SUMMER TRAINING PROJECT REPORT ON
“WORKING CAPITAL CAPITAL MANAGEMENT” MANAGE MENT” AT
RADICO KHAITAN LIMITED
Submitted in Partial Fulillment !
Master of Business Administration Pr!"ramme# $%%&'$%(% OF
ADVANCE INSTITUTE OF MANAGEMENT NH-24 Hapur-Delhi Bypass, Gaia!a"-##$$44
PROJECT GUIDE Mr%Sa&'ee( Mr%Sa&'ee( A)ar*al +Se&% Au&. E/eu.i(e0
SUBMITT SUBMI TTED ED BY: HASEEB MOHAMMED 1HAN
ACKNO)LEDGEMENT
In fine acknowledgement is due, and is here by made to Mr% Mr% SAN SANEE EEV V AGA3 GA3A5 +S +Srr% A u u&. &. e/e e/eu. u.i( i(e0 e0-A -A u& u&.s .s guided guided in the prepar preparat ation ion of the report. report. It could could not have been been completed. It is my pleasure to get training under his guidance.
I express my deep sense of gratitude to him for his interest, proper guidance, encouragement and co-operation in the preparation of the training report in time and in such and elegant form. My summer training report could not have become a reality without the aid and assistance of him, so I tender sincere thanks from the core of my heart. I woul ould like to tha thank Mr% Mr% 1%6% 1%6%SINGH SINGH +Dire +Dire. .rr - O0, Mr% Mr% S%6a&"e +AGM0 7 Mr%Al8 A)ar*al for give me the approval to this project in the organization.
HASEEB MOHAMMED 1HAN
+M%B%A0
63EFACE
he summer training report is the O31ING CA6ITA C A6ITA5 5 MANAGEMENT 9 9 3AM6U3 3AM6 U3 DISTI55E3: DIST I55E3:,, A UNIT OF 3ADICO 1HAITAN 5."% he merit of this report is that
!eaders a fairly complete idea about the corporation.
he objective of this report is to gain knowledge about the "peration, organization, management, financial assistance , financial position and working results of the #orporation.
HASEEB MOHAMMED 1HAN
+M%B%A0
contents COM6AN: 63OFI5E O3GANISATION
ST3UCTU3E
MANAGEMENT DIVISION BOA3D
OF DI3ECTO3S
COM6AN: VISION COM6AN: MISSION 3ADICO;S
CO3E VA5UE
3AM6U3 DISTI55E3:
CO36O3ATE SE3VICES
B3ANDS DETAI5S
3ADICO 1HAITAN 5TD%
ABOUT THE COM6AN: Radico
Khaitan is one of India's oldest and
largest liquor
manufacturers. Formerly known as Rampur istillery! which was esta"lished in #$%&. It was only in #$$$! that Radico decided to launch and market its own "rands! there"y em"arking on a period of phenomenal growth. o further "oost its production capacity of "ottled and "randed products! the company has tied up with "ottling units in (arious parts of the country.
3ADICO 1HAITAN 5TD%
THE *RAND STOR+ Radico Khaitan )td today has three millionaire "rands in its portfolio. Radico's flagship "rand! * +M ,hisky! launched in #$$$! was a runaway success. In the first year alone! it sold one million cases - a record for any Indian or foreign "rand operating in India. his also made it the first "rand in the liquor industry to make it to the )imca Book of Records. rinks International! the acclaimed international liquor magaine has rated * +M whisky as the fastest growing whisky in the world in the regional category /011%123. he other millionaire "rands are4 5ontessa Rum has won the prestigious Monde 6election award for its o(erall quality for the past three e7ecuti(e years. It has a large market share in the defense market... 8ld Admiral Brandy has also "een rated "y rinks International as the fastest growing Brandy in the world in
the regional category /011%-12 and 0112-193 also it has won the Monde 6election award for its o(erall quality in 011%-12. oday! Radico Khaitan has "rands that straddle almost e(ery market segment whisky! rum! "randy! (odka : gin - and price category. Its fine "lends! consistent quality! distincti(e packaging and superior (alue ha(e resonated with customers.
!$%I#" &'$I$( )%.
THE INTERNATIONAL LINK
In a significant mo(e aimed at catapulting the Indian liquor industry to international standards! Radico Khaitan set up its international di(ision - Radico International - to distri"ute and market some of the world's "est-known liquor "rands! including ,ines from ;rnest :
ighland istillers3.
STRONG FINANCIALS Radico Khaitan is not ?ust a company of great "rands@ it is a company of great financials. he equity shares of the company are quoted on the Mum"ai and
ational 6tock ;7changes! and the company has more than &2!111 shareholders. It is the most profita"le company in the domestic liquor industry.
3ADICO 1HAITAN 5TD%
O3GANISATION ST3UCTU3E M% %I!*# "! +!* I% *( *( M I( **! I( % M
+!* I% *( +! M "% # I" % ( M
+!* I% *( /I( M $( #* % M
+!* I% *( '! M % M
3ADICO 1HAITAN 5TD%
Mana"ement
Dr, LALIT KHAITAN
5>AIRMA : MAA=I= IR;58R RAI58 K>AIA ). A (eteran of the Indian liquor industry /o(er %2 years3! r. Khaitan o(ersees the entire "usiness of Radico Khaitan. >e has "een instrumental in impro(ing quality
standards and
seeking
and
achie(ing customer satisfaction! leading to su"stantial growth in sales and re(enues! and increased market shares. In the process! he has succeeded in transforming Radico Khaitan from a small! "ehind-. r. Khaitan has "een widely recognied for his contri"ution to the liquor industry. >e has "een associated the-scenes player to a Rs. $$2 crore company! the most profita"le in its sector! and a soughtafter partner "y leading international liquor "rands seeking to enter the Indian
market. >is unique management style has helped maintain Radico as an open! ethical and transparent organiation with a num"er of de(elopmental pro?ects! has represented India with se(eral international delegations! and is in(ol(ed in social : educational acti(ities across India. >e is currently4
5hairman! .+. 5ommittee of +> 5ham"er of 5ommerce and Industry
Mem"er! Managing 5ommittee! A6685>AM
Mem"er! Managing 5ommittee! All India istillers Association
Mem"er! Managing 5ommittee! .+. istillers Association
rustee! Khaitan +u"lic 6chool! oida
Mr, A*HISHEK KHAITAN
MAA=I= IR;58R RAI58 K>AIA ) Mr. A"hishek Khaitan is a Bachelor of ;ngineering /Industrial +roduction3 from Bangalore! and has done a Managerial Finance : Managerial accounting course at >ar(ard! 6A. >e ?oined Radico Khaitan in #$$C! and super(ised
the
esta"lishment
of
the
company's Marketing i(ision in the same year. he first "rand to "e launched "y the di(ision! * +M ,hisky! was a runaway success. In the first year alone! it sold one million cases - a record for any Indian or foreign "rand operating in India. his also made it the first "rand in the liquor industry to make it to the )imca Book of Records. nder A"hishek Khaitan's leadership! Radico Khaitan's "rand portfolio is wide and deep! with "rands that straddle almost e(ery market segment! taste preference and price category. o recognie Mr. A"hishek Khaitan's contri"ution to Indian Industry! ;conomic e(elopment : Research Association "estowed the
*-arti.a Ud.!" Ratan A/ard
him. he ,orld ;conomic +rogress 6ociety has honored him with the Indu0trial E12ellen2e A/ard.
on
Nati!nal
3ADICO 1HAITAN 5TD%
DI3ISION OF THE COMPAN+
Mr, RK Me-r!tra 4Pre0ident ' Finan2e5
Mr. Mehrotra o(ersees the financial affairs of Radico Khaitan. >e has "een associated with the company since #$$#. A 5hartered Accountant "y profession! Mr. Mehrotra has a (ast and rich career spanning more than %1 years. >e is a mem"er of the All India Management Association. Mr, KP Sin" 4Pre0ident ' O6erati!n05
Mr. 6ingh! whole time irector! o(ersees Radico Khaitan's operations! and heads its' distillery unit at Rampur. >e has "een associated with the company for o(er a decade. Mr. 6ingh is a qualified technocrat with o(er &1 years of e7perience in the liquor industry.
Mr, Ra7u 3a8irane. 4Pre0ident ' Sale0 9 Mar:etin"5
Mr. Dairaney o(ersees Radico Khaitan's 5i(il Marketing and efence Marketing Brands i(isions@ he also handles the country liquor "rands of the company. Mr. Dairaney has a Masters degree in ;conomics! and iplomas in 6ales : Marketing in 5orporate )aw! and Business Management. >e has a"out #2 years of e7perience in sales in the liquor industry.
Mr, KS Ra7u 4E1e2uti;e 3i2e Pre0ident ' Manua2turin" 9 O6erat i!n05
Mr. !aju oversees the operations of all of !adico &haitan0s strategic tie-up bottling units and !adico0s own bottling units. Mr. !aju has a Masters degree in #ommerce from $ndhra niversity, and a %iploma in Management from $ll India Institute of Management. 'e has over 12 years of experience in the li3uor industry.
Mr, San7a. Lamba 4E1e2uti;e' 3i2e Pre0ident' E16!rt0 9 I*D5
Mr. )am"a o(ersees e7port of Radico's "rands to (arious markets and also heads the International "rands di(isions where Radico has marketing : distri"ution tie-up with some of the liquor ma?ors of the world. Mr. )am"a is a qualified 5hartered Accountant and today has a (ast e7perience of #2 years in (aried sectors.
Mr, KS Ra7u 4E1e2uti;e 3i2e Pre0ident ' Manua2turin" 9 O6erati!n05
Mr. Ra?u o(ersees the operations of all of Radico Khaitan's strategic tie-up "ottling units and Radico's own "ottling units. Mr. Ra?u has a Masters degree in 5ommerce from Andhra ni(ersity! and a iploma in Management from All India Institute of Management. >e has o(er 0# years of e7perience in the liquor industry.
BOA3D OF DI3ECTO3S
DR, LALIT KHAITAN
5>AIRMA : MAA=I= IR;58R RAI58 K>AIA ). An eminent industrialist! r. Khaitan has "een at the helm of affairs of the 5ompany for more than 02 years. >e is on the Managing 5ommittee of a num"er of associations! including the +> 5ham"er of 5ommerce : Industry! A6685>AM! All India istillers Association! .+. istillers Association and 5onfederation of Indian Industry. uring his illustrious career r. Khaitan has won se(eral awards in recognition of his ser(ices. hese include4E 'Indira =andhi ational nity Award'! instituted "y All India ational nity 5onference! presented "y the ;7-+resident of India! =iani ail 6inghE 'Di?ay Ratna Award'! instituted "y the International Friendship 6ociety of India! presented "y the then +rime Minister of India! 6hri 5handra 6ekhar E 'ational Builder of ;minence in the inetees' award! instituted "y the International Business 5ouncil. MR, A*HISHEK KHAITAN
MAA=I= IR;58R! RAI58 K>AIA ). Mr. Khaitan has a Bachelors egree in ;ngineering in Industrial +roduction and qualifications in Managerial Finance and Managerial Accounting an alumnus of >ar(ard ni(ersity! .6.A. >e is a young and talented industrialist! and has "een responsi"le for the e7ponential growth of the 5ompany.
MR, KARNA SINGH MEHTA
IR;58R! RAI58 K>AIA ). MAA=I= +AR;R! 6.6. K8>ARI : 58. /A );AI= FIRM 8F 5>AR;R; A558A6 5 Mr. Mehta is a leading 5hartered Accountant! with (ast and rich e7perience in the field of Finance and Accounting. >e is on the Board of irectors of a num"er of leading Indian companies. >e is also a Mem"er of the managing committees of se(eral associations! including +> 5ham"er of 5ommerce : Industry.
MR, ASHUTOSH PATRA
IR;58RG RAI58 K>AIA ). MAA=I= +AR;R! 8.+. K>AIA : 58. /A );AI= )A, FIRM3 Mr. +atra has o(er 02 years of e7perience in the legal field. >e is an eminent 6upreme 5ourt lawyer and a leading legal e7pert. MR, K,P, SINGH
,>8); IM; IR;58R ;6I=A; A6 +R;6I; /8+;RAI863! RAI58 K>AIA ). Mr. 6ingh! a qualified technocrat! has o(er &1 years of e7perience in the liquor industry and has "een associated with Radico Khaitan )td. for o(er a decade. >e o(ersees the operations of the 5ompany! and heads its istillery nit at Rampur.
MR, SANJA+ JALAN
IR;58R! RAI58 K>AIA ) , Mr.
MR, RAGHUPATI SINGHANIA
IR;58R! RAI58 K>AIA ). MAA=I= IR;58R! <.K I6RI;6 ) Mr. 6inghania! an eminent industrialist! is the Managing irector of <.K. Industries )td. >e is also a irector in many other companies of the <.K =roup! including <.K. 5orp )td.! Dikrant yres )td.! and <.K. rugs and +harmaceuticals )td.
MR, AMIT *URMAN
IR;58R! RAI58 K>AIA ). ;H;5ID; IR;58R! ABR IIA ). Mr. Burman is an eminent industrialist and ;7ecuti(e irector! a"ur India )td. An alumnus of )eigh and 5olum"ia ni(ersities! .6.A.! and the ni(ersity of 5am"ridge! ;ngland! he has a Masters degree in Industrial ;ngineering and a Masters degree in Business Administration. >e is on the Board of irectors of a num"er of leading Indian companies.
3ISION OF THE COMPAN+
MISSION OF THE COMPAN+
3ADICO 1HAITAN 5TD%
RADICO
FOCUS ON CUSTOMER Radico Khaitan "elie(es that customer focus is (ery important. hey gi(e importance to deli(er "oth (alue : quality to the customer.
EXCELLENCE Radico will stri(e for e7cellence in whate(er we do. Radico will take the right path to do whate(er we do and e7cel in the same.
RESPECT FOR PEOPLE Radico will (alue differences in indi(idual perspecti(es. Radico want indi(iduals to dream! create and e7periment in pursuit of opportunities and achie(e leadership through teamwork.
INNO3ATION Radico will constantly inno(ate and stri(e to "etter our processes! products! ser(ices and management practices.
3ADICO 1HAITAN 5TD%
CORPORATE GO3ERNANCE
5orporate =o(ernance at Radico means the framework to encourage the efficient use of resources and equally to require accounta"ility for the
stewardship of those resources. he aim is to align as nearly as possi"le the interests of indi(iduals! corporations and society.
;rnst : oung are the internal auditors and strategic ad(isors and help to impro(e its operational efficiencies and control procedures. Board of irectors consisting of eminent independent professionals. 6trict adherence to the accounting standards lay down "y the Institute of 5hartered Accountants of India. 6pecial
attention "eing
paid to the
in(estors relations. Regular
communication to the in(estors a"out the "usiness de(elopments and important (ents impacting the operations. 6trict compliance with the requirement of 6tock ;7changes! 6ecurities and ;7change Board of India and other statutory authorities. )i"eral disclosures in the "alance sheet o(er and a"o(e those required "y the regulatory authorities.
3ADICO 1HAITAN 5TD%
CORPORATE SOCIAL RESPONSI*ILIT+ PROGRAMME
HUNAR
In accordance with Radico's mission to work towards the up-liftment of local artisans and to promote the + handicraft! ardoi and 5hikan work it had launched 'Radico- 5hikankari Aur ardoi +ratiyogita' in association with the Indian Academy of Art : 5ulture! .+. he competition was organied to "ring out the creati(ity of the artisans and to look for young talent in the field of 5hikankari : ardoi. he e(ent was promoted through mo"ile (ans! pamphlet distri"ution in the areas where the artisans li(e. here were two le(els of ?udging eminent personalities from )ucknow ?udged the first le(el and in the second le(el Mrs. , o get employment for the artisans is the cause towards which the
group >unar is working.
3ADICO 1HAITAN 5TD%
EN3IRONMENT FRIENDL+
Radico Khaitan )td is an en(ironment friendly company and follows all the norms for its production facility at Rampur. It has also "een awarded the I68 $11# certification for the Rampur distillery.
3ADICO 1HAITAN 5TD%
Bala&e Shee.
------------------- i& 3s% Cr% -------------------
Mar 056
Mar 057
Mar 058 Mar 059
21 moths 21 moths 21 moths 21 moths
21 moths
ources "f /unds otal hare #apital
2:.1:
2:.1:
2:.1:
2:.1:
98.:9
*3uity hare #apital
2:.1:
2:.1:
2:.1:
2:.1:
2:.1:
hare $pplication Money
5.55
5.55
5.55
5.55
5.55
+reference hare #apital
5.55
5.55
5.55
5.55
79.8;
!eserves
66.<<
7;.22
9:.<2
226.56
268.<1
!evaluation !eserves
25.57
:.96
:.89
:.82
:.76
(etworth
9<.89
;9.26
25;.19
261.:6
1<1.;<
ecured )oans
8;.5;
251.8<
26<.89
1<1.;9
198.;9
nsecured )oans
<1.61
<1.:;
92.5<
25:.22
<<<.<9
otal %ebt
255.75
2<7.82
126.95
<62.:;
825.16
otal )iabilities
296.29
111.97
<11.:9
6;6.:1
;6<.59
Mar 05<
Mar 056
Mar 057
Mar 058 Mar 059
21 moths 21 moths 21 moths 21 moths
21 moths
$pplication "f /unds ross =lock
211.79
266.11
156.2;
<2;.1<
<85.82
)ess> $ccum. %epreciation
62.85
68.57
7<.7<
85.9;
98.2<
(et =lock
;5.:9
:;.29
275.87
179.67
1;6.6;
#apital ?ork in +rogress
2.51
1.8:
29.<9
<.98
66.1<
Investments
;.:5
;.87
5.52
9.12
17.1:
Inventories
29.28
1;.;;
85.88
8<.;6
9<.9:
undry %ebtors
75.55
76.97
82.72
:5.1:
21:.7;
6.58
2.;:
7.76
<.28
26.;9
otal #urrent $ssets
92.11
;7.71
219.92
279.1:
12;.16
)oans and $dvances
76.:8
;<.78
251.52
261.15
2:7.72
5.8;
5.72
2.17
2.22
2:6.22
218.;8
28:.7:
1<5.:9
<55.85
859.;8
5.55
5.55
5.55
5.55
5.55
82.28
86.;7
99.<7
9:.<1
:;.66
6.98
7.79
8.66
9.8<
15.<8
otal #) @ +rovisions
87.:1
95.61
;<.9:
;8.:7
22;.;5
(et #urrent $ssets
85.:6
::.29
269.2;
12<.87
6;:.58
Miscellaneous *xpenses
11.<6
26.59
9.9;
1.;6
5.55
296.29
111.97
<11.::
6;6.:2
;6<.58
2.;8
1.75
12.9;
2;.16
1:.89
<1.:;
65.2<
72.22
2<.;1
29.29
#ash and =ank =alance
/ixed %eposits otal #$, )oans @ $dvances %effered #redit #urrent )iabilities +rovisions
otal $ssets #ontingent )iabilities =ook 4alue A!sB
3ADICO 1HAITAN 5TD%
RAMPUR DISTILLERY Rampur istillery is one of the largest distilleries in India and a leading manufacturer of ;7tra eutral Alcohol /used in manufacturing Indian Made foreign )iquor3 it also manufacturers Rectified 6pirit /used in manufacturing of lower segments 5ountry )iquor3 and manufacturing of Anhydrous Alcohol or ;thanol or =asohol /used in +etrol Mi7ing3 and the recent addition of grain distillery . oday with a production capacity of 91 million liters p. a and with the recent addition of the grain distillery which has taken the capacity up to $1 million lit p.a. it is one of the largest distilleries in the country he nit has a series of firsts to its credit4 It is the first Indian distillery to o"tain I68 $11#40111 certifications. It has achie(ed capacity utiliation of o(er #11J in the alcohol plant. It is the first en(ironment-friendly distillery in the country.
3ADICO 1HAITAN 5TD%
CAPACIT+ M!la00e0 Di0tiller. ?% milli!n liter0 6er annum, Grain Di0tiller. @% milli!n liter0 6er annum, Malt Di0tiller. $% t-!u0and liter0 6er annum,
EFFLUENT TREATMENT PLANT he effluent reatment Facility in Rampur istillery is unique in nature when compared among and in the Industry. he istillery complies with ero ischarge concept set up "y 5+5B. he treatment has (aried "y products! which not only impro(es operational sta"ility of the plants "ut also adds on to company's profita"ility. +rimary reatment of the ;ffluent yields Bio =as! which is used as fuel in 5ogen Boiler to generate steam and then +ower through a "ackpressure ur"ine. he "ackpressure steam is used again in the istillation +lant to produce ;7tra eutral Alcohol and Rectified 6pirit.
EN3IRONMENTALL+ FRIENDL+ Meeting out #11J +ollution 5ontrol norms! the reated ;ffluent is not discharged outside and in turn is mi7ed and cured with organic mass like +ress Mud of 6ugar Mills and suita"le organic manures to manufacture Bio Manure or Bio 5ompost! a "io fertilier used successfully in growing the crop of sugar canes etc.
3ADICO 1HAITAN 5TD%
CO'GENERATION PLANT he cogeneration plant of Rampur istillery consist of 09 M capacity India's first stand alone Bio =as fired steam "oiler and 0 M, ur"ine =enerator in tandem to make Radico Khaitan self reliant on its requirement for power for its normal operation.
*ACK)ARD INTEGRATION he (ery first "ackward integration pro?ect has come in the form of setting up a fully automatic C21 ml Kidney shape +; "ottle manufacturing plant in low cost and ta7 "enefited area like ttranchal. he unit started with production rate of *2 lacs "ottle per year in 8cto"er 011% and is now geared up to produce 022 lacs +; "ottles to cater Radico's own capti(e consumption of appro7. #21 lacs "ottle per year and rest is "eing sold to outside clients in similar "usinesses. he unit
has not only eliminated the pressure of +; "ottle suppliers "ut has also pro(ided a kind of di(ersified manufacturing "ase for future "usiness e7ploration.
O)N *OTTLING UNITS
Rampur istillery has #% state-of-the-art "ottling lines! including those imported from Italy! equipped with tunnel "ottle washing! filling! sealing and la"eling machines with a capacity to produce #211 cases /# case #0 "ottles of C21 ml each3 of liquor in a single shift of operation. )ine capacities (ary from C21 cases to &!111 cases in a shift. o keep pace with the growing demand! Radico Khaitan has significantly increased its "ottling capacity "y acquiringLsetting up "ottling plants in the states of Ra?asthan! ttranchal and Andhra +radesh. Rampur istillery! Rampur /ttar +radesh3 ,hytehall /India3 )td.! Rampur /ttar +radesh3 Radico Khaitan )td.! /ttaranchal3 Radico Khaitan )td.! Reengus /Ra?asthan3 Radico Khaitan )td.! >ydera"ad /Andhra +radesh3
STRATEGIC *OTTLING UNITS Radico Khaitan )td is working continuously towards increasing its reach through the
strategic
"ottling units across the
country.
he focus
underlines
comprehensi(e quality control and enhanced market penetration. 6trategic Bottling nits through out India.
NORTH
N 3 Di0tillerie0 9 *re/erie0 Ltd,B 4Pun7ab5
G/ali!r Di0tiller0B G/ali!r 4Mad-.a Prade0-5
Patiala Di0tiller0 9 Manua2turer0 Ltd,B *addi 4Hima2-al Prade0-5
Oa:land *!ttler0 4P5 Ltd, 4Jammu 9 Ka0-mir5
EAST G!!d-!0t Liu!r0 4P5 Ltd,B PatnaB 4*i-ar5
IFP A"r! Indu0trie0 Ltd,B K!l:attaB 4)e0t *en"al5
Se;en Si0ter0 Trade 9 Di0tillerie0 4P5 Ltd,B Gu/a-ati,4A00am5
*a22-u0 *!ttlin" 4P5 Ltd,B 4Ori00a5
United *r!t-er0 Di0tillerie0 4P5 Ltd,B 4Aruna2-al Prade0-5
SOUTH
Kamal )inerie0B H.derabad 4And-ra Prade0-5
Ka6itan Di0tiller.B H.derabad 4And-ra Prade0-5
Ra;i:umar Di0tillerie0 4P!ndi2-err.5
United Di0tiller.B Cali2utB 4Kerala5
0!ut-
Sri 3en:ate0/ara Di0tillerie0B *an"al!reB 4Karnata:a5
*T 9 FC 4P5 Ltd,B *an"al!reB 4Karnata:a5
Mida0 G!ldenB C-ennaiB 4Tamil Nadu5
De;i2!lam Di0tillerie0B K!2-iB 4Kerala5
)EST
Tila:na"ar Indu0trie0 LtdB Tila:na"arB 4Ma-ara0-tra5
Gemini Di0tillerie0 4P5 Ltd, 4G!a5
A7ant-a Di0tillerie0 LtdB Na"6ur, 4Ma-ara0-tra5
)e0t )el2!me Di0tillerie0B *ila06ur, 4C-atti0"ar-5
Sil;er 0tar Di0tiller.B 4Daman5
3ADICO 1HAITAN 5TD%
CO36O3ATE SE3VICES
HUMAN RESOURCES Radico Khaitan "elie(es that the growth of a company depends on the collecti(e efforts of its employees. he >uman Resources epartment seeks to create an en(ironment that fosters the emergence of empowered leaders. hey hire people who ha(e the fire to grow! the potential to lead and the eal to e7cel. All new hires undergo a C-day induction and familiariation program.
3ADICO 1HAITAN 5TD%
MARKETING In the short span of time! Radico Khaitan has "een a"le to make the transition from "eing a manufacturer of ;7tra eutral Alcohol to "eing a company with a portfolio of hugely successful "rands. heir understanding of market demands and a"ility to satisfy consumer needs has "een responsi"le for this. 5onsistently superior quality! a wide range of products! inno(ati(e packaging! pricing to suit all pockets! a nation-wide distri"ution network that co(ers $2J of retail points! clu"s and "ars in the country! effecti(e ad(ertising! and popular e(ents and promotions. All these elements go to making up Radico Khaitan's winning marketing mi7.
SALES Radico Khaitans young and enthusiastic sales force ser(ices retail outlets across the country! understanding requirements and fulfilling them! there"y de(eloping enduring relationships. he 6ales team comprises professionals with (ast domain e7pertise! years of e7perience in the liquor industry and a deep understanding of (aried markets.
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ACCOUNTS' FINANCE Radico Khaitan )td has "een continuously showing growth o(er pre(ious years and registering healthy profits. his has "een made possi"le through the steps taken "y the Finance department like "ringing down the cost of "orrowings su"stantially. he ;fforts of the finance department has made Radico one of the "est prospects for timely repayment of de"ts and pro(iding the highest safety of funds for lenders. he department also has e7cellent financial management with strong fundamentals in the short and medium term.
PRODUCTION he +roduction epartment is responsi"le for operations in Radico Khaitan's "ottling units. It works towards the smooth production and deli(ery of all the Radico Khaitan "rands as per market needs.
*RANDS Radico made its foray into the International Market a few years "ack and today Radico's "rands are present in more than &1 countries. Radico has "een consistently pro(iding e7cellent quality in terms of "oth product and packaging along with outstanding ser(ice. wo of our "rands * +M ,hisky and 8ld Admiral "randy featured in rinks International Magaine as the fastest growing "rands in the world in the regional category. hree of its "rands! 5ontessa HHH Rum! * +M Bermuda ,hite Rum and 8ld Admiral "randy ha(e won 6il(er Medal in
prestigious Monde 6election for o(erall quality their "rands ha(e already attained the leadership position in many countries. Radico Khaitan is now "reaking into newer and sophisticated markets with liquor "rands de(eloped to appeal to a wider palate.
)HISK+ he "ase for Indian whisky is ENA. he other ingredients used are matured Indian malt sprit! 6cotch whisky concentrate! added fla(ors! and caramel : dm water. All these ingredients are not added at a time "ut different stages.
#. 6pecial appointment whisky 0. *pm oryale whisky &. ,hitefield whisky
%. *pm whisky 2. Radico gold supreme whisky 9. Radico gold whisky C. 5ontessa delu7e whisky *. Rampur no.# whisky
*RAND+ Brandy is a utch word means /Brunt ,ine3. In India they make "randy "y "lending with ;A! matured grape spirit! added fla(oring.
#. 5ontessa Brandy 0. 8ld Admiral Brandy &. ,hite Field Brandy %. *pm ;7cellency Brandy
RUM Rum is distilled liquor made from sugarcane products! cane ?uice spirit along with "ase ;A and fla(oring. #. 5ontessa rum 0. )argest Rum &. *pm Bermuda %. Black 5at Rum
2. Rampur o.# 9. Big >it Rum C. 5ontessa ,hite Rum
GIN =in is alcoholic liquor o"tained "y distilling grain mash or redistilling sprit with "otanicals such as ?uniper "erries! angelica! lemon and orange peels! cassia "ark! coriander and cardamom.
#. 5ontessa =ene 0. Big >it =ene &. Magic Moment =ene
RA) MATERIAL For the production of alcohol! materials containing sustaining amount of glucose 5ontent can "e used as a raw material. But for commercial production! common raw materials used are as follows4 #. Molasses 0. 5ane
2. =rain /Barley! Rice3
FUNCTIONS
+urchasing of packing materials! engineering goods! and logistics etc. function is done here.
he packing materials include carton! monochrome! "ottles! and caps la"el etc.
he procurement of packing materials is done on the "asis of
#. Forecast from marketing department for the month. 0. entati(e planning "ased on last month. &. +roduction schedule.
+acking material accounts for *1J of all other. Material and it is the main requirement for distillery. >ence it is essential to ha(e a proper stock of the material as per the requirement.
)a"el is the most critical packing material as it in(ol(es different la"els for the different states as the rules and regulations are different in different states.
For finaliation the (endor for packing material purchase committee where (endor is introduced .here are num"er of suppliers for packing material and purchasing is done "y share of "usiness.
For the engineering material indenter raise the indent and the quotations are called for the same. hen comparati(e is done and after that finaliing the terms and conditions purchase order is released.
)ogistics of country liquor is taken care of here. he procedure for dispatch of country liquor is that the marketing department sends indent according to the demand.
For the country liquor it is the policy of state go(t. that distillers should ha(e their own depots and this depots will sell to retail (endors who will sell called as CL$A.
ransportation annual rate contract is done and the documents that are to "e carried along with the CL includes e7cise pass PD$B in(oice and challan.
SOME *RAND OF COMPAN+
< 6M 3yale *his8y ; +M !oyale whisky , which extends the ;+M brand franchise to the prestige semi C premium whisky segment , is made with international 3uality spirit and imported scotch with matured malt spirits. he mellow taste comes from years of being matured in wooden casks in meticulously guarded environs.
hy.ehall *his8y ?hytehall whisky was rewarded with silver medal at the international wine and spirit competiton 1559 held at .&. it is a distinguished blends of aged scotch malts and the finest Indian spirits, skillfully blended to give a rich , warm , fullbodied whisky with a grace ful after note that lingers.
C&.essa ru= #ontessa rum was rewarded with bronze medal at the inter national wine @ spirit competition 1559 held at .&. another leading brand contessa rum enjoys a17D Market share in the defence segment and has won the prestigious gold medal at the monde collection in =russels for its overall 3uality. It is in the regular segment.
l" a"=iral !ra&"y he phenomenally successful old admiral brandy is our third million C case =rand . in spite of India being a predominantly whisky- drinking country, old admirl brandy has received an overwhelming response from trade channel and consumers a like , to record exponential growth, year-on-year.
< 6M Ber=u"a *hi.e ru= olden sands, calypso beats, cheerful people, that is the spirit of the #aribbean , reflected In ; +M =ermuda white rum first entry in the white spirit segment .its size available at domestic is 975 ml, <97ml, 2;5ml.and at the international is same.
<6M HIS1: ;+M ?'I&E, radico flagship brand, is a perfact balance of strength and smoothness, it is one of the finest whiskies in the regular segment . the strong positioning of $ IM* /"! /!I*(% has ensured a distinctive identity for the b rand.since its launch in 2:::, backed by fine product 3uality, superior packaging it has been a run away success.
SOME NE)S RELATED )ITH RADICO
contents O31ING CA6ITA5 CA6ITA5 CONCE6T OF O31ING CA6ITA5 CA6ITA5
FACTO3S FACTO3S INF5UENCING INF5U ENCING O31ING CA6ITA5 CA6ITA5 T:6ES OF O31ING CA6ITA5 ON THE BASIS OF CONCE6T T:6ES OF O31ING CA6ITA5 ON THE BASIS OF 3E>UI3EMENTS NEED OF O31ING CA6ITA5 CA6ITA5 O6E3ATING C:C5E OF O31ING CA6ITA5 CA6ITA5 MANAGEMENT OF O31ING CA6ITA5 CA6ITA5 ADVANTAGES FINDINGS BIB5IOG3A6H:
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Mea&i&) 9 *r8i&) api.al
#apital re3uired for a business can be classified under two main categories viz.
#0 fixed capital 20 working capital
*very business needs funds for its establishment and to carry out its day-to-day operations. )ong-term funds are re3uired to create production facilities through purchase of fixed assets such as plant and machinery, land =uilding, furniture etc. Investment in these assets represents that part of firm0s capital which is blocked on $ permanent or fixed bassis and is called fixed capital. /unds are also needed for short-term purpose for the purchase of raw materials ,paymentof wages and other day-to-day xpenses,etc. these funds are known as ?orking capital. "Working capital is the amount of funds necessary to cover the cost of operating the enterprises."
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CONCE6T OF O31ING CA6ITA5
here are two concepts of working capital.
#0 ross working capital 20 (et working capital
In the broad sense , the term working capital refers to the gross working capital and represents the amount of funds invested in current assets. Thus, .he )rss *r8i&) api.al is .he api.al i&(es.e" i& ..al urre&. asse.s 9 .he e&.erprise%current assets are
those assets which in the ordinary course of business can be converted In to cash with in the short period of normally one accounting year .
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CONSTITUTNTS O! CUNT #SSTS
2B #ash in hand and bank balances.
1B =ills !eceivables. aB !aw materials, bB ?ork in process cB /inished goods. 8B emporary investment of surplus funds. 9B $ccrued incomes.
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In narrow sense, the term working capital refers to the net working capital. Ne. *r8i&) api.al is the
excess of #urrent assets over current liabilities, or say> Net Working capital $ Current #ssets % Current lia&ilities
(et working capital may be positive or negative . ?hen the current assets exceed the current liabilities the working capital is positive and the negative working capital results when the current liabilities are more than the current assets.
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CONSTITUNTS O! CUNT 'I#(I'ITIS
2B =ills payable.
1B undry creditors or account payable.
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The )rss &ep. is s=e .i=es pre9erre" . .he &e. &ep. 9 *r8i&) api.al 9r .he 9ll*i&) reas& ? #0 It enables the enterprise to provided correct amount of working capital at the right time .
20 *very management is more interested in the total current assets with which it has to operate than the sources /rom where it is made available.
@0 he gross concept takes in to consideration the fact that every increase in the funds of the enterprise would increase its working capital .
40 he gross concept of working capital is more useful in determining the rate of return on investments in working capital.
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The &e. *r8i&) api.al &ep., h*e(er, is als i=pr.a&. 9r .he 9ll*i&) reas&?
2B It is the 3ualitative concept which indicates the firm 0s ability to meet its operating expenses and short term liabilities .
1B It indicates the margine of protection available to the short term creditors, i.e., the excess of current assets over current liabilities.
@0 It is an indicator of the financial soundness of the enterprise.
40 it suggests the need for financing a part of the working capital re3uirements out of the permanent sources of funds.
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Chara.eris.is 9 urre&. asse.s
hey have a short life span. #ash balances are held only for a week or so
accounts receivables typically are held for a duration of <5-85 days and inventory may be held for <5-255 days.
hey are rapidly transformed in to other assets form . cash is utlised to purchase raw material. !aw material is converted to work in progress which is converted to finished goods. /inished good are sold for cash or credit, which creates accounts receivables are finally realised in cash.
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=ased on these characteristics of current assets, following implications arise2B ?orking capital involves making fre3uent decision.
1B he difference between profit and present value is insignificant.
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FACTO3S INF5UENCING O31ING CA6ITA5 3E>UI3EMENTS
Na.ure 9 .he !usi&ess ?-
his is one of the primery factors influencing the working capital re3uirements of a firm . /or instance, a service firm like a hotel has a short operating cycle since it sells mostly on a cash basis and has lower working capital re3uirement. $
manufacturing firm , on the other hand , has a longer operating cycle and invests more in its current assets. It thus has greater working capital re3uirement.
Seas&ali.y 9 pera.i&s >-
some firms0 products sell only during particular seasons . for instance, air conditioners sell more during the summer than in the winter. uch firms have greater working capital re3uirement during peak %
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seasons and lower re3uirements during other seasons . /irms whose sales are not affected by seasons have stable working capital re3uirement. Mar8e. &"i.i& ?-
he level of competition existing in market also influences working capital re3uirement. ?hen competition is high, the company should have enough inventories of finished goods to meet a
certain level of demand. "therwise customers are highly likely to switch over the competitor0s products. Supply &"i.i& ?-
if supply of raw material and spares is timely and ade3uate , the firm can get by we they comparatively low inventory level. If supply is scarce and un predictable or available during particular season , the firm will have to obtain raw material when it is available.
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Types 9 *r8i&) api.al O& .he !asis 9 .he reuire=e&. 6er=a&e&. *r8i&) api.al?It refers to the minimum amount of the investment which should always be there is the fixed or minimum current assets such as cash and bank balance , debtors, and other short- term assets i.e inventory etc .in order to carry out business smoothly.
his investment is a regular type permanent working capital also increases. ondon committee refered to working capital the following characteristics C unlike
fixed assets ,it keeps on changing its form from one assets to another
It
can not be reduced substantially as long as the firm is going concern.
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?ith
the growth of the business, the size of this component of working capital also increases.
his
hard core working capital is very important from finance point of view. It should be financed from long term sources of fund .for this purpose besides ploughing back of profits, shares and debentures can be issued to raise necessary funds.
Te=prary *r8i&) api.al?he amount of temporary this hard core working capital identification is working capital keeps on fluctuating from time to time on the business activities. It may be divided in to two parts . i.e seasonaland special working capital . easonal working capital is re3uired to meet the seasonal demand d of busy period or season occurring at stipulated intervals. ?hile special working capital is
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!e3uired to meet extra ordinary needs for contingencies such as rising prices, fire strikes unexpected competition or big advertisement campaign.
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Nee" 9 *r8i&) api.al ?-
?orking capital is needed for the following purposes #0 for the purchase of raw materials, components
and spares.
20 o pay wages and salaries.
@0 o incur day to day expenses and overhead costs
such as fuel , power and office expenses. *tc.
40 o meet the selling costs as packing, advertising, etc. 0 o provide credit facilities to the customer.
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Opera.i&) yle 9 *r8i&) api.al *very business undertaking re3uires funds for two purposes> investment in fixed assets and investment in current assets. /unds re3uired to invest in stock, debtors and current assets keep on changing shape and volume. /or example , a company has some cash in the beginning. he cash may be paid to the suppliers of raw materials , to meet labor costs and other overheds
. these three combined would generate work in progress which will be converted into finished goods on the completion of the production process on sale , these finished goods get converted in to debtors and when debtors pay , the firm will again have cash . his cash will again be used for financing raw material, work- in- progress, finished goods, debtors and finally again cash. his time period is known as the working capital cycle of the firm.
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ACCOUNT 3ECEIVAB5ES
CASH
FINISHED GOODS
3A MATE3IA5S
O31 - IN 63OCESS
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Ma&a)e=e&. 9 *r8i&) api.al $ccording to smith , working capital management is considered with the problem that arises in attempting to manage the current liabilities and the inter C relationship that exist between them .
he basic objective of working capital management is to manage the firm0s current assets and liabilities in such a way that a satisfactory level of working capital is maintained i.e., it is neither excessive not inade3uate. In other words, it must have an optimum size. hus we can say that working capital management has these objective >
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Maintenance of working capital and availabity of funds at the time of needs.
$s a matter of the fact, a business can not survive in the absence of a satisfactory ratio between its current assets and current liabilities further more its ability to prosper will largely be determined by the omposition of the current assets tools.
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C=p&e&.s 9 =a&a)e=e&. 9 *r8i&) api.al
?orking capital management bears the following components *stimating
the working capital re3uirement i.e forcasting of working capital.
/inding
out the optimum level of investment in various current , namely cash, account receivable , and stocks. In other words , determining the size of working capital.
/inding
out the optimum mix of short C term funds in relation to long C term capital.
/inding
out all appropriate sources of working
capital.
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I&(e&.ry =a&a)e=e&.?=a&a)e=e&.?Inventory is the one of the most important component "f working capital and its proper management can not be under stressed. /undamentally, inventory consists of raw material, work in progress and finished goods. he proportion of inventories to fixed assets is 3uite high ranging from 17D to 67D in the manufacturing sector. 'ence inventory management is crucial for all managers irrespective of functional functional specialization. specialization. ince a number of industrial relations disputes in manufacturing industries are linked to production bonus and incentives incentives relating to inventories inventories irrespective of the market need for inventory , the manager must understand this point well. *very member of the organization feels its impact and yet scant respect is paid to it. 'ence managers should take note of some of these important criteria for insuring proper management. management.
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Maintaining $=#
a proper level of stock.
analysis to control high value items .
+roper
ordering policies .
+ricing
of raw material work in progress and finished goods.
#ontrol
over wastage and obsolescence. obsolescence.
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Au&. reei(a!le?his is also a forms an important part of working capital and depends on the credit policy adopted by the firm namely. 'ow /or
much credit to be given
how long is it given
%iscounts
for early payment
#ollection and recovery
efforts
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CASH MANAGEMENT?This as mentioned is the most li3uid of all assets and is re3uired to
2B Meet day to day expenses 1B $s a hudge against uncertainties. oo much cash is not good nor is having too little a healthy practices . ood companies usually have a practices to plant surpulus cash in risk free securities or inter company deposits. "n the other hand , companies with a deficit tend to borrow at a high rate of interest indicating a lack of planning . a sudden surge in business may spur the need of working capital and its may also re3uire additional interest to be paid and again planning is important. he key to all management and especially working capital management is to plan work . this also Important aspect of working capital management and good companies have the practice of planning their needs well in advance.
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A"(a&.a)es 9 a"eua.e *r8i&) api.al ?-
(o business can run successfully without an ade3uate amount of working capital. he main advantages of maintaining ade3uate amount of working capital are as follows> #0 Sl(e&y 9 .he !usi&ess ? ade3uate working capital helps in maintaining solvency of the business by providing uninterrupted flow of production. 20 G"*ill ? sufficient working capital enables a business concern to make a prompt payments and hence helps in creating and maintaining goodwill. @0 Easy la&s ? a concern having ade3uate working capital , high solvency and good credit standing can arrange loans from banks and others on easy and favorable terms.
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40 Cash "isu&. ? ade3uate working capital also enables a concern to avail cash in purchase and hence it reduces cost. 0 3e)ular supply 9 ra* =a.erials ? sufficient working capital ensures regular supply of raw materials and continuous production. 0 E/pli.a.i& 9 9a(ra!le =ar8e. &"i.i&s ? only concerns with ade3uate working capital can exploit favorable market condition such as purchasing its re3uirements in bulk when the prices are lower and by holding its inventories for higher prices . 0 A!ili.y . 9ae risis ? ade3uate working capital enables a concern to face business crisis in emergencies such as depression because during such periods, generally, there is much pressure on working capital.
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@# ST
G3OSS O31ING CA6ITA5 AS AT MA3CH, 2$$ ACCU3ED INCOME
##%2
INVENTO3IES
@%
SUNDA3: DEBTO3S
#2%<
CASH AND BAN1 BA5ANCE
#4%<
5OANS AND ADVANCES
#%#
TOTA5 GC
42%$2
NET O31ING CA6ITA5 AS AT @#ST MA3CH, 2$$ CU33ENT 5IABI5ITIES
<%44
NET O31ING CA6ITA5 CU33ENT ASSETS CU33ENT 5IABI5ITIES
42%$2 <%44 @2%< NOTE? all a=u&. i& 3s% Cr%
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FINDINGS The se&" lar)es. liur pr"uer =pa&y i& I&"ia% I& "e9e&e i. is .he lar)es. supplier 9 I&"ia& liur% Fu&"i&) *i.h i& .he =pa&y 9r re)ular e/pa&es has . !e prperly .a8e& are 99%
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