cadburyfinance puja
TRANSCRIPT
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DECLARATION
I NARESH KUSHWAHA, student of MBA 3 Semester of Jiwaji university,
Gwalior, hereby declare that the project is my original piece of work and not the
copy of any such work undertaken by someone else, all the information , facts and
figures presented in the report are first hand in nature. They are actually based on
my intense efforts conducted in CADBURY INDIA LTD . I have completed this
project under the guidance ofDR. SHWETA SHARMA ( Faculty Jiwaji
university)
Date: NARESH KUSHWAHA
MBA III Sem
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CERTIFICATE
This is to certify thatMr. NARESH KUSHWAHA Student of MBA III Semesterprogramme has completed her summer training of 45 Days and prepared this report
ofMATERIAL COST CONTROL under my guidance .
Date: DR. SHWETA SHARMA
(Faculty Guide)
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ACKNOWLEDGEMENT
The present work is dedicated to the persons who not only taught me, but continue
inspire me in knowing the clandestine facts of workmanship. I bow in honor beforethese great teachers. The accomplishment of the present study became possible by
the invaluable assistance and guidance of my professional guides to whom I may
gratefully indebted. Firstly I would like to express my sincere gratitude to my
faculty guide Prof. SHWETA SHARMA without whose invaluable guidance,
moral support and encouragement my work would have ever assumed the present
shape, research. I were indebted to my parents and friends for their moral support
and possible efforts they made for me.
Date: NARESH KUSHWAHA
MBA III SEM
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INDEX
Company profile
Theoretical aspect of topic
Practical aspect of topic in company
Research methodology
Analysis and graphical presentations
finding
conclusion
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COMPANY PROFILE
CADBURY INDIA
Cadbury began its operations in 1948 by importing chocolates and then re-
packing them before distribution in the Indian market. After 59 years of
existence, it today has five compay-owned manufacturing facilities at Thane,
Induri (Pune) and Malanpur (Gwalior) , Bangalore and Baddi (Himachal
Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkota and Chennai).
The corporate office is in Mumbai. Our core purpose Working together to
create brands people love captures the spirit of what we are ttrying to
achieve as a business. We collaborate and work as teams to convert products
into brands. Simply put, we spread happiness! Currently Cadbury India
operates in three sectors viz. Chocolate Confectionery, milk food Drinks andin the Candy category.
In the Chocolate Confectionery business, Cadbury has maintained its
undisputed leadership over the years. Some of the key brands are Cadbury
Dairy Milk, 5 Star, Perk, Eclairs and Celebrations. Cadbury enjoys a value
market share of over 70% the highest Cadbury brand share in the world! Our
flagship brand Cadbury Dairy Milk is considered the gold standard forchocolates in India. The pure taste of CDM defines the chocolate taste for the
Indian consumer.
In the Milk food drinks segment our main product is Bournvita the leading
Malted Food Drink (MFD) in the country. Similarly in the medicated candy
category Halls is the undisputed leader. We recently entered the gums
category with the launch of our worldwide dominant bubble gum brand
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Bubbaloo. Bubbaloo is sold in 25 countries worldwide. The Cadbury India
Brand Strategy has received consistent support through simple but
imaginative extensions to product categories and distribution. A good
example of this is the development of Bytes. Crispy wafers filled with cocacream in the form of a bagged snack, Bytes is positioned as The new
concept of sweet snacking. It delivers the taste of chocolate in the form of a
light snack, and thus heralds the entry of Cadbury India into the growing
bagged Snack Market, which has been dominated until now by Salted
Bagged Snack Brands. Bytes was first launched in South India in 2003.
MALANPUR FACTORY
In 1989 the company stated manufacturing operations from its third and
newest factory at Malanpur near Gwalior in M.P.
Using the most modern state of the art technology, the unit todaymanufactures range of liqud milk chocolate and a variety of enrobed
chocolate products.
Factory in 8 phases
1988-89 - Eclairs & Gems
1994-95 - 5 Star
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1997 - Perk
2001 - Chocolate expansion
2005 - Fruity Gems
2006 - Ulta Perk
2008 - Short
2009 - clair Sticks
LOCATION : Plot No. 25, Malanpur Industrial area, Malanpurdistt. Bhind.
Telephone No. : 07539-83803, 83804
Parent Company : Cadbury Schweppes International UK
Total Area 24 Acres Constructed 8.5 Acre
HISTORY OF ORGANISATION
Fifty years ago, the real taste of chocolate as we know it today, landed on
Indian shores. An event that carried forward the entrepreneurship and vision
born as far back as 1824, when John Cadbury set up shop in Birmingham(UK) to sell among other things his own cocoa concoction. From these
modest beginnings emerged Cadbury Schweppes that is today the leading
manufacturer of confectionery and beverages in the United Kingdom. A
company that has its presence in over 200 countries worldwide and has made
the name Cadbury synonymous with cocoa products in countries across the
planet.
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This is the brand that came to India in 1947 to a nation that was in its
infancy, a market that was ready for the world and a people that were open to
new ideas, new products.
Within a year of being set up as a trading concern, Cadbury fry India was
incorporated as a Private Limited company, set up for processing imported
chocolates and Bourn vita. The same year saw the launch of Cadburys Milk
chocolate for millions of Indians.
Through 50 years of investment in capital and marketing, the scale and scope
of our operations has expaned to cover a range of brands in the chocolate,
sugar confectionery and malted food drinks segments. We have a majority
share in the Indian chocolate market and a significant presence in sugar
confectionery and food drinks.
Today Cadbury India Ltd, a subsidiary of Cadbury Schweppes employs over
200 people across the country. And operates in one of the fastest growing
chocolate markets for Cadbury Schweppes group across the globe.
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ORGANISATION STRUCTURE
Chairman
C Y PalChairman -Non Executive
Managing Director
Anand KripaluManaging Director
Non-Executive Directors
Harsh MariwalaRadhakrishnan B. MenonSuresh Talwar
ExecutiveDirectors
Atul Bhatia
Executive Director -
Science & Technology
Rajesh Garg
Executive Director -
Finance & Commercial
Jaiboy Phillips
Executive Director - Supply
Chain
Sanjay Purohit
Executie Director - Marketing
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Sunil Sethi
Executive Director -
Sales & Customer Development
V Chandramouli
Executive Director -
HR & Strategy
Senior Management
Ashish Pisharodi Rajesh RamanathanVice President - Modern Trade Vice President - People & TalentShivanand Sanadi Dr. Shantanu SamantVice President - Legal Affairs
Vice President -
Science & TechnologyVivek Sarbhai Dharmesh JoshiVice President - Logistics &
Customer Operations
Vice President -
Manufacturing Development
Sherezad Irani Sanjay KurupVP - Procurement VP - Manufacturing (Baddi)
Monaz NobleCompany Secretary
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THEORTICAL ASPECT
Finance holds the key to all human activity. Finance department of
malanpur factory is also working in the same direction and with the
same objective but it has some limitation because most of the
importance finance related matter are directly dealt and finalized by the
central finance department in the Mumbai head office.
Factory finance department always endeavors of maximizing the profit
of high company through two possible ways:
1. Reduction in cost
2. Increase in Sales
FINANCIAL FUNCTIONS
1. Preparing variance report
a) Material user variance report
b) Packaging material user variance report
2. Production report
3. Excise related matter
4. Export related matter
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5. Payment to small engineering items and other goods.
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MATERIAL COST CONTRL
MATERIAL COST CONTROL
Material cost control is the management of cost of material it consists of the
following .
1. Capital costs
2. Storage costs3. Risk of price decline
4. Risk of obsolescence
MATERIAL
Material is very important factor for production. it includes physical
commodities used to manufacture the final end product. It is the starting
point from which the first operation starts. Material refers to all of
commodities in the process of manufactures. Proper control of material is
necessary from the time order of purchase material is placed with supplies.
Until the have been consumed.
COST
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It is the amount of resources given up in exchange for some goods or
services. The cost is that which is given or a sacrifice to obtain something
cost is also different from value as cost is measured in terms of money
whereas values is measured in terms of usefulness or utility of an article.
We can define as : the amount of expenditure ( actual or notional ) incurred
on or attributable to a given thing or to ascertain the cost of a given thing.
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Methods of controlling the size of material:
There arc two method of controlling as follows:
1) Standardization.
2) Simplification.
Standardization and simplification are the tools of material control to
optimize on the number of items and reduce the size of material, carried in
the stores.
Standard institutions:
Standardization and simplification are the continuous
process for controlling the size of materials ,so there are many institution
regarding the help of this, these arc as follows
. Indian Standard Institute.
. International Organization for Standardization.
. Other Specialilised Institutions.
Types of stores department:
I) centralized stores
2) Decentralized stores
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3) Central stores with sub- stores.
1) Centralized stores: In case of such a store, material are received by and
issued from one stores department materials kept at one central store.
2) Decentralized stores:
Under this type of stores, independent stores are situated in various
departments. Such types or stores setup to meet the requirements of materials
of each production department are not very popular because of the heavy
expenditure involved.
3) Central stores with sub-stores:
Such stores should be situated near production departments. For each item of
material, a quantity is determined and this should be kept in stock in sub-
store at the beginning ofany period .In the end of a period the storekeeper
ofeach sub-store will requisition from the central stores.
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PRACTICAL ASPECT
Fixation of KO.Q. and various level:
a)E.O.Q.:The decision about how much order has great significance in
inventory management .the quantity should be order neither small nor big
because cost of buying and carrying material are very high.Economic order
quantity is the size ofthe lot to be purchased which is economically ) viable
.this is the quantity of material which can be purchased at minimum costs
.economic order quantity is the point at which inventory carrying cost is
equal to order costs E.O.Q. is made. 01' two parts.
Ordering cost. Carrying cost.
EOQ = 2All
I
Where:A Annual.
B Cost ofplacing an order/. ordering cost or buying cost
PCI' unit
1 Inventory carrying cost ofone unit
C*S(cost per unit*storage cost)
a) Minimum Level or safety stock level:It represent the minimum qty. ofan
item ,which must be keep in store at all time .the main (II' determination of
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minimum level is that ,due to this, production should not be stoped.Calcu1all'
formula of min. stock level is as follows
Minimum level = Re-ordering level-(Normal consumption*Normal Re-order
period)
b) Maximum Level:
It represents the maximum quantity ofan item ofmaterial which can be held
in stock at any time .stock should not exceed this quantity .the quantity is
fixed so that there may bb no overstocking .the formula ofmaximum stock
level given by WHELDON is as follows
Maximum stock level= Reordering level + Re-ordering Quantity-
(Minimum
Consumption*Minimum Reordering period)
c) Average stock level: The average stock level is calculated by the
following formula: Average stock level = Minimum stock level + of re-
order quantity
d) Reordering level :-The order is sent before the materials reach minimum
stock level.Re-order level = Safety stock + (Average usage *Average re=-
order period )
OR
Maximum consumption * Maximum Re-order period
OR
Maximum usage * Maximum lead time
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SAMPLE & TOOLS
1. First in first out (FIFO) method:
Under this method material is first issued from the earliest consignment on
hand and priced at the cost at which that consignment was placed in the
stores .in other words, materials received first arc issued first. the units in the
opening stock of materials are treated as if they are issued (first, the unitsfrom the first purchase issued next and so on until the units left in the closing
stock of materials arc valued at the latest cost of purchases.['his method is
most suitable in times of falling price of materials to jobs or works orders
will he high, while the cost of replacement of materials will be low .but in
case of rising prices this method is not suitable because the issue price of
materials to production will be low ,while the cost of replacement of
materials will be high.
Advantages of FIFO Method: Main advantage of FIFO method is that it is
simple to understand and easy to operate. It is logical method because it takes
into consideration the normal procedure. Of utilizing first those materials
which arc received first .Materials are issued in order of purchases,
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. This method is also useful when transactions arc not too many and price of
materials are fairly steady.
Disadvantages of FIFO method:
. ['his method is increase the possibility of clerical errors, if consignment are
received frequently at fluctuating prices as every time an issue of materials is
made ,the store ledger clerk will have to go through his record to ascertain
the price to be charged.
. For pricing one requisition more than one price has often to be taken.
. When prices rise ,the issue price does reflect the market price as material
are issue from the earliest consignment .therefore the change of production is
low because the cost of replacing the material consumed will be higher than
the price of issue.
2)Last in first out method(LIFO) method:The issues under this method are
priced in the reverse order of purchase i.e., the price of the latest available
consignment is taken. This method is sometimes known as the replacement
cost method because materials are issued at the current cost to jobs or work
orders except when purchases were made long ago. This method is suitable
in times of rising prices because material will be issued from the latest
consignment at a price which is closely related to the current price levels.This method was first introduced in the U.S.A.during the Second World War
to get the advantages of rising prices
Advantages of LIFO Method:
. Like FIFO method, this is simple to operate and is useful when transactions
are not too many and the prices are fairly steady.
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. Like FIFO, this method recovers cost from production because actual cost
of material is charged to production. .
. In times of rising prices, LIFO method of pricing issues is suitable materials
are issued at the current market prices which arc high .this method thus
helps in showing a lower profit because of increased charged to
production during periods of rising prices and lower profit reduces burden
of income-tax..
Disadvantages of LIFO Method
. Like FIFO, comparison between one job and the other job will become
difficult because one job started a few minutes after another of the same
type many bear are different charged of materials consumed.
. Like FIFO, this method many lead to clerical errors as every time as issue is
made. Till...Stored ledger clerk will have to go through the record to as
certain the price to be charge. For pricing a single requisition, more than one
price has often to be adopted. . The stock in hand is valued at price which
does not reflect current market price.
3) AVERAGE COST METHOD: The principle on which the average cost
method is based is that all of the materials in store arc show mixed up that an
issue can not be made from any particular lot of purchases and, there fore, it
is proper if the materials arc issued at the average cost of materials in store.
Average may be of two types:
1) Simple arithmetic
average.
2) Weighted arithmthetics
average.
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1) Simple average price: A price which is calculated by dividing the total of
the prices of the material in the stock from which the material to be period
could be drawn by the number of the prices used in that total.
2) Weighted average price: A price which is calculated by dividing the cost
of materials in the stock from which the materials to be priced could be
drawn by the total quantity of materials in the stock.
Methodology
Every project work is based on certain methodology, which is a way to
systematically solve the problem or attain its objectives. It is a very important
guideline and lead to completion of any project work through observation, data
collection and data analysis.
The word research is derived from the Latin word meaning to know, it is a
systematic and a replicable process which identifies and defines problems, with
specified boundaries. It employs well designed method to collect the data and
analyses the result. A research methodology defines what the activity of research is,how to proceed, how to measure progress, and what constitutes success. A
methodology is a jumbled mess. Different methodologies define distinct schools
which wage religious wars against each other. Research methodology also
considered as a movement, a movement from the known to the unknown. It is
actually a journey of discovery.
According to Clifford Woody,
Research Methodology comprises of defining & redefining problems,
collecting, organizing & evaluating data, making deductions & researching
to conclusions.
Accordingly, the methodology used in the project is as follows: -Defining
the objectives of the study Framing of questionnaire keeping objectives in
mind (considering the objectives) Feedback from the employeesAnalysis offeedback. Conclusion, findings and suggestions.
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Sampling Technique Used:This research has used convenience
sampling technique.
Convenience sampling technique: Convenience sampling is used in
exploratory research where the researcher is interested in getting an
inexpensive approximation of the truth. As the name implies, the sample is
selected because they are convenient
Selection of Sample Size: For the survey of departments.
Sources of Data Collection: Research will be based on two sources:
1. Primary data
2. Secondary data
1) Primary Data:
Survey: Primary data was collected by departmental survey for CADBURY.
2) Secondary Data:
Secondary data will consist of different literatures like books which are published,
articles, internet, the company manuals and websites of company-
www.CADBURY.COM In order to reach relevant conclusion, research work
needed to be designed in a proper way.
This research methodology also includes:-
Familiarization with the concept of finance and its various merits, demerits.
Thorough study of the information collected.
Conclusions based on findings.
Statistical Tools Used
http://www.cadbury.com/http://www.cadbury.com/ -
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The main statistical tools used for the collection and analyses of data in this project
are:
Pie Charts
Bar Diagrams
Limitations of Study
Financial analysis is a powerful mechanism of determining financial strengths and
weaknesses of a firm but, the analysis is based on the information available in the
financial statements. We has also careful about the impact of price level chances,
windows-dressing of financial statements, changes in accounting policies ofAIRTEL, accounting concepts and conventions, and personal judgments etc.
Due to the following unavoidable and uncontrollable factors the factors, the
result might not be accurate. Some of the problems faced while conducting the
survey are as follows:-
Time and cost constraints were also there.
Chances of some biasness could not be eliminated.
A majority of respondents show lack of cooperation and are biased towards
their own opinions.
Some of the important Limitations of financial analysis are however, summed up as
below:
It is only a study of interim reports.
Financial analysis is based upon only monetary information and non-
monetary factors are ignored.
It does not consider changes in price level.
As the financial statements are prepared on the basis of a going concern, it
does not give exact position. Thus accounting concepts and conventions
cause a serious limitation to financials analysis.
Changes in accounting procedure by a firm may often make financialanalysis misleading.
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Analysis is only a means and not an end in itself. We has to make
interpretation and draw own conclusion
Different people may interpret the same analysis in different ways.
OBJECTIVE OF THE STUDY
The main objective of this study is to carry on brief study on P/rice earnings
Ratio through this I am able to get the difference of various equity share price of
the CADBURY.
Other objectives of this project are as follows:
To identify the various relating amount of the CADBURY with respect to
Annual Reports of the CADBURY
Comparative study of years Annual reports.
To study the various departments for the needs of assets and use-less assets
amount of CADBURY MALANPUR
To understand the information contained in financial statement with a view
to know the strength or weaknesses of the firm and to make forecast about
the future prospects of the firm and thereby enabling the financial analyst to
take different decision regarding the operation of the firm.
Financial ratios are used to compare the risk and return of different firms in order to
help equity investors and creditors make intelligent investment and credit decisions.
Such decisions range from an evaluation of change in performance over time for a
particular investment to a comparison among all firms within a single industry at aspecific point in time. The informational needs and appropriate analytical
techniques used for these investment and credit decisions depend on the decision
makers time horizon. Short-term bank and trade creditors are primarily interested
in the immediate liquidity of the firm. Long-term creditors (e.g., bondholders) are
interested in long-term solvency. Creditors seek to minimize risk and ensure that
resources are available for the payment of interest and principal obligations.Equity
investors are primarily interested in the long-term earning power of the firm. As the
equity investor bears the residual risk (which can be defined as the return from
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operations after all claims from suppliers and creditors have been satisfied), it
requires a return proportionate to the risk. The residual risk is highly volatile and
difficult to quantify, as is the equity investors time horizon. Thus, analysis by the
equity investor needs to be the most comprehensive, and it includes the analysis
carried out by other users.The P/E ratio measures the degree to which the market
capitalizes a firms earnings. The P/E ratio has been the subject of much scrutiny
in the academic as well as the professional world.
RESULTS & DISCUSSION
The P/E ratio is the current stock price of a company divided by its EPS
Variations exist using trailing EPS, forward EPS, or an average of the two
historically, the average P/E ratio in the market has been around 15-25.
Theoretically, a stock's P/E tells us how much investors are willing to pay
per dollar of earnings.
A better interpretation of the P/E ratio is to see it as a reflection of the
market's optimism concerning a firm's growth prospects.
The P/E ratio is a much better indicator of a stock's value than the market
price alone. In general, it's difficult to say whether a particular P/E is high or low
without taking into account growth rates and the industry.
Changes in accounting rules as well as differing EPS calculations can make
analysis difficult.
P/E ratios are generally lower during times of high inflation.
There are many explanations as to why a company has a low P/E.
Don't base any buy or sell decision on the multiple alone.
http://www.investopedia.com/terms/p/price-earningsratio.asphttp://www.investopedia.com/terms/t/trailingeps.asphttp://www.investopedia.com/terms/f/forwardpe.asphttp://www.investopedia.com/terms/i/inflation.asphttp://www.investopedia.com/terms/p/price-earningsratio.asphttp://www.investopedia.com/terms/t/trailingeps.asphttp://www.investopedia.com/terms/f/forwardpe.asphttp://www.investopedia.com/terms/i/inflation.asp -
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Analysis and graphical presentation of data
P/E RATIO ANALYSIS
Table for market price of equity share NSC/BSC
Year Market Price of
Equity Share
(NSC)
Market price of
Equity Share
(BSC)
Earning per share
2005-06 308.96 307.14 10.612006-07 512.41 515.13 21.262007-08 880.48 876.09 32.912008-09 531.78 542.21 20.392009-10 476.80 473.89 24.83
YearsNSC BSCHigh Low Average Price High Low Average Price
2009-2010
515.7
1 437.89 476.80
509.7
8 438.01 473.89
2008-2009 542.56 521.00 531.78
856.3
4 789.76 542.21
2007-2008
965.2
0 795.76 880.48
959.3
9 792.79 876.09
2006-2007566.28 458.53 512.41
564.91 465.36 515.13
2005-2006
333.7
8 284.15 308.96
328.5
4 285.74 307.14
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Earning Yield Ratio
Year Earning Yield
Ratio
(NSC)
Earning Yield
Ratio
(BSC)2005-06 29.11 28.942006-07 24.10 24.232007-08 26.75 26.62
2008-09 26.08 26.592009-10 19.20 19.08
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STRENGTH & WEAKNESS
Strengths
Cadbury is the largest global confectionery supplier, with 9.9%
of global market share.
Strong manufacturing competence, established brand name and
leader in innovation.
Advantage that it is totally focused on chocolate,
candy, chewing gum, unique understanding of consumer in
these segments.
Weaknesses
The company is dependent on the confectionery and beverage
market, whereas other competitors e.g. Nestle have a more
diverse product portfolio, where profits can be used to invest in
other areas of the business and R&D.
Other competitors have greater international experience -
Cadbury has traditionally been strong in Europe. New to the US,
possible lack of understanding of the new emerging markets
compared to competitors.
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Suggestions
1. Necessary knowledge and skills about new learning strategies at alllevels;
2. Accreditation of the current teacher training and staff development
programs offered by various providers;
3. A critical mass of local experts to spread the new knowledge and
skills throughout the teachers in the country;
4. Suitable alternative model for in-service training;
5. A plan for national implementation;
Indication of support and commitment by the government
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SPECIAL POINT
Use of Advertising'
No. 1 FMCG Company
Cadbury India has been ranked as the 7th Great Place to Work and the
No. 1 FMCG company in India in 2008, by the Great Place to Work
Institute.
Great Place to Work 2007'
Cadbury India' has been awarded the "Bronze Award for Excellence in
People Management" in the 'Great Place to Work 2007' survey
conducted by Grow Talent Company Limited and Business world. The
award recognizes Cadbury India as a national leader in the
area of Human Resource Management.
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Great Place to Work 2007'
Cadbury India' has been awarded the "Bronze Award for
Excellence in People Management" in the 'Great
Place to Work 2007' survey conducted by Grow
Talent Company Limited and Business world. The award
recognizes Cadbury India as a national leader inthe area of Human Resource Management.
Cadbury India received a bronze award at the Cannes Lions
International Advertising Festival for partnering with a mobile phone
operator in 2005 to provide exam results via SMS to school children.
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Reader's Digest Award recognizes Bournvita
Bournvita won the 'Reader's Digest Trusted Brands' Gold
Award for the vitamin health supplement category in
Indian in 2006. The merit was based on 7000 responses
from questionnaires and telephone interviews across Asia.
Suraksha Puraskar Award 2005
Cadbury India's Bangalore factory has received the "Suraksha
Puraskar" safety award from the National Safety Council - Karnataka
chapter.
ABBY Award wins for India.
The prestigious ABBY awards, held in March, recognise
creative excellence in the Indian Advertising Industry. The Ulta
Perk campaign won four Silver Awards in total and theCadbury Dairy Milk Campaign, Miss Palampur, also
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won a Silver Award. This year Cadbury also sponsored the new'Young ABBY' Award.
Cadbury wins the Effies 2006
At the recent Effie 2006 awards organized by The
Advertising Club of Mumbai, our 'Pappu Pass Ho
Gaya' advertising campaign bagged two more awards
- Gold in the Consumer Products category and Silver in the integrated
advertising campaign category.
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INTRODUCTION
INTRODUCTION of TOPIC
In India we believe that effective communication and availability of
information at the right team and time and right place is critical for an edge in
business. In order to achieve this we realize to importance of and have in
place, an effective IT infrastructure.
Cost accounting isnt just collecting data for history . it is an important tool in
predicting and assuring future profitability . We cant overstress theimportance of our costing tools that provide complete cost estimates at the
time of quotation/order entry based on your latest materials, labor and overhead
costs.
MATERIAL COST CONTROL
Material cost control is the management of cost of material it consists of the
following .
5. Capital costs
6. Storage costs7. Risk of price decline
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8. Risk of obsolescence
MATERIAL
Material is very important factor for production . it includes physicalcommodities used to manufacture the final end product. It is the starting point
from which the first operation start. Material refer to all of commodities in the
process of manufactures . Proper control of material is necessary from the time
order of purchase material are palced with supplies . until the have been
consumed.
COST
It is the amount of resources given up in exchange for some goods or services.The cost is that which is given or a sacrifice to obtain something cost is also
different from value as cost is measured in terms of money whereas values is
measured in terms of usefulness or utility of an article.
We can define as : the amount of expenditure ( actual or notional ) incurred on
or attributable to a given thing or to ascertain the cost of a given thing.
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RESULTS & DISCUSSION
During my research in CADBURY INDIA LTD., MALANUR I
found that MATERIAL COST CONTROL is an integral part of
industrial success.
For purchasing material we should concentrate on the cost of material
through material cost control company can take a top position in
corporate market.
Material cost has played a very important role in economic condition of
company.
After analyzing the data I have reached the conclusion that the
miscellaneous expenditure of the company has reduced which is goodsign and shows the capability of the company in handling wastage,
losses and bad debts.
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DISCUSSION
I have found here these below things from analysis of data.
For economic purchase order of 114 units of MS PIPE. We analysis of
three quotations for choosing lower cost of material. We select the B.D.Raj. & Cos quotation because the lower cost of material. This is the
56185.469 with applying 4% ST & fright.
In store material we found these below things from the store keeping
receipt. Here we show about the two type of material.
ITEM CODE Re-order
level
Max. stock
level
Min. stock
level
Avg. stock
levelCC5801008 1290 1700 540 990CC5801009 2700 3600 900 1500
As such we can get these levels for further items.
For issuing the material we found the knowledge through FIFO and
LIFO method. How material received in store and how should issue it
from the store etc.
During my research period. I have found material cost control
management of the company is very sound thats why their economic
position is also very sound.
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OBJECTIVE OF STUDY
OBJECTIVE OF STUDY
1. To highlight the policies and procedures of Material cost control
2. To make a detailed analysis of the strategies adopted by the companyfor planning and monitoring costs
3. To identify the vertical areas where greater attention is needed for better
management.
4. To find our better plan for company for controlling material.
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SUGGESTION
During my research period I have studied the MATERIAL COST CONTROL
in CADBURY IND. LTD at MALANPUR. On the basis of my study I am
putting some suggestion. Which may certainly improve the efficiency of
material cost control management.
FIFO and LIFO methods should be apply for keeping and issuing the
material in stores.
I suggest through research in this regard to arrive at some suitable mix
of both this method which gives due consideration to value, qualityimportance etc of stock items.
The maximum and minimum level of each item should be indicated to
avoid over-stock or under-stock situation.
Internal performance report an inventory on at least monthly basis
should be prepared to study the material price variance, material usage
and inventory level variance from hr estimate figure.
Material should be purchase at the lower cost but also quality should be
maintains.
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CONCLUSION
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BIBLIOGRAPHY
I concerned the following references in course of my research study
1. Kotari C.R. , Research methodology (Methods & Techniques), Wishwa
Prakashan, 24th Reprint March 1999/
2. CHANDRA PRASANNA, FINANCIAL MANAGEMENT, Tata Megraw-
Hill publishing com. Ltd. New Delhi, Fifth edition 2002.
3. Shukla SM, ACCOUNTING FOR MANAGERS, SAHITYA BHAWAN
PUBLICATION COM. Ltd Raipur.
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