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SUMMER TRAINING PROJECT REPORTON
“WORKING CAPITAL MANAGEMENT”
AT
RADICO KHAITAN LIMITED
Master of Business AdministrationProgramme OF: 2011-2013
KRISHNA INSTITUTE OF MANAGEMENT
MORADABAD
(U.P)
PROJECT GUIDE
Mr.Sanjeev Agarwal
(Sen. Account Executive)
SUBMITTED BY:
ISHAQ
MBA 2ND YEAR
RO. NO. 1138170014
ACKNOWLEDGEMENT
In fine acknowledgement is due, and is here by made to Mr. SANJEEV AGARWAL (Sr. Account executive)-Accounts guided in the preparation of the report. It could not have been completed. It is my pleasure to get training under his guidance.
I express my deep sense of gratitude to him for his interest, proper guidance, encouragement and co-operation in the preparation of the training report in time and in such and elegant form. My summer training report could not have become a reality without the aid and assistance of him, so I tender sincere thanks from the core of my heart.I would like to thank Mr. K.P.SINGH (Director - O), Mr. S.Pande (AGM) & Mr.Alok Agarwal for give me the approval to this project in the organization.
ISHAQ (M.B.A)
PREFACE
The summer training report is the WORKING CAPITAL
MANAGEMENT of RAMPUR DISTILLERY, A UNIT OF
RADICO KHAITAN Ltd. The merit of this report is that
Readers a fairly complete idea about the corporation.
The objective of this report is to gain knowledge about the
Operation, organization, management, financial assistance
, financial position and working results of the Corporation.
ISHAQ (M.B.A)
CERTIFICATE
This to certify that MR.ISHAQ, MBA (finance) student of m/sKRISHNA INSTITUTE OF MANAGEMENT AND TECHNOLOGY has undergone project training with us.He was assigned a project on “WORKING CAPITAL MANAGEMENT” and he has successfully completed the project.During the project period, we found him sincere and dedicated towards his work.We wish all the best for his future assignments.
MR. SANJEEV AGRAWAL(SR. ACCOUNT OFFICER)
contents
COMPANY PROFILE
ORGANISATION STRUCTURE
MANAGEMENT
DIVISION
BOARD OF DIRECTORS
COMPANY VISION
COMPANY MISSION
RADICO'S CORE VALUE
RAMPUR DISTILLERY
CORPORATE SERVICES
BRANDS DETAILS
COMPANY PROFILE
RADICO KHAITAN LTD.
ABOUT THE COMPANY
Radico Khaitan is one of India's oldest and largest liquor
manufacturers. Formerly known as Rampur Distillery, which was
established in 1943. It was only in 1999, that Radico decided to
launch and market its own brands, thereby embarking on a period of
phenomenal growth. To further boost its production capacity of
bottled and branded products, the company has tied up with bottling
units in various parts of the country.
RADICO KHAITAN LTD.
THE BRAND STORY
Radico Khaitan Ltd today has three millionaire brands in its portfolio. Radico's
flagship brand, 8 PM Whisky, launched in 1999, was a runaway success. In the
first year alone, it sold one million cases - a record for any Indian or foreign brand
operating in India. This also made it the first brand in the liquor industry to make
it to the Limca Book of Records.
Drinks International, the acclaimed international liquor magazine has rated 8 PM
whisky as the fastest growing whisky in the world in the regional category (2004-
05). The other millionaire brands are: Contessa Rum has won the prestigious
Monde Selection award for its overall quality for the past three executive years.
It has a large market share in the defense market... Old Admiral Brandy has also
been rated by Drinks International as the fastest growing Brandy in the world in
the regional category (2004-05 and 2005-06) also it has won the Monde
Selection award for its overall quality in 2004-05.
Today, Radico Khaitan has brands that straddle almost every market segment -
whisky, rum, brandy, vodka & gin - and price category. Its fine blends, consistent
quality, distinctive packaging and superior value have resonated with customers.
RADICO KHAITAN LTD.
THE INTERNATIONAL LINK
In a significant move aimed at catapulting the Indian liquor industry to
international standards, Radico Khaitan set up its international division - Radico
International - to distribute and market some of the world's best-known liquor
brands, including Wines from Ernest & Julio Gallo (makers of the world's largest-
selling wine, Carlo Rossi), Famous Grouse Whisky (from Highland Distillers).
STRONG FINANCIALS
Radico Khaitan is not just a company of great brands; it is a company of great
financials. The equity shares of the company are quoted on the Mumbai and
National Stock Exchanges, and the company has more than 35,000
shareholders. It is the most profitable company in the domestic liquor industry.
ORGANIZATION STRUCTURE
RADICO KHAITAN LTD.
ORGANISATION STRUCTURE
MD
DIRECTOR
PRESIDENTENGINEERING
PRESIDENTPRODUCTION
PRESIDENTFINANCE
PRESIDENTHR
GM GM GM GM
DGM DGM DGM DGM
RADICO KHAITAN LTD.
Management
Dr. LALIT KHAITAN
CHAIRMAN & MANAGING DIRECTOR
RADICO KHAITAN LTD.
A veteran of the Indian liquor industry
(over 45 years), Dr. Khaitan oversees
the entire business of Radico Khaitan.
He has been instrumental in improving
quality standards and seeking and
achieving customer satisfaction, leading
to substantial growth in sales and
revenues, and increased market shares.
In the process, he has succeeded in
transforming Radico Khaitan from a
small, behind-.
Dr. Khaitan has been widely recognized
for his contribution to the liquor industry. He has been associated the-scenes
player to a Rs. 995 crore company, the most profitable in its sector, and a
sought-after partner by leading international liquor brands seeking to enter the
Indian market. His unique management style has helped maintain Radico as an
open, ethical and transparent organization with a number of developmental
projects, has represented India with several international delegations, and is
involved in social & educational activities across India. He is currently:
Chairman, U.P. Committee of PHD Chamber of Commerce and
Industry
Member, Managing Committee, ASSOCHAM
Member, Managing Committee, All India Distillers Association
Member, Managing Committee, U.P. Distillers Association
Trustee, Khaitan Public School, Noida
Mr. ABHISHEK KHAITAN
MANAGING DIRECTOR
RADICO KHAITAN LTD
Mr. Abhishek Khaitan is a Bachelor of
Engineering (Industrial Production) from
Bangalore, and has done a Managerial
Finance & Managerial accounting course at
Harvard, USA.
He joined Radico Khaitan in 1997, and
supervised the establishment of the
company's Marketing Division in the same
year. The first brand to be launched by the division, 8 PM Whisky, was a
runaway success. In the first year alone, it sold one million cases - a record for
any Indian or foreign brand operating in India. This also made it the first brand in
the liquor industry to make it to the Limca Book of Records.
Under Abhishek Khaitan's leadership, Radico Khaitan's brand portfolio is wide
and deep, with brands that straddle almost every market segment, taste
preference and price category.
To recognize Mr. Abhishek Khaitan's contribution to Indian Industry, Economic
Development & Research Association bestowed the Bhartiya Udyog Ratan Award on
him. The World Economic Progress Society has honored him with the National
Industrial Excellence Award.
DIVISION OF THE COMPANY
RADICO KHAITAN LTD.
DIVISION OF THE COMPANY
Mr. RK Mehrotra
(President - Finance)
Mr. Mehrotra oversees the financial affairs of Radico Khaitan. He has been
associated with the company since 1991.
A Chartered Accountant by profession, Mr. Mehrotra has a vast and rich career
spanning more than 40 years. He is a member of the All India Management
Association.
Mr. KP Singh
(President - Operations)
Mr. Singh, whole time Director, oversees Radico Khaitan's operations, and heads
its' distillery unit at Rampur. He has been associated with the company for over a
decade.
Mr. Singh is a qualified technocrat with over 30 years of experience in the liquor
industry.
Mr. Raju Vaziraney
(President - Sales & Marketing)
Mr. Vaziraney oversees Radico Khaitan's Civil Marketing and Defence
Marketing Brands Divisions; he also handles the country liquor brands
of the company.
Mr. Vaziraney has a Masters degree in Economics, and Diplomas in Sales &
Marketing in Corporate Law, and Business Management. He has about 15
years of experience in sales in the liquor industry.
Mr. KS Raju
(Executive Vice President - Manufacturing & Operations)
Mr. Raju oversees the operations of all of Radico Khaitan's strategic tie-up
bottling units and Radico's own bottling units. Mr. Raju has a Masters
degree in Commerce from Andhra University, and a Diploma in
Management from All India Institute of Management. He has over 21 years
of experience in the liquor industry.
Mr. Sanjay Lamba
(Executive- Vice President- Exports & IBD)
Mr. Lamba oversees export of Radico's brands to various markets and also
heads the International brands divisions where Radico has marketing &
distribution tie-up with some of the liquor majors of the world.
Mr. Lamba is a qualified Chartered Accountant and today has a vast experience
of 15 years in varied sectors.
Mr. KS Raju (Executive Vice President - Manufacturing & Operations)
Mr. Raju oversees the operations of all of Radico Khaitan's strategic tie-up
bottling units and Radico's own bottling units.
Mr. Raju has a Masters degree in Commerce from Andhra University, and a
Diploma in Management from All India Institute of Management. He has over 21
years of experience in the liquor industry.
BOARD OF DIRECTORS
DR. LALIT KHAITAN
CHAIRMAN & MANAGING DIRECTOR
RADICO KHAITAN LTD.
An eminent industrialist, Dr. Khaitan has been at the helm of affairs of the
Company for more than 25 years. He is on the Managing Committee of a number
of associations, including the PHD Chamber of Commerce & Industry,
ASSOCHAM, All India Distillers Association, U.P. Distillers Association and
Confederation of Indian Industry.
During his illustrious career Dr. Khaitan has won several awards in recognition of
his services. These include:" 'Indira Gandhi National Unity Award', instituted by
All India National Unity Conference, presented by the Ex-President of India, Giani
Zail Singh" 'Vijay Ratna Award', instituted by the International Friendship Society
of India, presented by the then Prime Minister of India, Shri Chandra Sekhar
" 'National Builder of Eminence in the Ninetees' award, instituted by the
International Business Council.
MR. ABHISHEK KHAITAN
MANAGING DIRECTOR, RADICO KHAITAN LTD.
Mr. Khaitan has a Bachelors Degree in Engineering in
Industrial Production and qualifications in Managerial
Finance and Managerial Accounting an alumnus of
Harvard University, U.S.A. He is a young and talented
industrialist, and has been responsible for the exponential growth of the
Company.
MR. KARNA SINGH MEHTA
DIRECTOR, RADICO KHAITAN LTD.
MANAGING PARTNER, S.S. KOTHARI & CO. (A
LEADING FIRM OF CHARTERED ACCOUNTANTS)
Mr. Mehta is a leading Chartered Accountant, with vast
and rich experience in the field of Finance and Accounting.
He is on the Board of Directors of a number of leading Indian companies. He is
also a Member of the managing committees of several associations, including
PHD Chamber of Commerce & Industry.
MR. ASHUTOSH PATRA
DIRECTOR< RADICO KHAITAN LTD.
MANAGING PARTNER, O.P. KHAITAN & CO. (A LEADING
LAW FIRM)
Mr. Patra has over 25 years of experience in the legal field. He
is an eminent Supreme Court lawyer and a leading legal
expert.
MR. K.P. SINGH
WHOLE TIME DIRECTOR DESIGNATED AS
PRESIDENT (OPERATIONS), RADICO KHAITAN LTD.
Mr. Singh, a qualified technocrat, has over 30 years of
experience in the liquor industry and has been associated
with Radico Khaitan Ltd. for over a decade. He oversees
the operations of the Company, and heads its Distillery
Unit at Rampur.
MR. SANJAY JALAN
DIRECTOR, RADICO KHAITAN LTD.
Mr. Jalan, a practicing Chartered Accountant, has over 15
years of experience in Finance and Accounting, and is a
Director in a number of companies.
MR. RAGHUPATI SINGHANIA
DIRECTOR, RADICO KHAITAN LTD.
MANAGING DIRECTOR, J.K INDUSTRIES LTD
Mr. Singhania, an eminent industrialist, is the Managing
Director of J.K. Industries Ltd. He is also a Director in
many other companies of the J.K Group, including J.K.
Corp Ltd., Vikrant Tyres Ltd., and J.K. Drugs and Pharmaceuticals Ltd.
MR. AMIT BURMAN
DIRECTOR, RADICO KHAITAN LTD.
EXECUTIVE DIRECTOR, DABUR INDIA LTD.
Mr. Burman is an eminent industrialist and Executive
Director, Dabur India Ltd. An alumnus of Leigh and
Columbia Universities, U.S.A., and the University of
Cambridge, England, he has a Masters degree in
Industrial Engineering and a Masters degree in Business Administration. He is on
the Board of Directors of a number of leading Indian companies.
VISION OF THE COMPANY
MISSION OF THE COMPANY
RADICO KHAITAN LTD.
RADICO'S CORE VALUES
Radico's Core Values are aimed at developing a customer-focused, high-performance
organization, which creates value for all its stakeholders.
FOCUS ON CUSTOMER
Radico Khaitan believes that customer focus is very important. They give
importance to deliver both value & quality to the customer.
EXCELLENCE
Radico will strive for excellence in whatever we do. Radico will take the right path
to do whatever we do and excel in the same.
RESPECT FOR PEOPLE
Radico will value differences in individual perspectives. Radico want individuals
to dream, create and experiment in pursuit of opportunities and achieve
leadership through teamwork.
INNOVATION
Radico will constantly innovate and strive to better our processes, products,
services and management practices.
RADICO KHAITAN LTD.
CORPORATE GOVERNANCE
Corporate Governance at Radico means the framework to encourage the
efficient use of resources and equally to require accountability for the
stewardship of those resources. The aim is to align as nearly as possible the
interests of individuals, corporations and society.
Ernst & Young are the internal auditors and strategic advisors and help to
improve its operational efficiencies and control procedures.
Board of Directors consisting of eminent independent professionals.
Strict adherence to the accounting standards lay down by the Institute of
Chartered Accountants of India.
Special attention being paid to the investors relations. Regular
communication to the investors about the business developments and
important vents impacting the operations.
Strict compliance with the requirement of Stock Exchanges, Securities and
Exchange Board of India and other statutory authorities.
Liberal disclosures in the balance sheet over and above those required by
the regulatory authorities.
RADICO KHAITAN LTD.
CORPORATE SOCIAL RESPONSIBILITY PROGRAMME
HUNAR
In accordance with Radico's mission to work towards the up-liftment of local
artisans and to promote the UP handicraft, Zardozi and Chikan work it had
launched 'Radico- Chikankari Aur Zardozi Pratiyogita' in association with the
Indian Academy of Art & Culture, U.P.
The competition was organized to bring out the creativity of the artisans and to
look for young talent in the field of Chikankari & Zardozi. The event was
promoted through mobile vans, pamphlet distribution in the areas where the
artisans live. There were two levels of judging eminent personalities from
Lucknow judged the first level and in the second level Mrs. Jaya Prada, Mrs.
Kiran Khaitan, Mrs. Sucheta Merh & Mr. Swapan both designers from Kolkatta
judged the first three winners.
The artisans were awarded with cash prizes.
The artisans have been empanelled by Radico Khaitan Ltd to form a group called
"HUNAR”. To get employment for the artisans is the cause towards which the
group Hunar is working.
RADICO KHAITAN LTD.
ENVIRONMENT FRIENDLY
Radico Khaitan Ltd is an environment friendly company and follows all the norms
for its production facility at Rampur. It has also been awarded the ISO 9001
certification for the Rampur distillery.
RADICO KHAITAN LTD.
Balance Sheet ------------------- in Rs. Cr. -------------------
Mar '04 Mar '05 Mar '06 Mar '07
12 moths 12 moths 12 moths 12 moths12
moths
Sources Of Funds
Total Share Capital 19.29 19.29 19.29 19.29 76.97
Equity Share Capital 19.29 19.29 19.29 19.29 19.29
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 57.68
Reserves 44.33 58.11 79.31 114.04 146.32
Revaluation Reserves 10.05 9.74 9.67 9.61 9.54
Networth 73.67 87.14 108.27 142.94 232.83
Secured Loans 68.08 102.63 143.67 232.87 276.87
Unsecured Loans 32.42 32.98 71.03 109.11 333.37
Total Debt 100.50 135.61 214.70 341.98 610.24
Total Liabilities 174.17 222.75 322.97 484.92 843.07
Mar '03 Mar '04 Mar '05 Mar '06 Mar '07
12 moths 12 moths 12 moths 12 moths12
moths
Application Of Funds
Gross Block 122.57 144.22 204.18 318.23 360.61
Less: Accum. Depreciation 41.60 46.05 53.53 60.78 76.13
Net Block 80.97 98.17 150.65 257.45 284.48
Capital Work in Progress 1.02 2.69 17.37 3.76 44.23
Investments 8.90 8.65 0.01 7.21 25.29
Inventories 17.16 28.88 60.66 63.84 73.79
Sundry Debtors 50.00 54.75 61.51 90.29 129.58
Cash and Bank Balance 4.06 1.89 5.54 3.16 14.87
Total Current Assets 71.22 85.52 127.71 157.29 218.24
Loans and Advances 54.96 83.56 102.01 142.20 195.51
Fixed Deposits 0.68 0.51 1.25 1.11 194.11
Total CA, Loans & Advances 126.86 169.59 230.97 300.60 607.86
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 61.16 64.85 77.35 79.32 98.44
Provisions 4.76 5.57 6.44 7.63 20.36
Total CL & Provisions 65.92 70.42 83.79 86.95 118.80
Net Current Assets 60.94 99.17 147.18 213.65 489.06
Miscellaneous Expenses 22.34 14.07 7.78 2.84 0.00
Total Assets 174.17 222.75 322.99 484.91 843.06
Contingent Liabilities 1.86 2.50 21.78 18.24 29.67
Book Value (Rs) 32.98 40.13 51.11 13.82 17.17
RADICO KHAITAN LTD.
RAMPUR DISTILLERY
Rampur Distillery is one of the largest distilleries in India and a leading
manufacturer of Extra Neutral Alcohol (used in manufacturing Indian Made
foreign Liquor) it also manufacturers Rectified Spirit (used in manufacturing of
lower segments Country Liquor) and manufacturing of Anhydrous Alcohol or
Ethanol or Gasohol (used in Petrol Mixing) and the recent addition of grain
distillery . Today with a production capacity of 60 million liters p. a and with the
recent addition of the grain distillery which has taken the capacity up to 90 million
lit p.a. it is one of the largest distilleries in the country The Unit has a series of
firsts to its credit:
It is the first Indian distillery to obtain ISO 9001:2000 certifications. It has
achieved capacity utilization of over 100% in the alcohol plant. It is the first
environment-friendly distillery in the country.
RADICO KHAITAN LTD.
CAPACITY
Molasses Distillery 60 million liters per annum.
Grain Distillery 30 million liters per annum.
Malt Distillery 720 thousand liters per annum.
EFFLUENT TREATMENT PLANT
The effluent Treatment Facility in Rampur Distillery is unique in nature when
compared among and in the Industry. The Distillery complies with Zero
Discharge concept set up by CPCB. The treatment has varied by products, which
not only improves operational stability of the plants but also adds on to
company's profitability. Primary Treatment of the Effluent yields Bio Gas, which is
used as fuel in Cogen Boiler to generate steam and then Power through a
backpressure Turbine. The backpressure steam is used again in the Distillation
Plant to produce Extra Neutral Alcohol and Rectified Spirit.
ENVIRONMENTALLY FRIENDLY
Meeting out 100% Pollution Control norms, the Treated Effluent is not discharged
outside and in turn is mixed and cured with organic mass like Press Mud of
Sugar Mills and suitable organic manures to manufacture Bio Manure or Bio
Compost, a bio fertilizer used successfully in growing the crop of sugar canes
etc.
RADICO KHAITAN LTD.
CO-GENERATION PLANT
The cogeneration plant of Rampur Distillery consist of 26 MT capacity India's first
stand alone Bio Gas fired steam boiler and 2 MW Turbine Generator in tandem
to make Radico Khaitan self reliant on its requirement for power for its normal
operation.
BACKWARD INTEGRATION
The very first backward integration project has come in the form of setting up a
fully automatic 750 ml Kidney shape PET bottle manufacturing plant in low cost
and tax benefited area like Uttranchal. The unit started with production rate of 85
lacs bottle per year in October 2004 and is now geared up to produce 255 lacs
PET bottles to cater Radico's own captive consumption of approx. 150 lacs bottle
per year and rest is being sold to outside clients in similar businesses. The unit
has not only eliminated the pressure of PET bottle suppliers but has also
provided a kind of diversified manufacturing base for future business exploration.
OWN BOTTLING UNITS
Rampur Distillery has 14 state-of-the-art bottling lines, including those imported
from Italy, equipped with tunnel bottle washing, filling, sealing and labeling
machines with a capacity to produce 1500 cases (1 case = 12 bottles of 750 ml
each) of liquor in a single shift of operation. Line capacities vary from 750 cases
to 3,000 cases in a shift. To keep pace with the growing demand, Radico Khaitan
has significantly increased its bottling capacity by acquiring/setting up bottling
plants in the states of Rajasthan, Uttranchal and Andhra Pradesh.
Rampur Distillery, Rampur (Uttar Pradesh)
Whytehall (India) Ltd., Rampur (Uttar Pradesh)
Radico Khaitan Ltd., (Uttaranchal)
Radico Khaitan Ltd., Reengus (Rajasthan)
Radico Khaitan Ltd., Hyderabad (Andhra Pradesh)
STRATEGIC BOTTLING UNITS
Radico Khaitan Ltd is working continuously towards increasing its reach through
the strategic bottling units across the country. The focus underlines
comprehensive quality control and enhanced market penetration. Strategic
Bottling Units through out India.
NORTH
N V Distilleries & Breweries Ltd., (Punjab)
Gwalior Distillers, Gwalior (Madhya Pradesh)
Patiala Distillers & Manufacturers Ltd., Baddi
(Himachal Pradesh)
Oakland Bottlers (P) Ltd. (Jammu & Kashmir)
EAST
Goodhost Liquors (P) Ltd., Patna, (Bihar)
IFP Agro Industries Ltd., Kolkatta,
(West Bengal)
Seven Sisters Trade & Distilleries (P) Ltd.,
Guwahati.(Assam)
Bacchus Bottling (P) Ltd., (Orissa)
United Brothers Distilleries (P) Ltd.,
(Arunachal Pradesh)
SOUTH
Kamal Wineries, Hyderabad (Andhra Pradesh)
Kapitan Distillery, Hyderabad (Andhra Pradesh)
Ravikumar Distilleries (Pondicherry)
United Distillery, Calicut, (Kerala)
south
Sri Venkateswara Distilleries, Bangalore,
(Karnataka)
BT & FC (P) Ltd., Bangalore, (Karnataka)
Midas Golden, Chennai, (Tamil Nadu)
Devicolam Distilleries, Kochi, (Kerala)
WEST
Tilaknagar Industries Ltd, Tilaknagar,
(Maharashtra)
Gemini Distilleries (P) Ltd. (Goa)
Ajantha Distilleries Ltd, Nagpur.
(Maharashtra)
West
Welcome Distilleries, Bilaspur.
(Chattisgarh)
Silver star Distillery, (Daman)
RADICO KHAITAN LTD.
CORPORATE SERVICES
HUMAN RESOURCES
Radico Khaitan believes that the growth of a company depends on the collective
efforts of its employees. The Human Resources Department seeks to create an
environment that fosters the emergence of empowered leaders. They hire people
who have the fire to grow, the potential to lead and the zeal to excel. All new
hires undergo a 7-day induction and familiarization program.
RADICO KHAITAN LTD.
MARKETING
In the short span of time, Radico Khaitan has been able to make the transition
from being a manufacturer of Extra Neutral Alcohol to being a company with a
portfolio of hugely successful brands. Their understanding of market demands
and ability to satisfy consumer needs has been responsible for this. Consistently
superior quality, a wide range of products, innovative packaging, pricing to suit all
pockets, a nation-wide distribution network that covers 95% of retail points, clubs
and bars in the country, effective advertising, and popular events and
promotions. All these elements go to making up Radico Khaitan's winning
marketing mix.
SALES
Radico Khaitan’s young and enthusiastic sales force services retail outlets across
the country, understanding requirements and fulfilling them, thereby developing
enduring relationships. The Sales team comprises professionals with vast
domain expertise, years of experience in the liquor industry and a deep
understanding of varied markets.
RADICO KHAITAN LTD.
ACCOUNTS- FINANCE
Radico Khaitan Ltd has been continuously showing growth over previous years
and registering healthy profits. This has been made possible through the steps
taken by the Finance department like bringing down the cost of borrowings
substantially. The Efforts of the finance department has made Radico one of the
best prospects for timely repayment of debts and providing the highest safety of
funds for lenders. The department also has excellent financial management with
strong fundamentals in the short and medium term.
PRODUCTION
The Production Department is responsible for operations in Radico Khaitan's
bottling units. It works towards the smooth production and delivery of all the
Radico Khaitan brands as per market needs.
BRANDS
Radico made its foray into the International Market a few years back and today
Radico's brands are present in more than 30 countries. Radico has been
consistently providing excellent quality in terms of both product and packaging
along with outstanding service. Two of our brands 8 PM Whisky and Old Admiral
brandy featured in Drinks International Magazine as the fastest growing brands in
the world in the regional category. Three of its brands, Contessa XXX Rum, 8 PM
Bermuda White Rum and Old Admiral brandy have won Silver Medal in
prestigious Monde Selection for overall quality their brands have already attained
the leadership position in many countries.
Radico Khaitan is now breaking into newer and sophisticated markets with liquor
brands developed to appeal to a wider palate.
WHISKY
The base for Indian whisky is ENA. The other ingredients used are matured
Indian malt sprit, Scotch whisky concentrate, added flavors, and caramel & dm
water. All these ingredients are not added at a time but different stages.
1. Special appointment whisky
2. 8pm oryale whisky
3. Whitefield whisky
4. 8pm whisky
5. Radico gold supreme whisky
6. Radico gold whisky
7. Contessa deluxe whisky
8. Rampur no.1 whisky
BRANDY
Brandy is a Dutch word means (Brunt Wine). In India they make brandy by
blending with ENA, matured grape spirit, added flavoring.
1. Contessa Brandy
2. Old Admiral Brandy
3. White Field Brandy
4. 8pm Excellency Brandy
RUM
Rum is distilled liquor made from sugarcane products, cane juice spirit along with
base ENA and flavoring.
1. Contessa rum
2. Largest Rum
3. 8pm Bermuda
4. Black Cat Rum
5. Rampur No.1
6. Big Hit Rum
7. Contessa White Rum
GIN
Gin is alcoholic liquor obtained by distilling grain mash or redistilling sprit with
botanicals such as juniper berries, angelica, lemon and orange peels, cassia
bark, coriander and cardamom.
1. Contessa Gene
2. Big Hit Gene
3. Magic Moment Gene
RAW MATERIAL
For the production of alcohol, materials containing sustaining amount of glucose
Content can be used as a raw material. But for commercial production, common
raw materials used are as follows:
1. Molasses
2. Cane Juice
3. Sweet Potato
4. Sugar Beet
5. Grain (Barley, Rice)
FUNCTIONS
Purchasing of packing materials, engineering goods, and logistics etc.
function is done here.
The packing materials include carton, monochrome, bottles, and caps
label etc.
The procurement of packing materials is done on the basis of
1. Forecast from marketing department for the month.
2. Tentative planning based on last month.
3. Production schedule.
Packing material accounts for 80% of all other. Material and it is the main
requirement for distillery. Hence it is essential to have a proper stock of
the material as per the requirement.
Label is the most critical packing material as it involves different labels for
the different states as the rules and regulations are different in different
states.
For finalization the vendor for packing material purchase committee where
vendor is introduced .There are number of suppliers for packing material
and purchasing is done by share of business.
For the engineering material indenter raise the indent and the quotations
are called for the same. Then comparative is done and after that finalizing
the terms and conditions purchase order is released.
Logistics of country liquor is taken care of here. The procedure for
dispatch of country liquor is that the marketing department sends indent
according to the demand.
For the country liquor it is the policy of state govt. that distillers should
have their own depots and this depots will sell to retail vendors who will
sell called as CL2A.
Transportation annual rate contract is done and the documents that are to
be carried along with the CL includes excise pass PD25, invoice and
challan.
SOME BRAND OF COMPANY
8 PM Royale whisky
8 PM Royale whisky , which extends the 8PM brand franchise to the prestige semi – premium whisky segment , is made with international quality spirit and imported scotch with matured malt spirits. The mellow taste comes from years of being matured in wooden casks in meticulously guarded environs.
Whytehall whisky
Whytehall whisky was rewarded with silver medal at the international wine and spirit competiton 2007 held at U.K. it is a distinguished blends of aged scotch malts and the finest Indian spirits, skillfully blended to give a rich , warm , fullbodied whisky with a grace ful after note that lingers.
Contessa rum
Contessa rum was rewarded with bronze medal at the inter national wine & spirit competition 2007 held at U.K. another leading brand contessa rum enjoys a25%Market share in the defence segment and has won the prestigious gold medal at the monde collection in Brussels for its overall quality. It is in the regular segment.
old admiral brandy
The phenomenally successful old admiral brandy is our third million – caseBrand . in spite of India being a predominantly whisky- drinking country, old admirl brandy has received an overwhelming response from trade channel and consumers a like , to record exponential growth, year-on-year.
8 PM Bermuda white rum
Golden sands, calypso beats, cheerful people, that is the spirit of the Caribbean , reflectedIn 8 PM Bermuda white rum first entry in the white spirit segment .its size available at domestic is 750 ml, 375ml, 180ml.and at the international is same.
8PM WHISKY
8PM WHISKY, radico flagship brand, is a perfact balance of strength and smoothness, it is one of the finest whiskies in the regular segment . the strong positioning of A TIME FOR FRIEND has ensured a distinctive identity for the brand.since its launch in 1999, backed by fine product quality, superior packaging it has been a run away success.
SOME NEWS RELATED WITH RADICO
contents
WORKING CAPITAL
CONCEPT OF WORKING CAPITAL
FACTORS INFLUENCING WORKING CAPITAL
TYPES OF WORKING CAPITAL ON THE BASIS OF CONCEPT
TYPES OF WORKING CAPITAL ON THE BASIS OF REQUIREMENTS
NEED OF WORKING CAPITAL
OPERATING CYCLE OF WORKING CAPITAL
MANAGEMENT OF WORKING CAPITAL
ADVANTAGES
FINDINGS
BIBLIOGRAPHY
RADICO KHAITAN LTD.
Meaning of working capital
Capital required for a business can be classified under two main categories viz.
1) fixed capital
2) working capital
Every business needs funds for its establishment and to carry out its day-to-day operations. Long-term funds are required to create production facilities through purchase of fixed assets such as plant and machinery, land Building, furniture etc. Investment in these assets represents that part of firm's capital which is blocked on A permanent or fixed bassis and is called fixed capital. Funds are also needed for short-term purpose for the purchase of raw materials ,paymentof wages and other day-to-day xpenses,etc. these funds are known as Working capital. "Working capital is the amount of funds necessary to cover the cost of operating the enterprises."
RADICO KHAITAN LTD.
CONCEPT OF WORKING CAPITAL
There are two concepts of working capital.
1) Gross working capital
2) Net working capital
In the broad sense , the term working capital refers to
the gross working capital and represents the amount
of funds invested in current assets. Thus, the gross
working capital is the capital invested in total
current assets of the enterprise.current assets are
those assets which in the ordinary course of business
can be converted In to cash with in the short period of
normally one accounting year .
RADICO KHAITAN LTD.
CONSTITUTENTS OF CURRENT ASSETS
1) Cash in hand and bank balances.
2) Bills Receivables.
3) Sundry debtors.
4) Short-term loans and advances.
5) Inventories of stocks, as:
a) Raw materials,
b) Work in process
c) Finished goods.
6) Temporary investment of surplus funds.
7) Accrued incomes.
RADICO KHAITAN LTD.
In narrow sense, the term working capital refers to
the net working capital. Net working capital is the
excess of Current assets over current liabilities, or say:
Net Working capital = Current Assets – Current liabilities
Net working capital may be positive or negative .
When the current assets exceed the current liabilities
the working capital is positive and the negative
working capital results when the current liabilities are more than the current assets.
RADICO KHAITAN LTD.
CONSTITUENTS OF CURRENT LIABILITIES
1) Bills payable.
2) Sundry creditors or account payable.
3) Short term loans. Advances and deposits.
4) Accrued or out standing expenses. 5) Dividends payable .
6) Bank over draft. 7) Provision for taxation . if it does not amount
to appropriation of profits
RADICO KHAITAN LTD.
The gross concept is some times preferred to the net concept of working capital for the following reason :
1) It enables the enterprise to provided correct amount of working capital at the right time .
2) Every management is more interested in the total current assets with which it has to operate than the sources From where it is made available.
3) The gross concept takes in to consideration the fact that every increase in the funds of the enterprise would increase its working capital .
4) The gross concept of working capital is more useful in determining the rate of return on investments in working capital.
RADICO KHAITAN LTD.
The net working capital concept, however, is also important for the following reason:
1) It is the qualitative concept which indicates the firm 's ability to meet its operating expenses and short term liabilities .
2) It indicates the margine of protection available
to the short term creditors, i.e., the excess of current assets over current liabilities.
3) It is an indicator of the financial soundness of the enterprise.
4) it suggests the need for financing a part of the working capital requirements out of the permanent sources of funds.
RADICO KHAITAN LTD.
Characteristics of current assets
They have a short life span. Cash balances are held only for a week or so
accounts receivables typically are held for a duration of 30-60 days and inventory may be held for 30-100 days.
They are rapidly transformed in to other assets form . cash is utlised to purchase raw material. Raw material is converted to work in progress which is converted to finished goods. Finished good are sold for cash or credit, which creates accounts receivables are finally realised in cash.
RADICO KHAITAN LTD.
Based on these characteristics of current assets, following implications arise-
1) Working capital involves making frequent decision.
2) The difference between profit and present value is insignificant.
3) Since the various components of working capital closely interact with each other , decision pertaining to one component must be taken after given consideration to the effect on other components.
RADICO KHAITAN LTD.
FACTORS INFLUENCING WORKING CAPITAL REQUIREMENTS
Nature of the business :- This is one of the primery factors influencing the working capital requirements of a firm . For instance, a service firm like a hotel has a short operating cycle since it sells mostly on a cash basis and has lower working capital requirement. A
manufacturing firm , on the other hand , has a longer operating cycle and invests more in its current assets. It thus has greater working capital requirement.
Seasonality of operations :- some firms' products sell only during particular seasons . for instance, air conditioners sell more during the summer than in the winter. Such firms have greater working capital requirement during peak
.
RADICO KHAITAN LTD.
seasons and lower requirements during other seasons . Firms whose sales are not affected by seasons havestable working capital requirement.
Market condition :-
The level of competition existing in market also influences working capital requirement. When competition is high, the company should have enough inventories of finished goods to meet a
certain level of demand. Otherwise customers are highly likely to switch over the competitor's products.
Supply condition :-
if supply of raw material and spares is timely and adequate , the firm can get by we they comparatively low inventory level. If supply is scarce and un predictable or available during particular season , the firm will have to obtain raw material when it is available.
RADICO KHAITAN LTD.
Types of working capitalOn the basis of the requirement
Permanent working capital:-
It refers to the minimum amount of the investment which should always be there is the fixed or minimum current assets such as cash and bank balance , debtors, and other short- term assets i.e inventory etc .in order to carry out business
smoothly. This investment is a regular type permanent working capital also increases. Tondon committee refered to working capital the following characteristics –
unlike fixed assets ,it keeps on changing its form from one assets to another
It can not be reduced substantially as long as the firm is going concern.
RADICO KHAITAN LTD.
With the growth of the business, the size of this component of working capital also increases.
This hard core working capital is very important from finance point of view. It should be financed from long term sources of fund .for this purpose besides ploughing back of profits, shares and debentures can be issued to raise necessary funds.
Temporary working capital:-
The amount of temporary this hard core working capital identification is working capital keeps on fluctuating from time to time on the business activities. It may be divided in to two parts . i.e seasonaland special working capital . Seasonal working capital is required to meet the seasonal demand d of busy period or season occurring at stipulated intervals. While special working capital is
RADICO KHAITAN LTD.
Required to meet extra ordinary needs for contingencies such as rising prices, fire strikes unexpected competition or big advertisement campaign.
RADICO KHAITAN LTD.
Need of working capital :- Working capital is needed for the following purposes
1) for the purchase of raw materials, components
and spares.
2) To pay wages and salaries.
3) To incur day to day expenses and overhead costs
such as fuel , power and office expenses. Etc.
4) To meet the selling costs as packing, advertising, etc.
5) To provide credit facilities to the customer.
RADICO KHAITAN LTD.
Operating cycle of working capital
Every business undertaking requires funds for two purposes: investment in fixed assets and investment in current assets. Funds required to invest in stock, debtors and current assets keep on changing shape and volume.For example , a company has some cash in the beginning. The cash may be paid to the suppliers of raw materials , to meet labor costs and other overheds . these three combined would generate work in
progress which will be converted into finished goods on the completion of the production process on sale , these finished goods get converted in to debtors and when debtors pay , the firm will again have cash . This cash will again be used for financing raw material, work- in- progress, finished goods, debtors and finally again cash. This time period is known as the working capital cycle of the firm.
RADICO KHAITAN LTD.
RADICO KHAITAN LTD.
ACCOUNT RECEIVABLES
CASH FINISHED GOODS
RAW MATERIALS
WORK - IN - PROCESS
Management of working capital
According to smith , working capital management is considered with the problem that arises in attempting to manage the current liabilities and the inter – relationship that exist between them .
The basic objective of working capital management is to manage the firm's current assets and liabilities in such a way that a satisfactory level of working capital is maintained i.e., it is neither excessive not inadequate. In other words, it must have an optimum size.
Thus we can say that working capital management has these objective :
RADICO KHAITAN LTD.
Maintenance of working capital and availabity of funds at the time of needs.
As a matter of the fact, a business can not survive in the absence of a satisfactory ratio between its current assets and current liabilities further more its ability to prosper will largely be determined by the omposition of the current assets tools.
RADICO KHAITAN LTD.
Components of management of working capital
Working capital management bears the following components-
Estimating the working capital requirement i.e forcasting of working capital.
Finding out the optimum level of investment in various current , namely cash, account receivable , and stocks. In other words , determining the size of working capital.
Finding out the optimum mix of short – term funds in relation to long – term capital.
Finding out all appropriate sources of working capital.
RADICO KHAITAN LTD.
Inventory management:-
Inventory is the one of the most important componentOf working capital and its proper management can not be under stressed. Fundamentally, inventory consists of raw material, work in progress and finished goods. The proportion of inventories to fixed assets is quite high ranging from 25% to 45% in the manufacturing sector.
Hence inventory management is crucial for all managers irrespective of functional specialization. Since a number of industrial relations disputes in manufacturing industries are linked to production bonus and incentives relating to inventories irrespective of the market need for inventory , the manager must understand this point well. Every member of the organization feels its impact and yet scant respect is paid to it. Hence managers should take note of some of these important criteria for insuring proper management.
RADICO KHAITAN LTD.
Maintaining a proper level of stock.
ABC analysis to control high value items .
Proper ordering policies .
Pricing of raw material work in progress and finished goods.
Control over wastage and obsolescence.
RADICO KHAITAN LTD.
Account receivable:-
This is also a forms an important part of working capital and depends on the credit policy adopted by the firm namely.
How much credit to be given
For how long is it given
Discounts for early payment
Collection and recovery efforts
RADICO KHAITAN LTD.
CASH MANAGEMENT:-This as mentioned is the most liquid of all assets and is required to
1) Meet day to day expenses 2) As a hudge against uncertainties.
Too much cash is not good nor is having too little a healthy practices . Good companies usually have a practices to plant surpulus cash in risk free securities or inter company deposits. On the other hand , companies with a deficit tend to borrow at a high rate of interest indicating a lack of planning . a sudden surge in business may spur the need of working capital and its may also require additional interest to be paid and again planning is important.
The key to all management and especially working capital management is to plan work . this also Important aspect of working capital management and good companies have the practice of planning their needs well in advance.
RADICO KHAITAN LTD.
Advantages of adequate working capital :- No business can run successfully without an adequate amount of working capital. The main advantages of maintaining adequate amount of working capital are as follows:
1) Solvency of the business : adequate workingcapital helps in maintaining solvency of the business by providing uninterrupted flow of production.
2) Goodwill : sufficient working capital enables a business concern to make a prompt payments and hence helps in creating and maintaining goodwill.
3) Easy loans : a concern having adequate working capital , high solvency and good credit standing can arrange loans from banks and others on easy and favorable terms.
RADICO KHAITAN LTD.
4) Cash discount : adequate working capital also enables a concern to avail cash in purchase and hence it reduces cost.
5) Regular supply of raw materials : sufficient working capital ensures regular supply of raw materials and continuous production.
6) Exploitation of favorable market conditions : only concerns with adequate working capital can exploit favorable market condition such as purchasing its requirements in bulk when the prices are lower and by holding its inventories for higher prices .
7) Ability to face crisis : adequate working capital enables a concern to face business crisis in emergencies such as depression because during such periods, generally, there is much pressure on working capital.
RADICO KHAITAN LTD.
GROSS WORKING CAPITAL AS AT 31ST MARCH, 2012
ACCURED INCOME 611.27
INVENTORIES 73.79
SUNDARY DEBTORS 129.58
CASH AND BANK BALANCE 14.87
LOANS AND ADVANCES 195.51
TOTAL GWC 425.02
NET WORKING CAPITAL AS AT 31ST MARCH, 2012
CURRENT LIABILITIES 98.44
NET WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITIES
= 425.02 – 98.44 = 326.58NOTE: all amount in Rs. Cr.
RADICO KHAITAN LTD.
FINDINGS
The second largest liquor producer company in India.
In defence it is the largest supplier of Indian liquor.
Funding with in the company for regular expances has to be properly taken care off.
RADICO KHAITAN LTD.
BIBLIOGRAPHY
BOOKS:
FINANCIAL MANAGEMENT - KHAN & JAIN
INTERNET:
www.Goggle.com
www.radico khaitan.com Www. yahoo.com
