Guided by:-DR. J.C.JANI.

Submitted To:-

Submitted by:- Mistry Manisha.S 160

Patel Snehal.H

150

Patel Nirmita. B 137

Patel priyal.J
1

144

NO.

PARTICULAR

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PAGENO.

Preface

Acknowledgement

Introduction.

History Organization chart & development

Company profile.

12

PRODUCTION DEPARTMENT

20

Introduction

21

Amul organization.

23

Number of product

24

Production Plant

24

Number Of Plant

25

Production process.

27

MARKETING DEPARTMENT

32

Introduction

33

Advertising

34

Channel Of Distribution

35

Marketing research

37

Marketing mix.

39

Finance Department

44

Introduction

45

Organization structure

47

Acconting policy.

50

Balance sheet

52

Profit and loss account

55

Ratio analysis

56

HUMAN RESOURSE DEPARTMENT

78

Introduction

79

Types of leaves.

81

Performance appraisal.

82

Training and development

84

CONCLUSION

89

We
are

student of management in faculty of business administrator was given a project

report on Amul kheda satellite dairy as part of our studies.
The practical training as the TYBBA level is develop the student ability and
knowledge about industrial environment and develop idea in that as a supplement
in practical knowledge and concept idea and the enough background for the carrier
there is one right saying Experience is the best teacher.
This statement is true in every field so industrial training in TYBBA is
arranged to develop the skill and attitude.
During the industrial training. we got on opportunity to gain practical
knowledge about the management of Amul kheda satellite dairy. From this report
one can get information about the various department of Amul kheda satellite
dairy
it is a really a matter of pride to be a student of Business
Administration. we would like to thank first of all the chairman and Mr.Ramsinh
parmar because who was giving permission to training the company. Amul kheda
satellite dairy ltd. we would also thankful to the Amul for giving us full and
correct information we would like the also thank all the employees of the company
who had helped me lot during training.

we are thankful to Mr. G.S.shah Sir who give us permission to training

the industry. we like to thank MR. Mitul Patel sir to give us constant support
during the training and give right guidance. At last we thankful to all the staff
member of collage and my friends who provide our guidance.

we would like to thank first of all the chairman Mr.Ramsinh parmar because
who was giving permission to training the company. Amul kheda satellite dairy
3

ltd. we would also thankful to the Amul for giving us full and correct information
we would like the also thank all the employees of the company who had helped me
lot during training.

we am thankful to Mr. G.S.shah Sir who give us permission to training

the industry. we like to thank MR. Mitul Patel sir to give us constant support
during the training and give right guidance. At last we thankful to all the staff
member of collage and my friends who provide me guidance.

India is a country connected with agricultural and cattle rearing from

ancient time nearly more than 70 % on agriculture and cattle rearing. So dairy
industry is the best suited for the growth of India. And Indian people prefer more
milk and milk products than any other food. Due to liberalization, globalization
inexpensive, labor, large market and democracy India has best opportunity for
dairy industry.
The full form of AMUL is ANAND MILK UNION LIMITED that is the
brand name of Kaira District Co-operative milk producers union Ltd. for its
product range since 1955.
AMUL is Asias no. 1 and worlds second number co-operative dairy. It has
large market and dairy network in every state of India and across the India, like
central Asian countries, Bangladesh, Thailand, Indonesia, Malaysia, Singapore, etc.
It was started with 250 liters of milk and 2 societies and now, it produces 10 lakhs
litters milk per day and has 1113 societies and more than 6 lakes farmer members.
It produces milk and milk products.
AMUL was started with little machinery and now all the production of
AMUL are produced by latest and advanced machineries. AMUL has completed
61st year and entered in 62nd year on 14 December 2007.

In the year 1946 the first milk union was established. This union was started
with 250 liters of milk per day. In the year 1955 AMUL was established. In the
year 1946 the union was known as KAIRA DISTRICT CO-OPERATIVE MILK
PRODUCERS' UNION. This union selected the brand name AMUL in 1955.

The brand name Amul means "AMULYA". This word derived form the
Sanskrit word "AMULYA" which means "PRICELESS". A quality control
expert in Anand had suggested the brand name "AMUL". Amul products have been
in use in millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul
Ghee, Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice
cream, Nutramul, Amul Milk and Amulya have made Amul a leading food brand in
India. (The total sale is Rs. 6 billion in 2005). Today Amul is a symbol of many
things like of the high-quality products sold at reasonable prices, of the genesis of a
vast co-operative network, of the triumph of indigenous technology, of the
marketing savvy of a fanners' organization. And have a proven model for dairy
development (Generally known as "ANAND PATTERN").

In the early 40's, the main sources of earning for the farmers of kaira district
were farming and selling of milk. That time there was high demand for milk in
Bombay. The main supplier of the milk was Poison dairy limited, which was a
6

privately owned company and held monopoly over the supply of milk at Bombay
from the kaira district. This system leads to exploitation of poor and illiterates'
farmers by the private traders. The traders used to beside the prices of milk and the
fanners were forced to accept it without uttering a single word.
However, when the exploitation became intolerable, the farmers were
frustrated. They collectively appealed to Sardar Vallabhbhai Patel, who was a
leading activist in the freedom movement. Sardar Patel advised the farmers to sell
the milk on their own by establishing a co-operative union, Instead of supplying
milk to private traders. Sardar Patel sent the farmers to Shri Morarji Desai in
order to gain his cooperation and help. Shri Desai held a meeting at Samarkha
village near Anand, on 4th January 1946. He advised the farmers to form a society
for collection of the milk.
These village societies would collect the milk themselves and would decide
the prices at which they can sell the milk. The district union was also form to
collect the milk from such village co-operative societies and to sell them. It was
also resolved that the Government should be asked to buy milk from the
union.However, the govt. did not seem to help farmers by any means. It gave the
negative response by turning down the demand for the milk. To respond to this
action of govt., the farmers of kaira district went on a milk strike. For 15 whole
days not a single drop of milk was sold to the traders. As a result the Bombay milk
scheme was severely affected. The milk commissioner of Bombay then visited
Anand to assess the situation. Having seemed the condition, he decided to fulfill
the farmers demand.
Thus their cooperative unions were forced at the village and district level
to collect and sell milk on a cooperative basis, without the intervention of
7

Government. Mr. Vergeese Courian showed main interest in establishing union

who was supported by Shri Tribhovandas Patel who lead the farmers in forming
the Co-operative unions at the village level. The kaira district milk producers union
was thus established in ANAND and was registered formally on 14th December
1946. Since farmers sold all the milk in Anand through a co-operative union, it was
commonly resolved to sell the milk under the brand name AMUL.
At the initial stage only 250 liters of milk was collected everyday. But with
the growing awareness of the benefits of the cooperativeness, the collection of milk
increased. Today Amul collect 11 lakhs liters of milk everyday. Since milk was a
perishable commodity it becomes difficult to preserve milk flora longer period.
Besides when the milk was to be collected from the far places, there was a fear of
spoiling of milk. To overcome this problem the union thought out to develop the
chilling unit at various junctions, which would collect the milk and could chill it,
so as to preserve it for a longer period. Thus, today Amul has more than 150
chilling centers in various villages. Milk is collected from almost 1073 societies.
With the financial help from UNICEF, assistance from the govt. of
Newzeland under the Colombo plan, of Rs. 50 millions for factory to manufacture
milk powder and butter was planned. Dr.Rajendra Prasad, the president of India
laid the foundation on November 15, 1954. Shri Pundit Jawaharlal Nehru, the
prime minister of India declared it open at Amul dairy on November 20, 1955.

STAGES OF DEVELOPMENT
The Amul is the co-operative union which successes with the slow and
steady growth. The Amul has start with one society and now it is converted into a
union with 1073 societies. At the beginning Amul collect only 250 liters of milk
per day. Now, Amul collect 11 lakhs of liters of milk every day. The excess of milk
8

leads the Amul to develop the milk products. The Amul developed step by step.
The main stages of development are as follows:

IN 1954
In the year 1954 UNICEF provide the financial help worth of Rs. 50 million
to the Amul. This financial help lead Amul to established fully automatic plant for
producing milk and milk powder.

IN 1958
In this year Amul expand the plant and started to produce sweetened
condensed milk.

IN 1960
The excess supply of milk in the winter season and huge amount of profit
make possible the expansion of Amul. The Amul established new units for
producing cheese and baby food. This creates history in the dairy products, because
it was the first time where cheese and baby food is produced from the buffalo milk.

IN 1981
The new cattle plant was established at Kanjari.

IN 1992
For getting the benefits of excess supply of milk, Amul established another
plant named Amul-3. This plant has capacity of producing 14 lakhs litters of milk
everyday.
9

 IN 1994
The new cheese plant was established at Khatraj and Chocolates plant
established at Mogar. These two plants started with help of NDDB. .

IN 2001
For providing the quality milk at any time, Amul launched the new flavored
milk. This flavored milk available in four different tastes. :

IN 2003
For expanding the market share, Amul launched the "SNOWBALL" pizza and
flavored lassie. This product has been given the new market share to Amul in
the area of fast food.

IN 2004
The Amul keeps on achieving new highs in this competitive world. It has
launched CHOCOZOO [Chocolate], MUNCHTIME [Gathiya]. Amul also started
the new Satellite dairy at PUNE and COLCUTTA. This helped Amul in expanding
milk marketing in other state.

10

11

 NAME:AMUL SATELLITE DAIRY.

LOCATION:Amul kheda satellite dairy,
Khataraj chokadi,
Memdavad.
Registered in:14,December 1946.
Registrar office:kaira district co-operative milk producer union limited.
E-mail address:www.Amul dairy.com.
Main business:to produce different type of cheese, paneer, milk powder .
Product of the amul:butter, amul milk, amul ghee, cheese, shrikhand, amul ice-cream,
nutramul,shrikhand etc.
New product of the company:kesar peda, kajukatri, sandwitch, bun, bhajipav bun, bread.
Chairman of the company:Mr. ramsinh parmar.
Leader of the company:Dr.kurien,sardar patel,t.k.patel.

12

 Establishment:in 26,November 1996.

Award of the company:1985-1986:- national productivity council productivity award.
1986-1987:- national productivity council productivity award.
1987-1988:- national productivity council productivity award.
1988:- Indian merchants chamber Bombay award.
1991-1992:- national productivity council productivity award.
1992-1993:- national productivity council productivity award.
1993-1994:- national productivity council productivity award.
1994-1995:- national productivity council productivity award.
2004:- Indian co-operative cantina calabration.
2009:- national enery conservation award.
2010:-GMMF receive srishtis g-cube award.
Motto:
The main motto of Amul is to help farmers i.e. Milk Producers. Amul
system works under objective of highest possible compensation to the milk
producers and lowest possible price to consumers. Farmers are paid money in cash
payment for the milk. Milk gives them money for the daily necessities. Amul is the
one who started using their profits for the milk producers' common good.
Quality Management at Amul:

Quality Policies:The motivated and devoted work-force of AMUL arc committed to

produce wholesome and safe foods of excellent quality to remain market
leader through deployment of quality management systems, state-of-arttechnology, and innovation and eco-friendly operations to achieve satisfaction
of customers and milk producers.
Vision:

13

Vision of AMUL is to provide and vanish the problems of farmers (milk

-producers). The AMUL apparition was to run the organization with the cooperation of four main parties, the farmers, the representatives, the marketers, and
the consumers.

Quality of milk and milk produces:

In the current competitive environment, the customer is the king and
failure to satisfy his needs will have adverse impact on our growth and thereby
survival. It is my humble request to all of you that should our Union maintains the
lead, quality aspect is shall have to be given utmost priority. Milk received at the
societies is the raw material of our produces. Therefore, we should commit to
produce and procure clean and fresh milk with least bacterial count.
Amul Union received ISO 9001-2000 and HACCP certification 3 years ago
and it is a matter of pride for all of us that we were the first Union to achieve this
distinction. Efforts are afoot lo achieve ISO 14000 certification which is awaited to
"environment friendly" manufacturers.

LOGO OF THE AMUL

14

Logo of AMUL is a ring of four hands, which are co-coordinated each other.
The actual meaning of this symbol is co-ordination of hand of different people by
whom this union is now at top.

FIRST HAND: Is for farmers (producers), without whom the organization

would not be existed. Farmers are the inspiration of the AMUL-taste of India.
SECOND HAND: Is for the representatives of processors by whom the raw milk
processed in to different finished products.
THIRD HAND: Is for marketers without whom the products would not been able
to reach to the customers.
FOURTH HAND: Is for customers without whom the organization could not
carry on because they are the people who consume the products.
THE BRAND NAME OF AMUL:The Kaira district co- operative milk producers union ltd selected the brand name
AMUL for its products range, in 1955.
AMUL word is derived from Sanskrit word AMULYA. And it means that
PRICELESS
15

 INVALUABLE
PRECIOUS
It means that one can not measure the value.
One finds similar sounding word with the same meaning in several Indian
languages also. The very concept of Kaira unions system of co-operative dairying
was destined to become priceless for millions of farmers.
BANKERS:
1. Kaira District Co- Operative Bank.
2. Axis Bank
3. State Bank of India
4. Bank of Maharastra
5. Corporation Bank
6. Bank of Baroda
7. Bank of Saurastra

SOCIETIES: 1147
MEMBERS: 6, 34,678
OFFICE TIME: 10:00A.M TO 6:00P.M
ORGANIZATION STRUCTURE

B.O.D

16

Chairman

Vice Chairman

Managing Director

General Manager (Dairy Plant & Technology)

Assistant General Manager

Manager

Deputy Manager

Assistant Manager

Superintendent

Deputy Superintendent
17


Senior Officer

Assistant

Junior Assistant

Workers
BOARD OF DIRECTORS
SHRI RAMSINH PRABHATSINH PARMAR

CHAIRMAN

SHRI BHAIJIBHAI AMARSINGH ZALA

DIRECTOR

SMT. MADHUBEN DHARMSINGH PARMAR

DIRECTOR

SHRI DHIRUBHAI AMARSINH CHAWDA

DIRECTOR

SHRI PRAVINSINH FULSINH SOLANKI

DIRECTOR

SHRI MANSINH KOHYABHAI CHAUHAN

DIRECTOR

SHRI SHIVABHAI MAHIJIBHAI PARMAR

DIRECTOR

SHRI RANJITBHAI KANTIBHAI PATEL

DIRECTOR

SHRI CHANDUBHAI MAGHABHAI PARMAR

SHRI B.B. BHABHOR
SHRI RAHULKUMAR
DIRECTOR
18

DIRECTOR

SPECIAL AUDITOR
MANAGING

19

 INTRODUCTION
Production management is refers to the process of correction of past
mistakes catching up with the new techniques, taking up steps with developing
techniques and taking measures for the production of goods at competitive cost.
The basic philosophy of production management is to launch a formal attack
on direct cost and effective utilization of available resources, and developing
production management is the process of Planning, Organizing, Directing and
Controlling.
The AMUL is started with only 250 liters of milk per day but now AMUL
collects average 10 lakhs liters milk per day. At the initial stage AMUL has no
problem regarding milk, but in winter season there was excess supply of milk, so
AMUL has to sell out that excess milk at the low price or AMUL has to face loss.
To remove this problem AMUL took decision to set up a plant to process the
surplus milk into butter and milk powder.
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Today, AMUL has 3 plants known as AMUL 1, 2 and 3 and another plant in
Mogar and Khatraj and another two dairy at PUNE and CALCUTTA. The two
plant of AMUL except AMUL 1 is fully automated plant. The production is done in
the special machines. These machines and the technology are import-id from the
TRFTA PEAK Company. There is also facility of chilling of milk, so that the milk
remains usable.
Production manager:Mr. Bhulabhai. D. patel.
Production:The action of making or manufacturing from components of raw
materials, or the process of being so manufactured. Example:- milk converted to
the cheese, paneer, milk powder etc.
Production management:the job of co-ordination and controlling the activities required to make a
product, typically involving effective control of schedule, cost, performance,
quality and waste requirements.
Target:its depend upon the demand of the GCMMF.
Productivity:optimum input at given output.
Product line:product line is a group if different product items closely related with each
other. All products of products of a product line satisfy a class of the need used
together or are sold some group customers. All are sold through the channel of
destitution or are with some pricing range. Amul produced more than 40
varieties in milk product. Its products line includes cheese,chocolate,cool milk,
etc

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Amul organization:-

Firstly milk produce in the different villages. Collect the milk in the village cooperative centers. The milk collect in the two ways in the ken and tanker. Aim
of the company is to social and economical development. The milk distribute to
in the milk co-operative union And co-operative union using the milk to
22

produce the products. After that the product give GCMMF as for their demand.
GCMMF distribute the product in different parlors. Parlors directly sell the
product to the customers.

Production mix:Production mix means collection of the product line.I.e. total product
the Amul is selling in the market. The product mix of the Amul is consisting
of the different type of milk product suppose cheese include pizza cheese,
emmental cheese, gouda cheese.

Cheese:-

NUMBER OF PLANT:technology.

Amul dairy has 5 vast plants with new scientific

Plant 1 is in Anand which produce flavored milk,

Powder etc.
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Plant - 2 is in Mogar which produce chocolate &

Nutramul.
Plant - 3 is in Khatraj which produce cheese.
Plant - 4 is in kanjari which produce cattle food,
Like Amul Dairy & casein.
Plant - 5 is in puna which concern with milk packing.

PRODUCTION PLAN:1. IssuingtheRawMaterials:

As per the formula raw materials are indented from the Store
section to plant section.
Store superintendent issuing different ingredients to the hopper in the
warehouse.
Now from the ware house different ingredients are taken to the
interking conveys one by one into the plant.
2.

Cleaning section:
First materials are passed through a cleaning section.
Clearing means to remove all the useless part or particles from
the materials.

3.

Grinding section:
Powder ingredients like rice police fine, maize glutton etc. are taken
to the grinding reaction for the purpose for the purpose of
grinding.
Ground materials is taken to the respective pre-weighing binds 1 to 14
are well liked the respective materials as per the formula.

4.

Batch preparation:
As per the formula different ingredients are extracted.
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From the pre-weighing brides & catty weighed &

Collected into contract desk weather.
Preparation time per batch 3:5 minutes.
Ones batch is prepared whole batch is taken to be batch Mixes
machine for humongous mixing.
Now his mixed batch materials section.
5. Molasses section:
In Molasses section Molasses is added into
A how of any material at certain temperature
& pressure.
Molasses & dry materials are mixed in molasses mixer machine.
Now this mixes materials is taken to the palletizing section.
6.

Palletizing section:
Steam is mixed materials in feeder conditioner & passed through a
pallet mills dye & pallet from is prepared.
Now this not finished product is passed through
Pallet corer to costs down its temperature.
Then finished product is taken to packaging section & powder or
broken pallet 6 are taken
To the direct mill for reprocess.

7. Packaging section:
In packaging section finished product is packs into the gunny bags with
weight gross of 71800 kg 70000 kg get weight product 00.900 kg gross
weight of empty gunny bags. 00.900 kg gross excess feeling of finished
product.

25

 The finished product has in the invited stage a good amount of moisture
to prevent the reduction of weight excess feeling is done in the since.
The multitude dries cut after some time, the loss of weightier is
correspondent with the exiles product.
8. Laboratory Testing:
Also at the time of packaging sample of finished product is taken into a
box.
After 100 bags the sample box is collected by laboratory for the
analysis of finished product.
9. Dispatch:
When analysis report comes to the despites section then finished
product is dispatched to the village milk society.

Production in the dairy:-

26

 Production process:-

From the Above diagram of production process, we can see that first at all
the milk is produce by producer than producer give milk to village co-operative.
Secondly dairy collect the milk from villages with the help of the cane and tanker.
Dairy receiving the milk in the chilling center. In the milk 85% water and 15%
Milk. Than remove the water and only 15% milk use in the production process.
After that milk is standardize for product. Standardize milk distribution to
production department. Manufacture of the product. After all manufacturing stage
27

All these finished product are stored in cold storage. The product distribute to the
GCMMF according their demand.

Paneer:-

paneer is one type of Indian cheese. In use of buffalo milk. First of

all receiving the milk from village co-operative. Heating the milk. Remove
the cream. than after cooling the milk. Standardization of the milk fat is 4.5
to 4.6 available. After that add citric aside for milk brining the milk and
remove the above part of milk that part use for paneer production. It made
in the block Than after cooling it in the cold storage department. It is
cutting with the help of the maral machine. Finally paneer made than after
pack the paneer. Transport to GCMMF as par their demand.

Cheddar cheese:-

cheddar cheese made with the help of the buffalo milk. First of all
collect the milk from village co-operative. Dairy receiving the milk in to
the chilling center. Heating the milk depending on the desire cheese the
milk may be pasteurized or middle heat treated to reduce the number of
spoilage organisms and improve the environment for the starter culture to
grow some verities of milk made for some raw milk. Cooling the milk
because grow of the starter bacteria . after that fat and protein are
standardizes. Starter culture and non-starter adjunct bacteria are added to
milk. It is ripen for 30 min because bacteria grow. After that add rennet.
And curd made. Curd is cut with cheese knives into small pieces after that
add dry salt on the curd. Finally into block to form the cheese. Cutting to
the cheese.
28

Processed cheese:-

cheddar cheese is one type of raw material of processed cheese.

Addition of water, colour, emulsifiers and salt Initially a part of shredded
cheese is added to the processing kettle to which are added calculated
amount of water, colour, emulsifier and salt. Later the remaining portions
of ground cheese is added to the kettle. The emulsifier helps to prevent fat
separation during heating, imparts specific soft and smooth characteristics
in the body and texture of the finished product and produces desirable
melting and slicing properties in the processed cheese. Disodium
phosphate and sodium citrate are the two commonly used emulsifiers.
Some times Rochelle salt, sodium pyrophosphate and sodium Meta
phosphate are also used. Some add chedder cheese mixing with water the
modern kettle used nowadays is a closed type with provision for vacuum
or air supply to aid in heating or emptying the kettle. which results in better
microbial destruction besides improving the shelf life of the product. The
cheese when processed is conveyed straight to the filling machine. Storage
in cold store. It has been use in 5-6 month. Than after supply to GCMMF
according their demand.

Mozzarella cheese:-

First of all collect the milk from village co-operative. Dairy

receiving the milk in to the chilling center. Heating the milk depending on
the desire cheese the milk may be pasteurized or middle heat treated to
29

reduce the number of spoilage organisms and improve the environment for
the starter culture to grow some verities of milk made for some raw milk.
standardize the milk to protein and fat. When heating the milk add rennet
because coagulate and this takes approximately. Whey is drained and the
curds milled dry salted and then conveyed stretcher to obtain in elastic and
made character of the mozzarella cheese. Cheese is wrapped in plastic and
stored at cold storage.

Emmental cheese:-

Emmnetal cheese also called Swiss cheese. Dairy use cow milk
for production process. collect the raw milk . standardized the milk for
production process. heating the milk than after cooling the milk for
growing some starter bacteria add some termini cultures, stir to mix,
whisk thoroughly into milk. and add to rennet including ripening to the
product curd is made. Add common salt into the cheese Cut to the curd
into the small pieces.packeging to the emmental cheese. Store in to the
cold storage. Finally supply to the GCMMF according their demand.

Milk powder:-

milk powder is produce by the whey of the cheese. Whey powder

is essentially produced by the same method as other milk powders reverse
osmosis can be used to partially concentrate the whey prior to vacuum
evaporation. Before the whey concentrate is spray dried, lactose
crystallization is induced to decrease the hygroscopicity. This is
accomplished by quick cooling in flash coolers after evaporation.
30

Crystallization continues in agitated tanks for 4 to 24 h.A fluidized bed

may be used to produce large agglomerated particles with free-flowing,
non-hygroscopic, no caking characteristics.
After that packing to the milk powder. And supply to GCMMF.

31

32

INTRODUCTION
Every organization that produces one or more products requires
marketing of the products sell them in the market. It is only through marketing that
people know about a company's products. Hence marketing is considered as a key
activity of organization. The organization requires sound marketing structure to
carry on its marketing activities.

33

However the concept of marketing is not confined only to selling of goods

and services to customers. Instead the company tries to create and maintain the
customer base through marketing. The marketing thus focus on the customer needs
and wants in the market and emphasis on producing and selling only those goods,
which have higher demand in market. The company mainly markets its products
through advertising. Marketing uses various sales promotional tools to boost the
sales of the company. The marketing department thus should have sound
distribution channel and promotional system to make the marketing activities
sound.
Gujarat Co-operative milk marketing federation (GCMMF) is performing
all the marketing activity foamed. Most of all product of AMUL are being
marketed by GCMMF except for liquid milk.
GCMMF was established in 1972 by Dr. Varghese Kurien who was a
chairman of Amul. Till 1965 all products were marketed by Amul but due to
progress and increasing demand many problems emerged. It was necessary to
create separate department.

Products:-

PRODUCTS AMUL means "priceless" in Sanskrit. The brand name

"Amul," from the Sanskrit "Amoolya," was suggested by a quality control expert in
Anand. Variants, all meaning "priceless", are found in several Indian languages.
Amul products have been in use in millions of homes since 1946. Amul Butter,
Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul Chocolates,
Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made
Amul a leading food brand in India. Today Amul is a symbol of many things. Of
high-quality products sold at reasonable prices. Of the genesis of a vast cooperative network. Of the triumph of indigenous technology. Of the marketing

34

savvy of a farmers' organisation. And of a proven model for dairy development.

Check out this vast and ever-growing range of 'tasteful' Amul delectables!

ADVERTISING
Advertising is one tool that a company uses to direct persuasive
communication to target buyers & consumer. Advertising is any paid from of nonpresentation & promotion of ideas well as services by identified sponsors.
Advertising is employed in all the countries of the world. Advertising is a cost
effective ways to dissemination messages.
There are five major decisions in developing an advertising programmer knows
as five ms:

1. Mission: What are the advertising objectives?

2. Money: How much can be spent?
3. Message: What message should be sent?
4. Media: what media should be used?
5. Measurement: How should the result is evaluated?

The major objectives of advertising are to inform to persuade & to remind

customers about the media.
Frequency & impact, choosing, among major media type, selecting specific
media vehicles, deciding on media timing & deciding geographical media
allocation.
Advertising is very important tool for the product range of Amul Dairy. The
company is given advertising in reputed & well circulated industrial magazines
T.V. Newspapers etc.

35

This is done order to bring awareness of the company various product among
the customers & introduce, co-range of product into nearly diversification fields.
This is done order to bring awareness of the companys various products among
the customers & introduce, co-range of product into nearly diversification fields.

CHANNEL OF DISTRIBUTION:Most producers do not sale their good directly to the final users. But they sale their
product by keeping marketing intermediaries performs various type of factions and
bearing various names. It means most producer work with marketing
intermediaries to bring their producers to market. The marketing intermediaries
made up a marketing channel.
Marketing channels are sets of inter dependent organization involved in the
process of marking a product of service available for use or consumption.
It is an important in modern days. By dole fating some control over how and
to whom the products are sold, the producers do again several advantages by using
intermediaries. As we know that many producer lack the financial resources to
carry out direct marketing. While in some case direct marketing is not feasible, in
these types of situation the marketing intermediary makes their place. Thought
contacts, experience, specialization and scale of operation, intermediaries offer the
firm more then it can achieve unit own.
As Amul Dairy in milk selling is not able to distribute and sale the milk on its
own, it is taking the help of intermediary, which know in bringing the product and
its total closer to the final buyers constitute a channel level. Amul Dairy distributor
channels graphical representation is as follows.

Amul Dairy

36

GCMMF

Area Depot

Distributors

Retailers

Consumers

MARKETING RESEARCH:Market decision making is both problems in challenge because it depend on

consumer behavior to meet with this problems and challenge the marketing
manager has to collect dependable marketing data and information base of decision
marking, this job of collecting recording and analysis data for marketing decision
is known as marketing research
According to CRISP marketing research is the systematic objective and
exhaustive search study of the facts relevant to any marketing problem.
The scope of this research is related up to market consumer and sales as well as
distribution. While a marketing research on national level are performed by
37

GCMMF. For this GCMMF has appointed various management and marketing
expected who study the market, fashion unions research. The marketing research
expenditure is paid by GCMMF.
During marketing research due important is been given to the consumer
expected price. Competitors strength and govts force the product image, sales
growth, target sales quota etc. by Amul dairy an GCMMF. Amul dairy has also
quality control department.

EXPORT:The products like Butter, Ghee, Nutramul, chocolates made by

AMUL are also exported into various countries like USA, Nepal, South
Africa, Kenya, Bhutan, Bangladesh, Thailand, Srilanka, Tanzania,
Australia and Gulf Countries.New market like Russia and Saudi Arabia etc
are the prospect market in international market. In international market
federation has gone at the rate of 34% in reflecting consumers faith in the
AMUL brand.The federation has opened a warehouse in Dubai to serve
better customers.

COMPETITORS:-

Competitors are the person who produce and sales the same
product as produced by the unit. Competitors affect the business with
several causes. The Indian cheese market is dominated by Gujarat
Cooperative Milk Marketing Federation that uses the brand name Amul
and Britannia New Zealand Foods Pvt. Limited, using the brand name
'Britannia MilkMan'. Amul is way ahead of competition and owns about
60% of the market. Britannia has about a 25% share.Other conspicuous
players are Dabon International Private Limited, a wholly owned
subsidiary of the French dairy company Bongrain S.A and other regional
brands like Mother Dairy and Vijaya. These companies have a 10% market

38

share. The remainder 5% of the market is taken by imported cheese brands,

retailed in specialty stores.

The Indian Cheese Market

Brand(s)

Estimated

Share

of

Market (%)
Amul

60

Britannia MilkMan

25

Le Bon, Regional brands e.g. Mother Dairy,

10

Vijaya
Imported brands e.g. Kraft, Laughing Cow

MARKETING MIX

In terms of market segmentation, all the Indian cheese brands cater

primarily to the retail sector. On the other hand, Dabon International Private
Limited and Bel Fromageries have a a retail and institutional client focus. The
insitutional sector, comprising fast food chains, restaurants, in-flight caterers and
hotels also source their cheese from private dairy companies like Dynamix Dairy.
Geographically, cheese is produced and marketed for domestic
consumption. Amul Malai Paneer is only cheese product exported to the Middle
East, Singapore and North America. Paneer is targeted at the large Non Resident
Indian (NRI) population in these countries.

39

Importing cheese, especially for mass consumption faces two main stumbling
blocks:
i) High costs: Added to the high cost of importing cheese, importers often also
have to invest substantially in a distribution network due to the lack of cold chains.
Indian consumers are price sensitive and importers find it difficult competing
against local, better priced brands, which are also in synch with the local palate.
ii) Inordinate time lag in supplies: Due to logistics and the duration of the import
process, replenshing stock takes atleast a couple of months, making it difficult for
importers to cater rapidly to demand variations.
The marketing mix which is a set of four elements: Product, Price, Place
and Promotion.

PRODUCT:

A product is anything which satisfies a need or wants and can be offered in the
exchange. A product can be a good, service or idea. Without product there is no
marketing. This includes product variety, quality, product design and brand
name, sizes, warranties.
At AMUL, "GUJARAT

CO-OPERATIVE

MILK

MARKETING

FEDERATION LIMITED (GCMMF)" does the product planning at national

level. It is the duty of GCMMF to plan the new product by conducting the
market survey at the state and national level. However, issues of product lunch
at the local level are taken care of by Amul itself. The Amul has set up the
commercial department, which conducts the survey in the local areas through
business. The new product decisions are also taken by the GCMMF.

PLACE:-

40

 Place refers to marketing activities that make product available to customers at

the right time in the convenient place. It is the process of moving products from
the producers to consumers.
AMUL has developed federation and AMUL parlors located in several parts of
country. The GCMMF handles the works relating to managing of stocks and
distributors in country. Thus GCMMF looks after the disbursement of products
to the various marketing channel.
For the product like Milk, Butter Milk and Curd AMUL itself decides locations
for selling.

PRICE:
It is the value, usually in monetary terms that sellers ask in-exchange for the
products they are offering.

The prices of products of Amul are also decided by the GCMMF. The GCMMF
conducts the market survey to check the validity and feasibility of prices in the
market and accordingly decides the
prices of Amul products. However, the price is inclusive of several elements like:
Cost of Milk
Raw Material Cost
Labor Cost
Processing Cost
Packaging Cost
Advertising Cost
Transportation Cost
Sales Promotion Cost

41

 Taxes etc.
The GCMMF considers all these cost aspects and set them up in pricing structure
to decide the jelling price of milk and milk products.
AMUL decides prices for the product Milk, Butter Milk and Curd. For that
they mainly focus on commission of retailers.

PROMOTION:
Promotion refers to marketing activities used to communicate positive
information about an organization, its product and activities to directly or
indirectly expedite exchange in a target market.
AMUL promotes its products through newspaper, Television, hoardings etc.
Television is the best media for advertising. The GCMMF however uses
hoarding for advertising in local areas. Hoarding designed on the creative basis
attract the customer more.

42

 INTRODUCTION

Needless to say that without adequate finance, no business can succeed. It

is easy to imagine the plight of the management which due to insufficiency of
finance cant make payment for raw materials and wages on time. It not possible to
avail of the opportunities if adequate finance is not available.

Financial Management is activity, which is concerned with the acquisition

and conservation of capital funds in meeting financial needs and overall objectives
of a business enterprise.
In Financial Management process following points are consider:
43

 Financial Analysis
Financial Decision-Making
Financial Planning
Financial Control

Finance department is that managerial activity concerned with the planning

and controlling of the firm's financial resources. Among all the 5 Ms, i.e. man,
money, machine, material and market. Money plays a vital role ion the
organization. Finance is the lifeblood for the success of an organization. For the
organization to grow and develop an even basis, availability or finance on adequate
basis is the prime requirement.
The financial management involves critical decisions on which the very
survival of the organization depends. The main financial decisions are as follows:
Investment Decision.
Financing Decision.
Dividend Decision.

Financial decisions are thus very crucial and important, decisions for the
firm. The main function of finance department is to tackle The day to day financial
requirement and other short term and long term expenses, which an organization
incur quite often.
All the other department of the organization strongly depends upon the
finance department to carry on their departmental activity efficiently. Hence it is
44

the responsibility of the finance manager to manage the finance function with
proper care. Adequate financial availability in time in the organization would lead
to organizational success and the failure to manage finance will thus lead to
inefficiency.

11.2 IMPORTANCE OF FINANCIAL MANAGEMENT

Proper finance is the real key to the success of any business enterprise.
Without proper finance a business neither survives nor expands and modernizes. It
is the finance, which works like a lubricant, which keeps the organization dynamic.
Keeps men and machine at work. The following are the points highlight the
importance of finance.

Finance for business promotion.

Finance management for optimum use of firm.
Use for co-operation in business activities.
Useful in decision-making.
Determinant of business success.
Measurement of performance.
Basis of planning, co-operation and control.
11.3 ORGANIZATION STRUCTURE

Assistant General Manager

45


Assistant Manager

Senior Executive

Executive

Senior officer

Assistant Officer

Junior Assistant

Peon

There are total 20 employees including peon.

46

11.4 CAPITAL STRUCTURE

Sources of capital for AMUL are:

Federation gives them daily amount decided by union.
Fix deposit of society is major source of finance.
Interest of fix deposit of bank like SBI, BOB, GEB Bond and Sardar Sarovar
Bond etc is one of the sources of finance.
Share capital of AMUL. (Share of AMUL is not for public but only for the
society members.)

CAPITAL STRUCTURE OF AMUL

AMUL is a co-operative organization, therefore, there is nothing like

market value of shares. Whenever AMUL needs funds it issues adequate
number of shares, but only to its share holders or members of societies and
not to others.
The capital structure of a firm would generally denote the ratio of own
capital to the borrowed capital. The capital structure thus, indicates how the
capital has been raised. The capital structure of AMUL would be clear from
the following figures.

All the figures are for the year ending on 31st march 2009
47

(Rs. In Lakhs)

Authorized share capital

(40,00,000 shares Each of Rs.100)
Subscribed/ paid up capital
Reserve funds and Other Funds
Redeemable Debentures
Total loans

4000.00
2265.99
2485.23
856.58
6111.07
Table 11.1

11.5 ACCOUNTING POLICIES

METHOD OF ACCOUNTING:
The union follows accrual system of accounting in the preparation of
accounts.
The financial statements are prepared on the historical cost convention
and in accordance with the generally accepted accounting principles.

FIXED ASSETS:
Fixed assets are valued at cost. The cost of assets comprises purchase
price and any directly attributable cost in bringing the assets to its present
condition or intended use.

48

 DEPRECIATION:
Depreciation on fixed assets is provided on Written down Value Method
at the applicable rates prescribed under the Income Tax Act, 1961. In the
case of AMUL 3 Dairy and KHATRAJ Dairy depreciation has been charged
on straight line method as per the rates prescribed under the companies Act,
1956.
INVENTORIES:
Raw materials, packing materials, semi packed goods and goods in
transit are valued at cost on FIFO basis.
Stores and Spares are valued at cost on FIFO basis.
Finished goods in case of Anand, KANJARI, MOGAR and
KHATRAJ are valued at the Ex-factory price less 5% that is fair
estimation of the direct Costs.
Excise duty is applicable on finished goods stock has been
included in the valuation of finished goods.

INVESTMENTS:
Investments are primarily meant to be held over a long term
period as such are stated at cost.

RETIREMENT BENEFITS:

49

Unions contribution towards Gratuity and Superannuating for

its employees is funded with Life Insurance Corporation of India. Leave
encashment is accounted for as and when due for payment.

PAYMENT OF BONUS:
Provision has been made for bonus due for the year 2008-09
which will be payable to employees in 2009-10.

EXCISE DUTY:
The provision has been made for the excise duty applicable on
the finished goods stock in the excise expense.
FINANCIAL STATEMENT
The Financial statements of Amul are as under.
The Financial data of AMUL at 31st March 2009 is as under.
Balance sheet of AMUL as per 31st March 2009
Rs. In lacs

Debts & Funds

RS. IN LACS

RS. IN
LACS

Authorized Capital
4000000 each of Rs.100

4000

Shareholders' Funds
Share Capital

50

2789.53

Reserve & Surplus

3110.39

Grants

1506.39

Loans

11521.46

Redeemable Debentures

448.21

Fixed Deposits

7787.71

Net profit

926.65

Current Debts

26061.01

Provisions
Income tax provisions

557.78

Freenze Benefit tax provisions

69

Provisions for Bad debts

58.95

Provisions for Investments

Gratuity

1.5
578.24

TOTAL

1265.47
55416.82

Table 11.2

Assets

RS. IN LACS

RS. IN
LACS

Fixed Assets

40141.86

Less: Depreciation
Net assets
Capital expenditures
Investments
Stocks

24870.99

Trading Stocks
Stores

13193.56
3268.82

51

15270.87
1687.12
1040.58

16462.38

Advances & Receivables

Cash & Bank
Unpaid expenses
TOTAL

6344.09
14484.14
127.64
55416.82
Table 11.3

TRADE AND PROFIT & LOSS A/C OF THE YEAR 2008-09

Dr.
PARTICULARS

RS. IN LACS

RS. IN LACS

Opening stock
Finished goods in stock

12583.97

Process stock

2539.55

Milk in stock

415.92

Stock in transit

791.41

Parlor stock

3.65

Purchase of Milk

111402.36

Raw material used

26967.26

Research & Development expenses

1423.57

Processing expenses

2912.69

packaging expenses

10946.73

Power & Fuel expenses

4904.18

Salary expenses

1972.88

52

16334.50

Staff PF, Gratuity &Facility

expenses

1299.54

Maintenance expenses

1366.11

Octroi expenses

1807.78

Marketing expenses

136.06

Post, Telephone & Stationary

expenses

59.39

Insurance premium

46.29

Rents & Taxes

133.47

Inspection expenses

162.65

Official expenses

255.16

Interests & Bank Commission

1252.58

Depreciation
Total Depreciation
1167.89
Less: Grant(2008-09)
46.48

1121.41

Provision For Income Tax

244.00

Provision For Frieze Benefit Tax

(14.69)

Net Profit

185480.67
735.75

TOTAL

735.75

Cr.
PARTICULARS

RS. IN LACS

Sales Of Milk

73668.13

Sales Of Products

95659.53

53

RS. IN LACS

Sales Of Parlors

161.30
169488.96

Less: Excise

550.23

Net Sales

168938.73

Income Of Interests

352.26

Income Of Dividend

106.61

Other Income

720.67

1179.54

Closing Stock
Finished goods in stock

11121.03

Process stock

3709.66

Milk in stock

527.77

Stock in transit

0.00

Parlor stock

3.94
TOTAL

15362.40
185480.67

Table 11.5
RATIO ANALYSIS

The most important task of a financial manager is to interpret the financial

information in such a manner, that it can be well understood by the people, who are
not well versed in financial information figures. The technique, by which it is to be
calculated, is known as Ratio Analysis.
1) Percentage

2) Rate

3) Proportion

Ratio Analysis is an important technique of financial analysis. It depicts the

efficiency or shortfall of the organization in the form of trend Analysis.
54

Different ratio appeal to different people managements, having the task of

running business efficiency, will interest in all ratios.
A Supplier of goods on credit will be partially interested in liquidity ratios,
which indicate the ability of the business to pay its bills.
Existing and future shareholders will indicate the ability of business to
purchase.
Existing and future shareholders will interest in investment ratios, which
indicate the level of return that can be expected on an investment in business.
Major customers, intent on having a continuing source of supply, will be
interested in the financial stability, as reveled by the capital structure, liquidity and
profitability ratios.
Debenture and loan stock holders will be interested in ability of a business
will be interested in the ability of a business to pay interest, and ultimately to repay
capital.
A banker, gibing only short-term loans, will be interested mainly in the
liquidity of the business, and its ability to repay those loans.

STEPS IN RATIO ANALYSIS

Collection of information, which are relevant from the financial statements
and then to calculate different ratios accordingly.
Comparison of computed ratios of the same organization or with the industry
ratios.
Interpretation, drawing of the inference and report-writing.
55

RATIO ANALYSIS

Ratio analyses are a powerful tool of financial analysis. A ratio is defined as

the indicated quotient of two mathematical expressions and as the relationship
between two or more things. In financial analysis a ratio is used as a benchmark
for evaluating the financial position and performance of a firm. The relationship
between two accounting figures, expressed mathematically, is known as a financial
ratio.

TYPES OF RATIOS
Several ratios; calculated from the accounting data, can be grouped into
various classes according to financial activity or function to be evaluated. We may
classify the ratios into the following categories.
Liquidity ratios
Leverage ratios
Profitability ratios
Capital Structure Ratio
Other Ratio

1. LIQUIDITY RATIO
It is extremely essential for a firm to be able to meet its obligations as they
become due. Liquidity ratios measure the ability of the firm to meet its current
56

obligations. In fact, analyses of liquidity needs the preparation of cash budgets and
cash and fund flow statements but liquidity ratios by establishing a relationship
between cash and other current assets to current obligations, provide a quick
current assets to current obligations, provide a quick measure of liquidity. A firm
should ensure that it should not suffer from lack of liquidity, and also that it does
not have excess liquidity. The failure of company to meet its current obligation due
to lack of sufficient liquidity, will result in poor credit worthless, loss of creditors
confidence for even in legal tangles resulting in the closure of the company. A very
high degree of liquidity is also bed. The firms fund will be unnecessarily tied up in
current assets therefore, it is necessary to strike a proper balance between high
liquidity and lack of liquidity.

The most common ratios, which indicate the extent of liquidity, are
Current ratio
Quick ratio

CURRENT RATIO
Current ratio is the ratio of total current assets to total current liabilities.
Current assets of a firm represent those assets which can be in ordinary course of
business converted into cash with in short period of time and current liabilities
defined as liabilities which are short term manufacturing obligation to meet current
assets.
To measure the financial liquidity of Amul
Current assets = Stock, Advance & debtors, Cash & Bank Balance.
57

Current liabilities = Deposits, Due to societies, O/s against Expenses and

Purchases, Sundry Creditors, Provisions.

Current Ratio = Current assets Current liabilities

YEAR

58

CURRENT
ASSETS

CURRENT
LIABILITY

(Rs. in Lac)

(Rs. in Lac)

RATIO

2003-04

16102.2

6786

2.37

2004-05

18596.49

8988.56

2.07

2005-06

18990.94

9460.79

2.12

2006-07

19874.21

12106.54

1.64

2007-08

28995.9

23992.01

1.21

2008-09

28874.39

22798.69

1.27

2009-10

40524.27

29074.21

1.39

2010-11

37290.61

26061.01

1.43

Table 11.6
INTERPRETATION
The ideal Current Ratio of any firm is 2:1. In AMUL first three year the ratio
is more than 2, it indicates good financial ability of the sector. But after that the
ratio is declining because of the increase in Current Liability. It indicates that day
by day the amounts of creditors are increasing which is not good for the sector.
QUICK RATIO
Quick ratio is also called acid test ratio. It is the ratio between quick current
assets and current liabilities. It is calculated by dividing the quick assets by current
claim. Quick ratio is the measurement of firms ability to convert its current assets
quickly into cash in order to meet its current claim.
The term quick assets refers to current assets which can be converted into
cash immediately or at a short notice without reduction in value of quick ratio.

59

Quick Assets = Stock, due from societies, Advances, trade and Sundry
Debtors Cash and Bank Balance.

Quick Ratio = Quick assets Current liabilities

YEAR

QUIC CURRENT LIABILITY

K
ASSE

RATI
O

(Rs. in Lac)

(Q.A/

TS

C.L)

(Rs. in
Lac)
2003-04

11365.

6786

1.67

8988.56

1.19

9460.79

0.96

12106.54

0.87

23992.01

0.54

22798.69

0.4

29074.21

0.76

37
2004-05

10686.
31

2005-06

9078.2
1

2006-07

10533.
65

2007-08

12952.
44

2008-09

9025.4
5

2009-10
60

22138.

47
2010-11

20828.

26061.01

0.80

23

Table 11.7
INTERPRETATION
The ideal Quick Ratio is 1:1. In AMUL the Quick Ratio is more than 1 in 2003-04
and 2004-05.In 2009-10 it is 0.76 and in 2010-11 it is 0.80. But than after it started
declining and reached below 1 for the next four years. The reason is continuous
increase in the current liability.

2. LEVERAGE RATIO
In the short term creditors like bankers and suppliers of raw material; are
more concerned with firms current debt-paying ability, on the other hand, long61

term creditors like debenture holders, financial institution are more concerned with
the firms long term financial strength In fact a firm should have short as well as
long term financial position. To judge the long-term financial position of the firms
financial leverage or capital structure ratios are calculated. These ratios indicate
funds provided by owners and lenders. As a general rule, there should be an
appropriate mix of debt and owners equity in financing the firms assets.

STOCK TURNOVER RATIO

This ratio indicates the efficiency of the firm in selling its product. It is
calculated by dividing the cost of good sold by average inventory.
Inventory turnover = Average Stock Cost of Goods Sold 300

Cost of good sold =

Opening stock + Purchase of Milk + Purchase

Of Raw Material + Purchase expenses Closing stock

Average Inventory = Opening Stock + Closing Stock 2

YEAR

200362

AVGERAGE COST
STOCK
OF
GOODS
(Rs. in Lac)
SOLD
4493.49

43660.28

RATIO
(A.S./C.O.G.S)*300

31 days

04
200405

4900.41

47221.13

31 times

200506

7199

56259.48

38 times

200607

7471.21

65762.2

34 times

200708

10214.83

88181.97

35 times

200809

14902.68

113314.28

40 times

200910

15848.45

159528.89

30 times

201011

13883.36

200019.09

21 times

Table 11.8

63

INTERPRETATION
From the above ratio we can say that AMUL is turning its inventory of finished
good into sales in 31 times in 2003-04 and 2004-05, 38 times in 2005-06, 34 times
in 2006-07 and 35 times and 40 times in 2007-08 and 2008-09 respectively. In
2009-10 t is 30 times and in 2010-11 it is 21 times. It is good for any co-operative
sector.

(2009)

PROFITABILITY RATIOS

A company should earn profit to survive and grow over a long period of
time. Profit are essential but it would be wrong to assume that every action
initiated by management of a company should be aimed at maximizing profits
irrespective of social consequences and profit is looked upon as a term of above
since some firms always want to maximize profits at due cost of employees,
customers, and society. Except such infrequent cases, it is fact profit must be
64

earned to sustain the operation of the business to be able to obtain funds from
investor for expansion and growth and to contribute towards the social overhead
for the welfare of society.
Profit is the difference between revenues and expenses over a period of time.
Profit is the ultimate output of the company; and it will have no future if it fails to
make sufficient profits. There fore financial manager should continuously evaluate
the efficiency of its company in term of profits.
Generally two types of profitability ratios are calculated.
Profitability in relation to sales
Profitability in relation to investment

Measures of Profit
Profit can be measured in various ways
1) Gross Profit
(2) Net Profit

GROSS PROFIT TO SALES RATIO

65

YEAR

2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11

66

GROSS
PROFIT

SALES

(Rs. In

(Rs. In

Lac)
10428.01
12235.94
13946.75
15869.49
19005.32
23898.07
30569.11
36603.50

Lac)
54088.29
59459.07
70206.23
81631.69
107187.29
137212.35
168938.73
210642.68

RATIO
(G.P./Sales)*
100
19.27
20.58
19.87
19.44
17.73
17.42
18.09
17.38

Gross profit ratio is calculated by dividing Gross Profit by sales. Here gross
profit is the different between sales and the manufacturing cost of good sold.

INTERPRETATION
From the above ratio we can say that Gross Profit Ratio in 2003-04 is 19.27%,
20.58% in 2004-05 20.58%, 19.87% in 2005-06, 19.44% in 2006-07, 17.73% in
2007-08 and 17.42 in 2008-09 respectively. In 2009 -10it is 18.09% and in
2010-11 it is 17.38%. The total amount of Gross Profit is increasing every year.
But the ratio is decreasing; the main reason is increase in the Purchase Price
Milk and Raw Material.
NET PROFIT RATIO

67

Net Profit is obtained when operating expenses; interest and taxes are
subtracted from gross-profit. The net profit margin ratio is measured by dividing
profit after tax by sales.
Net profit margin = Net Profit Sales 100

YEAR

NET
PROFIT
(Rs. In Lac)

SALES
(Rs. In
Lac)

(N.P./Sales)

2003-04

252.46

54088.29

0.46

2004-05

311.23

59459.07

0.52

2005-06

323.74

70206.23

0.46

2006-07

411.5

81631.69

0.5

2007-08

451.51

107187.29

0.42

2008-09

575.53

137212.35

0.42

2009-10

735.75

168938.73

0.44

2010-11

926.65

210642.68

0.44

Table 11.10

68

RATIO

INTERPRETATION
From the above figure we can say that the percentage of Net Profit is 0.46%
in 2003-04 and 2005-06. In 2004-05 it is 0.52%, 0.50% in 2006-07 and 0.42% in
2007-08 and 2008-09 respectively.In 2009-10 it is 0.44% and in 2010-11 it is also
0.44%. The total amount of sales is increased every year but at the other side total
operating expenses is also increased day by day. So it directly affect to Net Profit
Ratio of AMUL.

EARNING PER SHARE

The profitability of the common shareholders investment can also be
measured in many other ways on such measure is to calculate the earning per
share. The earning per share is calculated by dividing the profit after taxes by the
total number of common (ordinary) shares outstanding.

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EPS calculation made over years indicate whether or net the firms earning
power on per-share basis has changed over that period. Earning per share of the
company should be compared with the industry average and the earning per share
of other firms. Earning per share simply shows the profitability of the firm on per
share basis.

Net Profit
Earning per share = __________________________________
Number of common shares outstanding

YEAR

NET
PROFIT
(Rs. In Lac)

NO. OF
SHARES
O/S

RATIO

2003-04

252.46

12.13

20.81

2004-05

311.23

13.95

22.31

2005-06

323.74

15.97

20.25

2006-07

411.5

19.8

20.78

2007-08

451.51

22.29

20.26

2008-09

575.53

22.66

25.4

2009-10

735.75

40.00

18.39

2010-11

926.65

40.00

23.17

Table 11.11

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(N.P.
/Share)

INTERPRETATION
From the above data we can say that Earning per Share is 20.81Rs in 2003-04,
22.31 Rs in 2004-05, 20.25 Rs. in 2005-06, 20.78 Rs. in 2006-07, 20.26 Rs in
2007-08 and 25.4 Rs. in 2008-09.In 2009-10 it is 18.39 Rs. And in 2010-11 it is
23.17 Rs.. Earning per Share ratio is comparatively better for AMUL. The shares
of AMUL are distributed only to the Societies, so the main earning is distributed to
its Societies.

4. CAPITAL STRUCTURE RATIO

In this type of Ratio the comparison made for Capital Structure. In this Ratio
the proportion is to be found out between different types of long term capital.
In this type of ratios we can find out following type of ratios
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 Debt Equity Ratio

Proprietary Ratio

DEBT EQUITY RATIO

Debt-Equity Ratio Compute by dividing Total Debt to Net Worth.
Total Debt = Debentures + Deposits + Long Term Loans
Net Worth = Equity Share Capital + Reserve & Surplus

Debt-Equity Ratio = Total Debt Net Worth

YEAR

TOTAL
DEBT
(Rs. in Lac)

72

NET
WORTH

RATIO
(T.D./N.W)

(Rs. in
Lac)

2003-04

10840.16

3201.91

3.38

2004-05

10363.16

3452.65

2005-06

9216.63

3754.41

2.45

2006-07

7363.71

4221.59

1.74

2007-08

5874.95

4591.36

1.28

2008-09

6799.97

4751.22

1.43

2009-10

6630.48

4520.86

1.47

2010-11

8235.92

5899.92

1.40

Table11.12

INTERPRETATION
From the above ratio it is clear that Debt-Equity Ratio in 2003-04 is 3.38
times. It was 3.0 times in 2004-05, 2.45 times in 2005-06, 1.74 times in 2006-07
and 1.28 times in 2007-08. The ideal Debt-Equity Ratio is 2:1, in AMUL 2003-04,
2004-05 and 2005-06 the Ratio is more than 2, In 2009-10 it is 1.47 and in 2010-11
it is 1.40. because of the higher amount of Long Term Debt but than after it is
declining, so it shows that Total Long Term Debt is decreasing. It is good sign for
AMUL.

PROPRIETARY RATIO
Proprietary Ratio is found out by dividing Proprietary Fund by Total Assets.
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Proprietary Fund = Equity Share Capital + Reserve and Surplus

Proprietary Ratio = Proprietary fund Total Assets
YEAR

PROPRIETARY
FUND
(Rs. In Lac)

TOTAL

RATIO

ASSETS (Sales/T.A.)%
(Rs. In
Lac)

2003-04

3201.01

26326.08

12.16

2004-05

3452.65

25277.94

13.66

2005-06

3754.41

24595.17

15.26

2006-07

4221.59

25761.82

16.39

2007-08

4591.36

35864.51

12.8

2008-09

4751.22

36424.39

13.04

2009-10

4899.2

55169.16

8.88

2010-11

5772.28

55289.18

10.44

INTERPRETATION
From the above ratio it is clear that Proprietary Ratio for the year 2003-04 is
12.16%. In 2004-05 it is 13.66%, in 2005-06 it is 15.26%, in 2006-07 it is 16.39%
in 2007-08 and 13.04 in 2008-09 it is 12.8%.In 2009-10 it is 8.88% and in 2010-11
it is 10.44%. Out of total Assets the above percentage is invested by Proprietor and
it is not better but we can say it is good for any Co-Operative Society.

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75

HUMAN RESOURCE MANAGEMENT

MISSION:
The mission of the Human Resources Department is to provide an
organizational frame work to recruit, select, classify, compensate, develop and
reward the organizations diverse workforce, while ensuring an environment
that optimizes productivity, efficiency and effective ness.

Joining Formalities:

In case of senior hires, the Company reimburses the expenses of travel to the
place of joining, as per grade entitlements.
All candidates are required to fill in the company application employment
form. Application forms are available with the HR Department.
After joining, the employee should submit the following documents to the
HR Department:
PF Declaration form
Provident fund transfer/nomination form
Gratuity nomination form
Superannuation nomination form
Form 16/ 12(b)

Induction: The process is encompass a brief about Kaira Union, its vision,

values, structure, nature of business and the HR policies. Employees will also
be briefed by their Supervisor / Department Head about their job
responsibilities and the Organizations expectations from their job.
Probation and Confirmation: All new employees will be on probation for
the 12 months. All confirmations will be finalized on the basis of the probation
reports (Confidential Report) of the employee, filled by their supervisors, based
on the performance of the employee in the probation phase.
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Working hours, shifts and Over Time (OT)

Working hours
Timings are different for Plant Workmen and employees in the Main Office
Following table gives a brief overview of the work timings for all employees
PLANT
General work timings 10 AM to
6PM
Lunch timings

OFFICE
10:15 AM to 5:45 PM
1:30 PM to 2:00 PM

Shift timings
The plant workmen at Kaira Union work in three shifts which are:
1. First shift 8:30 AM to 4:30 PM
2. Second shift 4:30 PM to 12:30 AM
3. Third shit 12:30 AM to 8:30 AM

Over Time (OT)

It is mandatory for every level of employee to complete their allotted
schedule for the day, and no overtime or compensatory claims will be
made if they have to stay back on duty to complete the pending works,
unless it is a justified and deserving case, as decided by the
Supervisor, supported by the supervisor concerned.
Compensatory offs are facilities offered to supervisory and above levels in
the following cases of extra working hours :
Up to 4 hrs continuous duty after completing allotted shift, attracting one
day compensatory off.
Up to 8 hrs continuous duty after completing allotted shift, attracting two
days compensatory off.
Working on a declared holiday.
For Supervisory levels and above, working on a declared holiday will make
them eligible for either one days pay compensation known as
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holiday wage or they can avail a compensatory off. Any of the

above choice will have to be made by the employee and requested for
in writing to the Head of the Projects, in the prescribed format and in
advance. This information will have to be sent to the Nodal office
along with salary details at the end of every month.

Types of Leaves:
1.

Casual Leave:
All pay-scale employees: 10/year. Cannot be transferred to next year.
For apprentices 1 CL will be transferred on monthly basis.
No CL for trainees.

2. Privilege Leave:
All employees will be eligible for privilege leave (PL) based on the working / pay
days. This leave can be carry forwarded to next year. The calculation is as follows:

2.75 leave for every month for other than apprentices and trainee (33 leave
days per year).
1.50 leaves/month for trainee (18 leave days per year)
1/20 present days for apprentices (18 leave days per year).
3. Leave with Salary:

1 leave every month for other than apprentices and trainee. This leave can be
carry forwarded to next year.

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4. Accident leave: Employee will not get any payment for the period from which
he is absent. But he will get compensation as per the workmen compensation act.

LAPSE / CONVERSION / CARRY FORWARD OF LEAVE:

1.

Casual Leave: This is non-transferable to next year and gets lapsed at

year end. It is valid from 1st April to 31st March.

2.

Privilege Leave: This gets carry forwarded to next year. Maximum

accumulation allowed for privilege leave is 180 days for employees from Sr.
Officer to managerial group, for employees from Sr. Assist. to Assist., PL is
120 days and for workers privilege leave is 72 days. If privilege Leave
exceeds the maximum limit, the balance will be auto en-cashed.

3.

Leave with Salary: This gets carry forwarded to next year. Maximum
accumulation allowed for leave with Salary is 60 days for all employees above
worker group and for Workers leave with Salary is 48 days. If leave with
Salary exceeds the maximum limit, the balance will be auto en-cashed.
SALARY DURING LEAVE PERIOD

In case of sanctioned CL / PL/ LS or Maternity leave, an employee will be

entitled for full salary for the leave period.
In case of Maternity leave, the employee will be paid salary equal to the
salary drawn immediately, before proceeding on leave.
LATE COMING

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If any employee comes late more than 3 times in a month, his / her casual leave
account will be debited by 1 day for each 3 days of late coming during a month. If
an employee does not have sufficient CL balance to his / her credit, his / her PL
account will be debited accordingly. However, if an employee does not have CL /
PL balance to his / her credit, he / she will be treated on LWP for 1 day for each 3
days of late coming.
Holiday Calendar: Attached.
Performance Appraisal process:

Quarterly appraisal for Managerial grade: Performance linked incentives are

given to managerial grade of employees. It is based on the completion of the
target proposed by them and approved by supervisor for that quarter. The
percentage of incentives to be given is decided by MD.

Yearly appraisal for rest of the employees: The employee gets a chance to
agree or disagree with the appraisal done by the supervisor. If he disagrees,
the HR department will mediate and will try to bring them on one platform
and to get true appraisal.
A confidential report is prepared by the supervisors of each
trainee/probationer. Based on that report, the training/probation period is
either extended or the employee is brought on probation/confirmation. In
extreme cases, if it is found that the employees performance is very much
unsatisfactory, he/she can also be terminated from the job.
Doing Exit Interview of the employee who is leaving the Organization.

PROMOTION
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Steps for promotion:

Recommendation from divisional heads.
Preparation of consolidated list with all details.
Verification of docket files for past records.
Calculation for financial implications & salary adjustment in higher grade.
Complete M. D.S approval formalities.
Preparation & issue of promotion letter.
Inform concerned division / TK.
At kaira, Merit based promotion policy is followed. It is assured that every
employees performance gets mapped and suitable employees are promoted
at right time.

Training and Development:

1.

Get identification of training Needs from concerned Departmental Head.

2.

Plan out the Training Programs and Preparing Training Calendar for the
whole year in consultation with divisional head.

3.

Send Training Brochure to concerned Divisional Heads for deputing our

employees for Outhouse training after taking approval from M.D.

4.

Complete Nomination formalities.

5.

While identifying the employees for any training programme, the

recommendations given by the supervisors in the appraisal forms for the
training requirements for employees is also considered.

6.

After each training, an appraisal form about the effectiveness of training is

got filled by the supervisor of the employee, to know the effectiveness of
training.
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7.

Trainings taken by employees are considered while evaluating them for

promotion.

8.

If any employee completes any specialized course in his field, or is more

specialized then others of same cadre while joining, he/she is rewarded
suitably.

9.

Based on the aptitude, interest and capabilities of the employees, they are
also sent to reputed institutes for specialization.

Dispensary:
Medical Check-Up of newly join employee.
Provide Medicines after examine by medical officer to employees and their
family members.

Uniforms:

Uniform clothes, aprons and other necessary equipments and utilities are
provided to the newly joined employees. Except for uniform clothes,
employee needs to return them back at the time of full and final settlement.
Facility of washing of clothes for plant employees.

Employee Welfare Activities:

Children of employees are motivated by awarding best performances for

S.Sc. and H.Sc.
Employees are given long service award at the completion of 25 years of his/
her service.
Mediclaim facility for spouse and up to two children
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 Anandalaya School fee discount.

Maternity Benefit
We also have a Postal Dispatch Section for ease of employees.
Group life insurance: AMUL Dairy has also taken Group Life Insurance
considering Social Responsibly of the Organization.

Canteen Services:
Quality food is provided at minimal price.
.Employee Activities:

A kaizen committee is formed for office and plant. Its main objective is to
review the kaizen done by the employees.
Kaizen is small improvement in day to day activities. AMUL Dairy
recognizes employees small improvement in day to day activities by
awarding KAIZEN Gift. Also recognize with special gift for Quality
Kaizen. Special appreciation letters are given to the employees, who have
given special contribution to achieve specific target.
RED TAG DAY is celebrated every year. All employees participate in the
event as celebration, wherein housekeeping activities are carried out.
Safety day is celebrated every year.

Code of Conduct:

1. General commitment: We are committed to support the growth and

ambitions of our people and customers, and we have a passion to deliver
excellence in everything we do, our work, financial performance and
customer service.

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2. Commitment towards customers : We are committed to listen to and learn

from its costomers, so that it is able to design and deliver the solutions they
really want and need. We should always deal with its customers in a fair and
forthright manner, maintaining the highest levels of integrity.
3. Commitment towards producers: It is of central importance for AMUL to
conduct its operations in accordance with the highest standards of
internationally accepted principles of good cooperative practices. AMUL
attaches great value to its relations with its producers, thus shareholders and
provides timely, regular and remunerative prices to its producers for the milk
they pour in the Dairy co-operatives.
4. Commitment towards employees: We value our employees as a key
resource. An atmosphere of good employee communication, involvement
and responsibility is of central importance, and an employees personal
development and optimum use of talents is encouraged.
5.

Conflicts of interest: The senior management, officers and employees

should be scrupulous in avoiding 'conflicts of interest' with the Company. In
case there is likely to be a conflict of interest, he/she should make full
disclosure of all facts and circumstances thereof to the Committee / officer
nominated for this purpose by the manager and a prior written approval
should be obtained.

6. Business integrity: The Senior Management are to ensure that the

organization carries out its business as per accepted practices of business
integrity, ethical standards, fair play and conduct, honestly, legitimately and
as a fair competitor.
7. Protection and proper use of company's assets: The employees are to
ensure to protect Companys assets and property and the same should be
used only for legitimate business purposes.
8. Compliance with laws, rules, and regulations: The employees shall
comply with all applicable laws, rules, and regulations.
84

9. Honest and ethical conduct: The employees shall act in accordance with
the highest standards of personal and professional integrity, honesty and
ethical conduct not only on Company's premises and offsite but also at
company sponsored business, social events as well as any places. They shall
act and conduct free from fraud and deception. Their conduct shall conform
to the best-accepted professional standards of conduct.
10.Smoking/Intoxication: We respect freedom of choice and therefore we
expect from those who wish to smoke/chew tobacco or Gutka that they do so
outside the premices. Smoking, chewing tobacco or gutka within the
building is prohibited in order to respect the freedom of those who do not
wish to smoke and for health and hygiene reasons. Other intoxication in the
form of alcohol etc., will be treated as improper employee conduct and will
call for disciplinary action.

85

86

In my thinking at T.Y.B.B.A level & particularly in Amul is one of the

greatest experiences.
Amul has beautiful establishment system. Amul is the successful story of cooperation. For hands working together is happiness & that is success.
Amul earned good reputation in milk market & other milk bared products and
covered the national market. Amul also adopted latest technology can not become
abated for the achievement of target.

The reason behind the success of Amul lies in its 4 Ds which are:
Dedication
Discipline
Determination
Development

To be a small producer is no more a disadvantage. In co-operative dairying

there is a great chance of rural development leading to the empowerment of
the poor & the lowly.

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88