Financial Analysis at Eastern Condiments Pvt Ltd

INTRODUCTION

As for a commerce student theoretical knowledge is not enough to achieve success

in his career.

India is known the world over as `The Home of Spices. The climate of the country

is ideal for the growth of almost all spices. Spices are an important group of

agricultural goods, which are virtually indispensable in the culinary art. They also

play a significant role in our national economy and also in the economies of several

spice producing, exporting and importing countries. India accounts for about 45%

of the global spice exports. Eastern Condiments Pvt Ltd. manufactures spices and

masalas. It sells South Indian powders, such as rasam, sambar, curry, pickle

powder, and other spice powders through its shops. And it was a growing company

in India and also it was a largest manufacturer condiment and it is one of the

leading brands among the South India. The company sells its products in Kerala

and outside Kerala.

The study helps to get awareness about the organizational structure and functioning

of successful organization, and also financial analysis of the company. It gives an

opportunity to interact with the people working in the organization and financial

structure of the company. The study has been carried out to get an understanding of

the financial structure and performance of the company and departmental

functioning of the company.

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STATEMENT OF THE PROBLEM

Finance is the lifeblood and nerve centre of a business, just as circulation of blood

is essential in the human body for maintaining life, finance is a very essential to

smooth running of the business. There for financial analysis is very significant as

far as present day trend is concerned. Spices industry and business is fast growing

one. The study is very important for knowing the following:

Financial statement analysis of the company.

The departmental functions of the company.

The products of the company.

SWOT analysis of the company.

OBJECTIVES OF THE STUDY

To have an overall study of the company.

Financial statement analysis of the company.

To know about various departments and its functions.

To study the products of the company.

To find out the various aspects of SWOT analysis in the company.

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METHODOLOGY

The study is made personally visiting the company. The data were collected

through various methods. The methods adopted mainly are:

1) Observation

By observing the general surrounding, the functional process, Interactions of

employees etc.

2) Data collection

Primary data

Primary data collected through discussion with manager, officers and employees.

And also some practical experience.

Secondary data

Secondary data for the study was collected from internal annual reports, website,

and office records were used for collecting relevant information for this study.

The data needed to prepare this report was obtained from other published sources

like internet, News paper, magazines, business dailies and journals.

The following tools are used with the analysis and interpretation of financial

statements: Ratio analysis:

1) LIQUIDITY RATIOS

Current ratio

Quick ratio

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2) LEVERAGE RATIOS

Debt-Equity ratio

Proprietary ratio

Fixed asset to net worth

3) PROFITABILITY RATIOS

Net profit ratio

Return on total asset ratio

Return on net capital employed

Earning per share (EPS)

Dividend pay out ratio

4) ACTIVITY RATIO/ TURNOVER RATIOS

Stock turnover ratio

Debtors’ turnover ratio

Working capital turnover ratio

Fixed asset turnover ratio

LIMITATIONS OF THE STUDY

The limitations of the study are as follows:

The company won’t disclose their financial matters.

Lack of co-operation from certain departments due to their work load.

The study was restricted only with available information and it may not be

authentic one.

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CHAPTERISATION SCHEMA

The project has been articulated with the help of six chapters as follows:

Chapter 1 - Introduction

This chapter focuses on the introduction, importance of project, objectives,

methodology used and the limitations of the study.

Chapter 2 - Literature review - Financial performance analysis: A theoretical

framework

This chapter focuses on the literature review where project details the evolution of

the concept and its associated contributories.

Chapter 3 - Profile of the industry

This chapter specifies the industry details.

Chapter 4 - Profile of the company

This chapter focuses on the brief history of the organization, History and growth,

product profile, department profile, mission and vision of the company

Chapter 5 - Analysis and interpretation

This chapter includes the analysis and interpretation made after the study of the

project and gives the result of analysis. And SWOT analysis of the company.

Chapter 6 - Findings, Conclusion and Suggestions

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This chapter includes the findings, conclusion and suggestions made after the

study.

LITERATURE REVIEW

Accounting is a very serious activity. One of its functions is communication

of information at a specific interval, usually at the yearend by the financial

statements.

Financial Analysis originated and it passed through several stages of

development and attained the present position. Evolution of financial analysis helps

us to understand the circumstances leading to growth of the system.

The Financial Statements provide a summary of the accounts of a business

enterprise, the Balance Sheet reflecting the assets and liabilities and the Income

Statement showing the result of operations during a certain period.

Smith & Ashburne defines Financial Statements as “The end product of Financial

Accounting is a set of Financial Statements that purports to reveal the financial

position of the enterprise the result of its recent activities and an analysis of what

has been done with earnings;”

According to Myer, Financial Analysis is largely a study of relationship

among the various financial factors in a business as disclosed by a single set of

statements and a study of the trend of these factors as shown in a series of

statements.

Financial Statements Analysis is defined as “the process of identifying

financial strength and weakness of the firm by properly establishing relationship

between the items of the Balance Sheet and the Profit and loss Account.”

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In other words, Financial Statement Analysis is largely a study of

relationship among the various financial factors in a business as disclosed by a

single set of statements and a study of the trend of these factors as shown in a series

of statements.

Amir et al. (1993) were the first to use the term “value relevance”

in the context of information content of accounting figures. An accounting

figure/ratio is value relevant as it has significant strong predicted association with

the stock prices and stock market indicators such, Price-Earnings (P/E) or Price-

Book (P/B) ratios. Misund et al. in their study on the value relevance of accounting

figures in the international oil and gas industry concluded that all accounting

figures are value relevant, be it cash or accrual based.

Mingyi Hung (2000) in his paper on “Accounting Standards and Value Relevance

of Financial Statements: An International Analysis” concluded that the use of

accrual accounting (versus cash accounting) negatively affects the value relevance

of Financial Statements in countries with weak shareholder protection. This

negative effect, however, does not exist in countries with strong shareholder

protection.

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INDUSTRIAL PROFILE

India is known the world over as `The Home of Spices. The climate of the country

is ideal for the growth of almost all spices. Spices are an important group of

agricultural goods, which are virtually indispensable in the culinary art. They also

play a significant role in our national economy and also in the economies of several

spice producing, exporting and importing countries. India accounts for about 45%

of the global spice exports. In India, from the point of view of both domestic

consumption and export, spices are important commercial crops.

According to the International Organization for Standardization [ISO], there are

about 109 spices and India produces as many as 75 in its various agro climatic

regions. The term ` spices and condiments` applies to `natural plant or vegetable

products or mixtures in whole or ground form, which are used for imparting flavor,

aroma and piquancy to the food items`. Spices are also being used within the

country for flavoring foods and in medicines, pharmaceutical, perfumery,

cosmetics and several other industries.

Spice industry has been witnessing phenomenal growth rate both in the

international and domestic sector. The growth in this sector can be attributed to

the change in the life style patterns of the consumers all over the world. The

shift in the consumption trend towards natural products has also contributed to

the increased global demand of spices and culinary herbs. Spice and derivatives

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market is booming because these products find applications in a number of

industries including pharmaceutical, medicine, beverages, food processing, etc.

A few developing countries especially in the Asian continent are the major

producers of variety of spices. A large percentage of international and domestic

trade takes place in the dried form. India, Indonesia, China are few of the prime

producers of a variety of high quality spices and also significant contributors to

the global spice market.

INDIA AND SPICES

India produces 2.5 million tons to 3 million tons of spices annually. India

produces spices of different categories worth around US$ 3 billion. In terms of

volume and value, India accounted for 46 percent and 23 percent in value of

global spice trade. (Source: Spices Board India) India accounts for 25-30 per

cent of world’s pepper production, 35 per cent of ginger and about 90 per cent

of turmeric production.

Indian spices played important role in the history of various lands discovered or

destroyed. Spices have also played a political role in the history. The use of

spices from the east became a status symbol by the year 1200 and the European

preoccupation with the world of spices was born. The use of spice in food mean

money and power and the desire to acquire these precious status symbols led to

world exploration, global communication, trade, alliances and wars.

Indian spices also fitted into philosophic concepts of improving health, since it

was understood that they could affect the four humors blood, phlegm, yellow

bile and back bile) and influencing the corresponding moods, (phlegmatic,

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choleric and melancholic). Thus, ginger would be used to heat the stomach and

improve digestion; clove was believed to comfort the sinus, mace would prevent

colic and bloody flaxes or diarrhea; nutmeg would benefit the spleen and relieve

any bad cold.

Among the Indian Federal states, Kerala tops in pepper (96 percent), Cardamom

(53 percent) and Ginger (25 percent) production in the country. Andhra Pradesh

leads in Chilly and Turmeric production in the country with 49 per cent and 57

per cent. In coriander, cumin and fenugreek production

in the country, Rajasthan emerges as the largest producer with 63 per cent, 56

per cent and 87 per cent. The world spice trade is estimated at US$ 1.5-2 billion

in terms of value and 500,000tonnes in terms of quantity.

THE INDIAN SHARE

At present India produces around 2.5 million tons of different spice valued at

approximately 3 million US dollar, and hold the premier position in the world.

Because of the varying climate suitable for the spice cultivation almost all spices

are grown in this country. In almost all the 28 states and six union territories of

India, at least one spice is grown in abundance. No country in the world

produces as much variety of spices as India.

SPICES BUSINESS IN KERALA

Kerala is a land of spices considering the large variety of spices grown in the

state. The most popular among the spices are pepper, cardamom, turmeric,

chilies and ginger. Pepper known as the ‘king of spices’ is perhaps the world’s

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oldest known spice and is cultivated in over 15800 hectares in Kerala, which

account for 96% of the total production in the country.

There are a lot of opportunities for investors in spice sector and spices board.

The care taking of the sector in India is based in the state.

ABOUT THE COMPANY

Eastern was spearhead by late Mr. M.E MEERAN, who founded Eastern

Trading Company as a whole sale provision business in 1969 in Adimali,

Kerala. He expanded it to a trading business in 1975 as Eastern Agencies and set

up Eastern Condiments in 1983. A proactive visionary with a distinctive talent

in decision making, he steered the company from success to success. His legacy

lives on.

The “Eastern Condiments Pvt. Ltd” started in 1991 with a dream, making good

products available to the common man at the right prices., is a pioneer in the state

to produce packaged curry powders, Masala powders, spices and coffee powder.

Eastern Condiments Pvt Ltd. manufactures spices and masalas. It sells South Indian

powders, such as rasam, sambar, curry, pickle powder, and other spice powders

through its shops. And it was a growing company in India and also it was a largest

manufacturer condiment and it is one of the leading brands among the South India.

The company sells its products in Kerala and outside Kerala. In the early stages the

company exports its products Saudi Arabia and Arab Emirates and now the

company exports its products in various parts of the world like Gulf & Western

countries Middle East, U.K, U.S.A, Australia, Germany etc.

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Eastern Condiments Pvt.ltd. is a well established name and Kerala’s

largest manufacturer and market leaders with a market share of 78 % in Kerala and

one of the leading brands in south India. A name that will hold its own for years to

come as the worthwhile manufacturer, distributers and exporters of the quality

network and the blended spice powders and spices. .

And now the Eastern Condiments Pvt Ltd have a tie-up with an American

company “MECORMIC” and Eastern condiments given their 26% share to that

company.

HISTORY AND GROWTH

The story of Eastern curry powders began in a small mountain township called

Adimali. Mr. M.E Meeran, the Managing Director of Eastern Group of

Companies, started his career as a businessman with a marketing division named

Eastern Trading Company at Adimali. The capacity of the firm was 100 kg per

day at the starting time. He could establish a sales network in Idukki district. It

was done with the support of KSFE. He planned to increase the capacity of the

plant to 2000 kg. It is the first company in Kerala which installed the IMPEX

pulverizes. The company got the SSI registration in 1983-1984.

From the beginning of the company Mr. M. E. Meeran is the managing Director

of the company. Eastern Condiments was established in 1991, an expanded form

of Eastern Coffee and Curry Powder with 400 employees. The production at the

initial period was only 100kg per day, now it has the capacity to produce around

130 tons per day. In 1993 the company got spice board approval for starting

export.

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In 1995 a new plant was started at Theni and also the exporting unit called

Eastern spice and export was launched. The period between 2003 and 2005 was

the period of plant expansion and unification. In 2003 the company got ISO

9001 certification. In 2007 the company got ISO 22000 certification. In 2008 the

company achieved the target of 10 crore sales. In 2008 the company launched

tea powder in the name of ‘Eastea’. Presently the company is running with a

turnover of 650 crore (2011-2012).

The purity and freshness of Eastern Curry Powder made “Eastern” a house hold

name in India and abroad. The company exports its product to kingdom of Saudi

Arabia and United Arab Emirates for the past four years and now its export the

product to Gulf & Western countries Middle East, U.K, U.S.A, Australia and

Germany etc...

Eastern Condiments Pvt. Ltd. is a well-established name as Kerala’s largest

manufacturer of curry powder and masala one of the leading brand among the

south India. An expertise and experience collated over a period of 30 years has

borne fruit. Nationwide branches, two well-equipped factories situated in the

Eastern high range of South India and over two million satisfied household all

over stand as solid evidence of its exceptional repute. A name that will hold its

own for years to come as the worthwhile manufacturers, distributors and

exporters of the quality natural and blended spices powders and spices.

MANAGEMENT

The group is managed by a team of professional and family members. From the

very beginning Mr. M.E. Meeran has been the chairman and managing director

of the company. Now Mr. Navas Meeran is the managing director. In addition

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Mr. S.M. Muhammad, Mr. M.E. Muhammad, Mr. Firoz Meeran holds the chain

of Directors and Mrs. Nabeesa Meeran. For administration there is corporate

office at Ernakulum. As head of administration there is chairman and below that

vice chairman. The company started functioning only with 25 employees. Now

it is grown to more than 2500 employees, they are working with one heart and

soul for the achievement of the goals of the organization .Mrs. Nabeesa Meeran

playing a key role behind the success of the Eastern Group; she has been the

principal of the Eastern Newton School Adimali.

AWARDS AND RECOGNITIONS

Stringent quality control techniques has got Eastern several quality certifications

and accreditations, including the HACCP and ISO 22000. Moreover, the

Spices Board of India has awarded Eastern for being the 'Largest Exporter of

Spice Powders' in consumer packs, continuously for 13 years. ISO: 22000

2005 - Eastern is the first company in India to get the ISO 22000 certification.

HACCP - This was the certificate issued by food cert BV Netherlands

accredited by RVA the first body in the world for food safety accreditation. It is

Hazard Analysis Critical Point Certification.

LEGAL FRAMEWORK OF THE COMPANY

Eastern Condiments Pvt Ltd is incorporated under THE COMPANIES ACT

1956 on 26th Feb 1991 having its registered office at Eastern condiments Pvt

Ltd, P. B No: 15, Eastern Valley - Adimali, Idukki-Kerala.

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MISSION OF THE COMPANY

“Winning the trust of the customer through commitments to quality at

the right price in all our products”

THE EASTERN GROUP OF COMPANIES

Eastern group of companies is a group with diverse interest and a world leader

in Indian spices Eastern has ventured in to various areas like tires, retreads

mattresses, garments, packaged food , mineral water , public school and has

many more projects in the vision.

1. Eastern Condiments Pvt Ltd

2. Eastern Treads Ltd

3. Eastern Mattresses Pvt Ltd

4. Eastea Chai Pvt Ltd

5. Eastern Clothing Company

6. Eastern Aqua Mineral

7. Eastern Newton School

Eastern Condiments Pvt Ltd

The “Eastern Condiments Pvt. Ltd” started in 1991 with a dream, making good

products available to the common man at the right prices, is a pioneer in the

state to produce packaged curry powders, Masala powders, spices and coffee

powder. Eastern Condiments Pvt Ltd. manufactures spices and masalas. It sells

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South Indian powders, such as rasam, sambar, curry, pickle powder, and other

spice powders through its shops. And it was a growing company in India and

also it was a largest manufacturer condiment and it is one of the leading brands

among the South India.

Eastern Treads Ltd

An ISO 9001-2000 certified public limited company; Eastern Treads Ltd. is

engaged in the manufacture of quality pre-cured tread, cushion/bonding, gum and

black vulcanizing cement. Eastern tread ltd is an ISO 9001-2000 certified company

and it entered into the industry in the year 1986. And the Eastern Treads

manufacture conventional treads and the company firstly started at a private ltd

company and it was changed into a public ltd company. And also the company

went for public issue and the shares listed in Indian Stock Exchange. Eastern

treads is managed by Mr. Navas M.Meeran he was a youngest person and he has a

vision for the development of the group and also he has 12 years future experience

in the industry. Eastern Treads design produced suit tyres for all types of vehicles

from heavy trucks to passenger cars. It is not only a cost effective product but also

they are dependable, reliable and safe.

Eastern Mattresses Pvt Ltd

Sunidra mattresses Pvt.Ltd. was set up in 1999. Nidra’ means sleep in Sanskrit.

The promise of good sleep and rest is ensured by Eastern Mattresses Pvt.

Limited which manufactures and sells the Sunidra range of mattresses, cushions

and pillows. The world-class rubberized coir mattresses are manufactured at

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Thodupuzha in Idukki district, Kerala. Coir, a natural fibre derived from coconut

husk adds to comfort and luxury of the mattress. Eastern Mattresses Pvt Ltd.

manufactures quality mattresses at a state-of-the-art facility. Sunidra rubberized

coir mattress uses the UNICOM technology to combine the resilience of coir for

contoured support with the sensuous comfort of foam that ensures blissful,

comfortable and healthy sleep. Excellent quality at right pricing has made

Sunidra popular inside and outside Kerala. Exported to many countries, Sunidra

has notched a significant position in the mattress market. Eastern Mattresses

Also Manufactures Soft And Comfortable Pillows And Cushions.

Eastea Chai Pvt Ltd

In recent time the company launched a new product ‘Eastea’ from its product line.

“Taste and Strength in every sip”, Eastea - Premium blended tea, from Eastern has

just entered the market with its signature promise of taste and strength. From the

rolling hills of the Nilgris where the nip of the frost deepens the flavour of fresh

green leaves comes Eastea. Carefully picked, processed and packaged to seal in its

flavours and freshness Eastea is cup worth waking up to.

Eastern Clothing Company

Eastern Clothing Company (An ISO Certified Company) belongs to Eastern

Group,. Eastern Clothing Company introduced their products like shirts & trousers

in the brand name of King Richard in 1999. This brand was targeted at the middle

class. Top quality fabrics are used in the manufacture of KING RICHARD brand

(Utilizing 100 % cotton fabrics from leading Indian mills like Aravind,

Vardhaman, BVM, and also Italian brands like Morarjee Brembana. The shirts are

of semi cauals and formals and casual Trousers.

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Eastern Aqua Mineral

Eastern Aqua Mineral, a recently launched company was set up in the year

2002.Eastern Aqua Mineral entered the area of packaged drinking water with

the state of art plant located at Ernakulum district. Eastern packaged drinking

water is of highest purity standard, high quality with control 1286 testing

facilities and quality product with international standards. It is available in

convenient sizes. Eastern packed drinking water is also priced attractively in

keeping with Eastern’s view of bringing high quality products to the common

man at the right price.

Eastern Retreads Pvt Ltd

Eastern Retreads Pvt. Ltd. was set up in 1993 is engaged in retreading of tyres.

The factory is located at Vazhakulam; Thodupuzha in Kerala is equipped with

hot and cold retreading process. . Retreads are not only cost effective but they are

also dependable, reliable and safe. Retreads are used by truckers with scheduled

delivery times and small package delivery companies with guaranteed delivery

times. Retreads are also environment friendly tyres which are basically petro-

chemical products. It takes 22 gallon of oil to manufacture one new truck tyre

most of the oil is found in the casing which is renewed in the retreading

processes. As a result it takes only 7 gallons of oil to produce a retread. Because

of the competitive nature of the retreading industry truckers can expect to see

continuous improvement in quality, durability and reliability.

Eastern Newton School

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The mountain township of Adimali, home to the Eastern Group, with its natural

abundance and moderate climate has all the potentials to become a major

tourist destination and a centre of learning in the hilly district Idukki and in the

State of Kerala at large. Eastern Newton School a prestigious venture from Eastern

Group promoted and managed by M.M.IBRAHIM MEMORIAL

EDUCATIONAL CHARITABLE TRUST believes strongly in the

aspect of providing quality education to the needy and pragmatic children of the

high ranges at an affordable fee structure. The school, launched in the year June

2001 is affiliated with CBSE- Delhi and has classes up to 12. The main objective of

the school is to become a role model in the field of education, bringing out the

untapped talents of the children entrusted to our care and enabling them to grow as

intellectually enlightened, morally upright, socially committed, emotionally

balanced, patriotic and productive citizens of our Great Nation.

PRODUCT PROFILE

In our national economy spices play a very virtual role and our country India is

considered to be the home of spices. The freshness and the purity of Indian spices

and spice powders have made it a favourite in India and all over the world. Spices

are used as flavouring agents in many countries. They improve the flavour and

acceptability of cooked food and make them more delicious. Eastern Condiments

Pvt. Ltd. has varieties of spices, curry powders and pickles in its product mix. The

purity and freshness of Eastern curry powders has helped to enter the customers

mind and the products will become a leading brand in Kerala.

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Eastern curry powders popularly known as ‘Strong Masala’ is processed using the

unique flavour-lock technique. The best quality spices are powdered under

stringent temperature control, using micro pulverisers ensuring that the precious

volatile oils that give the flavour to the spice are preserved. Eastern curry powders

are so pure and fresh so that use just half as much as any other for excellent taste.

Eastern curry powders export to various countries like Middle East, U.K, U.S.A,

Australia and Germany. Eastern has grown into a favourite in Indian home across

the world. Excellent quality and right pricing has become the winning formulae of

the Eastern Group. Eastern curry powder is fast growing into an all India brand

with its entry into new India is considered to be the home of spices. Spices play a

very vital role in our national economy. The purity and freshness of Indian spices

markets and the introduction of market specific new variants.

Eastern condiments have different kinds of spices, curry powders, blended

masalas, pickle powders, pickles, rice powders, etc. Now Eastern Condiments

Pvt Ltd has 144 products. The company concentrated on pickles in exporting.

The spices are produced from the plantations of Kerala. Products are produced

under strict conditions and pure quality is assured.

Different categories of products are as follows:

Spice Powders

Eastern Turmeric Powder

Eastern Chilly Powder

Eastern Coriander Powder

Eastern Black Pepper Powder

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Eastern Ginger Powder

Eastern Kashmiri Chilly Powder

Eastern Chilly Powder With Oil

Eastern Coriander Cumin Powder

Eastern Cumin Powder

Eastern Fenel Powder

Eastern Fenugreek Powder

Eastern White Pepper Powder

Blended Spice Powder

Eastern Garam Masala

Eastern Sambar Powders

Eastern Rasam Powders

Eastern Madras Sambar Powders

Eastern Vegetable Masala

Eastern Chana Masala

Eastern Dal Fry Masala

Eastern Egg Masala

Eastern Chicken Masala

Eastern Fish Masala

Eastern Meat Masala

Eastern Mutton Masala

Eastern Tandoori Masala

Eastern Meen Mulaku Masala

Eastern Belesaru

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Eastern Super Garam Masala

Eastern Rajma Masala

Eastern Kulambu Masala

Eastern Pickle Powders

Eastern Chicken Biryani Masala

Eastern Mutton Biryani Masala

Eastern Fish Biryani Masala

Eastern Chicken Fry Masala

Eastern Chat Masala

Eastern Kabab Masala

Eastern Panipuri Masala

Eastern Pavbhaji Masala

Eastern Puliogare Masala

Eastern Seekh Kabab Masala

Eastern Vangi Bhath Mix

Eastern Palada Mix

Eastern Payasam Mix

Eastern Coconut Chutney Powder

Eastern Prawn Chutney Powder

Eastern Pepper Chicken Masala

Eastern Beef Ularthu Masala

Eastern Chilly Chicken Masala

Eastern Pickles

Eastern Garlic Pickle

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Eastern Garlic (In Brine) Pickle

Eastern Bitter Gourd Pickle

Eastern Ginger Pickle

Eastern Mango Pickle

Eastern Mango ( In Brine) Pickle

Eastern Tender Mango Pickle

Eastern Tender Mango ( In Brine) Pickle

Eastern Mango Ginger Pickle

Eastern Dates Pickle

Eastern Fish Pickle

Eastern Tomato Pickle

Eastern Goosberry Pickle

Eastern Goosberry (In Brine) Pickle

Eastern Lemon Pickle

Eastern Hot & Sweet Lemon Pickle

Eastern Lemon (In Brine) Pickle

Eastern White Lemon Pickle

Eastern Mixed-Veg Pickle

Eastern Nutmeg Pickle

Eastern Prawns Pickle

Eastern Green Chilly Pickle

Eastern Pineapple Pickle

Eastern Rice Based Products (For Breakfast)

Eastern Puttu Powder

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Eastern Idli Powder

Eastern Dosa Powder

Eastern Pathiri Powder

Eastern Appam Powder

Eastern Chamba Puttu Powder

Eastern Easy Palappam Mix Powder

Eastern Appam Powder

Eastern Ragi Puttu Powder

FUNCTIONAL DEPARTMENTS OF THE COMPANY

1. Finance And Accounts Department

2. Marketing Department

3. Export Department

4. Human Resource Department

5. Production Department

6. Maintenance Department

7. Quality Control Department

8. Purchase Department

9. IT Department

10. Production Planning And Control Department

11. Taxation Department

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ORGANISATION CHART

DIRECTOR MANUFACTERING

DGM MKTG

MANAGER MKTG

ASST MANAGER

SR.SALES OFFICERS

SALES TEAM

OFFICERS PPC

MANAGER -PPC

OFFICER

MANGER EXPORTS

SR OFFICER PPC

MANAGER PRDN

SR OFFICER HR

ASST MANAGER PRODUCTION MPD

OFFICERS

SR MANAGER HR& ADMIN

ASST MANAGER PURCHASE

PRODUCTIONSUPERS

ASST MANAGER TAXATION

FINANCE CONTROLER

MANAGER ENGINEERING

SR MANAGER TECHNICAL

SR OFFICER TECHNICAL

OFFICER TECHNICAL

OFFICERS

OFFICER ENGINEERING

Director –M&T Director –F&A Director –P&O Director -It

Chairman - Board of Directors

Executive Committee

Head- Hr Head - Production Head-Purchase Head-Sales Dgm Technical Secretary Head It

AGM FINANCE

DY MANAGER

SR OFFICERS

OFFICERS

WORK SHOP IN CHARGE

OFFICER PURCHASE

OFFICERS IT

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1. FINANCE AND ACCOUNTS DEPARTMENT

Finance is the lifeblood and nerve centre of a business, just as circulation of blood

is essential in the human body for maintaining life, finance is a very essential to

smooth running of the business. It has been rightly termed as a universal lubricant

which keeps the enterprise dynamic. Finance department deals with planning,

organizing directing and controlling financial activities like procurement and

utilization of fund and distribution and distribution of earning to owners.

The authorized equity share capital of the company is Rs. 150000000/- divided in

to 15000000 shares of Rs. 10 each (as at 31/03/2011). General reserve of the

company is Rs.88045000 (as at 31/03/2011). The company has a daily working

capital of Rs.3 crore and the banking partners is FEDERAL BANK. Company has

no debentures. The yearly turnover of the company is 500 crore.

Important books/records maintained by the company

1. Monthly Trail balance, Profit and loss account & Balance sheet.

2. Stock statements

3. Purchase register

4. Sales register (weekly)

5. Stock register

6. Asset register

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7. Fund Flow Statement

8. Cash flow statement

9. Bank reconciliation statement (weekly)

10. Cost sheet

11. Budgets

12. Cash and bank books etc...

The finance & accounts department consists of fourteen (14) staffs in Adimali

division, DY. Manager Finance, DY. Manager accounts, Junior officers, Data entry

officers, Senior Petty casher & petty cashers, who manage and process its functions

by using ORION Accounting software.

There are lots of routine functions which accounting department has to do.

To record the transaction on the basis of invoice, bills and vouchers, keep

bills and vouchers in safe place after including them in files.

Collect amount from debtors and monitor debtors.

To reconcile the bank statements with his company's bank account.

Checking and passing the bills of supplier for the payment. A typical business

makes many purchases during the course of a year, many of them on credit,

which means that the items bought are received today but paid for later. So

this area of responsibility includes keeping files on all liabilities that arise

from purchases on credit so that cash payments can be processed on time.

Maintain sales register.

Maintain cash and bank books.

Daily cash tally and withdrawal.

Drawing monthly trial balance.

Page - 27

Preparation of monthly profit and loss account and balance sheet.

Preparation of Stock statements (monthly).

Preparation of purchase registers (monthly).

Preparation of sales registers (weekly).

Preparation of stock register (monthly).

Preparation of Asset registers,

Preparation of Fund Flow Statement.

Preparation of Cash flow statement.

Preparation of Bank reconciliation statement (weekly).

Preparation of Cost sheet.

Preparation of Cash and bank books.

Preparation of annual accounts.

Maintain the general and subsidiary ledgers.

Distribution of pay cheques.

Monitoring the process of budget achievement providing taxation pinning and

advisory service to the company.

Evolve an audit manual.

Advising management on funds, utilization and implementation.

Preparation of corporate plans annual plans and budget.

The finance and accounts department is divided in to four working sections:-

1. Receipt data entry section

2. Payment processing & data entry section

3. Bank/Cash section

Page - 28

4. Cash counter &Petty cash section

1. Receipt - data entry section

This section handled all receipts of the company and also some payments. An

important and frequent transaction in this section is route sales data entry work.

Route sales are handled by receipt data entry section. Eastern have more than 80

route sales. 98 % of sales are cash sales, only 2% Credit sales, credit provided to

only 200 parties. An important document filed in this section is ‘Route Sales

Statement’ and route traveling expenses documents submitted by sales executives

every Saturday. Route sales statement contains route name, period, total sales, cash

sales, cash deposited into companies bank account, cash deposited into companies

cash counter and also route expenses and sales summary. Sales summaries are

uploaded from PAM-Tech machines; it is done by separate section.

Some frequent Journal entries in this section:-

When route sales amount deposited in to bank (supporting document-bank

deposit slip)

By Federal Bank A/c Dr.

To Sales route

When route sales amount deposited in to company cash counter (supporting

document-slip provided by the company cash counter )

By Cash A/c Dr.

Page - 29

To Sales route

Route sales expenses, sales team those expenses taken from route collection

(supporting document-expense bills)

By Expenses A/c Dr.

To Sales route

Other important functions of this section:

Preparation of bank reconciliation statement for finding any difference in

companies receipts, between bank account and companies records.

Preparation of sales statement for finding out any increase or decrease in

route sales, if sales is below targeted sales, some portion of amount deduct

from sales executives salary.

Preparation of sales registers (weekly).

Preparation of stock register (monthly).

2. Payment processing & data entry section

This section handled all payments of the company and also other functions. An

important and frequent transaction in this section is data entry work to payment due

for a wide variety of purchases. The accounting department keeps all the

supporting business documents and files. For payment due only if all terms are

correct.

Page - 30

Important and frequent transaction in this section:

Receive supper’s bills for making payments. Purchase department send

suppers bills, copy of goods received note and copy of purchase order to

accounts department for making payment.

Suppler bill contain details such as: suppler address, to address, fright paid

or not, (if not, company pay the fright, as per agreement), quantity of

material, rate of material, amount of material etc…

Goods received note (G.R.N) contains details such as: date, suppers invoice

number & date, from address of suppers, quantity accepted, quantity

rejected, its rate and amount etc…

Purchase order contains details such as: Supplier code, supplier name,

supplier address, purchase order no, purchase order date, purchase item

name & code, quantity, rate, amount, price basis, payment term, mode of

dispatch, warranty, our bank, CST No./ST No., remarks, Tin No., delivery

schedule etc…

Company pays only the amount on the basis of purchase order rate.

After verification of suppers bills, copy of goods received note and copy of

purchase order, officer pass a journal entry for payment due

I.e.: Raw material A/c Dr.

Page - 31

To party

And prepare a payment advice, it is send to Bank/cash section

3. Bank/Cash section

This section handles all bank payment and receipts, and cash provide to petty cash

section of the company. Company’s payments through issuing cheques (account

payee only), Company’s bank provide only 5 cheque leaf to Adimali division, and

it contain 500 cheques. Cash transitions limited only up to 5000.

Important and frequent transaction in this section:-

Receive payment advice from Payment processing & data entry section,

payment advice contain details such as: Name of the payee, Vender code,

Nature of payment, Request for payment-Cheque or cash, Due date for

payment, Remarks by preparer:-doc.no. Invoice no & date, invoice amount

& rate variation if any. Payment advice is prepared by an accounts officer

& approved by senior officer.

Prepare a cheque for parties name ‘Account payee only’

Pass journal entry for payment

I.e. Party A/c Dr.

To Federal Bank. (Also record cheque number)

Prepare bank payment voucher & print and also signed by the preparer.

‘Bank Payment Voucher + Payment advice + Cheque’ submitted to

DY.Accountant.

Payment voucher and cheque is signed by DY.Accountant after verification.

Page - 32

Senior Officers

Deputy Manager Finance& Accounts

Officers

Data Entry Officers

After that, the cheques are submitted in to bank, or parties directly collect

the cheque.

This section files documents such as: Bank payment, General journal,

contract bills, cash receipt, medical claims, mobile bills, cash payments

etc…

4. Cash counter & Petty cash section

This section handles all cash payments and receipts, collect bills and verifying the

bills and send to concerned department, receive cheque and verifying that, collect

cash, cheque, and bank slips from sales executives, and provide salary & wages to

employees etc…

STRUCTURE OF FINANCE DEPARTMENT

Chart 4.2 [source: from dy.accounts manager]

Page - 33

2. HUMAN RESOURCE MANAGEMENT DEPARTMENT

Human resources are the real assets of an organization. If treated well, they can

take organizations to commanding heights. Organizations are generally driven by a

set of pre-determined goals. They employ physical, financial and human resources

in order to achieve goals. Organizations thus depend on people for their survival

and growth. In a similar way people need organizations. The success and failure of

every company depends upon its human resource. The vast majority of people

work to support themselves and their families. But people work for many other

reasons other than economic security, they want to gain recognition and achieve

status or to test and stretch their capabilities. It is a fact that the people are vital for

the effective operations of a company as human effort and brains are the main

driving force behind the organization.

Employment of competent and specialized persons at various levels is one

important reason for the continuous success of Eastern. Moreover employment of

women at certain key areas of operations avoids unreasonable labour problems to

an extent.

The key factor in the growth of Eastern is mainly the good and healthy employer-

employee relationship. About 2500 employees are working with a mutual

relationship in the organisation. In eastern maximum 80% people are women

workers. The workers keep discipline in the organisation and also they do the

works very carefully.

Page - 34

OBJECTIVES OF HUMAN RESOURCE DEPARTMENT

1. To procure right type of personnel for right job at the right time

2. To provide right kind of training to personnel to increase their productivity

3. To ensure effective utilization of human resources

4. To ensure development of human resources by offering opportunities for

learning and advancement

5. To achieve and maintain high morale among employees in the organization

by securing better human relation

6. To identify and satisfy the needs of the individuals by offering various

monetary and non-monetary rewards

SCOPE AND ACTIVITIES OF HUMAN RESOURCE DEPARTMENTS

Human resource or Manpower planning

Recruitment, selection and placement of personnel

Training and Development of employees for their efficient performance and

growth

Appraisal performance of employees and taking corrective steps

Motivate the workforce

Wage and salary administration

Personal counseling

Compensation and benefits

Page - 35

RECRUITMENT PROCEDURES ARE:

In eastern they are following two types of recruitment procedures direct

recruitment and internal recruitment.

A) DIRECT METHOD

Direct method means they are directly gives advertisements in Medias. In Eastern

this method is frequently used for recruitment. The firm places jobs advertisements

in Malayalam, English news papers and T.V media tries to attract as much capable

people from outside its company service.

B) INTERNAL RECRUITMENT

The company for filling the post by efficient and skilled workers from the rank,

promotion and panchayat has preferred local candidates who belong to

surroundings.

SELECTION PROCESS

The selection process is only through direct interviews. The employees are

transferred to different departments on the basis of their skills and abilities. They

conducted a test also but the test conducted only for senior position.

1) Tests are conducted only for senior position

2) Interview

Page - 36

After the test the managers conduct face-to-face interview with candidates and

select the best person based on his qualification and ability.

But in Adimali branch selection is done only for the posts of sales executive and

drivers. The executives from the Ernakulam branch are directly doing the

selection procedure of remaining all posts.

PERFORMANCE APPRAISAL

Eastern is following a special type of system for appraising the workers that is

KRA system i.e., the KEY RESULT AREA. Here the performance of individual

employee is evaluated by his superior officer. The officer will evaluate the

employee’s performance on the basis of result produced by them and gives a report

to the board for a particular period of time. If the board is satisfied he/ she will

forward it to the top management by recommending incentive or promotion

WAGES AND SALARY

The workers are paid in two types of wage system:

Piece rate system: Under piece rate system of payment, wage is paid on the output

produced and not on time. In the packing section they are following the piece rate

system.

Salary system: This mode of payment is applicable for the rest of the workers,

which also includes the loading and unloading workers.

NON MONITARY BENEFITS

The company provides a lot of non monitory benefits to their employees. Some of

them are as following

Page - 37

Vice president

Senior manager hr & administration

Senior officer

Officers

Transportation

Personal protective equipments

Medical insurance

Pension scheme

Annual medical check up

Canteen facilities

Tours and picnics

Structure of human resource & administration department

Chart 4.3 [source: from senior officer H.R]

Page - 38

3. PRODUCTION DEPARTMENT

The production department is the backbone of a manufacturing organization.

Production is a process of converting input in to output. Technically speaking, a

production is concerned with step by step process of raw material into finished

goods.

OBJECTIVES

a. Design of the product

b. Design of the production system

c. To ensure production according to the plan and requirement.

FUNCTIONS OF PRODUCTION DEPARTMENTS

a. Product selection and design

b. Production planning

c. Quality control

d. Inventory control

e. Plant layout and material handling

f. Cost control

The first step in the production takes place both at Adimali and Theni where the

raw material (chilly, turmeric, coriander) needed are purchased in bulk are

Page - 39

cleared, roasted, crushed, powdered and packed and dispatched to Adimali for

further packing. The distribution is handled by the company itself.

Eastern Condiment deals with production and packing of curry powders,

masalas, instant pickle powder and processing of pickles. The company has a

production capacity of 12 tons per day. To ensure that the spices reach the

consumer at fresh conditions at a minimal cost, the company follows

international packing standards to protect, preserve and present its products. For

bulk packing, the VACCUPAC system is used where in products are packed in

vacuum, thus protecting the powders from fungal infection, moisture, oxidation

etc.

Production function performs according to instructions from the PPC. PPC gives

monthly indent which is converted in to weekly plans by the production

department. A stock of goods for 3 days production is kept with the department

in case of contingencies. All details regarding production are given to PPC

daily. The department has 14 vehicles for the purpose of transferring raw

materials. The department has around 750 workers. The production is dependent

on the skill and experience of the workers. The productivity is around 75%.

QUALITY ASSURANCE

The company follows stringent measures which are applied with regular

laboratory testing. The Indian spices board with their spice house certification

has recognized the company’s obsession with quality and hygiene. Eastern has

also achieved the highest ranked approvals for quality, the Hazard Analysis

Critical Control Point (HACCP), ISO 9002 certification and ISO 22000

certification.

Page - 40

Chilies, coriander, turmeric &spicesCleaning Drying Roasting

PowderingMixing

Packing

Marketing

MANAGER PRODUCTION

AST.MANAGER

SR.SUPERVISORS

SUPERVISORSRosting, Powdering,

Hnd.paking, Mach. pking

Workers

PRODUCTION FLOW CHART

Chart 4.4 [source: from officer production]

STRUCTURE OF PRODUCTION DEPARTMENT

Page - 41

Chart 4.5 [source: from officer production]

4. MAINTENANCE DEPARTMENT

Maintenance department of Eastern are responsible for keeping the plant and

equipments in good condition. Maintenance Department of Eastern has four

sections.

1. Electrical

2. Mechanical

3. Technical

4. Automobile

FUNCTIONS OF MAINTENANCE DEPARTMENT

1. PREVENTIVE FUNCTION

Preventive function done to alert breakdowns, improve efficiency of working to

keep a routine monitoring of the machineries. There is a routine maintenance

schedule and the preventive maintenance is done according to it. This is done in

weekly or monthly basis according to the condition of the machine.

2. BREAKE DOWN MAINTENANCE

Page - 42

Maintenance Manger

Maintenance Team

Automobile in charge

Workers

This is done to restore the machine back to the work if it undergoes a break down.

It is done according to the priority of the machine. This is done in minimum

possible time, so that production of the plant is not affected.

3 PERIODICAL MAINTAINCE

This is done on a specific period of time it is like routine happens in fixed time to

ensure proper working of machines.

OBJECTIVES OF MAINTENANCE DEPARTMENT

a. Optimize the use of available funds, personnel and facilities and

equipment through the effective maintenance management methods

b. Systematically identify maintenance needs and deficiencies and capital

improvement needs at all field stations

c. Enable preparation of service maintenance and construction budget

request using systematic, standardized procedure

d. Monitor and document corrective actions , project expenditure and

accomplishment

STRUCTURE OF MAINTENANCE DEPARTMENT

Chart 4.6 [source: from officer maintenance]

Page - 43

5. MARKETING DEPARTMENT

Marketing is considered to be the head of an organization. It is the most important

department in an organization. One of the important reasons behind the success of

the company is its marketing strategy compared to their rivals. The system

followed by Eastern is very unique and it has been very effective. They deal with

the wholesalers and retailers directly at their door step with the help of around 80

direct selling regions in all around the state.

OBJECTIVES MARKETING DEPARTMENT

Developing marketing strategies

Capturing marketing insights

Building strong brand image

Delivering value to consumers

Connecting with customers

DIRECT SALES

This peculiar feature of Eastern curry powders helped it to vary from order

companies. The group directly distributes the products to retailers in Kerala. The

Page - 44

company has around more than 100 vehicles which go on around 80 strong routes

covering the entire state. A sales executive, sales assistant and driver will be on

each van to go for the sales. 22 lakh kg sales in Kerala per month. The company

has 144 products.

The various sales techniques consist of:-

1. Route Sales

2. Factory Fresh Outlet

3. Inter Company Sales

4. Export Sales

5. 30 Reverse vehicles

6. Performance awards

7. Sales executives classified in to three A, B , C on the basis of their

performance.

Company has four depots, which are at Kozhikode, Kottayam, Trivandrum, and

Trissur. Sales target is fixed only after looking the previous 3 months sale. More

sales are done in Kottayam (Dts) .The sales executives for each route give the

orders to be dispatched to each sale depot. He also takes care of the billing and cash

transactions. After making a sale, a sale invoice is made and the summary is given

to the cash department. The assistant places the order to different shops. After the

delivery of goods, the vans return after verifying the order form and checking the

stock. The accounts are maintained on a weekly basis. The company has around

Page - 45

40000 retailers and 15 dealers. Mainly, cash transactions are undertaken and credit

facilities is given to only around 200 parties.

Meetings of the sales executives are held every week after they return from their

different routes. Here every aspect of the weekly sales will be discussed and any

problems arising can be brought to the notice of the management.

By the direct distribution the company has achieved a lot of benefits. Some

of them are as follows;

1. They can deal with the wholesalers and retailers directly at their door step.

2. The company can maintain a good relationship with the wholesalers and

retailers.

3. The company can avoid the role of intermediaries in the distribution of the

product. It helps to avoid unnecessary commission, brokerage and other

related expenses.

4. The company’s own vehicles used for distribution aid to give an important

mode of advertisement in addition to the other media advertisements. This

incurs no additional cost.

Eastern Condiment has entered in to world market in the recent years. In India it

is capturing both urban and rural markets. In Kerala it is the market leader with

more than 78% market share to almost all its products.

MARKETING OUT SIDE KERALA

Page - 46

Factory

Dippo or carry forward ag

ent

Super stockist

Distributers

Retailers

CHAIRMAN

DGM MANAGER

MANAGER

ASSISTANT MANAGER

SR.SALES EXECUTIVES

SALES ADMNI.STAFFS

Eastern also deals with sales of their products outside Kerala by using well

established channel for over 9 years.

Outside marketing:

Chart 4.7 [source: from marketing manager]

STRUCTURE OF MARKETING DEPARTMEMT

Page - 47

Chart 4.8 [source: from marketing manager]

6. QUALITY CONTROL DEPARTMENT

Eastern have well equipped quality control department maintained by qualified

professionals and new technology oriented machines. Laboratory in Adimali is

central laboratory of eastern condiments pvt.ltd because all critical and major

decisions are taken from this laboratory itself. Functions of this department is to

ensure that the quality objectives of the firm are relevant to meet the requirements

of the product quality and are periodically measured and compared against product

quality requirement. Before packing each sample of products are tested in the lab

and will pack only if they get the good quality certification from the lab. And if any

products are returned by the customers, they will be tested to find out the reason for

rejection.

MAJOR FUNCTIONS

Checking the quality of raw material

Checking the quality of semi finished goods

Checking the quality of finished goods

Page - 48

HEAD TECHNOLOGY & ENGINEERING

TECHNICAL MANAGER

ASST MANAGER MICROBIOLOGY

SENIOR OFFICER TECHNICALMICROBIOLOGIST

Perform new research and development process

Helping to purchase department to procure right supplier

Help production department in actual quality production

Maintain standard for ISO 22000

Eastern condiments laboratory is function at three level

Microbiology

Chemical

Instrumental

Eastern has the first fully automated microbiology laboratory in India in food

industry. Microbiology lab is used to find out the bacteria, microbes etc. present in

the raw materials. It has 2 divisions-conventional method and automation method.

Chemical test helps to detect stones, moisture, oil percentage etc… The strict

quality control techniques has got Eastern several quality certifications and

accreditations, including the HACCP and ISO 22000.

Research and development function is also performed by quality control

department.

STRUCTURE OF QUALITY CONTROL DEPARTMENT

Page - 49

Chart 4.9 [source: from H.R dept]

7. PURCHASE DEPARTMENT

The purchasing department will be responsible for providing the materials,

components and equipment required to keep the production process running

smoothly. A vital aspect of this role is ensuring stocks arrive on time and to the

right quality. Performance of a manufacturing firm always depends on the

efficiency of its purchase department. The various raw materials needed for the

production is purchased by this department.

OBJECTIVES OF PURCHASE DEPARTMENT

To provide uninterrupted flow of materials and service for company

operations

To procure materials economically at a cost consistent with the quality and

service required. However, generally all purchases may be attempted at the

lowest cost.

To find reliable alternative source of supply

Page - 50

To buy at the most economic order quantities

To buy the best value, a combination of right quality at the best price with

the best supplier service

To maintain good relations with vendors

To promote source development

To develop and maintain good buyer-seller relationship

FUNCTIONS OF PURCHASE DEPARTMENT

The main functions of the Purchase Department are defined as follows:

Procurement of stores through indigenous and foreign sources as required

in accordance with the rules in force.

Checking of requisitions

Selection of suppliers for issue of enquiries.

Issuing enquiries/tenders and obtaining quotations.

Issue of Purchase Orders.

Follow-up of purchase orders for delivery in due time

Verification and passing of suppliers’ bills to see that payments are made

promptly.

Correspondence and dealing with suppliers, carriers etc., regarding

shortages, rejections etc., reported by the Stores Department.

Maintenance of purchase records.

Page - 51

Board of Directors

AGM Purchase

Asst Managers

Senior Officers

Officers

Purchase of raw materials , items such as dry chilies, coriander, turmeric, cumin,

fenugreek, fennel, rice, fruits and vegetables, preservatives, salt etc and outsourced

etc, purchased at Ernakulam, Adimali, and Theni.

Evaluation of existing suppliers

STRUCTURE OF PURCHASE DEPARMENT

Chart 4.10 [source: from H.R Dept]

Page - 52

8. EXPORT DEPARTMENT

Eastern Condiments Pvt Ltd started exporting in the year 1995. Today the company

is exporting its products to almost all gulf countries, and to the different parts of the

world, like USA, UK, UAE and AUSTRALIA. The Company has its own

distributors. 30 % of total production is export. The company exports above 600

tonnes per month (60 containers), export through ship. Eastern exports all their

products into the foreign market. Company exports mainly to gulf countries about

75% of export take place in gulf countries. 25 % of profit portion through export.

Export policies

Separate packing –bottles and duplex packet

More quantity products

Based on country standards

Page - 53

MANAGER

SENIOR OFFICER

JOUNIOR OFFICER

Quality checking under each stage

Mode of transportation in export business

Production at Adimali stuffing and packing is carried at kothamangalum

Packed materials are transferred using containers each have 10 tone capacity

monthly 60 containers are exported.

Company takes containers through his on vehicles to Cochin port.

From Cochin port containers are transferred other countries by sea.

Exported products are reaching the hands of distributers from there it reach the

customers.

The dealers are working on commission basis.

ACHIEVEMENTS

Eastern is the leading exporter of condiments from India. Eastern has

received the spices board award for the best exporter continuously for the

last 14 years.

STRUCTURE OF EXPORT DEPARTMENT

Page - 54

Chart 4.11 [source: from Export manager]

9. IT DEPARTMENT

Eastern condiments limited are fully automated ERP installed factory. Computer

system enables each process to do faster and safe manner. Artificial intelligence

is necessary for development of mankind. Today the term information

technology has bellowed to encompass many aspects of computing and

technology, and the term is more recognizable than ever before. The information

technology umbrella can be quite large, covering many fields. IT professionals

perform a variety of duties that range from installing applications to designing

complex computer network and information data bases.

The Eastern is a fully computerized. Adimali division has 140 machines. The

company has centralized data base password control to restrict unauthorized

access. All the departments are connected via networks. Eastern uses oracle

based software called ORION, which has been customized to suit the needs of

their particular organization. The networking is done through BSNL Broadband

line.

Page - 55

FEATURES

Well functioning ERP system.

DATA BASE BackUp

High Speed Internet facility.

Intel Pentium4 processer, 512 MB RAM and 80 GB Hard disc.

Windows 7 Operating system.

Online conference facility.

Best H.P Printers.

Wi-Fi Facility etc…

MAIN FUNCTIONs OBJECTIVES OF IT DEPARTMENT

Help in day to day process.

Timely access to data.

Proper communication with departments and out side.

Ensure the protection and security of data.

System maintenance & Repairing.

Software installation and updating.

Facilitating good communication system.

Data management.

Computer networking.

Computer engineering.

Data base system design.

Software design.

Management of information system.

Page - 56

Boar

d of

dire

ctor

s

IT M

ange

rs

Seni

or O

ffice

rs

Offi

cers

The company has a good IT team for implementing the ERP(Enterprise

Resource Planning) which was started in the year 2001 and was centralized in

the year 2005. ERP enables fast transactions and systematic in all its functions.

ERP also helps in generating MIS reports which help in decision making. The

package used is ORION 7.4 and ORION 10.x.

STRUCTURE OF IT DEPARTMENT

Table 4.12 [source: from H.R Dept]

10. PRODUCTION PLANNING AND CONTROL DEPARTMENT

This department mainly focuses on easy and smooth going of manufacturing unit

from purchase, production, and marketing. They make plans according to the data

provided by the marketing department (The requirements for coming period) Based

on this they give instruction to the purchase dept and the production department.

They plan for 3 months later it divided on monthly basis and finally supervisors in

production scheduling on weekly basis. Production is according to the requirements

and will depend on seasonal demands.

Based on the marketing forecast PPC department makes free zed plan then they

check with purchase department about raw material availability in case if there is

no adequate stock the procurement process take place after this production plan is

transferred into production department.

Production planning and control is the department which plans everything

regarding production. It find out what is to be produced, when, what quality and it

Page - 57

MANAGER PPC

SENIOR OFFICER

OFFICERS

SUPERVISOR

even informs the purchase department about what raw materials to be purchased

for production.

PPC regulates stock inflow and out flow with the help of ORION software so the

amount stock will be readily available. They make plans according to the data

provided by the marketing department. Based on this, they give instruction to

purchase department and the production department. Production is according to the

requirement and will depend on the seasonal demand. The monthly production of

Eastern is 240000 tons. This is based on monthly demand. Every sales executive

gives the order from retailers, Based on this PPC give instruction to both

production and purchase.

OBJECTIVES OF PPC DEPARTMENT

Increase profitability of the company

Quality control

Minimize cost

Coordination between men and machines

Maximize output with minimum input

Ensure operations are run efficiently and as planned

Optimize the use of resource, material, machines etc.

STRUCTURE OF PPC DEPARTMENT

Page - 58

Table 4.13 [source: from H.R dept]

11.TAXATION DEPARTMENT

Eastern condiments Pvt ltd has separate department for taxation purpose

performing under the finance department. Eastern deals with spices related

products so some item have tax on state wise. Eastern follows one month advanced

tax payment thorough E-filing with government of Kerala. Taxes are majorly paid

on the basis of sales.

For actual tax Payment Company follows: Internal audit, Statuary audit & Macro

audit.

Mainly company follows: Vat, Central Excise & Service Tax.

STRUCTURE OF TAXATION DEPARTMENT

Page - 59

MANAGER

Deputy Manager

Senior manager

WORKERS

Chart 4.14 [source: H.R dept]

Introduction

Financial Analysis is the process of determining the operating & financial

characteristics of a firm from accounting data & financial statement. The goal of

such analysis is to determine efficiency & performance of the firm management, as

reflected in the financial records and reports. Its main aim is to measure the firm’s

liquidity, profitability and other indications that business is conducted in a rational

and orderly way.

RATIO ANALYSIS

Ratio analysis is a powerful tools a financial analysis. Financial ratio analysis is an

arithmetic relationship between two figures.

Financial ratio analysis is a study of ratio between various items of groups of items

in financial statement. It also based upon various financial ratios, which are

Page - 60

calculated from the data provided in company’s balance sheet & profit and loss

account.

As per I.M. Pandey “Financial ratio in the relationship between two accounting

figures, expressed mathematically”.

A financial ratio is the relationship between two accounting figures expressed

mathematically. Ratios provide clues to the financial position of a concern. These

are the indicators of financial strength, soundness, position or weakness of an

enterprise. One can draw conclusions about the financial position of a concern with

the help of accounting ratios.

The following categories of some ratios calculated from the books of eastern

condiments private limited (ECPL) as under:

1. Liquidity Ratios

2. Leverage Ratio

3. Activity Ratios / Turnover Ratios

4. Profitability Ratios

1. PROFITABILITY RATIOS

The main aim of an enterprise is to earn profit which is necessary for the survival

and growth of the business enterprise. It is earned with the help of amount invested

in business. It is necessary to know how much profit has been earned with the help

of the amount invested in the business. This is possible through profitability ratio.

These ratios examine the current operating performance and efficiency of the

Page - 61

business concern. These ratios are helpful for the management to take remedial

measures if there is a declining trend.

a. Net Profit Ratio

b. Return On Total Assets

c. Return On Net Capital Employed/ Investment

d. Earning Per Share (EPS)

e. Dividend Pay Out Ratio

f. Return On Equity

a. NET PROFIT RATIO

A ratio of net profit to sales is called Net profit ratio. It indicates sales margin on

sales. This is expressed as a percentage. The main objective of calculating this ratio

is to determine the overall profitability. Net profit ratio determines overall

efficiency of the business. It indicates the extent to which management has been

effective in reducing the operational expenses. Higher the net profit ratio, better it

is for the business. Net profit ratio = Net profit / Net sales x 100

TABLE: 5.1 NET PROFIT RATIOS

Financial Year Net Profit Net SalesNet Profit

Ratio (%)

2006-2007 1385.4 16019.05 8.65

2007-2008 591.85 19487.84 3.04

2008-2009 1210.42 27514.45 4.40

2009-2010 3190.54 32026.17 9.96

Page - 62

2010-2011 1043.62 37590.3 2.78

[source: financial statements]

Chart 5.1 Net Profit Ratio

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

2

4

6

8

10

12

[source: table 5.1]

Interpretation

This ratio helps in determining the efficiency with which affairs of the business are

being managed. The net profit ratio rises till 2010; the net profit ratio was 9.96. The

net profit ratio decreased during 2011; the ratio was 2.78. But the income of the

company in 2011 is greater than 2010. Provision for doubtful loan and loss on

slump sale of tea division was the main reason for decreasing net profit of the

company during 2011.

b. RETURN ON TOTAL ASSETS

It calculates or measures the productivity of total assets. It is to ascertain whether

assets are being utilized properly or not.

Page - 63

Return on Total Assets = Net Profit / Total Assets x 100

TABLE: 5.2 RETURN ON TOTAL ASSET

Financial Year Net Profit Total AssetReturn on total

assets (%)

2006-2007 1385.4 11195.88 12.37

2007-2008 591.85 21118.45 2.80

2008-2009 1210.42 15471.16 7.82

2009-2010 3190.54 16847.31 18.94

2010-2011 1043.62 18975.33 5.50


Chart: 5.2 Return On Total Asset

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

2

4

6

8

10

12

14

16

18

20

[source: table 5.2]

Interpretation

In the year 2010 return on total asset ratio was 18.94. But in the year 2011 the ratio

was 5.50, there has been a sharp decline which means that they are not effectively

utilizing the assets effectively.

Page - 64

c. RETURN ON NET CAPITAL EMPLOYED

This ratio is also known as return on investment (ROI). The primary objective of

making investment in any business is to obtain satisfactory return on capital

invested. It indicates the return on capital employed in the business and it can be

used to show the efficiency of the business as a whole. The higher the ratio, the

more efficient use of the capital employed.

Return on Net Capital Employed = EBIT / Net Capital Employed x 100

Net capital employed = FA+CA-CL

TABLE: 5.3 RETURN ON NET CAPITAL EMPLOYED

Financial YearPBT (Profit Before

TAX)Net capital Employed

Return on Net Capital Employed

(%)

2006-2007 2190.62 10498.58 20.86

2007-2008 1069.55 14369.54 7.44

2008-2009 1837.73 14701.89 12.50

2009-2010 4684.38 16281.3 28.77

2010-2011 2533.23 18662.3 13.57


Chart: 5.3 Return On Net Capital Employed

Page - 65

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

5

10

15

20

25

30

35

[source: table 5.3]

Interpretation

A good return on investment indicates that the business is generating enough

returns to pay for its cost of capital. In the year 2010 return on investment shows

high return. In the year 2011 return on investment is satisfactory by comparing the

years 2008 and 2009.

d. EARNING PER SHARE (EPS)

This ratio helps in the assessment of the profitability of a firm from the stand point

of equity shareholders. This measures the profit available to the equity share

holders per share. The earning per share helps in determining the market price of

the equity shares of the company. A comparison of E.P.S of the company with

another will also help in deciding whether the equity share capital is being

effectively used or not. It also helps in estimating the company’s capacity to pay

dividend on its equity share holders.

Page - 66

E.P.S = Net Profit after Tax, Pref.Dividend / No. Of Equity Shares

TABLE: 5.4 EARNING PER SHARE

Financial YearNet Profit after

Tax, Pref.DividendNo. Of Equity

SharesE.P.S (times)

2006-2007 1385.4 8400000 16.492007-2008 591.85 8400000 7.042008-2009 1143.46 8400000 13.612009-2010 3123.58 8400000 37.182010-2011 1043.62 9656900 10.81


Chart: 5.4 Earning Per Share

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

5

10

15

20

25

30

35

40

[source: table 5.4]

Interpretation

In the year 2010 EPS of the company is very high, because net profit of the

company is very high. EPS of the company during that year was 37.18 times. But

in the year 2011 EPS of the company is very low (10.81 times) because net profit

of the company is very low.

e. DIVIDEND PAY-OUT RATIO

Page - 67

This ratio is also known as pay out ratio. It measures the relationship between the

earnings belonging to the equity share holders and dividend actually paid to them.

This ratio is computed by dividing the total dividend paid to the equity

shareholders by the total profit belonging to them.

Dividend Pay-Out Ratio = Dividend per Equity Share / Earning Per Share x 100

TABLE: 5.5 DIVIDEND PAYOUT RATIO

Financial YearDividend per Equity Share

E.P.SDividend Pay-Out

Ratio (%)2006-2007 5.3 16.49285714 32.13

2007-2008 5.3 7.045833333 75.22

2008-2009 0 13.61261905 0

2009-2010 4.5 37.18547619 12.10

2010-2011 4.5 10.80698775 41.64


Chart: 5.5 Dividend Payout Ratio

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

10

20

30

40

50

60

70

80

[source: table 5.5]

Page - 68

Interpretation

It indirectly shows the financial policy of the management as to what proportion of

earnings per share has been used for paying dividend and what has been retained

for ploughing back. In the year 2009 the company has not providing dividend. In

the year 2008 Dividend pay-out ratio was higher: the pay-out ratio was 75.22%. in

the year 2011 the pay-out ratio was 41.64 %.

f. RETURN ON EQUITY

It signifies the return on equity shareholders funds. The profit considered for

computing the ratio is taken after payment of preference dividend.

It is calculated by using the following formula:

TABLE: 5.6 ROE

Financial YearNet Profit after

Tax, Pref.DividendEquity

shareholders fundsReturn On Equity (%)

2006-2007 1385.4 7474.3 18.53

2007-2008 591.85 7523.08 7.87

2008-2009 1143.46 8212.86 13.92

2009-2010 3123.58 10884.53 28.70

2010-2011 1043.62 11424.81 9.13


Chart: 5.6 ROE

Page - 69

Return on equity = Profit after interest, tax & Pref.Dividend x 100

Equity shareholders funds

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

5

10

15

20

25

30

35

[source: table 5.6]

Interpretation

It signifies the return on equity shareholders funds. The profit considered for

computing the ratio is taken after payment of preference dividend. Graph shoeing

fluctuating trend in return on equity. In the year 2010 return on equity is very

higher. But in the year 2011 there has been a steep decline which means that the

return which the shareholders get is reduced.

2. ACTIVITY RATIOS / TURNOVER RATIOS

Activity ratios measure the efficiency or effectiveness with which a firm manages

its resources. These ratios are also called turnover ratios because they indicate the

speed at which assets are converted or turned over in sales. These ratios are

expressed as ‘times’ and should always be more than one.

a. WORKING CAPITAL TURNOVER RATIO

Page - 70

Working capital of a concern is directly related to sales. The current assets like

debtors, bill receivables, cash, stock etc, change with the increase or decrease in

sales. Working capital turnover ratio indicates the speed at which the working

capital is utilized for business operations. It is the velocity of working capital ratio

that indicates the number of times the working capital is turned over in the course

of a year. This ratio measures the efficiency at which the working capital is being

used by a firm. A higher ratio indicates efficient utilization of working capital and a

low ratio indicates the working capital is not properly utilized.

Working Capital Turnover Ratio = Net Sales / Net Working Capital

*Net W.C = C A - C L

TABLE 5.7 WORKING CAPITAL TURNOVER RATIO

Financial

Yearnet sales Working Capital

Working Capital

Turnover Ratio (Times)

2006-2007 16019.05 4430.27 3.61

2007-2008 19487.84 6593.37 2.95

2008-2009 27514.45 5993.29 4.60

2009-2010 32026.17 5794.48 5.53

2010-2011 37590.3 8243.21 4.56


Chart 5.7 WCTR

Page - 71

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

1

2

3

4

5

6

[source: table 5.7]

Interpretation

Working capital ratio of the company is satisfactory. The graph shows fluctuating

trend in working capital ratios. But in the year 2011 a small decline in working

capital ratio can be viewed. Operating efficiency of the company is good.

b. FIXED ASSET TURNOVER RATIO

This ratio indicates the extent to which the investments in fixed assets contribute

towards sales. If compared with a previous year, it indicates whether the

investment in fixed assets has been judicious or not.

Fixed Asset Turnover Ratio = Net Sales / Fixed Assets

Page - 72

TABLE 5.8 FIXED ASSET TURNOVER RATIO

Financial Year Net sales Fixed AssetFixed Asset

Turnover Ratio2006-2007 16019.05 6068.31 2.64

2007-2008 19487.84 7776.17 2.51

2008-2009 27514.45 8708.6 3.16

2009-2010 32026.17 10486.82 3.05

2010-2011 37590.3 10419.09 3.61


Chart 5.8 Fixed Asset Turnover Ratio

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.5

1

1.5

2

2.5

3

3.5

4

[source: table 5.8]

Interpretation

Fixed asset turnover ratio of the company shows increasing trend. It is a positive

trend which shows the effective utilization of fixed assets. In the year 2011 the

fixed asset turnover ratio was 3.60 (times). Net sales of the company every year is

increasing trend.

Page - 73

c. TOTAL ASSET TURNOVER RATIO

This ratio is calculated by dividing the net sales by the value of total assets. A high

ratio is an indicator of over trading of total assets while a low ratio reveals idle

capacity. The traditional standard for the ratio is two times.

Total Assets Turnover Ratio = Net sales / Total assets

TABLE 5.9 TOTAL ASSETS TURNOVER RATIO

Financial Year Net sales Total assetTotal assets

turnover ratio

2006-2007 16019.05 11195.88 1.43

2007-2008 19487.84 21118.45 0.92

2008-2009 27514.45 15471.16 1.78

2009-2010 32026.17 16847.31 1.90

2010-2011 37590.3 18975.33 1.98


Chart 5.9 Total assets turnover ratio

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.5

1

1.5

2

2.5

[source: table 5.9]

Page - 74

Interpretation

The total asset turnover ratio of the company shows increasing trend from the year

2008 to 2011. It reflects a company’s efficiency in managing its significant assets.

in the year 2011 the ratio was 1.98 (times).

d. CAPITAL TURNOVER RATIO

Managerial efficiency is calculated by establishing the relationship between cost of

sales or sales with the amount of capital invested in the business.

Capital Turnover Ratio = Sales / Capital Employed

CE = FA+CA-CL

TABLE 5.10 CAPITAL TURNOVER RATIO

Financial Year Net salesNet capital

Employed

Capital turnover

ratio (times)

2006-2007 16019.05 10498.58 1.52

2007-2008 19487.84 14369.54 1.36

2008-2009 27514.45 14701.89 1.87

2009-2010 32026.17 16281.3 1.97

2010-2011 37590.3 18662.3 2.01


Page - 75

Chart 5.10 Capital turnover ratio

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.5

1

1.5

2

2.5

Capital turnover ratio (5 years)

[source: table 5.10]

Interpretation

Capital turnover ratio of the company shows increasing trend from the year 2008 to

2011. This means that they are utilizing the capital effectively. In the year 2011 the

capital turnover ratio of the company was 2.01.

Page - 76

3. LIQUIDITY RATIOS

The term liquidity refers to the ability of the company to meet its current liabilities.

Liquidity ratios assess capacity of the firm to repay its short term liabilities. Thus,

liquidity ratios measure the firms’ ability to fulfill short term commitments out of

its liquid assets.

a. CURRENT RATIO

This ratio establishes a relationship between current assets and current liabilities. It

indicates the amount of current assets available for repayment of current liabilities.

Higher the ratio, the greater is the short term solvency of a firm and vice a versa.

However, a very high ratio or very low ratio is a matter of concern. If the ratio is

very high it means the current assets are lying idle. Very low ratio means the short

term solvency of the firm is not good. Thus, the ideal current ratio of a company is

2: 1 i.e. to repay current liabilities; there should be twice current assets.

Current ratio = Current Assets / Current liabilities

TABLE 5.11 CURRENT RATIOS

Financial YearTotal of Current

asset

Total of current

liabilities

Current ratio

(times)

2006-2007 6503.76 2073.49 3.14

2007-2008 9404.63 2811.26 3.344

2008-2009 7709.53 1716.24 4.494

2009-2010 8492.35 2697.87 3.15

2010-2011 10204.61 1961.4 5.20


Page - 77

Chart 5.11 Current ratio

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

1

2

3

4

5

6


Interpretation

Current ratio of the company shows fluctuating trend. Current ratio of the company

is greater than the idle ratio 2:1, which means the current assets are lying idle. In

2011 the current ratio is 5.20.

b. QUICK RATIO

Quick ratio is also known as Acid test or Liquid ratio. This ratio establishes a

relationship between quick assets and current liabilities. The main purpose of this

ratio is to measure the ability of the firm to pay its current liabilities. A quick ratio

of 1 : 1 is considered good / favorable for a company.

Liquid ratio = Liquid or quick assets / Current liabilities

Page - 78

TABLE 5.12 LIQUID RATIO

Financial YearTotal of liquid

assets

Total of current

liabilities

Liquid ratio

(times)

2006-2007 4351.02 2073.49 2.10

2007-2008 7088.28 2811.26 2.52

2008-2009 5572.95 1716.24 3.25

2009-2010 4820.3 2697.87 1.79

2010-2011 3719.94 1961.4 1.90


Chart 5.12 Liquid Ratio


Interpretation

Liquid ratio of the company shows fluctuating trend. A quick ratio of 1 : 1 is

considered good / favorable for a company, but last five years liquid ratios is

greater than 1:1. This means that the company is liquid. And the company has

ability to meet its current or liquid liabilities in time.

Page - 79

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.5

1

1.5

2

2.5

3

3.5

4. LEVERAGE RATIO

These ratios are also called efficiency ratios. These ratios measure the owner’s

stake in the business vis-à-vis that of outsiders. The long term solvency of the

business can be examined by using leverage ratios.

a. DEBT-EQUITY RATIO

It is also otherwise known as external to internal equity ratio. It is calculated to

know the relative claims of outsiders and the owners against the firm’s assets. This

ratio establishes the relationship between the outsider’s funds and the shareholders

fund. In India, this ratio may be taken as acceptable if it is 2 : 1. If the debt-equity

ratio is more than that, it shows a rather risky financial position from the long term

point of view. This ratio is very useful to assess the soundness of long term

financial position of the firm. It also indicates the extent to which the firm depends

upon outsiders for its existence.

Debt-Equity Ratio = Outsiders Fund / Shareholders Fund

TABLE 5.13 DEBT-EQUITY RATIO

Financial Year Outsiders fundShareholders

Fund

Debt-Equity

Ratio (times)

2006-2007 5795.07648 7474.3 0.77

2007-2008 10098.75125 7523.08 1.34

2008-2009 8974.54 8212.86 1.09

2009-2010 8660.65 10884.53 0.79

2010-2011 9511.92 11424.81 0.83


Page - 80

Chart 5.13 Debt-Equity Ratio

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6


Interpretation

Debt-equity ratio of the company shows fluctuating trend. A ratio of 1:1 is usually

considered to be satisfactory ratio although there cannot be rule of thumb or

standard norm for all types of businesses. Theoretically if the owner’s interests are

greater than that of creditors, the financial position is highly solvent.

b. PROPRIETARY RATIO

This ratio establishes the relationship between shareholders’ funds to total assets of

the firm. A high ratio shows that there is safety for creditors of all types. Higher the

ratio, the better it is for concerned.

Proprietary Ratio = Shareholders' Funds / Total Assets

Page - 81

TABLE 5.14 PROPRIETARY RATIO

Financial YearShareholders

FundTotal Asset

Proprietary Ratio

(times)

2006-2007 7474.3 11195.88 0.67

2007-2008 7523.08 21118.45 0.36

2008-2009 8212.86 15471.16 0.53

2009-2010 10884.53 16847.31 0.65

2010-2011 11424.81 18975.33 0.60


Chart 5.14 Proprietary Ratio

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8


Interpretation

Higher the ratio or the share of shareholders in the total capital of the company

better is the long-term solvency position of the company. A low proprietary ratio

will include greater risk to the creditors.

Page - 82

c. FIXED ASSET TO NET WORTH

This ratio shows the relationship between fixed assets and shareholders fund. The

purpose of this ratio is to find out the percentage of the owners fund invested in

fixed assets. If the ratio is greater than one, it means that creditor’s funds have been

used to acquire a part of the fixed assets.

Fixed Asset to Net Worth = Fixed Asset / Shareholders Fund

TABLE 5.15 FIXED ASSET TO NET WORTH

Financial Year Fixed Asset Shareholders Fund

Fixed Asset To

Net Worth

(times)

2006-2007 6068.31 7474.3 0.81

2007-2008 7776.17 7523.08 1.03

2008-2009 8708.6 8212.86 1.06

2009-2010 10486.82 10884.53 0.96

2010-2011 10419.09 11424.81 0.91


Chart 5.15 Fixed Asset to Net Worth

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.2

0.4

0.6

0.8

1

1.2


Page - 83

Interpretation

In the year 2008 and 2009 the ratio is greater than one, which means that creditor’s

funds was used to acquire a part of the fixed assets. In the year 2007, 2010 and

2011 the ratio is below one which means that only shareholders fund was used to

purchase fixed assets.

Page - 84

SWOT ANALYSIS

SWOT is an acronym for internal strength and weakness of a firm and the

environmental opportunities and threats facing the firm. SWOT analysis is widely

used technique through which managers create a quick overview of the company’s

strategic situation. The technique is based on the assumption that effective strategy

derives a sound ‘fit’ between a firm’s internal resources (strength and weaknesses)

and its external situation (opportunities and threats).

STRENGTHS

Eastern holds more than 78% of the market share in all its products in

Kerala.

It has a good customer relationship because of its product quality and

freshness.

Eastern is the largest exports of spice powders in consumer pack from

India that export mainly to middle East, U.K, Australia and Germany.

Presently the company is exporting 30% of its products.

The quality of the products is up to International standards.

First company in India to get ISO 22000 and second in Asia.

Eastern is only doing direct sales. It helps the company to avoid

intermediaries and so unnecessary commissions can be avoided.

It has direct sales to more than 40000 shops in Kerala.

Page - 85

Eastern was selected as second most popular brand in Kerala by the

Dhanam Business survey in 2008.

It has the facilities for controlling pollution and also for excellent

productivity.

All departments are computerized and it helps to easy handling of jobs.

Eastern is the leading exporter of condiment. Best spice export award

from spice board for the last 10 year.

HACCP- Hazardous Analysis Critical Control Point Certificate issued

by food cert Bv Netherland.

98% of the sales are cash sales.

Best spice export award from spice board for the last 14 year.

It has a good employee – employer relationship.

Grievance handling is done in weekly basis.

Well established quality control lab checks the raw material thoroughly

and it helps to assure the quality of the products.

Page - 86

WEAKNESS

Lack of advertisement in Medias.

Location of factory is not perfect for easy transportation.

Only aware about curry powder

Not enough market share in outside Kerala

Cash carrying method is so expensive and risk

Less availability of labours

Some products are not available in rural areas.

Problems in install a new system adopted in the company.

OPPORTUNITIES

Extend the exporting to other countries also.

Extend the product line.

Make the pickles available in local market also.

North Indian market will give more growth to the company.

Possibility of get listed as a public limited company.

Starting a spices garden – it gives two opportunity.

1) Can be used for research activities

2) Can be promoted as a tourist spot

Implementation of new machineries to company for more production.

Page - 87

THREATS

High competition in local market due to the low investment

requirement for the entering this industry.

Upward trend in material price.

Each year hundreds of new curry powder companies arising in whole

market.

Change in consumer taste and preference.

Availability of raw-materials from the local market is very less.

Appreciation in money value.

Upcoming retailers and their product

Page - 88

INTRODUCTION

The study helps to get awareness about the organizational structure and

functioning of successful organization, and also financial analysis of the

company. It gives an opportunity to interact with the people working in the

organization and financial structure of the company. This study with financial

statement analysis is carried out at Eastern Condiments Pvt.Ltd, The study has

been carried out to get an understanding of the financial structure and

performance of the company and departmental functioning of the company.

My findings and suggestions after this study as given below:-

FINDINGS

In the year 2010 company shows good performance, sales was high and net

profit was also high.

The turnover of the company shows increasing trend.

In the year 2011 gross profit of the company was high, but net profit of the

company was low by comparing previous year.

Loss on slump sale of tea division was the main reason for decreasing net

profit of the company during 2011.

The authorized equity share capital of the company is Rs.150000000 divided

in to 15000000 shares of Rs.10 each.

In the year 2010 return on total asset ratio was 18.94. But in the year 2011

the ratio was 5.50, there has been a sharp decline which means that they are

not effectively utilizing the assets effectively during that year.

Page - 89

In the year 2010 return on total asset ratio was 18.94. But in the year 2011

the ratio was 5.50, there has been a sharp decline which means that they are

not effectively utilizing the assets effectively during that year.

In the year 2008 Dividend pay-out ratio was higher: the dividend pay-out

ratio was 75.22%.

Fixed asset turnover ratio of the company shows increasing trend. It is a

positive trend which shows the effective utilization of fixed assets.

In the year 2008 and 2009 the ratio is greater than one, which means that

creditor’s funds was used to acquire a part of the fixed assets.

Eastern curry powder is a household name in India and is the largest

exporter of Spice powders in consumers. Pack from India those exports

mainly to Middle East, U.K, U.S.A, Australia & Germany.

25 % of profits from export.

Presently the company is exporting 60% of its products.

Presently the company export 30% of total production.

The total number of employees in the company is above 2500.

The company won prestigious award for the outstanding export performance

by spices board India, for 14 continuous years.

The company has well organized and coordinated organizational structure.

The company’s own vehicles undergoing distribution aids to give an

important mode of advertisement.

The company has fully computerized departments.

The company ensures high quality and taste to all its products.

The companies have around 200 vehicles for the delivering purpose.

Company has total 500 active vehicles.

Page - 90

The company always tries to maintain good customer relationship.

The companies have better chance to extend the market to other countries

also.

Page - 91

SUGGESTIONS

Company can start new plants to cover outside Kerala market accordance

with availability of raw material preference.

Company can give more advertisement on mass media for outside Kerala

market.

For reducing the cost company can install new automated machineries.

Company can develop new product related with food sectors.

Company can maintain proper day by day market research programs to

know movements in the markets.

Company can take direct feedback from customers for development of new

products.

Company can participate more actively in cooperate social responsibility

area.

Company can try to extend the market to other foreign countries also.

Company can introduce pickles in the local market.

Company can take direct feedback from employees for development of

their personality, motivation level also for new product development.

Increasing the exports also helps the company to increase its profit level.

Page - 92

Conclusion

Eastern condiments Pvt. Ltd is an ISO 22000-2005 company. Company aim is

1000 crore turnover in coming 3 years.

Financial statement analysis of the company was very helpful to identify the

financial performance of the company and financial position of the company.

The study conducted at Eastern Condiments Pvt. Ltd., which is one of the pioneer

in Condiment industry and the market leader in variety of packed curry powders in

South India. Eastern has achieved these enviable heights mainly due to the hard

work and commitment of quality besides bringing a good product at right prices to

the consumers .The study helped me to understand that how the company identifies

the right taste of the consumers and how it became the leading brand in south India

and largest exporter of spice powders in consumer pack from India. I was also able

to understand some of the opportunities and threats of the company. .

Being a Commerce student the internship training in EASTERN CONDIMENTS

PVT LTD.’ has benefited me with so much of confidence and awareness, so as to

be capable of myself to work in a firm. The study gave me an opportunity to

experience and improves my practical knowledge besides my theoretical

knowledge about an organization.

Page - 93

BIBLIOGRAPHY

NEWS PAPER

Mathrubhumi News Paper (on: 12 July 2012, 7 June 2012)

BOOKS

Business studies - K.G.C Nair

Cost Accounting - K.G.C Nair

Corporate Accounting - K.G.C Nair

Company Albums

WEBSITES

http://www.accounting4management.com

http://www.businessstudies.co.uk

http://www.eastern.in

http://www.indianspices.com

http://www.spicesboard.org

Page - 94

APPENDIX

EASTERN CONDIMENTS PRIVATE LIMITED

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2011

Schedule No.

For the year ended 31st March 2011

For the year ended 31st March 2010

(Rs. In Lakhs) (Rs.in Lakhs)

Income

Gross Turnover 8 37,591.16 32,026.17

Less: Excise Duty Paid 0.86 _

Net Sales 37,590.30 32,026.17

Other Income 9 971.4 606.19

38,561.70 32,632.36

Expenditure

(Increase)/Decreasein Finished Goods and Work_in_Process

10 786.74 552.77

Manufacturing and Other Expenses 11 33,954.09 26,940.16

Provision for Diminution in Value of Investments 207.5 203.51

Provision for Doubtful Loan 724.28 _

Loss on Slump Sale of Tea Division (See Schedule 12,Note No. 18)

124.82 _

Interest and Finance Charges (see Schedule 12,Note No. 3)

512.83 501.61

Depreciation 4 1,291.69 855.47

36,028.47 27,947.98

Profit Before Tax 2,533.23 4,684.38

Less: Provision for

Current Tax 1,450.00 1,780.00

Tax relating to Earlier year 2.43 _

Deferred Tax 37.18 286.16

1,489.61 1,493.84

Profit After Tax 1,043.62 3,190.54

Add:Surplus brought forward from previous year 5,548.53 3,195.91

Profit Available for Appropriation 6,592.15 6,386.45

Less: Appropriation:

General Reserve 104.45 319.06

Dividend on Preference Shares 66.96

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_Interim Dividend @Rs.4.50(Previous Year Rs.4.50)per Equity Share of Rs.10/-each

434.56 378

Tax on Dividends 68.78 73.9

607.79 837.92

Balance Carried to Schedule 2 5,984.36 5,548.53

Earnings per Share (in Rs.)(Face Value Rs.10/-)Basic &Diluted Earnings Per Share (see schedule 12,Note No.13)

11.69 37.05

EASTERN CONDIMENTS PRIVATE LIMITED

BALANCE SHEET AS AT 31st MARCH, 2011Schedule No.

As at 31st March 2011 As at 31st March 2010

(Rs.in Lakhs) (Rs.in Lakhs)

1.SOURCES OF FUNDS

(1) Shareholder's Funds

(a) Share Capital 1 965.69 4,560.00

(b) Reserves and Surplus 2 10,459.12 6,324.53

11,424.81 10,884.53

(2) Loan Funds 3

(a) Secured Loans 4,805.10 4,004.54

(b) Unsecured Loans 2,476.23 1,726.23

(3) Deferred Tax Liability(Net) 269.19 232.01

18,975.33 16,847.31

2. APPLICATION OF FUNDS

(1) Fixed Assets 4

(a) Gross Block 14,645.04 11,507.45

(b) Less : Depreciation 4,707.12 3,713.33

(c ) Net Block 9,937.92 7,794.12

(d) Capital Work-in- Progress 481.17 2,692.70

10,419.09 10,486.82

(2) Investments 5 313.03 566.01

(3) Current Assets, Loans and Advances 6

(a) Inventories 6,484.67 3,672.05

(b) Sundry Debtors 2,019.62 2,125.15

(c ) Cash and Bank Balances 553.52 280.95

(d) Loans and Advances 1,146.80 2,414.20

10,204.61 8,492.35

Less : Current Liabilities and Provisions 7

(a) Current Liabilities 1,150.94 1,537.88

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(b) Provisions 810.46 1,159.99

1,961.40 2,697.87

Net Current Assets 8,243.21 5,794.48

18,975.33 16,847.31

Significant Accounting Policies and Notes on Accounts

12

Page - 97

Financial Analysis at Eastern Condiments Pvt Ltd

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