SUMMER TRAINING PROJECT

REPORT

ON

“WORKING CAPITAL MANAGEMENT”

AT
RADICO KHAITAN LIMITED

Submitted in Partial Fulfillment of

Master of Business Administration
Batch: 2009-2011
Of

DEHRADUN INSTITUTE OF
TECHNOLOGY
GREATER NOIDA [UP]
PROJECT GUIDE BY: SUBMITTED BY:
Mrs. Anita Saxena
Nishank Agarwal
(HOD- Management Dept.) MBA III Semester
Roll no. 0929170024
 Radico Khaitan Ltd. (Rampur
Distillery)
 RADICO KHAITAN LTD.

ACKNOWLEDGEMENT

In fine acknowledgement to Mr.PRADEEP AGARWAL (Sr.Manager)-Accounts

guided in the preparation of the report. Without the guidance of whom it could
not have 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 would like to thank Mr. K.P.SINGH (Director - O), Mr. M.S.Jha (DGM) &
Mr.Alok Agarwal (AVP –A/cs) for give me the approval to this project in the
organization.

The learning during the project was immense & invaluable. Our work included the

study of various financial aspects for Working Capital.

 RADICO KHAITAN LTD.

Executive Summary

The summer training report is the WORKING CAPITAL MANAGEMENT

OF RAMPUR DISTILLERY, A UNIT OF RADICO KHAITAN LTD. The

merit of this report is that the readers get a complete idea about the corporation.

Working capital is a very important tool for any organization. It

forms the backbone of all activities to be carried out for the
fulfilment of goals of any organization. The Budget provides a
strategic framework on which to build our annual and long term
business plans. The objective is to provide a number of programs
and services at desired levels in a financially sustainable manner.
A well designed Budget plan facilitates to achieve the goals and
objectives of a company.

Radico Khaitan is one of India's oldest and largest liquor manufacturers. Formerly
known as Rampur Distillery, which was established in 1943. It was only in 1999,
that Radico decided to launch and market its own brands, thereby embarking on a
period of phenomenal growth. To further boost its production capacity of bottled
and branded products, the company has tied up with bottling units in various parts
of the country.

Radico Khaitan Limited is the proud owner of three millionaire brands of liquor
namely:
8 PM Whisky – Launched in 1999, it created a record among any Indian or foreign
brand operating in the country by selling one million cases in the 1st year itself.

Contessa Rum - It won the prestigious Monde Selection award for its overall quality
for the past three consecutive years.

Old Admiral Brandy - Rated by Drinks International as the fastest growing Brandy
in the world in the regional category (2004-05 and 2005-06), it also won the Monde
Selection award for its overall quality in 2004-05.

Besides, Radico Khaitan has brands that attract consumers of every market
segment both in terms of purchasing power and preference.

The Rampur Distillery has 14 state-of-the-art bottling lines, with a few

imported from Italy. It is also equipped with tunnel bottle washing, filling,
sealing and labelling machines having capacity of producing 1500 cases
(1 case = 12 bottles of 750 ml each) of liquor in a single shift of operation.
Line capacities vary from 750 cases to 3,000 cases in a shift. To keep pace
with the growing demand, Radico Khaitan has significantly increased its
bottling capacity by both acquiring and setting up bottling plants in the states
of Rajasthan, Uttaranchal and Andhra Pradesh.
Contents
 COMPANY PROFILE

 ORGANISATION STRUCTURE

 MANAGEMENT

 DIVISION

 BOARD OF DIRECTORS

 COMPANY VISION

 COMPANY MISSION

 RADICO'S CORE VALUE

 RAMPUR DISTILLERY

 CORPORATE SERVICES

 BRANDS DETAILS
 RADICO KHAITAN LTD.

ABOUT THE COMPANY

From evoking mysteries to awakening untamed desires; from pioneering possibilities to

moulding values, Radico continues to produce a kaleidoscope of time-honoured brands,
inspired by innovation of all forms and shapes. Dauntless, legendary and valued, Radico
Khaitan once again emerges a true virtuoso, creating an exciting invention that blends
passion and perfection into a rich aesthetic experience.

Radico Khaitan is one of India's oldest and largest liquor manufacturers.Formerly known
as Rampur Distillery, which was established in 1943. It was only in 1999, that Radico
decided to launch and market its own brands, thereby embarking on a period of
phenomenal growth. To further boost its production capacity of bottled and branded
products, the company has tied up with bottling units in various parts of the country.
 RADICO KHAITAN LTD.

THE BRAND STORY

Radico Khaitan Ltd today has three millionaire brands in its portfolio. Radico's flagship
brand, 8 PM Whisky, launched in 1999, was a runaway success. In the first year alone, it
sold one million cases - a record for any Indian or foreign brand operating in India. This
also made it the first brand in the liquor industry to make it to the Limca Book of
Records.

Drinks International, the acclaimed international liquor magazine has rated 8 PM whisky
as the fastest growing whisky in the world in the regional category (2004-05). The other
millionaire brands are: Contessa Rum has won the prestigious Monde Selection award
for its overall quality for the past three executive years.

It has a large market share in the defense market... Old Admiral Brandy has also been
rated by Drinks International as the fastest growing Brandy in the world in the regional
category (2004-05 and 2005-06) also it has won the Monde Selection award for its
overall quality in 2004-05. Today, Radico Khaitan has brands that straddle almost every
market segment - whisky, rum, brandy, vodka & gin - and price category. Its fine value
have resonated blends, consistent quality, distinctive packaging and superior with
customers.
 RADICO KHAITAN LTD.

THE INTERNATIONAL LINK

In a significant move aimed at catapulting the Indian liquor industry to international

standards, Radico Khaitan set up its international division - Radico International - to
distribute and market some of the world's best-known liquor brands, including Wines
from Ernest & Julio Gallo (makers of the world's largest-selling wine, Carlo Rossi),
Famous Grouse Whisky (from Highland Distillers).

STRONG FINANCIALS

Radico Khaitan is not just a company of great brands; it is a company of great financials.
The equity shares of the company are quoted on the Mumbai and National Stock
Exchanges, and the company has more than 35,000 shareholders. It is the most profitable
company in the domestic liquor industry.
 RADICO KHAITAN LTD.

ORGANISATION STRUCTURE

MANAGING DIRECTOR

DIRECTOR

PRESIDENT
PRESIDENT PRESIDENT
PRODUCTIO PRESIDENT
ENGINEERIN FINANCE
N HR
G

GM GM GM GM

DGM DGM DGM DGM

 RADICO KHAITAN LTD.

Management

Dr. LALIT KHAITAN

CHAIRMAN & MANAGING DIRECTOR

(RADICO KHAITAN LTD.)

A veteran of the Indian liquor industry (over 45

years), Dr. Lalit Khaitan oversees the entire
business of Radico Khaitan. He has been
instrumental in improving quality standards and
seeking and achieving customer satisfaction,
leading to substantial growth in sales and
revenues, and increased market shares.

Dr. Khaitan has been widely recognized for his

contribution to the liquor industry. He has been
associated the-scenes player to a Rs. 995 crore
company, the most profitable in its sector, and a
sought-after partner by leading international
liquor brands seeking to enter the Indian market. His unique management style has
helped maintain Radico as an open, ethical and transparent organization with a number
of developmental projects, has represented India with several international delegations,
and is involved in social & educational activities across India. He is currently:
 Chairman, U.P. Committee of PHD Chamber of Commerce and Industry.

 Member, Managing Committee, ASSOCHAM.

 Member, Managing Committee, All India Distillers Association.

 Member, Managing Committee, U.P. Distillers Association.

 Trustee, Khaitan Public School, Noida.

 RADICO KHAITAN LTD.

Mr. ABHISHEK KHAITAN

MANAGING DIRECTOR (RADICO KHAITAN

LTD.)

Mr. Abhishek Khaitan is a Bachelor of

Engineering (Industrial Production) from
Bangalore, and has done a Managerial Finance &
Managerial accounting course at Harvard, USA.

He joined Radico Khaitan in 1997, and

supervised the establishment of the company's
Marketing Division in the same year. The first
brand to be launched by the division, 8 PM
Whisky, was a runaway success. In the first year
alone, it sold one million cases - a record for any
Indian or foreign brand operating in India. This also made it the first brand in the liquor
industry to make it to the Limca Book of Records.

Under Abhishek Khaitan's leadership, Radico Khaitan's brand portfolio is wide and deep,
with brands that straddle almost every market segment, taste preference and price
category.

To recognize Mr. Abhishek Khaitan's contribution to Indian Industry, Economic

Development & Research Association bestowed the Bhartiya Udyog Ratan Award on
him. The World Economic Progress Society has honored him with the National
Industrial Excellence Award.
 RADICO KHAITAN LTD.

DIVISION OF THE COMPANY

Mr. Dilip K. Bantiya (CFO)

Mr. Bantiya oversees the financial affairs of Radico Khaitan. He has been associated
with the company since 1991.

A Chartered Accountant by profession, Mr. Bantiya has a vast and rich career spanning
more than 40 years. He is a member of the All India Management Association.

Mr. K.P. Singh (Director - Operations)

Mr. Singh, whole time Director, oversees Radico Khaitan's operations, and heads its'
distillery unit at Rampur. He has been associated with the company for over a decade.

Mr. Singh is a qualified technocrat with over 30 years of experience in the liquor
industry.

Mr. Raju Vaziraney (President - Sales & Marketing)

Mr. Vaziraney oversees Radico Khaitan's Civil Marketing and Defence Marketing
Brands Divisions; he also handles the country liquor brands of the company.

Mr. Vaziraney has a Masters degree in Economics, and Diplomas in Sales & Marketing
in Corporate Law and Business Management. He has about 15 years of experience in
sales in the liquor industry.
Mr. K.S. Raju (Executive Vice President - Manufacturing & Operations)

Mr. Raju oversees the operations of all Radico Khaitan's strategic tie-up bottling units
and Radico's own bottling units. Mr. Raju has a Masters degree in Commerce from
Andhra University, and a Diploma in Management from All India Institute of
Management. He has over 21 years of experience in the liquor industry.

Mr. Sanjeev Bamba (Executive- Vice President- Exports & IBD)

Mr. Bamba oversees export of Radico's brands to various markets and also heads the
International brands divisions where Radico has marketing & distribution tie-up with
some of the liquor majors of the world.

Mr. Bamba is a qualified Chartered Accountant and today has a vast experience of 15
years in varied sectors.
 RADICO KHAITAN LTD.

BOARD OF DIRECTORS

DR. LALIT KHAITAN

CHAIRMAN & MANAGING DIRECTOR

(RADICO KHAITAN LTD.)

An eminent industrialist, Dr. Khaitan has been at the helm

of affairs of the Company for more than 25 years. He is on
the Managing Committee of a number of associations,
including the PHD Chamber of Commerce & Industry,
ASSOCHAM, All India Distillers Association, U.P.
Distillers Association and Confederation of Indian Industry.

During his illustrious career Dr. Khaitan has won several awards in recognition of his
services. These include " 'Indira Gandhi National Unity Award', instituted by All India
National Unity Conference, presented by the Ex-President of India, Giani Zail Singh"
'Vijay Ratna Award', instituted by the International Friendship Society of India,
presented by the then Prime Minister of India, Shri Chandra Sekhar "National Builder of
Eminence in the Nineties' award, instituted by the International Business Council.
MR. ABHISHEK KHAITAN

MANAGING DIRECTOR,(RADICO KHAITAN LTD.)

Mr. Khaitan has a Bachelors Degree in Engineering in

Industrial Production and qualifications in Managerial
Finance and Managerial Accounting an alumnus of Harvard
University, U.S.A. He is a young and talented industrialist,
and has been responsible for the exponential growth of the
Company.

MR. KARNA SINGH MEHTA

DIRECTOR,(RADICO KHAITAN LTD.)
MANAGING PARTNER, S.S. KOTHARI & CO. (A
LEADING FIRM OF CHARTERED ACCOUNTANTS)

Mr. Mehta is a leading Chartered Accountant, with vast and

rich experience in the field of Finance and Accounting. He
is on the Board of Directors of a number of leading Indian
companies. He is also a Member of the managing committees of several associations,
including PHD Chamber of Commerce & Industry.

MR. ASHUTOSH PATRA

DIRECTOR,(RADICO KHAITAN LTD.)
MANAGING PARTNER, O.P. KHAITAN & CO. (A LEADING
LAW FIRM)

Mr. Patra has over 25 years of experience in the legal field. He is

an eminent Supreme Court lawyer and a leading legal expert.
MR. K.P. SINGH
WHOLE TIME DIRECTOR DESIGNATED AS PRESIDENT
(OPERATIONS), RADICO KHAITAN LTD.

Mr. Singh, a qualified technocrat, has over 30 years of

experience in the liquor industry and has been associated with
Radico Khaitan Ltd. for over a decade. He oversees the
operations of the Company, and heads its Distillery Unit at
Rampur.

MR. SANJAY JALAN

DIRECTOR,(RADICO KHAITAN LTD.)

Mr. Jalan, a practicing Chartered Accountant, has over 15

years of experience in Finance and Accounting, and is a
Director in a number of companies.

MR. RAGHUPATI SINGHANIA

DIRECTOR,(RADICO KHAITAN LTD.) &
MANAGING DIRECTOR,(J.K INDUSTRIES LTD.)

Mr. Singhania, an eminent industrialist, is the Managing

Director of J.K. Industries Ltd. He is also a Director in many
other companies of the J.K Group, including J.K. Corp Ltd.,
Vikrant Tyres Ltd., and J.K. Drugs and Pharmaceuticals Ltd.
MR. AMIT BURMAN
DIRECTOR,(RADICO KHAITAN LTD.) &
EXECUTIVE DIRECTOR,(DABUR INDIA LTD.)

Mr. Burman is an eminent industrialist and Executive

Director, Dabur India Ltd. An alumnus of Leigh and
Columbia Universities, U.S.A., and the University of
Cambridge, England, he has a Masters degree in Industrial
Engineering and a Masters degree in Business
Administration. He is on the Board of Directors of a number of leading Indian
companies.
 RADICO KHAITAN LTD.

RADICO'S CORE VALUES

Radico's Core Values are aimed at developing a customer-focused, high-performance
organization, which creates value for all its stakeholders.

Focus on Customer

Radico Khaitan believes that customer focus is very important. They give importance to
deliver both value & quality to the customer.

EXCELLENCE

Radico will strive for excellence in whatever we do. Radico will take the right path to do
whatever we do and excel in the same.

RESPECT FOR PEOPLE

Radico will value differences in individual perspectives. Radico want individuals to

dream, create and experiment in pursuit of opportunities and achieve leadership through
teamwork.

INNOVATION

Radico will constantly innovate and strive to better our processes, products, services and
management practices.
 RADICO KHAITAN LTD.

Corporate Governance

Corporate Governance at Radico means the framework to encourage the efficient use of
resources and equally to require accountability for the stewardship of those resources.
The aim is to align as nearly as possible the interests of individuals, corporations and
society.

 Ernst & Young are the internal auditors and strategic advisors and help to
improve its operational efficiencies and control procedures.
 Board of Directors consisting of eminent independent professionals.
 Strict adherence to the accounting standards lay down by the Institute of
Chartered Accountants of India.
 Special attention being paid to the investors relations. Regular communication
to the investors about the business developments and important vents
impacting the operations.
 Strict compliance with the requirement of Stock Exchanges, Securities and
Exchange Board of India and other statutory authorities.
 Liberal disclosures in the balance sheet over and above those required by the
regulatory authorities.
 RADICO KHAITAN LTD.

Corporate Social Responsibility Programme “hunar”

In accordance with Radico's mission to work towards the up-liftment of local artisans
and to promote the U.P. handicraft, Zardozi and Chikan work it had launched 'Radico-
Chikankari Aur Zardozi Pratiyogita' in association with the Indian Academy of Art &
Culture, U.P.

The competition was organized to bring out the creativity of the artisans and to look for
young talent in the field of Chikankari & Zardozi. The event was promoted through
mobile vans, pamphlet distribution in the areas where the artisans live. There were two
levels of judging eminent personalities from Lucknow judged the first level and in the
second level Mrs. Jaya Prada, Mrs. Kiran Khaitan, Mrs. Sucheta Merh & Mr. Swapan
both designers from Kolkatta judged the first three winners.

The artisans were awarded with cash prizes.

The artisans have been empanelled by Radico Khaitan Ltd to form a group called
"HUNAR”. To get employment for the artisans is the cause towards which the group
Hunar is working.
 RADICO KHAITAN LTD.

ENVIRONMENT FRIENDLY

Radico Khaitan Ltd is an environment friendly company and follows all the norms for its
production facility at Rampur. It has also been awarded the ISO 9001 certification for the
Rampur distillery.

FUTURE STRATEGY AND GROWTH

Liquor Industry in India is growing around 12% annually for last 5 years with major
growth coming in the white spirits segment and in the category of semi premium space.

Company plans to capture significant volumes into the high liquor consuming markets
like Kerala, Tamil Nadu, Andhra Pradesh and also to increase its market share in the
other existing markets. Company aims to achieve sales volume of more than 20 million
cases per year in next 2 years.

Company also plans to launch new Brands in premium/semi premium space to capitalize
on the rapidly growing segment. Its Directors are fully confident that execution of these
initiatives will put the company in high growth mode.
RADICO KHAITAN LTD.
RADICO KHAITAN LTD.
 RADICO KHAITAN LTD.

RAMPUR DISTILLERY
Rampur Distillery is one of the largest distilleries in India and a leading manufacturer of
Extra Neutral Alcohol (used in manufacturing Indian Made foreign Liquor) it also
manufacturers Rectified Spirit (used in manufacturing of lower segments Country
Liquor) and manufacturing of Anhydrous Alcohol or Ethanol or Gasohol (used in Petrol
Mixing) and the recent addition of grain distillery . Today with a production capacity of
60 million liters p. a and with the recent addition of the grain distillery which has taken
the capacity up to 90 million lit p.a. it is one of the largest distilleries in the country The
Unit has a series of firsts to its credit:

It is the first Indian distillery to obtain ISO 9001:2000 certifications. It has achieved
capacity utilization of over 100% in the alcohol plant. It is the first environment-friendly
distillery in the country.
 RADICO KHAITAN LTD.

CAPACITY

Molasses Distillery 60 million liters per annum.

Grain Distillery 30 million liters per annum.

Malt Distillery 720 thousand liters per annum.

EFFLUENT TREATMENT PLANT

The effluent Treatment Facility in Rampur Distillery is unique in nature when compared
among and in the Industry. The Distillery complies with Zero Discharge concept set up
by CPCB. The treatment has varied by products, which not only improves operational
stability of the plants but also adds on to company's profitability. Primary Treatment of
the Effluent yields Bio Gas, which is used as fuel in Cogen Boiler to generate steam and
then Power through a backpressure Turbine. The backpressure steam is used again in the
Distillation Plant to produce Extra Neutral Alcohol and Rectified Spirit.

ENVIRONMENTALLY FRIENDLY
Meeting out 100% Pollution Control norms, the Treated Effluent is not discharged
outside and in turn is mixed and cured with organic mass like Press Mud of Sugar Mills
and suitable organic manures to manufacture Bio Manure or Bio Compost, a bio fertilizer
used successfully in growing the crop of sugar canes etc.
 RADICO KHAITAN LTD.

CO-GENERATION PLANT

The cogeneration plant of Rampur Distillery consist of 26 MT capacity India's first stand
alone Bio Gas fired steam boiler and 2 MW Turbine Generator in tandem to make
Radico Khaitan self reliant on its requirement for power for its normal operation.

BACKWARD INTEGRATION

The very first backward integration project has come in the form of setting up a fully
automatic 750 ml Kidney shape PET bottle manufacturing plant in low cost and tax
benefited area like Uttarakhand. The unit started with production rate of 85 lacs bottle
per year in October 2004 and is now geared up to produce 255 lacs PET bottles to cater
Radico's own captive consumption of approx. 150 lacs bottle per year and rest is being
sold to outside clients in similar businesses. The unit has not only eliminated the pressure
of PET bottle suppliers but has also provided a kind of diversified manufacturing base
for future business exploration.

OWN BOTTLING UNITS

Rampur Distillery has 14 state-of-the-art bottling lines, including those imported from
Italy, equipped with tunnel bottle washing, filling, sealing and labeling machines with a
capacity to produce 1500 cases (1 case = 12 bottles of 750 ml each) of liquor in a single
shift of operation. Line capacities vary from 750 cases to 3,000 cases in a shift. To keep
pace with the growing demand, Radico Khaitan has significantly increased its bottling
capacity by acquiring/setting up bottling plants in the states of Rampur Distillery,Rampur
(Uttar Pradesh), Whytehall (India) Ltd.,Rampur (Uttar Pradesh), Radico Khaitan Ltd.,
Reengus(Rajasthan), Radico Khaitan Ltd., (Uttarakhand)and Radico Khaitan Ltd.,
Hyderabad(Andhra Pradesh).
 STRATEGIC BOTTLING UNITS

Radico Khaitan Ltd is working continuously towards increasing its reach through the
strategic bottling units across the country. The focus underlines comprehensive quality
control and enhanced market penetration. Strategic Bottling Units through out India.

NORTH

N V Distilleries & Breweries Ltd., (Punjab)

Himalayan Gold Distilleries (Himachal Pradesh)

Oakland Bottlers (P) Ltd. (Jammu & Kashmir)

M/s Rajasthan Liquors Pvt Ltd Derabassi (Punjab)

M/s NID – Jammu

EAST

Goodhost Liquors (P) Ltd., Patna, (Bihar)

M/s Prashant Impex –Dankuni, Kolkata, (West Bengal)

Seven Sisters Trade & Distilleries (P) Ltd., Guwahati.(Assam)

Bacchus Bottling (P) Ltd., (Orissa)

United Brothers Distilleries (P) Ltd., (Arunachal Pradesh)

Gemini Distilleries (Jharkhand) (P) Ltd., Ranchi, (Jharkhand)

M/s Uno-Koti Bottling – Tripura

M/s North-East Bottling – Shillong Meghalaya (To be closed in 2008-09)

 SOUTH

Kamal Wineries, Hyderabad (Andhra Pradesh)

M/s Gauthami Agro – Eluru (Andhra Pradesh)

Ravikumar Distilleries (Pondicherry )

United Distillery, Calicut, (Kerala)

Sri Venkateswara Distilleries, Bangalore, (Karnataka)

BT & FC (P) Ltd., Bangalore, (Karnataka)

Midas Golden, Chennai, (Tamil Nadu)

M/s EMPEE DISTILLERIES – CHENNAI

M/S SAFIL – CHENNAI – (Being started in 2008-09).

DRDPL (DIAGEO-RADICO) – M/S CHAMUNDI BOTTLING –BANGALORE.

WEST

M/S BMSS – SHRIPUR (Maharashtra).

Welcome Distilleries, Bilaspur. (Chattisgarh)

Silver Start Distillery, (Daman)

Gwalior Distillers, Gwalior (Madhya Pradesh)

DRDPL (DIAGEO-RADICO) – M/S AABPL-BARWAHA, INDORE (Madhya

Pradesh)
 RADICO KHAITAN LTD.

CORPORATE SERVICES

HUMAN RESOURCES

Radico Khaitan believes that the growth of a company depends on the collective efforts
of its employees. The Human Resources Department seeks to create an environment that
fosters the emergence of empowered leaders. They hire people who have the fire to
grow, the potential to lead and the zeal to excel. All new hires undergo a 7-day induction
and familiarization program.
 RADICO KHAITAN LTD.

MARKETING

In the short span of time, Radico Khaitan has been able to make the transition from being
a manufacturer of Extra Neutral Alcohol to being a company with a portfolio of hugely
successful brands. Their understanding of market demands and ability to satisfy
consumer needs has been responsible for this. Consistently superior quality, a wide range
of products, innovative packaging, pricing to suit all pockets, a nation-wide distribution
network that covers 95% of retail points, clubs and bars in the country, effective
advertising, and popular events and promotions. All these elements go to making up
Radico Khaitan's winning marketing mix.

SALES

Radico Khaitan’s young and enthusiastic sales force services retail outlets across the
country, understanding requirements and fulfilling them, thereby developing enduring
relationships. The Sales team comprises professionals with vast domain expertise, years
of experience in the liquor industry and a deep understanding of varied markets.
 RADICO KHAITAN LTD.

ACCOUNTS- FINANCE
Radico Khaitan Ltd has been continuously showing growth over previous years and
registering healthy profits. This has been made possible through the steps taken by the
Finance department like bringing down the cost of borrowings substantially. The Efforts
of the finance department has made Radico one of the best prospects for timely
repayment of debts and providing the highest safety of funds for lenders. The department
also has excellent financial management with strong fundamentals in the short and
medium term.

PRODUCTION
The Production Department is responsible for operations in Radico Khaitan's bottling
units. It works towards the smooth production and delivery of all the Radico Khaitan
brands as per market needs.
 BRANDS
Radico made its foray into the International Market a few years back and today Radico's
brands are present in more than 30 countries. Radico has been consistently providing
excellent quality in terms of both product and packaging along with outstanding service.
Two of our brands 8 PM Whisky and Old Admiral brandy featured in Drinks
International Magazine as the fastest growing brands in the world in the regional
category. Three of its brands, Contessa XXX Rum, 8 PM Bermuda White Rum and Old
Admiral brandy have won Silver Medal in prestigious Monde Selection for overall
quality their brands have already attained the leadership position in many countries.

Radico Khaitan is now breaking into newer and sophisticated markets with liquor brands
developed to appeal to a wider palate.
WHISKY

The base for Indian whisky is ENA. The other ingredients used are matured Indian malt
sprit, Scotch whisky concentrate, added flavors, and caramel & dm water. All these
ingredients are not added at a time but different stages.

 Special appointment whisky

 8pm royal whisky

 Whitefield whisky

 8pm whisky

 Radico gold supreme whisky

 Radico gold whisky

 Contessa deluxe whisky

 Rampur no.1 whisky

BRANDY
Brandy is a Dutch word means (Brunt Wine). In India they make brandy by blending
with ENA, matured grape spirit, added flavoring.

 Contessa Brandy

 Old Admiral Brandy

 White Field Brandy

 8pm Excellency Brandy

RUM
Rum is distilled liquor made from sugarcane products, cane juice spirit along with base
ENA and flavoring.

Contessa rum

Lord-Nelson Rum

8pm Bermuda

Black Cat Rum

Rampur No.1

Big Hit Rum

Contessa White Rum

GIN
Gin is alcoholic liquor obtained by distilling grain mash or redistilling sprit with
botanicals such as juniper berries, angelica, lemon and orange peels, cassia bark,
coriander and cardamom.

Contessa Gin

Big Hit Gin

Magic Moment Gin

VODKA

Magic Moments Grain Vodka

Magic Moments Remix Vodka

Contessa Vodka
RAW MATERIAL

For the production of alcohol, materials containing sustaining amount of glucose Content
can be used as a raw material. But for commercial production, common raw materials
used are as follows:
Molasses

Cane Juice

Colours & Essences

Sugar Beet

Grain (Barley, Rice, Sorghum)

FUNCTIONS

Purchasing of packing materials, engineering goods, and logistics etc. function is done
here.

The packing materials include carton, monochrome, bottles, and caps label etc.

The procurement of packing materials is done on the basis of

Forecast from marketing department for the month.

Tentative planning based on last month.

Production schedule.

Packing material accounts for 80% of all other. Material and it is the main requirement
for distillery. Hence it is essential to have a proper stock of the material as per the
requirement.

Label is the most critical packing material as it involves different labels for the different
states as the rules and regulations are different in different states.
For finalization the vendor for packing material purchase committee where vendor is
introduced .There are number of suppliers for packing material and purchasing is done
by share of business.

For the engineering material indenter raise the indent and the quotations are called for the
same. Then comparative is done and after that finalizing the terms and conditions
purchase order is released.

Logistics of country liquor is taken care of here. The 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 govt. that distillers should have their own
depots and this depots will sell to retail vendors who will sell called as CL2A.
Transportation annual rate contract is done and the documents that are to be carried along
with the CL includes excise pass PD25, invoice and challan.
SOME BRAND OF COMPANY
 8 PM ROYALE WHISKY
8 PM Royale whisky, which extends the 8PM brand franchise to the prestige semi –
premium whisky segment , is made with international quality spirit and imported scotch
with matured malt spirits. The mellow taste comes from years of being matured in
wooden casks in meticulously guarded environs.

WHYTEHALL WHISKY
Whytehall whisky was rewarded with silver medal at the international wine and spirit
competition 2007 held at U.K. 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
graceful after note that lingers.

Ib
 CONTESSA RUM
Contessa rum was rewarded with bronze medal at the inter national wine & spirit
competition 2007 held at U.K. another leading brand contessa rum enjoys a25%
marketshare in the defence segment and has won the prestigious gold medal at the monde
collection in Brussels for its overall quality. It is in the regular segment.

OLD ADMIRAL BRANDY

The phenomenally successful old admiral brandy is our third million case Brand. 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.

Ib
 8 PM BERMUDA WHITE RUM
Golden sands, calypso beats, cheerful people, that is the spirit of the Caribbean, reflected.
In 8 PM Bermuda white rum first entry in the white spirit segment .its size available at
domestic is 750 ml, 375ml, 180ml.and at the international is same.

8PM WHISKY
8PM WHISKY, 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 A TIME
FOR FRIEND has ensured a distinctive identity for the brand since its launch in 1999,
backed by fine product quality, superior packaging it has been a run away success.
 SOME NEWS RELATED WITH RADICO

I
 Contents
WORKING CAPITAL

CONCEPT OF WORKING CAPITAL

FACTORS INFLUENCING WORKING CAPITAL

TYPES OF WORKING CAPITAL ON

THE BASIS OF CONCEPT

TYPES OF WORKING CAPITAL ON

THE BASIS OF REQUIREMENTS

NEED OF WORKING CAPITAL

OPERATING CYCLE OF WORKING CAPITAL

MANAGEMENT OF WORKING CAPITAL

ADVANTAGES

FINDINGS

BIBLIOGRAPHY
 RADICO KHAITAN LTD.

Meaning of working capital

Capital required for a business can be classified under two main categories viz.

1) fixed capital 2) working capital

Every business needs funds for its establishment and to carry out its day-to-day
operations. Long-term funds are required to create production facilities through purchase
of fixed assets such as plant and machinery, land Building, furniture etc. Investment in
these assets represents that part of firm's capital which is blocked on A permanent or
fixed basis and is called fixed capital. Funds are also needed for short-term purpose for
the purchase of raw materials, payment of wages and other day-to-day expenses etc.
these funds are known as Working capital.

"Working capital is the amount of funds necessary to cover the cost of operating
the enterprises."
 RADICO KHAITAN LTD.

CONCEPT OF WORKING CAPITAL

There are two concepts of working capital.

1) Gross working capital

2) Net 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, the gross working capital is the capital invested in total current assets of the
enterprise.

Current assets are those assets which are in the ordinary course of business can be
converted in to cash with in the short period of time normally one accounting year.
 RADICO KHAITAN LTD.

CONSTITUTENTS OF CURRENT ASSETS

1) Cash in hand and bank balances.

2) Bills Receivables.

3) Sundry debtors.

4) Short-term loans and advances.

5) Inventories of stocks, as:

Raw materials,

Work in process

Finished goods.

6) Temporary investment of surplus funds.

7) Accrued incomes.

In narrow sense, the term working capital refers to the net working capital. Net working
capital is the excess of Current assets over current liabilities, or say:

Net Working capital = Current Assets – Current liabilities

Net working capital may be POSITIVE OR NEGATIVE.

When 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.
 RADICO KHAITAN LTD.

CONSTITUENTS OF CURRENT LIABILITIES

1) Bills Payable.

2) Sundry creditors or account payable.

3) Short term loans, Advances and deposits.

4) Accrued or out Standing expenses.

5) Dividends Payable.

6) Bank over Draft.

7) Provision for Taxation. If it does not amount to appropriation of profits.

 RADICO KHAITAN LTD.

The gross concept is some times preferred to the net concept of working capital for
the following reason:

It enables the enterprise to provided correct amount of working capital at the right
time.

Every management is more interested in the total current assets with which it has to
operate than the sources from where it is made available.

The gross concept takes in to consideration the fact that every increase in the funds of
the enterprise would increase its working capital.

The gross concept of working capital is more useful in determining the rate of
return on investments in working capital.
 RADICO KHAITAN LTD.

The net working capital concept, however, is also important for the following
reason:

It is the qualitative concept which indicates the firm's ability to meet its operating
expenses and short term liabilities.

It indicates the margine of protection available to the short term creditors, i.e., the
excess of current assets over current liabilities.

It is an indicator of the financial soundness of the enterprise.

it suggests the need for financing a part of the working capital requirements out of
the permanent sources of funds.
 RADICO KHAITAN LTD.

Characteristics of current assets

They have a short life span. Cash balances are held only for a week, so accounts
receivables typically are held for a duration of 30-60 days and inventory may be held for
30-100 days.

They are rapidly transformed in to other assets form. Cash is utilized to purchase raw
material. Raw material is converted to work in progress which is converted to finished
goods. Finished good are sold for cash or credit, which creates accounts receivables are
finally realised in to cash.
 RADICO KHAITAN LTD.

Based on these characteristics of current assets, following implications arise:

Working capital involves making frequent decision.

The difference between profit and present value is insignificant.

Since the various components of working capital closely interact with each other,
Decision pertaining to one component must be taken after given consideration to the
effect on other components.
 RADICO KHAITAN LTD.

FACTORS INFLUENCING WORKING CAPITAL REQUIREMENTS

Nature of the business :-

This is one of the primary factors influencing the working capital requirements of a
firm .For 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 requirement. A manufacturing
firm, on the other hand, has a longer operating cycle and invests more in its current
assets. It thus has greater working capital requirement.

Seasonality of operations :-

Some firms’ products sell only during particular seasons. For instance, air conditioners
sell more during the summer than in the winter. Such firms have greater working capital
requirement during peak time.
.
 RADICO KHAITAN LTD.

Seasons and lower requirements during other seasons. Firms whose sales are not affected
by seasons have stable working capital requirement.

Market condition :-

The level of competition existing in market also influences working capital requirement.
When competition is high, the company should have enough inventories of finished
goods to meet a certain level of demand. Otherwise customers are highly likely to switch
over the competitor's products.

Supply condition :-

If supply of raw material and spares is timely and adequate, the firm can get by
comparatively low inventory level. If supply is scarce and unpredictable or available
during particular season, the firm will have to obtain raw material when it is available.
 RADICO KHAITAN LTD.

Types of working capital On the basis of the requirement

Permanent working capital:-

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. This
investment is a regular type permanent working capital also increases.
Tondon committee reffered to working capital the following characteristics –

Unlike fixed assets, it keeps on changing its from one assets to another
It can not be reduced substantially as long as the firm is going concern.
With the growth of the business, the size of this component of working capital also
increases. This 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.

Temporary working capital:-

The 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. seasonal and special working capital. Seasonal working capital is required
to meet the seasonal demand d of busy period or season occurring at stipulated intervals.
Required to meet extra ordinary needs for contingencies such as rising prices, fire strikes
unexpected competition or big advertisement campaign.
 RADICO KHAITAN LTD.

Need of working capital :-

Working capital is needed for the following purposes:-

1) For the purchase of raw materials, components and spares.

2) To pay wages and salaries.

3) To incur day to day expenses and overhead costs such as fuel, power and
office expenses. Etc.

4) To meet the selling costs as packing, advertising, etc.

5) To provide credit facilities to the customer.

 RADICO KHAITAN LTD.

Operating cycle of working capital

Every business undertaking requires funds for two purposes: investment in fixed assets
and investment in current assets. Funds required to invest in stock, debtors and current
assets keep on changing shape and volume.
For example, a company has some cash in the beginning. The cash may be paid to the
suppliers of raw materials, to meet labor costs and other overheads. 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. This cash will again be
used for financing raw material, work- in- progress, finished goods, debtors and finally
again cash. This time period is known as the working capital cycle of the firm.

ACCOUNT

RECEIVABLES
FINISHED
GOODS
CASH

WORK - IN
RAW
-
MATERIALS
PROCESS
 RADICO KHAITAN LTD.

Management of working capital

According to smith, working capital management is considered with the problem that
arises in attempting to manage the current liabilities and the inter – relationship that exist
between them.

The basic objective of working capital management is to manage the firm's current assets
and liabilities in such a way that a satisfactory level of working capital is maintained i.e.,
it is neither excessive not inadequate. In other words, it must have an optimum size.

Thus we can say that working capital management has these objective :

Maintenance of working capital and availability of funds at the time of needs.

As 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 composition of the current assets tools.
 RADICO KHAITAN LTD.

Components of management of working capital

Working capital management bears the following components-

1) Estimating the working capital requirement i.e. forecasting of working capital.

2) Finding out the optimum level of investment in various current, namely cash,
account receivable, and stocks. In other words, determining the size of working
capital.

3) Finding out the optimum mix of short – term funds in relation to long – term
capital.

4) Finding out all appropriate sources of working capital.

 RADICO KHAITAN LTD.

Inventory management:-

Inventory is the one of the most important component of working capital and its proper
management can not be under stressed. Fundamentally, inventory consists of raw
material, work in progress and finished goods. The proportion of inventories to fixed
assets is quite high ranging from 25% to 45% in the manufacturing sector.

Hence inventory management is crucial for all managers irrespective of functional

specialization. Since a number of industrial relations disputes in manufacturing industries
are linked to production bonus and incentives relating to inventories irrespective of the
market need for inventory, the manager must understand this point well. Every member
of the organization feels its impact and yet scant respect is paid to it. Hence managers
should take note of some of these important criteria for insuring proper management.

Maintaining a proper level of stock.

ABC analysis to control high value items.

Proper ordering policies.

Pricing of raw material work in progress and finished goods.

Control over wastage and obsolescence.

 RADICO KHAITAN LTD.

Account receivable:-

This is also a forms an important part of working capital and depends on the credit
policy adopted by the firm namely.

How much credit to be given?

For how long is it given.

Discounts for early payment.

Collection and recovery efforts.

 RADICO KHAITAN LTD.

CASH MANAGEMENT:-
This as mentioned is the most liquid of all assets and is required to

Meet day to day expenses.

As a huge against uncertainties.

Too much cash is not good nor is having too little a healthy practices. Good companies
usually have a practices to plant surplus cash in risk free securities or inter company
deposits. On 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 require additional interest to be paid and again planning
is important.

The 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.
 RADICO KHAITAN LTD.

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 : Adequate working capital helps in maintaining

solvency of the business by providing uninterrupted flow of production.

Goodwill : Sufficient working capital enables a business concern to make a prompt

payments and hence helps in creating and maintaining goodwill.

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

Cash discount : Adequate working capital also enables a concern to avail cash in
purchase and hence it reduces cost.

Regular supply of raw materials : Sufficient working capital ensures regular

supply of raw materials and continuous production.

Exploitation of favorable market conditions : Only concerns with adequate

working capital can exploit favorable market condition such as purchasing its
requirements in bulk when the prices are lower and by holding its inventories for
higher prices.
 RADICO KHAITAN LTD.

FINDINGS

The second largest liquor producer company in India.

In defence it is the largest supplier of Indian liquor.

Funding with in the company for regular expances has to be properly taken care off.
 RADICO KHAITAN LTD.

BIBLIOGRAPHY

BOOKS:

FINANCIAL MANAGEMENT - KHAN & JAIN

INTERNET:

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