward and recognition

The objective of Sobhas reward policies is to attract, retain and motivate outstanding

employees. Our guiding principles are:

Pay for responsibility

Pay for performance

Pay for potential

Pay for results

Pay for competively

Implementation

Each job is assigned a grade and a pay scale. Each job within a grade has a pay scale based

on assessment of the size, scope and market value of the job.

Managers performance, skills, competencies and potential are assessed at least once each

year.

Pay scales are renewed periodically. In addition to pay, performance linked incentive bonusschemes are designed to motivate and retain talent.

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Sustained high performance list

The definition of sustained high performance is continued demonstration of most

outstanding performance through experience and/or skills. Sustained high performancereflects the accumulation of knowledge and experience through individual involved in the

same job.

Selecting managers for the sustained high performance list focuses on:

Track record for the last three years;

At least 3 examples of value creation, contribution to top to bottom line;

Completion of major projects;

Examples of innovation, entrepreneurship, leadership

DEVELOPMENT AND TRAINING

Learning policy

Learning has been identified by Sobha as a key building blocks for delivering

outstanding performance, hence a high performance organization. Continuous

learning is therefore to be encouraged and implemented as a systematic and

sustainable corporate action plus individual efforts.

Options

On the job learning

Local learning

Operational visits

On the job learning

The line manager and the individual shall identify and agree on work that can bridge

gaps identified in the PDP process and reinforce skills required. She/ he will then

arrange relevant opportunities/activities/tasks etc.

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Local learning

The line manager shall identify any learning events that will bridge gaps identified in

PDP, functional or business strategic needs she/he will then recommend specificlearning events or learning material available in centers, library etc.

Operational visits

Visits to other locations including international visits should be resorted to in order to

learn latest developments outside the group/country. All senior managers are

encouraged to travel abroad at least once a year. This is mandatory for managers in

functions like architect, research and development, purchase etc.

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FINANCE DEPARTMENT

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FINANCIALS AT A GLANCE

(Rs in million except earnings per share, rate of dividend and debt equity ratio)

Particulars 2010-11 2009-10 2008-09 2007-08 2006-07

Financial

performance

Turnover 14,643 11,193 99,917 14,363 11,894

Profit beforedepreciation

interest and

tax(PBDIT)

3,143 2,425 2,867 3,674 2,596

Depreciation 278 323 360 350 244

Profit before

interest and

tax(PBIT)

2,865 2,102 2,507 3,324 2,352

Interest 429 499 1052 615 486

Profit before

tax(PBT)

2,436 1,603 1,455 2,709 1,866

Profit after

tax(PAT)

1,825 1,367 1,097 2,283 1,615

Earnings per

share(Rs)

18.61 14.91 15.04 31.32 24.26

Dividend:

Equity 294 245 73 474 401

Rate of

dividend (%)

30 25 10 65 55

Financial

position

Shareholders

fund

18,566 17,085 10,895 9,883 8,155

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Borrowed

funds

12,110 14,540 19,122 17,630 5,837

Total 30,676 31,625 30,017 27,514 13,992

Debt equityratio

0.65 0.85 1.76 1.78 0.72

Net fixed

assets

2,041 2,061 2,248 2,142 1,948

Investments 516 429 362 294 527

Net current

assets

28,119 29,135 27,407 25,078 11,517

Total 30,676 31,625 30,017 27,513 13,992

CATEGORIES OF SAREHOLDERS AS ON MARCH 31, 2011

Category Shares %

Clearing member 92,799 0.09

Other bodies corporate 1,461,706 1.49

Corporate financial

institutions

543,869 0.56

Foreign institutional

investors

29,620,839 30.21

Mutual funds 3,958,742 4.04

Nationalized banks 10,850 0.01

Non nationalized banks - -

NRI 195,673 0.20

Nonresident(non repatriable) 22,751 0.02

Office bearers 47,628 0.05

Overseas corporate bodies 11 0.00

Public 2,612,505 2.66

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Promoters 59,331,35 60.5

Relatives of director 45,030 0.05

Other directors 79,271 0.08

Trusts 4,085 0.00

GIC and its subsidiaries 34,759 0.04

Foreign venture capital 2,000 0.00

Total 98,063,868 100

FINANCIAL RESULTS AND OVERALL BUSINESS

PERFORMANCE OF THE COMPANY

The overall performance of the company during the current financial period has been

excellent. The net sales of the company stood at Rs.14, 560.89 million for the year

ended March 31, 2011 showing an increase of 30.71% from Rs.11, 139.92 million

during last year and net profit before tax was Rs.243, 496 million for the year ended

March 31,2011 resulting an increase of 52% from Rs.1602.71 million during the

corresponding previous year.

The analysis of financial statements, viz balance sheet and cash flow are given below.

Balance sheet

With a net worth of Rs.18, 566.23 million and debt equity ratio of 0.65 as on March

31, 2011, the company has consistently improved its financial position and the

leverage ratio. The company has met stakeholders interests in time during the yearincluding commitments towards repayment of loan, interest servicing to banks and

payments of statutory dues.

Shareholders funds

The share capital remained constant at Rs.980.64 million as on March 31, 2011 while

reserves and surplus have increased from Rs.16, 104.04 million as on March 31, 2010

to Rs.17, 585.59 million as on March 31, 2011 showing healthy capital gearing ratio.

Loan funds

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Secured loan saw a reduction from Rs.14, 465.85 million as on March 31, 2010 to

Rs.12, 026.17 million as on March 31, 2011, showing a better debt equity ratio in the

current year. Unsecured loans marginally went up from Rs.74.50 million as on March

31, 2010, to Rs.83.48 million as on March 31, 2011.

Fixed assets

Gross fixed assets grew marginally to Rs.3, 147.69 million from Rs.2, 942.11 million

mainly on account of additions in the asset blocks of plant and machinery, building,

computers etc.

Investments

Trade and non-trade investments of the company increased from Rs.429.35 million as

on March 31, 2010 to Rs.516.09 million as on March 31, 2011.

Deferred tax assets(Net)

Deferred tax assets/liability represents timing differences in the financial and tax

books primarily arising from depreciation of assets with different rates and

expenditure disallowed under section 43B of the Income Tax Act, 1961, which are

allowed in the year of payment. Deferred tax assets are recognized only to the extent

that there is reasonable certainty that sufficient future taxable income will be available

against which such deferred tax asset can be realized. Deferred tax assets (Net)

increased from Rs.51.52 million as on March 31.2010 to Rs.73.79 million as on

March 31, 2011.

Current assets, loans and advances

Inventories were brought down from Rs.10, 173.94 million as on, March31, 2011. A

major portion of inventory was attributed to work in progress which was reduced

from Rs.9882.39 million as on March 31, 2010 to Rs.9193.91 million as on March 31,

2011.

Sundry debtors were Rs.3, 913.93 million and Rs.4, 165.80 million as on March

31.2011 and March 31, 2010 respectively. Since the ownership of apartments is

transferred to clients only upon fully settlement of their dues, the company considers

the debtors as food and realizable.

Loans and advances were Rs.21, 516.60 million as on March 31, 2011 as compared to

Rs.20, 093.23 million as on March 31, 2010. Advances are primarily towards amounts

paid in advance for purchase of land or other and services to be received in future.

The company considers the advances/deposits towards land as good since these

advances are backed by arrangements/memoranda of understanding/agreements

executed by the company and the company/seller/intermediary in the course of

obtaining clear and marketable titles free from all encumbrances.

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With good collection efforts, the overall debtors were brought down from Rs.4,165.80

million as on March 31, 2010 to Rs.3, 913.93 million as on March 31, 2011.

Cash and bank balances reduced from Rs.800.36 million as on March 31, 2010 to

Rs.275.35 million as on March 31, 2011, mostly held in current account and deposit

account maintained at various banks. The deposit accounts represent deposits for short

tenures, margin money deposits towards loan escrow account and other non-fund

based utilization of limits.

Current liabilities and provisions

Current liabilities include sundry creditors for supply of materials and provision of

services, bank O/D, advance from customers and interest accrued but not due and

other liabilities. This has increased from Rs.5, 613.9 million as on March 31, 2010 to

Rs.6, 455.31 million as on March 31, 2011. Advances from customers in current

liabilities denote monies received for the delivery of final products on future dates and

amount received towards this income is yet to be recognized in the books of accounts.

Provisions include proposed dividend, corporate dividend tax, provision for leave

encashment and gratuity, provision for taxation etc. Total provisions were Rs.537.09

million as on March 31, 2010 and Rs.931.70 million as on March 31, 2011.

BALANCE SHEET

(Rs. in millions)

Balance as at March 31

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37

2011 2010

SOURCES OF FUNDS

Shareholders funds:

Share capital 980.64 980.64

Reserves and Surplus 17,585.59 16,104.04

18,566.23 17,084.68

Loan funds:

Secured loans 12,026.17 14,465.85

Unsecured loans 83.48 74.50

12,109.65 14,540.35

30,675.88 3,1625.03

APPLICATION OF FUNDS

Fixed assets:

Gross block 3,147.69 2,942.11

Less: Accumulated depreciation/amortization 1,774.92 1,512.97

Net block 1,372.77 1,429.14

Capital work in progress including capital

advances

668.01 631.97

2040.78 2061.11

Investments 516.09 429.35

Deferred tax(Net) 73.79 51.52

Current assets, loans and advances:

Inventories 9,721.35 10,173.94

Sundry debtors 3,913.93 4,165.80

Cash and bank balances 275.35 800.36

Loans and advances 21,516.60 20,093.23

35,432.23 35,233.33

Less: Current liabilities and provisions

Current liabilities 6,455.31 5,613.19

Provisions 931.70 537.09

Net current assets 7,387.01 6,150.28

30,675.88 3,1625.03


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Cash flow

Operating activities

Net cash generated from operating activities was Rs.4, 143.60 million in fiscal 2011.

Net cash generated from operating activities consisted of profit before tax of Rs.2,

435.96 million as adjusted for interest expenses of Rs.352.36 million and non-cash

items such as depreciation and amortization of Rs.277.73 million. This amount was

partially offset by a decrease in cash generated from working capital movements

which was primarily due to increase in loan and advances amounting to Rs.506.26

million. Meanwhile, there was a also a Rs.863.74 million decrease in inventory,

Rs.251.87 million decrease in debtors and a Rs.862.32 million increase in current

liabilities and provisions.

As against above, net cash used in operating activities was Rs.3, 277.63 million in

fiscal 2010. The company had a PBT of Rs.1, 602.71 million, which was adjusted for

and interest expenses of Rs.438.11 million and non-cash items such as depreciation

and amortization of Rs.323.10 million. This amount was offset by a decrease in cash

generated from working capital movements which was primarily due to an increase in

debtors of Rs.612.56 million. Meanwhile there was also Rs.569.28 million decrease in

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inventory, Rs.523.74 million decrease in loans and advances and Rs.623.57 million in

current liabilities and provisions.

Investing activities

Net cash used in investing activities was Rs.218.68 million in fiscal 2011. We hadused Rs.229.78 million for the purchase of fixed assets, which was partially offset in a

small way by way of Rs.5.44 million, generated from the sale of fixed assets and

Rs.15.61 million towards interest received during the period.

As against above position, net cash used in investing activities was Rs.124.07 million

in fiscal 2010. We had used Rs.650 million for the purchase of investments and

Rs.139.41 million for the purchase of fixed assets, which was primarily offset by

Rs.650 million generated from the sale of investments.

Financing activities

Net cash used in financing activities Rs.4, 449.93 million in fiscal 2011, which

primarily included Rs.6, 408.27 million for the repayment of secured loans and

interest payment of Rs.1, 732.12 million. There was also an outflow due to dividend

paid amounting to Rs.245.46 million. This amount was partially offset by Rs.3,

968.59 million coming from proceeds of fresh inflows from secured loans.

Net cash used in financing activities was Rs.2, 563.71 million in fiscal 2010, which

primarily included Rs.6, 407.21 million for the repayment of secured loans and

interest payment of Rs.2, 447.98 million. There was also an outflow due to refund to

share application money amounting to Rs.474.70 million. This amount was partially

offset by 5,094 million coming from proceeds of issue of shares and Rs.1, 838 million

fresh inflows from secured loans.

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CASH FLOW STATEMENT

(Rs. in million)

Year ended March 31

2011 2010

A. CASH FLOW FROM OPERATING ACTIVITIES

PBT 2,435.96 1,602.71

Adjustment for:

Share in profits for partnership firm (76.79) 67.73)

Depreciation/amortization 277.73 323.10

(Profit)/loss on sale of fixed assets (3.06) (3.90)

Dividend income - (0.36)

Interest income (15.60) (7.89)

Interest expenses 352.36 438.11

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Operating profit before working capital changes 2,790.60 2,284.04

Movements in working capital:

(increase)/decrease in inventories 863.74 569.28

(increase)/decrease in debtors 251.87 (612.56)

(increase)/decrease in loans and advances (506.26) 523.74

increase/(decrease) in current liabilities and provisions 862.32 623.57

Cash generated from/(used in) operations 4,442.27 3,388.07

Direct taxes paid (net) (298.67) (110.44)

Net cash generated from/(used in) operating activities-(A)

4,143.60 3,277.63

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchased of fixed assets (229.78) (139.41)

Proceeds from sales of fixed assets 5.44 6.94

Purchase of investments - (650.00)

Purchase of equity investments (9.95) -

Sale of investments - 650

Interest received 15.61 8.04

Dividends received - 0.36

Net cash(used in)/from investing activities-(B) (218.68) (124.07)

C. CASH FLOW FROM FINANCING ACTIVITES

Refund of share application money - (474.70)

Proceeds from issue of shares(net) - 5,094.00

Proceeds from secured loans 3,968.59 1,838

Repayment of secured loans (6,408.27) (6,407.21)

Proceeds for unsecured loans 8.98 -

Interest paid(gross) (1,732.12) (2,447.98)

Dividends paid (245.46) (72.43)

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Tax on dividend paid (41.65) (93.39)

Net cash(used in)/from financing activities-(C) (4,449.93) (2,563.71)

Net increase/(decrease) in cash or cash equivalent(A+B+C) (525.01) 589.85

Cash and cash equivalents as at the beginning of the year 800.36 210.5

Cash and cash equivalents as at the end of the year 275.35 800.36

Components of cash and cash equivalents*

Cash on hand 4.37 4.23

Balances with banks:

On current A/C 157.07 430.17

On deposit A/c 113.91 365.96

275.35 800.36

*Cash and cash equivalents as March 31, 2011 included restricted cash and bank balances ofRs.115.30 million (previous year-Rs.83.77 million)

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MARKETING DEPARTMENT

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SOBHA PROJECTS ON SALE AS ON 30TH MAY 2011

Project

name

location Land

area(acre

s)

Type of

apartments

No.

ofunit

s

No.of

floors

Number of

bedroomarea(sft)

Rate/s

ft

In Rs

Total

cost Rs.

(approx.

all incl)

Sobha

cinnamon-2

Off sarjapur road

3.9

Luxury

apartment

203 G+10 3 BR-1451

to 1710

3757 68 L to

79L

Sobha

cinnamon-1

Off sarjapur road Super

luxury

apartment

40 G+10 3 BR-1916

to 2165

3919 3 BR-

91.50 L

to 1.02

Cr.

Sobha classic Sarjapur- outer

ring road

6.9 Super

luxury

apartment

243 G+13 3 BR- 1752

to 2070

4414-

4814

94.5 L -

1.2 Cr.

Sobha forest

view- pine

Banshankari

extension

13.28

Luxury

apartment

100 G+20 1511 to

1540

3802-

4052

73L -

77L

Sobha forest

view- maple

Banshankari

extension

Super

luxury

apartment

240 G+20 1661 to

1894

4306-

4560

87 L

1.04 Cr.

Sobha forest

view-oak

Banshankari

extension

Super

luxury

plus

apartment

152 G+19 2237 to

2250

4603-

4853

1.23-

1.30Cr.

Sobha

dewflower

Sarakki road,JP

nagar

7.0 Super

luxury

apartment

231 G+4 3BR-

2123.60 to

2672.69

4 BR-

3124.30 to

3138.58

4 BR

Duplex-

3467.16-

3489.33

7502-

8500

Duple

x-9004

3 BR-

1.95 to

2.4Cr.

4 BR-

2.8 to

2.95 Cr.

Duplex-

3.7

Sobha

suncrest

Off kanakapura

road(BSK 6th

stage)

1.5 Super

luxury

apartment

72 G+9 2 BR- 1535-

1590

3280 2 BR- 60

L

Sobha Elite Tumkur

road(kennmetal

vidia factory)

Luxury

apartment

160 G+15 3 BR-1651-

1789

3334-

3534

74 L-83L

Sobha Aspire Tumkur Dream 192 G+15 2 BR-1196- 3208- 2 BR-54

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road(kennmetal

vidia factory)

20.3 series 1251

3 BR-1404-

1459

3408 to 59L

3 BR-62

to 67.4 L

Sobha Althea Yelahanka

(dodaballapurRd,CRPF,Railwhe

el)

8.0 Super

luxuryapartment

176 G+16 3 BR-2012-

2128

4 BR-2937-

2997

Penthouse-

3278-4387

3379-

3775

3 BR-

80L to89 L

Penthous

e-1.37

Cr.

Sobha

chrysanthem

um

Thanisandra(naga

wara Jn)

9.0 Luxury

apartment

509 G+12 3 BR-1774-

1790)

3802-

3955

77 L

-81L

Sobhamoonstone

Dasarahalli(offhebbal ring road)

1.9 Super luxury

apartment

106 G+10 3 BR-1804-2097

3421-3846

3 BR-80-94 L

Sobha

lifestyle

Devanahalli 5.5 Presidenti

al villas

165 G+1 Plot area-

5000

(3851.70sft-

4303.84)

10000(6136.

32 sft)

- 4 BR-3-

5.85 Cr.

Sobhasaffron Off Hosur Rd(kudulu)(3.5 km

from spring field)

novel sys

0.6 Rowhouse 16 G+1&2 4 BR-3429 5107 4 BR-2.15 Cr.

Sobha

petunia

Hebbal ring road

near manyata tech

park

4.0 Super

luxury

apartment

156 G+13 3 BR-2274-

3302

4 BR-3496-

3738

4 BR

Penthouse-3497-4972

4750-

6050

3 BR-

1.63-2.08

Cr.

4 BR-

2.2-2.4

Cr.

4 BR

Penthous

e-2.55-

3.25 Cr.

SOBHA PROJECTS IN OTHER CITIES

Projectname

location Landarea

Type of No. of No.of Numberof

Rate/sft Total cost

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(acres) apartments units floors bedroom

area(sft)

In Rs Rs.

(approx.

all incl)

Sobha

Topaz-Sobha

city

Thrissur 3.35 Super

luxuryapartments

216 G+26 3 BR-

1676-2186

4 BR-

3068

2956-3181 3 BR-67-

72 L

4 BR-93L-

1.1 Cr.

Sobha

jade-

Sobha

city

Thrissur Super

luxury

apartments

216 - - - -

Sobha

lifestyle

Thrissur Super

luxury

villas

40 G+1 3 BR-

3038-3363

4 BR-4227

& 4774

4672-5683 3 BR-

1.77-1.87

Cr.

Sobha

Turquois

e

Coimbatore Row house 95 - - - -

Sobha

carnation

Pune 5.6 Super

luxury

apartments

116 B+G+9 3 BR-

2165.01-

2326.68

4 BR-2823.37-

2857.02

4 BR

Duplex-

3223.51

4 BR

Penthouse-

3863.66

3 BR-

3655-4055

4 BR-

3655-4055

4 BR

Duplex-

3902-4202

4 BR

Penthouse-

4900

3 BR-91L-

100L

4 BR-

1.16-1.30

Cr.

4 BR

Duplex-

1.40-1.51

Cr.

4 BR

Penthouse-

2.08 Cr.

Sobha

Ivory(to

be

launched)

Pune 3.8 Luxury

apartments

140 B+G+11 3 BR-

1459.32-

1906.39

Under

discussion

Under

discussion

ADVERTISEMENT

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Sobha developers follow aggressive advertising. They have categorized the advertisement

into two: Above the level advertisement (ATL) and Below the level advertisement (BTL).

Above the level advertisement includes media, hoarding, radio etc. Below the level

advertisement includes events, exhibition, campaigns etc. They do international campaigns

too.

CLIENTS

Sobha has many prestigious clients on its roster such as IT giant Infosys, Hewlett Packard,

Dell, Taj group, MICO and Timken to name a just a few. Through quality execution and

dedicated customer focus, the company has earned itself prestigious client all over Gulf and

neighboring countries. The clients include citizens of Oman, including the Diwan of Royal

Court who oversees workforce for the palaces and royalty.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Customer relationship management is a unique model based on the concept of customer

delight.

Being a modular organization, customer relations is established with a team of professionals,

each executive taking care of a set of clients from start to hand over of a project and one year

thereafter.

It is CRM executives, who are in touch with the clients and are the front face of the

organization. A great force in keeping the brand intact and liasoning with customers on a

regular basis, making sure their needs are understood and delivered as per the process/

guidelines set by the organization. These executives make sure that the needs of the customer

are understood. They ensure effective and efficient communication, timely deliveries as per

specification and the use of a customer centric approach.

POSTIONING

Sobha developers have positioned their products at premium segment. The cost is 20% to

30% higher compared to other builders. This is because of their quality. Deliverable quality at

Sobha is in the attention to the minutest details in systems, processes, design and execution.

SEGMENTATION

Segmentation at Sobha developers Ltd is done by doing a buyer segment analysis.

Segmentation is done after the bookings takes place. A proforma of the analysis is shownbelow:

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Buyer Segment Analysis

Slno.

Industry Total %

1 IT 64%

2 IT-ES/BPO/KPO 3%

3 Manufacturing 9%

4 Financial Services 7%

5 Hospitality Services 0%

6Medical/Pharmaceutical

3%

7 Media/Entertainment 0%

8 Travel/Transport 1%

9 Retail Services 1%

10 Telecom 1%

11 Others 7%

12 Details not Mentioned 5%

Total 0

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49

Sl no. Function Total %

1Software

Development58%

2 Sales & Marketing 9%

3

HR/Administratio

n 3%

4 Finance 7%

5 Production 6%

6 Legal 0%

7 Operations 7%

8 Others 3%

9Details notMentioned

7%

Total 0

Industry


50/66

50

Function


51/66

51

Sl no.Annual

IncomeTotal %

1Less than 5

Lakhs

1%

2 5 - 15 Lakhs 39%

3 15 - 25 Lakhs 17%

4 20-30 Lakhs 11%

5 25 - 50 Lakhs 13%

650 Lakhs &

above7%

7Details notprovided

11%

Total 0

Annual Income


52/66

52

Sl no. Age Total %

1 Below 21 0%

2 21-26 3%

3 27-31 24%

4 32-36 32%

5 37-41 13%

6 42-46 13%

7 47 & above 12%

8 Details NotProvided 3%

Total 0


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Sl no.Geographic

LocationTotal %

1 Bangalore 57%2 Mumbai 3%

53

Sl no.

No. of years in

the present

address

Total %

1 1-5 years 50%

2 6-10 years 23%

3 11-15 years 2%

416 years &

above8%

5Details notprovided

17%

Total 0

No. of years in the present address


54/66

3 New Delhi 1%

4 Chennai 5%

5 Singapore 1%

6 U.S.A 11%

7 U.A.E 1%

8 U.K. 1%

9Other cities /states in India

13%

10 Other countries 6%

Total 0

54

Sl no.Sobha

CustomerTotal %

1 Yes 15%

2 No 81%

3 Details NotProvided 5%

Total 0

Geographic location


55/66

Sl no.Regional

LocationTotal %

1 East 60%

2 West 4%

3 North 7%

4 South 29%

Total 0

55

Sobha customer


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From the above analysis we can see that IT people buy more. People of the age group 32-36 with an

annual income of Rs 5-15 lakhs are targeted.

56

Regional location


57/66

CASE STUDY

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CASE STUDY

By studying the whole organization we can see that backward integration is what makes

Sobha Developers stand out from other builders.

BACKWARD INTEGRATION

Backward integration is an approach of a company to increase its level of control on its

inputs. In the Business world of today, it is not very uncommon for a corporation to acquire a

supplier or a vendor or to create facilities of its supplier that are important to the welfare of

the company. This process of acquiring existing suppliers or creating a supply chain of its

own is referred as Backward Integration.

The process of Backward Integration involves in integrating of the supply chain within the

corporate family. It usually begins when a company becomes aware that the product or

service line offered by one of the companys suppliers is especially more appealing. This

appeal may be built on the fact that the products that are currently purchased have worked out

very well, and are helping to improve the quality and bottom line.

Two types of integration is possible- Full Backward Integration and Lower degree Backward

Integration. Full Backward Integration happens when a company incorporates the value chain

of a supplier in to its own value chain. This generally happens when the company acquires a

supplier or expands its operations to carry out the activities of its supplier. A lower degree of

Backward Integration is commonly known as Supply Chain optimization or also as Supply

Chain panning

Decision of Backward Integration is made usually considering the following:

In the strategy development process, Backward Integration may be considered as a

strategic process.

When analyzing industry dynamics, using Porters five forces model, BackwardIntegration is an action to decrease the bargaining power of the supplier.

Backward integration may be a path for reducing transaction costs.

In some cases, Backward Integration occurs because of demand of the situation; a company

wishes to acquire a company. For example, a vendor who supplies goods to a few companies

may be in financial trouble. These companies are not comfortable in building trust and

relationship with any new vendor, a working association is established where each of these

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Higher degree of control over the entire value chain

Since the value chain of the supplier gets integrated with the internal supply chain with

Backward Integration, the company has higher degree of control over the entire value chain.

However, the company has to have competences to undertake an expanded role in the

enlarged value chain.

BACKWARD INTEGRATION AT SOBHA

Sobha has developed in-house expertise to meet all crucial aspects of construction. With in-

house design studios and a trained and skilled work force the company has the best in talent

and technology.

Sobha developers is perhaps the only construction company in India and the world that has

all its activities fully backward integrated.

Apart from having architectural, mechanical and electrical expertise for design and execution,

its other manufacturing facilities produce interior, metal and glazing and concrete products.

The factories are state-of-the-art and have a built up area of over 600,000 sq.ft, comparable to

the best the world over. With superior infrastructure in place, quality of the end product and

its timely delivery is achieved. At Sobha they believe that, Backward Integration is the way

forward.

BACKWARD INTEGRATION IN OTHER COMPANIES

Backward Integration is followed in many companies. Some of them are:

Tata Steel

Capitalizing on the favorable environment for steel in the global market, Tata Steel has been

making all the right moves to position itself in strategic locations. In their view globalizationis a method by which you put the right part of the value chain in its right place in the world,

and link it up properly finishing facilities in places where customers exist, and primary

manufacturing facilities in places where manufacturing is competitive. Tata Steel's two major

acquisitions in 2004-2005 are good examples of how the company is implementing this

growth strategy.

The year 2005 was a good year for the company. It began with the investment in NatSteel

Asia, and ended with the company bagging Thai steel major Millennium Steel. The NatSteelacquisition not only allowed Tata Steel to establish a beachhead in seven countries across the

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region, namely Singapore, Thailand, China, Malaysia, Vietnam, the Philippines and

Australia, but also provided it with a customer base for close to two million tonnes of steel.

As a brand, NatSteel's strong equity in the region was yet another strategic gain for Tata

Steel. The company's strong human resources and management effectiveness is also an

inheritance of immense value.

The acquisition of Millennium Steel, Thailand's dominant steel producer, consolidated

Tata Steel's gains from the NatSteel deal. Millennium's three operating units give the

company a cumulative capacity to produce 1.2 million tonnes of steel per annum through the

electric arc furnace route. Along with a long products rolling capacity of 1.7 million tonnes a

year, geared towards the construction and automotive sector, Millenium provides Tata Steel

strategic space in the heart of the ASEAN region, enhancing its market position in South East

Asia.

At home

Meanwhile, Tata Steel has not been quiet on the domestic front either. The company's plans

for organic growth and backward integration in India are progressing at an impressive pace.

An MoU has been signed for setting up a five-million tonne greenfield integrated steel plant

in the Bastar region of Chhattisgarh. And, after the completion of its one-million tonne

expansion programme at Jamshedpur, Tata Steel has now initiated a further two-million

tonne expansion programme. Plans have also been announced for setting up of a large

integrated greenfield steel plant in Jharkhand, with an initial capacity of 5 million tonne per

annum. Work is also in progress to set up a six-million tonne integrated, steel-cum-mining,project in Orissa.

Pepsi

Pepsi Set Backward Integration for Tropicana. As a first step towards backward integration

for its pure juice business Tropicana, PepsiCo India Holdings is came into contract farming

of citrus fruits like oranges and keanu. PunjabJallowal, was chosen as apt locations. Pepsi

also plans to give its juice brandwhich has seen many hurdles in the nascent and nichejuice marketa renewed thrust.

Tropicana business which was earlier being run under a separate company called Tropicana

Beverages Company. It was integrated with PepsiCo in 2001. The changes happened in the

wake of merger of the cola majors three international beverage unitsPepsi-Cola

International, Tropicana International and Gatrorade Internationalinto one single new

company PepsiCo Beverages International (PBI).

Tropicana now operates as a functional beverages division of the cola major.

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Currently, in terms of market share, Tropicana is believed to trail behind rival Real (from the

Dabur stable) which claims to have a 55 per cent market share of the estimated Rs 100-crore

branded juice market.

The three-phase project involving trials, nursery and contract farming, is being pursued

jointly by Pepsi and the Punjab Agro Export Corporation.

In the first phase, Pepsiwith technical help and expertise of Tropicana Coplans to import

processing-focused citrus variety from multiple sources like California, Florida and Brazil

into Jallowal, Punjab. These varietiesthe first lot of trees is arriving in a months time

will be then monitored in a 10,000 sq.ft screening house or a quarantine facility which has

been developed by Pepsi.

Based on the response, this will be followed by setting up a facility for nurseries and

gradually five to six demonstration sites will be set up from where seeds will be given to

farmers. Typically, this should happen in three years period.

Pepsi, is not investing much at the moment except in the quarantine facility and technical

know-how. The long-term objective is to go for contract farming.

Tropicana juicesavailable in orange, apple, grape variantsare currently imported in a

concentrate form which is later reconstituted at a plant in Baramati, near Pune, and vacuum

packed into Tetrapacks after paying an import duty.

Pepsi is already involved into contract farming of potatoes, tomatoes, groundnut and chillies.

Its export turnover is nearly about Rs 350 crore.

Reliance Industries

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private

sector enterprise, with businesses in the energy and materials value chain. Group's annual

revenues are in excess of US$ 58 billion. The flagship company, Reliance Industries Limited,

is a Fortune Global 500 company and is the largest private sector company in India.

Backward vertical integration has been the cornerstone of the evolution and growth ofReliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward

vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum

refining and oil and gas exploration and production - to be fully integrated along the materials

and energy value chain.

The Group's activities span exploration and production of oil and gas, petroleum refining and

marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles,

retail, infotel and special economic zones.

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Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre

producer in the world and among the top five to ten producers in the world in major

petrochemical products.

Major Group Companies are Reliance Industries Limited, including its subsidiaries and

Reliance Industrial Infrastructure Limited.

Apollo

Apollo Tyres is open up in order to the prospect of buying rubber plantations as being the

climbing commodity prices have been deteriorating the net profit margins related to the

company. It is consistently wide open for all kinds of backward integration based on the

necessity of the hour to fight soaring rubber prices, a major raw material as for tyre.

The company is additionally going over contracts along with suppliers to alter rubber prices,

as well as keeping a leaner together with efficient inventory as well as working on the way to

better production efficiency to get over elevated prices of rubber.

SUGGESTIONS

Even though backward integration is one of the best methods of cost cutting, Sobha

developers should try other methods too. They can conduct As Build Audits where

superintendent and estimator should audit the use of materials to verify estimate and correctconstruction technique. While estimating building designs, they can do a Elemental Method

of cost analysis process, which consists of subdividing the cost of the building into its

functional elements. The advantage of Elemental cost analysis over the traditional Trade

analysis, especially in the early design process is that it takes into account the materials that is

used and determines the cost of each element but the function they perform may be similar.

Furthermore this type of analysis is extremely straightforward and provides a framework for

determining cost for projects at the early stages of design.

Another method that can help Construction Company like Sobha is computer modeling. It

is more energy efficient and cost effective. It allows designers, engineers and contractors to

input data into the system and then, using algorithms, it breaks this down in terms of areas of

focus. For Example: - If you are creating an office you can model the office space and then

use the system to assess what the day lighting will be for the occupants. You can find out

whether there is enough daylight or not. So early in the process you get the feedback that you

need to create more windows or reflectors to allow more daylight in. The concept behind it is

to build for today, in a way that doesn't compromise future generations.

Sobha developers can also opt for Horizontal integration. Horizontal integration is a

practice in businesses by which companies that produce a similar product or provide a similarservice merge. By doing so the company can increase its share in the market. The goal of

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horizontal integration is not to control all aspects of production, from raw materials to the

final product. It is, instead, to be able to produce a large number of the same product or

similar products and to control a large share of the market. With help of Horizontal

integration they can enter into new markets easily.

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SUGGESTIONS

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SUG ESSTIONS

Sobha Developers Limited is an organization with mature practices which has stood the test

of time, and as such there is very little scope for improvement. However, there is one aspect

which I feel could be improved. This concerns with the recruitment and hiring process.

Sobha Developers have incorporated employee referral scheme for hiring and recruitment for

quite some time now. But there is a flaw in the current scheme as the process for hiring and

recruitment through referrals is quite different from that of hiring and recruitment through the

normal route. The organization can make this process more stream lined, so that the process

for hiring will remain the same whether the recruitment takes place through referrals or

otherwise. This will help to reduce any discrepancies or issues which may arise due to the

different processes, like over hiring/ under hiring through the employee referral scheme.

In order to stream line the process of hiring through referral with that of the normal hiring

process, the Organization needs to device a tool which will act as a common repository of all

the resumes whether they are through referral or otherwise. Sobha Developers have a

software department of their own, which can develop such a tool, or there are other third

party tools available in the market which does the same.

This will make the management of the hiring and recruitment process much simpler and more

organized than it is currently.

Resh Report

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