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No. Subject Page No.









⇒ Product & Product Mix

⇒ Product Classification
⇒ Product Mix
⇒ Product Line Decision
⇒ Brand
⇒ Packaging & Labeling


⇒ Concept of Pricing
⇒ Setting the Price

CH.8. PLACE 51

⇒ Concept of Place
⇒ Channel Levels
⇒ Functions of Channel
⇒ Channel - Design Decision
⇒ Channel – Management Decision



This is to certify that the project entitled ‘Ratio Analysis’ submitted by

Ashish S. Gandhi for the partial fulfillment of the Semester –II in the
Master of Business Economics [M.B.E.] in the subject of RESEARCH
METHODOLOGY is his original work and he carried it out at
Department of Economics, Veer Narmad South Gujarat University- Surat,
under my supervision.

The project or any part of it has not been previously submitted for
any degree.
Subodhra medom
Associate Professor
Department of Economics
Veer Narmad South Gujarat University


I the undersigned, Mr. Ashish S. Gandhi herby declare that project work
entitled, “Marketing Mix of Sree Mahuva Pradesh Sahkari Khand Udyog Ltd,
Bamania ’’ is my own work and is not submitted to any other university or institution
for any other purpose.

Place :- Navsari Ashish S. Gandhi.

Date :- M.B.E.
Roll No. 10


I felt a great pleasure to prepare this report at this stage which is outcome of
all efforts of our self and many other who helps us through out the preparation.
I owe deep gratitude to Mr. RAJESH NAIK - Sales manager and Sree Mahuva
Pradesh Sahkari Khand Udyog Ltd. Who provides me good information’s and
marketing related data.

Ashish S. Gandhi

Synopsis of project work,

M.B.E. (sem 2)
ACADEMIC YEAR: - 2006 – ‘07
Project: - Marketing Mix of Sree Mahuva Pradesh Sahkari Khand Udyog Ltd,
Bamania ’
Location of the Unit where Project work is to be done:-
P.O. Sugar factory, BAMANIA.
Tal. Mahuva, Dist. Surat, Gujarat – 396246.
Project Work:-
A) Company Profile:
History of company and details of its owner’s area of operation & turn
over .
B) Product Profile:
Type of products, sales volume and major customers of the company.
C) study of the Organization:
Company’s organization structure and study of marketing department
and its function.
D) Study of Marketing Mix:-
 Product
 Price
 Place
E) Sources of Information:
Company’s annual report, marketing mix related book and internet
F) Methodology to be used:

Collection of data through primary and secondary sources, analyzing
data, reporting the results.


The main objective was to study the marketing mix of Mahuva pradesh
Sahkari Khand Udyog Mandal Ltd Mahuva and its product.

⇒ To find out the Marketing Mix i.e. Product, Price, Place in Mahuva sugar


There is no activity that can be completed without any limitation. The main
limitation facing during the preparation of this report on “Marketing mix” of Shree
Mahuva Pradesh Sahkari Khand Udyog Ltd.

1. For the preparation of this project report, time limit is the biggest problem.
Because the project report is to be completed within stipulated time.
2. Since the duration of the project is short these may be the chances of some
information may be left out.
3. At the time of training, people concerned with the organization are very
busy in routine work. So we get only brief idea of functioning of



The primary data that data which are generated or gathered by any person for
his own study or for his own purpose. This type of data are generated for the first
time. This type of data are not generated by any body in the past so this type of data
are called “PRIMARY DATA.”
For the completion of this project I collected primary data so my project report
is partly based on the primary data. For the collection of those primary data met some
officers in the Mahuva sugar factory. Whenever I was confused in any information I
had talk with them personally.

The data which are already generated or gathered by some one else in the past
for his own purpose or study and if such data are collected or used by us for our study
or our purpose then those data are called “SECONDARY DATA.”
I have collected some of the secondary data. For collecting those data I had
used internet and other books related to marketing mix.




Dist. Navasri, Gujarat state is registered as a co-operative society under the provision
of the Gujarat state co-operative societies Act 1961, vide the registration No. B-978,
dated 04/12/1968.

Shree Navsari Madhyasth Grahak Sahakari Bhandar Ltd., Navsari, Dist.

Navsari, Gujarat state is located at Dist Navsari at the tail end of the foothills of the
Dang Forest of Gujarat state. It is a notified backward area and majority of people in
the area are advises, small and marginal farmers, having small pieces of land. More
than 40% of the factory companies this group of farmers.


Shree Mahuva Pradesh Sahkari Khand Udyog Ltd.

At. & Post. Factory Site,
Bamania, Tal. Mahuva,
Dist. Surat (Gujarat)
Pin. : 394246

⇒ OWNER :-

The owners of the society are 6914 No. of members. In which 15 members

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are individuals & 6929 are co-operative societies.
Another word we say that the society, which in Gujarat is, registered as a co-
operative society under the provision of the Gujarat state co-operative societies Act.

⇒ Turnover :-

Year Sales Volume

2006-07 2,04,08,818
2007-08 2,53,29,567
2008-09 2,16,02,020

The societies have been awarded The Gujarat Co-Op. Award for achieving
best result in the season 2001-02.

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⇒ Product:-

1) Crackers
2) Books
3) Daily item


Year 2007-08 2008-09

crackers 3004921 3009127
Books 17998185 13239660
Daily needed item 1226270 1945128
Other item 3100191 3409127

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General Body

Board of Directors


Managing Director




Asst. Accountant


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 Introduction
(Marketing mix)


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Clerk Clerk

⇒ INTRODUCTION (marketing mix)

The marketing mix approach to marketing is a model of

crafting and implementing marketing strategies. The marketer task is to build a
marketing programme or plan to achieve the company’s desired objectives. The
marketing programme consists of numerous decisions on the mix of marketing tools
to use. The marketing mix is the set of marketing tools of the firm use to pursue its
marketing objectives in the target market. McKarthy classify these tools into four
broad groups that he called the four Ps of marketing i.e. Product, Price, Place, and

The below figure show the each ‘P’:-


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PRODUCT :- product variety, Quality ,Design,
Feature, Brand name, Packaging,
Size, Services, Warranties.

PRICE: - List price, Discount, Allowances, Payment

period, Credit Terms.

PLACE: - Sales promotion, Advertising, sales force,

public relations, Direct marketing.

PROMOTION: - Channels, Coverage, Assortment,

Location, Inventory, Transport.

Marketing mix is created for setting up the activity of trade channels and
satisfying the consumers by providing them satisfactory product in different segment
of market.

The firm can change its price, sales promotion and advertising expenditures in
the short-term. It can develop a new product and modify its distribution channel only
in the long run. Thus the firm can make some period-to-period marketing mix changes
in the short run then the number of marketing mix decision variable might suggest.

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 Product

 Product Level

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In marketing, a product is anything that can be offered to a market that might

satisfy a want or need. It is of two types: Tangible (physical) or Intangible (non-
physical). Since services have been at the forefront of all modern marketing strategies,
some intangibility has become essential part of marketing offers. It is therefore the
complete bundle of benefits or satisfactions that buyers perceive they will obtain if
they purchase the product. It is the sum of all physical, psychological, symbolic, and
service attributes, not just the physical merchandise. All products offered in a market
can be placed between Tangible (Pure Product) and Intangible (Pure Service)

A product is similar to goods. In accounting, goods are physical objects that

are available in the marketplace. This differentiates them from a service, which is a
non-material product. The term goods is used primarily by those that wish to abstract
from the details of a given product. As such it is useful in accounting and economic
models. The term product is used primarily by those that wish to examine the details
and richness of a specific market offering. As such it is useful to marketers, managers,
and quality control specialists.

A physical item that is offered for sale should not automatically be considered
a product if it has no market. Like 95% of patents they are at best interesting
diversions and at worst a waste of time.

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Product is something more than a mere physical commodity. It has

personality. Products carry certain meanings with them and project certain distinctive
images. In planning its market offer or product, the marketer needs to think through
five product levels:-

1. Core or Basic Benefits :-

The first level is the core or basic benefit level, namely the fundamental
services or product that the customers are really buying.

2. Generic Product:-
The second level is called the generic or basic level. In this level there are core
benefits which are converted in to the basic product. There are three classes in society
the upper class, middle class and the lower class..

3. Expected Product:-
The third level is the expected product level which is provided. The marketer
prepares an expected product. Namely the set of attributes and conditions that buyers
normally expect and agree to when they purchase this product.

4. Augmented Product:-
The fourth level of the product is the augmented product, namely one that
includes additional services and benefits that distinguish the company’s offer from
competitors offer.

5. Potential Product:-
The level which is called the potential level of the product is the very
important and the last and final level of the product. In this level the products category
is high. The innovation in the product is necessary.

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 Concept of Pricing
 Setting the Price

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⇒ PRICE :-

In economics and business, the price is the assigned numerical monetary value
of a good, service or asset.

The concept of price is central to microeconomics where it is one of the most

important variables in resource allocation theory (also called price theory).

Price is also central to marketing where it is one of the four variables in the
marketing mix that business people use to develop a marketing plan.

Price is the amount of money charged for a product or services, or the sum of
the values that consumers exchange for the benefits of having or using the product or

Price has two parts: Utility & Value

Utility is the general \basic property of a product to satisfy a need or want of a


Value is the worth the consumer attaches to the product for which he is willing to pay
a certain amount of money.

Market price is the price determined by the free play of the demand and
supply. The market price of the product affects the price paid to the factors of
production – rent for land, wages for labour, interest for capital and profit for

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In this way price becomes a prime or basic regulator of the entire economic

Setting the Price

The company must take the price decision for the first time when it introduces
its regular product into a new distribution channel, and when it enters bids on new
contract work. The firm must decide where to position its product on quality and

The following are the price setting steps in detail:-

A)Selecting the Pricing Objective:-

The company first decides where it wants to position its market offering. The
clearer firms objectives, the easier it is to set price. A company can pursue any of five
major objectives through pricing: survival, maximum current profit, maximum market
share, maximum market skimming, or product quality leadership. These are the
objectives which are firstly selected by the company.

Shree Navsari Madhyasth Grahak Sahakari Bhandar Ltd. has made some
objectives for price setting for survival of the company profit. It is major objective
for any company. But Shree Navsari Madhyasth Grahak Sahakari Bhandar Ltd. is a
co-operative society therefore their main objective is no profit no loss. It is non-
profit organization The company is not in total loss but it also think for the profit but
they earn profit to operating expenses .

B) Determining Demand:-

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Each price is lead to a different level of demand and therefore has a different
impact on the company’s marketing objectives. The relation between alternative
prices and the resulting current demand is captured in a demand curve. In the normal
case, demand and price are inversely related: the higher the price, the lower the
demand. In the case of prestige goods, the demand curve sometimes slopes upward.
If the price is high, the level of demand may fall.

C) Estimating costs:-
Demand sets ceiling on the price the company can charge for its product.
Costs set the floor. The company wants to charge the price that covers its costs of
producing, distributing, and selling the product, including the fair return for its effort
and risk. Yet, when companies price products to cover full costs, the net result is not
always profitability. There are two types of costs which are there in the company.

1) Fixed Cost:-
Fixed costs (also known as overhead) are costs that do not vary with
production or sales revenue. A company must pay bills for rent, heat, interest, salaries,
and so on, regardless of output. In Mahuva sugar factory fixed costs are interest,
salaries, wages, electricity bills etc are paid as a fixed cost.
2) Variable Cost:-
Variable costs vary with the level of the production. These costs tend to be
constant per unit produced. They are called variable because their total varies with the
number of units produced. In the sugar factory there is transportation which is
necessary to carry the sugar canes from the cultivation (gardening) area to the
production area. The factory hires the trucks. The rent paid by the factory to the truck
owners is called the variable cost. This type of cost is called the variable cost.

D) Selecting a Pricing Method:-

Given the three C’s the customers demand schedule, the cost function, and the
competitors prices – the company is now ready to select a price. Companies select the
pricing methods that include one or more of these three consideration. Two methods
are like Target return pricing and perceived value pricing used by the Mahuva sugar.

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1) Target Return - Pricing:-
In the target-return pricing the firm, determines the price that would yield its
target rate of return on investment.
This method is used by the mahuva sugar factory. They produce the sugar
cane and the cost of the production is there and they think of better return on their
investment in the production because the return on this investment is distributed to the
share holders because they invest their money in the shares of the factory. And the
other hand the farmers who are the raw material provider they are also given the
return of their raw material. The mahuva sugar paid to the farmers on the installments.
The mahuva sugar factory is a co-operative firm therefore the firm not sale the
product in below the cost. This organization is a non-profit organization.

2) Perceived – Value Pricing:-

An increasing number of companies now base their price on the customers
perceived value. They must deliver the value promised by their value proposition, and
customers must perceive this value.

The mahuva sugar factory’s price is decided by the government therefore the
customers are not getting the sugar at their perceived price. They decrease their price
when the price of the sugar is decreased in the market by the government.

E) Selecting the final Price:-

Pricing method narrow the range from which the company must select its final
price. In selecting that price, the company must to considered the addition factors
which are as follows.

1) Cost of the Product:-

Mahuva sugar factory not charged their product below the cost of production
and their prices are normally depends on government so government also not takes
decision that will affect the sugar prices. Because Cost and the prices of the product
are closely related, normally the price not or shall not be fixed below its cost of
production if the price are fixed below the cost of production than company have to
face losses because their target is no profit no loss.

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2) Market Position:-
The market position of the different firms is different. The price of the product
is different because of the market position of the firm. They charged different price by
showing their image in the market. If the product of the mahuva sugar is of best
quality and the image of the firm in customers mind is good then they charged high
price on the basis of their quality product. The price is normally fixed by the
government if the company image is well then they charged that price. The Mahuva
sugar factory has a good reputation in the market therefore they charged high price
than other factories.

3) Economic Environment:-
In the recession period, the price is reducing to maintain the level of turnover.
On the other hand the prices are increase in boom period to cover the increasing cost
of production. In mahuva sugar factory this kind of position is happened when the is
published by the food ministry prices of the sugar are raised or lower by the
government if there is a boom period than the prices are increases and if the market is
going under the recession period than the prices of the sugar are reduced.

4) Government Policy:-
Price decision is also affected by the price control of the government. If the
producer fixes the price high, the govt. may nationalize this concern. Sometimes
government starts selling this product. So price can not be fixed higher due to the fear
of the government action. Sales quota is given by the government to the sugar factory.
The quota includes the fixed price of the product by the government. The quota is
given for specific time period therefore the factory must go through this time period.
If the firm not go through this quota in a given period than they have to sale that quota
at the lower price. But they are not permitted to sale their product at a below the cost
of the production.

⇒ Adapting the Price:-

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Company usually do not set a signal price but rather a pricing structure that
reflects variation in geographical demand and cost, market segment requirements,
purchase timing , order level, delivery frequency, services contracts, and other factors.
The following are the price adapting strategy in the Mahuva sugar factory.

a) Discriminating Pricing:-
Companies will often modify their basic price to accommodate differences in
customers, products locations and so on. Discriminatory pricing occurs when a
company sells a product or service at two or more prices that do not reflect the
proportional difference in costs. Discriminating pricing takes several forms:-

1) Customer segment Pricing:-

Here different customer groups are charged different prices for the same
product or services. In mahuva sugar factory this kind of pricing is done. The share
holders, staff members, raw material providers are charged the less price on the
purchase of the sugar than others.

2) Product-form Pricing:-
Here different versions of the product charged different prices but not
proportionately to their respective cost. Here in factory there are three types of sugar
produced like M-30, S-30 and L-30. Each of these types charged different price.

3) Location Pricing:-
Here locations are priced differently even though cost of offering each
location is the same. There are two things which are there in location pricing the levy
sugar market and the open market. In the levy sugar market the Mahuva sugar factory
levy sugar’s customers are those customers who are nominees which are selected by
the government i.e. Gujarat, Maharashtra, Punjab etc. They charged different prices.
And in the open market which is in local area they charge different prices too. If the
customers are far from the company therefore they paid tax to the govt. therefore the
prices are charged differently to theses customers.

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 Concept of Place
 Channel Levels
 Functions of Channel
 Channel - Design Decision

 Channel – Management Decision

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⇒ PLACE :-
Place is a term that has a variety of meanings in a dictionary sense, but which
is principally used in a geographic sense as a noun to denote location, though in a
sense of a location identified with that which is located there.
For instance, much has been written about the "sense of place", a well-known
phenomenon in human society in which people strongly identify with a particular
geographical area or location. Another instance of its use is as an identifier of a
location that is noted for a particular characteristic.
In Marketing, place refers to one of the so-called 4 P's, defined as "the
market place". It can mean a geographic location, an industry, a group of people (a
segment) to whom a company wants to sell its products or services.

The distribution channel can be defined as a set of interdependent institutions

participating in the marketing activities involved in the flow of goods or services from
manufacturer to consumers.

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The producer and the final customer are part of every channel. We will use the
number of intermediary levels to designate the length of a channel. When the product
is reached from the manufacturer to its customer there are intermediary which are
there in between the manufacturer and the customers. Which are as follows:-


The distribution channel brings together the marketer and buyers in an
efficient and economic manner. It overcomes the time, place, and possession gaps the
separate goods and services from those who need or want them members of marketing
channel perform numbers of key functions:-

1) Increase Distribution Efficiency:-

The distribution channel brings together the marketer and buyers in an
efficient and economic manner. It will not be practical for any manufacturer to
organize a network of his own selling points throughout the market and sell products
directly to customers totally avoiding outside distribution channels. Marketing
intermediaries minimize the number of contacts. Firm has to make to sell its
In the mahuva sugar factory there are many intermediaries are working for the
channel of distribution of their product. The main intermediary is the agents who are
working there and handle all the customer contacts and transactions on behalph of the
sugar factory. And the work of the agent is only on the distribution of the goods and
the relationship with the customers and the contacts with the big industries is there
therefore the distribution efficiency is increase there.

2) Provide Information:-

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Provide information to the principals (producers). They provide marketing
intelligence feed-back to their producers. The channels are in position to do
authentically since they are in direct contact with custom and competitors and feel the
pulse of market all time.
The mahuva sugar factory is based on the distribution channels. In which the
agents are working for the selling of the product and they are providing the
information regarding the current market conditions to the factory. The agents are
directly contacted with the customs and the competitors therefore the current issue of
the market is provided by the agent.

3) Help in Production Function:-

The producer can concentrate on the production function leaving the
marketing problems to the middleman who specializes in the profession. Their
services can be best utilized for selling the product.
The agent who working as a middleman in the Mahuva sugar factory help in
the production function because by that agent company does not have to search for the
customers in the market the agent procure customers to the company and because of
the agent company can easily concentrate on its production function.

4) Financing the Producer:-

Middleman collects the huge orders and purchase product in bulk from the
manufacturer in cash. This enables the producers to under-take large scale of
production and adapting better techniques for production because they have problem
for finance.
The mahuva sugar factory done the large scale production because the agents
are giving the huge order of the product. They purchase the goods in cash therefore
the problem of finance is not there in the company.

5) Pricing:-
Channels help in implementing price mechanism. Distribution channel also
help implement the price mechanism in the market, they assist in arriving of price
level that is acceptable to the marketer as well as the user. They provide the

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suggestions about the customers who are capable to pay that amount which offer in
the market. The mahuva sugar factory depends on the agent for deciding the price.
The agent collect the information from the market regarding the price and give to the
factory. The agent also collects the price details made by the government.
6) Matching Demand and Supply:-
This is the very important for the Mahuva sugar factory to match the demand
and supply because they have to sale according to the realizing of the government
quota they have to finish the quota which is given by the government in the given
time period. If they do not match the demand and supply than they may loose the
sales. So for that company always have to make a contact with the agent.


The channel is designed there in the new company for selling its product first
time in the market. At the first time they select the limited market for selling their
product. For this the designing of the intermediaries is necessary for the firm. In
managing the intermediaries in the market there is two types of marketing strategy are
used by the manufacturer that is push strategy and the second one is the pull strategy.
In the push involves manufacture using its sales and trade promotions money to
induce intermediaries to carry promote and sale to end users. In the pull strategy the
whole promotion and sales expenses are occurred by the manufacturer.
In mahuva sugar factory there is push strategy used in which they pay the
commission to the hired agents and that agent brings customers to the company and
for the company has the promotion cost is decrease.

 Identifying the major channel alternatives:-

There are many channel alternatives in the whole market. Each channel has
unique strength as well as weaknesses. The problem is further complicated by the fact
that most companies now use a mix of channels. Each channel hopefully reaches a
different segment of buyers and delivers the right product to each at the least cost. If it
does not exist then the channel conflict and excessive cost is there.
In the mahuva sugar factory there is agent who are the intermediaries foe the
sugar factory. The sugar factory is highly depending on the agents. Then the other

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intermediaries are also there in the channel of distribution like wholesaler, big
retailers etc.
There are many intermediaries which are exist in the distribution channel after
selecting the channel alternatives the selection, training, motivation and evaluation is

1) Selecting the Channel members:-

Selecting the suitable channel members is necessary in the company for
marketing their goods properly. For selecting the channel members the mahuva sugar
factory prepare some rules and regulation and if the agents are accepted the rules and
regulations then they are invited in the factory to do marketing of the product.

2) Training the Channel members:-

Company need to plan and implement training programmes for
their intermediaries because they will be viewed as the company by end user. In the
mahuva sugar training is not given to the intermediaries but when they select the
channel members they select very carefully. If channel members have any difficulty
or any problem than company will solve that problem and give a proper suggestion to
them but they never provide any training or training programmers to the channel

3) Motivating the Channel members:-

A company needs to see its intermediaries in the same way it view its
end users. It need to determined intermediaries need and construct a channel
positioning such that it channel offering is tailored to provide superior value to these
intermediaries. In the mahuva sugar factory to motivate the channel members the co
give extra commission to the agent for their higher selling than other agents.

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4) Evaluating the Channel members:-
Producers must periodically evaluate intermediaries performance ageist such
standards as sales quota attainment average inventory level customers delivery time
etc. In the mahuva sugar factory they evaluate their channel members in which they
see that the channel members are working in the proper way or not if they find any
difficulty or fault by them than they does not give him a more involvement for the
5) Modifying Channel arrangements:-
Producers must periodically review its channel arrangements.
Modification is necessary when the distribution channel is not working properly. The
mahuva sugar the also doing modification in their channel if they find any agent not
follow their rules and conditions than they warn that agent for their misbehave. The
sugar factory want to start export of the sugar in future for this they are going to
modify their distribution channel.

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• Information sources for this project report:

 Book: Philip Kotler (12th edition) Marketing Management.

 Internet :
 Other: annual report of mahuva sugar factory.

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