MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.

DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INDIAN DAIRY INDUSTRY (NDDB):National Dairy Development Board, an institution of national importance was setup by the Government of India to promote plan & organize programmers for development of dairy & other agriculture based & allied industries along co-operative lines on an intensive & nationwide basis.

Gujarat Co-operative Milk Marketing Federation
Gujarat Co-operative Milk Marketing Federation (GCMMF) is India's largest food products marketing organization. It is a state level apex body of milk co-operative in Gujarat which aims to provide remunerative returns to the farmers & also serves the interest of consumers by providing quality products which are good value for money.

No. of Producer Members: No. of Village Societies: Total Milk handling capacity: Milk collection (Total - 2008-09): Milk collection (Daily Average 2008-09) Milk Drying Capacity: Cattle feed manufactured capacity

2.79 million 13,328 11.22 million liters per day 3.05 billion liters 8.4 million liters

626 Mts. per day 3500 Mts per day producer’s Union

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

DUDHSAGAR AMUL BANAS VASUDHARA

“GCMMF” Brand name “AMUL” & “SAGAR”

MDHUR

BRODA

UTTAM GOPAL SUMUL

SABAR

In all thirteen dairies the marketing is done by Gujarat Co-operative Milk Marketing Federation with brand name of “AMUL”.

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

ABOUT THE ORGANIZATION
INTRODUCTION

The “MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD”. Mehsana dairy is a Cooperative organization registered under Co-operative Societies Act.1925 on 08-11-1960 by Registration No. c/-1960. It has about 1241 member villages’ milk co-operative societies in Mehsana District from whom it procures milk. The Societies have over 4, 52,000 producer members. Working with Manpower (force) in the capacity of Managerial 34, officers 283, Skilled 798, Semi skilled 346, & Unskilled 27. Total strength of Manpower comes to 1488. The “MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION LTD” has its head Quarters & Dairy plant in Mehsana –town. The union has five milk chilling centre at Vihar, Kheralu, Kadi, Hansapur, & Harij, these chilling centers helps to store milk for longer period. All these centers are located in the rural area. It has two cattle feed plants, at Boriavi & Ubkhal (capacity 300 M.T) & an animal breeding station at Jagudan, this breeding station helps to improve milk product’s animal. The union provides various technical inputs to its members through village milk co-operative societies. The milk collected is processed in to various products such as market Milk, Butter, Ghee, Milk powder & Sweetened condensed milk. The market milk is sold in Mehsana District directly by the Union, whereas other milk products exported by the Gujarat Co-operative milk marketing federation into which the union is totally committed to provide quality & error-free products & services to its customers with the ultimate aim of satisfying them. S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 3

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

PROGRESSIVE JOURNEY OF DUDHSAGAR DAIRY
Mehsana –a largest milk producing district of Gujarat is famous since long for cattle breeding & animal husbandry practices. Large, small & marginal farmers & landless laborers are engaged in the practices of animal keeping & milk production. The high yielding well known “Mehsani” buffalo breed is native of the district & is known for its potential of economical milk production. The union makes use of most advanced technologies for manufacture of various milk products, for providing better animal health care services & for building socio-economic strength. Historical Background

1960 - Establishment of the MDCMPU Ltd. 1961 - Started milk supply to Ahmadabad Municipal dairy. 1963 - The MDCMPU ltd has Innograted 1964 - Innogration of the Vihar chilling center. 1966 - Establishment for the animal husbandry by the union. 1967 - Innogration of the Kheralu chilling center. 1968 - Milk supply to the Delhi started. 1969 - Innogration of the cattle feed in Boriavi. 1970 - Establishment of new processing section. 1971 - Vihar chilling center established unit with capacity 60,000L 1972 - Loan for purchasing cows & buffaloes. 1973 - Innogration of the Hansapur chilling center. 1974 - Hansapur chilling center has started colleting milk. 1975 - Innogration of the Harij chilling center 1976 - Harij chilling center has started collecting milk. 1977 - Animal insurance policy has started. S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 4

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

1978 - Kadi chilling center has started. 1979 - For animal Husbandry wireless radio telephone facility has provided. 1980 - Liquid nitrogen plant & artificial insemination at Jagudan has started. 1981 - Cattle feed plant at Ubkhal has started. 1982 - Government thanks Dudhsagar dairy for collecting large quantity of milk. 1983 - State awarded for high milk producing animal. 1984 - N4 powder plant has innograted. 1985 - Celebration of silver jubilee. 2005- Established Dudhmansagar Dairy 2009- Celebration of silver of Golden jubilee.

DUDHMANSAGAR HAS DAIRY – MANESAR, HARYANA
Dudhmansagar has started its operation with from daily average sales of 2 lakes in April 2005. During 2008-09 milk sales was. Now it is selling 8.5 lake liters of milk per day. Not only milk it is also into ice-cream & Dahi sales. There has a huge potential in the region which compel us increase our production capacity. We have outsourced packing unit at Sofia – Haryana & Goga- Utter Pradesh.

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

PURCHASE DEPARTMENT
The main objective of purchase dept is to ensure availability of right kind & quality of materials & services as per indents of user dept at competitive prices & in time. Dudhsagar dairy has a centralized Purchase dept. at Mehsana which caters to the needs of various dept., chilling centers & cattle feed plants. mr.S.Palit, Head (Purchase) is the in-charge of Purchase dept. The dept. is functioning through the set defined rules and regulations of the society. The procurement of cattle feed, engineering goods and other general goods are being handled from this department. The raw milk procurement is being handled by CS dept. under MPO dept. in-charge. The purchase dept. negotiates the rates with the supplier, but some times the user dept. also negotiates especially for the engineering goods. Purchase dept. makes sure for the timely payment to the supplier as per the terms and conditions decided at the time of PO. Before making the payment pre-audit inspection is being worked out by the Internal Audit dept there are numbers of activities which is performed by Purchase dept of Dudhsagar dairy.  General purchase which includes purchase of Packaging materials, Sugar, Furnace oil, Lignite, Chemicals & Cement, stationary & printing items, Human medicines, etc.  Raw material purchase cattle feed plant,  Engineering item purchase,  Capital items purchase  Computer equipment purchase,  Other miscellaneous items,  Petty case purchase,  Annual rate contracts,  contracts--- transport contract Labor contract Maintenance contract

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

FUNCTIONS
 Select suppliers on base of their ability, for purchase goods.  Obtain raw material at the most competitive prices from the market.  Attend to complaints of user department and take required.

The Purchase Activity
1. 2. 3. Engineering Purchase Cattle Feed Purchase General Purchase

1) Engineering Purchase:This section purchases all electrical & mechanical items. Activities: Get requisition letter from concerned department.  Create purchase inquiry and request for quotation.  Receive quotation. (in 7 to 8 days)  Open quotation. (on Monday – Wednesday – Friday)  Preparative comparative statement (within 2 days)  Give comparative statement for approval to user department.  Comparative statement approval by Asst. Mgr. (Purchase Department)  General purchase order in system.  At the end dispatch it to selected parties.

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

2) Cattle Feed Purchase:This section purchase cattle feed ingredients. The items are as follow; Juwar Maize Damage Wheat Rice Bran Ext. Sun Flower Ext. Mango Extant 3) General Purchase:In this department buy common items which are mostly used by all departments like Sugar, Stationary, Packing material etc. First of purchase department inform to Gujarat Co-operative Milk Marketing Federation for purchase the required material to whole year. After this federation issue tender in news paper and receive the quotation from different party and also prepare comparative statement & approve by federation. After this purchase dept. give purchase for every month to party & relives the goods. - An items are classified are as follow: Packing material Veterinary medicines Labor contracts Vehicles contracts

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

Market Segmentation Market segmentation is a process by which the company dividing the market on the base of need, features or behavior that require separate product. Market segment means classification of market on the base of Geographic, Demographic, Psychographic and Behaviorist. In the Dudhsagar dairy market segment on the base of “Geographic”. In the geographic base market divided in to different geographic units like nations, regions, states, cities and neighborhood.

Process

Survey stage

Analysis stage Profiling stage

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

Production Department
Introduction:Production dept. plays a vital role in the industry. In this dept. difference kind of dept. kinds of milk products are prepared from their raw material. It is called as input output process of the product. Meaning of PRODUCTION is simply that “To use material which is not in form to use but through systematically process- it converts into finish products which can be use. Production Department plays a vital role in the industry. In this department different kinds of milk products are prepared from their raw material. It is called as input output process of the product.

Mr B.K. Rana, A.G.M. (Egg.) is the in-charge of Process-Production dept. The dept handles various processes as RMRD, Processing, and Pouch Filling & Sterilized Flavored Milk. The milk is received through various CC on Mehsana Dock for further processing. For processing the milk, we have old and new process facility with different capacities. The milk is passed through pasteurization, cream pasteurization transferred to milk storage tank and cream storage tank, same procedure for new process capacity.

For pouch filling, various packing limits are available as per the market requirement after standardizing the milk at the required Fat & SNF %. Current pouch filling capacity is sufficient enough to provide for market demand. As per the requirement from the market, SFM bottles are being filled and dispatch from the plant. As per the standards required for SFM batch, the pasteurized milk is being standardized and taken in the lot of 1200 liters batch, sugar and approved

Colors are being added to complete the bottle filling. Daily inward of milk, pasteurization and standardization of milk, pouch filling and dispatch and SFM bottle filling and dispatch records are being maintained at this level. S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 10

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

Name of the Products:Amul gold, (Pasteurized full cream milk 6.0% Fat & 9.0% SNF.) Sagar standard, Amul Shakti Pasteurized standard milk, Amul ghee, Sagar ghee, Sagar sfurti flavored milk, Amul cool flavored milk, Amul Spray infant milk food, Sagar skimmed milk powder, Amulya dairy whitener, Amul whole milk powder Amul Pasteurized butter, Amul mithai, Sagardan (Cattle Feed)

Main product
1. Milk:Standardized milk Toned milk Double toned milk Whole milk 4.5 fat/ 8.5 snf 3.0 fat/ 8.5 snf 1.5 fat/ 9.0 snf 6.0 fat/ 9.0 snf

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

2. Flavored Milk:Flavored milk is recognized as beverage product containing milk to which has been added flavoring materials such as Chocolate, Fruit flavors (Strawberry, Pineapple, Apple, Banana etc) or Syrups & possibly coloring materials. The milk product is usually skimmed or partially skimmed milk with a reduced fat content. For longer shelf life here sterilized flavored milk manufactured. SFM is marketed under the brand name of Amul cool & sagar sfruti.    Elaichy flavored Kesar flavored Rose flavored

3. Butter:-

Mr.M.D. Patel, A.M. I/C (B) are the in-charge of Butter Maintenance Dept. Any kind of maintenance as preventive, breakdown etc. maintenance is being undertaken by him. For any kind of breakdown replacement of parts/spares, generally accepted procedure is to raise indent, approve the same through the respective authorities, and send it to purchase Dept., make comparative statement through different quotations, approve with the concerned dept. & order the goods/spares with the finalized bidder. They maintain the log book for the maintenance programmed to be carried out. The log contains date, sr.no. M/C make, breakdown spares, replacement, whether fault cleared & other remarks. There are two butter sections in this plant. The butter is produced by Continuous butter making machines and packed semi-automatically Milk Marketing Federation. “The capacity of butter production is approximately 120 tons per day. Now a day approximately 40 tons per day is produced. Centime process of continuous butter making is followed in machine. Butter is packed in 100 Gms, 500 Gms, 500 institutional packing, and 9.1 gm chaplet packets. The selling price of 100 Gms is Rs.16, 500 Gms is Rs.72, 500 Gms & Rs.200 per Kg. for chaplet packing. Table butter (yellow butter) White butter S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 12

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

4. Ghee:This is a very important section of the dairy. Here ghee is made by cream butter method i.e. first cream is converted to white butter through continuous butter making machine and then butter is melted and heated to make ghee. Buttermilk and serum are again issued to process section. There is a wide variety of packaging of ghee. Ghee is sold in 1 liter, 2 liters, 5 liter tin, 15 Kg. tin, 1 liter refill pack, 500 ml and 500 gm pouch pack average ghee production of this dairy is 20 ton per day in two shifts. The ghee is packed under two brand names Sagar and Amul, but the Sagar is mainly produced. Ghee is marketed under Gujarat Cooperative Marketing Federation Ltd, Anand. Mr. D.G. Patel, I/C (Ghee) is the in-charge of Butter & Ghee department but in his absence, I meet Mr. Parikhbhai and concluded the induction programmed. The department is responsible to manufacture butter and ghee as per the requirement from the market. Table Butter produced is being packed in various marketable forms, as per the requirement of GCMMF. Butter is available in two varieties as Pasteurized Table butter and pasteurized white butter (generally for special market inquiries packing). In case of table butter milk fat is 80%, moisture maxi. 15.95% allowed, curd below 1%, salt 2.0-2.7%. And other added flavors. The raw cream is taken from cream separator and pasteurized at 85-92 degree cent. And chilled at below 10 degree cent., at this level whether table butter or white butter is to be manufactured is decided. Different fat % is taken as per the standards and passed through contimab M/C for further washing of butter granules and checking the moisture Level. The pure butter is being mixed with standard salt and other added flavors. The table butter is than taken to different packing M/C as per the scheduled market inquiry. For Ghee manufacturing, fresh cream with fat content of 33 to 47% is processed at below 15 degree cent. The sour cream from different CC and collected at dock is also taken into process and further additional white butter is heated and the residue lying at the bottom is serum, which is also separated. For ghee manufacturing the temperature in ghee kettle is taken unto 108-110 degree cent. And passed through filtration stage and cooled down. Again the settled serum is being taken from the bottom for further reprocessing and good quality of ghee is passed to ghee storage tank. The ghee processed is being

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

analyzed by QA or as per the Agmark quality. The ghee stored in the tank is packed as per the requirement of the market inquiry or kept in storage till market inquiry arrives. 5. Powders:Powder is the best way of preserving milk solids. The main objective in processing it is to achieve good storing stability, low production costs & a product that resembles as much as possible the original after reconstituting. The production of concentrated & dried milks has the advantage of processing & storing all market surpluses especially fluid milks, as well as at by products. Due to the preserving effect of low water activity, dry milk products are desirable in regions with unfavorable climate conditions. Even infant formula is designed as a substitute for human milk when mother can not best feed their babies. Powder section has a paramount importance in itself, a large proportion of milks are diverts to this section for manufacturing different types of powder. In Dudhsagar, four powder plants are manufacturing powder. The types of powder manufactured are Whole milk powder (for army), Skim milk powder, Baby Food, and Dairy whitener. All plants are having two stages drying; two plants are manually operated while two are automated. The brand names of powder are Amul for whole milk powder, Amul spray for baby food, Amulya for dairy whitener and Sagar for skim milk powder. Mr. K.B. Dave, Executive (Prod.) is the in-charge of Powder – production; he is being assisted by N1/N2 Mr.A.H. Kalatola, Exe (Prod.) For N1/N2 plant and for N3/N4. The powder production capacity is approx. 140 tons per day for all 4 plants. The ratio of liquid milk to powder milk is 100 kg liquid milk to 12.50 kg milk powder, where fine powder particles is 9.30 kegs and 3.20 kegs moisture content in powder as per the standards. The dept. manufactures Skimmed Milk Powder (STD grade and extra grade), Whole Milk Powder, Dairy Whiter (Amulya) and Infant Milk Powder (food/substitute). Different standards % is being maintained for Fat, Moisture, Acidity, Total Ash, Sucrose, Vita A-C and Iron, varying from product to product.

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

The standardized milk is transferred to powder milk silos and processed for milk evaporating plant heating at 95 to 102 degree cent... This concentrated milk is kept in balance tank and blown towards filtered air at 160 to 210 degree cent. Through spray dryer. Through vibro fluidizer filtered air temp. Is 90 to 100 degree cent and during the process passed through dehumidifier at 20 to 30 degree cent. The fine powder particles are QA checked and transferred to Packing M/C. Initially milk powder is being packed in 25 kegs bulk pack and as per the requirement it is packed in different pack sizes as per the market inquiry. During the process above standard % is being stabilized as per the material mix of the product. Whole milk powder Infant milk powder Skimmed milk powder

6. SCM (Sweetened Condensed Milk):-

Mr. B. S. Patel, A.M. (Prod) is the in-charge of Sweetened Condensed Milk – Production. The capacity of this plant is 8 tones per day. The packing of SCM is in 400 gm tins, 7.50 kg and 280 kg sterile drums. The SCM is of two verities FCSCM & PCSCM, where the fat, total milk solids, sugar and lactose contents are different as per the standards.

The pasteurized and standardized milk with Fat/SNF ratio of 0.41 & 0.161 is maintained and transferred to filtration stage. After this sugar syrup is prepared and filtered and mixed in storage tank with the ready milk and again the filtration processes is carried out. The mixture is being heated at 120 to 126 degree cent.

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

And cooled at 20 to 30 degree cent. The lactose with required proportion is being added to this mixture, so that milk and sugar particles do not get separated at later stage. In short lactose works as binding agent for condensed milk and sugar. The mixture is ready to fill in the required packing specifications.

7 Cattle feed:Balance food for cattle (sagardan)

OBJECTIVES:-

 To add the value to the procured raw milk  To provide the nutritive diet to the consumers  To preserve the milk for longer duration  To manage the flow of milk

FUNCTION:-

 To produce the value added milk products like Ghee, Butter, and Powder etc  To process the milk & allocate to various sections  To preserve the milk for longer duration  To manufacture milk powder to manage the excess liquid milk  To collect the milk available from various villages  To supply the excess liquidity milk to the needy expressive daries  To handled the chilling centers related activities.

PRODUCTION PLANNING PROCESS:S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 16

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

The Production planning process is responsible for the overall production planning for all the products. The planning is based on the dispatch requirement, as specified by GCMMF, other party orders such as Army & ITBP, capacity of the Plants, availability of resources, quantity of milk expected to be procured, closing stock of finished goods, local demand

Milk flow process:Milk Farmers Village Milk Co-Op Soc. (Collection Center) Chilling Center Raw Milk Reception Dock (RMRD) Milk Processing Plant

Powder Section

Butter & Ghee Section

Milk Packing Section

Storage Dispatch Federation

Distribution Channel

Consumer

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

WASTE MANAGEMENT
There is an effluent treatment plant for the use of wastage occurred in production plants. There are different steams which collect the effluent water from the different production plants. There stream flows toward the effluent treatment plant. There are different fat traps arranged in the streams so that fat can be trapped out. This fat is heated out & good fat is obtained. The fat obtained this way is sold to the private parties for the production of soap & other goods.

Refrigeration Section
Mr. Ramjibhai Chaudhari is the in-charge of Refrigeration Section. The power required is supplied through 630 KVA own generation plant. The load of cooling system depends on the chilling requirement of storage area and during the process, ultimately the same load will also depend in own generation. As per the information & understanding the procedure, some times due to communication gap the same load are not increased/decreased as per requirement of user department. This may cause unnecessary excess or shortage of utility, resulting to increase in cost. For certain transaction as Delhi Supply, the chilling is done twice for special kind of transit of milk. Same way for converting the milk powder into Liquid milk supply, incase of shortage of liquid milk & when we have abundant stock of milk powder.

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

MARKETING DEPARTMENT Introduction:The marketing is very broad concepts for the business. We can distinguish between social and a Managerial definition of Marketing. Asocial definition saw the role Marketing plays in society. One market said that Marketing’s role is to “Deliver a higher standard of living.” Here is a social definition that serves our purpose Marketing is a societal process by which individuals and group obtain of what they need and want through creating, offering and freely exchanging products and services value with others. For Managerial definition, Marketing has often being described as “the art of selling products”. Dudhsagar Dairy, Mehsana covers a domestic market and now days its marketing is widely spread in foreign countries also. It has covered major markets in the states like Karnataka, Rajasthan, Maharashtra and many other states in India including Gujarat. Dudhsagar dairy is having its goods reputation in the market because of its best quality. Quality is the bench mark of Dudhsagar dairy resulting in to raising the graph of consumer demand and market.

At current year Dudhsagar dairy procured more than 20, 00,000 kg/day and its turnover have more than 1750 crores for the year 2008-09. Mr.P.A. Mukharji, Manager is the in-charge of Sales dept. Any kind of sales in the society is being booked through this dept. Majority of sales are booked through GCMMFL, ANAND, as direct & Through federation sales, consignment sales, Army sales, member farmer sales, etc. Federation transaction is ruling at federation decided prices, while rest of pricing is independent to our union. Our union as also entered in export market, where the price ruling is under the union control. Federation makes payment to the union on advance bases or approximately within 10-15 days as per the requirement of union or the fund facility available at GCMMFL.

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

Purpose & scope:-

 To supply milk & milk products  To review customer requirement, resolving any requirements differing from established norms.  To meet customer requirement.

Responsibility & authority:-

 Sales coordination of liquid milk, Butter milk & flavored milk within Mehsana milk shed area.  Sales coordination of milk products to various GCMMF depots & their bulk parties  Sales coordination of milk products to Defense  Liasioning with Government & legal agencies as & when required  Liasioning with National Co-operative Dairy Federation of India Ltd (NCDFI), GCMMF Ltd.  Complaints redressed.

Activities:

 Milk, Butter milk, flavored milk sales: the liquid milk is sold in pouches, in cans & tankers. The pouch milk will be supplied as per the requirement of milk distributing agents. The loose milk in tankers will be supplied to Mother Dairy, Gandhinagar, other member union other parties & to individual customer as per their requirement. Mother dairy 7 other member unions are lifting milk as per the monthly milk dispatch program decided in GCMMF, Anand. Butter milk is also sold in pouches & in cans. Flavored milk is sold in bottles as per the requirements of GCMMF, milk distributors &approved parties.  The appointment of milk distributing agent:- The sales process of dudhsagar dairy invites applications from the parties of potential areas, who are interested in selling milk, butter milk, S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 20

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

flavored milk. The area may be fixed while appointing the milk-distributing agent, whenever required.  In case of an individual customer, milk, butter milk, chilled water is given in union's cans vessel against cash payment basis. Product sales within district including village co-operative societies: the demand for ghee, butter milk, chilled water etc, within the district is being met by selling the products to the individual customer or institutional customers. The sale may be done against cash payment or cheque or DD or credit sales depending upon the party.  Export orders: - the export dept of GCMMDF Ltd. Anand sends the copy of export order for the various products to the managing director, production process, QA process, purchase process & sales process. On the receipt of the same, the order details are examined. Production planning is done as it done as it is mentioned in production process. The dispatch of different products is made by dairy against GCMMF Ltd's Dispatch instruction letter, to its various depots. Whenever there is demand for products, which is specific & special requirement from customers, it is received by sales process. Sales process in turn reviews the requirements with top management & concerned personal. Detail of the reviving and meeting customers requirement are explained in customer satisfaction sub process. General house keeping: Housekeeping is maintained at sales process as per the work instruction of general housekeeping. Advertisement “Dudhsagar Dairy” is do advertisement of its product many different ways, - Advertisement through News paper - Advertisement through Board and Hoardings - Advertisement through Posters - Advertisement through Internet The sales of organization mostly make by Gujarat Co-operative Milk Marketing Federation (GCMMF). S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 21 which are under;

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

1) Local Sales:It is the sales made in the boundaries of Mehsana district. The products mainly sold are Sagar Milk, Sagar Ghee, Sagar Butter Milk, Amul Butter and Amul Milk Powder. This local sale is done through distributors. On special occasions like marriage, party big orders are taken directly from party. Average milk sold locally is 7500 liters, per day. 2) Army Sales:It is very special selling to Army. There is no intermediate between two. Only Butter, Sweetened Condensed Milk and Skimmed Milk Powder sold to army. From this, Powder is negotiated by federation and Sweetened condensed Milk by dairy. - Powder is supply by main three centers; a) Mehsana District Co-operative Producers Union Ltd. b) Amul dairy c) Sabar dairy (Sabarkantha) Whole milk powder is give to Army’s supply depot. There total 47 Army supply depot in India. Skimmed milk powder is gives to Army’s Military farm.

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

COMPETITORS
LOCAL: Sardar Dairy Vimal Dairy Avkar Dairy Umiya Dairy Atul Dairy Adarsh Dairy Dayal Dairy

NATIONAL LEVEL:Paras Dairy Mother Dairy Nestle (powder, Ghee, SCM) Britannia (Butter, Ghee) Dyne mix Dahi Umang Ghee New Diamond Ghee

SUPPLY CHAIN MANAGEMENT

Supply chain of the Dudhsager dairy starts with the procurement of raw milk from the farmers and then production of pasteurized milk and milk products till the finished products reaches the consumers. The main component of supply chain is making or buys decision outsourcing information flow. Purchasing, vendor selection, &

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

Quality Assurance Department

Mr. Mahendrahai B. Jani is the in-charge of Quality Assurance dept. in Mehsana and for all other locations also. This dept. continuously check the quality of the milk and milk products coming inside and dispatch from the plant. The dept. maintains proper records and reports for whatever they have checked and retains the samples for future queries. The dept. takes different testing analysis from various angles to reach at the optimum accuracy level.

SYSTEM DEPARTEMENT
System Department is an important part of any Organization. In this department they use various system or we can says that use various software. Mr. A.M.Agarwal, Executive (Systems) is the in-charge of Systems dept. This dept. has handled various accounting software’s in-house as per the requirement of user dept. as and when required. Team of systems dept. as now approach TOWARDS THE TOTAL INTERGRATION PATH – DUDHSAGAR DAIRY titled as “SAMANVAY”. Dudhsagar Dairy as approached to Oracle Corporation for the licensed software to use various modules as per the requirement of the Dairy. TCS is facilitating the installation and implementation of the software and with the help of other hardware consultants it is being supported. Once the software will start functioning, lots of duality will be stopped and society will be working more efficiently.

System department use these kinds of Software used
  

MCBS (Milk collection & Billing System) Payroll system Enterprise resource planning

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
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1. MCBS: MCBS is a one kind of software, which is use in Dudhsagar Dairy. Features of MCBS:
 

On line Milk introduction available. Automatic data integration from 5 chilling center (Vihar, Kadi, Kheralu, Hanspur, Harij) to main Head office. Milk pricing calculating generated after every 10 days. Capable of calculating installments on sales to village. Profit distribution calculation done on yearly basis depending on the quality of milk receipt. Data like village wise, shift wise, milk types, milk quality wise available. Almost got reports are generated for regular & MIS purpose. Data record handling capacity is huge. Payroll software’s system: Payroll software helps to stores every employee’s personal information.

     

2.

For e.g. Employee Name, Employee no, Employee salary, Employee’s P .F. information. Features of Payroll system: Payroll helps to payment for employees. It helps to calculation of employee earning. Leave Encashment, Visit Bill, T.A. Bill, Over time, etc. S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 25

 

e.g.

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

It helps to calculation of Deduction e.g. L.I.C. P.F. P.F. Loan. It helps to attendance Record entry in Computer.

3. ERP system (Enterprise resource Planning)
In co-operative sector and dairy industries, ERP is running successfully. Under someway project “Total integration” Enterprise Resources Planning system was implemented in July 2004. ERP package of oracle application, US, was installed by Tata consultancy services. ERP system is a step towards online business or e-business. Here, at Dudhsagar it works in single domain (i.e. internet). It brings total integration in the dairy. Big Bang concept has been applied at Dudhsagar i.e. no other parallel system, only ERP system is under use. It includes 7 modules for proper integration that are purchase, sales, finance, engineering quality & fixed asset, production & stores.

Features: It can provide large quantities of information.  Authentically users can access the information demand.  The major benefits of ERP are improved condition across departments and increased efficiencies across business processes.  The implementation of an ERP system helps establishment of a backbone data warehouse, ERP allows better accessibility to data so that organization can have up to the minute access to information for decision making.

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RESEARCH METHODOLOGY
Research objective Researcher should to put down research objectives in his/her documentary note. Because of without objectives nobody can do research effectively. The first step for the Financing researcher will have to define the problems carefully and agree on the research objectives. Planning of research should be considered and implemental by researcher who will conduct research. An old edge says,” A problem well define is half solved”, Management’s objectives should not be taken for granted nor should be initial statements of objectives as given by management be accepted at face value. This is because the executive often has no definite plan of study in mind. It may will be that careful analysis of management as well as researcher’s objectives may even indicate that the proposed study need that not be undertaken such an analysis would be enable the researcher to identify the weak and poorly thought out proposal, thus concerning these research energies for really genuine these research energies for really genuine and useful research Projects.

Data collection I have used the secondary data for my research of financial analysis (Ratio analysis). I have collected the three years profit & loss a/c & balance sheet. I have also collected the data of production & sales for three years for the propose of compared to year wise production & its sales.

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Research Design Research design should be implemented very carefully and is the plant strategy of investigation conceived so as to obtain answer of research as early as possible to control the variance.

The plan is an out line of research scheme on which the researcher has to work. The structure of the research is more specific outline or the scheme which gives pre-determine action and strategy shows how the research will be carried out specifying method to be used in the collection and analysis and interpretation of data. 1. 2. 3. The method of data collection by communication based as well as observation based. The purpose of the study, our & research studies on casual. (analysis of financial data) Topical scope - breath and depth of the study.

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FINANCE DEPARTMENT Introduction
Finance Management is the part of the Managerial activity, which is concerned with planning, and controlling of the firms financial resources. It is an applied branch of general management it has to plan to organize and control the finance of the enterprise. Chief duties of financial management are planning and control of corporate finance. Financial Management is called upon to take three major decisions viz. Investment decision, financial decision, and dividend decision. Financial Management involves the implementation of these three major decisions it is an integral part of overall management rather than merely a staff activity concerned with fund raising operations without sound management of financial resources, business can not achieve its objective and may occur heavy losses. Thus financing management in charge of efficient planning and control of the cycle of flow of funds inflow and outflow of funds. Structure of Finance Management Chairman

Managing Directors

General Manager

Deputy General Manager

Assistant General Manager

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Senior Manager Managers

Deputy Manager

Assistant Manager

Sr. Executive Executive

Asst. Executive

Jr. Executive

Sr. Assistant

Assistant Jr. Assistant

Sr. Clerk S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 30

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

Jr. Clerk

Process of Finance & Account

The accounting function covering the Mehsana office and plant, the five Chilling centers at Vihar, Kadi, Harij, Hansapur, and Kheralu and two cattle feed plants at Boriavi and Ubkhal are performed by the Accounts Department at Mehsana head office of Dudhsagar dairy. All the purchase and sales for Dudhsagar dairy are executed from the Mehsana head office centrally. The purpose and scope of Account process are Management of Financial resource of the union accurate and timely payment to societies and supplies, maintain proper books of the union and advise Dudhsagar dairy’s management of the performance of the union based on accounting records, finance process includes the accounting functions of payables, Receivable, Cash Management, Asset Management, and General Accounting & Reporting functions including Budgeting. It also covers Costing activities performed at Dudhsagar dairy. The Audit Budgeting and Costing process are performed by the internal Audit department in closeness with Accounts Department.

Financial Planning
A firm needs to manage its resource effectively and efficiently to achieve its objective. The managing of resources in an a effective manner is possible only when the management work out the future course of action in advance and take decision in professional manner and rational manner that’s why financial planning is very important Financial planning is a statement estimating the amount of capital and determining its composition. It includes;  Determination the amount needed for implementing the business plans. S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 31

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 The determination form and proportionate amount of securities.  Laying down the policies as to administration of financial plan.

Steps for Financial Planning:Analysis of past performance Establishing objective Determine investment need Forecasting cash flow Financing

Budgeting & Costing

Currently the budgeting activities are restricted to annual preparation of budget and monitoring of budget versus actual cost quietly. Budget is made annually by manually obtaining the amount from each department against the several budget head description in a form. Dudhsagar wants to track and implement budgetary controls while making expenditure. Dudhsagar has limited exercise towards allotment and structuring of cost code, sub code and purpose code according operation classification. As sales are more or less regulated, a more system orientation is adhered to in drafting cost budgets. The code allocation practice is on to allot the codes based on direct cost and than to the sub division or activity the codes are both all allotted to process and product. In case of stores stock transfer is booked to stock ledger code and subsequent issues and consumption are booked to cc/sc/pc In case of finance and accounts, situation is different in case where the tally S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 32

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

accounts and budget codes are same and in circumstance where they are different. In case where they are different the budget accounting system codes are input against each account automatic conversation to BAS codes occur where they same. Budget is tracked against the cost centers and sub centers are defined with the responsibility center but currently the responsibility centers are not in use the stores consumption tracked till the cost center and sub center level at the time of consumption itself for other expenses like repairs and maintenance travel expense and other office expenses the cost center and sub centers are entered to categories the expenses after exporting them into an oracle based system from the tally system for the purpose of tracking. A quartly budget review report is prepared depicting the quartly budget amount actual expense and variance figures along with the cumulative figures.

Statutory budget:It is required to be prepared by Dudhsagar under the co-operative act this budget is prepared annually and approved in the annual general matting as according to the law and including in the annual report this budget in is prepared by the internal audit department. The budget is internal to Dudhsagar and not presented in the board AGM. The budget is prepared by seeking the budget amount from all the departments by giving the respective budget heads pertaining to the specific department for aiding the departments to prepare the budget. The relevant previous wears expenditure is given to them from the trial balance if required the detail expenditure is also given by the accounts departments. The departments provide the budget after approval from the departmental head. The LA department in consultation with the respective department makes some alteration to the budget amount. The LA department than complies and consolidate the department budget into Dudhsagar budget, which is then presented to the managing director, the MD can revise the budget before approving it, to be presented to the board. The board recommends the budget in the AGM seeking its approval.

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Costing Activities:In Dudhsagar Dairy is done on a yearly basis for the financial year. This is too limited to the product group costing. As the value of asset is not finally known production wise process, depreciation is avoided for allocation to the product groups. The yearly cost sheets forms an important basis in the estimation of costs, pack wise prepared, yearly for all products packs. Of late concept of conversation costing where by the milk purchase price is excluded from the estimated contribution analyses. The client opinions that as milk purchase price of the last year does not reflect the current and by comparing the gross contribution and gross profit visa-a-versa the milk Purchase price existing as on the date, one could as certain the profitability of the products and packs. The incremental cost of milk for fat, SNF and moisture are based on standard costing. The unit price is the actual transportation and chilling post based on the previous years financial data. The wastage is calculated based on actual content of the milk fat and SNF content in the milk purchased of the previous year less the standard content of fat and SNF for actual production for which milk had been consumed. This wastage is applied to the fat and SNF inputs in proportion. Based on the standard inputs the actual quantity product wise is derived applying the wastage rate on the standard the consumption.

Capital Structure
Capital is one of the most important factors of production without capital organization cannot production or other type of the activity. Capital includes share capital reserve and surplus and long term liabilities. The authorized share capital of the dairy is 2500,000 shares of Rs. 100 each and the capital is 2500, 00,000.

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
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TREND ANALYSIS
Share Capital (BASE YEAR 2006-07):--

Year Share Capital

31-3-2007 31-3-2008 31-3-2009 Banas Sagar Banas Sagar Banas Sagar 50cr 25cr 50cr 25cr 50cr 25cr

INTERPRETATION
Share Capital is the amount contributed by shareholders towards the company’s capital and is entered in the company’s share capital account. It is the capital of the company represented by the shares. In the above graph we can see that there is no change in Capital year 2006-07, 2007-08 and 2008-09. So from the above graph we can analyses that in the no change in the share capital of the

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
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company, this is because that Dudhsagar dairy is the co-operative milk producer so their share holder are only milk producer farmer that’s why no significant change in the chare capital. And the Dudhsagar Dairy are contributes 25 Cr. From the shareholder. Sagar Dairy has not a much stake holder as compare to the Banas dairy. Banas Dairy have doubled share holder from the Dudhsagar dairy. So we see that Banas dairy have more financial leverage as compare to the Dudhsagar Dairy. That is not good for the any firm because the responsibilities are increase for firm.

Reserve & Surplus (BASE YEAR 2006-07)
Year Reserve& Surplus 31-3-2007 Banas Sagar 16.10cr 26.57cr 31-3-2008 Banas Sagar 20.43cr 28.35cr 31-3-2008 Banas Sagar 25.32cr 390.92cr

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
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INTERPRETATION

From above graph we can know the actual trend of the reserve & surplus of the company or firm. increasing which shows the strong financial position of the company. Company’s reserve and surplus has increase by 1.78 cr.1st year and 362.57cr. after two years. The company is managing well with this source thus rely less on other financial sources like share capital and loans. We easily decided that the sagar dairy management very well in the finance factor, so that they have very good financial position.

For Dudhsagar Dairy: - Compare with base year indicates that the reserve company gradually

For Banas Dairy;- In the above graph we clearly see that Banas reserve & Surplus are not increase highly but they should maintain Consistent in all year. So we may comparison between the two Dairy we clearly decided that Dudhsagar is financial situation is better than Banas Dairy.

Secured Loans (BASE YEAR 2006-07)

Year

31-3-2007 Banas Sagar

31-3-2008 Banas Sagar

31-3-2009 Banas Sagar

Secured Loan

61.19cr 148.75cr

24.84cr 146.09cr 214.39cr 120.5cr

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INTERPRETATION Secured Loan are loans taken on the security of a company’s assets, such as land, building, plant, inventories, and debtors. Debentures and loan from bank and financial institution are generally secured. For the Dudhsagar dairy:- In the above Sagar graph we see that In the year 2006-07,2007-08,200809 Consistent Decreased in the secured loan and there was saw that firm had good Financial situation in last two year. For Banas Dairy :-In the above graph in year 2006-07 there was increase in the secured loan and then it was decreased in 2007-08. So we can say that company’s financial status is growing and this is good for the company. But in the 2008-09 The Banas secured loan increased by 88.45% there were huge increased in the loan. Because of the new plant is under construction in banas Dairy. So that Banas Dairy should increase their loans in current financial year. So we easily decided that the Dudhsagar dairy is more financial strong to the Banas dairy.

Unsecured Loan:-(Base year 2006-07)
Year Unsecured Loan 31-3-2007 Banas 0000000 Sagar 636.5161m 31-3-2008 Banas 1950m Sagar 736.5161m 31-3-2009 Banas 1900m Sagar 2486.516m

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION
Unsecured loans are loans taken on the strength of a company’s general credit standing and not backed by its assets. Public deposits and short-term loans from banks are usually taken on unsecured terms. In the above graph we can see the actual tread of the unsecured loan of the company. For Dudhsagar Dairy:- In the above graph we see that the Loans are increased slightly in first two year. But in the year2008-09 they increased loans by 338%. That is a very huge increase. And there are large responsibilities to the debtors. For Banas Dairy;- Here unsecured loan’s graph is increasing Highly. Company’s unsecured loan has been increased by 195% which shows that company’s debts has increased to Large extended. In the year 2008-09 the ratio decreased by Small partly. We easily decided that Banas Dairy should take some favorable step to decrease their debt. So Dudhsagar should try to reduce the loan in short time.

Investment:- (Base Year-2006-07)
31-3-2007 Banas Investment 52.49701m Sagar 77.04292m 31-3-2008 Banas Sagar 31-3-2009 Banas Sagar 98.21302m

Year

81.75701m 98.20702m 81.75701m

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
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INTERPRETATION

In the above graph, actual trend of investment has shown. For Dudhsagar Dairy:- In the above graph we see that the dudhsagar investment in the last three year. First year the investment was very high because of the new plant in the maneshar. For Banas Dairy:- Compared to the base year company has Increased its investment in subsidiary company, which has raised in 2007-08 by55%, but in year 2008-09 there was no increase in the investment this may be due to poor performance of the subsidiary company so the company is utilizing it resources to improve the situation. Banas Dairy Invest Major part in the new Plant of Banas-3. The new under construction building contribute large number of investment. When we may do comparison between Dudhsagar& Banas dairy their ware easily decided that Dudhsagar would invest very highly.

Current Liability :- (Base year 2006-07)
Year Current Liability 31-3-2007 Banas 1581.88513m Sagar 1861.0566m 31-3-2008 Banas 1397.9152m Sagar 1493.6878m 31-3-2009 Banas 1758.9609m Sagar 2350.0534m

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
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INTERPRETATION

The items that appear under this group are usually in the nature of obligations incurred in the day-today operations of the business. The subgroup current liabilities covers items such as bills payable, sundry creditors (creditors for purchases of goods and services), and advances received from customers. For Banas Dairy:- Form the above graph we can interpret that company’s current liabilities has been decreased by 12% in the year 2007-08 and increased by 25% in 2008-09. But it does not cause harm to company as net current asset is more than that of current liabilities. For Dudhsagar Dairy: From the above graph we can interpret that company’s current liabilities has been decreased by 20% in the year 2007-08. And increased by57 % in the year 2008-09. That saw that the firm current assets are more than the liabilities. When we may compare Sagar & Banas Dairy then we see that Dudhsagar dairy’s current liabilities affected as like Banas liabilities. But in the current year Dudhsagar Dairy’s Current liability raised by 57%, opposite side Banas liabilities increased by25%.That is half of the dudhsagar.

Fixed Assets:-(Base year 2006-07)
31-3-2007 Banas 528.4139m 31-3-2008 Banas 31-3-2009 Banas

Year Fixed Assets

Sagar 841.6532m

Sagar

Sagar

561.2890m 909.3225m 852.3539m 4723.19992m

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INTERPRETATION
Fixed assets are the assets that are held for use in the business and not for sale. Land, building, plant and machinery, furniture and fittings, and vehicles are examples of fixed assets. For Dudhsagar Dairy:- In the Above Graph we can see that the Dudhsagar Fixed Assets increased in first year by8%.But in the current year data the fixed assets jumped at 4723.20 lacks. Because make a new plant In Dudhmansagar dairy manesar. For Banas Dairy:- In the above graph net fixed assets is increasing by 6%. However, in subsequent year it has increased by 52%. We interpret that company’s investment in net fixed assets has been increase within the span of two years. Banas Dairy’s fixed increased 52% Because of the new plant. We compare between Sagar & Banas Dairy Dudhsagar’s fixed assets jumped very highly & the Banas Fixed assets raised few numbers.

Debtors:-(Base year 2006-07)
31-3-2007 31-3-2008 31-3-2009 Banas Sagar Banas Sagar Banas Sagar 531309506 628486610 675119944 844306783 459367237 571369017 S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 42

Year Debtors

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION
Debtors refer the current assets in the firm. When the debtors is very high then say that the firm done business on the credit base. If the debtors is very high then affected to the liquidity of the firm.

Loan& Advances:- (Base year-2006-07)
31-3-2007 Banas 31-3-2008 Banas 31-3-2009 Banas

Year Loan& Advances

Sagar

Sagar

Sagar

243133278 278296775 276768145 300393847 422867222 531448223

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Loan& Advances 600000000 500000000 400000000 243133278 300000000 200000000 100000000 0 531448223 422867222 31-3-2007 Banas 31-3-2007 Sagar 31-3-2008 Banas 31-3-2008 Sagar 31-3-2009 Banas

300393847 276768145 278296775

Sagar

Sagar

Banas

Banas

Banas

Sagar

31-3-2009 Sagar

31-3-2007 31-3-2008 31-3-2009

INTERPRETATION
Here loan & advance saw the firm current assets. The firm should give some advance payment for their responsibilities. And some loans give to their Branches for improvement. So the loan & advances come under current assets. For Dudhsagar Dairy:- in the above graph we clearly mention that management should give loan & advance in every year& that was increase in every year. But in the current year there is a huge increment in the loan& advances. For Banas Dairy:- in the above graph we clearly mention that management should give loan & advance in every year& that was increase in every year.

Cash& Bank Balance :-( Base year-2006-07)
31-3-2007 Banas 31-3-2008 Banas 31-3-2009 Banas

Year Cash& Bank Balance

Sagar

Sagar

Sagar

684936902

1515573851

1192224539

294499251

3276213446 2346561963

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RATIO ANALYSIS
INTRODUCTION OF THE RATIO ANALYSIS
Ratio analysis is a powerful tool of financial analysis, where ratios are used as a yardstick for evaluating the financial condition and performance of a firm. Analysis and interpretation of various accounting ratios give a skilled and experienced analysts a better understanding of the financial condition and performance of the firm that what he could have obtained only through a persuade of the financial statements. The term ratio refers to the numerical or quantitive relationship between two items or variables. It can be expressed as (1) percentages (2) fractions and (3) proportion of numbers. These alternative methods of expressing items which are related to each other are, for purpose of financial analysis referred to as ratio analysis. It should be noted that computing the ratios does not add any information that already inherited in the figures of profits and sales. What the ratios do is a more meaningful way so as to enable us to draw conclusions from them. The systematic use of ratio to interpret the financial statements for knowing the strength and weakness of a firm as well as its historical performance and current financial condition. The ratio analysis as a quantitive tool enables analysists to draw quantitive information about net profits adequate, efficient uses of assets, firm’s currents obligations etc.

DEFINITION OF RATIO:
“The relationship between two accounting figures expressed mathematically, is known as ratio or financial ratio.” “The alternative methods of expressing items which are related to each other are, for purpose of financial analysis, referred to as ratio analysis.”

STANDARD OF COMPARISION:
The ratio analysis involves comparison for a useful interpretation of the financial statements a single ratio in itself does not indicates favorable or unfavorable condition. Some standards of comparison are useful here, which may consist of:  Ratio calculated from the past financial statements of the same firm.  Ratio developed using the projected or pro forma, financial statement of the same year.  Ratios of some selected firms, especially the most progressive and successful. At the same point of time, and  Ratios of the industry to which the firm belongs. S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 46

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

The easiest way to evaluate the performance of a firm is to compare its current ratios with the past ratios. It gives an indication of the direction of change and reflects whether the firm’s financial performance has improved, deteriorated or remained constant over time. The change may be affected by changes in the firm’s performance. Sometimes future ratios are used as the standards of comparison of past ratios with future ratios show the firms relative strengths and weaknesses in the past and the future. If the future ratio indicates the weak financial position, corrective actions should be initiated. In the other way, we can compare ratios of one firm with some selected firms in the same industry at the same point in time. It is more useful to compare the firms’ ratios with ratio of a few carefully selected competitors, who have similar operations. It indicates the relative financial position of the firm. For determining the financial condition and performance of a firm, this ratio may be compared with average ratios of the industry of which the firm is a member. It helps to ascertain the financial standing and capability of the firm in the industry to which it belongs. Industry ratios are important standards in view of the fact that each has its own characteristics which influence the financial and operating relationships.

NATURE OF RATIO ANALYSIS:
Ratio analysis is a powerful tool of financial analysis. A ratio is a indication quotient of two mathematical expressions, which is used as an index or yardstick for evaluating the financial position and performance of a firm. The absolute accounting figures do not provide a meaning understanding of the performance and financial position of the firm. An accounting figure conveys meaning when it is related to some other relevant information. Ratios help to summarize the large quantities of financial data and to make qualitative judgment about the firm’s performance. The greater the ratio, the greater the firms liquidity and the vice-versa. The point to note is that a ratio indicates a quantities relationship, which can be used to make a quantitive judgment. Such is the nature of all the financial ratios.

IMPORTANCE OF RATIO ANALYSIS:
The importance of ratio analysis lies in the fact that it represents facts on a comparative basic and enables the drawings of a inferences regarding the performance of a firm. In respect of the following aspects, ratio analysis is relevant. 1. LIQUIDITY POSITION. 2. LONG TERM SOLVANCY. 3. OPERATING EFFICIENCY. 4. OVER ALL PROFITABILITY. S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 47

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

5. INTER FIRM COMPARISON. 6. TREND ANALYSIS.

LIMITATIONS OF RATIO ANALYSIS:
There are several limitations of ratio analysis. 1. COMPARATIVE STUDY REQUIRED 2. LIMITATION OF THE FINANCIAL STATEMENT. 3. RATIOS ALOME ARE NOT ADQUATE. 4. WINDOW DRESSING. 5. PROBLEMS OF PRICE LEVEL CHANGES. 6. NO FIXED STATEMENTS 7. RATIOS ARE A COMPOSITE OF MANY FIGURES.

VARIOUS TYPES OF RATIOS:
There are mainly five kinds of Ratios: . 1. LIQUIDITY RATIO. 2. PROFITABILITY RATIO. 3. ASSETS TURNOVER RATIO. 4. FINANCE / LEVERAGE / CAPITAL RATIO

1. LIQUIDITY RATIO:
(a) CURRENT RATIO (b) QUICK RATIO (c) NET WORKING CAPITAL (d) Debtor turnover Ratio (e) Inventory turnover (a) OPERATING PROFIT RATIO (b) GROSS PROFIT RATIO (c)NET PROFIT RATIO (d) RATE OF RETURN ON INVESTMENT

2. PROFITABILITY RATIO:

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

48

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

3. ASSETS TURNOVER RATIO:
(a) INVENTORY / STOCK TURNOVER RATIO (b) AVERAGE AGE OF INVENTORIES (c) TOTAL ASSETS TURNOVER (d) NET FIXED ASSETS TURNOVER (e) NET WORKING CAPITAL TURNOVER (f) DEBTORS TURNOVER

4. FINANCE / LEVERAGE / CAPITAL RATIO:
(a) PROPRIETORY RATIO (b) DEBT EQUITY RATIO (c) EARNING PER SHARE (EPS)

LIQUIDITY RATIO.
It is extremely essential for a firm to be able to meet its obligation as they become due. Liquidity ratio measures the ability of the firm to meet its current obligations. Liquidity ratios by establishing a relationship between cash and other current assets to current obligations provide a quick measure of liquidity. The failure of a company to meet its obligations due to lack of sufficient liquidity, will result in bad credit image or even in law suits resulting in the closure of the company. Proper balance between liquidity and profitability is required for efficient management. The liquidity ratio measures the ability of the firm to meet its short term obligation and reflect the short term financial strength/ solvency of a firm. The main ratio which indicates the liquidity of a firm is: (1) Current Ratio (2) Quick Ratio (3) Net working capital (4) Debtor turnover Ratio

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

49

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

1 CURRENT RATIO:
Current ratio is the most widely used ratio which shows the proportion of current assets to current liability. It is a measure that working capital is available on time or not. Current ratio: SIGNIFICANCE: The current ratio is not only a measure of solvency but it is an index of the working capital available to the margin of safety. It means. it is a crude and quick measure of the firm’s liquidity. (Rs. In Cr.) YEAR CURRENT ASSETS CURRENT LIABILITY RATIO (C.A/C.L) 2006-2007 Banas Sagar 209.89 355.24 158.19 1.3266 185.08 1.9994 2007-2008 Banas Sagar 360.62 318.56 139.79 2.5757 149.37 2.1327 2008-2009 Banas Sagar 560.88 534.97 175.90 3.1887 235 2.2764 current assets Current liability

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

50

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION:
 Composition of current ratio is very important at the time of interpretation. Current ratio indicates the sound short term finance from the creditor’s point of view. But on the other hand the higher ratio indicates blocking of funds in current assets. As a conventional rule, current ratio of 2:1 or more is considered satisfactory. To through more light on the quality of current assets the percentage of the current assets is to be calculated.  However current ratio is continuously increasing over the period because decreasing in current liabilities and also huge decreasing in cash and bank balance.  For Banas dairy: In the year 2006-07 to 2007-08 we saw in the Banas dairy current assets are increasingly in more number. Opposite that the current liability is decreasing mode so the current ratio is good for the two year. But year2008-09 Banas dairy increasing its liabilities so the Ratio was goes to 3.188 it was little more to the previous year.  For Dudhsagar Dairy: The Dudhsagar Dairy’s Current ratio was sawn constant rise mode but not high mode so the Current ratio of the sagar is little bit good.

2. QUICK RATIO
A variant of current ratio is the liquid ratio or quick ratio which is designed to show the amount of cash available to meet immediate payments. It is obtained by dividing the liquid assets to liquid liabilities. Quick assets are obtained by deducting stock -in trade from current assets. Quick ratio: Quick Assets Current liability YEAR Quick ASSETS Current LIABILITIES 2006-2007 Banas Sagar 145.94 242.24 158.19 185.08 (Rs.in Cr.) 2007-2008 2008-2009 Banas Sagar Banas Sagar 214.41 143.92 415.84 344.94 139.79 149.37 175.90 235

RATIO (L.A/L.L)

0.9226

1.3088

1.5338

0.0964

2.3642

1.4678

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

51

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION:
 The ideal liquid ratio is 1:1. The firm has more liquid position and it is good for the company because the firm should have some cash on hand to meet daily expense.  For Banas Dairy: The liquidity ratio in the year 2006-07 in little less so the ratio was good. But in the year 2007-08 their ware more but in the year 2008-09 the ratio is more increase because there is huge increase in cash and bank balance.  For the Dudhsagar dairy: When we see the Dudhsagar Liquidity ratio we would easily decided that is an ideal ratio for the any firm.  In the liquidity ratio the ideal ratio is 1:1 and the dudhsagar ratio is matching the ideal level.  So we easily comparison the dudhsagar dairy is good liquidity position other than banas dairy.

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

52

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

PROFITABILITY RATIO:Profitability is an indication of the efficiency with which the operations of the business are carried on. Poor operational performance may indicate poor sales and poor profit. A Lower profitability may arise due to lack of control over the expenses. Bankers, financial institutions and other creditors look at the profitability ratios as an indicator whether or not the firm earns substantially more than it pays interest for the use of borrowed funds whether the ultimate repayment of their debts appear reasonably certain. Owners are interested to know the profitability as it indicates the return which they can get on their investments.

1. GROSS PROFIT RATIO:
The ideal ratio is 25% for the trading concern while 15% for the manufacturing concern. This ratio shows the margin left after meeting manufacturing costs. It measures the efficiency of production as well as pricing. Gross profit ratio= Gross profit *100 Sales

YEAR GROSS PROFIT SALES RATIO (%)

2006-2007 Banas 151.74 933.97 16.247

Sagar 304.61 1265.92 24.06

2007-2008 Banas Sagar 169.34 351.92 1149.8 14.727 1482.18 23.74

2008-2009 Banas Sagar 221.78 288.33 1546.8 14.31 1750.26 16.47

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

53

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION:For Banas Dairy: Gross profit margin ratio is Decrease in the year 2007-08 that is1.33 % compares to 2006-07 year.  In the year 2008-09 the ratio goes down by 3% which is not good sign of company the ratio goes down because of huge increase in the cost of purchase. For Dudhsagar dairy: Gross profit margin ratio is Decrease in the year 2007-08 that is10 % compares to 2006-07 year.  In the year 2008-09 the ratio goes down by 31% which is not good sign of company the ratio goes down because of huge increase in the cost of purchase. When we compare the ratio between two dairy that saw that Banas Dairy’s profit goes consistent in the last three year then dudhsagar.

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

54

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

(2)NET PROFIT RATIO:The ratio helps in determining the efficiency with which affairs of the business are being managed. It also indicates the firm’s capacity to withstand adverse economic condition. NET PROFIT RATIO: EARNING AFTER TAX *100 SALES (Rs. In Cr.) YEAR EARNING AFTER TAX NET SALES RATIO (%) 2006-2007 Banas Sagar 6.80 3.73 933.97 0.7276 1265.9 0.2949 2007-2008 Banas Sagar 7.80 3.55 1149.9 0.6786 1482.2 0.2395 2008-2009 Banas Sagar 8.94 3.72 1546.8 0.5781 1750.3 0.2125

INTERPRETATION:  The ratio is an effective measure to check the profitability of business. However, constant increase in the net profit ratio year after year is a definite indication of improving condition of the business. If the net margin is inadequate, the firm will fail to achieve satisfactory return on owners’ equity.  For Banas Dairy:S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 55

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

 But not in this case the ratio is decreasing year by year the ratio of 2007-08 was 7% & in the year 2008-09 ratio decrease by 15% There was not good for any firm.  For Dudhsagar Dairy: Here in the case of Sagar dairy the net profit ratio is constant decrease last three year. In year 2007-08 19% & year2008-09 12% Decrease.  Compare two dairy Ratio there is a constant Decrease in the three year. Reason for that is the Dairy firm is public Assets & its main aim is not profit but make financial strongest to the poor farmer. So they should contribute most part of profit in the development of society.

(3) OPERATING PROFIT RATIO:
Operating profit ratio can be found out after excluding all non-operating expenses like interest and taxes that means earning before interest and tax. OPERATING PROFIT RATIO = OPERATING PROFIT *100 SALES (Rs. In Cr.) YEAR OPERATING PROFIT SALES RATIO (%) 2006-2007 Banas Sagar 924 1258.6 933.97 0.9892 1265.9 0.9942 2007-2008 Banas Sagar 1142.7 1476.2 1149.9 0.9938 1482.2 0.9959 2008-2009 Banas Sagar 1543.3 1895.9 1546.8 0.9977 1750.3 1.0832

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

56

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION:
 The ratio is decrease year by year because the cogs is increasing year by year the main reason behind increasing cogs is cost of purchase of raw material is increase in every year.  For Banas: The ratio in the year 2006-07 is 0.99% and thereafter the ratio is 0.9938%&0.9977 in the year 2007-08 and 2008-09 respectively.  For Dudhsagar: The ratio in the year 2006-07 is 0.9942% and thereafter the ratio is 0.9959%&1.0832 in the year 2007-08 and 2008-09 respectively.

(3)RATE OF RETURN ON INVESTMENT:
It is also known as return on capital employed or return on assets. It measures how efficiently the capital is employed. R.O.R.O.I = EBIT *100

Total Investment This ratio is spitted into following two parts by inserting “sales” in the above formula.

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

The below split is popularly known as DU PONT split. ROI = EBIT *100 SALES X SALES TOTAL ASSETS

PROFIT MARGIN (%) YEAR EBIT Investment R.O.R.O.I 2006-2007 Banas 6.80 104.51 6.5024

TOTAL ASSETS TURNOVER 2007-2008 Sagar 3.73 253.3 1.474 Banas 7.80 277 2.817 Sagar 3.55 260.12 1.364 2008-2009 Banas 8.94 470.2 1.902 Sagar 3.72 772.28 0.4817

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

58

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION:
 The rate of return on investment in the year 2006-07 was the highest compare to other year but thereafter the ratio goes down.  For Banas Dairy: In the year 2007-08 it decreased to 57% due decrease in the profit margin that is7 %.  In the year 2008-09 the ratio goes down because EBIT is decreasing every year and so the ratio is only 33%.  For Dudhsagar Dairy; In the year 2007-08 it decreased to9% due decrease in the profit margin that is19 %.  In the year 2008-09 the ratio goes down because EBIT is decreasing every year and so the ratio is only 65%.  Compare Between two dairy that was clearly Mention that Banas R.O.R.O.I Better then the dudhsagar.

TURN OVER / ACTIVITY RATIO:Turnover or activity Ratios are employed to evaluate the efficiency with which the firm manages and utilizes its assets. Funds of creditors and owners are invested in various assets to generate sales and profit. So, these ratios are helpful in knowing the speed with which assets are being compared or turned into sales. It shows relationship between sales and assets.

(1) INVENTORY / STOCK TURNOVER RATIO:
Inventory turnover is a valuable measure of selling efficiency and inventory quality. It expresses the frequency with which average level of inventory investment is turned over through operations. It signifies the liquidity of the inventory. This ratio indicates how many times in a year the stock is turnover. Higher the ratio better it is. STOCK TURNOVER RATIO= COST OF GOOD SOLD AVERAGE STOCK AVERAGE STOCK = OPENING STOCK + CLOSING STOCK 2

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

YEAR COGS AVERAGE STOCK RATIO (In times)

2006-2007 Banas Sagar 782.22 961.31 75 127.44 10.4289 7.5428

2007-2008 Banas Sagar 980.54 1130.26 105 143.82 9.3327 7.8587

2008-2009 Banas Sagar 1325.49 1461.93 145.62 182.33 9.1024 8.017

INTERPRETATION:  Inventory turnover ratio indicates the relationship between the cost of goods sold and the inventory level. Higher the inventory ratio, larger the amount of sales, the smaller the amount of the capital tied up in inventory and the more current the merchandise stock  Banas Dairy: The ratio in the year 2007-08 is 11% decrease& in the year 2008-09 to 3% which is not good sign of company.  Dudhsagar dairy:- The ratio in the year 2007-08 is 4%Increase. in the year 2008-09 to 2% which is good sign of company.  Compare this ratio between two dairy clearly indicate that dudhsagar ratio is very good because it constant increase in three years.

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

(2) AVERAGE AGE OF INVENTORIES:
This ratio indicates the waiting period of the investments in the inventories and is measured in days, week or months. Inventory turnover and average age of the inventories are inversely related. High inventory turnover ratio is goods but longer age of the inventory is bad as it indicates idle blocking of money in the inventories.

YEAR DAYS INVENTORY TURNOVER AVERAGE AGE OF INVENTORIES (IN DAYS)

2006-2007 Banas Sagar 360 360 10.429 7.5428 35 48

2007-2008 Banas Sagar 360 360 9.3327 7.8587 39 46

2008-2009 Banas Sagar 360 360 9.1065 8.0179 40 46

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

61

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION:
 For Banas:  In the year 2006-07 it was the lowest that is 35 days and it was increasing year by year to35days to 40days respectively which shows or indicates that idle blocking of money in the inventories year by year which is not good for the company or firm.  For Dudhsagar:  In the year 2006-07 it was the lowest that is 48 days and it was decreasing year by year to46days &46days respectively which shows or indicates that low blocking of money in the inventories year by year which is good for the company or firm  Compare between two Dairy it is indicate that dudhsagar ratio is little bit good to the Banas ratio.

(2) TOTAL ASSETS TURNOVER:
The amount invested in business is invested in all assets for earning profit. CAUTION: If the assets are old and more depreciation has been deducted than the turnover will seen more which in fact does not show efficiency. TOTAL ASSETS TURNOVER= SALES TOTAL ASSETS (Rs. In cr.) 2007-2008 Banas Sagar 1149.8 1482.1 346.44 434.21 3.3192 3.4214

YEAR SALES TOTAL ASSETS TOTAL ASSETS TURNOVER

2006-2007 Banas Sagar 933.97 1265.92 246.70 400.18 3.7858 3.1634

2008-2009 Banas Sagar 1546.7 1750.2 539.61 718.21 2.8665 2.4369

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION:
Following points should be kept in mind while interpreting  Type of assets whether new or old & by which method depreciation is provided.  The investment in fixed assets changes in the type of business for example steel business investment in the fixed assets is very high.  Sales depend upon overall efficiency in the part of management & not only on the use of fixed assets.  It is not always the case that more the sales more the profit, for this purpose difference between selling price and cost of sales should be taken into account.  The method of valuation of assets and in particular method of valuation of stock must be examined.  For Banas: Here in the graph in the year 2006-07 it was 3.79 than it decrease to 3.32 times in the year 2007-08than in the year 2008-09 it decrease to 2.86 may be due to cash and bank balance has decrease in that year.  For Dudhsagar: in the graph in the year 2006-07 it was 3.17 than it increase to 3.42 times in the year 200708than in the year 2008-09 it decrease to 2.44 may be due to cash and bank balance have decrease in that year.

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

(3)NET FIXED ASSETS TURNOVER
This ratio measures sales per rupees of investment in fixed assets. This ratio supposed to measure the efficacy with which fixed assets are employed. A high ratio indicates a high degree of efficacy in assets utilization and vice-versa. FIXED ASSETS TURNOVER = NET SALES NET FIXED ASSET (Rs. In cr.) 2008-2009 Banas 1546.78 85.24 18.1472

YEAR NET SALES NET FIXED ASSETS RATIO (IN TIMES)

2006-2007 Banas Sagar 933.97 1265.92 52.84 17.675 167.36 7.5640

2007-2008 Banas 1149.88 56.13 20.486

Sagar 1482.18 90.93 16.299

Sagar 1750.26 472.32 3.5058

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION:
 A fixed assets turnover ratio has increased reflects the efficient use of fixed asset.  For Banas: But in the graph it shows in the year 2006-07 it was 17.67 times and it increased to 20.49 times in the year 2007-08 and Decrease to 18.14 in2008-09 year. There little bit constant in three year.  It is due to increase in the net sales so assets turnover ratio is increased year by year.  For Dudhsagar: In the graph it shows in the year 2006-07 it was7.56 times and it increased to 20.48 times in the year 2007-08 and Decrease to 3.51 in2008-09 year. There little bit constant in three year.  It is due to increase in the net fixed assets so assets turnover ratio is increased in the current year.

(4) NET WORKING CAPITAL TURNOVER: This ratio measures sales per rupees of investment in the working capital. This ratio supposed to measure the efficacy with which working capital is employed. A high ratio indicates a high degree of efficacy in working capital utilization and vice-versa. NET WORKING CAPITAL TURNOVER = SALES NET WORKING CAPITAL

(Rs. In Cr) YEAR NET SALES NET WORKING Capital N.W.C.T

2006-2007 Banas Sagar 933.97 1265.92 51.67 169.13

2007-2008 Banas Sagar 1149.88 1482.18 220.83 169.19

2008-2009 Banas Sagar 1546.78 1750.26 384.98 299.96

18.076

7.4849

5.2071

8.7604

4.0178

5.83

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

65

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION:
 The ratio is in negative manner because the net working capital is in negative manner because the current liabilities are more than assets.

(5) DEBTORS TURNOVER:The analysis of the debtor’s turnover ratio supplements the information regarding the liquidation of one item of current assets of the firm. It measures how rapidly debts are collected. It is a measure of assessing the ability of the company to promote sales with minimum investments in uncollected debtors. It indicates timely quick collection or pre-matured collections through cash discounting incentives, bill discounting or factoring the book-debts. DEBTORS TURNOVER = CREDIT SALES AVERAGE DEBTOR

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

YEAR NET SALES AVERAGE DEBTORS DEBTORS TURNOVER

2006-2007 Banas Sagar 933.97 1265.92 40.04 23.3234 60.40 20.9583

2007-2008 Banas Sagar 1149.88 1482.18 60.32 19.0625 73.64 20.1275

2008-2009 Banas Sagar 1546.78 1750.26 56.72 27.27 70.78 24.7269

Debtors refer the current assets in the firm. When the debtors is very high then say that the firm done business on the credit base. If the debtors is very high then affected to the liquidity of the firm. For the Banas dairy: Banas sales in the year2006-07 were 934 Cr. on part that Rs.531cr. sales should do by Credit base. So that was high ratio. Next sales year sales were increase that effect on the debtors. But in current year Sales increase but debtors fall down that is good sign for the liquidity of the firm. For Dudhsagar Dairy:- In the above graph we see that the Sagar Debtors was increase in the year 2008.then after over all ratio is good. So dudhsagar should done their business most of cash bases. Compare between two dairy there are little bit same in all three year.

INTERPRETATION:

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

67

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

CAPITAL/ LEVERAGE / FINANCE STRUCTURE RATIOS

To judge the long term financial position of the firm, financial leverage or capital structure ratio is calculated. It indicates mix of the funds provided by the owners and the lenders. Long-term creditors, like debentures holders, financial institutions strength. In fact, the firm should have a strong short term as well as long term financial position. Leverage can work in opposite direction also. If the cost of debt is higher than the firm’s overall rate of return, the earnings of shareholders will be reduced. If the firm is actually liquidated for nonpayment of debt-holders’ dues, the worse suffers will be share holders.

(1) PROPRIETORY RATIO:The ratio indicates the proportion of total assets financed by owners. It is a variant of debt equity ratio. It established relationship between the proprietor’s funds and the total assets. This ratio focuses the attention on the general financial strength of the business enterprise. Higher the ratio stronger the position of enterprises. It indicates that proprietor have provided more fund to purchase the assets. If it is 100% that is business does not used any outside fund that is not using its reputation & bringing cash from outside, bringing more assets & multiplying business. This opportunity is lost by the conservative approach.

PROPRITEOR RATIO: PROPRIETORS FUND *100 TOTAL ASSETS

YEAR PROPRIETORS FUND TOTAL ASSETS RATIO (%)

2006-2007 Banas Sagar 41.70 44.87 267.94 15.5889 447.11 10.0347

2007-2008 Banas Sagar 57.48 46.66 424.92 13.5293 419.31 11.7271

2008-2009 Banas Sagar 65.06 409.24 654.29 9.9435 1017.11 40.2352

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

(Rs. In lakhs)

INTERPRETATION:
Dairy firm is a Public Property & Here equity holders are only milk produces. Dairy share are not trade in the market. In the Dairy nobody is owner They are only Member of Board directors.

(3) DEBT- EQUITY RATIO:
This ratio can be found out by dividing long term debt to total capital employed .This ratios are calculated to measure the financial risk. DEBT- EQUITY RATIO = LONG TERM DEBT TOTAL CAPITAL EMPLOYED S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 69

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

(Rs. In Cr.) YEAR LONG TERM DEBTS SHARE HOLDRES FUND DEBT EQUITY RATIO 2006-2007 Banas Sagar 77.3 175.32 25.67 3.0114 18.29 9.5835 2007-2008 Banas Sagar 45.27 174.43 37.06 1.2216 18.31 9.5262 2008-2009 Banas 239.71 39.74 6.0324

Sagar 511.41 18.32 27.9159

INTERPRETATION: It is a variant of debt equity ratio. The ratio is of particular importance to the creditors who can find out the proportion of share holders funds in the total assets employed in the business.  A high ratio will indicate a relatively little danger to the creditors, etc in the event of forced reorganization or winding up of the company. A low ratio indicates greater risk to the creditors since in the events of losses a part of their money may be lost besides loss to the proprietors of the business.  For Banas:  In the year 2006-07 the ratio is 3.01 and in the year 2007-08 the ratio is 1.22 and in the year it goes up to 6.03 which is good sign of company. S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA 70

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

 For Dudhsagar:- In the year 2006-07 the ratio is 9.58 and in the year 2007-08 the ratio is 9.52 and in the year it goes up to 27.91 which is not good sign of company. Because there was a huge increase in long term debt.

VALUATION RATIOS:
Valuation ratios are the results of the management of above four categories of the functional ratios. Valuation ratios are generally presented on a per share basis and thus are more useful to the equity investors.

(1) EARNING PER SHARE (EPS)
This is the measurement of calculating the profitability of the common share holders. As a profitability index, it is a valuable and widely used ratio. Adjustments for bonus or rights issues should be made while comparing earning per share over a period of time. EARNING PER SHARE: PROFIT AFTER TAX NUMBER OF EQUITY SHARE

YEAR P.A.T NO. OF EQ. SHARE E.P.S RATIO

2006-2007 Banas Sagar 6.80 3.73 0.50 0.25 13.5913 14.9324

2007-2008 Banas Sagar 7.80 3.55 0.50 0.25 15.6059 14.119

2008-2009 Banas Sagar 8.94 3.71 0.50 0.25 17.8832 14.8798

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

71

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

INTERPRETATION:
 This ratio shows the profitability of the firm on a per share basis. It helps in deciding that the equity share capital is being used effectively or not.  For Banas: The earnings per share during the year 2006-2007 13.59 was the lowest but in the in the 2007-2008 &2008-2009 it increased to 15.61 & 17.88 because of more profits. It was good for the shareholder’s point of view.  For Dudhsagar: The earnings per share during the year 2006-2007 14.87 was the lowest but in the in the 2007-2008 &2008-2009 it decreased to14.119 & 14.87 because of less profits. It was little bit not well for the shareholder’s point of view.

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

72

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

COMPARISONS OF THE RATIO OF DUDHAGAR & BANAS DAIRY FOR THE THREE YEAR

SR. NO 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

PARTICULARS (RATIO)

CURRENT RATIO QUICK RATIO NET WORKING CAPITAL OPERATING PROFIT RATIO GROSS PROFIT RATIO NET PROFIT RATIO RATE OF RETURN ON INVESTMENT TOTAL ASSETS TURN OVER NET FIXED ASSETS TURN OVER INVENTORY TURNOVER RATIO AVERAGE AGE OF INVENTORIES NET WORKING CAPITAL TURNOVER DEBTORS TURNOVER PROPRITERY RATIO DEBT EQUITY RATIO EARNING PER SHARE (EPS)

2006-2007 2007-2008 2008-2009 Banas Dudhsa Banas Dudhsag Banas Dudhsagar gar ar 1.33 1.99 2.58 2.1327 3.1887 2.2764 0.92 18.76 0.99 16.25 0.73 1.31 67.98 0.99 24.06 0.295 1.53 5.21 0.99 14.73 0.679 0.0964 10.605 0.996 23.74 0.239 2.3642 4.0178 0.9977 14.31 0.5781 1.4678 26.8004 1.0832 16.47 0.2125

3.79 17.67 10.43 35 18.08

3.163 7.564 7.543 48 7.485

3.319 20.49 9.333 39 5.207

3.421 16.29 7.859 46 8.760

2.8665 18.1472 9.1024 40 4.0178

2.4369 3.5058 8.017 46 5.83

13. 14. 15. 16.

23.32 15.59 3.0114 13.591 3

20.96 10.04 9.5835 14.932 4

19.06 13.53 1.221 6 15.60 59

20.13 11.73 9.5262 14.119

27.27 9.9435 6.0324 17.883

24.7269 40.2352 27.9159 14.8798

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

73

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

SWOT ANALYSIS
STRENGHTS
     High Standard production of products Sound R & D Continuously quality inspection of products Location of Company Brand name of the product

WEAKNESSES
 Product price is more so that lower people can not afford.

OPPORTUNITIES
   Global market Opportunity to enter into Niche market Back up from past references

THREATS
    Global competitions Introduction of new kind of raw materials with cheaper rate Government’s support Communication gap between seller and buyer

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

74

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

BIBLIOGRAPHY

Books
   I. M.Panday “Financial Management”. Vikas publishing house pvt ltd.8th edition. Narayanaswamy, “Financial accounting a managerial perspective”. 3rd edition Prasanna Chandra “ Financial Management Theory & practice” 7th edition

Website
     www.sagar.com www.gcmmf.com www.dudhsagardairy.com www.amul.com www.indiadairy.com

Other
  Annual report of Dudhsagar dairy Annual report of Banas dairy

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

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MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

BALANCE SHEET
PARTICULAR ASSEST FIXED ASSETS Capital work in process INVESTMENTS Investment in share National saving certificate INVENTORIES TRADE DEBTOR LOAN & ADVANCES CASH & BANK TOTEL LIABILITIES Authorized share capital Share capital(fully paid) RESERVES LOAN Secured Uncured CURRENT LIABILITIES & PROVISIONS Deposits Unpaid dividend Dues to societies Outstanding again exp Outstanding again purchase Sandry creditors Debenture redemption premium Provision for income tax Provision for contingent liability Profit & loss a/c TOTEL 2006-07 2007-08 2008-09

831957692 9695503 77026920 16000 1130026534 628486610 278296775 1515573851 4471079885

898608895 10713587 98191020 16000 1746402925 844306783 300393847 294499251 4193132308

4510945763 212254155 98191020 22000 1900294576 571369017 531448223 2346561963 10171086717

250000000 182943200 265716835 1487516157 636516100 314612337 5634 1223474127 72032031 112972951 77558291 10238708 50162554 0 37330960 4471079885

250000000 183107200 283466254 1460857134 736516100 379986885 7423 740415963 95881537 140793050 67006202 14334191 55262554 0 35497815 4193132308

250000000 183197200 3909157254 1204963315 2486516100 480085481 8443 1367281855 140989987 181912808 84786012 18429674 73087554 3471578 37199456 10171086717

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

76

MEHSANA DIST. CO-OPERATIVE MILK PRODUCERS' UNION LTD.
DUDHSAGAR DAIRY, HIGHWAY, MEHSANA – 384 002

EXPENDITURE Opening Stock Work in process Raw material of milk Purchase Purchase exp Power & Fuel material consumed Co-operative exp Processing exp Insurance Premium Salary & Wages Staff P.F & Others Benefit Freight & Forwarding Expense Audit fee Interest & Commission Other exp Marketing Expense Donation Repair & maintenance Rate Rent & Taxes Post Tel.&Stastionery-Prin Prevision for tax Provision for responsibility Depreciation Profit TOTAL INCOME Sales Closing Stock Loss TOTAL

DUDHSAGAR DAIRY PROFIT & LOSS A/C FOR THE YEAR ENDED 31ST MARCH 2006 TO 2009 2006-07 2007-08 1051298582 161073409 33392648 8930681333 366069948 317897797 1982968666 18118133 14031551 6410080 279753718 96112142 40265698 10741408 101258595 17890105 12026015 12211 61289639 8035693 6443369 1694465 0 113446183 37330960 13668242348 79643064 12659228733 929370551 13668242348 762183626 118143040 49043885 11388237501 490701293 374750901 2365212470 20839892 16825130 3749309 280769559 77248480 50948347 15710259 96956538 31869931 11436918 0 67239455 5294435 4712322 5677035 0 121655115 35497815 16394703256 67123786 14821827512 1505751958 16394703256

2008-09 1324870445 151429162 29452351 12448930258 66465771 479878006 2988357484 21808578 18647354 2876917 354520320 97499710 65538769 10669377 156708131 36003267 9964683 0 83125090 7801914 6644787 18928748 3471578 120425999 37199456 18541218155 67505990 17502649176 1569254289 19139409455 77

S.P.B.PATEL ENGG. COLLEGE(MBA PROGRAMME)MEHSANA

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