A PROJECT REPORT ON

WORKING CAPITAL
IN

BRITANNIA INDUSTRY LIMITED

FOR
THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (2010-12)

FROM

Dev Bhoomi Institute of Management

SUBMITTED TO: Mr. SANCHIT (Faculty of Management) SUBMITTED BY: RAJKUMAR M.B.A 4 (semester)

ACKNOWLEDGEMENT
It is not a single mans effort which is sufficient for the accomplishment of a research. No task can be successfully by a single individual. I acknowledge here the names of those people who have been instrumental in preparation of my project. I readily acknowledge my indebted to my parents whose support, dedication and honest efforts have given me an immense help in doing this project. It gives me immense pleasure to express my deep sense of gratitude and appreciation to my external guides Mr. Mudit Agarwal and his team whose constant encouragement and valuable suggestions gave back bone support in completing this project. I take the opportunity to thanks Mr. Mudit Agarwal for motivating, encouraging, guiding and supporting at every step and sparing his valuable time for me. Last but not the least I record my sincere thanks to all beloved and respectable persons who helped me and could find any separate mention. Above all I praise GOD the most beneficial, the most merciful that I have been able to complete my training project successfully.

RAJ KUMAR

DECLERATION
I Ruby Maliyan student of MBA III semester of Dev Bhoomi Institute hereby declare that this project report on WORKING CAPITAL MANAGEMENT is written and submitted by me under the guidance of Mr. Mudit Agarwal is my original work. The entire analysis and conclusion of this report are based on the information which is collected by me during the training period. The empirical finding in the report are based on the data collected myself while preparing this project. I have not copied anything from any source or other project submitted for the similar purpose, if any.

RAJ KUMAR

PREFACE
It gives great pleasure to present on the topic of Working capital Management of Britannia industries limited. I have selected this topic because to know about the relationship between current assets and current liabilities. As Working capital Management holds an important place in the theory of Finance. A large number of tools and techniques have been developed in the past to insure optimal allocation of Working Capital Management funds more than Eighty Percent of finance manager is spent in dealing with day to day problem which are part & parcel of working capital requirements of the enterprise. Efficient use of working capital has direct bearing on profitability of an enterprise. It augments the productivity of the investment in the fixed assets. Basic survival of the firm may be at stake if adequate working capital is not available in time. It is essential to maintain constant supply of working capital for healthy growth of an enterprise. Management of working capital assumes added significance in the context of small scale and medium sized industries in our country. Most of them have weak financial base and limited access to the institutional finance. Their risk capacity is also low. Working capital management deals with management of each of the firm current assets in such way that is maximizes the value of the firm. In any economy, the financial sector plays a major role in the mobilization and allocation of savings. In changing economic environment, manufacturing industries have to become more competitive, they have to keep their cost in check an efficient use of working capital would release the funds locked in the current assets.

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION TO FMGC SECTOR

1.1 Industry overview 1.2 Common FMGC product 1.3 Market Potentiality of FMGC industry 1.4 Why India

CHAPTER 2: INTRODUCTION TO THE COMPANY 1.1 Company overview BIL ltd. 1.2 Company profile 1.3 Management team 1.4 The origin of eat health think better 1.5 Milestones 1.6 History of biscuits 1.7 The BIL products 1.8 Activities of the company 1.9 Company performance 1.10 Achievement of the company

CHAPTER 3: INTRODUCTION TO PANTNAGAR UNIT

1.1 Brief about pantnagar unit 1.2 Company events 1.3 Head of department of the company 1.4 Objective of the unit 1.5 SWOT analysis 1.6 Things you dont know about Britannia 1.7 How production plan comes 1.8 Production plant at pantnagar unit

CHAPTER-1 INTRODUCTION ABOUT THE FMGC

INTRODUCTION TO FMGC SECTOR INDUSTORY OVERVIEW

The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of $13.1 billion. It has a strong MNC presence and is characterised by a well established distribution network, intense competition between the organised and unorganised segments and low operational cost. Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage. The FMCG market is set to treble from $11.6 billion in 2003 to $33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. Growth is also likely to come from consumer 'upgrading' in the matured product categories. With 200 million people expected to shift to processed and packaged food by 2010, India needs around $28 billion of investment in the foodprocessing Industry.

COMMON FMGC PRODUCTS

some common fmgc product categories include food and dairy products, glassware, paper product, pharmaceuticals, consumer electronics, packaged food products, plastic goods, printing and stationary, household products, photography, drinks etc. and some of the examples of the FMGC products are coffee, tea, dry cells, greeting cards, gifts, detergents, tobacco and cigarettes, watches, soaps etc.

FMCG Products

MARKET POTENTIALITY OF FMGC INDUSTRY

Some of the merits of FMGC industry, which made this industry as a one, are lower operational cost, strong distribution networks, presence of renowned FMGC companies, population growth is another factor which is responsible behind the success of this industry.

Leading FMGC companies

1. Hindustan unilever ltd. (HUL) 2. Indian tobacco company (ITC) 3. Nestle India 4. AMUL 5. Dabur India 6. Asian Paints (India) 7. Cadbury India 8. Britannia Industry 9. Procter and Gamble Hygiene and Health Care 10. Marico Industry

WHY INDIA
Large domestic market India is one of the largest emerging markets, with a population of over one billion. India is one of the largest economies in the world in term of purchasing power and has has a strong middle class base of 300 million.

Rural and urban potential

Rural- urban profile Urban Population 2001-02 (mn 53 household ) Population 2009-10 (mn 69 household) % Distribution (01-02) 28 72 153 Rural 135

Market (town/villages)

3,768

6,27,000

Universe of outlets (mn)

3.3

Source: statistical outline of India, NCAER

Around 70 % of the total household in India (188 million) reside in the rural areas. The total number of rural households is expected to rise from 135 million in 2001-02 to 153 million in 200910. This present the largest potential market in the world. The annual size of the rural FMCG market was estimated at around us$ 10.5 billion in 2001-02. With growing incomes at both the rural and the urban level, the market potential is expected to expand further.

Demand supply gap

Currently, only a small percentage of the raw materials in India are processed into value added products even as the demand for processed and convenience food is on the rise. This demand supply gap indicates an untapped opportunity in areas such as packaged form, convenience food and drinks, milk product etc. In the personal care segment, the low penetration rate is both the rural and urban areas indicate a market potential.

India a large consumer goods spender

An average Indian spends around 40 per cent of his income on grocery and 8 per cent on personal care product. The large share of fast moving consumer goods (FMCG) in total individual spending along with the large population base is another factor that makes India one of the largest FMCG markets.

CHAPTER-2 INTRODUCTION ABOUT THE COMPANY

COMPANY OVERVIEW
The story of one of India's favourite brands reads almost like a fairy tale. Once upon a time, in 1892 to be precise, a biscuit company was started in a nondescript house in Calcutta (now Kolkata) with an initial investment of Rs. 295. The company we all know as Britannia today.

The beginnings might have been humble-the dreams were anything but. By 1910, with the advent of electricity, Britannia mechanised its operations, and in 1921, it became the first company east of the Suez Canal to use imported gas ovens. Britannia's business was flourishing. But, more importantly, Britannia was acquiring a reputation for quality and value. As a result, during the tragic World War II, the Government reposed its trust in Britannia by contracting it to supply large quantities of "service biscuits" to the armed forces. As time moved on, the biscuit market continued to grow and Britannia grew along with it. In 1975, the Britannia Biscuit Company took over the distribution of biscuits from Parry's who till now distributed Britannia biscuits in India. In the subsequent public issue of 1978, Indian shareholding crossed 60%, firmly establishing the Indian ness of the firm. The following year, Britannia Biscuit Company was re-christened Britannia Industries Limited (BIL). Four years later in 1983, it crossed the Rs. 100 crores revenue mark.

On the operations front, the company was making equally dynamic strides. In 1992, it celebrated its Platinum Jubilee. In 1997, the company unveiled its new corporate identity - "Eat Healthy, Think Better" - and made its first foray into the dairy products market. In 1999, the "Britannia Khao, World Cup Jao" promotion further fortified the affinity consumers had with 'Brand Britannia'.

Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food brand of the country. It was equally recognised for its innovative approach to products and marketing: the Lagans Match was voted India's most successful promotional activity of the year 2001 while the delicious Britannia 50-50 Maska-Chaska became India's most successful product launch. In 2002, Britannia's New Business Division formed a joint venture with Fonterra, the

world's second largest Dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. In recognition of its vision and accelerating graph, Forbes Global rated Britannia 'One amongst the Top 200 Small Companies of the World', and The Economic Times pegged Britannia India's 2nd Most Trusted Brand.

Today, more than a century after those tentative first steps, Britannia's fairy tale is not only going strong but blazing new standards, and that miniscule initial investment has grown by leaps and bounds to crores of rupees in wealth for Britannia's shareholders. The company's offerings are spread across the spectrum with products ranging from the healthy and economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese. Having succeeded in garnering the trust of almost one-third of India's one billion populations and a strong management at the helm means Britannia will continue to dream big on its path of innovation and quality. And millions of consumers will savour the results, happily ever after.

COMPANY PROFILE
Registered office of Britannia Industries Limited is situated in West Bengal. This company is registered under Companies Act, 1956. Britannia biscuits Company Limited was originally incorporated on 21st March 1918under Indian Companies Act under the name The Britannia Biscuits Company Limited under section 21 of Companies Act and approval of Central Government. The main aim of the Company is to make available good and improved quality biscuits to each and every part of the country. The Company is perusing for ISO14001certificate and it is ISO 22000 certified. The Company was established at the Pantnagar branch on 21st May 2005 mainly for production with a production coverage area of approximately 20 acres. The control of management is through Board of Directors. The Companys head and registered office and works place are located at the below mentioned addresses:

Registered & Head office:

Britannia Industries Limited 5/1A, Hungerford Street Kolkata- 700017

Works places:

(a) Britannia Industries Limited 33, Industrial Area Lawrence Road, Delhi- 110035

(b) Britannia Industries Limited

Plot No.1, Sector- 1 Integrated Industrial Estate Pantnagar, Rudrapur- 263153

(c) Britannia Industries Limited 15, Taratola road, Kolkata 700088

(d) Britannia Industries Limited MTH road, PadiChennai 600050

(e) Britannia Industries Limited Ready road (East), Mazagaon, Mumbai- 400010

BOARD OF DIRECTORS
Name Mr. Nusli Neville Ms. Vinita Bali Mr. A.K.Hirjee Dr. Ajai Puri Mr. avijit Deb Mr. Jeh N Wadia Mr. Keki Dadiseth Mr. Nimesh N Kampani Mr. Pratap Khanna Mr.S.S.Kelkar Destination Chairman Managing Director Director Director Director Director Director Director Director Director

MANAGEMENT TEAM

ANURADHA NARASIMHANASHOK KUMAR GUPTA GAUTAM BANERJEE R K AGRAWALR. ANAND SHALINI DEGAN T S VENKETRAMVINOD MENONBALAJI REDDIPALLI N. VENKATARAMAN SHRIDHAR PANSHIKARKAILASH H. KAKANI B. PRASHANTH Dr. K.N. SHASHIKANTH-

Category Director - Health & General Manager - Accounts & P General Manager Materials Supply Chain Director for New Business Development Business Operations Director Category Director - Delight & Lifestyle General Manager - Engineering Projects & Technology Head - Dairy Business Head Replenishment General Manager Commercial National Sales Director General Manager - Manufacturing Operations Head of R&D Head - Corporate Quality

MILESTONE
1892 The genesis britannia established with an investment of Rs. 295 in Kolkata

1910

Advent of electricity sees operations mechanised

1921

Imported machinery introduced; Britannia becomes the first company East of the Suez to use gas ovens

1939 - 44

Sales rise exponentially to Rs.16,27,202 in 1939 .During 1944 sales ramp up by more than eight times to reach Rs.1.36 crore

1975

Britannia Biscuit Company takes over biscuit distribution from Parry's

1978 1979 1983

Public issue - Indian shareholding crosses 60% Re-christened Britannia Industries Ltd. (BIL) Sales cross Rs.100 crore The Executive Office relocated to Bangalore BIL celebrates its Platinum Jubilee Wadia Group acquires stake in ABIL, UK and becomes an equal partner with Groupe Danone in BIL

1989 1992
1993

1994

Volumes cross 1, 00,000 tons of biscuits.

1997

Re-birth - new corporate identity 'Eat Healthy, Think Better'

leads to new mission: 'Make every third Indian a Britannia consumer' BIL enters the dairy products market. 1999 "Britannia Khao World Cup Jao" - a major success! Profit up by 37%. Forbes Global Ranking - Britannia among Top 300 small companies. BIL ranked one of India's biggest brands No.1 food brand of the country. Britannia Lagaan Match: India's most successful promotional activity of the year. Maska Chaska: India's most successful FMCG launch .

2000 2001

2002

BIL launches joint venture with Fonterra, the world's second largest dairy company. Britannia New Zealand Foods Pvt. Ltd. is born . Rated as 'One amongst the Top 200 Small Companies of the World' by Forbes Global . Economic Times ranks BIL India's 2nd Most Trusted Brand. Pure Magic -Winner of the WordStar, Asia star and India star award for packaging. 'Treat Duet'- most successful launch of the year Britannia Khao World Cup Jao rocks the consumer lives yet again Britannia accorded the status of being a 'Super brand'. Volumes cross 3, 00,000 tons of biscuits. Good Day adds a new variant - Coconut - in its range. Re-birth of Tiger - 'Swasth Khao, Tiger Ban Jao' becomes the popular chant! Britannia launched 'Greetings' range of premium assorted gift packs. The new plant in Uttaranchal, commissioned ahead of schedule. The launch of yet another exciting snacking option Britannia 50-50 Pepper Chakkar. Britannia re-launched Nutri Choice Hi-Fibre Digestive biscuits in an international large sized biscuit pack. Britannia acquires 51% stake in Bangalore-based bakery foods retailer Daily Bread.

2003

2004

2005

2006

2007

Britannia industries formed a joint venture with the Khimji Ramdas Group and acquired a 70 percent beneficial stake in the Dubai-based Strategic Foods International Co. LLC and 65.4% in the Oman-based Al Sallan Food Industries Co. SAOG. Britannia launched Iron fortified 'Tiger Banana' biscuits, 'Good Day Classic Cookies', Low Fat Dahi and renovated 'MarieGold'

2008

2009

Britannia NutriChoice Nature Spice Crackers launched - Your favourite Cream Crackers, now made even more exciting with the addition of "Sabut" Ajwain and Jeera spices.

Britannia takes full control of Daily Bread.

Britannia Industries buys out New Zealand's Fonterra from existing dairy joint venture, Britannia New Zealand Foods (BNZF). BNZF became a 100 per cent Britannia subsidiary and was renamed Britannia Dairy Private Limited (BDPL).

Recognizing the changing global trends & health benefits of removing transfers, Britannia is the first Bakery brand in India to remove transfers from its products.

Wadia Group acquired stake holdings from Group Danone and becomes the single largest shareholder in BIL.

2010

50-50 Maska Chaska was re-launched with a new masaaledar twist - a delightful blend of butter and imported flavours along with sprinkling of masala in September 2010.

Britannia was presented the Master Brand 2010 Award by CMO Council in November 2010.

Tiger enters the Cookies category, with the launch of Crunch Cookies in October. These cookies are not only high on delight but also high on energy and have been created keeping in mind the needs of today's kids, These delightful cookies come in two exciting variants - Fruit & Nut and Choc chips and at an

affordable price point of just Rs 5.

Brand NutriChoice, in keeping with its track record of launching differentiated healthy snacks, launched Diabetic Friendly Essentials on 14th November, a day that is world over recognized as World Diabetes Day. The range comprised of 2 variants - Oats Cookies and Ragi Cookies - and is available in top Indian cities.

2011

Always committed to constant innovation, Britannia launched Britannia Healthy Start in Mumbai in January 2011. Specially designed with Indian tastes in mind, Healthy Start is a complete range of ready-to-cook breakfast mixes of Upmas, Pohas, Porridges and Oats that are healthy, delicious, and take just 5 minutes to cook! This is the only product range in its category that combines the natural nutrition of multi-grains, 100% real vegetables, pulses and nuts all in one pack.

Britannia received the Most Respected Company Award 2011 from Business world.

Bourbon received the Most Popular Confectionery Product Preferred By Youth (Biscuit) Award.

IMCRBNQA (Indian Merchant Chambers Ramakrishna Bajaj National Quality Award) conferred the Manufacturing Performance Excellence Trophy a National Quality Award for the 2010 cycle, for Britannia Corporate Office (Bangalore), Britannia Industries Ltd. (Rudrapur) and Sunandram Foods Pvt. Ltd (Mangaldoi, Guwahati

THE ORIGIN OF EAT HEALTHY THINK BETTER

Britannia the biscuit leader with a history-has withstood the tests of time. Part of the reason for its success has been its ability to resonate with the changes in consumer needs-needs that have varied significantly across its 100+ year epoch. With consumer democracy reaching new levels, t h e o n e common thread to emerge in recent times has been the shift in lifestyles and a corresponding awareness of health. People are increasingly becoming conscious of dietary care and its correlation to wellness and matching the new pace to their lives with improved nutritional and dietary habits. This new awareness has seen consumers seeking foods that complement their lifestyles while offering convenience, variety and economy, over and above health and nutrition. Britannia saw the writing on the wall. Its Swasth Khao Tan Man Jagao (Eat Healthy, Think Better) re-position directly addressed this new trend by promisi ng the new generation a healthy and nutritious alternative-that was also delightful and tasty. Thus, the new logo was born, encapsulating the core essence of Britannia healthy, nutritious, and optimistic and combining it with a delightful product range to offer variety and choice to consumers.

HISTORY OF BISCUITS

Sweet or salty.

Soft

or

crunchy. Simple or exotic. Everybody loves munching on

biscuits, but do they know how biscuits began? The history of biscuits can be traced back to a recipe created by the Roman chef Apicius, in which "a thick paste of fine wheat flour was boiled and spread out on a plate. When it had dried and served with honey and cut up and then fried hardened it was

until crisp, then pepper."

The word 'Biscuit' is derived from the Latin words 'Bis' (meaning 'twice') and 'Coctus' (meaning cooked or baked). The word 'Biscotti' is also the generic term for cookies in Italian. Back then, biscuits were unleavened, hard and thin wafers which, because of their low water content, were ideal food to store.

As people started to explore the globe, biscuits became the ideal travelling food since they stayed fresh for long periods. The seafaring age, thus, witnessed the boom of biscuits when these were sealed in airtight containers to last for months at a time. Hard track biscuits (earliest version of the biscotti and present-day crackers) were part of the staple diet of English and American sailors for many centuries. In fact, the countries which led this seafaring charge, such as those in Western Europe, are the ones where biscuits are most popular even today. Biscotti is said to have been a favourite of Christopher Columbus who discovered America!

Making good biscuits is quite an art, and history bears testimony to that. During the 17th and 18th Centuries in Europe, baking was a carefully controlled profession, managed through a series of 'guilds' or professional associations. To become a baker, one had to complete years of

apprenticeship - working through the ranks of apprentice, journeyman, and finally master baker. Not only this, the amount and quality of biscuits baked were also carefully monitored. The English, Scottish and Dutch immigrants originally brought the first cookies to the United States and they were called teacakes. They were often flavoured with nothing more than the finest butter, sometimes with the addition of a few drops of rose water. Cookies in America were also called by such names as "jumbles", "plunkets" and "cry babies".

As technology improved during the Industrial Revolution in the 19th century, the price of sugar and flour dropped. Chemical leavening agents, such as baking soda, became available and a profusion of cookie recipes occurred. This led to development of manufactured cookies.

Interestingly, as time has passed and despite more varieties becoming available, the essential ingredients of biscuits haven't changed - like 'soft' wheat flour (which contains less protein than the flour used to bake bread) sugar, and fats, such as butter and oil. Today, though they are known by different names the world over, people agree on one thing - nothing beats the biscuit!

OUR PRODUCTS

Little Heart

Little Hearts was launched in 1993 and targeted the growing youth segment. A completely unique product, it was the first time biscuits were retailed in pouch packs like potato wafers. The launch message introduced a special taste experience that made the unlikeliest characters - like Dracula and Frankenstein - melt. In 1997, the 'Direct Dil Se' campaign encouraged youngsters to openly express their feelings. And in 2003, two variants called Little Hearts Chocolate and Little Hearts Sesame were rolled out with a campaign "Dil sabka actually sweet hai". With Little Hearts, Britannia has tasted the sweet taste of success.

Britannia Tiger Banana

Britannia is committed to help secure every child's right to Growth & Development through good food everyday. Purposefully taking forward the credo of 'Eat Healthy, Think Better ', we have launched a new variant under our power brand tiger.

Britannia Tiger Banana packed with IRON ZOR and goodness of Banana is accessible to all, being available in convenient packs priced at Rs.2, Rs.4 and Rs.10.

Britannia Good day

Britannia Good Day was launched in 1986 in two delectable avatars - Good Day Cashew and Butter. Over the years, new variants were introduced - Good Day Pista Badam in 1989, Good Day Chocochips in 2000 and Good Day Choconut in 2004.

Tiger

Tiger, launched in 1997, became the largest brand in Britannia's portfolio in the very first year of its launch and continues to be so till today. Tiger has grown from strength to strength and the reinvigoration in June 2005 has further helped bolster its growth in the highly competitive glucose biscuit category.

Treat

Britannia launched Treat in 2002. Treat has a range of tasty delights for all kids with yummy creamy treasures within the biscuit shells. Britannia Treat offers a wide variety of flavors, such as the classic Bourbon & Elaichi, the Fruit Flavored Creams such as Orange, Pineapple, Mango, and Strawberry, the Jam Filled Centers under the Jim Jam range, and the Duet Range (biscuits with two flavours of cream between three layers of biscuit) comprising Strawberry Vanilla and Duet Strawberry Chocolate.

Treat Fruit Rollz

All kids who have relished the yummy creamy treasures of Britannia Treat in exciting flavors, have yet another reason to celebrate! Britannia Treat launches the amazingly yummy Treat Fruit Rollz!! These tasty soft rolls are filled with real fruits and provide a healthy yet mouth-watering treat to the kids. Fruit Rollz comes in four masti fruit flavours - Juicy Apple, Strawberry Surprise, Tangy Orange and Delicious Dates! Want to know a little secret? They make the best tiffin treats! So during snack time what better than to munch on the delicious and healthy Fruit Rollz and discover the yummy fruit flavor from within the shells. Keeping up with Britannia's platform of 'taste bhi, health bhi', Fruit Rollz is indeed a yummy snacking option for kids, while keeping the Moms assured about the goodness provided by the fruit filling. So go on and treat yourself to the lip-smacking snack!

Marie Gold

Britannia's oldest brand enjoys a heritage that spans the last 50 years - and going strong. In a market swamped with me-too products and where even the name 'Marie' has become generic, Britannia Marie Gold has maintained its stronghold. Today, the ever-popular Marie Gold is synonymous with the 'Tea Time Biscuit'. Its taste, crispiness and lightness make it a must for every tea break. It is the #1 brand in its category by a long shot.

Nutri Choice

In continuation of the promise of "Swasth Khao, Tan Man Jagao," Britannia introduced NutriChoice range of healthy biscuits in 1998. The brand is targeted towards overall health and wellness for adults. The range has for long comprised of three popular variants, namely NutriChoice Thin Arrowroot, NutriChoice Cream Cracker and NutriChoice Digestive.

Milk Bikis

Milk Bikis, the favourite growth partner of Kids, now brings greater value and delight to all with its new product and pack design. Recently re-launched in its existing Southern & Eastern markets, and extended across India, the new Milk Bikis is all set to add excitement and appeal to nutritious food. Whoever said that good food needs to look dull and boring, will just have to take a look at Milk Bikis. With a unique and attractive honeycomb design and an enhanced product experience, the new biscuit prompts the Kids will love it reaction amongst mothers.

Tiger launched Krunch Cookies nationally in October 2010.

The launches were held in Chennai, Hyderabad, Bangalore, Kolkata, Mumbai, Lucknow

and New Delhi with active participation by the entire Britannia Sales Team. Tiger Krunch is the first of its kind cookies and is specifically targeted at kids. It is available in two very exciting variants of Fruit & Nut and Chocochips.

Bread

Till 1958, there were no breads in the organized sector and bread consumption was a habit typed by the British. Then, a mechanized bread unit was set up in Delhi with the name Delbis which produced sliced bread and packed it under the Britannia name. The Mumbai unit came up in 1963. And there again Britannia was the first branded bread in the city.

Cakes

Britannia entered the cake market in the year 1963 and is the top player in the market. Britannia Cakes range is divinely scrumptious and has both Bar Cakes and Cup Cakes which were launched in 2005. Bar Cakes are available in variants that include Fruit, Butter Sponge, Chocolate, Pineapple, Milk, Vanilla Chocolate and Orange.

Rusks

Britannia launched its Rusks in the year 2005. In a Market full of unbranded players, Britannia rusks have stood head and shoulders above the rest in terms of sheer quality. They are made from the finest ingredients and baked with care as they are twice as crisper as and tastier than ordinary rusks. The communication for this mouthwatering offering is aptly Enliven your spirits with
Britannia rusks"

ACTIVITIES OF THE COMPANY

A C T

SALES

I V I T

FINANCE & IT

MARKETING

I E S

RESEARCH & DEVELOPMENT

OF

EXPORT
T H E

TRCHINICAL & OPERATION

HUMAN RESOURCE & LEGAL

PRODCUTION
C O M P A N Y

QUALITY ASSURANCE

COMPANY PERFORMANCE

For the year ended 31st march 2010 our company achieved a sale growth of 9.9%on an expanded base arising from 17.5% growth in the previous year. The consolidated net profit of the for the year ended 31st march 2010 was Rs. 1,032 MM compared with Rs. 1,515MM in the previous year.

Exceptional items for the year include Rs. 130.5 Mn towards amortization of VRS cost. Earnings share is Rs. 50 compared to Rs. 80 last year.

ACHIVEMENT OF THE COMPANY

THE Economic Times and AC Nielsen have announced the most trusted brands rated by consumers all over India and across categories. Britannia was in the India Top 10 list, ranked 9 across all categories and 2 in the food category. Last year, Britannia rank was 7 and 2 respectively.

CHAPTER

SPECIAL REASEARCH

ON

WORKING CAPITAL

WORKING CAPITAL MANAGEMENT

INTRODUCTION TO THE WORKING CAPITAL:-

It involves the relationship between a firm's short-term assets and its short-term liabilities. The goal of working capital management is to ensure that a firm is able to continue its operations and that it has sufficient ability to satisfy both maturing short-term debt and upcoming operational expenses. The management of working capital involves managing inventories, accounts receivable and payable, and cash. Working capital is represented by current assets .It constitutes a dominant segment of investment ,particularly in manufacturing enterprises management of working capital assumes added significance in the context of small scale and medium sized industries in our country .most of them have weak financial base and limited access to the institutional finance .their risk capacity is also low. An effort is to reduce or optimize its size releases funds and improves profitability working capital management deals with management of each of the firms current assets in such a way that maximizes the value of the firm. Shortage of funds for working capital as well as the uncontrolled over expansion has caused many business to fail and in less severe cases has stunted their growth .specially in small firms, working capital management may be the factor that decides success or failure: in large firms, efficient working capital management can significantly affect the firms risk, returns and share price.Commercial banks are the major source of finance to the industry and commerce banks in India provides mainly short term credit for financing working capital needs .the various types of advances provided by them are: loans cash credit and overdrafts are running accounts .borrower can draw funds up to the sanctioned credit limit interest is charged on the daily outstanding amount. DEFINITION According to SHUBIN, working capital is the amount of funds necessary to cover the cost of operating the enterprise. Working Capital Management is the process of planning and controlling the level and mix of the current assets of the firm as well as financing these assets. Working capital is the amount that is required to meet the day to day operations of the business.

TYPES OF WORKING CAPITAL

Working capital can be classified on the following two bases: 1. On the basis of concepts 2. On the basis of time

1. On the basis of concepts: On the basis of concepts working capital can be of two types.

Gross working capital Net working capital

Gross working capital

It refers to the firms investment in current assets. Current assets are the assets which can be converted in to cash with in an accounting year & include cash, short-term securities, debtors, bills receivable & stock and

Net working capital :

It refers to the difference between current assets and current liabilities. Current liabilities are those claims of outsiders which are expected to mature for payment with in an accounting year & include creditors, bills payable & outstanding expenses.

2. On the basis of time: Working capital can be divided into two categories:
Permanent (fixed or core) working capital Temporary (seasonal or variable) working capita

Permanent (fixed or core) working capital:

Permanent or fixed, working capital is the minimum amount of investment in all current assets is required at all times to carry out minimum level of business activities. In other words, it represents the current assets required on a continue basis over the entire year. For example every firm has to maintain level of raw material, finished goods and cash balance. This minimum level of current assets is called permanent or fixed working capital as this part of capital is permanently belongs in current assets. This amount varies from year to year, depending upon the growth of the company and the stage of the business cycle in which it operates. Permanent working capital is needed permanently for the business and, therefore, it should be financed out of long- term funds.

Temporary (seasonal or variable) working capital:

The amount of such working capital keeps on fluctuating from time to time on the basis of business activities. For example extra inventory has to be maintain to support sales during peek sales period. Similarly, this is a receivable also increase and must be financed during the period of high sales. On the other hand, investment in inventories receivables etc, will decrease in period of depression. Hence, it is that part of total working capital which varies with the variation in the volume of business operations. It rises during brisk seasons and goes down during slack season. It can be therefore, be called seasonal working capital also suppliers of temporary working capital can expect it return during of season when it is not required by the firm. Hence, temporary working capital is generally financed such as bank credit.

COMPONENTS OF WORKING CAPITAL

There are two components of working capital, viz., current assets and current liabilities. 1. CURRENT ASSETS : Current assets are those which are converted into cash in the normal course of business within a short period- say a maximum of one year. List of current assets comprises of: Cash in hand & cash at bank Bills receivables Sundry debtors (less provision for bad debts) Short term loans and advances. Inventories of stocks, as: raw material, work-in-progress, stores and spares, finished goods Temporary investments of surplus funds. Prepaid expanses Accrued incomes.

2.

CURRENT LIABILITIES :

Current liabilities are those liabilities which are intended to be paid in the ordinary course of business within a short period of normally one accounting year out of the current assets are the income of the business. Examples of current liabilities are: Bills payable Sundry creditors are account payable. Accrued or outstanding expenses. Short terms loans, advance and deposits. Dividend payable. Bank overdraft. Provision for taxation if it does not amount to appropriation of profits.

In order to ascertain the real position of working capital, certain adjustment, which are abnormal in nature, are to be adjusted against each component of current assets and current liabilities.

NEED FOR WORKING CAPITAL

The need for working capital to run day to day business activities cannot be overemphasis. We will hardly find a business firm which does not require any amount of working capital. We know that the firm aims at maximizing the wealth of the shareholder. In its endeavor to maximize shareholder wealth the firm should earn sufficient return from its operation earning a steady amount of profit requires successful sales activity. The firm has invested enough funds in current assets for the success of sales activity. Current assets are needed because sales do not convert into cash instaneously. There is always operating cycle involved in the conversion of cash. Thus working capital is needed for the following purpose: 1. For the purchase of raw material, components and spares. 2. To pay wages and salaries. 3. To incur day to day expenses and overhead cost such as fuel, power and office expenses etc. 4. To meet selling costs as packaging, advertising etc. 5. To provide credit facilities to the customers 6. To maintain the inventories of raw materials, work in progress, stores and spares and finished stock.

WORKING CAPITAL CYCLE

Cash flows in a cycle into, around and out of a business. It is the business's life blood and every manager's primary task is to help keep it flowing and to use the cashflow to generate profits. If a business is operating profitably, then it should, in theory, generate cash surpluses. If it doesn't generate surpluses, the business will eventually run out of cash and expire. The faster a business expands the more cash it will need for working capital and investment. The cheapest and best sources of cash exist as working capital right within business. Good management of working capital will generate cash will help improve profits and reduce risks. Bear in mind that the cost of providing credit to customers and holding stocks can represent a substantial proportion of a firm's total profits. There are two elements in the business cycle that absorb cash - Inventory (stocks and work-inprogress) and Receivables (debtors owing you money). The main sources of cash

are Payables (your creditors) and Equity and Loans.

Each component of working capital (namely inventory, receivables and payables) has two dimensions ........TIME ......... and MONEY. When it comes to managing working capital - TIME IS MONEY. If you can get money to move faster around the cycle (e.g. collect monies due from debtors more quickly) or reduce the amount of money tied up (e.g. reduce inventory levels relative to sales), the business will generate more cash or it will need to borrow less money to fund working capital. As a consequence, you could reduce the cost of bank interest or you'll have additional free money available to support additional sales growth or investment. Similarly, if you can negotiate improved terms with suppliers e.g. get longer credit or an increased credit limit, you effectively create free finance to help fund future sales.

If you .......

Then ......
You release cash from the cycle Your receivables soak up cash You increase your cash resources You free up cash You consume more cash

Collect receivables (debtors) faster Collect receivables (debtors) slower Get better credit (in terms of duration or amount) from suppliers Shift inventory (stocks) faster Move inventory (stocks) slower

It can be tempting to pay cash, if available, for fixed assets e.g. computers, plant, vehicles etc. If you do pay cash, remember that this is now longer available for working capital. Therefore, if cash is tight, consider other ways of financing capital investment - loans, equity, leasing etc. Similarly, if you pay dividends or increase drawings, these are cash outflows and, like water flowing down a plug hole, they remove liquidity from the business.

Importance or advantages of adequate working capital

No business can run successfully without an adequate amount of working capital. The main advantages of maintaining adequate amount of working capital are as follows: Solvency of the business To maintain goodwill Easy loans Cash discounts Regular supply of raw materials Regular payment of salary, wages and other day to day commitments Exploitation of favorable market conditions Ability to face crisis Quick and regular return on investments High morale

1. Solvency of the business Adequate working capital helps in maintaining solvency of the business by providing uninterrupted flow of production.

2. To maintain goodwill Sufficient working capital enables a business concern to make prompt payments and hence helps in creating and maintaining goodwill.

3. Easy loans A concern having adequate working capital, high solvency and good credit standing can arrange loans from banks and other financial institutions on easy and favorable terms.

4. Cash discounts Adequate working capital also enables a concern to avail cash discounts on the purchase and hence it reduces costs.

5. Regular supply of raw materials Sufficient working capital ensures regular supply of raw material and continuous production.

6. Regular payment of salary, wages and other day to day commitments A company which has ample working capital can make regular payment of wages, salary and other day to day commitments which rise the morale of its employees, increases their efficiency, reduces wastages and costs and enhances production and profit. 7. Exploitation of favorable market conditions Only concerns with adequate working capital can exploit favorable market conditions such as purchasing its requirement in bulk when the prices are lower and by holding its inventories for higher prices.

8. Ability to face crisis Adequate working capital enables a concern to face business crisis in emergencies such as depression because during such periods, generally, there, is much pressure on working capital.

9.

Quick and regular return on investments Every investors wants to quick and regular return on his investments. Sufficiently of working capital enables a concern to pay quick and regular dividends to its investor as there may not be much pressure to plough back profits. This gains the confidence of its investor and creates a favorable market to raises additional funds in the future.

10. High morale Adequacy of working capital creates an environment of security, confidence high morale and creates overall efficiency in business.

EXCESS OR INADEQUATE WORKING CAPITAL

Every firms must have adequate working capital. It should have working capital nor inadequate working capital nor inadequate

neither the excessive working capital. Both

situations are risky and may have dangerous outcome. However, out of the two. It is the inadequacy of working capital which is more dangerous form the point of view of the firm.

Disadvantages of redundant or excessive working capital:

Excessive working capital means idle funds which earn no profit for the business and hence the business can not earn a proper rate of return on its investment.

When there is a redundant working capital, it may lead to unnecessary purchasing and accumulation of inventories causing more chances of theft, waste and losses

Excessive working capital implies excessive debtors and defective credit policy which may cause higher incidence of bad debts.

It may result into overall inefficiency in the organizations.

When there is excessive working capital, relation with banks and other financial institutions may not be maintained.

Due to low rate of return on investment, the value of shares may also fall.

The redundant working capital gives rise to speculative transactions.

Disadvantages or Dangers or inadequate working capital A concern which has inadequate working capital cannot pay its short term liabilities in time. Thus, it will lose its reputation and shall not be able to get good credit facilities.

It cannot buy its requirements in bulk and can not avail of discounts, etc.

It becomes difficult for the firm to exploit favorable market conditions and undertake profitable projects due to lack of working capital.

The firm cannot pay day to day expenses of its operations and it creates inefficiencies, increases costs and reduces the profit of the business.

It becomes impossible to utilize efficiently the fixed assets due to non availability of liquid funds.

The rate return on investments also falls with the shortage of working capital.

Factors affecting working Capital

A firm should have neither low nor high working capital. Low working capital involves more risk and more returns, high working capital involves less risk and less returns. Risk here refers to technical insolvency while returns refer to increased profits/earnings. The amount of working capital is determined by a wide variety of factors. 1. Nature of Business: The working capital requirement of a firm depends on the nature of the business. For example, a firm involved in sale of services rather than manufacturing or a firm is allowing only cash sales. In the first instance, no investment is required in either raw materials or WIP or finished goods, while in the second instance there exists no receivables as there is immediate realization of cash. Hence the requirement of working capital will be lower.

2.

Production Cycle:

The term production cycle refers to the time involved in the manufacture of goods. It covers the time span between the procurement of the raw materials and the completion of the manufacturing process leading to the production of goods. As funds are necessarily tied up during the production cycle, the production cycle has a bearing on the quantum of working capital. The longer the time span of production cycle, the larger will be the funds tied up and therefore the larger the working capital needed and vice versa.

3.

Seasonality of Operations:

If the product of the firm has a seasonal demand like refrigerators, the firms need high working capital in the periods of summer, as the demand for the refrigerators is more and the firm needs low working capital in the periods of winter, as the demand for the product is low. 4. Business cycle fluctuation:

Different phases of business cycle, i.e., boom, recession, recovery etc also affect the working capital requirement. In case of boom condition, inflationary pressure appears and business

activities expand. As a result the overall need for cash, inventories etc. increases resulting in more and more funds blocked in these current assets. In case of recession period however, there is usually dullness in business activities and there will be an opposite effect on the level of working capital requirement. There will be a fall in inventories and cash requirement etc.

5. Market Conditions: The working capital requirements are also determined by the market conditions. In case of the high degree of competition prevailing in the market the firm has to maintain larger inventories as customers are not inclined to wait for the product. This needs higher working capital requirements. If there is good demand for the product and the competition is weak, a firm can manage with smaller inventory of finished goods, as customers can wait for the product if it is not available in the market. Thus, a firm can manage with low inventory and will need low working capital requirements.

6. Credit Policy: The credit policy means the totality of terms and conditions on which goods are sold and purchased. A firm has to interact with two types of credit policies at a time. One, the credit policy of the supplier of raw materials, foods etc., and the credit policy relating to credit which it extends to its customers. The level of the working capital is also determined by the credit policy, as the firms credit policy determines the amount of receivables. If the firm has a liberal credit policy, then the firm needs high working capital and the firm needs low working capital if the companys credit policy does not allow it to extend credit to the buyers 7. Production Policy: The quantum of working capital is also determined by production policy. In case of the firms having seasonal demand of the products like refrigerators, air coolers etc., The production policy of the firm determines the amount of working capital requirement. If the firm has production policy to carry production at a steady level to meet the peak demand, this will result in a large accumulation of finished goods (inventories) during the off-seasons and the abrupt sale during the

peak season. The progressive accumulation of finished goods will naturally require an increasing amount of working capital. If the firm has production policy to produce only when there is a demand then the firm needs low working capital during the slack season and high working capital during season. 8. Price level changes:

Changes the price level due to inflation or other reason also affect the requirement of working capital. Rising prices necessitate the use of more funds for maintaining an existing level of activity. Rising prices will require higher level of working capital and vice-versa. 9. Conditions of Supply:

The availability of raw materials and spares also determine the level of working capital. If there is ready availability of raw materials and spares, a firm can maintain minimum inventory and need less working capital. If the supply of raw materials is unpredictable, then the firm has to acquire stocks as and when they are available for ensuring continuous production. Thus, the firm needs to maintain larger inventory average and needs larger requirement of working capital. 10. Profit Margin and Profit Appropriation: A high net profit margin contributes towards the WC pool. Also, tax liability is unavoidable and hence provision for its payment must be made in the WC plan, otherwise it may impose a strain on the WC. Also if the firms policy is to retain the profits it will increase their WC, and if they decide to pay their dividends it will weaken their WC position, as the cash will flow out. However this can be avoided by declaring bonus shares out of past profits. This will help the firm to maintain a good image and also not part with the money immediately, thus not affecting the WC position.

OPERATING CYCLE AND CIRCULAR FLOW CONCEPT

The circular flow concept of working capital is based upon this operating or working cycle of a firm. The cycle starts with the purchase of raw material and other resources and ends with the realization of cash from the sale of finished goods. It involves purchase of raw material and stores, its conversion into stock of finished goods through work-in-progress with progressive increment of labour and service costs, conversion of again from cash to purchase of raw material and so on. The time duration required to complete one cycle determines the requirements of working capitallonger the cycle, large is the requirement of working capital. Thus gross operating cycle of a firm is equal to the length of the inventories and receivables conversion period. Thus Gross Operating Cycle = RMCP + WIPCP + FGCP + RCP Where: RMCP = Raw Material Conversion Period WIPCP = Work-in-process Conversion Period FGCP = Finished Goods Conversion Period RCP = Receivables Conversion period Net operating cycle period = Gross operating cycle Period -Payable Deferral Period.

OPERATING CYCLE
The operating cycle implies the continuing flow from cash to suppliers, to inventory to accounts receivable and back into cash.

RECEIVABLE

CASH INVENTORY

Operating cycle can be said to be at the heart of the need for working capital.

Determination of operating cycle: Raw material holding period= (360*stock of raw material) Cost of raw material consumed

Creditors payment period = (360*creditors) Purchases

Work in progress holding period= (360*stock of WIP) Cost of goods manufacture

Finished goods holding period = (360*stock of finished goods) Cost of goods sold

Debtors collection period = (360*debtors) Credit sales

Operating cycle = raw material holding period-creditors payment period + WIP holding period + Finished Goods holding period

The length of the operating cycle is the most widely use method to determine working capital need. As longer the operating cycle the more working capital is required. The shorter the operating cycle more predictable are the cash inflows. The operating cycle of Britannia industries limited, rudrapur is 22 days. As in FMCG sector, the 31 days is considered maximum length of the operating cycle. The operating cycle is managed efficiently. Cost of raw material consumed is assumed to be equivalent to purchases of raw material. Cost of goods sold is assumed to be equivalent to the goods transfer from factory throughout the year.

Cost of good manufacture is assumed to be equivalent to cost of goods sold

MEASURES TO IMPROVE WORKING CAPITAL MANAGEMENT

:-

The essence of effective Working capital management is proper cash flow forecasting. This should take into account the impact of unforeseen events, market cycles, loss of a prime customer and actions by competitors. The effect of unforeseen demands of Working capital should be factored in.

It pays to have contingency plans to tide over unexpected events. While market-leaders can manage uncertainty better, even other companies must have risk-management procedures. These must be based on objective and realistic view of the role of Working capital. Addressing the issue of Working capital on a corporate-wide basis has certain advantages. Cash generated at one location can well be utilized at another. For this to happen, information access, efficient banking channels, good linkages between production and billing, internal systems to move cash and good treasury practices should be in place.

An innovative approach, combining operational and financial skills and an all-encompassing view of the companys operations will help in identifying and implementing strategies that generate short-term cash. This can be achieved by having the right set of executives who are responsible for setting targets and performance levels.

Effective dispute management procedures in relation to customers will go along way in freeing up cash otherwise locked in due to disputes. It will also improve customer service and free up time for legitimate activities like sales, order entry and cash collection. Overall, efficiency will increase due to reduced operating costs.

Collaborating with your customers instead of being focused only on own operations will also yield good results. If feasible, helping them to plan their inventory requirements efficiently to match your production with their consumption will help reduce inventory levels. This can be done with suppliers also.

WORKING CAPITAL FINANCING POLICY

HEDGING FINANCING POLICY CONSERVATIVE FINANCING POLICY AGGRESSIVE FINANCING POLICY

HEDGING FINANCING POLICY: This requires that financing of each asset would be offset with a financing of each asset would be offset with a financing instrument of approximately the same maturity. Short term or seasonal variations in current assets would be financed with short term debt. The fixed assets and the permanent component of current assets would be financed with long term debt or equity. And the firm can adopt a financial plan which matches the expected life of source of fund s raised to finance assets. CONSERVATIVE FINANCING POLICY A firm can adopt a conservative approach in financing its current and fixed assets. a financial policy of the firm is said to be conservative when its depends more on long term funds for financing needs .under a conservative plan, the firm finances its permanent assets and also a part of temporary current assets, with long term financing . AGGRESSIVE FINANCING POLICY A firm may be aggressive in financing its assets. An aggressive policy is said to be followed by the firm when it uses more short term financing than warranted by matching plan .under a aggressive policy, the firm finance a part of permanent current assets with short term financing .

MANAGEMENT OF WORKING CAPITAL

Working Capital management involves the problem of decision making regarding investment in various current assets with an objective of maintaining the liquidity of funds of the firm to meet its obligation promptly and efficiently. The basic goal of working capital management is to manage the current assets and current liabilities of a firm in such a way that a satisfactory level of working capital is maintained, it is neither inadequate nor excessive. The management of working capital has-been studies under the following three heads1. Management of Cash Balance. 2. Management of receivable. 3. Management of Inventory. MANAGEMENT OF CASH BALANCE

Cash is one of the current assets of a business. It is needed at all times to keep business concern should always keep sufficient cash for meeting its obligations. Any shortage of cash will hamper the operations of a concern and any excess of it will be unproductive. Cash not only include hard cash but also include which can be easily converted into cash with in no time. TOOLS FOR CASH CONTROL: a. b. Cash Budget. Inflow or Outflow of cash. Ratio Analysis.

c.

MANAGEMENT OF RECEIVABLES : Receivable result from credit sales. A concern is required to allow credit sales in order to
expand its sales volume. It is not always possible to sell goods on cash basis only. Sometimes, other concerns in that line might have established a practice of selling goods on credit basis. Under these circumstances, it is not possible to avoid credit sale without adversely affecting sale.

TOOL FOR RECEIVABLE CONTROL: a. Deciding acceptable level of risk. b. Terms of credit sale.

c. Credit collection policy.

MANAGEMENT OF INVENTORY: Inventories mean the stock of the product and the components of the product that is Raw Material, W-I-P, Finish good, Spares. Inventories hold the prime position among the current assets in India. In India, about 60% of the current assets are representing by inventories. Thus large part of working capital is invested in inventories. The management of inventories is therefore necessary to avoid heavy losses due to leakage, theft and wastage because neglecting the management of inventories may jeopardize the long run profitability of the concern and the concern may fall ultimately. Inventory management will minimize these costs. TOOLS FOR INVENTORY CONTROL: a. Classification and identification of inventories. b. Adequate storage facilities. c. Record of inventories. d. Standardization and simplification of inventories. e. Use the appropriate method of inventory control for ex. - JIT, HML, EOQ, FSN etc.

f. Intelligent and experience person.

FORECAST/ ESIMATE OF WORKING CAPITAL REQUIREMENT

Working capital is the life blood and controlling never centre of a business. No business can be successfully run without an adequate amount of working capital. To avoid the shortage of working capital at once, an estimate of working capital requirements should be made in advance. For a manufacturing organization, the following factors have to be taken into consideration while an estimate of working capital.

Factor Requiring Consideration While Estimating Working Capital 1 2 3 4 5 6 7 8 9 Total costs incurred on material, wages and overheads. The length of time for which raw material are to remain In stores before they are issued for production. The length of sales cycle during which finished goods are to be kept waiting for sales. The length of the production cycle or work in process, i.e., the time taken for conversion of raw material into finished goods. The average period of credit allowed to customers. The amount of cash required to pay day-to-day expenses of the business. The average amount of cash required to make advance payments, if any. The average credit period expected to be allowed by suppliers. Time-lag in the payment of wages and other expenses.

ANALYSIS OF WORKING CAPITAL:There are three Techniques to analysis the working capital

Schedule of change in working capital Ratio Analysis Fund statement

SCHEDULE OF CHANGE IN WORKING CAPITAL: The working capital of a business concern is subject to change due to several business transactions. Working Capital represents excess of current assets over current liabilities. The Schedule of Change in Working Capital presents a detailed and analytical picture of changes in current assets and current liabilities during two balance sheet dates. RATIO ANALYSIS: Ratio is one of the methods of analyzing financial statement. Ratio analysis measures the Profitability, Efficiency and Financial soundness of the business. According to Myers, ratio analysis is a study of relationship among the various financial factors in a business. FUND STATEMENT: Fund flow statement is the technique of analyzing and interpreting the financial statement of business concern. It is a technical device designed to analyze the changes in the financial or working capital position of a business enterprise between two dates. The Fund Flow Statement is a statement, depicting change in working capital. It is also termed as a statement of source and Application of Funds, Statement of Change in Financial Position, Statement of Change in Working Capital.

TECHNIQUES OF FORECASTING WORKINGCAPITAL

1. Operating cycle method 2. Forecasting of current assets and current liabilities 3. Cash forecasting method 4. Projected balance sheet method 5. Profit & loss adjustment method

OPERATING CYCLE METHOD: Operating cycle is the time duration within one cycle of business operation is completed. Business operations involve a number of stages from purchase of raw material till conversion of receivable into cash. FORCASTING OF CURRENT ASSETS AND CURRENT LIABILITIES: This is the Traditional method of forecasting the Working Capital requirements. Working Capital is the excess of Current Assets over Current Liabilities; its requirement can easily be forecasted by making the estimate of the amount of each component of current assets and current liabilities. The procedure for estimating the component is as under:

Stock of Raw-materials:- The average amount of such stock of raw-materials would depend upon the quantity of raw-materials required for production during a particular period as well as upon the average time taken in obtaining fresh delivery.

Stock of Work-in-Progress:- Raw-materials, wages, overheads are included in the cost of work-in-progress. In order to determine the stock of work-in-progress, the time-period for which the inputs will be in the process of production will be determined.

Finished Goods Stock:- Finished goods are not immediately sold these are to be kept in go downs or warehouses for certain period. This is an important factor in determining the amount to be locked up in finished goods stock. On the basis of years production, the amount of finished goods for the storage period may be calculated.

Sundry Debtors:- The amount of capital locked up in sundry debtors can be computed on the basis of credit sales, period of credit allowed/time lag in collecting the payments.

Cash and Bank Balances:- These are estimated on the basis of past experience

Sundry Creditors:- This is estimated on the basis of credit purchases and the time lag in payments to creditors/credit period allowed by suppliers of raw-materials.

Outstanding Expenses:-These are ascertained having considered the time lag in payment of various types of expenses.

CASH FORCASTING METHOD: This method is very much related to cash budgeting and it attempts to estimate the cash surplus and deficiency. Every operating cycle starts with a cash outflow and after passing through various channels it ultimately ends with an inflow of cash. A statement of month, cash forecast is prepared which includes cash inflow and outflow for the various methods. The difference between the total cash flow will indicate surplus or deficiency for which necessary adjustment can be planned in advance.

Cash turnover

No. of days in operating period Duration of cash cycle in days

PROJECTED BALANCE SHEET METHOD: Under this method, various items of assets and liabilities (both long-term as well as short-term) are estimated for the future period. On the basis of these assets and liabilities, a projected Balance Sheet is prepared and then Working Capital estimate is made by deducting current liabilities from the current assets.

PROFIT AND LOSS ADJUSTMENT METHOD: According to this method, estimated profit is calculated first on the basis of transactions likely to take place in future. Working Capital magnitude is ascertained by making necessary adjustments for cash inflow and outflow in the estimated profit.

CHAPTER

FINDINGS

WORKING CAPITAL OF BRITANNIA INDUSTRY LTD

G/L CODE

DESCRIPTION OF GOODS

1 Apr'2010 to 31 Mar'2011

1 Apr'2009 to 31 Mar'2010

INC/DEC

% INC/DEC

AMOUNT ( RS) STORE AND SPARE PARTS 205002 Inventory HSD 205004 Inventory Engineering Stores 205013 Inventory Propane Fuel TOTAL

AMOUNT ( RS )

3,260,300.73 20,353,365.20 572,154.90 24,185,820.83

3,864,630.34 14,851,615.30 1,228,823.45 19,945,069.09

(604,329.61) 5,501,749.90 (656,668.55) 4,240,751.74

(0.15) 0.37 (0.53) 0.21

PACKAGING MATERIAL 206001 206002 Inventory Packing Material Inventory CBBS,CASE & CASE closing stock 206006 Inventory PKNG W/OFF TOTAL
RAW MATERIAL 206000 Inventory Ingredients TOTAL FINISHED GOODS 207003 Inventory Finished Stock Biscuits 207019 Closing Stock Inventory - FG TOTAL WORK IN PROGRESS 207013 Inventory WIP - GOOT 207020 Closing stock Inventory - WIP TOTAL INVENTORIES TOTAL SUNDRY DEBTORS 210000 Accounts Receivable - Domestic TOTAL 48,511,210.77 4,813,255.96 (1,393,830.17) 51,930,636.56 36,633,248.96 3,794,565.63 0.00 40,427,814.59 11,877,961.81 1,018,690.33 (1,393,830.17) 11,502,821.97 0.32 0.27 0.28

212,108,648.99 212,108,648.99

248,324,081.69 248,324,081.69

(36,215,432.70) (36,215,432.700)

(0.15) (0.15)

64,110,401.11 539,034.39 64,649,435.50

3,668,116.94 62,472.42 3,730,589.36 60,442,284.17 476,561.97 60,918,846.14 16.47 7.62 16.32

1,544,278.99 (720,514) 823,765.43 353,698,307.31

2,151,769.60 (1,164,298.12) 987,471.48 313,415,026.21

(607,490.61) 443,784.56 (163,706.05) 40,283,281.10

(0.28) (0.38) (0.17) 0.13

(16.11) (16.11)

187,072.50 187,072.50

(187,088.61) (187,088.61)

(1.00) (1.00)

CASH & BANK BALANCE 211024 Coin adjustment - Asset Account 211043 Cash in hand - Uttaranchal 213111 HDFC Disbursement bakeryUttaranchal TOTAL
OTHERS - LOANS & ADVANCES Prepaid rates & taxes Employee - other Advance Deposit with Government Bodies Deposit with vendors Loan - Employee Advance - Non capital Deposit with Government BodiesNew Advance - capital TOTAL CURRENT ASSETS TOTAL

11.8 5,717.00 (1,519,560.23) -1513831.43

8.32 17,635.00 2,293,120.10 2310763.42

3.48 (11,918.00) (3,812,680.33) (3824594.85)

0.42 (0.68) (1.66) (1.66)

220009 220015 220025 220026 220029 220031 220037 217000

21,749.00 (550) 117,090 3,687,320.00 (183,323.58) 141,487,159.65 3,000.00 190,000.00 145,322,445.07 497,506,904.84

21,749.00 (11,030.00) 33,090.00 2,627,906.00 (138,181.66) 125,216,795.15 3,000 6,653,190.00 134,406,518.49 450,319,380.62

0.00 10,480.00 84,000.00 1,059,414.00 (45,141.92) 16,270,364.50 0 (6,463,190.00) 10,915,926.58 47,187,524.22

0 (0.95) (2.54) 0.40 0.32 0.12 (0.97) 0.08

CURRENT LIABILITIES & PROVISIONS SUNDRY CREDITORS 111005 Accounts payable - SSI Domestic CURRENT LIABILITY PROVISION Provision for leave encashment Accrued Miscellaneous expense Accrued Primary freight - Finished goods Accrued Salaries & Wages Accrued Loading - FG Accrued Bonus & Commission

98,853.38 98,853.38

690,255.36 690,255.36

591,401.98 591,401.98

0.86 0.86

104014 104016 104023 104025 104033 104034

1,231,580.73 11,392,962.00 59,200,411.77 1,916,307.00 (38,337.00) (2,051,487.94)

870,989.17 10,065,713.17 40,505,389.52 1,340,396.00 (38,337.00) (2,694,038.99)

(360,591.56) (1,327,248.83) (18,695,022.2 5) (575,911.00) 0.00 (642,551.05)

(0.41)) (0.13) (0.46) (0.43) 0.23

104037 104050 104051 104053 104064 104067 104081 104094 104095 104102 104124 104127

Liability Sundry others company contribution to GPF liability A/C company contribution to GFPF - liability A/C company contribution to ESI liability A/C Employees contribution to ESIC Employees contribution to GPF Deduction - consumer cocoperative credit society Deduction - medical insurance scheme A/C NON ESI PF EDLI Adm charges Deduction - salary saving scheme - LIC Entry tax/devt payable A/C Deposit payable - customer other

1,700,000.00 42,775.00 97,045.00 112,061.00 41,431.00 139,820.00 50,816.29 (1,192,156.00) 77,611.61 2,520.60 19,552,801.93 0.00
2,231.00 5,514,722.00 3,200.00 0.00 125,000.00 6,321,863.00 23,222,984.00 37,916,641.08 3,543,921.00 1,810,392.00 2,609,726.00 130,818.00 (1,848.00) 336,477.00 11,295,203.04 1,570,147.73 (74,781.57) 87,147.00 41,599.00

0.00 32,602.00 74,042.00

(1,700,000.000 (10,173.00) (23,003.00)

(0.31) (0.31) (0.50) (0.50) (0.31) (0.36) (0.65) (0.01) (1.16) (3.33) (0.81) (0.40) 1 0 (0.42) (0.51) (0.62) (0.51) (0.48) (0.53) 0 (1.70) (3.41) 0.89 0 (3.33) (0.82)

74,537.00
(37,524.00)

27,589.00 106,644.00 37,274.29 (719,483.00) 76,375.93 1,164.60 4,509,165.49 0

1,231.00 3,952,569.00 3,200.00 (39,300.00) 125,000.00 4,454,716.00 15,352,047.00 23,388,221.50 2,342,510.00 1,217,412.00 1,705,928.00 130,818.00 (1,848.00) 124,264.00 2,557,287.67 14,627,904.06 (74,781.57) 20,102.00 22,749.00 13,057,756.33 0.00 (67,045.00) (18,850.00) (39,300.00) 0.00 (1,867,147) (7,870,937.00) (14,528,419.58) (1,201,411.00) (592,980.00) (903,798.00) 0.00 0.00 (212,213.00) (8,737,915.37) 472,673.00 (1,235.68) (1,356.00) (15,043,636.44) 0 -1,000.00 (1,562,153.00) 0.00 (13,842.00) (33,176.00) (13,542.00)

104128 Stable cheque A/C 104129 TDS - Convenanted staff salary 104133 Profession Tax - Convenanted staff salary 104141 Deduction salaries & wages advance 104143 Deposit payable - Vendors 104154 Retention money payable Vendors 104180 Salary payable - EO( Manager) 104181 Salary payable - EO( officer) 104182 salary payable - EO (Staff) 104185 PF-EO (Manager) 104186 PF-EO(Officer) 104187 PF-EO(Staff) 104188 Employee Settlement Clearing A/C 104189 VPF-EO 104202 GR/IR - Clearing-External procurement 104203 Freight clearing (MM)External procurement 104205 Excise Clearing (MM) A/C 104207 TDS- Contractors- SEC 194C 104209 TDS-rent - SEC 1941

104210 TDS- Professional Fees- SEC 194J 104218 TCS- Tax collected from customers - scrap sales 104900 HR-PY- Technical clearing Account 110002 Provision for bonus

25,332.00 5,469.92 (1,264,333.00) 2,199,110.00

29,565.00 5,683.64 (1,264,333.00)

4,233.00 213.72 0.00

0.14 0.03 (0.01) (0.40) (0.92) 0.06 1 (0.52) 1.07 1 (0.23)

2,176,911.09 (22,198.91)

110006 110007 111000 111001 111002 111003 111004 111007 107005

Provision for Gratuity fund Provision for Pension fund Acconts Payable - Domestic Accounts payable - Exports Accounts payable - One time Vendors Accounts Payable- Statutory Accounts Payable - Employees Accounts Payable - AW Vendors Provision for sales and other taxes TOTAL PROVISION CURRENT LIABILITIES AND PROVISION WORKING CAPITAL( Current Assets - Current Liabilities) DECREASE IN WORKING CAPITAL

5,672,964.01 627,493.29 97,641,859.68 0.00 11,300.00 1,834,637.00 (340.00) 0.00 0.00 293,485,098.17 293,583,951.55

4,054,492.69 325,685.25 104,876,001.24 124,842.81 0.00 1,201,298.00 4,818 0.00 1,400,000.00 237,115,017.56 237,805,272.92

(1,618,471.32) (301,808.04) 7,234,141.56 124,842.81 (11,300.00) (633,339.00) 5,158.00 0.00 1,400,000.00 (56,370,080.61)

(55,778,678.63)

(0.23)

203,922,953.29 (8,591,154.41)

212,514,107.70
(8,591,154.41)

P&L OF FINANCIAL YEAR 2010-11

INCOME OF BRITANNIA INDUSTRIES LIMITED, RUDRAPUR
G/L CODE 305001 306322 302000 428000 DESCRIPTION OF GOODS INCOME MISC SALES SCRAP, EMP INV CH SALE- SAMPLE INTEREST FROM DEPOSIT ASSET WRITE OFF ACCOUNT TOTAL OTHER RECEIPTS MISCELLANEOUS INCOME MISC SALES BY PROD CASH DISCOUNT OLD LIABILITIES WRITTEN BACK TOTAL TOTAL INCOME END OF F.Y. 2010-11 1 Apr10-31Mar11 AMOUNT(Rs) 14,572,120.51 (9,367.68) 146,230.00 (957,251.59) 13,751,731.24 1Apr09-31Mar10 AMOUNT(Rs) 12,948,205.10 (71,678.56) 89,825.00 (1,919,962.28) 11,046,389.26 821,256.39 16,585,784.34 869,731.34 2,271,153.62 20,547,925.69 31,594,314.95

305000 305003 307000 421002

66,051,239.67 1,120,652.87 10,107,580.89 77,279,473.43 91,031,204.67

EXPENDITURE OF BRITANNIA INDUSTRIES LIMITED, RUDRAPUR Expenditure

Consumption of materials Salaries, wages, bonus, commission Depreciation Packing material Store and spare parts consumed Contribution to provident and other funds Workmen and staff welfare expenses Power and fuel Repairs and maintenance of plant and building Rent guest house Carriage, freight & distribution Advertising others Conversion charges raw material/packaging material Miscellaneous expenses Rate & taxes TOTAL EXPENSES END OF F.Y. 2010-11

Amount ( Rs )
(1,027,986,136.55) 53,743,591.76 77,007,347.59 652,904,438.18 10,894,086.20 4,461,155.04 10,450,753.85 156,930,635.86 13,735,543.64 --310,638,116.74 200,964.00 18,801,465.92 122,338,774.21 15,929,575.44

Amount( Rs )
(1,128,204,969.06) 47,200,569.00 72,529,460.28 526,893,840.32 12,549,289.60 4,212,162.95 8,950,010.18 118,522,512.86 13,034,415.40 322,000.00 292,692,229.43 43,772.00 24,156,756.52 112,310,646.86 5,042,849.49

420,050,311.88

110,255,545.83

NET PROFIT(+) OR LOSS(-) (total income total expenses

(329,019,107.21)

(78,661,230.88)

WORKING OF EXPENDITURE INCURRED 2010-11

EXPENDITURE OF BRITANNIA INDUSTRIES LIMITED, RUDRAPUR

G/L CODE DESCRIPTION OF GOODS
EXPENDITURE CONSUMPTION OF MATERIAL 306003 306004 306005 306006 306007 306008 306009 306050 306100 306101 306110 306321 306322 306500 306501 400000 400001 400008 LOSS - INVENTORY - FG PRICE DIFF LOSS/GAIN - FROM STOCK TRANSFER - FG GAIN - INVENTORY- FG PRICE DIFF LOSS- VALUATION- EXTERNAL MATERIAL GAIN- VALUATION- EXTERNAL MATERIAL LOSS- INVENTORY GOOT PRICE DIFF GAIN- INVENTORY GOOT PRICE DIFF LOSS/GAIN- INVENTORY INVENTORY CHANGE - FG INVENTORY CHANGE - GOOT CONSUMED INVENTORY CHANGE- FG SUB- CONTRACTING INVENTORY CHANGE-( SAMPLE&GJV) -SD INVENTORY CHANGE SALE - SAMPLE INVENTORY CHANGE - FACTORY PROD - FG INVENTORY CHANGE - FACTORY PROD - GOOT CONSUMPTION INGREDIANTS CONSUMPTION VARIANCE-INGREDIANTS CONSUMPTION - INGREDIANTS LEGACY TOTAL 53,794,237.68 2,554,745.73 (1,420,816,474.51) 25,477,433.48 (24,261,613.36) 239,570,661.38 (265,573,109.58) (215,358.53) 22,187,677.94 5,703,883,968.46 (2,867,622.53) 9,367.68 (9,367.68) (3,045,832,368.81) (5,678,097,686.88) 3,452,822,171.98 (80,636,067.92) (9,976,731.08) (1,027,986,136.55) 29,045,550.10 5,601,671.87 (456,121,831.44) 17,807,280.72 (22,461,920.81) 261,003,832.12 (232,000,215.46) (149,507.69) 19,683,675.38 3,735,402,787.95 (3,215,963.00) 71,997.28 (71,678.56) (3,272,046,610.11) (3,757,562,115.75) 2,854,085,436.99 (17,260,701.90) (290,016,656.75) (1,128,204,969.06)

1 Apr 2010 to 31 Mar'11

AMOUNT( Rs )

1 Apr 2009 to 31 mar'10

AMOUNT(Rs)

SALARIES, WAGES, BONUS,& COMISSION 408000 408001 408002 408004 408009 SALARIES - MANAGER SALARIES - OFFICERS SALARIES - STAFF, SUB-STAFF & OTHERS WAGES - WORKERS BONUS/COMMISSION - WORKERS TOTAL 10,026,526.82 15,692,905.92 1,167,659.23 24,711,564.88 2,144,934.91 53,743,591.76 10,126,547.06 13,247,465.61 1,268,405.09 20,425,550.49 2,132,600.75 47,200,569.00

DEPRECIATION

407000

DEPRECIATION ACCOUNT TOTAL

77,007,347.59 77,007,347.59

72,529,460.28 72,529,460.28

PACKING MATERIAL 401000 401001 401003 401006 426008 429009 429010 CONSUMPTION - PACKING MATERIAL CONSUMPTION - CASE & CASE CLOSING MATERIAL CONSUMTION VARIANCE - PACKING MATERIAL CONSUMPTION CBB MATERIAL WRITE OFF - PACKING MATERIAL GRAMMAR DEDUCTION PRICE DIFFERENCE - PACKING MATERIAL ( MANUAL) TOTAL STORES & SPARE PARTS CONSUMED 402001 416004 CONSUMPTION ENGINEERING STORES ROAD TRANSPORT FREIGHT- PRIMARY ENGG TOTAL 10,859,824.20 34,262.00 10,894,086.20 12,520,290.60 28,999.00 12,549,289.60 424,747,438.08 43762317.62 19,126,003.26 165,038,563.05 1,425,075.54 (1,268,545.37) 73,586.00 652,904,438.18 338,893,071.05 35,230,270.33 14,401,500.43 138,354,324.01 38,362.68 (69,916.18) 46,228.00 526,893,840.32

CONTRIBUTION TO PROVIDENT & OTHER FUND 410000 410001 410004 410005 410006 410007 410008 410013 410016 410019 410020 410024 410025 COMPANY CONTRIBUTION TO GRATUITY - MANAGERS COMPANY CONTRIBUTION TO GRATUITY - OFFICERS COMPANY CONTRIBUTION TO GRATUITY - WORKERS COMPANY CONTRIBUTION TO COMPANY'S PF MANAGERS COMPANY CONTRIBUTION TO COMPANY'S PF OFFICERS CO. CONTR TO COMPANY'S PENSION FUND - MANAGERS CO. CONTR TO COMPANY'S PENSION FUND - OFFICERS CO. CONTRIBUTION TO GOVT.FPS - WORKERS CO. CONTRIBUTION TO GOVT.. PF - WORKERS CO. CONTRIBUTION TO GOVT. PF - WORKERS CO. CONTR TO DLI ADMN CHARGES ON DLI ADMN CHARGES ON PF TOTAL -16,262.31 208,310.95 17,152.04 4,461,155.04 205,811.78 336,158.93 1,076,400.61 296,490.00 484,212.00 124,238.55 177,569.49 1,076,647.00 474,426.00 223,245.28 314,920.11 949,648.51 321,615.00 453,668.00 149,945.60 210,552.65 944,358.00 418,611.00 5,193.00 19,382.51 182,775.85 18,247.44 4,212,162.95

300006 409005 409006 409009 409019 409020 409023 409025 409026 300006 410021 420038 420043

WORKMEN AND STAFF WELFARE EXPENSES CANTEEN SALES COUPON LEAVE ENCASHMENT - MANAGERS LEAVE ENCASHMENT - OFF, SELECTION GRADE LEAVE ENCASHMENT -WORKERS MEDICAL REIMB EXPENSES - WORKERS MEDICAL AND SANITARY EXPENSES EMPLOYEE WELFARE EXPENSES OFFICE LUNCH EXPENSES CANTEEN EXP/LOSS/SUBSIDY CANTEEN SALES COUPON COMPANY CONTR TO ESI TRAINING EXPENSES EMPLOYEE MOVING EXPENSES TOTAL

(2,404,522.00) 74,121.93 121,065.66 193,834.07 0.00 968,716.12 1,747,633.00 98,584.00 10,757,826.07 (2,404,522.00) 1,278,017.00 20,000.00 0.00 10,450,753.85

(1,879,070.00) 80,400.45 113,416.55 171,011.90 153,699.00 1,780,577.46 838,315.00 7,806.50 8,576,519.32 (1,879,070.00) 973,823.00 12,581.00 0.00 8,950,010.18

POWER AND FUEL 405005 405014 405015 CONSUMPTION - FUEL HSD ELECTRICITY CHARGES - FACTORY CONSUMPTION - PROPANE FUEL TOTAL 87,434,914.45 19,144,274.83 50,351,447 156,930,635.86 42,417,227.95 22,255,227.00 53,850,057.91 118,522,512.86

REPAIRS & MAINTENANCE OF PLANT & MACHINERY 411000 M & R PLANT & MACH CONTRACT 411001 M & R PLANT & MACH STORES 411002 M & R DIESEL GEN SETS TOTAL

3,532,335.30 8,522,949.77 469,233.00 12,524,518.07

3,475,406.07 7,163,829.95 501,864.00 11,141,100.02

REPAIRS & MAINTENANCE OF BUILDINGS 412000 M & R - BUILDING STORES 412002 M & R - PREMISES 412003 M & R - BUILDING CONTRACT TOTAL

87,936.15 450,652.42 672,437.00 1,211,025.57

645,006.88 266,077.90 982,230.60 1,893,315.38

413004

RENT RENT - GUEST HOUSE TOTAL

322,000.00 322,000.00

414001 414003 414006 414008 414009

RATE & TAXES RATE & TAXES - OTHERS RATE & TAXES - SALES TAX RATES & TAXES - MUNICIPAL & CITY RATE & TAXES - LICENSE FEES ENTRY TAX TOTAL

840,209.00 40,000 5730 15,043,636.44 15,929,575.44

38,869.00 8,879.00 40,000.00 59,935.00 4,895,166.49 5,042,849.49

416001 416002 416005 416006 416008 416009 416010 416015 416022 416024

CARRIAGE, FREIGHT & DISTRIBUTION PRIMARY FREIGHT RAW MATERIAL PRIMARY FREIGHT - FINISHED GOODS PRIMARY FREIGHT - RAW MATERIAL PRIMARY FREIGHT - FG DETENTION CHARGES PRIMARY FREIGHT - FG ADDNL TRANSPORT CHARGES PRIMARY - FG FREIGHT FINISHED GOODS - MANUAL LOADING/ UNLOADING CHARGES GODOWN RENT - RMPM OTHER EXPENSES - RMPM TOTAL

15,929,485.12 265,198,266.15 69,744.00 (75,411.25) 2,195,450.00 69,200.00 6,906,251.00 11,347,878.00 8,598,087.00 399,166.72 310,638,116.74

8,183,190.34 252,650,260.77 1,214,813.00 (33,683.00) 2,446,400.00 8,252,152.00 7,187,426.00 9,376,793.00 3,173,145.00 241,732.32 292,692,229.43

ADVERTISING 418019 ADVERTISING - OTHERS 418142 ADVERTISING- OTHERS TOTAL

7,100.00 193,864.00 200,964.00

37,772.00 6,000.00 43,772.00

CONVERSION COST ( NET ) 404000 CONVERSION CHARGES - RAW MATERIAL/ PKG MATL TOTAL

18,801,465.92 18,801,465.92

24,156,756.52 24,156,756.52

413001 420000 420003 420004 420010 420012 420013 420017 420021 420023 420026 420029 420032 420033 420035 420037 420039 420040 420041 420045 420046 420049 420050 420052 420053 420054 420056 420058 420063 420064 420065 420068 420070 420073 420077 420081 420086 420091 420096
420097

MISCELLANEOUS EXPENSES COLD STORAGE CHARGES TRANSIT LOSS(SALES) GENERAL CHARGES CAR HIRE CHARGES CONFERENCE CHARGES STIPEND FEES LEASE RENTAL CONVEYANCE EXPENSES GARDENING EXPENSES M & R MISCELLANEOUS BOOKS & PERIODICALS OUTSIDE CONTRACTED SERVICES SUPPLIES UTILITY & OTHER WATER CHARGES GUEST HOUSE EXPENSES SUBSCRIBTION TRAVEL DOMESTIC - AIR FARE TRAVEL DOMESTIC - OTHER EXPENSES TRAVEL FOREIGN - AIR FARE COMPUTER CONSUMABLES (STATIONARY) COMPUTER MAINTENANCE EXPENSES LAW CHARGES/LEGAL EXPENSES PHOTOCOPY EXPENSES POSTAGE & TELEGRAMS PRINTING & STATIONARY PROFESSIONAL CHARGES RECRUITMENT EXPENSES TELEPHONE CHARGES ENTERTAINMENT EXPENSES ISO 9000 LAB EXPENSES TRIAL RUN EXPENSES UNIFORM & WASHING CHARGES SECURITY CHARGES SANITARY/SAFETY/HYGIENE EXPENSES COIN ADJUSTMENT BANK CHARGES BANK CHARGES - AW FOOD SAFETY EXPENSES OUTSIDE CONTRACTED SERVICES-

2,838,000.00 (3,151,922.22) 5,000.00 1,514,223.54 0.00

2,064,243.00 453,999.00 600.00 21,082.00 7,296,017.71 485,608.22 20,569.00 173,017.05 31,850 509,089.00 273,496.50 0.00 83,288.88 0.00 170,460.00 1,493.00 222,569.00 320,381.03 489,775.00 28,689.00 0.00 65,483.00 268,279.00 271,418.78 94,747.26 580,701.23 3,363,332.00 5,344,154.66 8.64 10,396.28 0.00 640,468.01 86,010,512.82

2,838,000.00 496,529.95 20,000.00 1,167,621.85 0.00 62,718.00 436,788.00 1,482,773.00 366,392.00 26,093.32 11,297.00 6,815,128.48 1,002,857.26 56,006.00 195,743.38 40,426.00 449,133.00 327,769.50 106,292.00 131,062.00 2,206.00 101,800.00 6,965.00 181,867.00 421,154.08 479,520.00 14,410.00 0.00 225,976.00 85,334.50 78,354.23 396,442.92 347,087.96 3,128,124.00 4,289,078.26 11.22 16,016.40 (50.00) 1,394,421.63 66,128,327.13

420098 420102 420103 426004 426007 426010 429001 429004 429005 429006 429007 429008 429011 429012 430002

DIRECT LABOUR employee lunch allowance telephone expenses - land line Telephone expenses - mobile/data cards ROUNDING OFF - OTHERS MATERIAL WRITE OFF - INGREDIANTS MATERIAL WRITE OFF - FINISHED GOODS LOSS- FROM EXTERNAL PRODUCT PRICE DIFF LOSS/GAIN STOCK TRANSFER RAW MATERIAL LOSS- INVENTORY DIFF - FG GAIN- INVENTORY DIFF- FG GAIN - EXTERNAL PDT PRICE DIFF MOISTURE DEDUCTION OFFSETTING CLOSING STOCK INVENTORY - FINISHED GOODS OFFSETTING CLOSING STOCK INVENTORY - WIP PURCHASE SET OFF ACCOUNT

897,000.00 202,923.68 287,206.65 2.12 (3,661.00) 0.00 36,319.54

839,800.00 268,971.53 215,765.17 0.03 0.00 1,137,989.05 608,329.86 (47,685.51)

8,950,191.96 (10,929,131.72) (433,051.17) (1,798,985.03) (476,561.97) (1,119,207.48) 16,224,698.24 122,338,774.21

1.30 (186,361.11) -367,985.01 (751,605.95) (1,485,890.40) 709,128.50 18,040,512.33 112,310,646.86

TOTAL

OLD LIABILITIES WRITTEN BACK 421002 OLD LIABILITIES WRITTEN BACK TOTAL TOTAL EXPENDITURE

(10,107,580.89) (10,107,580.89) 409,942,730.99

(2,271,153.62) (2,271,153.62) 107,984,392.21

CHAPTER

REASEARCH METHODOLOGY

RESEARCH METHODOLOGY
The purpose of the methodology is to describe the process involve in the research work. This includes the overall research design, the data collection method. Research Methodology refers to the various sequential steps (along with a rationale, of each such steps) to be adopted by a researcher in studying a problem with certain object or objectives in view. It would be appropriate to mention that research project are not susceptible to any one complete and inflexible sequence of steps and type of problems to be studied will determine the particular steps to be taken and their order too.

SOURCES OF DATA COLLECTION Data was collected by using both primary and secondary methods. In primary method of data collection personal interview and questionnaire was used and in case of secondary ways of data collection the magazines of Britannia was used. PRIMARY DATA Primary data are those which are collected a fresh and for the first time and thus happen to be original in character. There are numbers of method of collecting primary data.

Calculation Observation

SECONDARY DATA Secondary data means data that are already available i.e. they refer to the data which have already been collected and analyze by someone else.

Books Reports Magazine

Internet

DATA COLLECTION METHOD Data was collected by using both primary and secondary methods. In primary method of data collection personal interviews and questionnaire was used and in case of data collection the magazines of Britannia was used.

OBJECTIVE OF REASEARCH

The main aim of research is to find out the truth which is hidden and which has not been discovered yet.

To test the hypothesis of a casual relationship between variables (such studies are known as hypothesis-testing research studies).

To discover answer to questions through application of scientific procedure. To gain familiarity with a phenomenon or to achieve new insights. To determine the frequency with which something occurs or which it is associated with something else.

CHAPTER

SUGGESTION, CONCLUSION AND BIBLIOGRAPHY

SUGGESTION

Management of Britannia ensures the efficient use of various resources & increases the productivity of the enterprise.

Maintaining good relations with suppliers to get maximum raw materials & capital so that the organization can continue dealing in future as well.

Keeping & maintaining good working condition to ensure fair wage for worker security of employment.

The organization structure must be flattered for the quicken decision making which will result in higher profitability.

Complaint and replace the defective product in time, otherwise it will tarnish the image of the company among the retailers.

To ensure the proper quality of raw materials before placing an order to the vender terms and conditions of penalties should be given to the vendors if they supply defected material.

The company can diversify itself by undertaking the manufacturing of various different products apart from manufacturing biscuits at the rudrapur branch.

Storage capacity of the company should be increased by properly utilizing the waste land of the company. There should be big and attractive companys board on the main gate.

CONCLUSION
This report is whole on the basis of financial analysis. The main object of doing this study is to analysis the condition of organization. The tools of financial are used to find out the soundness of the company. It can be concluded that in the fiercely competitive FMCG market with regional players striking so hard at BILs market share the company has not made any compromise with quality, systems and practices in spite of feeling the pinch in its profitability not only due to competition but also because being an agro based industry and because of the seasonality and unpredictability in the availability and price of one of its major raw material Maida. The company is doing well in terms of its marketing approach and the financials of the company seem to be healthy as of now.

BIBLIOGRAPHY:

Financial Management Management Accounting Financial management -

I.M Pandey S.P Gupta khan & jain

Annual report of Britannia industries Kothari C.R, research methodology.

WEBSITES

www.Britannia.com www.Google.com