An Internship Report on Organizational Study At voltas

An Internship ReportOn

ORGANIZATIONAL STUDYAT

.

.

DECLARATION

I _______, student of Master of Business Administration (MBA), M.P.Birla

Institute of Management, Bangalore here by declares that this report “study on

organization study VOLTAS LIMITED” is a record of independent work

carried out by me, towards partial fulfillment of requirement for Master of

Business Administration (MBA) course of Bangalore University at M.P.Birla

Institute of Management.

To the best of my knowledge this report has not formed the basis for the

award of any other degree.

Place:

Date:(0)

ACKNOWLEDGEMENT

It’s my privilege in writing this acknowledgement to thank all those who gave

their views and suggestions for helping in the completion of my internship at

VOLTAS LIMITED from 25.06.09 to 30.07.09. I would like to take up this

opportunity to convey my deep sense of gratitude to __________ my

internal guide and Principal ___________ for providing an

opportunity to do this project and internship.

I ardently thank ___________, area sales manager for having devoted

some of their precious time and for their guidance. I also thank them for the rich

experience that I have derived by working on this project under their guidance.

This project would not have been successful without the constant guidance and

support of my institutional guide, _________. who took keen interest

in my project to make it a beneficial exercise.

I also extend my thanks to all staffs of the company. Last but not the least, my

thanks to my beloved friends who have helped me a lot during the project for the

successful completion.

Place:

Date:

Nandini R

(08XQCM6120)

EXECUTIVE SUMMARYThe MBA course offered by the Bangalore University has its own unique syllabus which

requires its MBA students to undertake an internship with any of the leading business houses

for a period ranging from 4 weeks to 6 weeks during the second semester.

India’s premier air conditioning engineering service provider VOLTAS a Tata Enterprise, is a

well established company. It is an Indian company which always maintained the highest

international standards of excellence through quality, technology and innovation. The only

Indian Company with complete core competence in all aspects of air conditioning. For 50

years, Voltas has contributed to the Indian industries modernization and growth. Voltas’ Core

is its ability to provide the best in engineering and back up services.

The company has ISO 9001-2000 certification and has executed projects in the Middle East,

Southeast Asia, Central Asia, Africa and Europe. Voltas captured the various facets of the

Indian economy in sectors ranging from real estate (commercial and residential), retail,

construction, infrastructure, mining etc.

The company's past growth has been achieved without any equity dilution so growth is not

dependent on the vagaries of market. For over a decade, Voltas has been bringing the latest and

very best in Consumer Electronics and Home Appliances. Successfully adapting the best of

international technology to suit Indian needs, and crafting it to improve the quality of life – as

million of satisfied customers will agree.

Report tells the success story of VOLTAS. Sustainability is at the center of Voltas’s strategy.

The report consists of the study of the organization. It involves the Brief profile of the

company, pre-establishment factors that prompted the establishment of the company, location

matrix and milestones in the history of the company. Apart from this; a brief introduction has

been given to the product mix and each departments of the company. The organization also

implemented environment management systems and organization health & safety policy.

Another part contains microscopic study made on success of Voltas commercial refrigeration.

This part contains the introduction of the various products in refrigerator segment, market

characteristics, strategies, factors for Voltas superiority etc.

CONTENTS

Sl no1

1.1

1.2

1.3

2

2.1

2.2

2.3

2.4

3

4

5

6

7

7.1

7.2

7.3

7.4

7.5

7.6

7.7

8

9

Part IProfile of the company

- Factors that prompted the establishment

- Milestones in the history of the company

- Location matrix

Company Vision / Mission

- social responsibility

- Energy conservation

- Quality policy

- Ownership pattern

Company’s policies & product mix

An overview of labor force

Company’s performance in recent years

Organization structure

Operational aspects of different functional departments

- Human resource department.

-Marketing department.

-Finance & accounting department

-Water management department

-Mining & Construction Equipment Division

-Machine Tools department

-Materials Handling department

SWOT analysis

Suggestions &Recommendations

Page no.1

6

8

11

13

15

15

17

18

20

31

33

46

48

49

52

54

56

57

58

58

59

63

MICROSCOPIC STUDY ON SUCCESS OF VOLTAS COMMERCIAL

REFRIGERTATION

Sl no

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

part I I

Introduction

Product range

Unbeatable technology

Eco friendly

Strategies

Applications

Clients

R & D department

Voltas superiority

Key success factors

Market characteristics

Demand drivers

Market shares

Business concerns

Recommendations and Suggestions

Bibliography

Page no.

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66

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1

PART-I

ORGANISATIONAL

STUDY OF VOLTAS

M P Birla Institute Of Management

2

Chapter-1

Company Profile


3

COMPANY PROFILE

Voltas is India's largest supplier of engineering products and services for the textile machinery

sector and is a major manufacturer of forklift trucks. It provides solutions in turnkey pumping

projects for water, effluent and sewage treatment, and water pollution control. The company

has ISO 9001-2000 certification and has executed projects in the Middle East, Southeast Asia,

Central Asia, Africa and Europe.

Historical Background of the company

Voltas Limited is an engineering, air conditioning and refrigeration company based in

Mumbai, India. It offers engineering solutions for a wide spectrum of industries in areas such

as heating, ventilation and air conditioning, refrigeration, electro-mechanical projects, textile

machinery, machine tools, mining and construction equipment, materials handling, water

management, building management systems, indoor air quality and chemicals. The company

has ISO 9001-2000 certification and has executed projects in the Middle East, Southeast Asia,

Central Asia, Africa and Europe.

Voltas is a part of the Tata Group. The Chairman of Voltas is Ishaat Hussein. The managing

director is A. Soni. Its shares are traded on the Bombay Stock Exchange under symbol 500575.

Its 2008 sales were 40,70,25,00,000 rupees.

The Company was incorporated on 6th September, 1954 at Mumbai. . The Company was

promoted in 1954 by M/s. Volkart Brothers and Tata Sons Pvt. Ltd., to take over the

Engineering & Import Division of M/s. Volkart Brothers in India. Corporate Headquarters is at

Voltas House, "A" Block, Dr. Babasaheb Ambedkar Road, Chinchpokli, Mumbai 400 033,

Maharastra. The Company's manufacturing activities were originally carried on at its factory at

Chinchpokli, Mumbai and covered air-conditioning and refrigeration equipment mining,

electrical and agricultural equipment.


4

The Company's distribution organization is divided into two main groups - `Engineering' and

`Marketing'.

The marketing group consists of two main divisions, one dealing in drugs, pharmaceuticals and

consumer products and the other in chemicals and vitamins. The Company deals in foreign as

well as indigenous products, besides marketing its own products.

The Company manufactures sale and distribution of a variety of products in the engineering,

chemical and pharmaceutical industries such as agricultural, earthmoving, air-conditioning and

refrigeration, textile machinery, machine tools, electrical and mechanical equipments as well as

chemicals and pharmaceuticals.

The Company set up in Thane, Mumbai an up-to-date factory to manufacture wide range of

air-conditioning and refrigeration and a range of mining equipments for which the Company

had entered into collaboration with leading manufacturers abroad.

. Some of Voltas' collaborations are with:

Besseling, Netherland, for Controlled Atmosphere (CA) / Ultra - Low Oxygen (ULO)

storage technology.

Bock - Germany, Refcomp - Italy and JE Hall - UK, for Semi - Hermetic compressor

Costan of Italy, for Refrigerated Cabinet Display Units for hyper market engineered

systems.

Dunham-Bush Incorporated (USA), for screw chillers

Hitachi Limited, Japan, for vapor absorption machines

MIDEA, China, for Variable Refrigerant flow Systems.

Ruks Engineering, Canada, for ozone engineered systems

Standard Refrigeration Company (USA), for direct expansion chillers

Siemens Building Technologies (Asia-Pacific), for building management systems


5

The company is also an Indian representative of a number of leading manufacturers worldwide.

To name a few:

BT, Sweden

Bruckener, Germany

Erbatech, Germany

Fanuc Ltd. , Japan

Hercules - Aqualon Division, USA

Huntsman Tioxide, UK

Hyundai, Kore

Kobelco, Japan

Kluber, Germany

LeTourneau Inc., Australia

LMW, India

Memminger, Germany

Mitsubishi Heavy Industries, Japan

Terex - BL-Pegson, UK

Terex - Powerscreen, UK

Terex - O&K, Germany

Terrot , Germany

Tornos , Switzerland


6

Voltas's operations have been organized into three independent business-specific clusters. Each

of these has its own facilities for market coverage and service to customers.

1. Electro-Mechanical Projects & Services

Electrical, Mechanical, HVAC & Refrigeration Solutions

Electrical, Mechanical & HVAC Solutions (International)

Water Management & Treatment

2. Engineering products & Services

Textile Machinery

Mining & Construction Equipment

Machine Tools

Materials Handling Solutions

3. Unitary Cooling Products for Comfort & Commercial Use

Cooling Appliances

Commercial Refrigeration

1.1 Factors that prompted the establishment of company

Voltas Ltd was formed in 1954, as a joint venture between Tata's and Volkart Brothers; it was

already a century old in all but name. In fact, the alliance itself resulted from the need to

preserve that legacy, to carry forward that capability under changed post-war post-

Independence conditions.

Since 1853, Volkart had been prominent in 'two-way' trade between India and the West.

Broadly, raw materials and commodities were exported, while imports focused on machinery

and engineering equipment from overseas manufacturers.


7

Over the years, such technology-based products increasingly needed installation and support

services. This evolved into Volkart's Engineering & Import business, which soon formed the

bulk of their activities.

Post-war and post-Independence realities called for drastic revisions. India's manufacturing

capabilities had been jump-started by wartime conditions. Independent India too was intent on

forcing the pace of indigenization, by restricting imports of engineering equipment (among

others). Paradoxically, India's industrial and economic growth would require more and more

such equipment. Volkart's installation and support services would be in great demand if the

equipment could be sourced.

Volkart and Tata's teamed up as Voltas Limited to tackle these challenges. It was the ideal

combination: Volkart's engineering services and trading expertise, allied with Tata's historic

standing as a major industrializing power which was aligned with the many new markets

springing up in post-Independence India.

AWARDS:

Voltas has received many prestigious awards like:

United Nations' Grand Award for Excellence in Public Service Worldwide, 1993-94.

International Public Relations Associations' Golden Trophy for Excellence in Customer

Service, 1994-95.

Mumbai Chamber of Commerce and Industry's Good Corporate Citizenship Award,

1995-96.

Export Excellence Award, as Star Performer received from Engineering Export

Promotion Council (EEPC) India - Western Region, 2006-07.

MEP Middle East Awards 2008.


1954

1963

1964

1966

1979

1982

1988

8

1.2 MILESTONES IN THE HISTORY OF THE COMPANY.

- The Company was incorporated on 6th September 1954

- The Company promoted Scottish Indian Machine Tools Ltd., in Collaboration

with Scottish Machine Tool Corporation of Glasgow for the manufacture of

machine tools.

- The Company concluded a collaboration agreement with Eaton Yale and

Towns, U.S.A., for the manufacture of Yale fork-lift trucks.

- A new division, viz., the Agro-Industrial Products Division was added. The

main operation of the division consisted of the sale and servicing of the tractors

and implements made by the International Tractor Co. of India.

- With effect from 1st July, Tata-Merlin & Gerin Ltd. (TMG), and the National

electrical Industries Ltd. (NEI), was amalgamated with the Company.

- The Company proposed to set up an electrical business unit at Pune.

- The Air Pollution and Water Pollution project groups were amalgamated with

the Electrical project group.

- The material handling business group successfully introduced up-to-date

warehousing equipment to further enlarge its product range.

- Air-conditioning and refrigeration business group received Government's

approval for the technical collaboration agreement conveying large-sized

efficient compressors.


1989

1990

1991

1992

1993

9

- With effect from 1st March, Volrho Ltd. was amalgamated with the Company

as per the order of BIFR.

- The materials handling business group proposed to extend its scope of

activities to turn-key materials handling systems for mass production in

engineering industries.

- The performance of the industrial machinery division was adversely affected

due to a lock-out at the Company's principal, Westerworks.

- The Agro-Industrial Product Division successfully tested to international

standards, the indigenously built 36 KV SF6 breaker at CESI Test Laboratory,

Milan, Italy.

- The Company restructured its operations into product group I comprising

refrigerators, pharmaceuticals and consumer products and beverages while

product group I(A) include textile machinery. Product group II consisted of

machine tools, materials handling facility, industrial machinery, air-

conditioning pumps and projects. Group III comprised of chemicals plant,

chemicals division and agro-industrial products.

- Air-conditioning and refrigeration business and agro-industrial products and

pumps division suffered a setback due to prevailing recession in the market and

non-availability of Government funds as well as disturbances from December.

- The cooling appliances business launched four new products viz., water

coolers filled with purifiers ductable and slim-line 3 tone air-conditioners,

ceiling mounted split in 1.5 and 3 tone capacities and 2 tone room split units.

- The pharmaceutical and consumer products division was closed during the

year and had also withdrawn from the beverages business.


1997

1999

2000

10

- HAL, a sick industrial company, was merged with Voltas and the

amalgamation was approved by the Board for Industrial & Financial

Reconstruction (BIFR) in 1994.

1995 - Voltas gets Good corporate citizen award

- The Company has introduced `Soft Look' models of refrigerator in165 L. &

200 L segments. Company is also launching a premium Frost Free Refrigerator

in collaboration with Hitachi.

- A whole range of new products was launched both in the room air

conditioning and split segments. The heavy equipment and packaged system

division launched ozone-friendly centrifugals and superior quality energy

efficient steam, fired vapor absorption machines with Hitachi’s `Para flow'

technology.

- Voltas, India's leading air-conditioning company has been chosen to supply,

erect and commission high-tech climate air-conditioning system for India's first

information technology park.

- Air International Ltd. is a joint venture between Voltas Ltd. and Air

International Grmp, Australia.

- The Company has received a special award for completing the electro

mechanical pumping project of Ahmadabad Municipal Corporation in 120 days.

- The Company has introduced a voluntary retirement scheme called Early

Separation Scheme 2000 (ESS) for its employees.

- The Company has sold its wholly-owned subsidiary Voltas Foods &

Beverages to a Mumbai-based company, and has roped in a multinational as

strategic partner for Perfect Moulds.


2001

2002

2004

2005

2007

2008

11

-Relaunching Voltas air conditioners under the `Verdant' brand, a premium

model targeted at the retail segment.

- N D Khurody appointed as Additional Director of Voltas.

-Voltas has launched a range of small capacity refrigerators targeted

at semi-urban and rural markets in India.

- Chinese consumer durable giant Haier enters into a contract manufacturing

agreement Voltas Ltd for air-conditioners and refrigerators.

-Voltas introduces new range of water dispensers.

-Voltas secures order for world's Tallest building, burj towers, dubai

-Voltas Ltd has informed that Universal Comfort Products Ltd (UCPL) is a

50:50 joint venture Company between Voltas and Fedders International Air-

conditioning Pvt Ltd (FIACPL), a subsidiary of Fedders Corporation, USA.

-Voltas Ltd has appointed Mr. Jimmy Bilimoria and Mr. S N Menon,

Independent Directors have as Additional Directors of the Company with effect

from September 22, 2008.

1.3 LOCATION MATRIX

The Company has its head office in Mumbai.

The head quarter is present on 4 zones in India. West zone head quarters in Mumbai, East

zone head quarters in Kolkata, North zone head quarters in New Delhi and South zone head

quarters in Chennai.

The branch offices are widely distributed throughout India in many places as territorial and

area offices at Ahmadabad, Baroda, Bangalore, Calicut, Coimbatore, Chandigarh, Delhi,


12

Ghaziabad, Indore, Jaipur, Hyderabad, Jamshedpur, Kolhapur, Lucknow, Ludhiana, Madurai,

Panjim, Pune, Secunderabad, Surat, Tirupati, Thirupur, Vijayawada, Vishakapatanam and

Kochi which forms a responsive network across nation to cater to the demands.

Currently 4 factories are set up in India as Thane Plant (Maharastra), Dadra Plant (EM&RBG),

Uttarakhand Plant (EM&RBG), Uttarakhand Plant (UPBG)

Voltas has established its operations overseas and overseas offices are located in Dubai, Abu

Dhabi (UAE), Hong Kong, Kingdom of Bahrain, Singapore, Qatar, United Kingdom and

Jeddah.

Subsidiaries and associate companies are

There are many subsidiaries complementing Voltas.

Auto Aircon (India) limited, Pune

Simto Investment Co. Ltd, Mumbai

Metrovol FZE , Dubai

Weathermaker limited, Dubai

VIL Overseas Enterprises B.V., Amsterdam

Voice Antilles N.V., The Netherlands Antilles

Joint Ventures are:

Universal Comfort Products Private Limited, Dadra

Universal Voltas L.L.C. Abu Dhabi, UAE

Saudi Ensas Co. Ltd, Jeddah

Lalbuksh Voltas Engineering Services & Trading Company L.L.C., Muscat


13

Chapter- 2

Company Vision &

Mission


14

2. VISION, MISSION & VALUES

VISION

“Ever-changing times, never-changing spirit”

Voltas has developed a vision for itself that will take it further on the path to prosperity.

Megavol is the plan to achieve Rs10,000 crore in sales at a profitability of 10 per cent by the

end of 2010-11.

MISSION

a. To foster indigenous manufacture of engineering products and capital equipment, based

on technologies acquired from overseas, often from Volkart's existing principals

b. To supply the full gamut of services, from marketing to commissioning, for such

products.

VALUES

Commitment to excellence – Tata Business Excellence Module (TBEM)

Commitment to HRD

Commitment to good corporate citizenship

Commitment to Corporate Governance


15

2.1 SOCIAL RESPONSIBILITY

Voltas, true to the Tata tradition of improving the quality of life, has long regarded

participation in social development as a whole-hearted preoccupation that enriches the

corporation itself. Voltas has always gone beyond its traditional business and industrial

concerns to involve itself in projects that bring about upliftment in the lives of the under

privileged and the deprived.

The concern springs from a deeply held belief that a true corporate vision must encompass

more than those to whom the Company markets its services and products. Voltas

understands that the time and resources thus invested and the professional expertise shared

with the nation come back to the corporation in the long run as expected dividends of

reputation, opportunity and acceptance.

The declaration of the Tata Council on Social Responsibility is disseminated to all

employees through internal communications, since all are expected to be aware of the

declaration. Reporting on community initiatives is regularly done through the intranet. The

community is central to the core values we adhere to in the Tata Group.

If Voltas has a core, it is its businesses. If Voltas has a heart, it is its volunteers

2.2 ENERGY CONSERVATION

It's in the very nature of Voltas' core businesses to be actively engaged in today's Green

movement. Every day, the need to conserve energy, preserve the ecology and minimize

man's carbon footprint become more and more imperative. That's a call which Voltas

answers through its products, its services, and its operating principles Low-cost cooling

begins at home Voltas minimizes wasteful energy consumption in


16

its branded products. In fact, Voltas has long been a pioneer in microprocessor controlled

room ACs for optimal energy usage. Sophisticated control systems in its air conditioning

projects (the V-SCADA technology) as well as built environments (Building Management

Systems) also help optimize energy usage through continuous monitoring and regulation.

Most recently, Voltas broke through in lowering operating costs for household AC users --

by being first-to-market with the new generation 'Star-Rated' ACs. Rigorously tested and

certified for energy-efficiency, the new product line gave Voltas the lead in reaching a

whole new stratum of small town and rural buyer. The lowering of energy bills broke down

their last resistance to home cooling. Systems and solutions that save on a far larger scale,

Voltas' 'green' touch is seen in its Heating, Ventilation and Air Conditioning projects. The

Company offers a unique combination of Engineered Ozone Systems for purer air quality,

along with VRF (Variable Refrigerant Flow) technology for cooling. Installed together and

working in synergy, they make a marked impact on cooling costs. Customers can breathe

easier, for more reasons than one.

Energy-efficient technologies, 'intelligent' building management, purer air for better health

-- they add up to a full portfolio for today's 'Green' buildings. These are sure to become

more and more the rage, in step with the ongoing energy and climate crises. Voltas is right

there with the solutions desired. The high water mark of pollution control When Voltas'

Water Management business successfully completed its world-class water purification

project in Singapore; it was the capstone of more than two decades in treating wastewater

and effluents. All its built-up knowledge and experience were brought into play in the

Changing Water Purification Plant, one of the largest of its kind anywhere. Its success now

opens the way for more such large-scale and complex water management jobs, meeting

today’s urgent need for water conservation and reclamation. Once again, Voltas responds

to the needs of the times and the concerns of its stakeholders. The Company is ready with

the products, the processes, the people -- and most importantly, the principles.


17

ENVIRONMENTAL AND OCCUPATIONAL HEALTH AND SAFETY

POLICY

Voltas strives to provide a safe, healthy, clean and ergonomic working environment for its

people. It prevents the wasteful use of natural resources and is committed to improving the

environment, particularly with regard to the emission of greenhouse gases, and endeavours to

offset the effect of climate change in all spheres of its activities.

Voltas , in the process of production and sale of its products and services, strives for economic,

social and environmental sustainability’s.

2.3 QUALITY POLICY

Voltas is committed to supply goods and services of world class quality standards, backed

by after-sales services consistent with the requirements of its customers, while striving for

their total satisfaction. The quality standards of the company’s goods and services meet

applicable national and international standards.

Voltas displays adequate health and safety labels, caveats and other necessary information

on its product packaging.


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2.4 SHARE HOLDERS

Share holding pattern as on :30/06/2009

31/03/2009 31/12/2008

Face value 1.00 1.00 1.00

No. Of % No. Of % No. Of %

Shares Holding Shares Holding Shares Holding

Promoter's holding

Indian Promoters

Sub total

91532655 27.66

91532655 27.66

91748655 27.73

91748655 27.73

91241055 27.57

91241055 27.57

Non promoter's holding

Institutional investors

Banks Fin. Inst. and Insurance 53092271 16.05 53399873 16.14 51093918 15.44

FII's

Sub total

34785600 10.51

13381593140.44

37411643 11.31

12730917638.48

50507438 15.26

13831166541.80

Other investors

Private Corporate Bodies 26796703 8.10 28319977 8.56 26449301 7.99

NRI's/OCB's/Foreign Others 3880750 1.17 4546574 1.37 3835475 1.16

Sub total

General public

30671453 9.27

74858701 22.62

32860551 9.93

78960358 23.86

30278776 9.15

71047244 21.47

Grand total 330878740100.00 330878740100.00 330878740100.00


19M P Birla Institute Of Management

20

Chapter 3

Company’s policies &

product mix


21

3. FORMULATION OF COMPANY POLICIES

The cornerstone of the Voltas philosophy is the conviction that the well-being of the company

and of its people are interdependent; and that the company's most valuable assets are its people.

The company is committed for following:

To employ the most competent, on the basis of merit

To ensure that every employee is treated with dignity and respect, and in a fair,

consistent and equitable manner

To create a stimulating, enabling and supportive work atmosphere

To aid and encourage employees in realizing their full potential

Voltas recognizes that the success of this philosophy depends in a large measure on the manner

in which managers and their team members - at every level - carry out their duties and

obligations to each other and to the company. Without mutual confidence and loyalty among

employees, as well as respect for each other as human beings, our philosophy will not work.

Principles:

Have knowledge of, and accept total responsibility for, the success of the organization’s

human resources philosophy, policies and procedures, and review them with team

members to ensure their total understanding.

Ensure consistent and fair application of all HR policies

Exercise leadership by demonstrating integrity, professional knowledge, courage of

your convictions, and concern for the feelings of others.

Establish a relationship with team a member that encourages a free bi-directional flow

of information, permits open discussion of differing views, and allows decision making

at the most appropriate levels.


22

In the same context, all employees are expected to maintain certain standards in relation

to their work, and in representing themselves as the staff of Voltas. They will:

1. Communicate constructive ideas and opinions to managers and team members either

pro-actively, or on request

2. Accept and support decisions made contrary to their expressed positions

3. Apply the highest standards of ethics, integrity and honesty.


23

PRODUCT MIX AND MARKET IT SERVES

Voltas' operations have been organized into four independent business-specific clusters,

each with its own facilities for market coverage and service to customers.


24

Segment A : Electro-mechanical Projects & Services

Domestic and International MEP solutions (including HVAC) in built

and industrial environment.

water management and treatment

Segment B :Engineering Products & Services

Mining and Construction Equipment, Materials Handling, and Textile

Machinery.

Segment C: Unitary Cooling products for comfort and commercial use

Room air conditioners


The various products of the Tata Voltas are

Air Conditioners


25


Sturdiness, efficiency and superior design, featuring state-of-the-art technology, Voltas

Freezers and Coolers not only consume less power but also withstand long power cuts.

Add to this the trust of TATA, Voltas sets the benchmark for the industry. Backed by a

quick and friendly Customer service, Voltas products know the worth of every rupee.

Water Cooler


26

The success of every office, institute and establishment depends on the efficiency

of its most valuable assets. These assets are none other than its employees. And to

keep them going, they need to be recharged. That's what the Tushar range of

Water Coolers have been doing since 1964. They hold a prominent place in

thousands of establishments across the Country, for they provide cool water round the

clock. No Wonder, we call them the official thirst quenchers of India.

Water Dispenser

A perfect blend of beauty and brains, the new mini magic is what every office, home

and shop need. Experience the versatility of water. Hot enough to stimulate y with a

cup of tea or coffee and cold enough to refresh with a glass of pure water or with a soft

drink concentrate. An ode to nature's most marvelous gift.


27

Segment-wise break-up

Electro-mechanical: Core business of the Company

Operating Profits: Rs 3277 Mn. (USD 65 Mn.)

31st March, 2009

Electro-Mechanical Projects and Services

Engineering Products and Services

Unitary Cooling Products for Comfort & Commercial Use

Others

Operating Profits : Rs 29367 Mn. (USD 74 Mn.)

31st March, 2008

Electro-Mechanical Projects and Services

Engineering Products and Services

Unitary Cooling Products for Comfort & Commercial Use

Others


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ELECTRO-MECHANICAL PROJECTS & SERVICES

Contributes 63 % to the Company’s TO

Domestic business contributes 25% of the Company’s TO

International business contributes 38% of the Company’s TO.

Order book of 1000 cr as of 31st. March 2009

In the domestic market:

Expanded the scope of services from Air conditioning to MEP -Mechanical (including

air conditioning), electrical and public Health for built environment.

Bagged/executed large orders such as the Rajiv Gandhi International Airport, Godrej IT

park and 65% of the stadium projects for Commonwealth Games.

Rajiv Gandhi International Airport was the first airport in Asia to be awarded the LEED

certification.

‘Green” projects in progress are Lodha Excellus, Mumbai; Wave Rock-,TSI Venture,

Hyderabad; RMZ Business Park, Chennai: TCS Bhubaneswar.

MEP business grew by 94 % over last year

Completed the execution of the single largest VRF installation in India, with a capacity

of 3000 TR, for TCS’ Kensington IT Park, at Poway.

In Q1:

Bagged MEP orders for two prestigious international airport, worth Rs 300 Cr. –

Kolkata and Chennai to be competed in 21-24 months -Undisputed leader in the Airport

segment for MEP services

Renewed thrust in the Water Management business has resulted in securing two

prestigious orders worth Rs 38 Cr. from Kolkata Metropolitan Water & Sanitation

Authority and Tata Steel.


29

ENGINEERING PRODUCTS & SERVICES

· Contributes 13 % to the Company's TO.

· Impacted by the downturn in the Indian economy, especially in the second half.

· Resulted in marginal dip in TO.

· Profitability dropped by 40%.

· Focused on growth opportunities in coal mining and power plant construction, led to higher

sales of mining equipment, arts and services..

· The sale of forklifts showed a reduction of around 8% by volume, but increased the sale of

cranes and warehousing equipment.

· In Textile machinery, the actual off take was very low.

· In anticipation of opportunities in post spinning, tied up with new International manufactures

for new product lines – dyeing machinery and weaving looms.

In Q1

· Bagged order worth Rs. 210 Cr. From Hindustan Zinc Limited supply of worlds second

biggest model of hydraulic excavators manufactured by O&K + a maintenance contract for 5

years.

UNITARY COOLING PRODUCTS

Contributes 23 % to the Company's TO

Indian air conditioner industry witnessed a slowdown in growth, from 28% to 6% also

resulting in high inventory levels in the industry

Voltas air conditioner sales registered a growth of 8%

Voltas room air conditioner sales grew by 24% in volume. within the highly

competitive multi-brand retail segment well above the industry average of 7%

Increased reach in semi-urban and rural markets, by expanding the network of dealers.


30

Introduced new products, spanning the entire spectrum, right up to the highest 5-Star

rated Vertis Gold Split air conditioners, and the innovative Corner air conditioners

The service infrastructure was strengthened by the addition of an all-India toll-free

number

Restructured the Commercial Refrigeration operations into a separate vertical; resulted

in a higher sales growth of 34% in the Chest Cooler segment, and 87% in the Visi

Cooler segment


31

Chapter- 4

Labor Force


32

HUMAN RESOURCE AT VOLTAS

Human Resource capability remains a key source of the Company’s competitive advantage.

The Company continues to place emphasis on enhancement of skills and capabilities of its

people for meeting future challenges. The key areas of human resource

Developments are training, competency development and skill enhancement. The Company

continues to implement best practices and innovative initiatives to meet the challenges in

acquiring and retaining talent against intense competitive pressures. As the Company takes on

projects with higher complexities and expands its business, the need to reinforce the human

resource capabilities becomes more critical.

EMPLOYEE STRENGTH

The total staff strength as on 31st March, 2009 was 10657, including 6228 contract staff,

primarily for overseas projects.

EMPLOYEE COST

Staff Expenses comprise salary, wages, bonus, Company’s contribution to PF and other funds,

retiring gratuity and welfare expenses. Staff expenses increased by 55% in 2008-09 to

Rs.428.59 crores from Rs.276.85 crores in 2007-08, basically due to increase in manpower

including contract employees for overseas projects. While Staff Expenses for domestic

businesses increased by 17% in 2008-09 to Rs.185.86 crores from Rs.159.51 crores in 2007-

08, the increase in international business was substantially higher by 107% at Rs.242.73 crores

as compared to Rs.117.34 crores in 2007-08, primarily due to significant increase in

manpower, for large overseas projects.


33

Chapter-5

Company’s Financial

Performance


34

5.1 FINANCIAL PERFORMANCE

Financial performance as a measure of operational Performance

Year ended March 31, 2009

Operating profit at Rs335 crore, up by 21 per cent

Sales / income from operations at Rs4,070 crore, up by 32 per cent

Profit after tax at Rs253 crore, up by 21 per cent

EPS at Rs7.63 as against Rs6.30

Year ended March 31, 2009

The company’s operating profit (profit before tax and exceptional items) rose by 21 per cent to

Rs335 crore as compared to Rs278 crore in the previous year. Profit after exceptional items

and tax rose by 21 per cent to Rs253 crore as against Rs208 crore in the previous year.

Sales and Services, net of Excise duty, increased by 32% in 2008-09 to Rs.4042.55 crores from

Rs.3055.36 crores in 2007-08.In Electro-mechanical Projects and Services segment, the

increase in revenue was 55% from Rs.1641.09 crores in 2007-08 to Rs.2546.43 crores in 2008-

09. Revenue of Engineering Products and Services segment was lower by 2% and was

Rs.542.19 crores in 2008-09 as compared to Rs.553.49 crores in 2007-08. The Company

registered a growth of 11% in its Unitary Cooling Products for Comfort and Commercial Use

segment and reported higher revenue of Rs.913.75 crores in 2008-09 as compared to Rs.

820.99 crores in 2007-08.

Revenue from ‘Others’ was higher by 1% in 2008-09 at Rs.40.18 crores as compared to

Rs.39.79 crores in 2007-08.


35

5.2 Balance Sheet

5.2.1 Working Capital

The Company continued on its path of growth and took several measures to ensure

sustainability for the future in the face of global economic slowdown.

The Company continued its focus on tailoring its offerings of projects, services and products to

the present market realities and dynamics. Significant steps in this direction have been a

corporate acquisition, as well as additions to the roster of principals and the range of products

offered. There have also been significant measures to rationalize costs in the interests of a

short-term ‘holding action’, till such time, some clarity emerge with regard to future trends in

global economy.

Voltas’ operating profits have grown 532% over a period of last four years.


36

The business segments of the Company are :

(A) Electro-mechanical Projects and Services

(B) Engineering Products and Services

(C) Unitary Cooling Products for Comfort and

Commercial Use

(D) Others


- -

37

Earnings summary

Balance sheet

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Sources of funds

Owner's fund

Equity share capital

Share application money

Preference share capital

Reserves & surplus

33.07

-

-

505.25

33.07

-

-

347.68

33.06

-

-

208.35

33.06

-

-

160.46

33.06

-

-

155.95

Loan funds

Secured loans

Unsecured loans

Total

47.67

585.99

82.14

462.90

47.01

25.00

313.42

74.47

31.94

299.92

52.08

31.15

272.24

Uses of funds

Fixed assets

Gross block

Less : revaluation reserve

263.02

-

238.89

-

269.76

-

241.63

-

246.43

-

Less :

depreciation

accumulated122.28 115.06 145.92 166.15 124.81

Net block

Capital work-in-progress

Investments

140.75

18.75

267.93

123.84

6.03

137.41

123.84

10.99

61.03

75.48

6.95

46.22

121.62

0.97

45.47

Net current assets

Current assets, loans &

advances1,580.15 1,287.29 984.24 898.33 751.82


38

Less : current liabilities &

provisions

Total net current assets

Miscellaneous expenses not

written

Total

1,421.59

158.56

-

585.99

1,091.68

195.61

-

462.90

866.68

117.56

-

313.42

727.06

171.27

-

299.92

647.64

104.18

-

272.24

Notes:

Book value of unquoted

investments

Market value of quoted

investments

Contingent liabilities

Number of equity

268.44

103.54

227.47

3308.85

137.44

187.85

224.09

3308.85

45.86

10.17

214.99

330.88

50.02

54.15

269.94

330.88

47.46

33.58

291.60

330.88


39

BALANCE SHEET AS AT 31ST MARCH, 2009


-

40

PROFIT AND LOSS ACCOUNT


Income:

Operating income 3,044.54 2,400.55 1,853.14 1,386.66 1,273.19

Expenses

Material consumed

Manufacturing expenses

Personnel expenses

Selling expenses

Administrative expenses

Expenses capitalized

Cost of sales

Operating profit

Other recurring income

Adjusted PBDIT

Financial expenses

Depreciation

Other write offs

Adjusted PBT

Tax charges

Adjusted PAT

Nonrecurring items

Other non cash adjustments

Reported net profit

Earnings before appropriation

Equity dividend

2,240.09

6.98

276.85

73.35

193.59

-

2,790.86

253.68

45.89

299.57

5.96

13.56

-

280.04

99.17

180.87

27.50

208.37

248.37

44.67

46.24

1,774.67

239.97

44.48

177.09

-

2,282.45

118.10

64.35

182.45

9.40

12.32

-

160.73

41.42

119.31

60.79

5.98

186.08

210.94

33.09

-23.77

1,431.78

176.23

35.17

132.31

-

1,751.73

101.41

24.58

125.99

5.19

11.09

-

109.71

21.20

88.51

-52.27

6.52

42.76

62.76

19.85

213.71

825.21

144.35

30.09

130.34

-

1,343.70

42.96

25.57

68.53

7.24

10.48

-

50.81

7.39

43.42

7.06

-0.07

50.41

65.41

16.54

550.70

513.76

132.76

31.70

126.32

-105.66

1,249.59

23.61

22.43

46.04

6.73

13.25

-

26.06

7.73

18.33

12.67

8.03

39.03

49.03

9.93


41

Preference dividend

Dividend tax

Retained earnings

-

7.59

196.10

-

5.62

172.22

-

2.78

40.12

-

2.35

46.52

-

1.27

37.83

Financial leverage

Cash flow statement


Profit before tax

Net cash flow-operating activity

Net cash used in investing activity

Net cash used in fin. activity

Net inc/dec in cash and equivalent

Cash and equivalent begin of year

Cash and equivalent end of year

307.54

345.83

-131.80

-79.07

134.96

140.25

275.21

222.83

1.66

51.35

-21.39

31.62

108.63

140.25

91.69

48.94

-30.95

-55.02

-37.03

145.66

108.63

57.66

43.77

3.13

7.18

54.08

91.58

145.66

46.87

-22.83

46.60

-22.32

1.45

90.13

91.58


42

Key ratios

Conclusion: Voltas reported strong F1Q08 results, underpinning positive momentum in the

overall business dynamics and the possibility of operating margin expansion. However,

valuations look expensive, and any slowdown in margin expansion may be negative for the

stock.


43

Operational performance:

Financial performance as a measure of Operational Performance

Sales and Services (Segment Revenues):

Sales and Services, net of Excise duty, increased by 32% in 2008-09 to Rs.4042.55 crores from

Rs.3055.36 crores in 2007-08. In Electro-mechanical Projects and Services segment, the

increase in revenue was 55% from Rs.1641.09 crores in 2007-08 to Rs.2546.43 crores in 2008-

09. Revenue of Engineering Products and Services segment was lower by 2% and was

Rs.542.19 crores in 2008-09 as compared to Rs.553.49 crores in 2007-08. The Company

registered a growth of 11% in its Unitary Cooling Products for Comfort and Commercial Use

segment and reported higher revenue of Rs.913.75 crores in 2008-09 as compared to Rs.

820.99 crores in 2007-08. Revenue from ‘Others’ was higher by 1% in 2008-09 at Rs.40.18

crores as compared to Rs.39.79 crores in 2007-08.


44M P Birla Institute Of Management

45

Outlook

Voltas reported a top line of Rs8.6bn, a growth of 30% YoY, for Q3FY09. This growth was

ably supported by the MEP division, which grew by 68% YoY as compared to a de-growth of

31% and 5% in engineering and unitary cooling, respectively. EBITDA margins during the

quarter decreased by 254bps YoY to 5.7%, mainly due to a lower margin in both engineering

and unitary cooling(9.8% and 0.7%, respectively). Another reason for the lower margin was an

additional charge of Rs60m, which was included in the employee cost on account of

revaluation of employee benefit. PAT increased by 11% YoY to Rs424m, on the back of

interest income of Rs20m on account of settlement of claims and lower tax rate due to a tax

reversal of Rs10m.


46

Chapter-6

Organizational Structure


47

Organization structure

The board of directors consists of chairman ishaat hussain followed by the managing director

A soni and 8 directors Nasser munjee, N J jhaveri, S D kulkarni, ravi kanth, N D khurodey, N

N tata, jimmy bilimoria, S N menon.

Organization chart

Chairman

Managing Director

Directors

President

Vice President

General Manager

Finance & commercial HumanResource

Sales & Services BusinessImprovementGroup

Chief Financialofficer

Sales Manager

IndependentAdvisors


ChannelSales Officer

Financial PlanningConsultants

48

Chapter- 7

Departments in Voltas


49

7. DEPARTMENTS IN VOLTAS

There are various departments in the organization. The major departments are:

Human resource department.

Marketing department.

Finance & accounting department.

Water management department

Mining & Construction Equipment Division (M&CE)

Machine Tools department

Materials Handling department

7.1 HUMAN RESOURCE MANAGEMENT DEPARTMENT

Human Resource capability remains a key source of the Company’s competitive advantage.


people for meeting future challenges. The key areas of human resource

Developments are training, competency development and skill enhancement. The Company

continues to implement best practices and innovative initiatives to meet the challenges in

acquiring and retaining talent against intense competitive pressures. As the Company takes on

projects with higher complexities and expands its business, the need to reinforce the human

resource capabilities becomes more critical.

During the year, over 3000 personnel were deployed in international projects - recruited from

India, UK, Romania, Sri Lanka, Nepal, Bangladesh, Philippines and GCC countries. Technical

Training Programs were conducted in India at ten ITIs and two Polytechnics, to provide project

specific training to about 800 technicians, before deployment.


50

The Company’s focus on improved Employee Engagement and ushering in a proactive work

culture, through several enterprise level initiatives has been noteworthy. Employee Contact

Programs have helped in obtaining valuable feedback and implement appropriate

action plans.


people for meeting future challenges. The key areas of human resource development are

training, competency development and skill enhancement. Career Development Plans have

been evolved for high potential managers. In addition, the Company continued to impart

training to its employees, with major focus on Leadership Development and Managerial

Effectiveness. A number of Internal and External training workshops, courses and seminars

were conducted and an elaborate induction-training programme for fresh graduate engineers, at

the entry level is arranged. The feedback from the training programmes has been very

encouraging

Voltas HRD Center

Voltas HRD Centre, inaugurated on June 7, 1995, was designed by a group of architects,

engineers, behavioural scientists and HRD executives to provide the right environment for


51

Training and Development. Set amidst idyllic sylvan surroundings, the Centre has an

auditorium and a conference hall, as well as a number of syndicate rooms of varying seating

capacities, backed by modern training aids and accessories.

Voltas' operations have been organized into four independent business-specific clusters, each

with its own facilities for market coverage and service to customers

7.1.2 Responsibilities of HR

· To carry out the activities related to HR

· To ensure that Competency and Skill Matrix are identified

· To ensure that Training needs are Identified, Planned and Conducted

· To ensure that Training effectiveness is measured

· To ensure that systems to motivate and empower employees are identified and implemented

· To control Quality records related to Quality System of their functions

7.1.3 Authorities of HR

· To initiate corrective actions when training planned are not achieved within the targets.

· To arrange training programs to all departments as per plan

7.1.4 The functions of HRD

· Recruitment.

· Training & development.

· Statutory wage & salary administration.

· Labor welfare, which includes canteen facilities, transportation, and housekeeping

Etc.


52

7.2 MARKETING DEPARTMENT

Voltas sourcing and marketing operations cover air conditioners, textile machinery, machine

tools, mining and construction equipment and industrial chemicals. In these sectors, the

company demonstrates its specialized engineering expertise, as well as its extensive network

for global sourcing.

The global sourcing agreement has brought significant cost benefits to Voltas. Voltas claims

that global sourcing has helped it become the lowest-cost manufacturer in India. In the past

five years, material costs for window ACs have dropped 20 per cent, from Rs 10,400 per unit

to under Rs 8,000 a unit, while the conversion cost has come down by a remarkable 60 per

cent, from Rs 2,000 a unit to Rs 650 a unit.

7.2.1 DISTRIBUTON NETWORK

The company signed memoranda of understanding with the dealers, clear spelling out the

operational procedures and norms to be followed and the scope of work between the dealer and

Voltas. Voltas set aside 1 per cent of its turnover for training and development of its channel

partners. Money was pumped into dealer infrastructure, manpower training (with certification

programmes for all employees), sharing costs of mobile vans, cooperative ads and so on.

Changes were also made in the after-sales part of the business. The dealers are responsible for

customer care .Even the dealers have strict guidelines on interacting with customers and

responding to complaints. How many servicemen are required, what kind of servicing kit is

required, what spare parts must always be there, the dress code of a servicemen - everything is

spelt out for the dealer.


53

Time targets - under four hours in the metros - have also been set for responding to customer

calls. And since the dealers and the head office are connected through a SAP system, all

transactions are online and transparent.

7.2.2 Brand building

Voltas has been in the process of brand building and thus shifted ad agencies - from O&M to

Euro RSG, which came up with a new positioning platform. The ads focused on defining

features of Voltas's new product range such as uniform cooling, energy-saving, timers and air

filters, with cues of performance and value-addition through technological innovation.

Subsequent promotions have focused on themes like customer service and low costs of

ownership. Celebrities like Shah Rukh Khan and Shoaib Akhtar were also roped in to

strengthen the brand.

Voltas invested more than Rs 50 crore (Rs 500 million) in branding initiatives; last year, it

spent Rs 17 crore (Rs 170 million) on marketing.

The figure for this year is somewhat higher: Rs 20 crore (Rs 200 million). But then, the theme

has changed too. Since the focus now is on capturing a larger share of the mass market,

Voltas's new campaign is aimed at the middle class, and has been shot in a distinctly non-urban

environment.


54

7.3 FINANCE & ACCOUNTING DEPARTMENT

7.3.1 Various Sections in Finance Department.

· Book and Budget

· Sales & bills payable

· Costing & establishments

· Internal audit & price store ledger

7.3.2 Book and Budget

· Collection of accounts from different sections

· Preparation of trial balance and final accounts

· Co-ordination with auditors

· Helping statutory auditor

7.3.4 Bills Payable

This section handles the payment to be made to the suppliers. This includes the receiving of

stores receipt vouchers, purchase order and their verification in terms of quality and quantity.

Once the claims are found satisfactory, the payment is made as per the terms.

7.3.5 Costing

Sets the cost that is used by commercial group to add profit margin to set the price.

7.3.6 Establishment

This section handles all the payment to the employees such as

· Salary & provident fund

· Incentives

· Loans and advances

· Medical reimbursement


55

7.3.7 Internal audit:

After preparing the balance sheet, the internal auditors will audit & they send audited balance

sheets to the government auditors to audit the balance sheet.

7.3.9 Other functions of Finance Department are,

· Payment of wages and salaries

· Payment to suppliers

· Foreign purchase payments.

· Cash management.


56

7.4 Water Management Department

Voltas caters to the vital sector of water management through pumping and water treatment

projects. In this domain, Voltas is established as a total solutions provider for turnkey pumping

projects as well as for water, effluent and sewage treatment, as well as water pollution control.

In all these applications, Voltas offers complete electro-mechanical and associated civil

construction services.

The key strength of Voltas is the accumulated knowledge and expertise to design, engineer,

supply, erect, test and commission complex pumping and water/sewage/effluent treatment

systems for a diverse range of projects.

The entire range of water/waste pollution control equipment is offered by Voltas, and its

expertise in this area has been developed over the years. Voltas can handle large integrated

turnkey projects from concept to commissioning. It has ISO accreditation for Engineering

Design, Manufacturing and Contracting.

Voltas' capabilities have been proven in a range of projects, which include

water supply and pumping for cities and towns

major irrigation schemes

thermal, nuclear and hydroelectric power stations

water and sewage treatment projects for cities and towns

industrial water and effluent treatment projects for steel, fertilizer, chemicals, cement,

sugar refineries, paper and other industries.


57

7.5 Mining & Construction Equipment Division (M&CE)

Voltas Mining & Construction Equipment Division (M&CE) has been serving the cause of

mechanization and modernization for almost 50 years, serving as a vital value-adding link

between manufacturers, suppliers and end-users.

Over the decades, it has established a large and appreciative customer base from both public

and private sectors. In conjunction with globally renowned manufacturers, M & CE offers its

customers a comprehensive package - proven expertise, long experience, the world's best

equipment and value-added service support.

Today, the Division offers the world's best technologies for infrastructure building, along with

a highly professional support engineering team.

As technology transforms the style and scale of the core sector surface mining industry, M&CE

plays a vital role in making the latest and most efficient surface mining equipment available to

Indian end users, especially for mining of coal, iron, copper, zinc and lignite.

With growing investment in infrastructure development, M&CE is increasingly focusing on

construction equipment, especially catering to the needs of road building. Hydro projects and

quarrying are also prime end-user industries.

The scope, scale and impact of several recent milestones testify to M&CE's vital role in

mechanizing and modernizing mining and construction in India.


58

7.6 Machine Tools Department

Voltas Machine Tools is one of India's leading marketing & servicing organizations, focused

on providing engineering solutions to Indian industry. In this domain, Voltas has gained

experience over several decades by fulfilling machine tools needs across a wide spectrum of

manufacturing applications. In this activity, Voltas demonstrates a strong focus towards its

customer segments, be it automotive, heavy engineering, defense, public sector enterprises, or

small & medium enterprises.

7.7 Materials Handling Department

Voltas Materials Handling has been catering to the needs of the materials handling market for

over 44 years. Making a modest beginning in 1964 as a licensee of Yale - USA, for

manufacturing and marketing of diesel-driven forklift trucks (up to 3 tons) and battery-

operated trucks (up to 2.5 tons), Voltas has come a long way in establishing itself as a market

leader. Today it offers in-house designed forklift trucks ranging up to 20 tons in the diesel

version, and up to 3 tons in both battery and gas (LPG & CNG) versions. Voltas is capable of

designing and manufacturing higher capacity diesel forklift trucks against specific enquiries.

Voltas has had technical tie-ups with some of the most reputed names in the field, such as Boss

Trucks - UK and Terex Inc - USA. The knowledge and engineering expertise gained over the

years is used today to meet the unique needs of our customers. Customized design and quality

manufacture is facilitated with modern design tools such as CAD/CAM and CAE, and

production tools involving use of precision CNC machines.


59

Chapter-8

SWOT Analysis


60

8 SWOT ANALYSIS

8.1 Strengths

Voltas is a representation of global technology leadership

Undisputed domain knowledge

Provider of solutions in cooling appliances.

Committed life-long product support

Trusted sales and service network

The design and manufacture of industrial equipment

Serving diverse industrial sectors and applications.

The company has a strong nation-wide infrastructure with committed excusive dealers

8.2 Weakness

Highly dependent on its parent company for R&D and technology support.

After sales services is one of the most crucial aspects.

The company is not well equipped with eco friendly technology for all products.

Does not do any effective advertisement nor has not looked much into advertisement

strategy.

8.3 Opportunities

Growing Indian middle class characterized with low penetration level of consumer

durable.

Advent of Internet provides an excellent opportunity to reach to a large base of

consumers and cut costs.


61

There is a changing dynamics of consumer behavior where in luxury goods are

being perceived as necessities with higher disposable incomes being spent on

lifestyle products.

CII has urged the government to reduce special excise duty (SED) on air

conditioners form 16%-8% in the next budget

Government spending in infrastructure facilities is expected to increase and large

investments are being made in the power sector as well as in modernization of

existing airports. Two initial orders have been recently booked in the current year

(2009-10) for execution of MEP projects for the Kolkata and Chennai airports.

Compliance with legislation such as Energy Conservation Building Code/National

Building Code will shortly become mandatory. The Company has proactively

invested in the development of energy efficient and environment friendly products

which will provide an opportunity for wider participation in the market

The Central Government has taken measures such as reduction in excise duty to

revive the economic growth. This reduction in taxes and interest rates could provide

further stimulus to air conditioners and refrigeration products.

8.4 THREATS

Increased threats from cheaper imports, FROM NEIGHBOURING COUNTRIES

Inflation effect

The Company has increased its focus on industrial and infrastructure projects the entire

spectrum from pre-sale to project handover is critically evaluated for probable and

potential risks.

The domestic market is dominated by the presence of key international players, many

of whom are setting up manufacturing facilities for greater cost-effectiveness.


62

The Company has to deal with currency fluctuations, since it earns in the Middle East

in currencies linked to USD, while some of material inputs are often sourced from

Europe, Japan and China.

Commodity prices in the recent past have been subject to wide price fluctuations,

affecting metals such as steel, copper and aluminum, as well as PVC, which are the

major raw materials/components of this segment.

Likely to face fierce competition from domestic companies as well MNC brands


63

Chapter-9

Suggestions &

Recommendations

Suggestions & Recommendations


64

Sales & Distribution - Voltas must aim for the sales & distribution team to be more

flexible in responding to market dynamics and more accountable by requiring it to

document all sales commitments

Accounts Receivable - The company needed to improve accounting processes to reduce

working capital requirements

Customer Service - The idea of Customer service to keep comprehensive, centralized

records of all contact to enhance customer service and strengthen customer loyalty.

Improve after Sales Service –Improvement in after sales service can help in increasing

sales.

Improve the marketing strategies i.e. advertising, promotion etc. This will surely help

Voltas AC to penetrate the tough Indian market and to keep the market share intact.

Attractive schemes must be launched by company in order to attract lower middle class.

Increase the number of Engineers in after sales Service department.

More promotional campaigns must be started.

Customer service cell should be increased.


65

PART II

MICROSCOPIC STUDY ON SUCCESS OF VOLTAS

COMMERCIAL REFRIGERTATION

1. INTRODUCTION

Voltas, a Tata enterprise, is India’s premier air conditioning and refrigeration company. The

company’s primary asset has been its experience and knowledge, built up over 50 years, in

designing, manufacturing, installing and servicing of air conditioning and refrigeration

systems. Voltas products are synonymous with quality and reliability.

Apart from being the pioneer in air conditioning in India, the company is also a leader in

commercial refrigeration and preservation, offering a range of coolers and freezers. These

products are manufactured and marketed by Voltas Hyderabad unit and sold under the Coldcel

brand name.

Currently, the Coldcel brand is the market leader in the commercial refrigeration segment, with

an overall market share of 40 per cent, 34 per cent in the cooler segment and 95 per cent in the

chocolate cooler segment.

The Coldcel commercial refrigerator range includes deep freezers, visi coolers and chest

coolers. These products offer a host of advantages, the most important being multi-door

options, lower power consumption, dependable after-sales service for the life of the product

and the Tata assurance of quality and trust. These plusses are the result of the company’s

commitment to continuously provide cost effective solutions in refrigeration.


66

2. PRODUCT RANGE

A wide range of products are available to meet various refrigeration requirements. The product

range comprises Chest Freezers, Chest Coolers, Visicoolers, Chocolate Coolers, Wine Coolers

and other refrigeration products. These products are manufactured at Voltas newly set up

modern manufacturing facility at Pantnagar in Uttarakhand for commercial refrigeration

products.

Chest Coolers - 100L, 200L, 300L, 400L

Visi Coolers - 70L, 120L, 220L, 320L.

Chest Freezers - Hard top - 70L, 100L, 200L, 300L, 400L, 500L

Glass Top - 200L, 300L, 400L

Upright deep Freezers of 520L capacity

DEEP FREEZERS

Following are the features of deep freezers.

Soft Look Designs for Better Appearance

Precoated Inner Liners for Improved Hygiene

Castor Wheels for Easy Transportation

UV Grade Plastic Materials for Long Lasting Appear

CFC-Free Insulation for Environment Protection

Powder Painted Body for Glossy Finish

Spring Loaded Hinges for Effortless Usage

Fast Freeze Switch for Faster Cooling When in Need

Signal Indicator for Storage and Protection


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Door Lock for Restricted Accessibility

Sunken Handle for Safer Operation

PUF Insulation

Deep freezers are available as metal top freezers and glass top freezers

GLASS TOP FREEZER

SINGLE DOOR METAL TOP FREEZER


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DOUBLE DOOR METAL TOP FREEZER

CHEST COOLERS

Following are the features of horizontal chest coolers

Customized Branding of Machines

Elegant Door Trims

Castor Wheel for Free and Easy Movement

Spring-loaded Hinges in Doors

Multiple Door with Sunken Handles

Tropicalized and Energy-efficient R 134a Compressor

Inner Lining of Aluminum Textured Sheet Ensuring

Corrosion Resistant with Outer Body in Powder-coat

High Density, High Pressure 60mm Insulation Ensuring

Contemporary and Sturdy Design


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VISI COOLERS

Following are the features of visi coolers

Castor Wheels for Easy Transportation

UV Grade Plastic Materials for Long Lasting Appear

CFC-Free Insulation for Environment Protection

Powder Painted Body for Glossy Finish

Door Lock for Restricted Accessibility

PUF Insulation

Low Emissivity Glass for Optimum Cooling Loss

Sleek Designs for Better Appearance

Certified Performance by International Laboratories

Tropicalized Compressors


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3. UNBEATABLE TECHNOLOGY

SUPER QUIET COMPRESSOR

Our world famous compressors run more smoothly than piston compressors, thus reducing

the vibration noise.

SUPER QUIET FAN

The indoor unit uses indoor fan with a wide diameter, different distances and slanting

blades, which prevents the formation of whirling air. This results in reducing noise levels.

SUPER QUIET MOTOR

The PG no grade speed control motor is not affected by voltage fluctuations and this avoids

the noise caused by the motor.


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SUPER QUIET DESIGN

The new golden optimised wind flow design lets the air flow smoothly and lowers the noise

down to minimum.

SUPER QUIET PIPE

Each pipe is bent using an imported automatic three dimensional bending machine at one

goes. This reduces the welding knots; noise caused by box resonance and also avoids

deformation.

SLEEP MODE OPERATION

Once this function is chosen, the room temperature automatically adjusts to suit the human

body temperature. You only need to press the sleep key and the air conditioner deactivates

automatically by checking the fan speed and the temperature setting, avoiding excessive

cooling.

ELABORATE DESIGN AND HIGHLY EFFICIENT REFRIGERATION

Use of world-famous compressors ensures high cooling efficiency and long life.


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4. ECO FRIENDLY

ANTIBACTERIAL REMOTE CONTROL

The fluorescent technology adopted in the remote control makes it convenient to use in dark.

Also, nano technology used in the plastic crust produces antibacterial mote which can

efficiently eliminate bacteria on the remote control and avoid germ infection.

HYDROPHILIC COATED ALUMINUM FINS

Fitted in the indoor unit, this water contamination free foil enhances the heat exchange

efficiency.

GOLDEN BIO EVAPORATOR

It efficiently prevents bacteria from breeding and spreading to create a healthy and comfortable

environment.

5. STRATEGIES

Voltas, a Tata enterprise has always aimed at acquiring customer satisfaction and has hence

designed products to suit the special requirements.

Voltas are under a conscious effort to grow the commercial refrigeration products segment.

Voltas Limited has lined up a fresh strategy to develop the market for its commercial

refrigeration systems.


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Coldcel mainly targeted the institutional buyer, ice-cream manufacturers and retail

outlets. The Company customizes the products to suit special requirements.

The brand name is supported with an extensive multimedia advertising campaign. The

company had appointed Mudra Advertising to handle the advertising account for

Coldcel.

Voltas Limited had appointed dedicated sales personnel across 23 company-owned

branches in leading metros and mini metros.

Company started stocking a limited range of its commercial refrigerators across a

network of dealers across the country. The dealers will be used primarily for potential

consumers to book orders and contact the company in case the products have to be

customized to suit specific needs.

Voltas Coldcel refrigerators is available through its 850 authorized service dealers

covering over 8,000 towns and villages, making Voltas service network the widest and

most efficient in the industry.

The company offers Annual Maintenance Contract.

The products launched have the contemporary soft look design - a first in India,

exclusive multi-door options, lower power consumption, dependable after-sales service

for the life of the product and the Tata assurance of quality and trust.

The company is in the process of developing new kinds of products to cater to rural and

semi-urban areas, where the power supply is erratic.


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Entire logistics operations is outsourced to Drive India Enterprise Solutions Limited

(DIESL), an integrated logistics company promoted by Tata Industries as there were

inefficiencies in logistics operations, leading to high cost build-ups, higher dead-on-

arrivals and other irregularities.

A lean organization structure, with front-line personnel having defined authority levels,

helps employees to remain agile and responsive to customer needs. The lean work-force

combined with a Variable Pay model, has helped keep the work-force motivated and

achieves much higher performance.

6. APPLICATIONS

Voltas coldcel products are used by ice-cream and frozen food manufacturers, beverage

manufacturers, malls and hypermarkets, and at all retail points selling frozen or perishable food

and beverages. The applications of various products are

Visi Coolers

Ideal for storing Soft Drinks, Fruit Juices, Milk Sachets, Tetra Pak Products, Flavored Milk,

Yogurt, Chocolates, Sweet Curd, Cheese, Butter, Beer, Mineral Water.

Deep Freezers

Ideal for storing Ice Creams, Frozen Meat, Fish, Poultry and Frozen Vegetables.

Chest coolers

Ideal for storing Soft Drinks, Fruit Juices, Milk Sachets, Tetra Pak Products, Flavored Milk,

Yogurt, Chocolates, Sweet Curd, Cheese, Butter, Beer, Mineral Water.


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7. CLIENTS

Voltas Coldcel has helped clients across a spectrum of industries to meet their refrigeration

requirements.

Some of satisfied customers are

Pepsi

Cadbury

Nestle

GCMFF (Amul)

Hindustan Lever

Mother Dairy Fruits and Vegetables Ltd

Orissa Milk Marketing Federation

Parag Dairy

Patna Dairy

Bangalore Dairy

Parle International Limited

Creamline Dairy

Tulika Ice Cream

Hatchson Agro Products

Arokya Milk Products


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8. RESEARCH AND DEVELOPMENT DEPARTMENT

Voltas has a strong in-house R&D capability with a well-developed R&D laboratory.R&D

team comprises of highly experienced and efficient engineers dedicated to commercial

development of products. Quality Assurances Systems at various stages of product

development ensures top class quality of their products.

Testing facilities include...

Computerized data logger for accurate recording of test results.

Environmental test chambers for testing the machines in assimilated test conditions at

various ambient temperatures and humidity levels.

Well equipped electrical test lab to test components and accessories like fan motor etc.,

Design is carried out by the CAD CAM systems.

9. VOLTAS SUPERIORITY

Voltas Coldcel's products are highly advanced and have many advanced inbuilt features to

ensure smooth functioning of the product even under unfavorable conditions.

Manufacturing Facilities Voltas Small-scale Manufacturers

PU Foaming Automated PU Foaming Most of them don’t give PUF

equipment Insulation (Glass Wool used

instead). Those who give

PUF, use Manual Pouring

method


of

of

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PU Insulation PUF insulation thickness Density of insulation is very

Chest Type and Upright low due to manual pouring

Coolers – 60 mm method

Visi Coolers – 45mm

Painting Pre-treatment: Degreasing, Use crude methods owing to

Anti-Corrosion Treatment lack

and Phosphate enhances equipment

sophisticated

adhesive

paint

properties

Spray painting: Finish not as

good and prone to scratches

Powder Coating: Gives and rusting

products glossiness,

scratch resistance and

durability for a long time

Gas Charging Fully Automatic Charging No automation. Charging

machines with done with obsolete

computerized display of equipment

exact

charged

quantity being

Dehydration Internal Components are Sufficient care not taken

thoroughly cleaned and owing to lack of equipment,

dehydrated before hence cannot ensure

assembling complete dehydration

Brazing of Joints Soldering material used Soldering material has low

for brazing joints has high silver content, hence joints

silver content, hence joints are prone to cracks and leaks


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are leak proof

Evacuation High Capacity Vacuum Vacuum pump capacities are

pumps used for evacuation much lower, hence complete

of air and foreign particles evacuation very rarely

from evaporator / happens

condenser

10. Key Success Factors

Components availability & prices

Regional - distribution strengths

National - large institutional strengths

Ability to customize refrigeration configurations quickly

Select products - application engineering strengths

11. Market Characteristics

Commercial refrigeration products have a derived demand -that is, the demand is

dependent on the user industries performance

Usage mostly in processed foods and beverage segments

Refrigeration components are mostly standardized; Customization occurs mainly in

configuration of cold rooms / cold storage system, where the area to be cooled will

determine the design of the equipment

Components often sold on ‘Cash and Carry’ basis

Excise duty: 16 %; Import Duty - Basic: nil, surcharge: 2.5 %, countervailing: 16 %

and special additional duty: 4 %.

Channels: Voltas sell components through dealers


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12. Demand Drivers

Growth in the retailing sector

Investments in cold store / refrigeration chains across the country

Increase in the demand for fresh fruits and vegetables (processed as well as

unprocessed), milk and milk products, fish and meat products

Exports thrust, especially in processed fruits& vegetables, fish and meat products

13. Market Share

As per the information gathered from various sources Voltas coldcel are the market leaders

with market share of over 38% in the commercial refrigeration segment giving a cut throat

competition to its local as well as international players.

8%

25% 39% voltas

carrier

blue star

others

28%


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14. Business Concerns

Lack of adequate storage infrastructure - few cold storages, refrigerated trucks

High level of wastage of food products

Low level of conversion of food products into processed foods

Seasonality of demand for equipment such as freezers, ice making machine, bottle

coolers

Changes in excise and customs duties on refrigeration components affect their demand.


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15. Suggestions and recommendations

Voltas is that kind of brand which has highly deep routed in the Indian market and at the same

time people have developed a greater goodwill towards it.

The commercial refrigeration of Voltas which I had chosen for the topic of study has got all the

relevant factors to capture consumer market. The strategy found out by Voltas as well as its

quality is satisfactory which has led to the success of the product. One suggestion is that more

care and concern should be given to after sales service to retain the trust of existing customers.

That Voltas should bring advertisement in print media and audio to attract more consumers

towards brand and concentrate on semi urban areas and remote areas too. Voltas has more

visual identity, but it should work to create strong brand identity. Voltas should keep on

brining out new time attractive offers and schemes to increase brand value and attract

customers. Exhibitions do not help to generate so much sells but they should be conducted

regularly. This helps in generating awareness regarding the product in customers which

ultimately helps in sales. Company should try to improve service. No doubt the company

products have technically edge over competitors but in long run they have to build stronger

strategies in selling and distribution.


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16. Bibliography

Websites referred:

www.voltas.com

www.voltasac.com

www.britishlibrary.com

Journals:

Hindu business line

Business outlook


Documents

An Internship Report on Organizational Study At voltas