Significant Considerations in the Purchase of Electronic Home

Appliances

Submitted by:

Reema Jaggi

University Roll No. - 94972238218

Submitted in partial fulfilment of the MBA program 2009-2011

PUNJAB COLLEGE OF TECHNICAL EDUCATION, LUDHIANA

Acknowledgement

My training period had been a great learning experience and it wouldn’t have been without

the support of various people, who helped me to accomplish my project successfully. I

express my sincere thanks to all those who had guided me in one or the other way.

I would like to thank Mr. Hemant Bhalla(Associate Manager-Marketing),Godrej &

Boyce Manufacturing Co. Ltd. for giving me an opportunity to prove my worthiness in the

Marketing Department of the company and providing me with an insight into the marketing

world. He always proved as an excellent project guide & without his guidance this training

would not have been successful. I have seen in him an exceptional leader and will try to

follow and implement some of the techniques.

I would also like to thank all members of the Marketing Department who at all times treated

me as a part of their department and not as outside trainee. I am also thankful to the various

heads of departments and their assistants for sharing their experiences and also for giving

their valuable suggestions.

I would like to thank my mentor Ms Chitwan Bhutani who was there to guide me through

out my project and helped in the completion of the final report.

Date: 9th August,2010

Place: Ludhiana Reema Jaggi

Declaration

I Reema Jaggi of PCTE do hereby declare that this project relating to “Dealer’s perspective

regarding appliances- Case Study on GODREJ”, has been prepared by after completing my

dissertation in the same, as a part of my requirements of the MBA program of PCTE batch

2009-2011.

My guide to this project was Ms Chitwan Bhutani.

Reema Jaggi

(University Roll No.

MBA (Batch 2009-2011)

PUNJAB COLLEGE OF TECHNICAL EDUCATION

Certificate-1

This is to certify that report entitled “Dealers’ Perspective regarding appliances- Case Study

on GODREJ” submitted for the degree of MBA in subject of summer training report, is a

bonafide research project carried out by Reema Jaggi, PCTE student under my supervision

and no part of this report has been submitted for any other degree.

The assistance and help received during the course of investigation have been fully

acknowledged.

Ms Chitwan Bhutani

Major Advisor

UNIT CONTENTS Pg.No.

A Chapter-1 Corporate profile

History

Pirojsha Godrej

Incorporation

Corporate timeline

Board of Directors

Annual sales

Organisational chart

Corporate Mission

Corporate shared values

Corporate Care

Godrej Group Profile

Business Profile

Awards and Honours

Branch Locations and Godrej Group

Godrej & Boyce Mfg. Co. Ltd.

Products & services

Products of appliance division

Shareholders

Employees

Statutory auditors

1-29

Corporate concerns

The Pirojsha Godrej foundation

The Soonabai Pirojsha Godrej foundation

The Godrej memorial trust

Naoroji Godrej center

Swot Analysis

Bankers

Human Resource

Planning

Chapter-2 Financial analysis

Ratio analysis

Trend analysis

30-46

CONTENTS- UNIT B Pg.No.

48

49-53

54-61

62-80

81

82

83

84

(I) INTRODUCTION

(II) REVIEW OF LITERATURE

The Study

Need of Study

Research Objectives

(III) RESEARCH METHODOLOGY

Concept of marketing research

Research design

Limitations of the research

Sampling design

Limitations of Study

(IV)DATA ANALYSIS AND INTERPRETATION

CONCLUSION

SUGGESTIONS AND RECOMMENDATIONS

BIBLIOGRAPHY

ANNEXURE 1

Table No. List of tables Pg.No.

1.1

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

4.17

Trend Analysis

Experience of Dealers

Brands represented by dealers

Products represented by dealers

Factors considered while dealing with a brand

Factors influencing dealers to do more sales

Extra benefits given on bulk sales

Dealership with Godrej appliances

Godrej products dealt by dealers

Display of Godrej appliances

Products generating more sales

Reasons for low sales of least saleable item

Satisfaction with regard to company’s offered services

Satisfaction with regard to promptness

Satisfaction with regard to promotional tools

Continuation of dealership with Godrej

Reasons for quitting dealership with Godrej

Dealers’ preference to deal with Godrej in future

45

63

64

65

66-67

68

69

70

71

72

73

74

75

76

77

78

79

80

Fig No. List of Figures Pg.No.

1.1

1.2

1.3

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

4.17

Trend of Turnover

Trend of Net profit

Trend of EPS

Experience of Dealers

Brands represented by dealers

Products represented by dealers

Factors considered while dealing with a brand

Factors influencing dealers to do more sales

Extra benefits given on bulk sales

Dealership with Godrej appliances

Godrej products dealt by dealers

Display of Godrej appliances

Products generating more sales

Reasons for low sales of least saleable item

Satisfaction with regard to company’s offered services

Satisfaction with regard to promptness

Satisfaction with regard to promotional tools

Continuation of dealership with Godrej

Reasons for quitting dealership with Godrej

Dealers’ preference to deal with Godrej in future

45

46

47

63

64

65

66-67

68

69

70

71

72

73

74

75

76

77

78

79

80

UNIT-A

Chapter-1 CORPORATE

PROFILE

HISTORY

Pirojsha Godrej

The Company celebrated its centenary in 1997. In 1897 a young man named Ardeshir Godrej

gave up law and turned to lock making. Ardeshir went on to make safes and security

equipment of the highest order, and then stunned the world by creating toilet soap from

vegetable oil.

His brother Pirojsha Godrej carried Ardeshir's dream forward, leading Godrej towards

becoming a vibrant, multi-business enterprise. Pirojsha laid the foundation for the sprawling

industrial garden township (ISO 14001-certified) now called Pirojshanagar in the suburbs of

Mumbai. Godrej touches the lives of millions of Indians every day. To them, it is a symbol of

enduring ideals in a changing world.

Incorporation Established in 1897, the Company was incorporated with limited Liability on March 3, 1932,

under the Indian Companies Act,1913.

Corporate Timeline

1897 - Godrej & Boyce Mfg. Co. Ltd established

1918 - Godrej Soaps Limited incorporated

1961- Godrej Started Manufacturing Forklift Trucks in India

1971- Godrej Agrovet Limited began as an Animal Feeds division of Godrej Soaps

1974 - Veg oils division in Wadala, Mumbai acquired

1990 - Godrej Properties Limited, another subsidiary, established

1991 - Foods business started

1991 - Godrej Agrovet Limited incorporated

1994 - Transelektra Domestic Products acquired

1995 - Transelektra forged a strategic alliance with Sara Lee USA

1999 - Transelektra renamed Godrej Sara Lee Limited and incorporated Godrej

Infotech Ltd .

2001 - Godrej Consumer Products was formed as a result of the demerger of Godrej

Soaps Limited. Godrej Soaps renamed Godrej Industries Limited

2002 - Godrej Tea Limited set up

2003 - Entered the BPO solutions and services space with Godrej Global Solutions

Limited

2004 - Godrej HiCare Limited set up to provide a Safe Healthy Environment to

customers by providing professional pest management services

2006 - Foods business was merged with Godrej Tea and Godrej Tea renamed Godrej

Beverages & Foods Limited

2007 - Godrej Beverages & Foods Limited formed a JV with The Hershey Company

of North America and the company was renamed Godrej Hershey Foods & Beverages

Limited

2008 - Godrej relaunched itself with new colourful logo and a fresh identity music

Board of Directors

Chairman & Managing Director: JAMSHYD N. GODREJ

Executive Directors:

Phiroze D. Lam : Executive Director and President of the co.

Kyamas A. Palia : Executive Director(Finance)

Vijay M. Crishna : Lawkim Motors

Anil G. Verma : Personal & Administration

Non-executive Directors

Adi B. Godrej : Chairman - Godrej Group

Nadir B. Godrej : MD – Godrej Industries,

Chairman - Godrej Agrovet

Kavas N. Petigara : Chemical consultant & Businessman

Behram A. Hathikhanavala : Management Consultant

Fali P. Sarkari : Chartered accountant

Pradip P. Shah : Financial Advisor

Anita Ramachandran : HR consultant

Sales (including excise duty)

Fiscal Year 2008-09: Rs. 43 billion (US$ 881 million)

Combined Sales of the Company and its major subsidiaries and

affiliates, for FY 2008-09: Rs. 107 billion (US$ 2.3 billion)

Organisational Chart

ASM ASM

ASM

ASM ASM ASM

George Menzes

(COO)

Kamal Nandi

(VP-Sales & Marketing)

Mohali

Branch

Ramandeep Singh Trehan

(GM-Sales)

19 Branches

Atin

RSM-Haryana

Bikram Jit Singh

RSM-Punjab

Vijayesh Rana

RSM-Chandigarh

Ramesh Chembath

Head-Marketing

Hemant Bhalla

AM-Marketing

Corporate mission

We shall operate in existing & new businesses which capitalize on the Godrej brand

& our corporate image of reliability and integrity.

Our objective is to delight our customers, both in India and Abroad.

We shall strive for excellence by nurturing, developing & empowering our employees

& suppliers.

We shall encourage an open atmosphere conducive to learning & team work.

We shall achieve these objectives through continuous improvement in quality, cost &

customer service.

Corporate Shared Values

Commitment to quality

Dedication and commitment

Customer orientation

Honesty & integrity

Learning organization

Openness & transparency

Team work

Respect, care & concern for people

Trust

Corporate Care

As we complete our first century and enter the next one, our vision shines on with

brightness our founder intended- The concept of trusteeship of wealth.

Begun with a spontaneous donation of Rs.3 lac to the Tilak fund by Ardeshir Godrej,

this initiation of philanthropy was strengthened by Pirojsha Godrej, who made it a

corporate policy.

Along with housing, schooling, medical aid & paid leave to workers, Pirojsha was

also deeply concerned about environmental & social causes.

This vision continues to be the leading light in our lives.

Godrej Group Profile

Started in 1897 as a locks manufacturing company, the Godrej Group is today one of the

most accomplished and diversified business houses in India. Godrej's success has been driven

by the company's commitment to delivering innovation and excellence. Through the

consistent application of this commitment and a century of ethical business conduct, Godrej

has earned an unparalleled reputation for trust and reliability.

In 1930, Godrej became the first company in the world to develop the technology to

manufacture soap with vegetable oils; that spirit of innovation has continued throughout the

organization's history. Today Godrej is delivering consumers exciting innovations across a

spectrum of businesses. The company's pursuit of excellence is equally well established and

enduring.

In the 1944 Mumbai docks blast, Godrej safes were the only security equipment whose

contents were unharmed; an equal level of product quality continues to be expected from

every product bearing the Godrej brand name. Godrej management understands that the

company's greatest asset is the trust and faith that consumers have reposed in it, and

recognizes that the company must continue to earn this trust.

This translates to the organization delivering outstanding quality and value in everything it

does.

Godrej's ethical and visionary practices have allowed the company to successfully expand

into a number of businesses. Today Godrej is a leading manufacturer of goods and provider

of services in a multitude of categories: home appliances, consumer durables, consumer

products, industrial products, and agri products to name a few. A recent estimate suggested

that 350 million people across India use Godrej products. The group has more recently

entered the real estate and information technology sectors, and management views these as

avenues for enormous growth.

The Godrej Group stands in a strong position today. With annual sales in excess of $1 billion,

a workforce of approximately 18,000, and a strong diversified portfolio, Godrej has proven

its ability to deliver strong financial performance.

Business profile

Godrej group of companies are today’s one of the largest engineering and consumer products

company in the country having varied interests from engineering to personal care products

with a total sales turnover of about US$ 1.7 bn.

It is also one of the most respected corporate houses known for its philanthropy and initiation

of labour reforms besides being recognised for its values of fair, transparent and ethical

dealings.

The company has the following businesses which manufacture and market a wide range of

consumer durables and industrial products:

Chemicals

We are India’s leading manufacturers of oleo chemicals and over hundreds of different

industrial chemicals. With our global reach spreading wings across 40 countries, we were

conferred the prestigious exports award by Chemexcil for 3 consecutive years in 1998-99,

1999-00 and 2000-01.The products in our portfolio are used in a variety of applications:

cosmetics, tyres, detergents, pharmaceuticals, cigarettes, toothpaste and more.

Associate Companies

Godrej Properties

Godrej Properties was incepted in 1990 with an aim of providing ultra-modern townships to

discerning customers at affordable prices. It adheres to a simple philosophy of providing

exemplary service based on the optimal use of available resources.

Godrej Consumer Products

Godrej Consumer Products is a major player in the Indian FMCG market with a huge

portfolio of products in the form of personal, hair, and household & fabric care segments.

With 3 state-of-art manufacturing facilities at Malanpur (MP), Guwahati (Assam) and Baddi

(HP), this division employs 950 people across these industrial plants.

Godrej Household Products

Godrej Household Products Limited (GHPL) is a wholly owned subsidiary of Godrej

Consumer Products Limited. With strong brands like Good Knight, HIT, Jet, Ambipur,

Brylcreem and Kiwi, GHPL is the market leader in the Indian household insecticides

category and has a dominant presence in the air care, shoe care and male hair care markets.

Godrej Hershey

Godrej Hershey is one of the most respected business conglomerates established in 2006 with

a prime focus on the food division. The range of products from the house of Godrej Hershey

covers a number of popular products in the segment of Confectionery, Non Carbonated

Beverages, Cooking Aids, Packet Tea and Edible Oil.

Godrej Agrovet

Godrej Agrovet, formerly a division of Godrej Soaps Ltd. was reformed in 1971 with a focus

on the agricultural sector. Over the years this division has developed a close relationship with

farmers with its innovative offerings in the form of animal feed, oil palm plantations,

agrochemicals and poultry.

Awards and Honours

Godrej Consumer Products Limited ranks9th in the Great Place to Work Survey for

2008 .

GCPL, the Highest Ranked Indian FMCG in Asia's Hot Growth Companies' List by

Business Week .

Godrej Consumer Products Ltd. has been ranked14th in The Best

Companies to Work For study. This study was jointly conducted by Business Today,

Mercer and Taylor Nelson Sofres (TNS)

Godrej Consumer Products Ranks6th in ET-Hewitt Best Employers of India survey .

GCPL ranked15th in Great Places to Work 2006 survey .

The Corporate Citizen of the Year Award given by Economic Times.

Flagship brands Good knight,Cinthol and Ezee selected Super brands by the Super

brands Council.

Godrej Sara Lee, the JV between the Godrej Group and Sara lee Corporation, USA is

acknowledged the World's largest mat manufacturers and South Asia's largest

manufactures of Coils.

Godrej Consumer Products Limited, adjudged as a Business Super brand by the

Super Brands Council.

The Return on Capital Employed and Return on Net Worth ratios of Godrej

Consumer Products - the highest in corporate India.

Godrej Consumer Products was awarded the "Best Managed Workforce" award given

by Hewitt Associates and CNBC TV18.

Godrej Consumer Products features in the top 25 list of Great Places to Work

(survey conducted by Grow Talent in association with Business World) for four years

in a row.

Lifetime Achievement Award for Godrej Industries from CHEMEXCIL the basic

chemical pharmaceuticals and cosmetics experts promotion council

2006 Lalji Mehrotra Foundation Award for Excellence, conferred by National Society

for Equal Opportunities for the Handicapped. Great Son of India Award given to

Sohrab Godrej by National Convention for Protection of India's Resources and

Environment.

2005BNHS Green Governance Award for the Category - Conservation & Restoration

of Habitat, awarded to Godrej & Boyce Mfg. Co. Ltd

2003Economic Times Corporate Excellence Award for Corporate Citizenship

1994 Nisarga Mitra Award from Rotary Club of Bombay, Vikhroli for

Environmental Conservation

1991 Indira Gandhi Paryavaran Puraskar awarded to Sohrabji Godrej.

1989 Institution of Economic Studies Lok Shree Award for Social Commitment

towards the societ

New Delhi

Ghaziabad

Jaipur

Lucknow

Faridabad

Chandigarh

Mumbai Kolkata

Ahmedabad Bhubneshwar

Bhopal Guwahati

Jabalpur

Pune

Chennai

Bangalore

Coimbatore

Hyderabad

Kochi

Trivandrum

Vishakhapatnam

Branch Locations

International operators

UK

Netherlands

South Africa

Kenya

Kingdom of Saudi Arabia

Bahrain

UAE

Oman

Sri Lanka

Bangladesh

Veitnam

Malaysia

Singapore

Godrej Group Structure

Godrej and Boyce Mfg. Co. Ltd.

Products and Services

APPLIANCES (ISO 9001/14001)

Refrigerators, Washing Machines, Air Conditioners, Microwave Ovens and DVD Players

“INTERIO” FURNITURE (ISO 9001/14001; OHSAS 18001)

Office Furniture - Desking, Seating, Open Plan Office Systems, Computer , furniture and

Storages; Home Furniture - Living, Dining and Bedroom furniture; Kitchen cabinets.

Laboratory furniture; Marine accommodation; Healthcare furniture; Turnkey interiors;

Carpet tiles; Mattresses

LOCKS (ISO 9001/14001; OHSAS 18001)

Padlocks, Furniture locks, Mechanical and electromechanical door locks,

Door Controls, Architectural and Glass Hardware, Customized solutions & “Cartini” range

of Scissors, Knives and Kitchen Accessories

SECURITY SOLUTIONS (ISO 9001/14001; OHSAS18001)

Strong Room Doors, Safe Deposit Lockers, Data/ATM Safes, Burglary and Fire Resisting

Safes; Record & Filing Cabinets, Cash Boxes, Coffers,

Electronic Safes, Hotel Safes; Currency Sorters & Cash Counting Machines; Fire Doors,

“Entranza” Home Doors; Marine Doors & Hatches; Premises Security Solutions;

Surveillance, Scanning and Screening Systems; Baggage Scanners, Door Frame Metal

Detectors, Access Control Systems; Fire and Burglar Alarm Systems, Video Door Phones

“PRIMA” VENDING AND AUDIO-VISUAL SOLUTIONS (ISO 9001)

Vending Machines and Operations (Services), Audio Visual Solutions

STORAGE SOLUTIONS (ISO 9001)

Shelving and Racking systems (Static and Mobile), Drive-in System,

Cantilever System, Mezzanine Floors, Gravity Flow System, Special

Warehousing Solutions, Tool Storage Cabinets, Work surfaces, Trolleys and Warehousing

Consultancy

MATERIAL HANDLING (ISO 9001/14001; OHSAS 18001)

Forklift Trucks (Diesel, Electric and LPG) and Attachments; Warehouse

Trucks; Tyre Handlers; Tele Handlers; Container Handling Trucks; Industrial Cleaning and

Personal Access Equipment; Spare Parts, Service and Maintenance Contracts; Trucks on

Hire, Pre-owned Trucks.

INDUSTRIAL PRODUCTS (ISO 9001/14001)

Sheet Metal Dies, Die Casting Dies, Thermo-compression Moulds, Special Purpose

Machines, Jigs and Fixtures, High Precision Components/Equipment for Engineering and

allied industries, Sheet Metal

Working Machines – Sales and Service

PROCESS EQUIPMENT (ISO 9001/14001; OHSAS 18001; ASME ‘U’,

‘U2’,‘U3’, ‘S’; NBBI ‘R’; AD Merkblatt ‘HP0’; Chinese ‘SELO’)

Heavy Walled Reactors, High Pressure Vessels, High Pressure Shell and

Tube Heat Exchangers, Reactor/Tower Internals and Trays

ELECTRICALS AND ELECTRONICS (ISO 9001/14001, OHSAS 18001)

Busbar Power Distribution Systems, Compressors and Compressed Air

Control Systems, Industrial Electronics and Automation, Energy

Conservation and Green Building Services, Turnkey Electrical and Power

Infrastructure Projects

“LAWKIM” ELECTRIC MOTORS (ISO 9001/14001/17025, CMRI, UL)

Motors (FHP, Custom-designed and Metric Motors for Hermetic, HVAC,

General Purpose Applications), Calibration and Testing (Electro-technical

and Thermal Calibration)

CONSTRUCTION AND REAL ESTATE

(ISO 9001/14001; OHSAS 18001)

Ready Mix Concrete, Construction Projects, Property Development, Real

Estate Leasing and Services updated

Products of the appliance division

o Refrigerators

Direct cool

Cold Gold Deluxe

Pantacool V2

Pantacool

Axis

No.1

GDC 110

Edge

Frost free

EON

Pantacool

o Air conditioners

Split AC

Mirror star series

Silver line series

Pearl series

Ivory series

Window AC

Navigator series

Maxi miser series

o Washing machines

Fully automatic

Semi automatic

o Microwave ovens

Steam

Convection

Grill/combination

Solo

SHAREHOLDERS

Since its inception, the Company is controlled by the GODREJ family based in Mumbai,

India. Its shares are not listed on any Stock Exchange. About one-fourth of the Company's

share capital is held by Pirojsha Godrej Foundation, a public charitable trust.

EMPLOYEES 10,700 (including 2,000 in Sales and Service)

STATUTORY AUDITORS KALYANIWALLA & MISTRY, Chartered Accountants

Corporate concerns

The concept of trusteeship of wealth. Begun by the founder Ardeshir Godrej through a

spontaneous gesture of a Rs. 3-lakh donation in 1926 to the Tilak Fund for the upliftment of

Harijans. Acknowledged by the Mahatma as the biggest contribution he had received for the

cause.

The initation of philanthropy by Ardeshir was strengthened by his brother Pirojsha, who

made it a corporate principle for the Godrej group. Anticipating labour legislation by

providing housing, schooling (epitomised today in the Godrej Udayachal Schools), medical

aid and paid leave to workers. Environment and social concerns were equally vital to his

vision. And to the vision of his sons, among whom, the yongest, Naval set up the Foundation

for Research in Community Health and the Foundation for Medical Research along with

Vasant Sheth of Great Easten Shipping Co. Ardeshir's vision is alive and throbbing. Through

organisations that have taken the trusteeship of wealth as a mission of their own.

The Pirojsha Godrej Foundation

The Pirojsha Godrej Foundation, established in 1972, owns one-third shares of the holding

company, Godrej & Boyce Mfg. Co. Ltd. The income from dividends is utilised for

promoting the objectives of the Trust, which includes providing medical relief to the poor and

critically ill, educational aid to students, and relief funds in case of natural disasters.

Apart from promoting culture and the time arts (through the Godrej Dance Academy), sea

cadets (Boating Section), libraries, school, blood banks, The Godrej Baug for low income

people, the Red Cross Disaster Center at Vikhroli and the Pirojsha Godrej Memorial Wing at

Breach Candy Hospital are born of this foundation.

Significant contribution have been made to, among others, the World Wide Fund for Nature-

India, the Bombay Environment Action Group, the Latur Earthquake Relief Fund, the Andhra

Cyclone Relief Fund, the Prime Minister Relief Fund and the Chief Minister Relief Fund.

The Soonabai Pirojsha Godrej Foundation

The Soonabai Pirojsha Godrej Foundation, founded in March, 1974, it provides fund for

education, and other worthy causes. The trust maintains large tracts of protected land for two

separate projects - the conservation of mangroves and building an integrated housing colony

for lower and middle income groups in association with the Housing Development Finance

Corporation.

The Godrej Memorial Trust

The Godrej Memorial Trust, established in 1994, the Trust is a voluntary, non-religious,

non-sectarian, non-political charitable trust which is involved in maintaining hospitals,

clinics, dispensaries and providing medical relief to the underprivileged. The Trust runs a

clinic in New Delhi which provides facilities for operations, examinations, immunization,

counseling and family welfare. The Trust has also initiated a project to establish a specialised

hospital near Delhi.

The Naoroji Godrej Center

The Naoroji Godrej Center for Plant Research, started in 1992, the Center is involved in

basic and applied research in horticulture, pisiculture, sericulture, floriculture and

preservation of endangered species. Beside this, it acquires land to conduct the above

activities on and ties up with institution/individuals to successfully execute community

projects. Its seven primary projects include the conservation of threatened plant species,

development of an ideal village and mass propagation of medical plants.

Swot analysis

Strength

Good corporate image

Experience in the line

Qualitative products

Weakness

Ineffective promotional tools

Weak branding

Inappropriate variants of products

Opportunities

Innovation in the product line

Threat

Competitors grab on the market

Competitors expansion in the market at a faster

pace

BANKERS

Central Bank of India

Union Bank of India

Citibank N.A.

ICICI Bank Ltd.

State Bank of Patiala

Axis Bank Ltd.

Export-Import Bank of India

Human Resource

What drives Godrej Industries Limited employees is the positive outlook towards work in an

environment of change that encourages innovation and lateral thinking to harness new concepts for

increasing maximum efficiency. The Godrej Industries employee is determined, ready to learn and

committed to meeting and raising the organization's standards of quality, bringing the organisation to

the very forefront of the global FMCG and beverage industry.

Our employee is determined, loyal, committed and eager to learn and we provide this platform like

every other growing global entity. A complete teamwork is highly appreciated. Every Godrej

Industries employee works in harmony to reach higher goals and strive to take the organization

forward. Forming a team, whose sole purpose is to achieve its target under any circumstances, a team

that never compromises on quality and inner strength. The Godrej Industries Limited Human Resource

Department has initiated a metamorphosis within the organization - a phase of change to compete and

excel globally for future. HRD believes in the dynamics of change: if we always do what we had

always done, we will always get what we always got and we nurture a constant urge to achieve

something beyond the expected

To implement this change, Godrej Industries Limited is working to increase efficiency while reducing

unnecessary costs

and expenses. The HR has design a tailor-made HR roadmap, giving a new dimension to the HR

systems and processes, leading the organization towards an effective human engineering process.

HRD works towards enhancing the effectiveness and the efficiency of Godrej Industries Limited by

enriching individual maps of reality, by supporting personalized growth of the individuals, by

improving team-spirit and inter-personal communication of the organization's members.

It not only believes in harnessing internal pools of knowledge but also provides its employees a

platform for knowledge integration with internal as well as external sources. The Godrej Industries

Limited human resources department has become an eventful place with a focus towards attraction,

retention and development of talent, as it surges ahead to set higher performance thresholds. Our HR

motto states that - "We not only believe in blending Spirits into FMCG but also blending Aspirations

into Career.

Selection of any employee depends on the need in any sector. For this the particular department of

organization define the quality needed in employee and after this the HR department post the job on

different web sites, hire consultant or take placement from different colleges.

Promotion of the employee depends on the capability of employees learning means if the employee

can have ability or eagerness to learn the work of other department beside his work he will be

promoted. Also after the experience and quality of work any employee is promoted. Training and

Development is a part of any organization. Godrej Industries Limited believes in leveraging

technology to help it gain a competitive edge in the market place. Godrej has been one of the first

companies in the FMCG / Chemical industry. So they organize training program time to time

Planning

HRP is understood as the process of forecasting an organization’s future demand for, and supply of,

the right type of people in the right number. It is only after this that the HRM department can initiate

the recruitment and selection process. HRP is a sub-system in the total organization planning.

Organizational planning includes managerial activities that set the company’s objectives for the future

and determines the appropriate means for achieving those objectives. .an integrated part of strategic

management HRP is variously called strategic manpower planning, or for employment planning

PLANNING IN GODREJ

The costs of Human Resource planning are kept minimal as each plant/ profit centre has its

own Personal Department which provides all the respective plant’s requirements. Each

personal department comprises of four members.

The short term planning is conducted by each plant’s personal department with each team’s

respective heads.

The Long term planning is performed by superiors of each deptt. In accordance with

company’s interests and objectives.

The internal detailed planning is planned by each team separately.

In this way, it is lesser time consuming, energy, economic and also effective. The decisions are

agreed upon by most of the team members so they are more focused, clear, satisfied that even they

have a say in the working and meeting the targets set.

Chapter-2

Financial

Ratios

Ratio analysis

(I) LIQUIDITY RATIOS

Liquidity ratios measure the ability of the company to meets its current obligations. It

establishes the relationship between cash and other current assets to current obligation provide a quick

measure of liquidity. It includes following ratios:-

(a) CURRENT RATIO

current assets

Current ratio = ----------------------

current liabilities

Net current liability = Current Liability + Borrowing from bank

19191400

Mar’09 = -------------------- = 1.22:1

15787385

17792704

Mar’08 = -------------------- = 1.29:1

13833723

12844718

Mar’07 = -------------------- = 1.22:1

10495902

9736196

Mar’06= -------------------- = 1.29:1

7554033

Interpretation

The company’s current ratio is within the rule of thumb, ie. 2:1, which means that the company’s

liquidity position is quite satisfactory. The company’s current assets are sufficient to pay off its current

liabilities.

(b) LIQUID ASSETS RATIO

Liquid Assets

Liquid ratio = -----------------------

Current Liabilities

10935122

Mar’09 = -------------------- = 0.69:1

15787385

9437695

Mar’08 = -------------------- = 0.68:1

13833723

6361123

Mar’07 = -------------------- = 0.61:1

10495902

4665899

Mar’06 = -------------------- = 0.62:1

7554033

Interpretation

As a convention, 1:1 liquid ratio is considered satisfactory. According to this convention, the company

has satisfactory liquidity position. It was close to rule of thumb. The overall liquidity position is

sufficient.

(c) ABSOLUTE LIQUID RATIO

Absolute Liquid Assets

Absolute liquid ratio = -----------------------------------

Current Liabilities

33234

Mar’09 = -------------------- = 0.002:1

15787385

40854

Mar’08 = -------------------- = 0.003:1

13833723

57116

Mar’07 = -------------------- = 0.005:1

10495902

58265

Mar’06 = -------------------- = 0.008:1

7554033

Interpretation

Absolute liquid ratio is calculated to know how many liquid assets are available with the firm to pay

off its liabilities, if the need to pay them arises immediately. The rule of thumb for this ratio is 0.5:1

but the company has it below the rule of thumb, thus signifying dissatisfactory liquidity position in

terms of absolute liquid assets.

(II) PROFITABILITY RATIOS

Profitability ratios are calculated to measure the operating efficiency of the company.

Besides management of the company creditors and owners are also interested in the profitability of the

company. Creditors want to get it and repayment of principle regularly; owners want to get a required

rate of return on their investment.

(A) General profitability ratios

(a) GROSS PROFIT RATIO

Gross profit

Gross profit ratio = --------------------- *100

Net sales

Gross profit = Net sales - cost of goods sold

Cost of goods sold= opening stock + purchases + direct expenses – closing

stock

10464626

Mar’09 = --------------------- *100 = 25.93%

40351778

9995840

Mar’08 = --------------------- *100 = 28.80%

34711149

6968842

Mar’07 = --------------------- *100 = 26.18%

26614361

9041355

Mar’06 = --------------------- *100 = 44.73%

20212172

Interpretation

Since gross profit is decreasing from Mar’06 to Mar’09, it signals a bad profitability position of the

company. Since gross profit is calculated by deducting cost of goods sold from sales, it reflects that the

firm is inefficient in producing its products as cost of goods sold is increasing more than sales.

(b) OPERATING PROFIT RATIO

operating profit

operating profit ratio = --------------------- *100

Net sales

Operating profit = Net sales-( COGS + administration expenses + selling

& distribution expenses)

5826427

Mar’09 = --------------------- *100 = 14.44%

40351778

6033988

Mar’08 = --------------------- *100 = 17.38%

34711149

3707130

Mar’07 = --------------------- *100 = 13.93%

26614361

6423477

Mar’06 = --------------------- *100 = 31.78%

20212172

Interpretation

Operating profits are showing a declining trend from 2006 to 2009; it is due to ineffective cost control

in material consumption and cost reduction in manufacturing expenses. Overall as this ratio has

downward trend it indicates dissatisfactory profitability position of the company.

(c) OPERATING RATIO

Operating cost

operating ratio = --------------------- *100

Net sales

Operating cost= COGS + operating expenses

34525351

Mar’09 = --------------------- *100 = 85.56%

40351778

28677161

Mar’08 = --------------------- *100 = 82.62%

34711149

22907231

Mar’07 = --------------------- *100 = 86.07%

26614361

13788695

Mar’06 = --------------------- *100 = 68.22%

20212172

Interpretation

Operating ratio indicates the percentage of net sales that is consumed by operating cost. So, a very

high operating ratio is less favourable as it would leave a small margin(operating profit) to cover

interest , income tax, dividend and reserves. A percentage of 75-85% is considered favorable, and

Godrej is having a satisfactory operating ratio.

(d) NET PROFIT RATIO

Net profit after tax

net profit ratio = --------------------- *100

Net sales

2414381

Mar’09 = --------------------- *100 = 5.98%

40351778

1717303

Mar’08 = --------------------- *100 = 4.95%

34711149

1097632

Mar’07 = --------------------- *100 = 4.12%

26614361

392038

Mar’06 = --------------------- *100 = 1.94%

20212172

Interpretation

Net profit ratio has increased over the three years. It is due to cost savings on material consumption,

which is quite satisfactory for the company.

(B) OVERALL PROFITABILITY RATIOS

(a) RETURN ON SHAREHOLDERS’ INVESTMENT

Net profit after tax

Return on S/Hs investment = --------------------- *100

S/Hs funds

2414381

Mar’09 = --------------------- *100 = 26.54%

9097425

1717303

Mar’08 = --------------------- *100 = 25%

6868162

1097632

Mar’07 = --------------------- *100 = 19.54%

5616015

392038

Mar’06 = --------------------- *100 = 7.87%

4982733

Interpretation

ROI is of great importance as it depicts how much the company has accomplished its objective of

maximizing its earnings. As this ratio reveals how well the resources of a firm are being used, higher

the ratio, better are the results. The company’s ROI is increasing over the years which indicate a

favorable profitability position.

(b) EARNING PER SHARE

NPAT – Preference dividend

EPS = --------------------- *100

No.of equity shares

2414381

Mar’09 = --------------------- *100 = Rs.3.64

662910

1717303

Mar’08 = --------------------- *100 = Rs.2.59

662640

1097632

Mar’07 = --------------------- *100 = Rs.1.66

662640

392038

Mar’06 = --------------------- *100 = Rs.0.59

662640

Interpretation

As the return on the equity capital is increasing, so the EPS is increasing over the years and it shows

increase in the earning capacity of the company.

(c) FIXED ASSETS TURNOVER RATIO

COGS

Fixed assets turnover ratio = ---------------------

Fixed assets

29887152

Mar’09 = --------------------- = 4.58

6524423

24715309

Mar’08 = --------------------- = 4.79

5160322

19645519

Mar’07 = --------------------- = 4.22

4655390

11170817

Mar’06 = --------------------- = 2.61

4281291

Interpretation

Fixed assets turnover is the relationship b/w COGS and fixed assets employed in the business. The

increase in this ratio over the years shows increase in the efficiency of the company in using its capital

resources.

(d)WORKING CAPITAL TURNOVER RATIO

COGS

Working capital turnover ratio = ---------------------

Net working capital

29887152

Mar’09 = --------------------- = 31.38

952547

24715309

Mar’08 = --------------------- = 53.62

460911

19645519

Mar’07 = --------------------- = 53.32

368432

11170817

Mar’06 = --------------------- = 45.59

245006

Interpretation

Working capital turnover ratio depicts the velocity of the utilization of net working capital. Although it

is increasing between the years Mar’06 and Mar’08, but it again comes back to 31.38% in Mar’09.

(III) Activity ratio

Stock turnover ratio= COGS

---------------- Average stock

Mar’09 = 29887152

------------------ = 3.60

8305643

Mar’ 08 = 24715309

------------------ = 3.33

7419302

Mar’07 = 19645519

---------------- = 3.40

5776946

Mar’06 = 11170817

--------------- = 2.20

5070297

Inventory conversion period

Mar’09 = 365

-------- = 101days

3.60

Mar’08 = 365

-------- = 110 days

3.33

Mar’07 = 365

--------- = 107 days

3.40

Mar’06 = 365

-------- = 166 days

2.20

Interpretation Every firm has to maintain a certain level of inventory of finished goods so as to be able to meet the

requirements of the business, and in case of Godrej, the inventory turnover ratio holds utmost

importance. Closely associated with it is the inventory conversion period, which is imperative to know

the average time taken for clearing the stocks.

In case of Godrej, inventory conversion period is very high in all the four years, which means that the

company is not able to clear its stock in time. However, after 2006, this ratio is showing a declining

trend.

Trend analysis

A. Turnover

B. Net profit

C. Earning per share

Table 1.1

Fig 1.1(a)

Year Turnover Trend Net profit Trend EPS Trend

2006 20212172 100 392038 100 0.59 100

2007 26614361 131.67 1097632 279.98 1.66 281.36

2008 34711149 171.73 1717303 438.05 2.59 438.98

2009 40351778 199.64 2414381 615.85 3.64 616.95

2010(projected) +33.98% 233.62 +167.93 783.78 +167.79 784.74

Fig 1.1(b)

Fig 1.1(c)