Project Working Capital Management

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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

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V

I

T

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OF

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P

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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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