FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD

A STUDY ON FUNDS FLOW STATEMENT OF DODLA

DAIRY,PALAMANER

PROJECT REPORT
Submitted in the Partial Fulfillment of the

Requirement for the Award of the degree

Of

MASTER OF BUSINESS ADMINISTRATION

[JAWAHARLAL NEHURU TECHNOLOGICAL UNIVERSITY,

ANANTAPURURAM]

Submitted By

K.MOUNIKA

REG.No:17751E0078

Under the Guidance of

T.HIMABINDU (M.F.M.,M.B.A,Ph.D)

Assistant Professor,Dept of MBA

SREENIVASA INSTITUTE OF TECHNOLOGY AND MANAGEMENT

STUDIES

Dr .VISWESWARAIAH ROAD (BANGALORE-TIRUPATHI BYE-PASS)

MURUKAMBATTU POST, CHITTOOR-517127(A.P)

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(2018-2019)

SREENIVASA INSTITUTE OF TECHNOLOGY AND MANAGEMENT STUDIES

DR.VISWESWARAIAH ROAD,

(BANGALORE-TIRUPATHI BYE-PASS ROAD)

MURUKUMBATU, CHITTOOR-517127

(APPROVED BY AICTE, NEW DELHI & AFFILIATED TO J.N.T.U, ANANTAPUR.)

CERTIFICATE

This is to certify that the project report entitled on “A STUDY ON WORKING

CAPITAL MANAGEMENT OFAPSRTC,TIRUPATHI.” Submitted by M.JESHNA
(REG No: 17751E0091) in partial fulfillment of the requirements for the award of the
degree in Master of Business Administration under JAWAHARLAL NEHRU
TECHNOLOGICAL UNIVERSITY, ANANTAPUR.

UNDER THE GUIDENCE OF DIRECTOR

T.HIMABINDU (M.F.M., M.B.A, Ph.D) Dr .J.V.BALASUBRAMANIAN,

MBA, PhD

PROFESSOR

ASSISTANT PROFESSOR, DEPARTMENT OF MBA,

DEPARTMENT OF MBA,SITAMS.

EXTERNAL EXAMINER

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DECLARATION

I hereby declare that the project report entitled “A STUDY ON FUNDS FLOW
STATEMENT OF DODLA DAIRY ,PALAMANER.”has been done by me inpartial
fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS
ADMINISTRATION in the academic year 2017-19 of Jawaharlal Nehru
Technological University Ananthapuram.

PLACE: K.MOUNIKA

DATE: (REG No: 1751E0078)

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ACKNOWLEDGEMENT
 
 
I wish to express my sincere thanks to DR .P. Ramesh Kumar M.E., PH.D,
PRINCIPAL,SITAMS for providing the opportunity to take up this project.
 
I wish to express my sincere gratitude to DR. J. v.
Balasubramanian,M.B.A, Ph.D, DIRECTOR DEPARTMENT OF M.B.A.,
SITAMS, for providing the opportunity to do this project.
 
I express my sincere gratitude to my guide T.HIMABINDU (M.F.M., M.B.A, Ph.D.ASSISTANT
PROFESSOR, DEPARTMENT OFMBA, SITAMS For his valuable guidance, and encouragement
bestowed up on me in the preparation of this project.       

 
             I sincerely express my gratitude to technical and non-technical staff
of . For making my project gets complete successfully.  
 
I sincerely express my thanks to all FACULTY Members  who help to
complete this project successfully.

 
 
 
 
                                                                                   
K.MOUNIKA

           (Reg. No.:17751E0078)

 

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INDEX

CONTENTS PAGE NO
INTRODUCTION OF THE TOPIC 1-15
INDUSTRY PROFILE 16-46
COMPANY PROFILE 47-56
RESEARCH METHODOLOGY 57
NEEDS OF THE STUDY 58
STATEMENT OF THE PROBLEM 59
OBJECTIVES OF THE STUDY 60
LIMITATIONS OF THE STUDY 61
DATA ANALYSIS AND INTERPRETATION 62-71
FINDINGS 72
SUGGESTIONS 73
CONCLUSIONS 74
BIBLIOGRAPHY 75
ANNEXURE 76-80

INTRODUCTION TO FINANCE

Finance is an important function in any business as money is required to

support its various activities. Financial is one of the basic foundations of all kinds of
economic activities. It is the master key, which provides access to all the sources for being
employed in manufacturing.

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Hence it is rightly said that finance is the life blood of any enterprise,
besides being the scarcest elements, it is also the most indispensable requirements without
finance neither any business can be started nor successfully run provision of sufficient
funds at the required time is the key to success of concern .as matter of fact finance may
be said to be the circulatory system of economic body, making possible the needed co-
operation among many units of the activity.

Financial management

Finance management emerged as a distinct use field of study at the turn of this
century. Many eminent persons define it in the following ways.

DEFINITION:

“Business finance may be said to deal with acquisition of funds, use of funds
and distribution of profit by a business organization”

- According to
CHARLESW.GERSTENBER

“Business finance can broadly be defined as the activity concerned with

planning, rising, controlling and administrating of funds used in the business”

- According to GUTHMANN AND

DOUGHAL

“Financial management is concerned with the efficient use of any important”

- According to Prof. EZRA SOLOMAN

Objectives of financial management

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Financial management evaluates how funds are products and used. In all cases,
it involves a sound judgment combined with logical approach of decision making financial
management provides a framework for selecting a course of action and deciding an
economically viable strategy.

The main objective of a business is to maximize the owner’s welfare. This

objective can be achieved by

 PROFIT MAXIMIZATION
 WEALTH MAXIMIZATION

PROFIT MAXIMIZATION:

Profit earning is the primary of economic activity. Business can service only it earns
profit. Profit is the measure of the efficiency of a business enterprise. It is remuneration
for innovation. The survival of the firm depends upon it ability to earn profit but from the
experience it is learn that concept of maximization is a myth.

WEALTH MAXIMIZATION:

Wealth maximization is the appropriate objective for an enterprise. The concepts

of wealth maximization tell value of assets in term of benefits it can produce. The concept
of wealth maximization universally accepted in financial decision-making.

FINANCIAL DECISION

 Investment decisions
 Financing decisions
 Dividend decisions

Investment decision

The decision relates to the determination of the total amount of assets to be held by the
firm, their composition, the business risk and the images of the firm’s perceived by the
investment.

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Financing decision

After taking the investment decision. The firm commits itself to the investment. And
hence it must decide upon the best means of financing these commitments. The cost of
raising funds for investing is very crucial in making the financial decision.

Dividend decision

This refers to the reimbursement of profit to the investors who have supplied fun

Meaning of Funds Flow Statement:

The profit and loss account and balance sheet statements are the common
important accounting statements of a business organization. The profit and loss account

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provides financial information relating to only a limited range of financial transactions
entered into during an accounting period and its impact on the profits to be reported.

The balance sheet contains information relating to capital or debt raised or assets
purchased. But both the above two statements do not contain sufficiently wide range of
information to make assessment of organization by the end user of the information.

A report on the movement of funds or working capital. In a narrow sense the term
fund means cash and the fund flow statement depicts the cash receipts and cash
disbursements/ payments. It highlights the changes in the cash receipts and payments as a
cash flow statement in addition to the cash balances i.e., opening cash balance and closing
cash balance. Contrary to the earlier, the fund means working capital i.e., the differences
between the current assets and current liabilities.

The term flow denotes the change. Flow of funds means the change in funds or in
working capital. The change on the working capital leads to the net changes taken place on
the working capital i.e., especially due to either increase or decrease in the working
capital. The change in the volume of the working capital due to numerous transactions.
Some of the transactions may lead to increase or decrease the volume of working capital.
Some other transactions neither registers an increase nor decrease in the volume of
working capital.

According Foulke “A statement of source and application of funds is a technical

device designed to analyse the changes to the financial condition of a business enterprise
in between two dates”

Various Factors of Fund flow statement are as follows:

 Statement of sources and application of funds

 Statement changes in financial position

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 Analysis of working capital changes and
 Movement of funds statement

Objective of Preparing a Fund Flow Statement:

The main purpose of preparing a Funds Flow Statement is that it reveals clearly the
important items relating to sources and applications of funds of fixed assets, long-term
loans including capital. It also informs how far the assets derived from normal activities of
business are being utilized properly with adequate consideration.

Secondly, it also reveals how much out of the total funds is being collected by disposing
of fixed assets, how much from issuing shares or debentures, how much from long-term or
short-term loans, and how much from normal operational activities of the business.

Thirdly, it also provides the information about the specific utilization of such funds, i.e.
how much has been applied for acquiring fixed assets, how much for repayment of long-
term or short-term loans as well as for payment of tax and dividend etc.

1.It pinpoints the mobilization of resources and the further utilization of resources

2.It highlights the financing of the general expansion of the business firms
3.It exemplifies the utilization of debt finance in the structure of financing
4.It portrays the relationship between the financing, investment, liquidity and dividend
decision of the firm during the given point of time.

This statement supplies an efficient method for the financial manager in

order to assess the:

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(a) Growth of the firm,

(b) Its resulting financial needs, and

(c) To determine the best way to finance those needs.

Significance and Importance of Funds Flow Statement:

Since traditional reports (i.e. Income Statement/Profit and Loss Account, and Balance
Sheet) are not very informative, a financial analyst has to depend on some other report—
Funds Flow Statement. In other words, along with the traditional sources of information,
some other sources of information are absolutely required in order to take the challenge
offered by modern business.

Funds Flow Statement, no doubt, caters to the needs of management. This is because a
Funds Flow Statement not only presents the Balance Sheet values for consecutive two
years, it also ascertains the changes of working capital—which is a very important
indicator.

It not only reveals the source from which additional working capital has been financed but
also, at the same time, the use of such funds. Moreover, from a projected funds flow
statement the management can easily ascertain the adequacy or inadequacy of working
capital, i.e., it helps in decision-making in a number of ways.

The significance and importance of Funds Flow Statements may be

summarized as:

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(a) Analysis of Financial Statement:
The traditional financial statements, viz. Profit and Loss Account and Balance Sheet,
exhibit the result of the operation and financial position of a firm. Balance Sheet presents
a static view about the resources and how the said resources have been utilized at a
particular date with recording the changes in financial activities. But Funds Flow
Statement can do so, i.e., it explains the causes of changes so made and effect of such
change in the firm accordingly.

(b) Highlighting Answers to Various Perplexing Questions:

Funds Flow Statement highlights answers of the following questions:
(i) Causes of changes in Working Capital;
(ii) Whether the firm sells any Non-Current Asset; if sold, how were the proceeds
utilized?
(iii) Why smaller amount of dividend is paid in spite of sufficient profit?
(iv) Where did the net profit go?
(v) Was it possible to pay more dividend than the present one?
(vi) Did the firm pay-off its scheduled debts? If so, how, and from what sources?
(vii) Sources of increased Working Capital, etc.
(viii) Realistic Dividend Policy:
(ix) Sometimes it may so happen that a firm, instead of having sufficient profit,
cannot pay dividend due to lack of liquid sources, viz. cash. In such a

(x) Proper Allocation of Resources:

(xi) Resources are always limited. So, it is the duty of the management to make its
proper use. A projected Funds Flow Statement helps the management to take
proper decision about the proper allocation of business resources in a best
possible manner since it highlights the future.

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(xii) As a Future Guide:
(xiii) A projected Funds Flow Statement acts as a business guide. It helps the
management to make provision for the future for the necessary funds to be
required on the basis of the problem faced. In other words, the future needs of
the fund for various purposes can be known well in advance which is a very
helpful guide to the management. In short, a firm may arrange funds on the
basis of this statement in order to avoid the financial problem that may arise in
future.
(xiv) Appraising of the Working Capital:
(xv) A projected Funds Flow Statement, no doubt, helps the management to know
about how the working capital has been efficiently used and, at the same time,
also suggests how to improve the working capital position for the future on the
basis of the present problem faced by it, if any.

Advantages of Funds Flow Statement:

Funds flow statement presents the following advantages:

(a) Fund Generating Capacity:
With the helps of cash flows from operating activities a Funds Flow Statement helps to
understand the fund generating capacity of the firm which ultimately provides valuable
information to the management for taking future courses of action.

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(b) Changes in Working Capital position:
A Funds Flow Statement presents either the increase in Working Capital or Decrease in
Working Capital with the helps of ‘A statement of exchanges in Working Capital’ which
helps us to know from which sources the additional Capital has -been procured or the
application of such funds.

(c) Projected Funds Flow Statement:

A firm can prepare its expected inflows and outflows of cash for future with the help of a
Projected Funds Flow Statement.

(d) Highlights the Causes of Changes:

A Funds flow statement highlights the significant causes of changes in Working Capital
position between two accounting period revealing the effect for the same on the liquidity
and solvency position of a firm.

(e) Evaluation of Credit Worthiness:

Credit Granting Agencies after careful analysis of a Funds Flow Statement, can evaluate
the credit-worthiness of a firm which helps them to understand the liquidity position.

(f) Highlight the causes of the following contradictions:

(i) Adequate Cash reserve but insufficient profit or,

(ii) Sufficient profit inadequate cash reserves.

Limitations of Funds Flow Statement:

The funds flow statement is also not free from limitations.

The significant snags are:

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(a) A funds flow statement cannot present a continuous change of financial activities
including the changes of working capital.

(b) Since it is based on financial statement (i.e., Income Statement and Balance Sheet), it
is not an original statement.

(c) A projected funds flow statement does not always present much accurate estimates
about the financial position since it is a historic one.

(d) It is not a substitute of financial statements, i.e. Income Statement and Balance Sheet.
It simply supplies information about the change of Working Capital position which, again,
depends on the data presented by the financial statements.

INDUSTRY PROFILE

Today, India is 'The Oyster' of the global dairy industry. It offers opportunities
galore to entrepreneurs worldwide, who wish to capitalize on one of the world's largest
and fastest growing markets for milk and milk products. A bagful of 'pearls' awaits the
international dairy processor in India. The Indian dairy industry is rapidly growing, trying

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to keep pace with the galloping progress around the world. As he expands his overseas
operations to India many profitable options await him. He may transfer technology, sign
joint ventures or use India as a sourcing center for regional exports. The liberalization of
the Indian economy beckons to MNC's and foreign investors alike.

India’s dairy sector is expected to triple its production in the next 10 years in view
of expanding potential for export to Europe and the West. Moreover with WTO
regulations expected to come into force in coming years all the developed countries which
are among big exporters today would have to withdraw the support and subsidy to their
domestic milk products sector. Also India today is the lowest cost producer of per litre of
milk in the world, at 27 cents, compared with the U.S' 63 cents, and Japan’s $2.8 dollars.
Also to take advantage of this lowest cost of milk production and increasing production in
the country multinational companies are planning to expand their activities here. Some of
these milk producers have already obtained quality standard certificates from the
authorities. This will help them in marketing their products in foreign countries in
processed form.

The urban market for milk products is expected to grow at an accelerated pace of
around 33% per annum to around Rs.43,500 crores by year 2005. This growth is going to
come from the greater emphasis on the processed foods sector and also by increase in the
conversion of milk into milk products. By 2005, the value of Indian dairy produce is
expected to be Rs 10,00,000 million. Presently the market is valued at around
Rs7,00,000mn

Background

India with 134mn cows and 125mn buffaloes, has the largest population of cattle
in the world. Total cattle population in the country as on October'00 stood at 313mn. More
than fifty percent of the buffaloes and twenty percent of the cattle in the world are found
in India and most of these are milch cows and milch buffaloes.

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Indian dairy sector contributes the large share in agricultural gross domestic
products. Presently there are around 70,000 village dairy cooperatives across the country.
The co-operative societies are federated into 170 district milk producers unions, which is
turn has 22-state cooperative dairy federation. Milk production gives employment to more
than 72mn dairy farmers. In terms of total production, India is the leading producer of
milk in the world followed by USA. The milk production in 1999-00 is estimated at 78mn
MT as compared to 74.5mn MT in the previous year. This production is expected to
increase to 81mn MT by 2000-01. Of this total produce of 78mn cows' milk constitute
36mn MT while rest is from other cattle.

While world milk production declined by 2 per cent in the last three years,
according to FAO estimates, Indian production has increased by 4 per cent. The milk
production in India accounts for more than 13% of the total world output and 57% of total
Asia's production. The top five milk producing nations in the world are India ,USA,
Russia, Germany and France.

Although milk production has grown at a fast pace during the last three decades
(courtesy: Operation Flood), milk yield per animal is very low. The main reasons for the
low yield are

 Lack of use of scientific practices in milching.

 Inadequate availability of fodder in all seasons.
 Unavailability of veterinary health services.

Milk yield comparision:

Country Milk Yield (Kgs

per year)
USA 7002
UK 5417
Canada 5348

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New Zealand 2976
Pakistan 1052
India 795
World (Average) 2021

Production of milk in India

Year Production in million MT

1988-89 48.4
1989-90 51.4
1990-91 53.7
1991-92 56.3
1992-93 58.6
1993-94 61.2
1994-95 63.5
1995-96 65
1996-97 68.5
1997-98 70.8
1998-99 74.7
1999-00(E) 78.1
2000-01(T) 81.0

E= estimated
T= target / expected

Source: DFPI, Annual Report-1999-2000

World's major milk producers

(Million MTs)

1998-99
Country 1997-98
( Approx.)
India 71 74.5
USA 71 71
Russia 34 33

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Germany 27 27
France 24 24
Pakistan 21 22
Brazil 21 27
UK 14 14
Ukraine 15 14
Poland 12 12
New Zealand 11 12
Netherlands 11 11
Italy 10 10
Australia 9 10

 Operation Flood

  The transition of the Indian milk industry from a situation of net import to that of
surplus has been led by the efforts of National Dairy Development Board's Operation
Flood. programme under the aegis of the former Chairman of the board Dr. Kurien.

Launched in 1970, Operation Flood has led to the modernization of India's dairy
sector and created a strong network for procurement processing and distribution of milk
by the co-operative sector. Per capita availability of milk has increased from 132 gm per
day in 1950 to over 220 gm per day in 1998. The main thrust of Operation Flood was to
organize dairy cooperatives in the milkshed areas of the village, and to link them to the
four Metro cities, which are the main markets for milk. The efforts undertaken by NDDB
have not only led to enhanced production, improvement in methods of processing and
development of a strong marketing network, but have also led to the emergence of
dairying as an important source of employment and income generation in the rural areas. It
has also led to an improvement in yields, longer lactation periods, shorter calving
intervals, etc through the use of modern breeding techniques. Establishment of milk
collection centers, and chilling centers has enhanced life of raw milk and enabled
minimization of wastage due to spoilage of milk. Operation Flood has been one of the
world's largest dairy development programme and looking at the success achieved in India

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by adopting the co-operative route, a few other countries have also replicated the model of
India's White Revolution.

Per Capita availability of milk 

Year gm/day
1950 132
1960 127
1968 113
1973 111
1980* 128
1990 178
1992 192
1996 198
1997 200
1998 202
1999 203
2000 212
2001E 225
2002P 250

E= Estimated
P= Provisional

* Operation flood was launched in 1970

Fresh Milk

Over 50% of the milk produced in India is buffalo milk, and 45% is cow milk. The buffalo
milk contribution to total milk produce is expected to be 54% in 2000. Buffalo milk has
3.6% protein, 7.4% fat, 5.5% milk sugar, 0.8% ash and 82.7% water whereas cow milk
has 3.5% protein, 3.7% fat, 4.9% milk sugar, 0.7% ash and 87% water. While presently
(for the year 2000) the price of Buffalo milk is ruling at $261-313 per MT that of cow is
ruling at $170-267 per MT. Fresh pasteurized milk is available in packaged form.

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However, a large part of milk consumed in India is not pasteurized, and is sold in loose
form by vendors. Sterilized milk is scarcely available in India.

Packaged milk can be divided according to fat content as follows,

Whole (full cream) milk - 6% fat

Standardized (toned) milk - 4.5% fat
Doubled toned (low fat) milk - 3% fat
Another category of milk, which has a small market is flavoured milk.

The Indian Market - A Pyramid

Consumer Habits And Practices

Milk has been an integral part of Indian food for centuries. The per capita
availability of milk in India has grown from 172 gm per person per day in 1972 to 182gm
in 1992 and 203 gm in 1998-99.This is expected to increase to 212gms for 1999-00.
However a large part of the population cannot afford milk. At this per capita consumption
it is below the world average of 285 gm and even less than 220 gm recommended by the
Nutritional Advisory Committee of the Indian Council of Medical Research.

There are regional disparities in production and consumption also. The per capita
availability in the north is 278 gm, west 174 gm, south 148 gm and in the east only 93 gm
per person per day. This disparity is due to concentration of milk production in some
pockets and high cost of transportation. Also the output of milk in cereal growing areas is

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much higher than elsewhere which can be attributed to abundant availability of fodder,
crop residues, etc which have a high food value for milch animals.

In India about 46 per cent of the total milk produced is consumed in liquid form
and 47 per cent is converted into traditional products like cottage butter, ghee, paneer,
khoya, curd, malai, etc. Only 7 per cent of the milk goes into the production of western
products like milk powders, processed butter and processed cheese. The remaining 54% is
utilized for conversion to milk products. Among the milk products manufactured by the
organized sector some of the prominent ones are ghee, butter, cheese, ice creams, milk

powders, malted milk food, condensed milk infants foods etc. Of these ghee alone
accounts for 85%.

It is estimated that around 20% of the total milk produced in the country is
consumed at producer-household level and remaining is marketed through various
cooperatives, private dairies and vendors. Also of the total produce more than 50% is
procured by cooperatives and other private dairies.

While for cooperatives of the total milk procured 60% is consumed in fluid form
and rest is used for manufacturing processed value added dairy products; for private
dairies only 45% is marketed in fluid form and rest is processed into value added dairy
products like ghee, makhan etc.

Still, several consumers in urban areas prefer to buy loose milk from vendors due
to the strong perception that loose milk is fresh. Also, the current level of processing and
packaging capacity limits the availability of packaged milk.

The preferred dairy animal in India is buffalo unlike the majority of the world
market, which is dominated by cow milk. As high as 98% of milk is produced in rural
India, which caters to 72% of the total population, whereas the urban sector with 28%
population consumes 56% of total milk produced. Even in urban India, as high as 83% of
the consumed milk comes from the unorganized traditional sector.

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Presently only 12% of the milk market is represented by packaged and branded
pasteurized milk, valued at about Rs. 8,000 crores. Quality of milk sold by unorganized
sector however is inconsistent and so is the price across the season in local areas. Also
these vendors add water and caustic soda, which makes the milk unhygienic.

India's dairy market is multi-layered. It's shaped like a pyramid with the base made
up of a vast market for low-cost milk. The bulk of the demand for milk is among the poor
in urban areas whose individual requirement is small, maybe a glassful for use as whitener

for their tea and coffee. Nevertheless, it adds up to a sizable volume - millions of litres per
day. In the major cities lies an immense growth potential for the modern sector. Presently,
barely 778 out of 3,700 cities and towns are served by its milk distribution network,
dispensing hygienically packed wholesome, quality pasteurized milk. According to one
estimate, the packed milk segment would double in the next five years, giving both
strength and volume to the modern sector. The narrow tip at the top is a small but affluent
market for western type milk products.

Growing Volumes

The effective milk market is largely confined to urban areas, inhabited by over 25
per cent of the country's population. An estimated 50 per cent of the total milk produced is
consumed here. By the end of the twentieth century, the urban population is expected
to increase by more than 100 million to touch 364 million in 2000 a growth of about 40
per cent. The expected rise in urban population would be a boon to Indian dairying.
Presently, the organized sector both cooperative and private and the traditional sector cater
to this market.

The consumer access has become easier with the information revolution. The
number of households with TV has increased from 23 million in 1989 to 45 million in
1995. About 34 per cent of these households in urban India have access to satellite
television channel.

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Potential for further growth

Of the three A's of marketing - availability, acceptability and affordability,

Indian dairying is already endowed with the first two. People in India love to drink milk.
Hence no efforts are needed to make it acceptable. Its availability is not a limitation either,
because of the ample scope for increasing milk production, given the prevailing low yields
from dairy cattle. It leaves the third vital marketing factor affordability. How to make milk
affordable for the large majority with limited purchasing power? That is essence of the

challenge. One practical way is to pack milk in small quantities of 250 ml or less in
polythene sachets. Already, the glass bottle for retailing milk has given way to single-use
sachets which are more economical. Another viable alternative is to sell small quantities of
milk powder in mini-sachets, adequate for two cups of tea or coffee.

Marketing Strategy for 2000 AD

Two key elements of marketing strategy for 2000 AD are: Focus on strong brands
and, product mix expansion to include UHT milk, cheese, ice creams and spreads. The
changing marketing trends will see the shift from generic products to the packaged quasi,
regular and premium brands. The national brands will gradually edge out the regional
brands or reduce their presence. The brand image can do wonders to a product's marketing
as is evident from the words of Perfume Princess Coco Channel: In the factory, we pack
perfume; in the market, we sell hope!

Emerging Dairy Markets

 Food service institutional market: It is growing at double the rate of consumer

market
 Defense market: An important growing market for quality products at reasonable
prices
 Ingredients market: A boom is forecast in the market of dairy products used as
raw material in pharmaceutical and allied industries

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 Parlour market: The increasing away-from-home consumption trend opens new
vistas for ready-to-serve dairy products which would ride piggyback on the fast
food revolution sweeping the urban India.

India, with her sizable dairy industry growing rapidly and on the path of
modernization, would have a place in the sun of prosperity for many decades to come. The
one index to the statement is the fact that the projected total milk output over the next 15

years (1995-2010) would exceed 1457.6 million tonnes which is twice the total production
of the past 15 years!

Penetration of milk products

Western table spreads such as butter, margarine and jams are not very popular in
India. All India penetration of butter/ margarine is only 4%. This is also largely
represented by urban areas, where penetration is higher at 9%. In rural areas, butter/
margarine have penetrated in 2.1% of households only. The use of these products in the
large metros is higher, with penetration at 15%.

Penetration of cheese is almost nil in rural areas and negligible in the urban areas.
Per capita consumption even among the cheese-consuming households is a poor 2.4kg pa
as compared to over 20kg in USA. The lower penetration is due to peculiar food habits,
relatively expensive products and also non-availability in many parts of the country.
Butter, margarine and cheese products are mainly manufactured by organized sector.

Similarly, penetration of ghee is highest in medium sized towns at 37.2%

compared to 31.7% in all urban areas and 21.3% in all rural areas. The all India
penetration of ghee is 24.1%. In relative terms, penetration of ghee is significantly higher
in North and West, which are milk surplus regions. North accounts for 57% of ghee
consumption and West for 23%, South & East together account for the balance 20%. A

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large part of ghee is made at home and by small/ cottage industry from milk. The relative
share of branded products in this category is very low at around 1-2%.

Milk powder and condensed milk have not been able to garner any significant
consumer acceptance in India as indicated by a very low 4.7% penetration. The
penetration is higher at 8.1% in urban areas and lower at 3.5% in rural areas. Within urban
areas, it is relatively higher in medium sized towns at 8.5% compared to 7.7% in a large
metros.

Market Size And Growth

Market size for milk (sold in loose/ packaged form) is estimated to be 36mn MT
valued at Rs470bn. The market is currently growing at round 4% pa in volume terms. The
milk surplus states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat,
Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk
products is concentrated in these milk surplus States. The top 6 states viz. Uttar Pradesh,
Punjab, Madhya Pradesh, Rajasthan, Tamil Nadu and Gujarat together account for 58% of
national production.

Milk production grew by a mere 1% pa between 1947 and 1970. Since the early
70's, under Operation Flood, production growth increased significantly averaging over 5%
pa.

About 75% of milk is consumed at the household level which is not a part of
commercial dairy industry. Loose milk has a larger market in India as it is perceived to be
fresh by most consumers. In reality however, it poses a higher risk of adulteration and
contamination.

The production of milk products, i.e. milk products including infant milk food,
malted food, condensed milk & cheese stood at 3.07 lakh MT in 1999. Production of milk
powder including infant milk-food has risen to 2.25 lakh MT in 1999, whereas that of

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malted food is at 65000 MT. Cheese and condensed milk production stands at 5000 and
11000 MT respectively in the same year.

Major Players

The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-
operative Milk Marketing Federation (GCMMF) is the largest player. All other local dairy
cooperatives have their local brands (For e.g. Gokul, Warana in Maharashtra, Saras in
Rajasthan, Verka in Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil Nadu, etc). Other

private players include J K Dairy, Heritage Foods, Indiana Dairy, Dairy Specialties, etc.
Amrut Industries, once a leading player in the sector has turned bankrupt and is facing
liquidation.

Packaging Technology

Milk was initially sold door-to-door by the local milkman. When the dairy co-
operatives initially started marketing branded milk, it was sold in glass bottles sealed with
foil. Over the years, several developments in packaging media have taken place. In the
early 80's, plastic pouches replaced the bottles. Plastic pouches made transportation and
storage very convenient, besides reducing costs. Milk packed in plastic pouches/bottles
have a shelf life of just 1-2 days , that too only if refrigerated. In 1996, Tetra Packs were
introduced in India. Tetra Packs are aseptic laminate packs made of aluminum, paper,
board and plastic. Milk stored in tetra packs and treated under Ultra High Temperature
(UHT) technique can be stored for four months without refrigeration. Most of the dairy
co-operatives in Andhra Pradesh, Tamil Nadu, Punjab and Rajasthan sell milk in tetra
packs. However tetra packed milk is costlier by Rs5-7 compared to plastic pouches. In
1999-00 Nestle launched its UHT milk. Dodla too re-launched its Dodla Taaza brand of
UHT milk. The UHT milk market is expected to grow at a rate of more than 10-12% in
coming years.

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Export Potential

India has the potential to become one of the leading players in milk and milk
product exports. Locational advantage : India is located amidst major milk deficit
countries in Asia and Africa. Major importers of milk and milk products are Bangladesh,
China, Hong Kong, Singapore, Thailand, Malaysia, Philippines, Japan, UAE, Oman and
other gulf countries, all located close to India.

Low Cost Of Production :

 Milk production is scale insensitive and labour intensive. Due to low labour cost,
cost of production of milk is significantly lower in India.

Concerns in export competitiveness are

Quality : 

Significant investment has to be made in milk procurement, equipments, chilling

and refrigeration facilities. Also, training has to be imparted to improve the quality to
bring it up to international standards.

Productivity :

To have an exportable surplus in the long-term and also to maintain cost

competitiveness, it is imperative to improve productivity of Indian cattle.

There is a vast market for the export of traditional milk products such as ghee,
paneer, shrikhand, rasgolas and other ethnic sweets to the large number of Indians
scattered all over the world

India's exports of milk products

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Description 1995-96 1996-97 1997-98
(Quantity, M T.:
Quantity Value Quantity Value Quantity Value
Value, Rs. million)
Skimmed milk
4,638.62 3,35.32 282.70 19.64 5.00 0.375
powder
Milk and Milk Food
8.27 2.019 111.37 4.27 11.00 2.02
for babies
Milk cream 332.23 28.04 1.00 0.084 - -
Sweetened condensed
41.73 2.84 9.22 0.97 60.39 7.22
milk
Whey 78.46 3.75 11.50 1.01 6.00 0.342
Ghee/Butter/Butter
7,895.08 431.1 299.97 19.2 4,352.08 2,38.95
oil
Cheese
(a) Fresh 0.10 0.013 - - - -
(b) Processed 5.67 1.20 2.1 0.375 22.10 2.19
(c) Other 66.64 8.35 36.78 0.69 24.84 4.55
TOTAL - 8,72.7 - 52.4 - 2,55.6

What does the Indian Dairy Industry has to Offer to Foreign Investors?

India is a land of opportunity for investors looking for new and expanding markets.
Dairy food processing holds immense potential for high returns. Growth prospects in the
dairy food sector are termed healthy, according to various studies on the subject.

The basic infrastructural elements for a successful enterprise are in place.

 Key elements of free market system

 raw material (milk) availability
 an established infrastructure of technology
 supporting manpower

An entrepreneur's participation is likely to provide attractive returns on the investment

in a fast growing market such as India, along with an export potential in the Middle East,

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Singapore, Malaysia, Indonesia, Korea, Thailand, Hong Kong and other countries in the
region.

Among several areas of potential participation by NRIs and foreign investors, the
following list outlines a few promising opportunities:

Biotechnology:

 Dairy cattle breeding of the finest buffaloes and hybrid cows

 Milk yield increase with recombinant somatotropin
 Recombinant chymosin, acceptable to vegetarian consumers
 Dairy cultures, probiotics, dairy biologics, enzymes and coloring materials for food
processing
 Fermentation derived foods and industrial products alcohol, citric acid, lysine,
flavor preparations, etc.
 Biopreservative ingredients based on dairy fermentation, viz., Nisin, pediococcin,
acidophilin, bulgarican contained in dairy powders.

Dairy/food processing equipment:

Potential exists for manufacturing and marketing of cost competitive food

processing machinery of world-class quality.

Food packaging equipment:

Opportunities lie in the manufacturing of both machinery and packaging materials

that help develop brand loyalty and a clear edge in the marketing of dairy foods.

Distribution channels:

For refrigerated and frozen food distribution, a world class cold chain would help
in providing quality assurance to the consumers around the region.

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Retailing:

There is scope for standardizing and upgrading food retailing in major

metropolitan cities to meet the shopping needs of a vast middle class. This area includes
grocery stores of European and North American quality, warehousing and distribution.

 Product development:

 Dairy foods can be manufactured and packaged for export to countries where
Indian food enjoys basic acceptance. The manufacturing may be carried out in
contract plants in India. An option to market the products in collaboration with
local establishments or entrepreneurs can also be explored. Products exhibiting
potential include typical indigenous dairy foods either not available in foreign
countries or products whose authenticity may be questionable. Gulabjamuns,
Burfi, Peda, Rasagollas, and a host of other Indian sweets have good business
prospects.
 Products typically foreign to India but indigenous to other countries could also be
developed for export. Such products can be manufactured in retail package sizes
and could be produced from milk of sheep, goats and camel. Certain products are
characteristically produced from milk of a particular species. For example, Feta
cheese is used in significant tonnage, in Iran. Sheep milk is traditionally used for
authentic Feta cheese. Accordingly, India's goat and sheep herds can be utilized for
the manufacture of such authentic products.

Ingredient manufacture:

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Export markets for commodities like dry milk, condensed milk, ghee and certain
cheese varieties are well established. These items are utilized as ingredients in foreign
countries. These markets can be expanded to include value-added ingredients like
aseptically packaged cheese sauce and dehydrated cheese powders.

 Cheese sauce: Canned cheese sauce is made from real cheese to which milk,
whey, modified food starch, vegetable oil, colorings and spices may be added.
Cheese sauce is useful in kitchens for the preparation of omelet, sandwiches,
entrees, and soups. In addition, cheese sauce is used as a topping on potatoes and
vegetables and may be incorporated in pasta dishes.
 Cheese powders: Cheese powders are formulated for dusting or smearing of
popular snacks like potato chips, crackers, etc. They impart flavor and may be
blended with spices.

With the globalization of food items, an opportunity should open up for food service
and institutional markets.

Technology-driven manufacturing units:

These plants would fulfil an essential need by providing a centralized and

specialized facility for hire by the units which cannot justify capital investment but do
need such services. Potential areas for state-of-the-art contract-pack units may conceivably
specialize in cheese slicing, or dicing line, cheese packaging, butter printing, and aseptic
packaged fluid products.

Training centers for continuing education:

NRIs could set up technology transfer and updating centers for conducting
seminars and workshops - catering to the needs of workers at all levels of the dairy
industry. Here technical, marketing and management topics can be offered to ensure that
the manpower continues to acquire the latest know-how of their respective fields.

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  The entrepreneurs need powerful tools to implement their plans. Appropriate
investment and involvement by NRIs can serve as a catalyst for India's dairy food industry
leading to exploration of business potential in domestic and export trade. Risk factors

must be identified and managed by in-depth study of chosen areas so that chances of
rewards are maximized under the current liberalization climate.

Indian (traditional) Milk Products

There are a large variety of traditional Indian milk products such as

Makkhan - unsalted butter.

Ghee - butter oil prepared by heat clarification, for longer shelf life.
Kheer - a sweet mix of boiled milk, sugar and rice.
Basundi - milk and sugar boiled down till it thickens.
Rabri - sweetened cream.
Dahi - a type of curd.
Lassi - curd mixed with water and sugar/ salt.
Channa/Paneer - milk mixed with lactic acid to coagulate.
Khoa - evaporated milk, used as a base to produce sweet meats.

The market for indigenous based milk food products is difficult to estimate as most of
these products are manufactured at home or in small cottage industries catering to local
areas.

Consumers while purchasing dairy products look for freshness, quality, taste and texture,
variety and convenience. Products like Dahi and sweets like Kheer, Basundi, Rabri are
perishable products with a shelf life of less than a day. These products are therefore
manufactured and sold by local milk and sweet shops. There are several such small shops

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within the vicinity of residential areas. Consumer loyalty is built by consistent quality,
taste and freshness. There are several sweetmeat shop have built a strong brand franchise,
and have several branches located in various parts of a city.

Branding Of Traditional Milk Products

Among the traditional milk products, ghee is the only product, which is currently
marketed, in branded form. main ghee brands are Sagar, MilkMan (Britannia), Dodla
(GCMMF), Aarey (Mafco Ltd), Vijaya (AP Dairy Development Cooperative Federation),
Verka ( Punjab Dairy Cooperative), Everyday (Nestle) and Farm Fresh (Wockhardt).

With increasing urbanization and changing consumer preferences, there is

possibility of large scale manufacture of indigenous milk products also. The equipments in
milk manufacturing have versatility and can be adapted for several products. For instance,
equipments used to manufacture yogurt also can be adapted for large scale production of
Indian curd products (dahi and lassi). Significant research work has been done on dairy
equipments under the aegis of NDDB.

Mafco Limited sells Lassi under the Aarey brand and flavoured milk under the
Energee franchise (in the Western region, mainly in Mumbai). Britannia has launched
flavored milk in various flavors in tetra packs.

GCMMF has also made a beginning in branding of other traditional milk products
with the launch of packaged Paneer under the Dodla brand. It has also created a new
umbrella brand "Dodla Mithaee", for a range of ethnic Indian sweets that are proposed to
be launched The first new product Dodla Mithaee Gulabjamun has already been launched
in major Indian markets.

Western Milk Products

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Western milk products such as butter, cheese, yogurt have gained popularity in the
Indian market only during the last few years. However consumption has been expanding
with increasing urbanization.

Butter

Most Indians prefer to use home made white butter (makkhan) for reasons of taste
and affordability. Most of the branded butter is sold in the towns and cities. The major
brands are Dodla, Vijaya, Sagar, Nandini and Aarey. Dodla is the leading national brand
while the other players have greater shares in their local markets. The latest entrant in the
butter market has been Britannia. Britannia has the advantages of a wide distribution reach
and a strong brand recall. Priced at par with the Dodla brand, it is expected to give stiff
competition to the existing players. In 1999-00 the butter production is estimated at 4 lakh
MT of this only 45K MT is in the white form used for table purposes rest all is in the
yellow form.

CheeseThe present market for cheese in India is estimated at about 9,000 tonnes and is
growing at the rate of about 15% per annum. Cheese is mainly consumed in the urban
areas. The four metro cities alone account for more than 50% of consumption . Mumbai is
the largest market (accounting for 30% of cheese sold in the country), followed by Delhi
(20%). Calcutta (7%) and Chennai (6%). Mumbai has a larger number of domestic
consumers, compared to Delhi where the bulk institutional segment (mainly hotels) is
larger.

 Demand for various types of cheese in the Indian market

Type of cheese % of total consumption

Processed 50
Cheese spread 30
Mozzarella 10

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Flavoured/Spiced 5
Others 5

The major players are Dodla, Britannia, and Dabon International dominating the
market. Other major brands were Vijaya, Verka and Nandini (all brands of various
regional dairy cooperatives) and Vadilal. The heavy advertising and promotions being
undertaken by these new entrants is expected to lead to strong 20% growth in the segment.
Dodla has also become more aggressive with launch of new variants such as Mozzarella
cheese (used in Pizza), cheese powder, etc.

The entry of new players and increased marketing activity is expected to expand
the market. All the major players are expanding their capacities

Capacity expansion in Cheese

Company Brands State Capacity

Dynamix Group Manufactures for Maharashtra 35 tons per
Britannia day
GCMMF Dodla Gujarat 20 tons per
day
APDDCF Vijaya Andhra Pradesh 10 tons per
day

 Milk Powder

Milk powder are mainly of 2 types

 Whole milk powder

 Skimmed milk powder

Whole milk powder contains fat, as distinguished from skimmed milk powder, which
is produced by removing fat from milk solids. Skimmed milk powder is preferred by diet

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conscious consumers. Dairy whiteners contain more fat than skimmed milk powder but
less compared to whole milk powder. Dairy whiteners are popular milk substitute for

making tea, coffee etc. The penetration of these products in milk abundant regions is
driven by convenience and non perishable nature (longer shelf life) of the product.

Dairy sector of advanced nations export milk products with a subsidy of $ 1000 per
tonne with a level of subsidy more than 60 % of the price of milk powder produced in
India, this has led to large scale imports of milk powder both in whole and skimmed form.
To protect the domestic sector from these subsidized imports the central government has
recently increased the basic import duty on all imports of milk powder more than 10000
MT to 60% from 15%. For imports less than 10000 MT the basic customs duty has been
left unchanged at 15%.

In 1999-00 India is estimated to have imported about 18,000 tonnes of milk powder
against a total estimated production of 2.40 Lakh MTs. In 2000-01 India is expected to
export 10000 MT of skimmed milk powder due to rise in international prices to $2300 per
MT from last year's levels of $1400 per MT. These expectations are based on the strong
demand from Russia, East Asia and Latin America, and also on tightening of supply in
EU, which accounts for 75% of the annual global Skimmed Milk Powder exports.

Major Players

Milk Powder/Dairy Whiteners : Major skimmed milk brands are Sagar (GCMMF)
and Nandini (Karnataka Milk Federation), Dodla Full Cream milk powder is a whole milk
powder brand.

Leading brands in the dairy whitener segment are Nestle's Everyday, GCMMF's
Amulya, Dalmia Industry's Sapan, Kwality Dairy India's KreamKountry, Wockhardt's
Farm Fresh and Britannia's MilkMan Dairy Whitener.

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Condensed Milk

The condensed milk market has grown from 9000 MT in 1998 to 11000 MT in
1999. Condensed milk is a popular ingredient used in home-made sweets and cakes.
Nestle's Milkmaid is the leading brand with more than 55% market share. The only other
competitor is GCMMF's Dodla.

Value addition in milk powder - Infant Foods

Nestle is the market leader in the segment. This is a category where brand loyalties
are very strong as mothers want the best for their babies. Heinz is the only other
significant competitor to Nestle in this segment. Nestle's Cerelac and Nestum together
have around 80% market share and Heinz's Farex has close to 18% share. Wockhardt is a
relatively new entrant with its First Food brand. Wockhardt also proposes to launch a new
baby food Easum containing moong (moong is one of the easily digestible pulses). The
Easum brand will directly compete with Nestle's Nestum (made from rice).

In infant formula also Nestle's Lactogen formula and Lactogen standard formula
are the leading brands with around 75% market share. Other brands are Heinz's Lactodex
Farex, Wockhardt's Raptakos, and Dodla.

Regulatory Framework

The dairy industry was de-licensed in 1991 with a view to encourage private
investment and flow of capital and new technology in the segment. Although de-licensing
attracted a large number of players, concerns on issues like excess capacity, sale of
contaminated/ substandard quality of milk etc induced the Government to promulgate the
MMPO (Milk and Milk Products Order) in 1992. Milk and Milk Products Order (MMPO)
regulates milk and milk products production in the country. The order requires no

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permission for units handling less than 10,000 litres of liquid milk per day or milk solids
up to 500 tpa. MMPO prescribes State registration to plants producing between 10,000 to

75,000 litres of milk per day or manufacturing milk products containing between 500 to
3,750 tonnes of milk solids per year. Plants producing over 75,000 litres per day or more
than 3,750 tonnes per year of milk solids have to be registered with the Central
Government. The stringent regulations, government controls and licensing requirements
for new capacities have restricted large Indian and MNC players from making significant
investments in this product category. Most of the private sector players have restricted
themselves to manufacture of value added milk products like baby food, dairy whiteners,
condensed milk etc.

All the milk products except malted foods are covered in the category of industries
for which foreign equity participation up to 51% is automatically allowed. Ice cream,
which was earlier reserved for manufacturing in the small-scale sector, has now been de-
reserved. As such, no license is required for setting up of large-scale production facilities
for manufacture of ice cream.

Subsequent to de-canalization, exports of some milk based products are freely

allowed provided these units comply with the compulsory inspection requirements of
concerned agencies like: National Dairy Development Board, Export Inspection Council
etc. Bureau of Indian standards has prescribed the necessary standards for almost all milk-
based products, which are to be adhered to by the industry.

Proposal to Amend the MMPO

A proposal to raise the exemption limit for compulsory registration of dairy plants,
from the present 10,000 litres a day to 20,000 litres, is being considered by the Animal
Husbandry Department. The 75,000-litre limit is likely to be raised either to 100,000 litres
or 125,000 litres in the amended order. The new order would also do away with the
provision for re-registration.

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Dodla dairy secret of success

The system succeeded mainly because it provides an assured market at

remunerative prices for producers' milk besides acting as a channel to market the
production enhancement package. What's more, it does not disturb the agro-system of the
farmers. It also enables the consumer an access to high quality milk and milk products.
Contrary to the traditional system, when the profit of the business was cornered by the
middlemen, the system ensured that the profit goes to the participants for their socio-
economic upliftment and common good.

Looking back on the path traversed by Dodla the following features make it a pattern
and model for emulation elsewhere. Dodla has been able to:

 Produce an appropriate blend of the policy makers farmers board of management

and the professionals: each group appreciating its roles and limitations
 Bring at the command of the rural milk producers the best of the technology and
harness its fruit for betterment
 Provide a support system to the milk producers without disturbing their agro-
economic systems
 Plough back the profits, by prudent use of men, material and machines, in the rural
sector for the common good and betterment of the member producers and
 Even though, growing with time and on scale, it has remained with the smallest
producer members. In that sense, Dodla is an example par excellence, of an
intervention for rural change.

The Union looks after policy formulation, processing and marketing of milk, provision
of technical inputs to enhance milk yield of animals, the artificial insemination service,
veterinary care, better feeds and the like - all through the village societies.

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The village society also facilitates the implementation of various production
enhancement and member education programs undertaken by the Union. The staff of the

village societies have been trained to undertake the veterinary first-aid and the artificial
insemination activities on their own.

Dairy success: A model for other districts to follow.

Dodla’s success led to the creation of similar structures of milk producers in other
districts of Gujarat. They drew on Dodla’s experience in project planning and execution.
Thus the 'Anand Pattern' was followed not just in Kaira district but in Mehsana,
Sabarkantha, Banaskantha, Baroda and Surat districts also. Even before the Dairy Board
of India was born, farmers and their leaders carried out empirical tests of the hypotheses
that explained Dodla’s success. In these districts, milk producers and their leaders
experienced significant commonalties and found easy and effortless ways to adapt
Dodla’s gameplan to their respective areas. This led to the Creation of the National Dairy
Development Board with the clear mandate of replicating the 'Anand pattern' in other parts
of the country. Initially the pattern was followed for the dairy sector but at a later stage
oilseeds, fruit and vegetables, salt, and tree sectors also benefited from it's success.

 GCMMF: An Overview

Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food

products marketing organization. It is a state level apex body of milk cooperatives in
Gujarat which aims to provide remunerative returns to the farmers and also serve the
interest of consumers by providing quality products which are good value for money. 

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Members: 12 district cooperative milk

producers' Union
No. of Producer Members: 2.12 million
No. of Village Societies: 10,411
Total Milk handling capacity: 6.1 million litres per day
Milk collection (Total - 1999-00): 1.59 billion litres
Milk collection (Daily Average 1999-00): 4.47 million litres
Milk Drying Capacity: 450 metric Tons per day

 Cattle feed manufacturing Capacity: 1450 Mts per day

YEARS Rs (million) US $ (in million)

1994-95 11140 355
1995-96 13790 400
1996-97 15540 450
1997-98 18840 455
1998-99 22192 493
1999-00 22185 493

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Major dairy products manufacturers

Some of the major dairy products manufacturers in the country:

Company Brands Major Products

Nestle India Milkmaid,Cerelac, Sweetened condensed milk, malted
Limited Lactogen, Milo, Everyday foods, milk powder and Dairy
whitener
Milkfood Milkfood Ghee, ice cream, and other milk
Limited products
SmithKline Horlicks, Maltova, Viva Malted Milkfood, ghee, butter,
Beecham powdered milk, milk fluid and
Limited other milk based baby foods.
Indodan Indana Condensed milk, skimmed milk
Industries powder, whole milk powder, dairy
Limited milk whitener, chilled and
processed milk
Gujarat Co- Dodla Butter, cheese and other milk
operative milk products
Marketing
 
Federation
Limited
 

 
H.J. Heinz Farex, Complan, Glactose, Infant Milkfood, malted Milkfood
Limited Bonniemix, Vitamilk
Britannia Milkman Flavoured milk, cheese, Milk
Powder, Ghee
Cadbury Bournvita Malted food

Future Prospects

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India is the world's highest milk producer and all set to become the world's largest
food factory. In celebration, Indian Dairy sector is now ready to invite NRIs and Foreign
investors to find this country a place for the mammoth investment projects. Be it investors,
researchers, entrepreneurs, or the merely curious – Indian Dairy sector has something for
everyone.

Milk production is relatively efficient way of converting vegetable material into

animal food. Dairy cows buffaloes goats and sheep can eat fodder and crop by products
which are not eaten by humans. Yet the loss of nutrients energy and equipment required in
milk handling inevitably make milk comparatively expensive food. Also if dairying is to
play its part in rural development policies , the price to milk producers has to be
remunerative. In a situation of increased international prices, low availabilities of food aid
and foreign exchange constraints, large scale subsidization of milk conception will be
difficult in the majority of developing countries.

Hence in the foreseeable future, in most of developing countries milk and milk
products will not play the same roll in nutrition as in the affluent societies of developed
countries. Effective demand will come mainly from middle and high income consumers in
urban areas.

There are ways to mitigate the effects of unequal distribution of incomes. In Cuba
where the Government attaches high priority to milk in its food and nutrition policy, all
pre-school children receive a daily ration of almost a litre of milk fat the reduced price.
Cheap milk and milk products are made available to certain other vulnerable groups, by
milk products outside the rationing system are sold price which is well above the cost
level. Until recently, most fresh milk in the big cities of China was a reserved for infants
and hospitals, but with the increase in supply, rationing has been relaxed.

In other countries dairy industries have attempted to reach lower income

consumers by variation of compositional quality or packaging and distribution methods or
blending milk in vegetable ingredients in formula foods for vulnerable groups. For
instance, pricing of products rich in butter fat or in more luxury packaging above cost

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
level so as to enable sales of high protein milk products at a some what a reduced price has
been widely practiced in developing countries. This policies need to be brought in Indian
Dairy scenario.

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Company profile

Dodla Dairy Limited is a public limited company having its registered and
corporate office at Hyderabad City of Telangana State in India. The company was
incorporated in the year 1995 and production commenced in 1997. Currently, Our
procurement is centered in 4 states and our products are available for purchase in 9 states.
We have 80 milk chilling centers. Some of our plants are ISO 22000:2005 Certified while
two are ISO 50001:2011 (EnMS) Certified. Dodla Dairy is among the most admired dairy
companies in India. The work environment in the organization keeps the employees loving
their roles. Recognition for good performance and timely rewards are assured.

Employees are motivated to display the organizational values while dealing with
the stakeholders. This is the reason for the ethical success of the organization.

The culture of the organization is being built since the last 18 years by the efforts
of all stakeholders and employees. Currently, we have 2100 employees on-board.

Dodla Dairy has a combination of senior and young teams of professionals. The
clarity of roles and responsibilities for the employees keep them involved in the core job
right from their first day of joining. Employees will get a fair opportunity to learn the
domain knowledge and skill in a congenial atmosphere. One of the primary
responsibilities of a senior is to train the new employee. The company believes in the
creation of internal capability to manage the future.

Our distribution and marketing operations consist of distribution of our products

through 14 sales offices, 3,329 distribution agents, 379 milk distributors and 466 milk
product distributors across nine states in India. Additionally, as of May 31, 2018, our
products are also available through 217 “Dodla Retail Parlors” which commenced
operations in 2016 and are spread across the states of Andhra Pradesh, Telangana, Tamil
Nadu and Karnataka. Our product portfolio consists of Milk, Butter, Ghee, Paneer, Curd,
Flavoured Milk, Doodh Peda, Ice Cream and Skimmed Milk Powder. These products are
conveniently packed to suit various needs of its consumers.

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Dodla Dairy is an integrated dairy company based in south India deriving all of its
revenue from the sale of milk and dairy based VAPs in the branded consumer market.
Amongst private dairy players with a significant presence in the southern region,
Dodla Dairy is the third highest in terms of milk procurement with an average
procurement of 1.00 million litres of raw milk per day as of May 31, 2018 (“MLPD”) and
second highest in terms of market presence amongst private dairies.
Company’s operations in India are primarily across the four South Indian states of
Andhra Pradesh, Telangana, Karnataka and Tamil Nadu. Company’s International
operations are based in Uganda and Kenya.
Company’s Indian and international operations are undertaken under their brands
“Dodla Dairy” and “Dairy Top” respectively.
Company process and retails milk and produce dairy based value added products
(“VAPs”) such as curd, ultra-high temperature processing (“UHT”) milk, ghee, butter,
flavoured milk and ice cream amongst others.
Company’s revenues from sale of milk and dairy based VAPs constituted 68.41%
and 31.59% of their consolidated revenues in Fiscal 2018 respectively.
Company’s procurement operations are spread across the states of Andhra Pradesh,
Telangana, Tamil Nadu and Karnataka and consist of an average procurement of 1.00
million MLPD as of May 31, 2018 from approximately 220,789 farmers through 3,212
procurement agents including third party suppliers across 7,598 villages and through our
own Dodla Dairy Collection Centres (“DDCCs”) as of May 31, 2018.
Company’s total average raw milk procurement increased from 0.62 MLPD in
Fiscal 2014 to 1.02 MLPD in Fiscal 2018.
 

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Processing of Milk.
Company’s processing operations consist of processing of the raw milk collected
into packaged milk and manufacturing of other dairy based VAPs by 11 processing plants
with an aggregate installed capacity of 1.29 MLPD.
The aggregate installed capacity has increased from 0.57 MLPD in Fiscal 2014 to 1.29
MLPD in Fiscal 2018.
Further, they intend to commence operations at their 12th plant near Rajahmundry,
Andhra Pradesh in 2019.
Company’s distribution and marketing operations consist of distribution of their milk and
dairy based VAPs through 14 sales offices, 3,329 distribution agents, 379 milk distributors
and 466 milk product distributors across nine states in India.
Additionally, the milk and dairy based VAPs are also available through 217 “Dodla Retail
Parlors” which commenced operations in 2016 and are spread across the states of Andhra
Pradesh, Telangana, Tamil Nadu and Karnataka
`Company’s African Operations:
Dodla Dairy’s international operations are based in Uganda and Kenya.
Packaged milk and dairy based VAPs for retail are produced from our processing plant in
Uganda and are distributed in Uganda and Kenya.
Company’s distribution operations in Uganda are conducted through their African
Subsidiary Lakeside Dairy Ltd. and include distribution of milk and dairy based VAPs
through 21 distributors and four distribution agents.
The distribution operation in Kenya are conducted through their African subsidiary
Dodla Dairy Kenya Limited and include distribution of milk and dairy based VAPs
through 107 distribution agents and 34 distributors.

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Key Financial Comparison of Dairy Companies in South India.

Paticulars(FY17) Hatsun Agro Heritage Food Tirumala Milk Dodla Dairy

Product Ltd Ltd Products Pvt Ltd
Ltd
Revenue(₹mn) 41,997 26,429 19,462 14.415
Revenue CAGR 19.0% 15.3% 7.2% 19.6%
FY14 FY17(%)
Contribution 35% 23% NA 33%
from VADPs(%)
Gross 27.4% 21.9% 27.0% 21.3%
margin(%)
PAT(₹mn) 1.,340 668 1,092 439
PAT margin (%) 3.2% 2.5% 5.6% 3.0%

 Management Team:
1. Mr. Madhusudhana Reddy Ambavaram (Designation: Whole-time Director)
2.  Mr. Dodla Sesha Reddy (Designation: Chairman and Non- Executive Director)
3. Mr. Dodla Sunil Reddy (Designation: Managing Director)
Positives for the Company:
Consumer focused Dairy company with a diverse range of products under the
“Dodla Dairy” brand.
Dodla Dairy is one of the leading brands in the dairy products industry in south
India with strong consumer recognition, particularly in the States of Andhra Pradesh,
Karnataka, Tamil Nadu and Telangana.
Company is the third highest in terms of milk procurement with an average
procurement of 1.00 million litres of raw milk per day as of May 31, 2018 (“MLPD”) and
second highest in terms of market presence amongst private dairies.

Integrated Business model with well-defined Procurement, Processing and

Distribution capabilities.

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Company’s procurement operations are spread across the states of Andhra Pradesh,
Telangana, Tamil Nadu and Karnataka and consist of procurement of on an average
approximately 1.00 MLPD of raw milk from approximately 220,789 farmers across 7,598
villages through 3,717 DDCCs, 3,212 procurement agents and 78 chilling centres
Company’s processing operations are spread across 11 processing plants (nine of
which are owned and two are leased) located in the states of Andhra Pradesh, Telangana,
Karnataka and Tamil Nadu in India with an aggregate installed capacity of 1.29 million
liters per day.
Company distributes its milk and dairy based VAPs through 14 sales offices, 3,329
distribution agents, 379 milk distributors and 466 milk product distributors.

Corporate Social Responsibility

We have adopted a Corporate Social Responsibility (“CSR”) policy in compliance
with the requirements of the Companies Act, 2013 and the rules framed thereunder. Our
CSR activities are primarily focused on initiatives related to education and these activities
are centred around the geographical areas near our processing plants.
Corporate Social Responsibility Committee

The members of the Corporate Social Responsibility Committee are:

 Dodla Sesha Reddy (Chairman)

 Akshay Tanna
 Ponnavolu Divya

The terms of reference of the Corporate Social Responsibility Committee include the
following:

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
 Formulating and recommending to the Board the corporate social responsibility
policy of the Company, including any amendments thereto in accordance with
Schedule VII of the Companies Act, 2013 and the rules made thereunder;
 Identifying corporate social responsibility policy partners and corporate social
responsibility policy programmes;
 Recommending the amount of corporate social responsibility policy expenditure
for the corporate social responsibility activities and the distribution of the same to
various corporate social responsibility programmes undertaken by the Company;
 Identifying and appointing the corporate social responsibility team of the Company
including corporate social responsibility manager, wherever required;
 Delegating responsibilities to the corporate social responsibility team and
supervise proper execution of all delegated responsibilities;
 Reviewing and monitoring the implementation of corporate social responsibility
policy of the Company, from time to time and programmes thereunder, and issuing
necessary directions as required for proper implementation and timely completion
of corporate social responsibility programmes; and
 Performing such other duties and functions as the Board may require the corporate
social responsibility committee to undertake to promote the corporate social
responsibility activities of the Company.

Global Presence

 Lakeside Dairy Limited was incorporated on 15 July 2014 to acquire the business
of Hillside Dairy & Agriculture Ltd. and to carry on with the business of Dairy and
Agriculture. It is a wholly owned subsidiary of Dodla Holdings Pte Ltd, Singapore.
The processing unit is located at Mbarara.

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Overview of Dodla dairy:

The overall dairy industry (which includes both organised and unorganised
segments) in India broadly consists of processed milk (liquid/fluid milk) and other dairy
products such as curd, ghee, skim milk powder (SMP), cheese, and ice cream. Of these,
the fluid milk segment is the largest (~65%) and is expected to grow consistently. The
milk products segment, currently accounting for ~35% of the industry, has been growing
at a much faster pace than the overall dairy industry.

Growth of Dodla Dairy

MUMBAI: TPG Growth, a private equity firm with stakes in Uber and Airbnb, has
invested $50 million in Dodla Dairy through the Rise Fund, its global social impact fund.
This is the $2 billion Rise Fund’s first investment in India after it was set up in December.
“The deal involves largely a secondary component. We will own significant minority
stake in the company post the deal,” said Vish Narain, a partner at TPG Growth.
US-based investment firm Proterra Investment Partners was looking at selling its 23 per
cent stake in Dodla Dairy and had mandated investment bank Edelweiss to look for a
buyer, ET was the first to report on November 29. Proterra, formerly Black River Asset
Management, purchased the stake for Rs 110 crore in 2012

Hyderabad-based Dodla Dairy, founded in 1998, procures, processes and sells milk and
milk products across 66 regions in south India and Maharashtra, Madhya Pradesh,
Rajasthan, Gujarat and West Bengal.The company was founded by Sunil Reddy of the
Dodla family of Nellore. According to the company website, it sells about 900,000 litres
of milk and six tonnes of milk products every day through more than 50,000 outlets.
Almost all of Dodla’s milk is procured locally from smallholder farmers .. The company
sources milk from 250,000 farmer across 7,000 villages every day. 

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Product Range: 

Category Product Range

 Toned Milk
Milk  Full cream Milk
 Standardized Milk

Milk Products  Milk

 Ghee
 Curd
 Butter
 Paneer
 Sterilized flavored Milk
 Butter Milk
 Milk Based sweets
 Ice creams

Ice Creams Manufacturers 80 variants of ICE Creams which include

Vanilla, strawberry, Butter scotch, Chocolate, Choco bar,
Casattas, Matka Kulfi etc., to mention a few.

The salient features of these products are as follows:

 Superior nutritional value

 No adulteration and mouth watering taste
 Long self life and pure and non –toxic

Product list:

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD

MILK

GHEE

CURD

BUTTER

PANEER

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD

STERILISED FLAVORED MILK

BUTTER MILK

MILK BASED SWEETS

ICE CREAM

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Research Methodology

Research methodology is the specific procedures or techniques used to identify,

select, process, and analyze information about a topic. In a research paper, the
methodology section allows the reader to critically evaluate a study's overall validity and
reliability.

The relevant information necessary for the study is collected from two sources
namely

1.primary data:

Information collected from organisation guide and finance manager.

2.secondary data:

Information collected from company balance sheet, profit and loss account, and
academic books

Journals, records and website (www.dodla dairy.com)

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
NEED OF THE STUDY

The main need of the study is to study the sources and applications of funds in the
company and methods to evaluate the financial performance of the company.

 The financial pattern of the firm can be know with the help of the fund flow
statement analysis.
 The funds flow reveals clearly the causes for the financial difficulties of the
company.
 It is important to know shout the firm and the funds for the growth of the
firm and the working capital position of the company.
 We can estimate the cash balance of the company. With the help of the
funds flow statement.
 To find out the out flow and inflow of the funds.

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
STATEMENT OF THE PROBLEM

Funds flow analysis helps judging the efficiency of financial functions and
administration of a business by providing a summary of the sources from which funds
have be procured and uses to which such funds have been put to.

A projected funds flow statement will help the analyst in finding out has to how
the management is going to allocate the scare financial resources for meeting productive
requirements of the business.

It is the responsibility of the organisation to maintain a standard level of funds

flow either excess or deficit.

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
OBJECTIVES OF THE STUDY

 To study the different application funds during the study period.

 To study the different sources of funds during the study period.
 To analyze the change in current assets and current liabilities from the end of the
period of time to the end of the another period of time.
 To analyze the trends in networking capital during the study period.

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
LIMITATION OF THE STUDY

 The study is based on the information provided by the organization in

the form of various annual reports only.
 The study is based on the past data, which can’t predict the future
performance.
 The study may not be detailed in all aspects.
 The study period is limited.

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD

DATA ANALYSIS AND INTERPRETATION

STATEMENT OF THE CHANGES IN WORKING CAPITAL OF

DODLA MILK PRODUCTS LTD IN THE YEAR 2014-15
Statement of change in working capital 2014-2015
Change In Working
Particulars 2014 2015 Capital
Increase Decrease
A) current assets:-        
a) Investments 163841667 187662793 21821126  ---------
b) Advances and other assets 25610357 27814860  2204503 ---------
c) cash & bank balance 13697494 13323534 --------- 373960
e) loans and advances 3556867 3337534 ---------  219333
Total current assets 206706385 232138721    
B) current liabilities:-        
a)Current liabilities 85740526 104998571  --------- 19258045
b) provision 37657459 4125295  --------- 3596836
Total current liabilities 1233979785 146252866    
Net working capital (A-B) 83308400 85885855    
Increase in working capital 2577455 2577455
TOTAL 85885855 85885855 26025629 26025629

During the year 2015, the net working capital is increased by Rs.25,77,455.

Calculation of funds from operations

(Rs in crores)

Particulars Amount

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Profit during the year
Reserves and surplus (48026309-43974715)
Funds from operations 4051594
Total 4051594

Funds Flow Statement for the year 2014-15

Sources Amount Applications Amount

Funds from operations 4051594 Purchase of Fixed 75841
Assets
Fair value change
Account 1398298
Increase in Net Working
Capital 2577455

4051594
4051594

The above table shows during the year 2015, the major source of fund is funds
from operation. The Major Application of funds are Purchase of Fixed Asset, Fair Value
Change Account and increase in net working capital.

Statement of change in working capital 2015-2016

Particulars 2015 2016 Change In Working

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Capital
Increase Decrease
A) current assets:-        
a) Investments 187662793 2029287988 21625195  ---------
b) Advances and other assets 27814860 27434671  ---------- 380189
c) cash & bank balance 13323534 15608144 2284610 ----------
e) loans and advances 3337534 3268229 ---------  69305
Total current assets (A) 232138721 255599032    
B) current liabilities:-        
a)Current liabilities 104998571 110573484  --------- 5574913
b) provision 41254295 49642568  --------- 8388273
Total current liabilities (B) 146252866 160216052    
Net working capital (A-B) 85885855 95382980    
Increase in working capital 9497125 9497125
TOTAL 95382980 95382980 23909805 23909805

During the year 2016, the net working capital is increased by Rs.94,97,125.

Calculation of funds from operations

(Rs in crores)

Particulars Amount

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Profit during the year
Reserves and surplus (52105280-48026309)
Funds from operations 40,78,971
Total 40,78,971

Funds Flow Statement for the year 2016

Sources of Funds Amount Applications of Funds Amount

Funds from operations 40,78,97 Purchase of Fixed Assets 34,843
Fair value change 1 Increase in Net working 94,97,125
Account 54,52,99 Capital
8
9531969

9531969

The above table shows during the year 2016, the major source of funds are funds
from operations and fair value change account. The Major Application of funds are
Purchase of Fixed Assets and Increase in Net working capital.

Statement of change in working capital 2016-2017

Change In Working Capital
Particulars 2016 2017
Increase Decrease
A) current assets:-        
a) Investments 209287988 241543745  
b) Advances and other assets 27434671 25027885  
c) cash & bank balance 15608144 161757885 567738 ---------
e) loans and advances 3268229 3115101 32255757  ---------
Total current assets 255599032 285862613  ---------  153128

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
B) current liabilities:-        
a)Current liabilities 110573484 11643301  --------- 5859547
b) provision 49642568 56070704  --------- 6428136
Total current liabilities 160216052 172503735    
working capital (A-B) 95382980 113358878    
Increase in working capital 17975898 17975898
TOTAL 113358878 113358878 32823495 32823495

During the year2017,the net working capital is increased by Rs.17975898.

Calculation of funds from operations

(Rs in crores)

Particulars Amount
Profit during the year
Reserves and surplus (54390343-52105280)
Funds from operations 2285063
Total 2285063

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Funds Flow Statement for the year 2016-17

Sources Amount Applications Amount

Funds from operations 2285063 Purchase of Fixed 259302
Fair value change 15950137 Assets
Account Increase in Net working 17975898
Capital
18235200
18235200

The above table shows during the year 2017, the major source of funds are funds
from operation and Fair value change account. The Major Application of funds are
Purchase of Fixed Asset and Increase in net working capital.

Statement of change in working capital 2017-2018

Change In Working Capital
Particulars 2017 2018
Increase Decrease
A) current assets:-        
a) Investments 241543745 232382394 ---------  4237973
b) Advances and other assets 25027885 31422036  6394151 ---------
c) cash & bank balance 16175882 11937909 -------- 9161351
e) loans and advances 3115101 2894353 ---------  220748
Total current assets 285862613 278636692    
B) current liabilities:-        
a)Current liabilities 116433031 120537118  --------- 4104087
b) provision 56070704 60872679   ------- 4801975
Total current liabilities 172503735 181409797    
Net working capital (A-B) 113358878 97226895    
Decrease in working capital 16131981 16131983
TOTAL 113358878 113358878 22526134 22526134

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD

During the year 2018, the net working capital is decreased by 16131981.

Calculation of funds from operations

(Rs in crores)

Particulars Amount
Profit during the year
Reserves and surplus (55811975-543900343)
Funds from operations 1421632
Total 1421632

Funds Flow Statement for the year 2017-2018

Sources Amount Applications Amount

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Funds from operations 1421632 Purchase of Fixed 39288
Decrease in net working 16131983 Assets 17514330
capital Fair value change
Account
17553618
17553618

The above table shows during the year 2018, the major source of funds are funds
from operation and Decrease in Net Working Capital. The Major Application of funds are
Purchase of Fixed Asset and Fair Value Change Account.

Trends in Funds from operation (Rs in Crores)

Year Funds from operations

2014 to 15 2995383
2015 to 16 4051594
2016 to 17 4078971
2017 to 18 1421632

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD

Funds from operations

4500000
4000000
3500000
3000000
2500000 Funds from
2000000 operations
1500000
1000000
500000
0

2014 to 2015 to 2016 to 2017 to

15 16 17 18

INTERPRETATION:

During the study period 2014-2018, the funds from operations are in
increasing Trend from 2014-2016 and thereafter it is in Decreasing Trend.

Trends in Net Working Capital (Rs in Crores)

Year Net working capital

2014 to 15 2577455
2015 to 16 9497125
2016 to 17 17975898
2017 to 18 -16131981

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD

Net working capital

20000000
18000000
16000000
14000000
12000000
10000000 Net working
8000000 capital
6000000
4000000
2000000
0

2014 to 2015 to 2016 to 2017 to

15 16 17 18

INTERPRETATION:

During the study period, the net working capital is in increasing trend from 2014 to 2017
and the slightly decreased in the year 2018.

FINDINGS

 During the study period 2014-18, the major cash inflows are funds
from operations and fair value change account.
 The major cash outflows are purchase of fixed assets and working
capital.
 During the study period 2014-18, the funds operations are in increasing
trend from 2014 to 16 and thereafter it is in decreasing trend.

SREENIVASA INSTITUTE OF TECHNOLOGY AND MANAGEMENT STUDIES Page 70

FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
 During the study period, the net working is in increasing trend from
2014 to 2017 and the slightly decreased in the year 2018.

SUGGESTIONS

 The firm should enhance its funds from operations by utilizing its fixed
operations by utilizing its fixed assets.
 The firm should focus on working capital management in order to
avoid excess working capital.

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD

Conclusion

The overall performance of Dodla Dairy Milk Products Private Limited is

good and satisfactory.Already it has gained goodwill and popularity among
the people. It enhances its position in the market at the same time it should
try to maintain same quality of products in future also.

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD

Bibliography

Text Books:

Sl.No Title of the book Author Publishers and year

1 Financial Management Prasanna Chandra TATA-McGrow Hill,
New Delhi.
2 Advanced S.P.JAIN,K.L.NARAN Kalyan publisher,
Accountancy G Ludhiana

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
3 Financial Management I.M.PANDAY Vikas Publisher house
Pvt Ltd, New Delhi.

Journals:

 The ICFAI Journal of Applied Finance.

 Finance India (Indian Institute of Finance)

Website:

 www.dodladairymilk productspvtltd.com

Balance Sheet at 31st March 2014

Particulars Current Previous

year year
Sources of funds
Share capital 1500000 1500000
Reserve And Surplus 43974715 40979332
Fair Value Change Account 38868135 47162518
Borrowings 0 0
Total 84342850 89641850

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Applications of Funds
Investments 163841667 152667223
Loans 3556867 4036716
Fixed Assets 1034451 864213
Current Assets
Cash and Bank Balance 13697494 9877966
Advances and other Assets 25610357 19332354
Sub-Total(A) 39307851 29210320
Current Liabilities 85740526 67312969
Provisions 37657459 29823653
Sub-Total(B) 123397985 97136622
Net Current Asset (c) =(A-B) -84090134 -67926302
Miscellaneous Expenditure(to the extent not 0 0
written off or adjusted)
Expenditure (to the extent mot written off or 0 0
adjusted)
Debit Balance in profit & loss
Total 84342850 89641850

Balance Sheet at 31st March 2015

Particulars Current Previous

year year
Sources of funds
Share capital 1500000 1500000
Reserve And Surplus 48026300 43947415
Fair Value Change Account 37469837 38868135
Borrowings 0 0
Total 86996146 84342850

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Applications of Funds
Investments 187662793 163841667
Loans 3337534 3556867
Fixed Assets 1110292 1034451
Current Assets
Cash and Bank Balance 1332354 13697494
Advances and other Assets 27814860 25610357
Sub-Total(A) 41138394 39307851
Current Liabilities 104998571 85740526
Provisions 41254295 37657459
Sub-Total(B)
Net Current Asset (c) =(A-B) -105114472 -84090134
Miscellaneous Expenditure(to the extent not 0 0
written off or adjusted)
Expenditure (to the extent mot written off or 0 0
adjusted)
Debit Balance in profit & loss
Total 96528115 84342850

Balance Sheet at 31st March 2016

Particulars Current Previous

year year
Sources of funds
Share capital 1500000 1500000
Reserve And Surplus 52105280 48026309
Fair Value Change Account 42922835 37469837
Borrowings 0 0
Total 96528115 86996146

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Applications of Funds
Investments 209287988 187662793
Loans 3268229 3337564
Fixed Assets 1145135 1110292
Current Assets
Cash and Bank Balance 15608144 13323534
Advances and other Assets 27434671 27814860
Sub-Total(A) 43042815 41138394
Current Liabilities 110573484 104998571
Provisions 49642568 41254295
Sub-Total(B) 160216052 146252866
Net Current Asset (c) =(A-B) -117173237 -105114472
Miscellaneous Expenditure(to the extent not 0 0
written off or adjusted)
Expenditure (to the extent mot written off or 0 0
adjusted)
Debit Balance in profit & loss
Total 96528115 86996146

Balance Sheet at 31st March 2017

Particulars Current Previous

year year
Sources of funds
Share capital 1500000 1500000
Reserve And Surplus 52105280 48026309
Fair Value Change Account 42922835 37469837
Borrowings 0 0
Total 114763315 96528115

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Applications of Funds
Investments 241543745 209287988
Loans 3115101 3268229
Fixed Assets 1404437 1145135
Current Assets
Cash and Bank Balance 16175882 15608144
Advances and other Assets 25027885 27434671
Sub-Total(A) 41203767 43042815
Current Liabilities 116433031 110573484
Provisions 56070704 49642568
Sub-Total(B) 172503735 160216052
Net Current Asset (c) =(A-B) -131299968 -117173237
Miscellaneous Expenditure(to the extent not 0 0
written off or adjusted)
Expenditure (to the extent mot written off or 0 0
adjusted)
Debit Balance in profit & loss
Total 114763315 96528115

Balance Sheet at 31st March 2018

Particulars Current Previous

year year
Sources of funds
Share capital 1500000 1500000
Reserve And Surplus 55811975 54390343
Fair Value Change Account 41358645 58872972
Borrowings 0 0
Total 98670620 114763315

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FUNDS FLOW STATEMENT DODLA MILK PRODUCTS PVT LTD
Applications of Funds
Investments 232382394 241543745
Loans 2894353 3115101
Fixed Assets 1443725 1404437
Current Assets
Cash and Bank Balance 11937909 16175882
Advances and other Assets 31422036 2507885
Sub-Total(A) 43359945 41203767
Current Liabilities 120537118 116433031
Provisions 60872679 56070704
Sub-Total(B) 160216052 146252866
Net Current Asset (c) =(A-B) -138049852 -131299968
Miscellaneous Expenditure(to the extent not 0 0
written off or adjusted)
Expenditure (to the extent mot written off or 0 0
adjusted)
Debit Balance in profit & loss
Total 98670620 114763315

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