SUMMER TRAINING PROJECT REPORT

ON

WORKING
AT

CAPITAL MANAGEMENT

RADICO KHAITAN LIMITED

Master of Business Administration

Programme OF: 2011-2013

KRISHNA INSTITUTE OF MANAGEMENT MORADABAD (U.P)

PROJECT GUIDE
Mr.Sanjeev Agarwal (Sen. Account Executive)

SUBMITTED BY:
ISHAQ

MBA 2ND YEAR

RO. NO. 1138170014

ACKNOWLEDGEMENT

In fine acknowledgement is due, and is here by made to Mr. SANJEEV AGARWAL (Sr. Account executive)-Accounts guided in the preparation of the report. 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. S.Pande (AGM) & Mr.Alok Agarwal for give me the approval to this project in the organization.

ISHAQ
(M.B.A)

PREFACE

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 Readers a fairly complete idea about the corporation.

The objective of this report is to gain knowledge about the Operation, organization, management, financial assistance , financial position and working results of the Corporation.

ISHAQ (M.B.A)

CERTIFICATE
This to certify that MR.ISHAQ, MBA (finance) student of m/s KRISHNA INSTITUTE OF MANAGEMENT AND TECHNOLOGY has undergone project training with us. He was assigned a project on WORKING CAPITAL MANAGEMENT and he has successfully completed the project. During the project period, we found him sincere and dedicated towards his work. We wish all the best for his future assignments.

MR. SANJEEV AGRAWAL (SR. ACCOUNT OFFICER)

contents
COMPANY PROFILE ORGANISATION STRUCTURE MANAGEMENT DIVISION BOARD OF DIRECTORS COMPANY VISION COMPANY MISSION RADICO'S CORE VALUE
RAMPUR DISTILLERY CORPORATE SERVICES BRANDS DETAILS

COMPANY PROFILE

RADICO KHAITAN LTD.

ABOUT THE 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 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 (200405). 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 blends, consistent quality, distinctive packaging and superior value have resonated 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 largestselling 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.

ORGANIZATION STRUCTURE

RADICO KHAITAN LTD.

ORGANISATION STRUCTURE

MD

DIRECTOR

PRESIDENT ENGINEERING

PRESIDENT PRODUCTION

PRESIDENT FINANCE

PRESIDENT HR

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. 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. In the process, he has succeeded in transforming Radico Khaitan from a small, behind-. 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

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
Industrial Excellence Award. Bhartiya Udyog Ratan Award

on

him. The World Economic Progress Society has honored him with the

National

DIVISION OF THE COMPANY

RADICO KHAITAN LTD.

DIVISION OF THE COMPANY

Mr. RK Mehrotra (President - Finance) Mr. Mehrotra oversees the financial affairs of Radico Khaitan. He has been associated with the company since 1991. A Chartered Accountant by profession, Mr. Mehrotra has a vast and rich career spanning more than 40 years. He is a member of the All India Management Association. Mr. KP Singh (President - 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. KS Raju (Executive Vice President - Manufacturing & Operations)

Mr. Raju oversees the operations of all of 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. Sanjay Lamba (Executive- Vice President- Exports & IBD) Mr. Lamba 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. Lamba is a qualified Chartered Accountant and today has a vast experience of 15 years in varied sectors.

Mr. KS Raju (Executive Vice President - Manufacturing & Operations) Mr. Raju oversees the operations of all of 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.

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 Ninetees' 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.

VISION OF THE COMPANY

MISSION OF THE COMPANY

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 UP 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.

RADICO KHAITAN LTD.

Balance Sheet

------------------- in Rs. Cr. ------------------Mar '04 Mar '05 Mar '06 Mar '07 12 moths

12 moths 12 moths 12 moths 12 moths Sources Of Funds Total Share Capital

19.29

19.29

19.29

19.29

76.97

Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities

19.29 0.00 0.00 44.33 10.05 73.67 68.08 32.42 100.50 174.17 Mar '03

19.29 0.00 0.00 58.11 9.74 87.14 102.63 32.98 135.61 222.75 Mar '04

19.29 0.00 0.00 79.31 9.67 108.27 143.67 71.03 214.70 322.97 Mar '05

19.29 0.00 0.00 114.04 9.61 142.94 232.87 109.11 341.98 484.92 Mar '06

19.29 0.00 57.68 146.32 9.54 232.83 276.87 333.37 610.24 843.07 Mar '07 12 moths

12 moths 12 moths 12 moths 12 moths Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

122.57 41.60 80.97 1.02 8.90 17.16 50.00 4.06 71.22 54.96 0.68 126.86 0.00 61.16 4.76 65.92 60.94 22.34 174.17 1.86 32.98

144.22 46.05 98.17 2.69 8.65 28.88 54.75 1.89 85.52 83.56 0.51 169.59 0.00 64.85 5.57 70.42 99.17 14.07 222.75 2.50 40.13

204.18 53.53 150.65 17.37 0.01 60.66 61.51 5.54 127.71 102.01 1.25 230.97 0.00 77.35 6.44 83.79 147.18 7.78 322.99 21.78 51.11

318.23 60.78 257.45 3.76 7.21 63.84 90.29 3.16 157.29 142.20 1.11 300.60 0.00 79.32 7.63 86.95 213.65 2.84 484.91 18.24 13.82

360.61 76.13 284.48 44.23 25.29 73.79 129.58 14.87 218.24 195.51 194.11 607.86 0.00 98.44 20.36 118.80 489.06 0.00 843.06 29.67 17.17

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 Uttranchal. 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 Rajasthan, Uttranchal and Andhra Pradesh. Rampur Distillery, Rampur (Uttar Pradesh) Whytehall (India) Ltd., Rampur (Uttar Pradesh) Radico Khaitan Ltd., (Uttaranchal) Radico Khaitan Ltd., Reengus (Rajasthan) 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. Bottling Units through out India. The focus underlines comprehensive quality control and enhanced market penetration. Strategic

NORTH

N V Distilleries & Breweries Ltd., (Punjab)

Gwalior Distillers, Gwalior (Madhya Pradesh)

Patiala Distillers & Manufacturers Ltd., Baddi (Himachal Pradesh)

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

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

IFP Agro Industries Ltd., Kolkatta, (West Bengal)

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

Bacchus Bottling (P) Ltd., (Orissa)

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

SOUTH

Kamal Wineries, Hyderabad (Andhra Pradesh)

Kapitan Distillery, Hyderabad (Andhra Pradesh)

Ravikumar Distilleries (Pondicherry)

United Distillery, Calicut, (Kerala)

south

Sri Venkateswara Distilleries, Bangalore, (Karnataka)

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

Midas Golden, Chennai, (Tamil Nadu)

Devicolam Distilleries, Kochi, (Kerala)

WEST

Tilaknagar Industries Ltd, Tilaknagar, (Maharashtra)

Gemini Distilleries (P) Ltd. (Goa)

Ajantha Distilleries Ltd, Nagpur. (Maharashtra)

West
Welcome Distilleries, Bilaspur. (Chattisgarh)

Silver star Distillery, (Daman)

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 Khaitans 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. 1. Special appointment whisky 2. 8pm oryale whisky 3. Whitefield whisky

4. 8pm whisky 5. Radico gold supreme whisky 6. Radico gold whisky 7. Contessa deluxe whisky 8. 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. 1. Contessa Brandy 2. Old Admiral Brandy 3. White Field Brandy 4. 8pm Excellency Brandy

RUM
Rum is distilled liquor made from sugarcane products, cane juice spirit along with base ENA and flavoring. 1. Contessa rum 2. Largest Rum 3. 8pm Bermuda 4. Black Cat Rum

5. Rampur No.1 6. Big Hit Rum 7. 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. 1. Contessa Gene 2. Big Hit Gene 3. Magic Moment Gene

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: 1. Molasses 2. Cane Juice 3. Sweet Potato 4. Sugar Beet

5. Grain (Barley, Rice)

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 1. Forecast from marketing department for the month. 2. Tentative planning based on last month. 3. 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 competiton 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 grace ful after note that lingers.

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% Market share 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.

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

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 bassis and is called fixed capital. Funds are also needed for short-term purpose for the purchase of raw materials ,paymentof wages and other day-to-day xpenses,etc. these funds are known as Working capital. "Working capital is the amount of funds necessary to cover the cost of operating the enterprises."

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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 in the ordinary course of business can be converted In to cash with in the short period of normally one accounting year .

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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: a) Raw materials, b) Work in process c) Finished goods. 6) Temporary investment of surplus funds. 7) Accrued incomes.

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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.

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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

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The gross concept is some times preferred to the net concept of working capital for the following reason : 1) It enables the enterprise to provided correct amount of working capital at the right time .

2) 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. 3) The gross concept takes in to consideration the fact that every increase in the funds of the enterprise would increase its working capital . 4) The gross concept of working capital is more useful in determining the rate of return on investments in working capital.

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The net working capital concept, however, is also important for the following reason: 1) It is the qualitative concept which indicates the firm 's ability to meet its operating expenses and short term liabilities .

2) It indicates the margine of protection available to the short term creditors, i.e., the excess of current assets over current liabilities. 3) It is an indicator of the financial soundness of the enterprise. 4) it suggests the need for financing a part of the working capital requirements out of the permanent sources of funds.

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Characteristics of current assets

They have a short life span. Cash balances are held only for a week or 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 utlised 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 cash.

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Based on these characteristics of current assets, following implications arise1) Working capital involves making frequent decision.

2) The difference between profit and present value is insignificant. 3) 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.

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FACTORS INFLUENCING WORKING CAPITAL REQUIREMENTS

Nature of the business :This is one of the primery 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
.

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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 we they comparatively low inventory level. If supply is scarce and un predictable or available during particular season , the firm will have to obtain raw material when it is available.

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Types 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 refered to working capital the following characteristics unlike fixed assets ,it keeps on changing its form from one assets to another It can not be reduced substantially as long as the firm is going concern.

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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 seasonaland special working capital . Seasonal working capital is required to meet the seasonal demand d of busy period or season occurring at stipulated intervals. While special working capital is

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Required to meet extra ordinary needs for contingencies such as rising prices, fire strikes unexpected competition or big advertisement campaign.

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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.

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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 overheds

. these three combined would generate work in progress which will be converted into finished goods on the completion of the production process on sale , these finished goods get converted in to debtors and when debtors pay , the firm will again have cash . 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.

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ACCOUNT RECEIVABLES FINISHED GOODS

CASH

RAW MATERIALS

WORK - IN PROCESS

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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 :

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Maintenance of working capital and availabity 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 omposition of the current assets tools.

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Components of management of working capital

Working capital management bears the following components Estimating the working capital requirement i.e forcasting of working capital. 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. Finding out the optimum mix of short term funds in relation to long term capital. Finding out all appropriate sources of working capital.

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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.

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 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.

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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

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CASH MANAGEMENT:This as mentioned is the most liquid of all assets and is required to 1) Meet day to day expenses 2) As a hudge against uncertainties. Too much cash is not good nor is having too little a healthy practices . Good companies usually have a practices to plant surpulus 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.

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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.
1) 2)

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.

3)

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4)

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 . 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.

5)

6)

7)

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GROSS WORKING CAPITAL AS AT 31ST MARCH, 2012

ACCURED INCOME INVENTORIES SUNDARY DEBTORS CASH AND BANK BALANCE LOANS AND ADVANCES TOTAL GWC 611.27 73.79 129.58 14.87 195.51 425.02

NET WORKING CAPITAL AS AT 31ST MARCH, 2012

CURRENT LIABILITIES 98.44

NET WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITIES

= 425.02 98.44 = 326.58 NOTE: all amount in Rs. Cr.

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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.

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BIBLIOGRAPHY BOOKS: FINANCIAL MANAGEMENT - KHAN & JAIN INTERNET: www.Goggle.com www.radico khaitan.com Www. yahoo.com