Amara Raja Updated Project

STATEMENT OF THE PROBLEM Trade credit arises when a firm sells its products or services on credit and does not receivable immediately. It is an a n essential marketing tool, acting as a bridge for for the movement of goods that the production and distribution stages to customers. Credit cr eates ³Receivables or Book Debts´ which the firm is expected to collect in the near future. Book debts or receivable arising out of credit receivable constitutes a substantial portion of current assets of the firm. Receivables constitute constitute a substantial portion of of current current assets of several firms. firms. After the inventories, inventories, trade debtors, are the major components components of the current assets. They form one-third of the current assets. Granting credit and creating creating debtors amount to the blocking of funds. funds. The interval between the date of sale sale and the date of payment payment has to be financed out of the working capital. Thus, trade debtors represent represent investment. investment. As substantial substantial amounts are tied up in trade debtors, it needs careful analysis and proper management. An attempt is made in the project work to analyze the efficiency of receivable management of the sample sa mple unit.

SVCCS, CTR

(M.B.A Dept.)

INTRODUCTION Finance is aptly described as the lifeblood and nerve centre of any business. It is just

as the circulation of blood, an essential system in the human body to keep and alive. Finance is vital input for the smooth functioning of the business. Every business enterprise

irrespective of its size and nature needs finance to carry on its operations and achieve its target. FINANCIAL MANAGEMENT: Definition:

³Business finance can broadly define as activity concerned with planning, organizing, controlling and administration of funds used in business.´ ³Financial management as an application of general managerial principles to the area of decision-making.´ Working capital refers to a firm¶s f irm¶s investment in short-term short-term assets viz, cash, short-ter short-term m securities. Current assets are to be managed in an efficient manner. Receivables represent an important component in current assets of a firm. Management of receivables is having more significance in order to avoid blockage of funds in receivables. RECEIVABLES MANAGEMENT

The term receivable is defined as µdebt owed to the firm by customers arising from sale of goods or services in the ordinary course of business¶. Receivables management is also called trade credit management. Thus, accounts receivable represent an extension of credit to customers, allowing them a reasonable period of time in which to pay for the goods received. These receivables come under current assets as they sooner are converted into cash. Accounts receivables are the second most most liquid form of assets of the firm. firm. Skill full administration of the receivables management is therefore of prime importance to the business. business.

The very reason of credit sales is is to expand expand sales volume. volume. Trade credit is

considered as an essential marketing tool, acting as a bridge for the movement of the products through production and distribution stages t o the customers.

SVCCS, CTR

(M.B.A Dept.)

INTRODUCTION Finance is aptly described as the lifeblood and nerve centre of any business. It is just

as the circulation of blood, an essential system in the human body to keep and alive. Finance is vital input for the smooth functioning of the business. Every business enterprise

irrespective of its size and nature needs finance to carry on its operations and achieve its target. FINANCIAL MANAGEMENT: Definition:

³Business finance can broadly define as activity concerned with planning, organizing, controlling and administration of funds used in business.´ ³Financial management as an application of general managerial principles to the area of decision-making.´ Working capital refers to a firm¶s f irm¶s investment in short-term short-term assets viz, cash, short-ter short-term m securities. Current assets are to be managed in an efficient manner. Receivables represent an important component in current assets of a firm. Management of receivables is having more significance in order to avoid blockage of funds in receivables. RECEIVABLES MANAGEMENT

The term receivable is defined as µdebt owed to the firm by customers arising from sale of goods or services in the ordinary course of business¶. Receivables management is also called trade credit management. Thus, accounts receivable represent an extension of credit to customers, allowing them a reasonable period of time in which to pay for the goods received. These receivables come under current assets as they sooner are converted into cash. Accounts receivables are the second most most liquid form of assets of the firm. firm. Skill full administration of the receivables management is therefore of prime importance to the business. business.

The very reason of credit sales is is to expand expand sales volume. volume. Trade credit is

considered as an essential marketing tool, acting as a bridge for the movement of the products through production and distribution stages t o the customers.

SVCCS, CTR

(M.B.A Dept.)

DEFINITION OF ACCOUNTS RECEIVABLE MANAGEMENT: ACCOUNTS RECEIVABLES:

³Receivables represent amount owed to the firm as a result of sale of goods or services in the ordinary course of business´ RECEIVABLES MANAGEMENT: ³Receivables management is the process of making decisions relating to investment in trade debtors´

A firm investment in accounts receivable depends upon volume of credit sales and collection period. The three major areas involved in accounts receivables management includes credit policy, credit terms and collection coll ection policies. CREDIT POLICY

The credit policy of a company is considerably influenced by the practices followed by the industry. The credit policy of a firm provides provides the framework to determine, 1. Whether or not to extend a credit to customer and 2. How much credit to extend. The credit policy decision of a firm has a two broad dimensions: 1. Credit standards 2. Credit analysis CREDIT STANDARDS

The term¶ credit standards¶ represents the basic criteria for the extension of credit of customers. Our aim is to show what happens to the trade-off when standards are relaxed or, alternatively, tightened. The tradeoff with reference to credit standards are:

y

The collection costs The average collection period Level of bad debt losses

y

Level of sales

y y

SVCCS, CTR

(M.B.A Dept.)

CREDIT ANALYSIS

Besides establishing credit standards a firm should develop procedures for evaluating credit applicants. The second aspect of credit cr edit policies is credit analysis and investigation. The two basic steps that are involved in the credit investigation process are: y

Obtaining credit information

y

Analysis of credit information

Credit information can be obtained by both internal and external sources. Internal sources includes various forms and documents that are filled by the customers, records of the firm. External sources to assess the credit worthiness of the customers are published financial statements of the customers, bank references, trade references, credit bureau reports. Information gathered can be analyzed by both qualitatively and quantitatively. CREDIT TERMS

The second decision in accounts receivables management is the credit terms. After the credit standards have established and the credit worthiness of the customers has been assessed, the management of a firm must determine the terms and conditions of which trade credit will be made available. The stipulations under which goods are sold on credit are referred to as credit terms. t erms. CREDIT TERMS HAVE THREE COMPONENTS 1. CREDIT PERIOD

In terms of the duration of time for which trade credit is extended during this period the overdue amount must be paid by the customer. A firm¶s credit period may be governed by the industry norms. But depending on its objective, the firm can lengthen the credit period. 2. CREDIT DISCOUNT

If any, which the customer can take advantage of, that is, the overdue amount will be reduced by this amount. The firm uses cash discount as a increase in sales and accelerate collections from customers. 3. CREDIT DISCOUNT PERIOD

Which refers to the duration during which the discount can be available of these terms are usually. SVCCS, CTR

(M.B.A Dept.)

COLLECTION POLICIES

The third area involved in the accounts receivables management is collection policies. They refers to the procedures followed to collect account receivables when, after the expiry of the credit period, they become due. These policies cover two aspects. 1. DEGREE OF COLLECTION EFFORT To illustrate the effect of the collection effort, the credit policies of a firm may be categorized into y y

Stringent/Light Lenient

The collection policy would be tight if very rigorous procedures are followed a tight collection policy has implications which involve benefits as well as costs . 2. TYPES OF COLLECTION EFFORTS

The second aspect of collection policies related to the steps that should be taken to collect over dues from the customers. The steps usually taken are y

Letters, including reminders, to expedite payment.

y

Telephone calls for personal contact.

y

Personal visits.

y y

Help of collection agencies and fully. Legal action. 1. The aim should be to collect as early as possible; genuine difficulties the customers should be given due consideration.

of

2. The management of receivables involves crucial decision in 3 areas credit policies, credit terms, collection policies. 3. The objective of receivables management therefore is to have a trade-off between the benefits and costs associated with the extension of credit. 4. The extension of credit involves risk and cost. The benefits are increased sales and anticipated increased profits/incremental contribution.

SVCCS, CTR

(M.B.A Dept.)

INDUSTRY PROFILE Industry Overview:

The total Indian storage battery market is approximately estimated at US$ 500 Million with the automotive battery segment contributing 60 to 65 percent of the overall market value. In terms of volumes, the overall consumption of automotive batteries could be around 6.3 million units with the OE segment comprising around 1.2 to 1.3 million units per annum, according to an interview with the Executive Vice President of ARBL that was published on the website chennaibest.com. The late 1990s also saw a surge in the sales of the passenger car segment for around 2 years due to certain factors like the software boom, lowering of interest rates, etc. - which increased the overall sales of batteries. The automotive sector did not see any significant growth during the early part of the new millennium and is slowly showing signs of growth during this financial year. This factor also adds to the demand in the aftermarket as more number of cars was sold around 2 to 3 years back which is generally the life of a lead acid battery. The replacement automotive battery market is expected to grow at a healthy rate in the coming years. The SLI market in the Indian subcontinent is a highly fragmented industry with a few manufacturers in the organized segment and a lot many belonging to the tier 2 / tier 3 categories which have a regional presence and thrive especially among the semi urban and rural areas.

Role of Technology With the advent of newer more advanced technologies, the consumer is getting the best of both worlds; a superior product at an affordable price. ARB L sells its automotive battery under the brand name Amaron which is the country's first Zero Maintenance Free Automotive battery while the competitors had only maintenance free batteries that needed topping up of distilled water. Today, all the leading manufacturers are also offering a similar product with focus shifting towards offering a technologically superior product. Amaron was also the first to talk about what goes into making a great product. It spoke of having silver inside which is used as an alloy mix that actually increases the battery life and this was the first attempt by any battery manufacturer to educate the consumers. Fuddy Duddy Category to Creative Advertisement of the Year

The interest level shown by any car owner to a battery revolves around only when the car fails to start. Amaron therefore realized the need to make the consumer think about

SVCCS, CTR

(M.B.A Dept.)

automotive batteries, because thinking before a purchase will definitely lead to a comparison among the brands available in the market. Amaron thus went ahead with its "Chicken Leg" media campaign that created a storm in the advertising industry and made people look to this relatively new player in the battery industry. Over the years, the creative bent of all its campaigns starting from the media blitz, to below-the-line campaigns have been towards educating the consumer about a battery. The lead shown by ARB L was quickly followed by the others, with Exide Industries sponsoring a cricket series in India for the first time with the campaign "India moves on Exide" becoming a major success. All this action in the automotive battery industry did not go unnoticed. An automotive battery manufacturer (Amaron) for the first time was in the same league as mega ad spenders like Coca Cola, Times of India, and others and won the Creative Advertiser of the Year, which was a shot in the arm for the entire automotive battery industry. Distribution

For the success of any aftermarket product, availability of the same is as important as

the product quality and competitive pricing which go a long way in increasing the visibility and creating a network across markets. Here again, the leading automotive battery manufacturers became aggressive in extending their reach to the nooks and corners of the country and also moved away from the traditional distribution network and instead appointed dealers and distributors who were the first timers to the battery business like service outlets of some of the automobile majors like Maruti, Hyundai, Telco, Ashok Leyland, Hindustan Motors etc, roadside mechanics and lube shops etc., which went a long way in increasing the reach and visibility. There has been certain uniqueness that has been brought into the business by establishing exclusive outlets with some flashy names like "Pitstops" and "Terminals" which was never seen earlier in this industry. All this, resulted in taking the smaller / regional manufacturers head on and helped in building better brand recall and awareness among the end users.

Global scenario: Global

Opportunities

for

Advanced

Battery

Technologies

in

Automotive

Applications, 1998 to 2008 is a multi client report designed specifically to provide subscribes with an accurate and independent assessment of emerging opportunities in the automotive battery industry. In addition to providing invaluable information and insights into

SVCCS, CTR

(M.B.A Dept.)

developments in starting, lighting, and ignition (S LI) technology, the report focuses specifically on opportunities emerging from electric vehicles and hybrid electric vehicles. The report provides material suppliers, advanced battery companies, automotive original equipment manufacturers, investors, and others with an excellent resource to build soil, strategic plans and respond to competitive forces, emerging technologies, and evolving market needs. Specifically, the report assists subscribers in growing their business by providing the following: Features:

Identification of the issues and timing for large scale commercial implementation of advanced battery technology in the global automotive industry. y

Unbiased global scenario forecasts of commercial systems to 2003 and 2008.

y

Forecast of material requirements for advanced batteries.

y

Profiles of companies those are active in this field.

Benefits: Identification of emerging business opportunities for adva nced batteries y

New SLI technologies

y

HEVs

y

EVs

y

Competitive intelligence for use in bench marking

y

A resource for screening potential merger and acquisition candidates

The business: Revenues for the global battery market reached an estimated $30 billion in 1998.S LI and related secondary battery applications represent approximately one-half of the overall revenues and are mostly utilized in automotive applications. High-performance secondary batteries used in such applications as portable electronics represent approximately 15% of the overall battery market. These high-performance secondary batteries have the fastest growth rates, at over 10% a year. Primary batteries represent the remaining one-third of battery industry revenues. A battery is an electro chemical device in which the free energy of chemical reaction is converted in to the electrical energy. The chemical energy contained in the active materials is converted electrical by means of electrochemical oxidation reduction reactions.

SVCCS, CTR

(M.B.A Dept.)

HOW BATTERY WORKS: When you place the key in your car¶s ignition and turn the ignition switch ³O N´ a signal sent to the battery. Upon receiving the signal, the battery takes energy that it has been strong in chemicals form and releases it as electricity power is used to crank the engine. The battery also release energy to power the car¶s light and others accessories. It is the only device, which can store electrical energy in the form of chemical energy, and science it is called as a storage battery. SEALED MAINTENANCE FREE (SMF) BATTERY:

Sealed maintenance free (SMF) batteries technologies are leading the battery industry in the recent years in automobile and industry battery sector around the globe. SMF batteries come under the rechargeable battery category so it can be used a number of times the life of a battery. SM F batteries are more economical than cadmium batteries. These batteries are more compact then the wet type batteries. It can be at any position, these batteries are very popular for portable power requirements and space constraint applications. The replacement market, on the other hand, is much longer. The replacement market is characterized by the presence of large unorganized sector, which constitutes around 55-60% of the total replacement market.

INDUSTRIAL BATTERIES: Industrial batteries can be basically classified into two main categories: y

AUTOMOTIVE BATTERIES

y

STATIONARY BATTERIES

The automotive batteries are used in electric vehicles and forklifts. The stationary batteries used in Telecom, Railway and power industries have Registered a growth in excess of 20% and this trend in likely to be continuing in the next 5 years. The industrial segment is highly technology is an important factor land is vital for brand reference. The total demand for the industrial battery segment is met by indigenous production with a small saves of about 10% of by imports. The demand for industrial has grown slowly and steadily.

SVCCS, CTR

(M.B.A Dept.)

RECYCLING OF BATTERIES:

Battery acid is recycled neutralizing it into water of converting it to sodium soleplate for laundry manufacturing. Cleaning the battery cases, melting the plastics and reforming it into pellets recycle plastic. Lead, which makes up 50% of every battery, is melted, poured into slabs and purified. PROSPECTUS OF SMF\ VRLA BATTERIESD IN INDIA:

The following factors are influencing demand of VR LA technology batteries. y

Entry of multinationals in telecom industry.

y

DOT¶S policy decision to upgrade the overall technology base.

y

Constraints in the use of conventional battery in ra dio

TELECOM:

The government policy to increase the capacity from 10 million lines by 2000 increased the demand for storage batteries considerably. The value added services like ra dio paging and cellular will increase the demand for storage batteries in future considerably. RAILWAY :

In railways, the demand estimate is based on the annual post production which comes to 2500 numbers by railways itself and 1000 numbers more by various other segments, plus replacements demand and annual requirements for railwa y electrification. POWER SECTOR:

In power sector the estimated 90 private power projects which are expected to produce 40000 MV with approximate capital outlay of Rs. 1, 40,000 crores would keep the industry figured brighter in the coming years. The demand for VR LA batteries is increased due to its performance over the conventional batteries. So it is more acceptable to the consumers. VALUE REGULATED LEAD ACID BATTERIES:

In the recent years in automobiles and industry battery sector around the globe VR LA batteries have become the preferred choice in various applications such as uninterrupted power supply, emergency lights, security systems and weighting scales. VR LA batteries are leak- proof, explosion resistant and having life duration of 15-20 years. These batteries SVCCS, CTR

(M.B.A Dept.)

withstand the environment conditions due to high technology, in built in the batteries. Each cell is housed in a power coated steel tray making them convenient to transport and installation. So transit damages are minimized in case of these batteries.

AMARA RAJA GROUP OF COMPANIES: y

AMARA RAJA BATTERIES LIMITED (ARBL), karakambadi, Tirupathi.

y

AMARA RAJA POWER SYSTEMS PVT.LTD (AR PSPL), Karakambadi, Tirupathi.

y

MA NGAL PRECISIO N PRODUCTS PVT LTD (MPPL), karakambadi, Tirupathi.

y

MA NGAL PRECISIO N PRODUCTS PVT LTD (MPPL), petamitta, chittoor.

y

AMARA RAJA ELECTRO NICS PVT. LTD (AREPL), Dighavamagham, Chittoor.

ENVIRONMENTAL PROGRAMS: y

Advancement for ISO-14001 Certification.

y

Health monitoring and industrial safety program.

y

Both personnel and industrial programs.

y

Start-up of environment management system (EMS) implementation Programs.

y

Nil discharges and lowest emission awareness and i mplementation program.

y

Waste reduction program.

y

Energy conservation program.

y

Continuous and massive greenbelt development program ground water level improvement program.

y

Central wastage collection, treatment, storage on safe disposal personal health safe guarding program.

SVCCS, CTR

(M.B.A Dept.)

AWARDS: y

³ The spirit of excellence´

- awarded by academy of fine arts, Tirupathi. y

³ Best entrepreneur of the year 1998 ³

- awarded by Hyderabad management association y

³ Industrial economist business excellence awards ± 1991´

- awarded by the industrial economist, Chennai. y

³ Excellence award´

- Institution of economic studies ( New Delhi). y

³Udyog ratton award´

- Institution of economic studies ( New Delhi).

SVCCS, CTR

(M.B.A Dept.)

COMPANY PROFILE B

and incepti n of t e company:

Amara R a ja Batter ies td: Amara R a ja Batter ies t

act 1956 in 13

imited (ARBL Company incorporated under t e company¶s t

ebruary 1985 and conver ted into public limited company on 6 September

1990. ARBL is t e f irst company in India to manufacture VRLA (va lue regulated lead acid)

Batter ies. The ma in ob jective of the company is manufactur ing of good qua lity of SEALED MAI TE A CE R EE lead acid batter ies (SMF). The company was set up with R s.1920 lakhs in 18 acres area near Karakambad i village, R enigunta Manda l. The pro ject site is notif ied Under ³ B category. The company has the clear-cut policy of direct selling without any intermediate. So

they have set up si

branches and are opera t ed by corpora t e operations off ice located in

Chenna i. The company has v ir tual monopoly in higher A.H (Amp Hour) ra ting market its produc t VRLA. It is also having the facility for Industr ial and Automoti ve Batter ies.

Mr. Galla R machandra

a idu, cha irman who is an

R I having engineer ing background

promot ed AMAR A R AJA BATTER IES LTD. in 1985 a t Karakambadi Village near Tirupathi. He a lso seeded HAR SHA ELECTR NICS

vt. Ltd. in 1990 at Karakambad i

Village near Chittoor and AMAR A R AJA ELECTR NICS Ltd. in 2000 at Diguvamagham village near Chittoor. Before embark ing on this venture he worked as sen ior pro ject engineer

S

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with M/S Sergeant& Lundy, USA (power consultants) for about 20 years. Prior to this, he worked as an Electrical Engineer for US Steel Corporation for about 3 years. In 1989, ARBL has entered into Industrial Battery market with Technical alliance with G NB Batteries, USA to promote advanced Maintenance Free Valve Regulated Lead Acid (MF-VR LA) batteries prior to setting its own facilities ARB L Imported the product in semi-Knocked down condition. In September 1990, it was converted into a public limited company and it¶s IPO (Initial Public Offer) in January 1991 aggregating Rs.59.5Million. It was formed to manufacture Maintenance-free, sealed lead acid batteries in which commercial production commenced from May 1992. Despite its initial technical support from G NB Batteries, during the financial year 1998 ARBL ceded a 23.7% stake to Johnson Controls Inc. USA, at a premium of Rs.75 per share to cement a financial and technical tie-up to foray into Automotive Batteries. Besides having overall control of the company as the chairman Mr.R. N.Galla. His son, Mr. Jayadev Galla, who is acting as a managing director of the company, has worked earlier with G NB Battery Technologies, USA as an International Sales Executive.

Nature and business carried:

ARBL comprises of two major divisions viz, .4.

Industrial Batteries Division (IBD)

.5.

Automotive Batteries Division (ABD)

.6.

Small Batteries Division (SBD)

Industrial battery division (IBD)

Amara raja has become the benchmark in the manufacture of industrial batteries. India is one of the largest and fastest growing markets for industrial batteries in the world and Amara raja is leading the front with an 80% Market share for stand by VR LA batteries. It is having the facility for producing plastic components required for industrial batteries.

SVCCS, CTR

(M.B.A Dept.)

Incorporation:

ARBL is the first company in India to manufacture VR LA batteries. The company has setup of Rs. 1920 lakhs. Plants in 18 acres in karakambadi village, near Tirupati. ARBL was established in the year 1985 as private limited and then it has been changed into public limited company with the advent of G NB industrial batteries USA, for manufacturing sealed value regulated. Capacity

The actual installed capacity of IBD is over 4, 00,000 cells per annum and utilization capacity is reached over 3, 50,000 cells per annum. Automotive Battery Division (ABD)

ARBL inaugurated its new automotive plant at karakambadi near Tirupati. On September 2001 this plant part of the most completely integrated battery manufacturing facility in India with all critical components including plastics sourced in house from existing facilities on site. This gives Amara raja is having complete control own inventory and product quality in this project, Amara raja strategic alliance partners Johnson Controls USA have closely worked with their Indian counterparts to put together the latest advances in manufacturing technology and plant engineering. It is also having the capacity for producing plastic components required for automotive batteries. Capacity:

Amara Raja has a replacement Battery Brand Amaron hi-life. ARB L has a capacity for manufacture of around 1,000,000 units at its facility at Tirupati with an investment of US $ 10.00 million. A Greenfield project is planned at the same site with an additional investment of US $6 million to augment capacity to 2 million batteries. The Amaron hi-life battery is a product of the collaborative efforts of engineers at Johnson Controls Inc. and Amara Raja. This Zero maintenance product incorporates the latest technological advances in the field and is on par with batteries manufactured and marketed in developed countries. A fully charged, factory-activated battery provides extra high starting performance and power at any temperature.

SVCCS, CTR

(M.B.A Dept.)

Mi i

, vi i

and hi

Mi i n:

Mission, mantra, way of think ing, philosophy, wha t we live for« ca ll it what you want, you¶ll f ind it below. ³To transform our spheres of inf luence and to improve the qua lity of life by bu ilding

institutions that provide better access to better oppor tunities, goods and serv ices to more people«all the ti me.´ Introduce latest generation technologies: y

Adapt these technologies to suit the operating environment

y

Develop and manufacture globally competitive, customer-focused produc ts of wor ldclass qua lity.

y

R esponsi bly introduce these produc ts into relevant markets.

y

Provide wor ld-class customer suppor t.

Vision:

In January 2007, ARBL announced expans ion plans to invest R s.84 crores to set up the combined manufactur ing capacity of 3.2 million units for 2-whee ler batter ies and sma ll VRLA batter ies for UPS applications. Currently 1 million units combined capacity is ready and will sca le up to 3.2 million units by F

2010.

Product prof ile: Automotive battery products:

Four-wheelers: 1. Amaron hi- ay

Amaron hi-way truck batter ies-lasts long, really long Amaron hi-way truck batter ies, brought to you by Amara R a ja Batter ies Limited (ARBL), the largest manufacturer of Stand by VRLA Industr ial Batter ies in the Indian.

S

S

A

2. Amaron pro hi-life Amaron PR hi-life batter ies des ign features and benef its

Longest life ± thanks to the reformulated Advanta paste reci pe. Zero ma intenance ± high heat technology, premium s ilver alloys for a low-corrosion and no top-ups exper ience. Highest crank ing power ± largest intercell welds, 19mm

lugs. Amaron harves t Types of Harves t tractor batter ies 75 Ah ± TR A 500 D31R/L 90 Ah ± TR A 600 H29R/L

. Amaron shield

Amaron shield ± power Inf inite The new Amaron shield, with an unheard of 24 mont hs warranty. A product of Amara R a ja

Batter ies Li mited, Amaron shield is a resu lt of a par tnershi p between the Amara R a ja Group and Johnson Control Inc, USA, the global leader in inter ior exper ience, building eff iciency and power solutions.

Amaron shield design features and benef its Long life ±

the robust plate design and a r i bbed container provide extra strength and improved res istance to corros ion. Ultra low maintenance ± the special hybr id alloy system minimi es water loss, mak ing the battery ultra

low maint enance and ensur ing longer life.R eady to install ± factory charged, wet shi pped and equi pped with T3 terminals.Charge acceptance ± the unique paste formulation provides for quick charging between power fa ilures.

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A

4. Amaron go:

Amaron go ba tter ies design fea tures and benef its

Long life ± thanks to the reformu lated advanta paste reci pe. Maint enance free ± H igh heat technology, premium s ilver a lloys for a low-corrosion and no top-ups exper ience. Factory fresh ± wet shi pped and ready to f it.

5.

Amaron fresh

6.Amaron optima

Opti ma yellow top: deep cycle batter ies for ex treme applications Opti ma b lue top: for twice the life of traditional mar ine and R V batter ies Opti ma red top: the battery that withstands the most vi brations

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Applications: O.E.Customer

Model Number

Rating

Hyundai(Santro)

38B20R

12V35Ah

Maruthi Udyog Ltd(Wagon R)

38B20l

12V35Ah

Maruthi Udyog Ltd(Swift)

38B20R

12V35Ah

GMIL(Tavera)

80D26R

12V60Ah

GMIL(Optra)

55D23R

12V55Ah

Ashok Leyland(Goods)

75D31R

12V75Ah

Ashok Leyland(Passenger)

HCVX00D04R

12V150Ah

Ashok Leyland(Goods)

HCV500D31R

12V80Ah

M&M(Scor/Comm/Marshall)

65D26R

12V65Ah

M&M(Bolero)

75D31L

12V75Ah

M&M(Champion)

48D26R

12V50Ah

M&M(Tractors-All Types)

TRA500D31L

12V75Ah

HO NDA(City)

34B19L

12V32Ah

HO NDA(Accord)

55B24L

12V60Ah

TELCO(Ace-Cub)

38B20L

12V35Ah

TELCO(207DI/Sumo/Variants)

75D31R

12V75Ah

TELCO(Safari-CRDI)

95D31R

12V80Ah

TELCO(Telco709/907)

HCV700H29R

12V100Ah

TELCO(1613)

HCV800D04R

12V120Ah

TELCO(1313/1512)

HCVX00D04R

12V150Ah

SWRAJ MAZDA(Truck)

75D31R

12V75Ah

HML-Kolkata(Ambassador-D)

75D31R

12V75Ah

HML-Kolkata(Ambassador-P)

55D26R

12V60Ah

HML-Chennai(Lancer-P)

38B20L

12V35Ah

HML-Chennai(Lancer-D)

95D31L

12V80Ah

EICHER Tractors(for available models)

TRA500D31R

12V75Ah

I NTER NATIO NAL Tractors

TRA500D31R

12V75Ah

SVCCS, CTR

(M.B.A Dept.)

T o wheelers:

Applications:

Vehicle

Scooters

Battery type

Ba ja j

Ba ja j Bravo

AP-ATX2.5L

Ba ja j

Saff ire, spr it,wave

AP-ATX5L

TVS

Scooty

manufacturer

ES,Scoot y AP-ATX5L

pep,spectra Herohonda

Pleasure, Street

AP-ATX5L

Suzuk i

Access 125

AP-ATX5L

K inetic honda

K inetic

AP-ATX5L

hondaDX,Zx k inetic

Nova

135, Nova AP-ATX9

EX,Blaze

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Industrial battery division:

Amara R a ja¶s Power Stack is a high performance ba ttery des igned to meet the demands of a wide range of industr ial app lications. The power s tack range is modular in structure and is capable of accommoda ting a wide spectrum of capac ities depending on the application. Ma jor application areas include t elecommunications, power utilities, ra ilways, defence, and other heavy industr ies.

The advantages of powers tack at a glance: y

The advantages of power stack at a glance

y

Design f loats life of 20 years

y

Proven performance in harsh tropical conditions

y

Deep discharge capabilities

y

Unbeatable track record in applications across heavy industr ies

y

QS 9000 ± accredited across a ll functional areas and bus iness ranging from

manufactur ing to services. Wor ld class ISO 14100 accredited facility

y

S

S

A

Quanta is no t just another UPS ba ttery, it is a UPS ba ttery with a back-up for a back-

up.UPS ba ttery is fur ther backed by the wor ld renowed t echnology that others cannot provide you with. Put simply, Quanta is the produc t of fail-safe, fool-proof battery technology, produced and test ed in our premier manufactur ing facility and provides severa l f irsts for a battery of its k ind.

The advantages of Quanta at a glance Unique heavy-du ty, corrosion-res istant alloy for pos itive gr ids, to increase cyc lic life

y

in a tropical environment. y

Lower internal resistance for super ior high-discharge performance.

y

Interchange, a pa tented paste reci pe for excellent charge acceptance.

y

Aesthetically designed with a rugged Flappon terminal protector that prevents shor ts

y

Compact, lightweight, factory-charged, exp losion-res istant and environment fr iendl y clean and s leek looks. Apar t from the t echnology itself, hel ping us meet our str ingent quality norms is our

y

QS 9000 accredited manufactur ing plant. All of which makes Quanta the unr ivalled

choice for the smar t UPS equi pment buyer. Power Control:

They provide back-up cr itical installations in power genera ting units and provide

y

back-up power for transmission and distr i bution sub-stations like: y

Nor th Chenna i therma l power station ARBL is an approved vendor for NTPC/NHPC and power Gr id Corporation.

y

S

S

A

Oil & gas:

1. ARBL provides integrated solutions for renewable energy back-up power for O NGC¶s offshore platforms. 2. The island of Lakshadweep is powered through Amara Raja Power Systems. 3. They also provide back-up power for low power transmitters for Doordarshan. Motive Power:

1. ARBL is the country¶s first manufacturer of maintenance-free traction batteries used in Forklifts and Pallet trucks. Defence:

ARBL introduced new technologies for back-up power in defence, police and paramilitary communication systems. UPS & EPABX:

ARBL is the preferred suppliers for all leading UPS back-up manufacturers like APC, Numeric, DB power, AP Lab, Electronics & Controls etc. our U PS batteries are the fastest

growing battery brand since its launch in July 2002 with a nation-wide footprint of sales and service points and over 3,00,000 batteries in use at over 10,000 customer sites. Railways: y

ARBL pioneered the use of maintenance-free batteries in the Indian Railways.

y

Over 50% of Indian Railways¶ two and three tier self-generation Air-conditioned coaches are powered by ARBL.

y

Over 40% of Railway¶s Signalling and Telecom power supply solutions are provided by ARBL.

Area of operation: Regional: Leading battery manufacturer Amara Raja Batteries Limited launched Amaron pit

shop in Kakinada and Rajamundry today. With these the total number of pit shops in Andhra Pradesh will grow to 14. The complete range of Amaron automotive batteries, the most

popular product from ARBL, will be available at the pit shop. Amaron pit shop is an innovative concept pioneered by Amara Raja in the automotive battery industry.

SVCCS, CTR

(M.B.A Dept.)

National: The Company currently has a pan-India sales and service network with 152

franchisees, 120 pit shops and over 15 000 active retailers.

Ownership pattern: Shareholding of promoter and promoter group Indian - 20.5427% Foreign - 31.5187% Public shareholding

Institutions- 15.1278% Non-institutions - 32.8106%

Competitor¶s information: EXIDE: The Company was incorporated as Associated Battery Makers (Eastern) Ltd., on

31st January, 1947 under the Companies Act, 1913 to purchase all or any of the assets of the business of manufacturers, buyers and sellers of and dealers in and repairers of electrical and chemical appliances and goods carried on by the Chloride Electric Storage Company (India) Ltd, in India , since 1916 with a view thereto to enter into and carry into effect (either with or

without modification) an agreement which had already been prepared and was expressed to be made between the Chloride Electric Storage Co (India) Ltd on the one part and the Company of the other part. The Company manufactures the widest range of storage batteries in the world from 2.5 Ah to 20,400 Ah capacities, covering the broadest spectrum of applications. The Company has six factories strategically located across the country ± two in Maharashtra, one in West Bengal, two in Tamil Nadu and one in Haryana. The Company¶s predecessor carried on their operations as import house from 1916 under the name Chloride Electrical Storage Company. Thereafter, the Company start ed manufacturing storage batteries in the country and have grown to become one of the largest manufacturer and exporter of batteries in the sub-continent today. Exide separated from its UK-based parent, Chloride Group Plc., in 1989, after the latter divested its ownership in favour of a group of Indian shareholders. The Company has grown steadily, modernized its manufacturing processes and taken initiatives on the service front. Constant innovations have helped the Company to

SVCCS, CTR

(M.B.A Dept.)

produce the world¶s largest range of industrial batteries extending from 2.5 Ah to 15000 Ah and covering various technology configurations. Atlas:

Manufacturer of Lead Acid Batteries from 32 ± 180Ah Total number of employees 51- 100 Location details: Punjab Ludhiana transport nagar Ludhiana Punjab State

The other competitors in the market are Hyderabad Batteries Limited, Southern Batteries Ltd, Atlas batteries industries, Mico Bosch Automotive Batteries Ltd etc.

HIGHLIGHTS: y

Amaron TM is the preferred supplier to Daimler Chrysler, Ford and General Motors

y

Automotive product of the year 2000 by overdrive

y

Excellence in Environmental management in 2002 by A P Pollution Control Board

y

Creative Advertiser of the year ¶02 by ABBY

y

Ford ³World Excellence Award´

y

Ford Q1 Award

y

ISO - 9001 in 1997«.RWTUV

y

QS 9000 in 1999«.RWTUV

y

ISO/TS 16949 in 2004«.RWTUV

y

Quality benchmarks

y

Best business practices as per JCI

y

ISO 14001 in 2002«..RWTUV

y

Part of the world¶s largest battery manufacturing alliance- Johnson Controls Inc.,

USA y

Largest manufacturer of standby VR LA batteries for industrial application in India

y

Auto CAD for sheet metal design

SVCCS, CTR

(M.B.A Dept.)

y

Largest & dominant market leader of standby batteries in Railways, Telecom, power

generating stations in India y

One of the largest (designed for producing 2.5 million batteries p.a) and most modern automotive battery plants in Asia

y

Highly automated (oxide preparation to finishing; all processes and operations are automated)

y

Part of Amara Raja¶s highly integrated battery complex (most components are built

in-house) y

Industrial Economist Business Excellence Award ± 1991 by the Industrial Economist, Chennai.

y

Best Entrepreneur of the year 1998 ± by Hyderabad Management Association.

y

Excellence award by Institution of Economic Studies (ES), New Delhi.

y

Udyog Rattan ± 1999 by Institution of Economic Studies (ES), New Delhi

y

Q1 vendor status by Ford India Limited ± 2003

y

World Excellence Silver Award by Ford USA

y

The spirit of Excellence by Academy of fine arts, Tirupathi

SVCCS, CTR

(M.B.A Dept.)

Workflow model: FIGURE1.6.1: AMARA RAJA WORK FLOW MODEL: Oxide plant

Grid casting

Plate Preparation

Assembly

Formation

Finishing

Dispatching

SVCCS, CTR

(M.B.A Dept.)

Future growth and prospectus: The company has plans of expanding its battery manufacturing capacity a r obust 50% from 3.6 million units per annum to 5.4 million units per annum. The company intends to make an investment of Rs 882 million for the expansion. The company plans to expand the capacity of the industrial battery division, which would incur a capital expenditure of Rs 650 million. The company would be investing Rs 1,134 million in setting up a facility at Tirupati for the manufacture of two wheeler and small VR LA batteries. The proposed Share valueinvestment would be spread over three years. The capacity¶s facility would increase t o 5.74 million units Share value

SVCCS, CTR

(M.B.A Dept.)

NEED FOR THE STUDY The main purpose behind this project is to know how debts were procured by Amara Raja batteries Limited. The study is on internal financing pattern of the debtor¶s receivables relating to the wing of cash management to achieve more customers with better excellence of policies relating to domestic economy of the company. Therefore, clear analysis is to be made to know the reasons & find out the measures to be taken to make the organization more successful in acquiring debt amounts from its customers.

SVCCS, CTR

(M.B.A Dept.)

SCOPE OF THE STUDY

The current study is undertaken for the purpose of analyzing receivables management of Amar Raja batteries Ltd, which is situated at Tirupati, Andhra Pradesh. An extensive study is done on the blocking up of receivables and its retaining activities, and the factors determining these receivables. The study concentrates on the liquidity position of the firm, and a brief study is made on the techniques used by the firm for collection.

SVCCS, CTR

(M.B.A Dept.)

OBJECTIVES OF THE STUDY

The main objective of the current study is to know the company performance towards receivables action executing in ARBL. The prime objective is to analyze and evaluate the receivables management and its performance in ARBL. The following were the objectives of study were: y

To know how the receivables were managed.

y

To analyze to what extent they were offering credit.

y

To know who were the major defaulters.

y

To know how much extent of cash is blocked as bad debts.

SVCCS, CTR

(M.B.A Dept.)

RESEARCH METHODOLOGY

Methodology refers to the way adopted for collecting information for the purpose of drawing inferences. Methodology plays a vital role in the analysis of the study. Methodology is the science of system and a method of conducting a research work. Data Collection:

The study is depends on primary and secondary data from various sources: Primary Data:

First hand information was collected from experts of finance department, on their

course of actions towards collections. Secondary Data:

The Secondary data that is required for the studies is collected from the Schedules, past notes, Budgets, through company websites and other statements provided by Finance Department of AMARA RAJA BATTERIES LIMITED.

SVCCS, CTR

(M.B.A Dept.)

LIMITATIONS 1. The data used is gathered mainly through secondary sources and no independent verification has been done on the same. 2. Only five years financial reports have been considered i.e., from 2005 to 2009. 3. And the total statements are given as secondary sources and they don¶t provide to go through scrutiny of those statements.

SVCCS, CTR

(M.B.A Dept.)

ANALYSIS FRAME WORK CLASSIFICATIONS OF COLLECTION OPERATIONS: 

Preparation of Aging Schedules.



Credit Sales to Accounts ReceivablesStatement.



Collections to Accounts Receivables Statement. The whole calculation part data has provided by the employees of Finance Department as secondary source of data and there was no scope has given me to look into original statements.when we step into the organization,we will see a wal hanger consists of ³A LITTLE FROM EVERYO NE CA N SAVE A LOT´. ANALYSIS OF AGING SCHEDULE

The company prepares monthly aging schedule to monitor its book debts.The debts outstanding are broken down into branch wise entries.The aging schedules for the past two years have been thoroughly analyzed to come out with average outstanding days of the book debts in the company is as follows overdue less than 30 days, 301to 60 days, 61 to 90 days, 91 to 180 days, 181 to 300days, 301 to 365 days and above 365 days respectively. These reports are prepared especially for the extended over due accounts. The basic reason is to develop a file of customers who require special attention either in the form of statements,letters or other collection activity. RECEIVABLES MANAGEMENT:

Accounts receivables are the second most liquid form of assets of the firm.the receivables come into being as credit sales and constitute as one of the largest assets. Skill full administration of the receivables management is therefore of prime importance to the business. The very reason of credit sales is to expand sales volume. If the company is very strict in granting credit to customers many sales may be lost that would other wise contribute to the profits of the firm. Before going to quote the credit aspiration and credit practices at Amara Raja Power systems Ltd.,

SVCCS, CTR

(M.B.A Dept.)

What actually credit will create?

1. Company position. 2. Protection from competition. 3. Buyer states and Requirements. 4. Dealer Relationship. 5. Transit Delays. 6. Industrial practie

CREDIT POLICY AND PRACTICES AT AMARA RAJA POWER SYSTEMS LTD.

The sales of the company Amara Raja power systems ltd go on cash as well as credit terms. The trading division of the AR PSL sells its products, which it receives from the factories on a credit period of 45 days,through the branches of the company located all over the country. CREDIT POLICY

Credit Standards

It is careful analysis Risk

Credit Terms

Specified of the Duration

Collection

Cash Discount

Lower collection

influences lower investment in Receivables and Vice-versa.

SVCCS, CTR

(M.B.A Dept.)

CREDIT STANDARDS CREDIT STANDARDS ARE CRITERIA TO DECIDE THE TYPES:

Customers to whom goods could be sold on credit. If a firm has slow paying customer its investment in accounts receivables will increase, the firm will also be exposed to higher risk of default. CREDIT TERMS:

Specify duration of credit and terms of payment by customers, investment in accounts receivables will be high if customer are allowed extended time period for making payment. COLLECTION EFFORTS:

Collection effort determine the actual collection period. The lower the collection the lower the investment in accounts r eceivables and vice-versa.

GOALS OF THE CREDIT POLICY

Stringent credit policy

Leninent credit

policy

Less credit to customer as a Results decrease in sales

SVCCS, CTR

M ore credit to customer as it leads to increase in sales.

(M.B.A Dept.)

CREDIT POLICY AND PRACTICES AT AMARA RAJA BATTERIES LTD.

The sales of the company Amara Raja batteries ltd go on cash as well as credit terms. The trading division of the ARBL sells its products, which it receives from the factories on a credit period of 45 days,through the branches of the company located all over the country. If there is any changes in credit policy there will be change in the 1. Volume of credit sales. 2. Default risk (or) Bad debts. 3. Costs. 4. Average collection period. 

Looks for the period of presence of the customer in the business.

1. RAILWAYS 2. TELECOM 3. SERVICE OR SPARES 

Looks for the character of the customer i.e., his willingness to pay the moral factor is of

considerable importance in credit position. 

Looks for his ability to pay is evaluated by his financial position and the bank guarantee

given by him. Based on the above factors the company analyses the customers and determine the credit limit to them. Every six months the company goes for the review of the customers. When a customer is found to be regular in paying the dues within 30 days the company may go for increase in the credit limit for the customer. In a small way, the new customers are taken into consideration and given the cre dit.

COLLECTION PROCEDURES:

The company follows a system of centralized control and decentralized collections. the company does not employ any collection agency for its collection activities. The trading division receives a statement of sales and outstanding daily from all the branches in the country, to initiate appropriate actions. the sales offices are engaged in collection activity and the collection is done through CM P account and through Bank cheques.

SVCCS, CTR

(M.B.A Dept.)

MONITORING BOOK DEBTS

The company classifies its book debts based on the number of outstanding days in the given following way: OUTSTA NDI NG DAYS

DEBTS CATEGORY

MORE THA N 300 DAYS

DISPUTES

BETWEE N 180 DAYS

BAD DEBTS

BETWEE N 90-180 DAYS

DOWBTFUL DEBTS

BETWEE N 0-90 DAYS

GOOD DEBTS.

CLASSIFICATION OF CUSTOMER ACCOUNTS:

An analysis of collection from aspects of accounts provides a useful measure of the potential loss in the various customer classifications. Customer accounts may be classified in various categories. 1. Prime or excellent large. Well-established firms. 2. Good firms that are not large and have not yet established excellent credit reputations. 3. Restricted: firms that are limited to a definite credit line and 4. Marginal high risk accounts which must be watched.

SVCCS, CTR

(M.B.A Dept.)

DATA ANALYSIS & INTERPR ETATION Analysis of Aging Schedule:

The company prepares mon thly ageing schedule to monitor its book deb ts. The outstanding are broken down into branch wise entr ies. The ageing schedu les for the past two years have been thorough ly ana lyzed to come ou t with average ou tstand ing days of the book debts of the company. On an average the outstand ing days of the book deb ts in the company

is as follows:

Aging schedule for the year 005 Outstanding per iod

Outstanding R eceivables (values in R s) 32,23,38,603 11,48,55,005 7,70,01,950 2,55,44,568 2,60,41,030 9,63,22,626 66,21,03,780

Not due 0-30 31-60 61-90 91-180 >181 Total

% of total outstanding receivables 48.68% 17.34% 11.63% 3.88% 3.93% 14.54% 100%

60.00% 50.00% 40.00% 30.00%

% of total outstanding receivables

20.00%

10.00% 0.00% Not due

0-30

31-60

61-90

91-180

>181

ANALYSIS:

Dur ing the year 2005, the total outstanding receivables were R s. 66,21,03,780.ou t of which 48.68% were no t due, 17.34% rece ivables were collected within 30 days, 11.63% were co llected in between 31 days to 60 days, 3.88% were co llected in between 61 days to 90 days, 3.93% were collected in between 91 days to 180 days. The rema ining 14.54% rece ivables are tak ing more than 180 days.

S

S

A



Not due 0-30 31-60 61-90 91-180 >181 Total


60.00%

50.00% 40.00% 0.00%


20.00% 10.00% 0.00% Not due

0- 0

1-60

61 -90

91 -180

>181

ANALYSIS:

Dur ing the year 2005, the total outstanding receivables were R s. 89,43,39,436.out of which 52.53%were not due, 20.47% rece ivables were collected within 30 days, 5.80% were co llected in between 31 days to 60 days, 4.41% were collect ed in be tween 61 days to 90 days, 4.75% were co llected i n between 91 days to 180 days. The rema ining 12.04% rece ivables are tak ing more than 180 days.

S

S

A



Not due 0-30 31-60 61-90 91-180 >181 Total


70.00% 60.00% 50.00%

40.00% % of total outstanding receivables

0.00%

20.00% 10.00% 0.00%

Not d ue

0- 0

1-60

61-90

91-180

>181

ANALYSIS:

Dur ing the year 2005, the total outstanding receivables were R s. 1,499,994,595.ou t of which 64.29% were no t due, 20.37% rece ivables were collected within 30 days, 6.67% were co llected in between 31 days to 60 days, 1.86% were collect ed in between 61 days to 90 days, and 2.57% were collected in between 91 days to 180 days. The rema ining 4.24% rece ivables are tak ing more than 180 days.

S

S

A



Not due 0-30 31-60 61-90 91-180 >181 Total


0.00% 0.00% 60.00% 50.00% 40.00%


30.00% 20.00% 10.00% 0.00% Not due

0-30

31- 60

61- 90

91-1 0

>1 1

ANALYSIS:

Dur ing the year 2005, the total outstanding receivables were R s. 2,294,795,539.ou t of which 68.67% were no t due, 15.00% rece ivables were collected within 30 days, 9.59% were co llected in between 31 days to 60 days, 2.65% were collect ed in between 61 days to 90 days, and 2.23% were collected in between 91 days to 180 days. The rema ining 1.86% rece ivables are tak ing more than 180 days.

S

S

A



Not due 0-30 31-60 61-90 91-180 >181 Total


0.00%

60.00% 50.00% 40.00% % of total outstanding receivables

30.00% 0.00%

10.00% 0.00% Not due

0-30

31-60

61-90

91-180

>181

ANALYSIS:

Dur ing the year 2005, the total outstanding receivables were R s. 2,104,025,117.ou t of which 63.21% were no t due, 21.79% rece ivables were collected within 30 days, 5.10% were co llected in between 31 days to 60 days, 1.86% were collect ed in between 61 days to 90 days, and 5.50% were collected in between 91 days to 180 days. The rema ining 2.54% receivables are tak ing more than 180 days.

S

S

A

1) DEBTORS T RNO VER RATIO:

NET CR EDIT SALES DEBTOR S TU RNOVE R R ATIO = --------------------------------AVER AGE DEBTOR S Openi ng debt ors + cl osing debt ors

AVG DEBTOR S = ----------------------------------------------------

2 YEAR S 2005-06 2006-07 2007-08 2008-09

Net credit sa les 391,85,58,196 595,80,16,404 1083,32,56,904 13,177,230,047

Avg debtors 75,31,13,338.5 115,80,32,766.5 186,21,13,498 217,15,87,529.5

TIMES 5.20 5.14 5.81 6.06

.

. TIMES

4.

200 -0

200 -0

200 -08

2008-09

INTERPR ETATION: 

Dur ing the year 2005-06, the debtor¶s turnover is 5.2 times.



In the year 2006-07, it was slightly decreased, but in the year 2007-08&2008-09 it was increased to 5.81 ti mes and 6.06 times respectively.



S

S

Overall it is in increasing trend.

A

) DEBTORS COLLECTION PERIOD(in days):

Avg debtors = ----------------------------x365

Net sales YEAR 2005-06 2006-07 2007-08 2008-09

AVG DEBTO R S 75,31,13,338.5 115,80,32,766.5 186,21,13,498 217,15,87,529.5

NET SALES 391,85,58,196 595,80,16,404 1083,32,56,904 13,177,230,047

I N DAYS 70.14 70.94 62.73 60.15

75 70 65 60

IN DAYS

55 50 2005-06

2006-07

2007-08

2008-09

INTERPR ETATION: 

Dur ing the year 2005-06, the debtor¶s collection per iod was 70.14 days.



In the year 2006-07, it was slightly increased to 70.94 days, bu t in the years 2007-08 and 2008-09 it was decreased to 62.73 days and 60.15 days respec tively.



S

S

The above table ref lects, the f irm is maintaining str ict collection policy.

A

FINDINGS 1. The credit worthiness and credit limit of customer is determined by the character and financial position of a customers and period of presence in the business. 2. The transactions with the new customers will be on cash terms, with due course of time, credit will be given to them. 3. The company follows the classification of debts into three categories namely debts outstanding for less than 30-90 days are considered to be ³GOOD´, for 90-180 days are considered to be ³DOUBT FUL´ and > 181 days are considered to be ³DISPUTES´, >365 days are considered to be ³bad debts´. 4. The sales of the company on both cash and credit terms. Out of the sales generated 60% are of cash and 40%are of credit basis. 5. No bad debts are seen in the year of September 2009 & February 2010. 6. From the analysis it is found that Tirupathi branch performance is good when compared with other branches.

SVCCS, CTR

(M.B.A Dept.)

SUGGESTIONS 1. The company Structured frame work of bank Guarantee Limits must be done by the company to which extent the company may give credit limit to its customers. 2. Implementation of special package of ³E PR´, that which can improve the cash and credit management procedure in a better manner regarding to ³ACCOU NTS RECEIVABLES´. 3. Granting cash discount will be better to encourage regular payments. 4. The payments are delayed due to wrong billing; delayed billing etc., the billing system should be improved. (Reasonable time). 5. If any customer is habitually defaulter in making payments, guarantee must be taken. 6. If credit period is increased the company can increase its sales.

CONCLUSION SVCCS, CTR

(M.B.A Dept.)

The receivable management systems followed by Amara Raja batteries Ltd shows satisfactory position. It gives to clear idea to the management to take decision. .The company is reduced its bad debts .it can get extra receivables. If credit period is increased, the collections can increases in sales. Overall the financial performance of the company is good. And it has to take necessary steps to further growth of the company.

BIBLIOGRAPHY SVCCS, CTR

(M.B.A Dept.)

Amara Raja Updated Project

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