AN

ANALYTICAL STUDY
ON
VADILAL INDUSTRIES LTD.
SUBMITTED TO:-
INDIAN INSTITUTE OF
PLANNING & MANAGEMENT

SUBMITTED BY:-

DARSHANA VAGHELA
PGP (SS/07-09)

1
 ACKNOWLEGEMENT

I am a student of PGP (SS/07-09) INDIAN INSTITUTE OF PLANING &

MANAGEMENT”. I thank to our institute’s Dean “Mr.DIPANKAR
SARKAR” who gave me this valuable opportunity to prepare a Financial
Report, Secondly, I am also thankful to “PROF. TARAK SHAH” who
guided me while making this report. I also express my gratitude to my
friends who helped me while preparing this report.

Lastly, I convey thanks to my college and well-wishers that inspired me to,

guided, and encouraged me at the cost of their precious time.

Thanks Again,

DARSHANA VAGHELA
PGP (SS/07-09)

2
 PREFACE

As per the instruction given by IIPM, I a

Student of PGP (SS/07-09) have to submit the report on financial Analysis
of any company of Co-operative unit. Therefore, in accordance with that I
have prepared the analytical Report of finance on “VADILAL
INDUSTRIES LTD.”

The Report has been divided into various

sections for the convenience with origin objective, turnover, fixed Assets,
PBT and PAT & Amount of Taxation.

First Chapter Introduction to the company is

divided into four categories i.e. 1) History & Development of the Company
2) Products of the Company 3) Trend Analysis & last 4) Strategic Moves.
The second chapter is about the directors of the company in which the
Analysis of director’s Report is discussed. Then in the third chapter of
Analysis of Auditor’s Report which includes the detailed study of Auditors
of the company. The fourth chapter of the report is the main chapter in
which the ratio is of the different types is discussed. In this, the following
rations are sub-divided into-

i) Profitability ratio
ii) Liquidity ratio
iii) Leverage ratio
iv) Activity ratio

Different types of ratios are discussed in detail and in the

fifth chapter are discussed about comparative statement in which the
comparative P&L a/c & Balance sheet are discussed then the next chapter
talks about common size statement in which discussion about common size
P&L a/c and is included common size Balance sheet is included. Then the
seventh chapter discusses about the Accounting policies, which are adopted
by the company, and an Analysis of significant Accounting policies is
written. Then the Eighth chapter is about Calculation of CFAT. Here CFAT
means cash flow after Tax and the Ninth chapter included conclusion and
the last and final chapter is about the Annexure.

3
 TABLE OF CONTANTS
S. NO. PARTICULARS PAGE NO.

A Company profile
1.1 History of company
1.2 Product of the company
1.3 Peer Group company
1.4 Strategic moves of org.
1.5 Analysis of director’s report
1.6 Trend analysis
B About management
2.1 Activity ratio analysis
C Three years of financial performance
evaluations
3.1 General evaluation of financial position
of company
3.2 Key ratio analysis
D Capital structure of company
E Evaluation of income statement of last
three years
5.1 Cost structure analysis
F Evaluation of assets portfolio
6.1 Current assets
6.2 Current liabilities
6.3 Tangible fixed assets company uses
G Dividend policy
H Prospect of company and future risk
I View about the company as a share
holder
J View about the company as a banker
K View about the company as a creditor
L Bibliography

4
 A.1Company Profile:-
1.1)HISTORY OF THE ORGANISATION:-
This company is renone and is very old and he is very wide experience of
manufacturing ice-cream products. This company is in top amongst the other
competitors in Indian market. This company is established in the year
Vadilal, the name conjures up images of ice cream laden bowls and a
plethora of new flavours. Starting from one man show with a hand cranked
machine in 1926 as a small retail outlet, the ice cream division now has a
production capacity of 1 lac ltrs/day at 3 sophisticated plants, located at
Ahmedabad, Pundhra and Bareilly. These ISO 9002 certified plants for
Pundhra and Bareilly are established in such a way that they are in
consonance with the market expansion strategies of the division.

Vadilal has one of the largest cold chain networks in India, comprising of 12
C&F agents, 250 distributors and 15,000 retailers. The network is kept alive
by a large fleet of refrigerated vehicles. Refrigeration equipments and retail
freezers are sourced from world leaders in the technology to deliver quality
products to the consumers, which is a commitment at Vadilal.

Vadilal has 25% of the Indian ice cream market as its share. However, that is
no surprise considering that the group has the largest range of ice creams in
the country in a variety of flavours, packs and forms. The group has a
product matrix of over 200 SKUs comprising of cones, cups, candies, family
and party bricks and bulk packs. Vadilal introduced the concept of "flavour
of the month" under which the company develops and markets one new
flavour every month for its customers delight.

 Vadilal Industries Ltd. (VIL) is the flagship company of Vadilal

Group. 

VIL is a public limited company listed in major Stock Exchanges of India.

VIL's primary interests are in Ice creams and Food Processing.

ICE-CREAM DIVISION    ISO-9002

Vadilal is having one fourth of the Indian Ice-cream market as its share.
With its successful record of accomplishment spanning seven decades,
Vadilal is synonymous with Ice cream in several parts of the country.

1
Adapted from www.vdilalgroup.com

5
PROCESSED FOODS DIVISION   ISO-9002
The Processed Foods Division processes and markets a wide variety and
range of fruits, vegetables and ready-to-serve Indian Foods. The Division
also exports several of these products to the European Union, the Middle
East, Asia Pacific Region and the US.
2
1.2) PRODUCTS OF THE ORGANIZATION

A) CUPS:-
1.) BIG CUPS:- Vanila, Ripe Strawberry, 2 – in – 1 , Chocolate Chips,
Tuti Fruity, Real Mango, Rainbow, Fruit Bonanza, Kaju Draksh, Butter
Scootch, Kewra, Jafrani Badam Pista, Fun 2000-co.cho, Rajbhog (Ice
Mithai)

Dairy Fresh

Alphonso Mango, Wild Strawberrey, Figs-n-Honey

FRESH FRUIT DELIGHT

Mango, Pineapple, Litchee, Sitafal

Frozen Dessert

Kool Gulab, Snowy, Kaju Lite, Scotch Lite, Yummy Mango Munch,
Yummy Kesar Pista.

2) SMALL CUPS

Vanila, Ripe Strawberry.

Frozen Dessert

Kool Gulab, Snowy,

Snowy

2
Adapted from www.vadilalgroup.com

6
B) FAMILY PACKS:-

PLAIN FAVOURATIES:-

Vanila, Ripe Strawberry, 2-in-1.

CHOCOLATE ECSTASIES:-

Chocolate Chips

DAIRY FRESH:-

Alphonso Mango

FRUIT FANTASIES:-

Real Mango, Fresh Strawberry

NUTTY DELIGHTS:-
Kaju Draksh, Butter Scotch, Real Kesar Pista, Jafrani Badam Pista.

ICE MITHAI:-

Rajbhog

FROZEN DESSERTS:-

Snowy, Yummy Kesar Pista, Yummy Mango Munch.

C) KULFI

KULFI CORNER:-

Kesar Pista kulfi, Chowpati Kulfi, Kewra kulfi, Pista Kesar Roll Cut, Kewra
Roll Cut

7
DANDY CANDIES:-
Pencil, Mango Juicy, Juicee Orange, Kaju Candy, Lichee Dolly,
Orange Dolly, Raspberry Dolly, Mango Dolly, One-up Choc-bar, Nutty
Choc-bar, Chocolate Choc-bar, Soft Spot (Chocolate), Funtastic.

FROZEN DESSERT:-
Bargain, Best Choc-bar, Mango Tango Dolly, Fun Bhari Raspberry,
Bomber.

D) NOVELTIES:-

VADILAL SPECIALS:-

Heart throb, Mini Sandwich, Sajan Sajani (Roll Cut), Quick Sundae, Easy
Sundae, August – 15 , Cassatta Slice , Cassatta (Cut) , Sajan Sajani (Roll) ,
Vanila Magic, Strawberry Magic, Mango Magic.

E) CONES:-

KING KONES:-

Pineapple Delight, Chocolate Drip, Yummy Butter Scotch, Chashmeshahi,

Prime Kesar Pista, Almond Kulfi, Cone.

1.3) PEER GROUP COMPANY:-

SNOW CAP
HAVEMORE
DAIRYDEN

8
1.4) STRATEGIC MOVES OF THE ORGANIZATION

Vadilal is the oldest ice cram manufacturing company in India since 1925.
There are various moves of this company from its corporation. This is as
below stepwise step.
YEAR EVENTS 1961 - Vadilal Ice-cream Pvt. Ltd. was Incorporated on
12th June, to carry on the business of manufacture of ice cream candy.

1982 - The Company was incorporated in the name of Vadilal Oxygen Pvt.
Ltd., on 28 April to carry on the business of purification and refilling of
oxygen gas and selling the same. The Company`s objects in Processing of
frozen fruits and vegetables and manufacture of ice cream.

1985 - The Company was amalgamated with Vadilal Oxygen Pvt. Ltd.
effective 1 July.

- The company issued 3, 00,000 - 14% secured redeemable convertible

debentures of Rs.130 each as follows.

- (i) 30,000 Debentures to UTI,

- (ii) 15,000 debentures to Employees.

- Balance 2, 25,000 Debentures along with 1, 15,550 debentures not taken

up under preferential quota was issued to the public. Additional 45,125
debentures were allotted to retain over subscription.

- Part A of Rs.100 of each debenture was to be converted into 4 equity

shares of Rs.10 each at a premium of Rs.15 per share on the date of
allotment of debentures. Accordingly 13, 80,500 shares were allotted.

- Part B of Rs.30 of each debenture was to be redeemed on three full

instalments of Rs.10 each at the end of 7th, 8th and 9th year respectively
from the date of allotment of debentures.

9
1989 - Name of the Company was subsequently changed to Vadilal
Industries Pvt. Ltd. and it became a Public Ltd., company from 4 August.
Ramchandra R. Gandhi and Laxmanbhai R. Gandhi promoted it.

1991 - The processed foods and frozen vegetable division commenced

activities in May.

- The products such as canned/frozen tropical fruit juices and pulp

canned/frozen vegetables are mainly exported. The commodities division
comprises HPS groundnuts, soyabean extraction, sesame seeds, non-basmati
rice etc.

1993 - The ice-cream division had introduced 300 flavours in 600 different
packs. The company entered into a marketing arrangement with a leading
Company in U.P. to manufacture and sell the products under the brand name
and as per the quality stipulated. Similar arrangements are to be entered into
with Companies in Tamil Nadu, Punjab, M.P., and W.Bengal.

- In future, it was proposed to include extruded products, frozen desserts,

low priced varieties like milk, lollies, mini milk fingers, fruit based ice
creams etc.

- The Company proposed to manufacture concentrated fruit juices/ pulps

aseptically packed with an annual capacity of 16,200 TPA. Also frozen
dessert an item containing vegetable fat and in low cholesterol was to be
manufactured in novelty shapes and bulk packs in various flavours.

- 2, 46,500 No. of equity shares of Rs.10 each, issued, subscribed and paid
up. 15, 53,000 bonus equity shares issued in prop. 3107:493 shares held on
25 November 1989. 13, 80,500 shares allotted in part conversion of 14%
second redeemable convertible debentures.

1994 - Exports of agricultural commodities such as HPS, soyabean natural

and hulled sesame seeds and also vegetable and fruit pulps rose by 61% to
Rs.18.46 crores when compared on an annualized basis and the overeall
working was reported to be satisfactory.

- The company launched low fat calory ice-cream `Vadilal Lite` in different
flavours manufactured at Ahmedabad, Gujarat.

10
- The Company undertook to install new machineries for IQF project (for
manufacturing frozen vegetables and fruits) at Dharampur, Dist. Valsad, and
Gujarat.

- The Company launched mango pulp, mixed fruit and pineapple jam,
tomato ketchup sauce, sweet corn soup (cream style) and baked beans.

- The Company installed wind farm unit with total capacity of 1.28 MW
consisting of 4 Wind Turbine Generators (WTG) of 320 KW each and 400
KVA transformers at village Lamba, Dist. Jamnagar, and Gujarat.

- During July, the company issued 15, 00,000 No. of equity shares of Rs.10
each at a prem. of Rs.42.50 per share to promoter group of companies.

- On 23 July, the company allotted 20, 00,000 No. of equity shares of Rs.10
each at a premium of Rs.37.50 per share to promoters on private placement
basis.

1995 - The Company was on the look out for a foreign collaboration.

- Additional WTGs of 320 KW each was installed at village Bhogat, Dist.

Jamnagar, Gujarat.

- The company received necessary permission for developing commercial

building project name `Mahalay` off C.G. Road, Navrangpura, and
Ahmedabad at a cost of Rs.9 crores. 1996 - The company has installed IQF
facilities at Dharampur plant at a total cost of Rs.6 crores by using fluidised
bed-belt type continuous freezing technology imported from U.K. with a
capacity of process 2 MT of fruits and vegetables per hour. - The Company
has launched Manga/Pulp/Ral, frozen green peas into domestic market.

11
 1.6) ANALYSIS OF DIRECTOR’S REPORT.
3

FINANCIAL RESULTS Rs in lacks

Particulars Year ended Previous year 31-
31-3-06 3-05
(a) Profit for the year before Depreciation and 1107.48 829.29
Financial Exp.
(b) Less: Depreciation 245.83 251.01
Financial Expenses(Net) 295.58 541.41 412.15 663.16
(c) Profit before Exceptional & Prior year items 566.07 166.13
(d) Prior year’s Adjustments(Net)
(e) Exceptional items 1.05 3.95
(f) (Short)/ Excess Provision of Tax of Earlier 0.00 21.66
years (Net) 0.60 5.17
(g) Profit before Tax
(h) Provision for Tax 565.62 135.35
- Current
- Deferred 114.00 28.00
- Fringe benefit 69.26 33.57
(I) Net Profit after Tax 12.50 0.00
(J) Profit brought forward 369.86 140.92
388.88 288.94
Amount available for appropriation
758.74 429.86
Appropriation
Proposed Dividend
Tax on Proposed Divided
Transfer to GR 71.88 35.94
Balance carried to Balance Sheet 10.08 5.04
421.07 0.00
Total 255.71 388.88

758.74 429.86

3
Refer from annual report of vadilalcompany

12
 As per above report we can say that growth of the
company is so good and the profit of the company is increased by
approximately 130% it is good for the company.

13
1.7) TREND ANALYSIS:-

NETPPROFIT CHART

400
369.86
350
300
250
200
150 140.92
100
63.6
50
0
2003-04 2004-05 2005-06

Analysis
As per above graph we conclude that the profit of the company is
increase by every year & in latest year the profit is more than double it
represents good efficiency of management.

14
NET SALES CHART

11200
11008.26
11000

10800 10742.18
10600

10400 10341.75

10200

10000
2003-04 2004-05 2005-06

Analysis
As per the graph we conclude that the company is good in selling of its
product. The company is adapting good marketing strategy.

15
 B. ABOUT MANAGEMENT

2.1) RATIO ANALYSIS

4
INTRODUCTION TO RATIO:-
A ratio is a
meaningful explanation on a relationship between two terms of profit & loss
a/c or Balance sheet. It can be shown in three ways.

1) As proportion of two terms:-

E.g. Current Assets : Current Liabilities.

2) In the form of Percentage.

E.g. Net Profit Ratio = Net Profit * 100.
Sales
3) In terms No. of times.
E.g. Stock turnover Ratio = Sales
Stock

4) Comparison of Ratio a Ratio of Commerce.

I) With an ideal Ratio.
II) Past Ratio of the same Company.
III) With the other firms in the same Industry.

5) Types of Ratio can be classified into:-

a) Profitability Ratio:-
This Ratio denoted the Profit
earning capacity of a firm. This category includes-
I) Gross Profit Ratio.
II) Net Profit Ratio.
III) Operating Profit Ratio.
IV) Return on Capital Employed.
V) Debt Service Coverage Ratio.
VI) Return on Shareholder’s Fund.

4
Refer from khan & jain

16
 b) Liquidity Ratio: - This Ratio indicates whether short-term assets
are enough to pay for short-term liability. This category includes-

I) Current Ratio.
II) Liquid Ratio.
III) Acid test Ratio.

c) Leverage Ratio:-
This category includes Ratio like-
I) Proprietory Ratio.
II) Debt Equity Ratio.
III) Capital Gearing Ratio.
IV) Fixed Capital to Fixed Assets Ratio.
This Ratio indicates the
composition of Capital and its division into own and Borrowed funds.

d) Activity Ratio: - This Ratio indicates the efficiency of Management

and this category includes-
I) Debtors Turnover Ratio.
II) Creditors Turnover Ratio.
III) Fixed Assets Turnover Ratio.
IV) Total Assets Turnover Ratio.

Calculation of ratios

17
ACTIVITY RATIO:-

1.) Fixed Assets Turnover Ratio:-

Sales
Fixed Assets

2003-04
11008.26
3298.39

3.34 Times

2004-05
10341.75
3052.50

3.39 Times

2005-06

10742.18
2940.70

3.65 Times

18
 3.7
3.65
3.6

3.5

3.4 3.39
3.34
3.3

3.2

3.1
2003-04 2004-05 2005-06

year
Interpretation:-
This ratio shows that the efficiency of the sale of
the company. By the above result, we can say that the Turnover is
continuously increasing Because of increase in sales and decrease in fixed
Assets.

2.) Debtors Ratio:-

Debtors + B/R * 100

Sales

2003-04
1967.54 * 365
11008.26

65.24Days

19
s2004-05
1980.86 * 365
10341.75

69.91Days

2005-06

1848.01 * 365
10742.18

62.79Days

Debtors Turnover Ratio:-

360
Debtors Ratio

2003-04
365
65.24

5.59Times

20
 2004-05
365
69.91

5.22 Times

2005-06

365
62.79

5.81Times

5.8 5.81

5.6 5.59

5.4
5.2 5.22

4.8
2003-04 2004-05 2005-06

Interpretation:-
From the above result, we can say that the Companies debt
collection policy is not good because the debt collection period is approx
two months for 2004-05 but in 2003-04, 2004-05 ,it is some below then this
two year.

21
3.) Creditors Ratio:-
Creditors + B/P * 360
CGS / Credit Purchase

Note: - Credit Purchase is not given so CGS is taken in this formula

Particulars 03-04 04-05 05-06

Creditors 1013.83 901.76 680.95
B/P - - -
Total 1013.83 901.76 680.95
CGS 8466.79 7737.02 6995.84

2003-04
1013.83 * 365
8466.79

43.71Days

2004-05
901.76 * 365
7737.02

42.54Days

2005-06

22
 680.95*365

6995.84

35.53 Days

Creditors Turnover Ratio:-

360
Creditors Ratio

2003-04
365
43.71

8.35 Times

2004-05
365
42.54

8.58 Times

2005-06

365

35.53

23
 10.27 Times

12
10.27
10
8.35 8.58
8

0
2003-04 2004-05 2005-06

years
Interpretation:-
According to the above result, we can say that the
credit policy of the company is not reliable. Because the Creditors Ratio is
approx 45 days and the turnover is approx 8 times. As we can see that, the
Debtors ratio is Approx 60 days. More the no. of days is good for the
company. It needs the credit policy from Creditors is usual.

4.) Total Assets Turnover Ratio:-

Sales
Total Assets

Particulars 03-04 04-05 05-06

Fixed Assets 3298.39 3052.50 2940.70
Investments 427.28 331.54 331.90

24
Current Assets 5404.83 4961.81 4876.48
Total Assets 9130.50 8345.85 8149.08

2003-04
11008.26
9130.50
1.21: 1

2004-05
10341.75
8345.85
1.24: 1

2005-06

10742.18

8149.08

1.32:1

25
 1.32 1.32
1.3
1.28
1.26
1.24 1.24
1.22 1.21
1.2
1.18
1.16
1.14
2003-04 2004-05 2005-06

Interpretation:-
This ratio suggest that the Total Assets Turnover
Ratio to the Total Sales. The Sales of the Company and Total Assets is
inversely related so the Turnover is quite increase for all the three years.
This shows good for the Company.

C. THREE YEARS OF FINANCIAL PERFORMANCE

EVALUATION

3.1) General evaluation of financial position of company

During the year under review, your

company has saved interest cost on Term loans availed from various
financial institutions by reducing the rate of interest from time to
time.During the year under review, part of the do eristic working capital
facilities availed by the company from state bank of India, where converted
into foreign currency loan with forward booking of foreign currency thereby
your company is able to save the interest cost of around 5% per annum.
However, your company has counted to enjoy during the year under review,
various other working capital facility from State Bank of India.
3.2) Key ratio analysis

Return on investment:-

26
 EBIT * 100
Capital employed

Particulars 03-04 04-05 05-06

Profit After Tax 63.60 140.92 369.86
Add: Interest 550.42 465.65 340.26
Add: Tax - 28.00
EBIT 614.02 634.57

Particulars 03-04 04-05 05-06

Share Capital 718.78 718.78 718.78
Reserves & Surplus 1961.06 1898.57 2147.14
Secured Loans 3050.26 2791.40 2432.92
Capital Employed 5730.10 5408.75 5298.84

2003-04
614.02 * 100
5730.10
10.72%

2004-05
634.57 * 100
5408.75

11.73%

2005-06

27
 656 *100

5298.84

12.38%

12.50% 12.38%
12.00%
11.73%
11.50%

11.00%
10.72%
10.50%

10.00%

9.50%
2003-04 2004-05 2005-06

Interpretation:-
According to the ratio, we can say that the company has
sufficient to earn the profit as per the capital invested in it. As per the above
calculation, we say that the company has earned average profit for its capital
invested. Because the return is not more, it is between 10 to 12 % for the
three years.

6) Return on Shareholders Funds:-

Net Profit * 100

Shareholders fund

Particulars 03-04 04-05 05-06

Net Profit 63.60 140.92 369.86

28
Particulars 03-04 04-05 05-06
Share Capital 718.78 718.78 718.78
Reserves & Surplus 1961.06 1898.57 2147.14
Shareholder’s Fund 2679.84 2617.35 2325.92

2003-04
63.60 * 100
2679.84

2.37%

2004-05
140.92 * 100
2617.35

5.38%

2005-06

369.86 *100

2325.92

15.90%

29
 16.00% 15.90%
14.00%
12.00%
10.00%
8.00%
6.00% 5.38%
4.00%
2.37%
2.00%
0.00%
2003-04 2004-05 2005-06

year
Interpretation:-
According to this ratio the, Company’s Profit is falling upto
50% but in the next year in 04-05 it is approx about 5%. Therefore, this is a
good indicator for the shareholders that they will earn more dividends.
2) Debt Equity Ratio:-

Long Term Liability * 100

Shareholder’s fund

Long Term Liability = Secured Loans.

Shareholders fund = Share Capital + R & S.

Particulars 03-04 04-05 05-06

Secured Loans 3050.26 2791.40 2432.92
Share Capital 718.78 718.78 718.78
Reserves & Surplus 1961.06 1898.57 2147.14
Shareholder’s Fund 2679.84 2617.35 5298.84

30
 2003-04
3050.26 * 100
2679.84
113.82 %

2004-05
2791.40 * 100
2617.35
106.65%

2005-06

5298.84 *100

2432.92

217.80%

250.00%
217.80%
200.00%

150.00%
113.82% 106.65%
100.00%

50.00%

0.00%
2003-04 2004-05 2005-06

Interpretation:-

31
 This ratio is very high which means loan
component is more than share capital. The company will pay large liability
in the form of interest. This is danger single for company.

2) Net Profit Ratio: - Net Profit *100

Sales

Particulars 03-04 04-05 05-06

Net Profit 63.60 140.92 369.86

Sales 11008.26 10341.75 10742.18

2003-04
063.60 * 100
11008.26
0.58%

2004-05
140.92 * 100
10341.75
1.36%

2005-06

369.86 *100

10742.18

3.44%

32
 3.50% 3.44%

3.00%
2.50%
2.00%
1.50% 1.36%
1.00%
0.58%
0.50%
0.00%
2003-04 2004-05 2005-06

Interpretation:-
As per this ratio, we shows that the Net Profit of the
company is very low because in the similar type of companies the Net Profit
is around 5 to 10 % but this shows that net Profit is around 1% which is very
low. It shows the inefficiency of the management and high expenditure on
Administration expenses, Selling expenses and financial expenses.

33
 5
D. Capital structure of the company for three years

Share holding patern

HUF
10.47 0.03
0.67 17.26 Bodies corp.

Mutual fund (uti)

Individual share holders

22.67 in excess of 1 lack
Individual share holders
up to 1 lack
NRI

Non industrial bodies

8.78 40 corp.
Foreign institutional
0.12 investor

5
Adapted from www.vadilalmarket.com

34
Balance Sheet ------------------- in Rs. Cr. -------------------
Mar '02 Mar '03 Mar '04 Mar '05 Mar '06

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 7.19 7.19 7.19 7.19 7.19
Equity Share Capital 7.19 7.19 7.19 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 23.59 15.26 15.81 16.64 19.52
Revaluation Reserves 5.18 4.43 3.80 2.35 1.95
Networth 35.96 26.88 26.80 26.18 28.66
Secured Loans 33.03 32.15 30.50 27.91 24.33
Unsecured Loans 7.94 9.57 7.67 7.89 7.97
Total Debt 40.97 41.72 38.17 35.80 32.30
Total Liabilities 76.93 68.60 64.97 61.98 60.96
Mar '02 Mar '03 Mar '04 Mar '05 Mar '06

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 53.67 56.22 57.98 57.42 58.22
Less: Accum. Depreciation 20.87 23.74 26.50 27.28 29.73
Net Block 32.80 32.48 31.48 30.14 28.49
Capital Work in Progress 1.42 0.62 1.50 0.38 0.92
Investments 7.59 5.69 4.27 3.32 3.32
Inventories 19.02 22.36 20.70 19.57 17.73
Sundry Debtors 13.48 16.52 19.68 19.81 18.48
Cash and Bank Balance 1.21 2.60 1.42 0.86 2.66
Total Current Assets 33.71 41.48 41.80 40.24 38.87
Loans and Advances 25.85 13.57 13.00 10.30 10.21
Total CA, Loans & Advances 59.56 55.05 54.80 50.54 49.08
Deffered Credit 0.18 0.27 0.36 0.41 0.05

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Fixed Deposits 7.93 6.98 7.03 7.01 6.63
Current Liabilities 23.62 24.38 25.88 21.08 19.07
Provisions 0.82 0.86 1.20 2.10 2.40
Total CL & Provisions 24.44 25.24 27.08 23.18 21.47
Net Current Assets 35.12 29.81 27.72 27.36 27.61
Miscellaneous Expenses 0.00 0.00 0.00 0.78 0.62
Total Assets 76.93 68.60 64.97 61.98 60.96

Contingent Liabilities 15.14 6.19 5.23 11.61 14.85

Book Value (Rs) 42.81 31.22 31.99 33.14 37.15

BSE:  519156 NSE:  N.A Reuters:  VDLI.BO   N.A

E. Evaluation of income statement of the last three years

5.1) Cost structure analysis

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Per 2003-04 2004-05 2005-06 Avg.
Employee expences 4.53% 4.80% 4.56% 4.63%
Job charges 3.54% 3.35% 3.37% 3.42%
Power &fule 5.30% 5.98% 5.43% 5.57%
Stores & spare 0.40% 0.48% 0.44% 0.44%
Warehouse charges 0.87% 1.00% 0.98% 0.95%
Repaires 0.87% 1.13% 1.05% 1.02%
Other manufacturing 0.29% 0.26% 0.28% 0.28%
exp
Taxes 0.04% 0.04% 0.05% 0.04%
Donation 0% 0.008% 0% 0%
Research 0.06% 0.07% 0.06% 0.06%
&development exp
Advertisement exp 0.04% 0.04% 0.24% 0.11%
Other exp 1.46% 1.67% 1.86% 1.66%
Sales &turnover tax 7.70% 8.16% 9.18% 8.35%
Freight & forwarding 5.00% 6.76% 7.31% 6.36%

Analysis
Sales cost is the key cost of the company because the company has to spend
more money on selling the product & has to pay high amount of tax
according to their sales.

F. Evaluation of assets portfolio

6.1) Current assets.

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Cash balance
Par 2003-04 2004-05 2005-06
Cash including cheques 21.22 29.12 191.84
& draft

Other current assets

Par 2003-04 2004-05 2005-06

Inventories 2070.03 1956.74 1773.04
Debtors 1967.54 1980.86 1848.01
Loan &adv 1174.08 910.18 959.20
Other current assets 50.97 27.71 30.10

Changes in current assets

Current assets are fluctuating over the year because of change in
production capacity & company policy. Cash is increasing in the year 2005-
06 is almost 7 times more in the company.

6.2)Current liabilities
Current liability is reduced from Rs 1619.81 lacks to Rs 1410.92 in
the year 2005-06.because the creditors are decreased from 901.76 to 680.95

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lacks & another reason is reduces in over draft in current a/c is Rs 153.76
to Rs 118.66 lacks.

Key current asset:-

Key current assets for the the company is debtors because the highest
share in current assets is debtors i.e. Rs 1848.01lakhs.

Key current liability:-

Key current liability for the company is creditors because the highest
share in current liabilities is creditors i.e. Rs 680.95 lacks. We can conclude
that the company is mainly run on debtors & creditors.

6.3) Tangible fixed assets company uses:-

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Fixed assets Rs in lakhs
Land free hold 112.84
Land lease hold 94.76
Building 955.61
Plant & machinery 1574.27
Furniture & fixture 22.57
Office equipmet 46.02
Vehicles 42.68
TOTAL(A) 2848.75
Leased assets
Plant & machinery 0.00
Vehicles 0.00
TOTAL(B) 2848.75

G Dividend policy

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 0.25
0.21
0.2

0.15
0.13
0.1 0.1

0.05

0
2003-04 2004-05 2005-06

Analysis
The company is giving lesser dividend to the share holder because the
company is reinvesting its earning make it more beneficial to shareholder by
expanding the business & can give better dividend to its shareholder.

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 H. Prospect of Company and future risk

Prospect of company will have good growth in future the strategy of

the company is good for its growth the ice cream market in India is
estimated to be about US$ 200million per annum. The industry structure and
ongoing transformation offers opportunities for organized players to invest
and grow.

I. View about the company as share holder

The company is paying 10% dividend of its net income to their share
holder & reinvest reaming earnings in the business for expansion of the
company so it can give better reward in future.

J. View about the company as a banker

The company is paying the interest of loan on timely and the company
is able to pay the interest and capital amount because assets of the company
is comparatively higher than the amount of loan so banker can give the loan
to the company. Company is safe debtor of the bank.

K. View about the company as creditor

As per creditors turnover ratio we can say that the company is paying
the amount to the creditors within 1.5 months it is quite good so company is
maintaining good relation with creditors.

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 L. BIBLIOGRAPHY & ANNEXTURE

The books, which I referred for preparing the financial

report, are I.M. Pandy,Khan & Jain, Dr.Paresh P. Shah and other reference
taken in preparing the financial report has been taken from the last three
years annual report of the company.

1) Financial Management:-
> By Khan & Jain
2) Financial Management:-
> By I.M. Panday

References: - Annual Report of the Company

a. 2003-04
b. 2004-05
c. 2005-06

Website :-
www.vadilalgroup.com
www.vadilalmarkets.com

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