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 1-29

 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

 Corporate concerns

 The Pirojsha Godrej foundation

 The Soonabai Pirojsha Godrej foundation

 The Godrej memorial trust

 Naoroji Godrej center

 Swot Analysis

 Bankers

 Human Resource

 Planning

30-46 Chapter-2 Financial analysis

 Ratio analysis

 Trend analysis

CONTENTS- UNIT B Pg.No.

(I) INTRODUCTION 48

(II) REVIEW OF LITERATURE 49-53

 The Study

 Need of Study

 Research Objectives

(III) RESEARCH METHODOLOGY 54-61

 Concept of marketing research

 Research design

 Limitations of the research

 Sampling design

 Limitations of Study

(IV)DATA ANALYSIS AND INTERPRETATION 62-80

CONCLUSION 81 SUGGESTIONS AND RECOMMENDATIONS 82 83 BIBLIOGRAPHY

ANNEXURE 1 84

Table No. List of tables Pg.No.

1.1 Trend Analysis 45 4.1 Experience of Dealers 63 4.2 Brands represented by dealers 64 4.3 Products represented by dealers 65 4.4 Factors considered while dealing with a brand 66-67 4.5 Factors influencing dealers to do more sales 68 4.6 Extra benefits given on bulk sales 69 4.7 Dealership with Godrej appliances 70 4.8 Godrej products dealt by dealers 71 4.9 Display of Godrej appliances 72 4.10 Products generating more sales 73 4.11 Reasons for low sales of least saleable item 74 4.12 Satisfaction with regard to company’s offered services 75 4.13 Satisfaction with regard to promptness 76 4.14 Satisfaction with regard to promotional tools 77 4.15 Continuation of dealership with Godrej 78 4.16 Reasons for quitting dealership with Godrej 79 4.17 Dealers’ preference to deal with Godrej in future 80

Fig No. List of Figures Pg.No.

1.1 Trend of Turnover 45 1.2 Trend of Net profit 46 1.3 Trend of EPS 47 4.1 Experience of Dealers 63 4.2 Brands represented by dealers 64 4.3 Products represented by dealers 65 4.4 Factors considered while dealing with a brand 66-67 4.5 Factors influencing dealers to do more sales 68 4.6 Extra benefits given on bulk sales 69 4.7 Dealership with Godrej appliances 70 4.8 Godrej products dealt by dealers 71 4.9 Display of Godrej appliances 72 4.10 Products generating more sales 73 4.11 Reasons for low sales of least saleable item 74 4.12 Satisfaction with regard to company’s offered services 75 4.13 Satisfaction with regard to promptness 76 4.14 Satisfaction with regard to promotional tools 77 4.15 Continuation of dealership with Godrej 78 4.16 Reasons for quitting dealership with Godrej 79 4.17 Dealers’ preference to deal with Godrej in future 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 George Menzes

(COO)

Kamal Nandi

(VP-Sales & Marketing)

Ramesh Chembath 19 Branches Head-Marketing

Mohali

Branch

Ramandeep Singh Trehan

(GM-Sales)

Hemant Bhalla Vijayesh Rana Bikram Jit Singh Atin AM-Marketing RSM-Punjab RSM-Chandigarh RSM-Haryana

ASM ASM ASM

ASM ASM ASM

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 Branch Ahmedabad Bhubneshwar Bhopal Locations Guwahati Jabalpur Pune

Chennai Bangalore Coimbatore Hyderabad Kochi Trivandrum Vishakhapatnam

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 Weakness

Good corporate image Ineffective promotional tools

Experience in the line Weak branding

Qualitative products Inappropriate variants of products

Opportunities Threat

Innovation in the product line 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

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(a)

Fig 1.1(b)

Fig 1.1(c)