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A
PROJECT REPORT
ON
WORKING CAPITAL
IN
BRITANNIA INDUSTRY LIMITED
FOR
THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION (2010-12)
FROM
Dev Bhoomi Institute of Management
SUBMITTED TO: SUBMITTED BY:
Mr. SANCHIT RAJKUMAR
(Faculty of Management) M.B.A 4 (semester)
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ACKNOWLEDGEMENT
It is not a single mans effort which is sufficient for the accomplishment of a research. No task can
be successfully by a single individual. I acknowledge here the names of those people who have
been instrumental in preparation of my project.
I readily acknowledge my indebted to my parents whose support, dedication and honest efforts
have given me an immense help in doing this project.
It gives me immense pleasure to express my deep sense of gratitude and appreciation to my
external guides Mr. Mudit Agarwal and his team whose constant encouragement and valuable
suggestions gave back bone support in completing this project.
I take the opportunity to thanks Mr. Mudit Agarwal for motivating, encouraging, guiding and
supporting at every step and sparing his valuable time for me.
Last but not the least I record my sincere thanks to all beloved and respectable persons who helped
me and could find any separate mention.
Above all I praise GODthe most beneficial, the most merciful that I have been able to complete
my training project successfully.
RAJ KUMAR
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DECLERATION
I Ruby Maliyan student of MBA III semester ofDev Bhoomi Institute hereby declare that this
project report onWORKING CAPITAL MANAGEMENTis written and submitted by meunder the guidance ofMr. Mudit Agarwal is my original work. The entire analysis and
conclusion of this report are based on the information which is collected by me during the training
period.
The empirical finding in the report are based on the data collected myself while preparing thisproject. I have not copied anything from any source or other project submitted for the similar
purpose, if any.
RAJ KUMAR
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PREFACE
It gives great pleasure to present on the topic ofWorking capital Management of Britannia
industries limited. I have selected this topic because to know about the relationship between
current assets and current liabilities.
As Working capital Management holds an important place in the theory of Finance. A large
number of tools and techniques have been developed in the past to insure optimal allocation of
Working Capital Management funds more than Eighty Percent of finance manager is spent in
dealing with day to day problem which are part & parcel of working capital requirements of the
enterprise. Efficient use of working capital has direct bearing on profitability of an enterprise. It
augments the productivity of the investment in the fixed assets. Basic survival of the firm may be
at stake if adequate working capital is not available in time. It is essential to maintain constant
supply of working capital for healthy growth of an enterprise.
Management of working capital assumes added significance in the context of small scale and
medium sized industries in our country. Most of them have weak financial base and limited access
to the institutional finance. Their risk capacity is also low. Working capital management deals with
management of each of the firm current assets in such way that is maximizes the value of the firm.
In any economy, the financial sector plays a major role in the mobilization and allocation of
savings. In changing economic environment, manufacturing industries have to become more
competitive, they have to keep their cost in check an efficient use of working capital would release
the funds locked in the current assets.
TABLE OF CONTENTS
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CHAPTER 1:INTRODUCTION TO FMGC SECTOR
1.1 Industry overview
1.2 Common FMGC product
1.3 Market Potentiality of FMGC industry
1.4 Why India
CHAPTER 2: INTRODUCTION TO THE COMPANY
1.1Company overview BIL ltd.
1.2Company profile
1.3Management team
1.4The origin of eat health think better
1.5 Milestones
1.6History of biscuits
1.7The BIL products
1.8Activities of the company
1.9Company performance
1.10 Achievement of the company
CHAPTER 3: INTRODUCTION TO PANTNAGAR UNIT
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1.1Brief about pantnagar unit
1.2Company events
1.3Head of department of the company
1.4Objective of the unit
1.5SWOT analysis
1.6Things you dont know about Britannia
1.7How production plan comes
1.8Production plant at pantnagar unit
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CHAPTER-1
INTRODUCTION
ABOUT
THE FMGC
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INTRODUCTION TO FMGC SECTOR
INDUSTORY OVERVIEW
The Indian FMCG sector is the fourth largest sector in the economy with a total market size in
excess of $13.1 billion. It has a strong MNC presence and is characterised by a well established
distribution network, intense competition between the organised and unorganised segments and
low operational cost. Availability of key raw materials, cheaper labour costs and presence across
the entire value chain gives India a competitive advantage.
The FMCG market is set to treble from $11.6 billion in 2003 to $33.4 billion in 2015. Penetration
level as well as per capita consumption in most product categories like jams, toothpaste, skin care,
hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian
population, particularly the middle class and the rural segments, presents an opportunity to makers
of branded products to convert consumers to branded products. Growth is also likely to come from
consumer 'upgrading' in the matured product categories. With 200 million people expected to shift
to processed and packaged food by 2010, India needs around $28 billion of investment in the food-
processing Industry.
COMMON FMGC PRODUCTSsome common fmgc product categories include food and dairy products, glassware, paper product,
pharmaceuticals, consumer electronics, packaged food products, plastic goods, printing and
stationary, household products, photography, drinks etc. and some of the examples of the FMGC
products are coffee, tea, dry cells, greeting cards, gifts, detergents, tobacco and cigarettes, watches,
soaps etc.
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FMCG Products
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MARKET POTENTIALITY OF FMGC INDUSTRY
Some of the merits of FMGC industry, which made this industry as a one, are lower operational
cost, strong distribution networks, presence of renowned FMGC companies, population growth is
another factor which is responsible behind the success of this industry.
Leading FMGC companies
1. Hindustan unilever ltd. (HUL)
2. Indian tobacco company (ITC)
3. Nestle India
4. AMUL
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industry
9. Procter and Gamble Hygiene and Health Care
10. Marico Industry
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WHY INDIA
Large domestic market
India is one of the largest emerging markets, with a population of over one billion. India is one ofthe largest economies in the world in term of purchasing power and has has a strong middle class
base of 300 million.
Rural and urban potential
Rural- urban profile
Urban Rural
Population 2001-02 (mn
household )
53 135
Population 2009-10 (mn
household)
69 153
% Distribution (01-02) 28 72
Market (town/villages) 3,768 6,27,000
Universe of outlets (mn) 1 3.3
Source: statistical outline of India, NCAER
Around 70 % of the total household in India (188 million) reside in the rural areas. The total
number of rural households is expected to rise from 135 million in 2001-02 to 153 million in 2009-10. This present the largest potential market in the world. The annual size of the rural FMCG
market was estimated at around us$ 10.5 billion in 2001-02. With growing incomes at both the
rural and the urban level, the market potential is expected to expand further.
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Demandsupply gap
Currently, only a small percentage of the raw materials in India are processed into value added
products even as the demand for processed and convenience food is on the rise. This demand
supply gap indicates an untapped opportunity in areas such as packaged form, convenience food
and drinks, milk product etc.
In the personal care segment, the low penetration rate is both the rural and urban areas indicate a
market potential.
Indiaa large consumer goods spender
An average Indian spends around 40 per cent of his income on grocery and 8 per cent on personal
care product. The large share of fast moving consumer goods (FMCG) in total individual spending
along with the large population base is another factor that makes India one of the largest FMCG
markets.
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CHAPTER-2
INTRODUCTION
ABOUT
THE COMPANY
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COMPANY OVERVIEW
The story of one of India's favourite brands reads almost like a fairy tale. Once upon a time, in
1892 to be precise, a biscuit company was started in a nondescript house in Calcutta (now Kolkata)
with an initial investment of Rs. 295. The company we all know as Britannia today.
The beginnings might have been humble-the dreams were anything but. By 1910, with the advent
of electricity, Britannia mechanised its operations, and in 1921, it became the first company east of
the Suez Canal to use imported gas ovens. Britannia's business was flourishing. But, more
importantly, Britannia was acquiring a reputation for quality and value. As a result, during the
tragic World War II, the Government reposed its trust in Britannia by contracting it to supply large
quantities of "service biscuits" to the armed forces.
As time moved on, the biscuit market continued to grow and Britannia grew along with it. In
1975, the Britannia Biscuit Company took over the distribution of biscuits from Parry's who till
now distributed Britannia biscuits in India. In the subsequent public issue of 1978, Indian
shareholding crossed 60%, firmly establishing the Indian ness of the firm. The following year,
Britannia Biscuit Company was re-christened Britannia Industries Limited (BIL). Four years later
in 1983, it crossed the Rs. 100 crores revenue mark.
On the operations front, the company was making equally dynamic strides. In 1992, it celebrated
its Platinum Jubilee. In 1997, the company unveiled its new corporate identity - "Eat Healthy,
Think Better" - and made its first foray into the dairy products market. In 1999, the "Britannia
Khao, World Cup Jao" promotion further fortified the affinity consumers had with 'Brand
Britannia'.
Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food
brand of the country. It was equally recognised for its innovative approach to products and
marketing: the Lagans Match was voted India's most successful promotional activity of the year
2001 while the delicious Britannia 50-50 Maska-Chaska became India's most successful product
launch. In 2002, Britannia's New Business Division formed a joint venture with Fonterra, the
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world's second largest Dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. In
recognition of its vision and accelerating graph, Forbes Global rated Britannia 'One amongst the
Top 200 Small Companies of the World', and The Economic Times pegged Britannia India's
2nd Most Trusted Brand.
Today, more than a century after those tentative first steps, Britannia's fairy tale is not only going
strong but blazing new standards, and that miniscule initial investment has grown by leaps and
bounds to crores of rupees in wealth for Britannia's shareholders. The company's offerings are
spread across the spectrum with products ranging from the healthy and economical Tiger biscuits
to the more lifestyle-oriented Milkman Cheese. Having succeeded in garnering the trust of almost
one-third of India's one billion populations and a strong management at the helm means Britannia
will continue to dream big on its path of innovation and quality. And millions of consumers will
savour the results, happily ever after.
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COMPANY PROFILE
Registered office of Britannia Industries Limited is situated in West Bengal. This company is
registered under Companies Act, 1956.
Britannia biscuits Company Limited was originally incorporated on 21st
March 1918under Indian
Companies Act under the name The Britannia Biscuits Company Limited under section 21
of Companies Act and approval of Central Government.
The main aim of the Company is to make available good and improved quality biscuits to each and
every part of the country.
The Company is perusing for ISO14001certificate and it is ISO 22000 certified. The Company was
established at the Pantnagar branch on 21st May 2005 mainly for production with a production
coverage area of approximately 20 acres.
The control of management is through Board of Directors.
The Companys head and registered office and works place are located at the below mentioned
addresses:
Registered & Head office: Britannia Industries Limited
5/1A, Hungerford Street
Kolkata- 700017
Works places: (a) Britannia Industries Limited
33, Industrial Area
Lawrence Road,
Delhi- 110035
(b) Britannia Industries Limited
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Plot No.1, Sector- 1
Integrated Industrial Estate
Pantnagar, Rudrapur- 263153
(c) Britannia Industries Limited
15, Taratola road,
Kolkata700088
(d) Britannia Industries Limited
MTH road,
PadiChennai600050
(e) Britannia Industries Limited
Ready road (East),
Mazagaon, Mumbai- 400010
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BOARD OF DIRECTORS
Name Destination
Mr. Nusli Neville Chairman
Ms. Vinita Bali Managing Director
Mr. A.K.Hirjee Director
Dr. Ajai Puri Director
Mr. avijit Deb Director
Mr. Jeh N Wadia Director
Mr. Keki Dadiseth Director
Mr. Nimesh N Kampani Director
Mr. Pratap Khanna Director
Mr.S.S.Kelkar Director
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MANAGEMENT TEAM
ANURADHA NARASIMHAN- Category Director - Health &
ASHOK KUMAR GUPTA - General Manager - Accounts & P
GAUTAM BANERJEE - General ManagerMaterials
R K AGRAWAL- Supply Chain Director for New Business Development
R. ANAND - Business Operations Director
SHALINI DEGAN - Category Director - Delight & Lifestyle
T S VENKETRAM- General Manager - Engineering Projects & Technology
VINOD MENON- Head - Dairy Business
BALAJI REDDIPALLI - Head Replenishment
N. VENKATARAMAN - General ManagerCommercial
SHRIDHAR PANSHIKAR- National Sales Director
KAILASH H. KAKANI - General Manager - Manufacturing Operations
B. PRASHANTH - Head of R&D
Dr. K.N. SHASHIKANTH- Head - Corporate Quality
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MILESTONE1892 The genesisbritannia established with an investment of Rs.
295 in Kolkata
1910 Advent of electricity sees operations mechanised
1921 Imported machinery introduced; Britannia becomes the first
company East of the Suez to use gas ovens
1939 - 44 Sales rise exponentially to Rs.16,27,202 in 1939 .During 1944
sales ramp up by more than eight times to reach Rs.1.36 crore
1975 Britannia Biscuit Company takes over biscuit distribution from
Parry's
1978 Public issue - Indian shareholding crosses 60%
1979 Re-christened Britannia Industries Ltd. (BIL)
1983 Sales cross Rs.100 crore
1989 The Executive Office relocated to Bangalore
1992 BIL celebrates its Platinum Jubilee
1993 Wadia Group acquires stake in ABIL, UK and becomes an
equal partner with Groupe Danone in BIL
1994 Volumes cross 1, 00,000 tons of biscuits.
1997 Re-birth - new corporate identity 'Eat Healthy, Think Better'
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leads to new mission: 'Make every third Indian a Britannia
consumer' BIL enters the dairy products market.
1999 "Britannia Khao World Cup Jao" - a major success! Profit upby 37%.
2000 Forbes Global Ranking - Britannia among Top 300 smallcompanies.
2001 BIL ranked one of India's biggest brands No.1 food brand ofthe country.
Britannia Lagaan Match: India's most successful promotionalactivity of the year.
Maska Chaska: India's most successful FMCG launch .
2002 BIL launches joint venture with Fonterra, the world's secondlargest dairy company.Britannia New Zealand Foods Pvt. Ltd. is born .Rated as 'One amongst the Top 200 Small Companies of theWorld' by Forbes Global .Economic Times ranks BIL India's 2nd Most Trusted Brand.Pure Magic -Winner of the WordStar, Asia star and India staraward for packaging.
2003 'Treat Duet'- most successful launch of the year
Britannia Khao World Cup Jao rocks the consumer lives yetagain
2004 Britannia accorded the status of being a 'Super brand'.Volumes cross 3, 00,000 tons of biscuits.Good Day adds a new variant - Coconut - in its range.
2005 Re-birth of Tiger - 'Swasth Khao, Tiger Ban Jao' becomes thepopular chant!Britannia launched 'Greetings' range of premium assorted giftpacks. The new plant in Uttaranchal, commissioned ahead ofschedule. The launch of yet another exciting snacking option -
Britannia 50-50 Pepper Chakkar.
2006 Britannia re-launched Nutri Choice Hi-Fibre Digestive biscuitsin an international large sized biscuit pack. Britannia acquires51% stake in Bangalore-based bakery foods retailer DailyBread.
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2007 Britannia industries formed a joint venture with the KhimjiRamdas Group and acquired a 70 percent beneficial stake inthe Dubai-based Strategic Foods International Co. LLC and65.4% in the Oman-based Al Sallan Food Industries Co.SAOG.
2008 Britannia launched Iron fortified 'Tiger Banana' biscuits, 'Good
Day Classic Cookies', Low Fat Dahi and renovated
'MarieGold'
2009 Britannia NutriChoice Nature Spice Crackers launched - Your
favourite Cream Crackers, now made even more exciting with
the addition of "Sabut" Ajwain and Jeera spices.
Britannia takes full control of Daily Bread.
Britannia Industries buys out New Zealand's Fonterra from
existing dairy joint venture, Britannia New Zealand Foods
(BNZF). BNZF became a 100 per cent Britannia subsidiary
and was renamed Britannia Dairy Private Limited (BDPL).
Recognizing the changing global trends & health benefits of
removing transfers, Britannia is the first Bakery brand in India
to remove transfers from its products.
Wadia Group acquired stake holdings from Group Danone and
becomes the single largest shareholder in BIL.
2010 50-50 Maska Chaska was re-launched with a new masaaledar
twist - a delightful blend of butter and imported flavours along
with sprinkling of masala in September 2010.
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Britannia was presented the Master Brand 2010 Award by
CMO Council in November 2010.
Tiger enters the Cookies category, with the launch of Crunch
Cookies in October. These cookies are not only high on delight
but also high on energy and have been created keeping in mind
the needs of today's kids, These delightful cookies come in two
exciting variants - Fruit & Nut and Choc chips and at an
affordable price point of just Rs 5.
Brand NutriChoice, in keeping with its track record of
launching differentiated healthy snacks, launched Diabetic
Friendly Essentials on 14th November, a day that is world over
recognized as World Diabetes Day. The range comprised of 2
variants - Oats Cookies and Ragi Cookies - and is available in
top Indian cities.
2011 Always committed to constant innovation, Britannia launchedBritannia Healthy Start in Mumbai in January 2011. Specially
designed with Indian tastes in mind, Healthy Start is a
complete range of ready-to-cook breakfast mixes of Upmas,
Pohas, Porridges and Oats that are healthy, delicious, and take
just 5 minutes to cook! This is the only product range in its
category that combines the natural nutrition of multi-grains,
100% real vegetables, pulses and nuts all in one pack.
Britannia received the Most Respected Company Award 2011
from Business world.
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Bourbon received the Most Popular Confectionery Product
Preferred By Youth (Biscuit) Award.
IMCRBNQA (Indian Merchant Chambers Ramakrishna Bajaj
National Quality Award) conferred the Manufacturing
Performance Excellence Trophy a National Quality Award for
the 2010 cycle, for Britannia Corporate Office (Bangalore),
Britannia Industries Ltd. (Rudrapur) and Sunandram Foods
Pvt. Ltd (Mangaldoi, Guwahati
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THE ORIGIN OF EAT HEALTHY THINK BETTER
Britanniathe biscuit leader with a history-has withstood the tests of time. Part of the reason for
its success has been its ability to resonate with the changes in consumer needs-needs that have
varied significantly across its 100+ year epoch. With consumer democracy reaching new levels,
t h e o n e common thread to emerge in recent times has been the shift in lifestyles and a
corresponding awareness of health. People are increasingly becoming conscious of dietary care
and its correlation to wellness and matching the new pace to their lives with improved nutritional
and dietary habits. This new awareness has seen consumers seeking foods that complement their
lifestyles while offering convenience, variety and economy, over and above health and nutrition.
Britannia saw the writing on the wall. Its Swasth Khao Tan Man Jagao (Eat Healthy,
Think Better) re-position direc tly addressed this new trend by promisi ng the new
generation a healthy and nutritious alternative-that was also delightful and tasty.
Thus, the new logo was born, encapsulating the core essence of Britannia healthy, nutritious, and
optimistic and combining it with a delightful product range to offer variety and choice to
consumers.
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HISTORY OF BISCUITS
Sweet or salty. Soft or crunchy. Simple or exotic. Everybody loves munching on
biscuits, but do they know how biscuits began? The history of biscuits can be traced back
to a recipe created by the Roman chef Apicius, in which "a thick paste of fine wheat
flour was boiled and spread out on a plate. When it had dried and hardened it was
served with honey and cut up and then fried until crisp, then pepper."
The word 'Biscuit' is derived from the Latin words 'Bis' (meaning 'twice') and 'Coctus' (meaning
cooked or baked). The word 'Biscotti' is also the generic term for cookies in Italian. Back then,
biscuits were unleavened, hard and thin wafers which, because of their low water content, were
ideal food to store.
As people started to explore the globe, biscuits became the ideal travelling food since they stayed
fresh for long periods. The seafaring age, thus, witnessed the boom of biscuits when these were
sealed in airtight containers to last for months at a time. Hard track biscuits (earliest version of the
biscotti and present-day crackers) were part of the staple diet of English and American sailors for
many centuries. In fact, the countries which led this seafaring charge, such as those in Western
Europe, are the ones where biscuits are most popular even today. Biscotti is said to have been a
favourite of Christopher Columbus who discovered America!
Making good biscuits is quite an art, and history bears testimony to that. During the 17th and 18th
Centuries in Europe, baking was a carefully controlled profession, managed through a series of
'guilds' or professional associations. To become a baker, one had to complete years of
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OUR PRODUCTS
Little Heart
Little Hearts was launched in 1993 and targeted the growing youth segment. A completely unique
product, it was the first time biscuits were retailed in pouch packs like potato wafers. The launch
message introduced a special taste experience that made the unlikeliest characters - like Dracula
and Frankenstein - melt. In 1997, the 'Direct Dil Se' campaign encouraged youngsters to openly
express their feelings. And in 2003, two variants called Little Hearts Chocolate and Little Hearts
Sesame were rolled out with a campaign "Dil sabka actually sweet hai". With Little Hearts,
Britannia has tasted the sweet taste of success.
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Tiger
Tiger, launched in 1997, became the largest brand in Britannia's portfolio in the very first year of
its launch and continues to be so till today. Tiger has grown from strength to strength and the re-
invigoration in June 2005 has further helped bolster its growth in the highly competitive glucose
biscuit category.
Treat
Britannia launched Treat in 2002. Treat has a range of tasty delights for all kids with yummycreamy treasures within the biscuit shells. Britannia Treat offers a wide variety of flavors, such as
the classic Bourbon & Elaichi, the Fruit Flavored Creams such as Orange, Pineapple, Mango, and
Strawberry, the Jam Filled Centers under the Jim Jam range, and the Duet Range (biscuits with
two flavours of cream between three layers of biscuit) comprising Strawberry Vanilla and Duet
Strawberry Chocolate.
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Nutri Choice
In continuation of the promise of "Swasth Khao, Tan Man Jagao," Britannia introduced
NutriChoice range of healthy biscuits in 1998. The brand is targeted towards overall health and
wellness for adults. The range has for long comprised of three popular variants, namely
NutriChoice Thin Arrowroot, NutriChoice Cream Cracker and NutriChoice Digestive.Milk Bikis
Milk Bikis, the favourite growth partner of Kids, now brings greater value and delight to all with
its new product and pack design. Recently re-launched in its existing Southern & Eastern markets,
and extended across India, the new Milk Bikis is all set to add excitement and appeal to
nutritious food. Whoever said that good food needs to look dull and boring, will just have to
take a look at Milk Bikis. With a unique and attractive honeycomb design and an enhanced product
experience, the new biscuit prompts the Kids will love it reaction amongst mothers.
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Tiger launched Krunch Cookies nationally in October 2010.
The launches were held in Chennai, Hyderabad, Bangalore, Kolkata, Mumbai, Lucknow
and New Delhi with active participation by the entire Britannia Sales Team. Tiger Krunch
is the first of its kind cookies and is specifically targeted at kids. It is available in
two very exciting variants of Fruit & Nut and Chocochips.
Bread
Till 1958, there were no breads in the organized sector and bread consumption was a habit typed
by the British. Then, a mechanized bread unit was set up in Delhi with the name Delbis which
produced sliced bread and packed it under the Britannia name.
The Mumbai unit came up in 1963. And there again Britannia was the first branded bread in the
city.
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Cakes
Britannia entered the cake market in the year 1963 and is the top player in the market. Britannia
Cakes range is divinely scrumptious and has both Bar Cakes and Cup Cakes which were launched
in 2005. Bar Cakes are available in variants that include Fruit, Butter Sponge, Chocolate,
Pineapple, Milk, Vanilla Chocolate and Orange.
Rusks
Britannia launched its Rusks in the year 2005. In a Market full of unbranded players, Britannia
rusks have stood head and shoulders above the rest in terms of sheer quality. They are made from
the finest ingredients and baked with care as they are twice as crisper as and tastier than ordinary
rusks. The communication for this mouthwatering offering is aptly Enliven your spirits with
Britannia rusks"
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ACTIVITIES OF THE COMPANY
A
C
T
I
V
I
T
I
E
S
OF
T
H
E
C
O
M
P
A
N
SALES
MARKETING
EXPORT
PRODCUTION
FINANCE & IT
RESEARCH &
DEVELOPMENT
TRCHINICAL &
OPERATION
HUMAN RESOURCE
& LEGAL
QUALITYASSURANCE
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COMPANY PERFORMANCE
For the year ended 31st
march 2010 our company achieved a sale growth of 9.9%on an expanded
base arising from 17.5% growth in the previous year. The consolidated net profit of the for the year
ended 31st march 2010 was Rs. 1,032 MM compared with Rs. 1,515MM in the previous year.
Exceptional items for the year include Rs. 130.5 Mn towards amortization of VRS cost. Earnings
share is Rs. 50 compared to Rs. 80 last year.
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ACHIVEMENT OF THE COMPANY
THE Economic Times and AC Nielsen have announced the most trusted brands rated by
consumers all over India and across categories. Britannia was in the India Top 10 list, ranked 9
across all categories and 2 in the food category. Last year, Britannia rank was 7 and 2 respectively.
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CHAPTER
SPECIAL REASEARCH
ON
WORKING CAPITAL
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COMPONENTS OF WORKING CAPITAL
There are two components of working capital, viz., current assets and current liabilities.
1. CURRENT ASSETS :
Current assets are those which are converted into cash in the normal course of business within a
short period- say a maximum of one year. List of current assets comprises of:
Cash in hand & cash at bank
Bills receivables
Sundry debtors (less provision for bad debts)
Short term loans and advances.
Inventories of stocks, as: raw material, work-in-progress, stores and spares, finished goods
Temporary investments of surplus funds.
Prepaid expanses
Accrued incomes.
2. CURRENT LIABILITIES :
Current liabilities are those liabilities which are intended to be paid in the ordinary course of
business within a short period of normally one accounting year out of the current assets are the
income of the business. Examples of current liabilities are:
Bills payable
Sundry creditors are account payable.
Accrued or outstanding expenses.
Shortterms loans, advance and deposits.
Dividend payable.
Bank overdraft.
Provision for taxation if it does not amount to appropriation of profits.
In order to ascertain the real position of working capital, certain adjustment, which are abnormal in
nature, are to be adjusted against each component of current assets and current liabilities.
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NEED FOR WORKING CAPITAL
The need for working capital to run day to day business activities cannot be overemphasis. We will
hardly find a business firm which does not require any amount of working capital.
We know that the firm aims at maximizing the wealth of the shareholder. In its endeavor to
maximize shareholder wealth the firm should earn sufficient return from its operation earning a
steady amount of profit requires successful sales activity. The firm has invested enough funds in
current assets for the success of sales activity. Current assets are needed because sales do not
convert into cash instaneously. There is always operating cycle involved in the conversion of
cash. Thus working capital is needed for the following purpose:
1. For the purchase of raw material, components and spares.
2. To pay wages and salaries.
3. To incur day to day expenses and overhead cost such as fuel, power and office expenses etc.
4. To meet selling costs as packaging, advertising etc.
5. To provide credit facilities to the customers
6. To maintain the inventories of raw materials, work in progress, stores and spares and finished
stock.
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WORKING CAPITAL CYCLE
Cash flows in a cycle into, around and out of a business. It is the business's life blood and every
manager's primary task is to help keep it flowing and to use the cashflow to generate profits. If a
business is operating profitably, then it should, in theory, generate cash surpluses. If it doesn'tgenerate surpluses, the business will eventually run out of cash and expire.
The faster a business expands the more cash it will need for working capital and investment. The
cheapest and best sources of cash exist as working capital right within business. Good management
of working capital will generate cash will help improve profits and reduce risks. Bear in mind that
the cost of providing credit to customers and holding stocks can represent a substantial proportion
of a firm's total profits.
There are two elements in the business cycle that absorb cash - Inventory (stocks and work-in-
progress) and Receivables (debtors owing you money). The main sources of cash
are Payables (your creditors) and Equity and Loans.
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Each component of working capital (namely inventory, receivables and payables) has two
dimensions ........TIME ......... and MONEY. When it comes to managing working capital - TIME
IS MONEY. If you can get money to move faster around the cycle (e.g. collect monies due from
debtors more quickly) or reduce the amount of money tied up (e.g. reduce inventory levels relative
to sales), the business will generate more cash or it will need to borrow less money to fund
working capital. As a consequence, you could reduce the cost of bank interest or you'll have
additionalfree money available to support additional sales growth or investment. Similarly, if you
can negotiate improved terms with suppliers e.g. get longer credit or an increased credit limit, you
effectively createfree finance to help fund future sales.
If you ....... Then ......
Collect receivables (debtors) faster You release cash from
the cycle
Collect receivables (debtors) slower Your receivables soak up
cash
Get better credit (in terms of duration or amount)
from suppliers
You increase your cash
resources
Shift inventory (stocks) faster You free up cash
Move inventory (stocks) slower You consume more cash
It can be tempting to pay cash, if available, for fixed assets e.g. computers, plant, vehicles etc. If
you do pay cash, remember that this is now longer available for working capital. Therefore, if cash
is tight, consider other ways of financing capital investment - loans, equity, leasing etc. Similarly,
if you pay dividends or increase drawings, these are cash outflows and, like water flowing down a
plug hole, they remove liquidity from the business.
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Importance or 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:
Solvency of the business
To maintain goodwill
Easy loans
Cash discounts
Regular supply of raw materials
Regular payment of salary, wages and other day to day commitments
Exploitation of favorable market conditions
Ability to face crisis
Quick and regular return on investments
High morale
1. Solvency of the business
Adequate working capital helps in maintaining solvency of the business by providing
uninterrupted flow of production.
2. To maintain goodwill
Sufficient working capital enables a business concern to make 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 other financial institutions on easy and favorable terms.
4. Cash discounts
Adequate working capital also enables a concern to avail cash discounts on the purchase and
hence it reduces costs.
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activities expand. As a result the overall need for cash, inventories etc. increases resulting in more
and more funds blocked in these current assets. In case of recession period however, there is
usually dullness in business activities and there will be an opposite effect on the level of working
capital requirement. There will be a fall in inventories and cash requirement etc.
5. Market Conditions:
The working capital requirements are also determined by the market conditions. In case of the high
degree of competition prevailing in the market the firm has to maintain larger inventories as
customers are not inclined to wait for the product. This needs higher working capital requirements.
If there is good demand for the product and the competition is weak, a firm can manage with
smaller inventory of finished goods, as customers can wait for the product if it is not available in
the market. Thus, a firm can manage with low inventory and will need low working capital
requirements.
6. Credit Policy:
The credit policy means the totality of terms and conditions on which goods are sold and
purchased. A firm has to interact with two types of credit policies at a time. One, the credit policy
of the supplier of raw materials, foods etc., and the credit policy relating to credit which it extendsto its customers. The level of the working capital is also determined by the credit policy, as the
firms credit policy determines the amount of receivables. If the firm has a liberal credit policy,
then the firm needs high working capital and the firm needs low working capital if the companys
credit policy does not allow it to extend credit to the buyers
7. Production Policy:
The quantum of working capital is also determined by production policy. In case of the firms
having seasonal demand of the products like refrigerators, air coolers etc., The production policy
of the firm determines the amount of working capital requirement. If the firm has production
policy to carry production at a steady level to meet the peak demand, this will result in a large
accumulation of finished goods (inventories) during the off-seasons and the abrupt sale during the
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peak season. The progressive accumulation of finished goods will naturally require an increasing
amount of working capital. If the firm has production policy to produce only when there is a
demand then the firm needs low working capital during the slack season and high working capital
during season.
8. Price level changes:
Changes the price level due to inflation or other reason also affect the requirement of working
capital. Rising prices necessitate the use of more funds for maintaining an existing level of activity.
Rising prices will require higher level of working capital and vice-versa.
9. Conditions of Supply:
The availability of raw materials and spares also determine the level of working capital. If there is
ready availability of raw materials and spares, a firm can maintain minimum inventory and need
less working capital. If the supply of raw materials is unpredictable, then the firm has to acquire
stocks as and when they are available for ensuring continuous production. Thus, the firm needs to
maintain larger inventory average and needs larger requirement of working capital.
10. Profit Margin and Profit Appropriation:
A high net profit margin contributes towards the WC pool. Also, tax liability is unavoidable and
hence provision for its payment must be made in the WC plan, otherwise it may impose a strain on
the WC. Also if the firms policy is to retain the profits it will increase their WC, and if they
decide to pay their dividends it will weaken their WC position, as the cash will flow out. However
this can be avoided by declaring bonus shares out of past profits. This will help the firm to
maintain a good image and also not part with the money immediately, thus not affecting the WC
position.
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OPERATING CYCLE
The operating cycle implies the continuing flow from cash to suppliers, to inventory to accounts
receivable and back into cash.
Operating cycle can be said to be at the heart of the need for working capital.
Determination of operating cycle:
Raw material holding period= (360*stock of raw material)
Cost of raw material consumed
Creditors payment period = (360*creditors)
Purchases
Work in progress holding period= (360*stock of WIP)
Cost of goods manufacture
Finished goods holding period = (360*stock of finished goods)
Cost of goods sold
CASH
RECEIVABLE
INVENTORY
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Debtors collection period = (360*debtors)
Credit sales
Operating cycle = raw material holding period-creditors payment period + WIP holding period +
Finished Goods holding period
The length of the operating cycle is the most widely use method to determine working capital
need. As longer the operating cycle the more working capital is required. The shorter the operating
cycle more predictable are the cash inflows. The operating cycle of Britannia industries limited,
rudrapur is 22 days. As in FMCG sector, the 31 days is considered maximum length of the
operating cycle. The operating cycle is managed efficiently.
Cost of raw material consumed is assumed to be equivalent to purchases of raw material.
Cost of goods sold is assumed to be equivalent to the goods transfer from factory
throughout the year.
Cost of good manufacture is assumed to be equivalent to cost of goods sold
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MANAGEMENT OF WORKING CAPITAL
Working Capital management involves the problem of decision making regarding investment in
various current assets with an objective of maintaining the liquidity of funds of the firm to meet its
obligation promptly and efficiently. The basic goal of working capital management is to managethe current assets and current liabilities of a firm in such a way that a satisfactory level of working
capital is maintained, it is neither inadequate nor excessive.
The management of working capital has-been studies under the following three heads-
1. Management of Cash Balance.
2. Management of receivable.
3. Management of Inventory.
MANAGEMENT OF CASH BALANCE
Cash is one of the current assets of a business. It is needed at all times to keep business concern
should always keep sufficient cash for meeting its obligations. Any shortage of cash will hamper
the operations of a concern and any excess of it will be unproductive. Cash not only include hard
cash but also include which can be easily converted into cash with in no time.
TOOLS FOR CASH CONTROL:
a. Cash Budget.
b. Inflow or Outflow of cash.
c. Ratio Analysis.
MANAGEMENT OF RECEIVABLES
Receivable result from credit sales. A concern is required to allow credit sales in order to
expand its sales volume. It is not always possible to sell goods on cash basis only. Sometimes,
other concerns in that line might have established a practice of selling goods on credit basis.
Under these circumstances, it is not possible to avoid credit sale without adversely affecting
sale.
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ANALYSIS OF WORKING CAPITAL
There are three Techniques to analysis the working capital
Schedule of change in working capital
Ratio Analysis
Fund statement
SCHEDULE OF CHANGE IN WORKING CAPITAL:
The working capital of a business concern is subject to change due to several business transactions.
Working Capital represents excess of current assets over current liabilities. The Schedule of
Change in Working Capital presents a detailed and analytical picture of changes in current assets
and current liabilities during two balance sheet dates.
RATIO ANALYSIS:
Ratio is one of the methods of analyzing financial statement. Ratio analysis measures the
Profitability, Efficiency and Financial soundness of the business.
According to Myers, ratio analysis is a study of relationship among the various financial
factors in a business.
FUND STATEMENT:
Fund flow statement is the technique of analyzing and interpreting the financial statement of
business concern. It is a technical device designed to analyze the changes in the financial or
working capital position of a business enterprise between two dates.
The Fund Flow Statement is a statement, depicting change in working capital. It is also termed as
a statement of source and Application of Funds, Statement of Change in Financial Position,
Statement of Change in Working Capital.
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TECHNIQUES OF FORECASTING WORKINGCAPITAL
1. Operating cycle method
2. Forecasting of current assets and current liabilities
3. Cash forecasting method
4. Projected balance sheet method
5. Profit & loss adjustment method
OPERATING CYCLE METHOD:
Operating cycle is the time duration within one cycle of business operation is completed. Business
operations involve a number of stages from purchase of raw material till conversion of receivable
into cash.
FORCASTING OF CURRENT ASSETS AND CURRENT LIABILITIES:
This is the Traditional method of forecasting the Working Capital requirements. Working Capital
is the excess of Current Assets over Current Liabilities; its requirement can easily be forecasted by
making the estimate of the amount of each component of current assets and current liabilities. The
procedure for estimating the component is as under:-
Stock of Raw-materials:- The average amount of such stock of raw-materials would
depend upon the quantity of raw-materials required for production during a particular
period as well as upon the average time taken in obtaining fresh delivery.
Stock of Work-in-Progress:- Raw-materials, wages, overheads are included in the cost of
work-in-progress. In order to determine the stock of work-in-progress, the time-period for
which the inputs will be in the process of production will be determined.
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Finished Goods Stock:- Finished goods are not immediately sold these are to be kept in go
downs or warehouses for certain period. This is an important factor in determining the
amount to be locked up in finished goods stock. On the basis of years production, the
amount of finished goods for the storage period may be calculated.
Sundry Debtors:- The amount of capital locked up in sundry debtors can be computed on
the basis of credit sales, period of credit allowed/time lag in collecting the payments.
Cash and Bank Balances:- These are estimated on the basis of past experience
Sundry Creditors:- This is estimated on the basis of credit purchases and the time lag in
payments to creditors/credit period allowed by suppliers of raw-materials.
Outstanding Expenses:-These are ascertained having considered the time lag in payment
of various types of expenses.
CASH FORCASTING METHOD:
This method is very much related to cash budgeting and it attempts to estimate the cash surplus
and deficiency.
Every operating cycle starts with a cash outflow and after passing through various channels it
ultimately ends with an inflow of cash. A statement of month, cash forecast is prepared which
includes cash inflow and outflow for the various methods. The difference between the total cash
flow will indicate surplus or deficiency for which necessary adjustment can be planned in
advance.
Cash turnover = No. of days in operating period
Duration of cash cycle in days
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WORKING CAPITAL OF BRITANNIA INDUSTRY LTD
G/L
CODE
DESCRIPTION OF GOODS 1 Apr'2010 to 31
Mar'2011
1 Apr'2009 to
31 Mar'2010
INC/DEC %
INC/DEC
AMOUNT (
RS)
AMOUNT (
RS )
STORE AND SPARE
PARTS
205002 Inventory HSD 3,260,300.73 3,864,630.34 (604,329.61) (0.15)
205004 Inventory Engineering Stores 20,353,365.20 14,851,615.30 5,501,749.90 0.37
205013 Inventory Propane Fuel 572,154.90 1,228,823.45 (656,668.55) (0.53)
TOTAL 24,185,820.83 19,945,069.09 4,240,751.74 0.21
PACKAGING MATERIAL
206001 Inventory Packing Material 48,511,210.77 36,633,248.96 11,877,961.81 0.32
206002 Inventory CBBS,CASE &CASE closing stock 4,813,255.96 3,794,565.63 1,018,690.33 0.27
206006 Inventory PKNG W/OFF (1,393,830.17) 0.00 (1,393,830.17) -
TOTAL 51,930,636.56 40,427,814.59 11,502,821.97 0.28
RAW MATERIAL
206000 Inventory Ingredients 212,108,648.99 248,324,081.69 (36,215,432.70) (0.15)
TOTAL 212,108,648.99 248,324,081.69 (36,215,432.700) (0.15)
FINISHED GOODS
207003 Inventory Finished Stock -Biscuits
64,110,401.11 3,668,116.9460,442,284.17 16.47
207019 Closing Stock Inventory - FG 539,034.39 62,472.42 476,561.97 7.62
TOTAL 64,649,435.50 3,730,589.36 60,918,846.14 16.32
WORK IN PROGRESS
207013 Inventory WIP - GOOT 1,544,278.99 2,151,769.60 (607,490.61) (0.28)
207020 Closing stock Inventory - WIP (720,514) (1,164,298.12) 443,784.56 (0.38)
TOTAL 823,765.43 987,471.48 (163,706.05) (0.17)
INVENTORIES TOTAL 353,698,307.31 313,415,026.21 40,283,281.10 0.13
SUNDRY DEBTORS
210000 Accounts Receivable - Domestic (16.11) 187,072.50 (187,088.61) (1.00)
TOTAL (16.11) 187,072.50 (187,088.61) (1.00)
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CASH & BANK BALANCE
211024 Coin adjustment - Asset Account 11.8 8.32 3.48 0.42
211043 Cash in hand - Uttaranchal 5,717.00 17,635.00 (11,918.00) (0.68)
213111 HDFC DisbursementbakeryUttaranchal (1,519,560.23) 2,293,120.10 (3,812,680.33) (1.66)
TOTAL -1513831.43 2310763.42 (3824594.85) (1.66)
OTHERS - LOANS &
ADVANCES
220009 Prepaid rates & taxes 21,749.00 21,749.00 0.00 0220015 Employee - other Advance (550) (11,030.00) 10,480.00 (0.95)
220025 Deposit with Government Bodies 117,090 33,090.00 84,000.00 (2.54)
220026 Deposit with vendors 3,687,320.00 2,627,906.00 1,059,414.00 0.40
220029 Loan - Employee (183,323.58) (138,181.66) (45,141.92) 0.32
220031 Advance - Non capital 141,487,159.65 125,216,795.15 16,270,364.50 0.12
220037 Deposit with Government Bodies-New
3,000.003,000 0 -
217000 Advance - capital 190,000.00 6,653,190.00 (6,463,190.00) (0.97)
TOTAL 145,322,445.07 134,406,518.49 10,915,926.58 0.08
CURRENT ASSETS TOTAL 497,506,904.84 450,319,380.62 47,187,524.22
CURRENT LIABILITIES &
PROVISIONS
SUNDRY CREDITORS
111005 Accounts payable - SSI Domestic 98,853.38 690,255.36 591,401.98 0.86
CURRENT LIABILITY 98,853.38 690,255.36 591,401.98 0.86
PROVISION
104014 Provision for leave encashment 1,231,580.73 870,989.17 (360,591.56) (0.41))104016 Accrued Miscellaneous expense 11,392,962.00 10,065,713.17 (1,327,248.83) (0.13)104023 Accrued Primary freight - Finished
goods59,200,411.77
40,505,389.52(18,695,022.2
5)(0.46)
104025 Accrued Salaries & Wages 1,916,307.00 1,340,396.00 (575,911.00) (0.43)
104033 Accrued Loading - FG (38,337.00) (38,337.00) 0.00 -
104034 Accrued Bonus & Commission (2,051,487.94) (2,694,038.99) (642,551.05) 0.23
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104037 Liability Sundry others 1,700,000.00 0.00 (1,700,000.000 -104050 company contribution to GPF -
liability A/C42,775.00 32,602.00
(10,173.00) (0.31)
104051 company contribution to GFPF- liability A/C
97,045.00 74,042.00(23,003.00) (0.31)
104053 company contribution to ESI -liability A/C
112,061.00 74,537.00(37,524.00) (0.50)
104064 Employees contribution toESIC
41,431.00 27,589.00(13,842.00) (0.50)
104067 Employees contribution to GPF 139,820.00 106,644.00 (33,176.00) (0.31)104081 Deduction - consumer co-
coperative credit society50,816.29 37,274.29
(13,542.00) (0.36)
104094 Deduction - medical insurancescheme A/C NON ESI
(1,192,156.00) (719,483.00)472,673.00 (0.65)
104095 PF EDLI Adm charges 77,611.61 76,375.93 (1,235.68) (0.01)104102 Deduction - salary saving
scheme - LIC
2,520.60 1,164.60
(1,356.00) (1.16)104124 Entry tax/devt payable A/C 19,552,801.93 4,509,165.49 (15,043,636.44) (3.33)104127 Deposit payable - customer
other0.00 0
0 -
104128 Stable cheque A/C 2,231.00 1,231.00 -1,000.00 (0.81)
104129 TDS - Convenanted staff salary 5,514,722.00 3,952,569.00 (1,562,153.00) (0.40)
104133 Profession Tax - Convenantedstaff salary
3,200.00 3,200.000.00 -
104141 Deduction salaries & wages -advance
0.00 (39,300.00)(39,300.00) 1
104143 Deposit payable - Vendors 125,000.00 125,000.00 0.00 0
104154 Retention money payable -Vendors
6,321,863.00 4,454,716.00(1,867,147) (0.42)
104180 Salary payable - EO( Manager) 23,222,984.00 15,352,047.00 (7,870,937.00) (0.51)
104181 Salary payable - EO( officer) 37,916,641.08 23,388,221.50 (14,528,419.58) (0.62)
104182 salary payable - EO (Staff) 3,543,921.00 2,342,510.00 (1,201,411.00) (0.51)
104185 PF-EO (Manager) 1,810,392.00 1,217,412.00 (592,980.00) (0.48)
104186 PF-EO(Officer) 2,609,726.00 1,705,928.00 (903,798.00) (0.53)
104187 PF-EO(Staff) 130,818.00 130,818.00 0.00 0
104188 Employee Settlement ClearingA/C
(1,848.00) (1,848.00)0.00 -
104189 VPF-EO 336,477.00 124,264.00 (212,213.00) (1.70)104202 GR/IR - Clearing-External
procurement11,295,203.04 2,557,287.67
(8,737,915.37) (3.41)
104203 Freight clearing (MM)Externalprocurement
1,570,147.73 14,627,904.0613,057,756.33 0.89
104205 Excise Clearing (MM) A/C (74,781.57) (74,781.57) 0.00 0
104207 TDS- Contractors- SEC 194C 87,147.00 20,102.00 (67,045.00) (3.33)
104209 TDS-rent - SEC 1941 41,599.00 22,749.00 (18,850.00) (0.82)
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WORKING OF EXPENDITURE INCURRED 2010-11
EXPENDITURE OF BRITANNIA INDUSTRIES LIMITED, RUDRAPUR
G/L
CODE DESCRIPTION OF GOODS
1 Apr 2010 to 31
Mar'11 1 Apr 2009 to 31 mar'10
EXPENDITURE AMOUNT( Rs ) AMOUNT(Rs)
CONSUMPTION OF MATERIAL
306003 LOSS - INVENTORY - FG PRICE DIFF 53,794,237.68 29,045,550.10
306004 LOSS/GAIN - FROM STOCK TRANSFER - FG 2,554,745.73 5,601,671.87
306005 GAIN - INVENTORY- FG PRICE DIFF (1,420,816,474.51) (456,121,831.44)
306006 LOSS- VALUATION- EXTERNAL MATERIAL 25,477,433.48 17,807,280.72
306007 GAIN- VALUATION- EXTERNAL MATERIAL (24,261,613.36) (22,461,920.81)306008 LOSS- INVENTORY GOOT PRICE DIFF 239,570,661.38 261,003,832.12
306009 GAIN- INVENTORY GOOT PRICE DIFF (265,573,109.58) (232,000,215.46)
306050 LOSS/GAIN- INVENTORY (215,358.53) (149,507.69)
306100 INVENTORY CHANGE - FG 22,187,677.94 19,683,675.38
306101 INVENTORY CHANGE - GOOT CONSUMED 5,703,883,968.46 3,735,402,787.95
306110 INVENTORY CHANGE- FG SUB- CONTRACTING (2,867,622.53) (3,215,963.00)
306321 INVENTORY CHANGE-( SAMPLE&GJV) -SD 9,367.68 71,997.28
306322 INVENTORY CHANGE SALE - SAMPLE (9,367.68) (71,678.56)
306500 INVENTORY CHANGE - FACTORY PROD - FG (3,045,832,368.81) (3,272,046,610.11)
306501 INVENTORY CHANGE - FACTORY PROD - GOOT (5,678,097,686.88) (3,757,562,115.75)400000 CONSUMPTION INGREDIANTS 3,452,822,171.98 2,854,085,436.99
400001 CONSUMPTION VARIANCE-INGREDIANTS (80,636,067.92) (17,260,701.90)
400008 CONSUMPTION - INGREDIANTS LEGACY (9,976,731.08) (290,016,656.75)
TOTAL (1,027,986,136.55) (1,128,204,969.06)
SALARIES, WAGES, BONUS,& COMISSION
408000 SALARIES - MANAGER 10,026,526.82 10,126,547.06
408001 SALARIES - OFFICERS 15,692,905.92 13,247,465.61
408002 SALARIES - STAFF, SUB-STAFF & OTHERS 1,167,659.23 1,268,405.09
408004 WAGES - WORKERS 24,711,564.88 20,425,550.49
408009 BONUS/COMMISSION - WORKERS 2,144,934.91 2,132,600.75
TOTAL 53,743,591.76 47,200,569.00
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POWER AND FUEL
405005 CONSUMPTION - FUEL HSD 87,434,914.45 42,417,227.95
405014 ELECTRICITY CHARGES - FACTORY 19,144,274.83 22,255,227.00405015 CONSUMPTION - PROPANE FUEL 50,351,447 53,850,057.91
TOTAL 156,930,635.86 118,522,512.86
REPAIRS & MAINTENANCE OF PLANT &
MACHINERY
411000 M & R PLANT & MACH CONTRACT 3,532,335.30 3,475,406.07
411001 M & R PLANT & MACH STORES 8,522,949.77 7,163,829.95
411002 M & R DIESEL GEN SETS 469,233.00 501,864.00
TOTAL 12,524,518.07 11,141,100.02
REPAIRS & MAINTENANCE OF BUILDINGS
412000 M & R - BUILDING STORES 87,936.15 645,006.88412002 M & R - PREMISES 450,652.42 266,077.90412003 M & R - BUILDING CONTRACT 672,437.00 982,230.60
TOTAL 1,211,025.57 1,893,315.38
WORKMEN AND STAFF WELFARE EXPENSES
300006 CANTEEN SALES COUPON (2,404,522.00) (1,879,070.00)409005 LEAVE ENCASHMENT - MANAGERS 74,121.93 80,400.45409006 LEAVE ENCASHMENT - OFF, SELECTION GRADE 121,065.66 113,416.55
409009 LEAVE ENCASHMENT -WORKERS193,834.07 171,011.90409019 MEDICAL REIMB EXPENSES - WORKERS 0.00 153,699.00
409020 MEDICAL AND SANITARY EXPENSES 968,716.12 1,780,577.46
409023 EMPLOYEE WELFARE EXPENSES 1,747,633.00 838,315.00409025 OFFICE LUNCH EXPENSES 98,584.00 7,806.50
409026 CANTEEN EXP/LOSS/SUBSIDY 10,757,826.07 8,576,519.32
300006 CANTEEN SALES COUPON (2,404,522.00) (1,879,070.00)
410021 COMPANY CONTR TO ESI 1,278,017.00 973,823.00
420038 TRAINING EXPENSES 20,000.00 12,581.00
420043 EMPLOYEE MOVING EXPENSES 0.00 0.00
TOTAL 10,450,753.85 8,950,010.18
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MISCELLANEOUS EXPENSES
413001 COLD STORAGE CHARGES 2,838,000.00 2,838,000.00
420000 TRANSIT LOSS(SALES) (3,151,922.22) 496,529.95
420003 GENERAL CHARGES 5,000.00 20,000.00
420004 CAR HIRE CHARGES 1,514,223.54 1,167,621.85
420010 CONFERENCE CHARGES 0.00 0.00
420012 STIPEND FEES 62,718.00
420013 LEASE RENTAL 436,788.00
420017 CONVEYANCE EXPENSES 2,064,243.00 1,482,773.00
420021 GARDENING EXPENSES 453,999.00 366,392.00
420023 M & R MISCELLANEOUS 600.00 26,093.32
420026 BOOKS & PERIODICALS 21,082.00 11,297.00
420029 OUTSIDE CONTRACTED SERVICES 7,296,017.71 6,815,128.48
420032 SUPPLIES UTILITY & OTHER 485,608.22 1,002,857.26
420033 WATER CHARGES 20,569.00 56,006.00
420035 GUEST HOUSE EXPENSES 173,017.05 195,743.38
420037 SUBSCRIBTION 31,850 40,426.00
420039 TRAVEL DOMESTIC - AIR FARE 509,089.00 449,133.00
420040 TRAVEL DOMESTIC - OTHER EXPENSES 273,496.50 327,769.50
420041 TRAVEL FOREIGN - AIR FARE 0.00 106,292.00
420045 COMPUTER CONSUMABLES(STATIONARY) 83,288.88 131,062.00
420046 COMPUTER MAINTENANCE EXPENSES 0.00 2,206.00
420049 LAW CHARGES/LEGAL EXPENSES 170,460.00 101,800.00
420050 PHOTOCOPY EXPENSES 1,493.00 6,965.00
420052 POSTAGE & TELEGRAMS 222,569.00 181,867.00
420053 PRINTING & STATIONARY 320,381.03 421,154.08
420054 PROFESSIONAL CHARGES 489,775.00 479,520.00
420056 RECRUITMENT EXPENSES 28,689.00 14,410.00
420058 TELEPHONE CHARGES 0.00 0.00
420063 ENTERTAINMENT EXPENSES 65,483.00 225,976.00
420064 ISO 9000 268,279.00 85,334.50
420065 LAB EXPENSES 271,418.78 78,354.23
420068 TRIAL RUN EXPENSES 94,747.26 396,442.92
420070 UNIFORM & WASHING CHARGES 580,701.23 347,087.96
420073 SECURITY CHARGES 3,363,332.00 3,128,124.00
420077 SANITARY/SAFETY/HYGIENE EXPENSES 5,344,154.66 4,289,078.26
420081 COIN ADJUSTMENT 8.64 11.22
420086 BANK CHARGES 10,396.28 16,016.40
420091 BANK CHARGES - AW 0.00 (50.00)
420096 FOOD SAFETY EXPENSES 640,468.01 1,394,421.63420097 OUTSIDE CONTRACTED SERVICES- 86,010,512.82 66,128,327.13
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CHAPTER
REASEARCH METHODOLOGY
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RESEARCH METHODOLOGY
The purpose of the methodology is to describe the process involve in the research work. This
includes the overall research design, the data collection method.
Research Methodology refers to the various sequential steps (along with a rationale, of each such
steps) to be adopted by a researcher in studying a problem with certain object or objectives in
view. It would be appropriate to mention that research project are not susceptible to any one
complete and inflexible sequence of steps and type of problems to be studied will determine the
particular steps to be taken and their order too.
SOURCES OF DATA COLLECTION
Data was collected by using both primary and secondary methods. In primary method of data
collection personal interview and questionnaire was used and in case of secondary ways of data
collection the magazines of Britannia was used.
PRIMARY DATA
Primary data are those which are collected a fresh and for the first time and thus happen to be
original in character. There are numbers of method of collecting primary data.
Calculation
Observation
SECONDARY DATA
Secondary data means data that are already available i.e. they refer to the data which have already
been collected and analyze by someone else.
Books
Reports
Magazine
Internet
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CHAPTER
SUGGESTION,
CONCLUSION
AND
BIBLIOGRAPHY
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SUGGESTION
Management of Britannia ensures the efficient use of various resources & increases the
productivity of the enterprise.
Maintaining good relations with suppliers to get maximum raw materials & capital so that
the organization can continue dealing in future as well.
Keeping & maintaining good working condition to ensure fair wage for worker security of
employment.
The organization structure must be flattered for the quicken decision making which will
result in higher profitability.
Complaint and replace the defective product in time, otherwise it will tarnish the image of
the company among the retailers. To ensure the proper quality of raw materials before placing an order to the vender terms
and conditions of penalties should be given to the vendors if they supply defected material.
The company can diversify itself by undertaking the manufacturing of various different
products apart from manufacturing biscuits at the rudrapur branch.
Storage capacity of the company should be increased by properly utilizing the waste land
of the company.
There should be big and attractive companys board on the main gate.
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CONCLUSION
This report is whole on the basis of financial analysis. The main object of doing this study is to
analysis the condition of organization. The tools of financial are used to find out the soundness of
the company.
It can be concluded that in the fiercely competitive FMCG market with regional players
striking so hard at BILs market share the company has not made any compromise with quality,
systems and practices in spite of feeling the pinch in its profitability not only due to competition
but also because being an agro based industry and because of the seasonality and unpredictability
in the availability and price of one of its major raw material Maida.
The company is doing well in terms of its marketing approach and the financials of the company
seem to be healthy as of now.
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