Final Project-Aakansha Rough

8/2/2019 Final Project-Aakansha Rough

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PROJECT REPORT

ON

TO STUDY THE WORKING CAPITAL MANAGEMENT OF DABURINDIA LTD.

SUBMITTED IN PARTIAL FULFILLMENT FOR THE

AWARD OF THE

DEGREE OF BACHELOR OF BUSINESS

ADMINISTRATION 2009-2012

UNDER THE GUIDANCE OF

MS. SUPRIYA MAHESHWARIFACULTY, MAIMS

SUBMITTED BY:

AAKANSHA PAHLAJANI

Roll no-02414701709BATCH No.2009-2012(BBA SEM 3rd)

Maharaja Agrasen Institute of Management Studies

Affiliated to Guru Gobind Singh Indraprastha University, DelhiPSP Area, Plot No. 1, Sector 22, Rohini Delhi 110086


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Table of CONTENTS

Student declaration..i

Certificate from Guide.ii

Acknowledgementiii

Executive Summary..iv

List of Tables.vi

List of Graphsvii

List of Charts.viii

CHAPTER -1 INTRODUCTION Page no.

1.1 Introduction to Working Capital

1.2 Company Profile

CHAPTER-2 METHODOLOGY

2.1. Purpose of the study..

2.2. Research Objectives of the study..

2.3. Research Methodology of the study.

2.3.1 Research Design.


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2.3.2 Data Collection

2.3.3 Limitation .

CHAPTER -3 Findings and Analysis.

3.1 IT Initiatives

3.2 Financing of Working Capital

3.4 Sources of Working Capital

3.5 SWOT Analysis

3.6 Competitors

3.7 Comparison of working capital

Of different companies

CHAPTER-4 Suggestions.

CHAPTER -5 Conclusions ..

CHAPTER-6 Limitation..

Bibliography


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STUDENT DECLARATION

This is to certify that I have completed the Project titled To Study The Working capital management of

Dabur India Ltd. under the guidance of Ms Supriya Maheshwari in partial fulfillment of the

requirement for the award of degree of Bachelor of Business Administration at Maharaja Agrasen

Institute of Management Studies, Delhi. This is an original piece of work & I have not submitted it

earlier elsewhere.

Date: Signature:

Place: Name: Aakansha Pahlajani

University Enrollment No: 02414701709


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CERTIFICATE FROM THE INSTITUTE GUIDE

This is to certify that the project titled To Study The Working Capital Management of Dabur India

Ltd is an academic work done by AAKANSHA PAHLAJANI submitted in the partial fulfillment of

the requirement for the award of the degree of Bachelor Of Business Administration from Maharaja

Agrasen Institute of Management Studies, Delhi, under my guidance & direction. To the best of my

knowledge and belief the data & information presented by her in the project has not been submitted

earlier.

Signature :

Name of the Faculty: Supriya Maheshwari

Designation : Faculty MAIMS


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ACKNOWLEDGEMENT

I take this opportunity to express my profound sense of gratitude and respect

to all those who helped me throughout the duration of this project. I express

my sincere gratitude towards Dr. N.K. KAKKAR the director of our institute,

for being a continuous source of inspiration and motivation. It gives me

Immense pleasure to knowledge my indebtness and sense of my gratitude to

Ms. Supriya Maheshwari project coordinator for the project undertaken.

I would immensely thank the other faculty members of the institute for providing

me immense support and guidance to complete the project.

Aakansha Pahlajani02414701709


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EXECUTIVE SUMMARY

Dabur India Limited has marked its presence with some very significant achievements and today

commands a market leadership status. Our story of success is based on dedication to nature, corporate

and process hygiene, dynamic leadership and commitment to our partners and stake holders.

Further the project discusses the meaning, objectives, significance of the research, the overall

methodology applied and the also enumerates the sources of data collection. It should be remembered

that the project is prepared using secondary sources of data and no primary sources have been used.

The project gives a brief history of Dabur India Limited, its founders and leaders. It also gives brief

information of the board of directors managing the company.

Dabur India limited has three major strategic units namely Family Products Division, Dabur Ayurvedic

Specialties and Health Care Products. It discusses the principles followed by the company.

The project also gives brief information regarding the products manufactured by Dabur India Limited-

Health Care Products, Personal Care Products, Foods, Ayurvedic Specialties and the International

Range of products.

Dabur India Limited spreads world wide and not only in India. In Dabur India Limited knowledge and

technology are key resources which have helped the Company achieve higher levels of excellence and

efficiency.

The project discusses about the Working Capital Management of Dabur India Limited. A good way to

judge a company's cash flow prospects is to look at its Working Capital Management (WCM). Cash is

the lifeline of a company. If this lifeline deteriorates, so does the company's ability to fund operations,

reinvest, and meet capital requirements and payments. Understanding a Companys cash flow health is

essential to make investment decisions.

The project at this stage began with the research of the financials of Dabur India Limited through the

official website of the company www.dabur.com. Basically the purpose for the research was to

understand as to what exactly is working capital, why do companies require working capital, what is the


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ideal ratio of working capital to be maintained by the Company, etc. After the research data was

collected which was to be analyzed and compared with the data of other companies (Hindustan Lever

Ltd., Cadbury India Ltd., Nestle India Ltd., Britannia Industries and Marico Ltd.) to see how well the

company is handling and managing its finances.

The collected data was sorted out as per the requirements of the project. The data till the year 2004-

2005 has been analyzed and the working capital and ratios for six major FMCG companies that are:

Dabur India Ltd., Hindustan Lever Ltd., Cadbury India Ltd., Nestle India Ltd., Britannia Industries and

Marico Ltd. have been compared.


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PURPOSE OF STUDY

The main emphasis is on Dabur India Ltd. With the overall turnover of Rs 1268.72 crores.

This study will include following objectives:

To study Dabur India Ltd. evolution and why it is so successful.

To study the production function and management of the company and compare the company

with other competitive companies.

To study the future plans financial reports and Daburs strength as business organization.

To study the working capital management of the company and then comparing the working

capital management with its competitors and finding the result.


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COMPANY DABUR INDIA

INTRODUCTION

Dabur India Limited has marked its presence with some very significant achievements and today

commands a market leadership status. Our story of success is based on dedication to nature, corporate

and process hygiene, dynamic leadership and commitment to our partners and stake holders. The results

of our policies and initiatives speak for themselves.

Leading consumer goods company in India with a turnover of Rs.1268.72 Crore(FY04-05)

Three major Strategic Business Units (SBU) Family Products Division (FPD), Health Care

Products (HCPD) and Dabur Ayurvedic Specialties (DASL).

Thirteen Ultra-Modern manufacturing units spread across four Countries.

Products marketed in over 50 Countries.

FPD, dealing with personal care, the largest SBU contributing to 45% sales of Dabur

Products related to hair care, Skin care, Oral care and Foods.

3 Leading brands- Vatika, Amla Hair Oil and Lal Dant Manjan with Rs.100 Crore turnover each.

Vatika Hair oils and Shampoo the high growth brand.

Strategic positioning of honey as food product, leading to market leadership (over 40%) in branded

honey market.

HCPD, dealing with daily health care, Second largest SBU with 28% share in sales

Products related to Health Supplements, Digestive, Baby Care and Natural Cures.

Leadership in Ayurvedic and Herbal products market with highly popular brands.

Dabur Chyawanprash the largest selling Ayurvedic and Herbal products market with highly popularbrands.

Leader in Herbal Digestives with 90% market share.

Hajmola tablets in command with 75% market share of digestive tablets category.

Dabur Lal Tail tops baby massage oil market with 35% of total share.

DASL, dealing with classical Ayurvedic medicines.


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Has more than 250 products sold through prescriptions, as well as over the counter

Major categories in traditional formulations include:

Asav Arishtas

Ras Rasayanas

Churans

Medicated Oils

Proprietary Ayurvedic medicines developed by Dabur include:

Nature Care Isabgol

Madhuvaani

Trifgol

Division also works for promotion of Ayurveda through organized community of traditional

practitioners and developing fresh batches of students.


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COMPANY PROFILE

COMPANY HISTORY

1884 Birth of Dabur

The birth of Dabur in a small Calcutta pharmacy, where Dr. S.K.Burman

launches his mission of making healthcare products.

1896 Setting up of a manufacturing plant

With growing popularity of Dabur products, Dr. Burman expands his operartions by setting up a

manufacturing plant for mass production of formulation.

Early 1900s Ayurvedic Medicines

Dabur enters the specialized area of nature-based Ayurvedic medicines, for which standardized

drugs are not available in the market.

1919 Establishment of Research Laboratories

The need to develop scientific processes & quality checks for mass production of traditional

Ayurvedic medicines leads to establishment of research laboratories.

1920 Expands further

Dabur expands further with new manufacturing units at Narendrapur & Daburgram. The

distribution of Dabur products spreads to other states like Bihar and the North-East.

1936 Dabur India (Dr.S.K.Burman) Pvt. Ltd.

Dabur becomes a fulfledged company- Dabur India (Dr.S.K.Burman) Private Limited.

1972 Shift to Delhi

Daburs operations shift to Delhi. A new manufacturing plant is set up in temporary premises in

Faridabad, on the outskirts of Delhi.


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1979 Sahibabad factory/Dabur research foundation

Commercial production starts in the new Sahibabad factory of Dabur, one of the largest and best

equipped production facilities for Ayurvedic medicines. Launch of ful-fledged research operations

in pioneering areas of healthcare with establishment of the Dabur Research Foundation.

1986 Public Limited Company

Dabur becomes a public ltd co. Dabur India Ltd comes into being after reverse merger with

Vidogum Ltd.

1992 Joint Venture with Agrolimen of Spain

Beginning a new chapter of strategic partnerships with international businesses, dabur enters into a

joint venture with Agrolimen of Spain. Tis new venture is to manufacture & market confectionery

items in India.

1993 Cancer treatment

Dabur enters into specialized healthcare area of cancer treatment with its oncology formulation

plant at Baddi in Himachal Pradesh.

1995 Joint Ventures

Dabur India Ltd. raises its first issue. Dabur enters into joint ventures with Osem of Israel for food

& Bongrain of France for cheese & other dairy products.

1996 Three separate divisions

For better operations and management, 3 separate divisions are created according to their product

mix- Health Care Products Division, Family Product Division and Dabur Ayurvedic Specialities ltd.

1997 Foods Division / Project STARS

Dabur enters full scale in the nascent processed foods market with the creation of food division.

Project STARS (Strive to Achieve Record Successes) is initiated to give a jump start to the

company and accelerate its growth performance.


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1998 Professionals to manage the Company

With the changing demands of business and to inculcate a spirit of corporate governance, the

Burman family inducts professionals to manage the company. For the first time in the history of

Dabur, a non-family professional CEO sits at the helm of the company.

2000 Turnover of Rs.1,000 crores

Dabur establishes its market leadership status with a turnover of Rs. 1000 Crores. From a small

beginning and upholding the values of its founder, Dabur now enters the august league of large

corporate business.

2003 Demerged its Pharmaceuticals Division

Dabur India approved the damager of its pharmaceuticals business from the FMCG business into a

separate company as a part of plans to provide greater focus of both the businesses. With this,

Dabur India now largely comprises of the FMCG business that include personal care products,

healthcare products & ayurvedic Specialities. While the pharmaceuticals business would include

Allopathic, Oncology formulations and Bulk drugs. Dabur Oncology Plc, a subsidiary of Dabur

India, would also be part of the pharmaceutical business.

2005 Dabur acquires Balsara

As part of its inorganic growth strategy, Dabur India acquires Balsaras Hygienic and Home

products business, a leading provider of oral care and household care products in the Indian market,

in a Rs. 143 crore all-cash deal.

2005 Dabur announces bonus after 12 years

Dabur India announced issue of 1:1 Bonus share to the shareholders of the company, i.e. one sharefor every one share held. The Board also proposed an increase in the authorized share capital of the

company from existing Rs. 50 crore to Rs. 125 crore.


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2006 Dabur crosses $2 Bin market Cap, adopts US GAAP

Dabur India crosses the $2-Billion mark in market capitalization. The company also adopted US

GAAP in line with its commitment to follow global best practices and adopt highest standards of

transparency and governance.

2007 Celebrating 10 years of real

Dabur foods unveiled the new packaging and design for Real at the completion of 10 years of the

brand. The new refined modern look depicts the natural goodness of juice from freshly plucked

fruits.

2007 Foray into organized retail

Dabur India announced its foray into the organized retail business through a wholly owned

subsidiary, H & B Stores Ltd. Dabur will invest Rs. 140 crores by 2010 to establish its presence in

the retail market in India with a chain of stores on the Health & Beauty format.

2007 Dabur foods merged with Dabur India

Dabur India decides to merge its wholly-owned subsidiaryDabur Foods with itself to extract

synergies and unlock operational efficiencies. The integration will also help Dabur sharpen focus on

the high growth business of foods and beverages and enter newer product categories in this space.

OVER HUNDRED YEARS OF CARING


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Dabur commenced operations in 1884 and is today a multi- locational, multi-product enterprise. The

company has major interests in health and beauty care.

Dabur is a leader in Ayurveda the traditional Indian health care system.

The company has 12 manufacturing plants in India, Nepal and Egypt. Dabur products are also

manufactured in Dubai.

Dabur has a transactional network of 19 offices servicing both rural and urban markets in India.

The company has sales and marketing offices in Dubai and London. Dabur products are available in

over 50 countries.


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FOUNDING THOUGHTS

What is that life worth which cannot bring comfort to

others

The doorstepDAKTAR

The story of Dabur began with a small, but visionary endeavor by Dr. S. K. Burman, a physician

tucked away in Bengal. His mission was to provide effective and affordable cure for ordinary people in

far-flung villages. With missionary zeal and fervor, Dr. Burman undertook the task of preparing natural

cures for the killer diseases of those days, like cholera, malaria and plague.

Soon the news of his medicines traveled, and he came to be known as the trusted 'Daktar' or Doctor

who came up with effective cures. And that is how his venture Dabur got its name - derived from the

Devanagri rendition of Daktar Burman. Dr. Burman set up Dabur in 1884 to produce and dispense

Ayurvedic medicines. Reaching out to a wide mass of people who had no access to proper treatment.

Dr. S. K. Burman's commitment and ceaseless efforts resulted in the company growing from a fledgling

medicine manufacturer in a small Calcutta house, to a household name that at once evokes trust and

reliability.

CEO

MR. SUNIL DUGGAL


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BOARD OF DIRECTORS

Dabur has an illustrious Board of Directors who are committed to take the company onto newer levels

of human endeavour in the service of mankind. The Board comprises of:

CHAIRMAN Dr. ANAND BURMAN

VICE-CHAIRMAN

Dr. AMIT BURMAN

CHIEF EXECUTIVE OFFICER

Mr. SUNIL DUGGAL

WHOLE TIME DIRECTORS

MR P.D. NARANG-

P.D. Narang is the Group Director, Corporate Affairs, Dabur India Limited. Born in 1954, Mr.

Narang specialized in finance and started his professional career in 1979 with his own practice.

He joined the Dabur family in 1983 as a management consultant with a mandate to streamline

the finance, accounts and audit functions of the company.

MR. SUNIL DUGGAL

Sunil Duggal took over as the Chief Executive Officer of Dabur India Limited in June 2002,

holding reins of the organization he joined in 1995.

MR. PRADIP BURMAN

Mr. Burman was born on 2 November 1942,.

Chairman of Governing body (Aug86 to june99) PHDCCI- Ruraldevelopment Foundation, Delhi-a non-Profit organization looking

after socio-economic activities of the rural areas. Founder chairman

of Sundesh a non-profit organization involved in the education of

rural women and in other socio-economic activities.


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NON-WHOLE TIME DIRECTORS

MR. MOHIT BURMAN

Mr. Burman was born on July 20, 1968 in Calcutta.

Mohit Burman, son of Mr. Vivek and Mrs Monica Burman, is the

driving force behind the Burman family's foray into several high-

growth and sunrise sectors of Financial Services like Life Insurance,

Pensions, Annuities and Asset Management, besides Agriculture and

Retailing.

INDEPENDENT DIRECTORS

HIS HIGHNESS MAHARAJA GAJ SINGH

Date of Birth- 13.01.1948

MR. P.N. VIJAY


MR R.C.BHARGAVA

DR. S NARAYAN


DABURS MAJOR STRATEGIC BUSINESS UNITS

Dabur has three major Strategic Business Units (SBUs) namely:

Family Products Division with a share of 45% in its total sales.

Dabur Ayurvedic Specialities having a share of 27% in its total sales.

Health Care Products with a share of 28% in the total sales.


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D a b u r s S B U s A n d T heir S ha r

F a m il

P rod uc

D ivis io

4 5 %

He a lth C

P r o d u c t

2 8 %

D ab ur

Ayurved

S pe c ia lit i

2 7 %

F a m ily P ro d

D iv is io n

H ea lth C a re

P rodu c ts

D ab ur Ayu rv

S p e c ial it ies


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DABURS CORE VALUES

VISION

Dedicated to the health and well being of every household.

PRINCIPLES

OWNERSHIP

This is our company. We accept personal responsibility, and accountability to meet business needs.

PASSION FOR WINNING

We all are the leaders in our area of responsibility, with a deep commitment to deliver the results. We

are determined to be the best at doing what matters the most.

PEOPLE DEVELOPMENT

People are our most important asset. We add value through result driven training, and we encourage and

award excellence.

CONSUMER FOCUS

We have superior understanding of consumer needs and develop products to fulfill them better.

TEAM WORK

We work together on the principle of mutual trust and transparency in a boundary less organization. We

are intellectually honest in advocating proposals, including recognizing risks.

INNOVATIONContinuous innovation in products & processes is the basis of our success.

INTEGRITY

We are committed to the achievement of business success with integrity. We are honest with the consumers, with

business partners and with each other.


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PRODUCTS

HEALTH SUPPLEMENTS:

Dabur Chyawanprash

Dabur Glucose D

DIGESTIVES:

Hajmola Mast Masala

Anardana

Hajmola

Hajmola Candy

Hajmola Candy Fun2

Pudin Hara(Liquid and Pearls)

Pudin Hara G

Dabur Hingoli


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BABY CARE:

Dabur Lal Tail

Dabur Baby Olive Oil

Dabur Janma Ghunti

NATURAL CURES:

Shilajit Gold

Nature Care

Sat Isabgol

Shilajit

Ring Ring

Itch Care

Back-Aid

Shankha Pushpi

Dabur Balm


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HAIR CARE OIL:

Amla Hair Oil

Amla Lite Hair Oil

Vatika Hair Oil

Anmol Sarson Amla

HAIR CARE SHAMPOO:

Vatika Henna Conditioning Shampoo

Vatika Anti Dandruff Shampoo

Anmol Natural Shine Shampoo

SKIN CARE:

Gulabari

Vatika Fairness Face Pack


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ORAL CARE:

Dabur Red Gel

Dabur Red Toothpaste

Dabur Lal Dant Manjan

Dabur Binaca Toothbrush


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REAL:

Real Fruit Juice

Real Activ

HOMMADE:

Cooking Pastes

Coconut Milk

Tomato puree

Dashmularishta

Ashokarishta

Lauhasava

Mahanarayan Tail

Juritap


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Madhuvani

Lavan Bhaskar Churna

HEALTH CARE:

Dabur Chyawanprash

Pudinhara

Hajmola Tablets

Dabur Honey

Shilajit


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SKIN CARE:

Natural Soaps

ORAL CARE:

Herbal Tooth Paste

HAIR CARE:

Vatika Shampoos and Conditioners

Dabur Amla Hair Oil

FOODS:

Real Juices

Homemade Food Products


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DR.BURMAN (RUSSIA)

Health Supplements

Ayurvedic Toothpastes

DABUR MANUFACTURING FACILITIES IN INDIA


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DABUR WORLD WIDE


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Dabur's mission of popularizing a natural lifestyle transcends national boundaries. Today there is

global awareness of alternative medicine, nature-based and holistic lifestyles and an interest in herbal

products. Dabur has been in the forefront of popularizing this alternative way of life, marketing itsproducts in more than 50 countries all over the world.

DABURproducts World Wide

Dabur has spread widely and deeply to be in close touch with overseas consumers.

Offices and representatives in Europe, America and Africa;

A special herbal health care and personal care range successfully selling in markets of the

Middle East, Far East and several European countries.

Inroads into European and American markets that have good potential due to resurgence of the

back-to-nature movement.

Export of Active Pharmaceutical Ingredients (APIs), manufactured under strict international

quality benchmarks, to Europe, Latin America, Africa, and other Asian countries.

Export of food and textile grade natural gums, extracted from traditional plant sources.

RE-ENGINEERING FOR VALUE CREATION

DABUR has re-organized two of its biggest SBUs- THE FAMILY PRODUCTS DIDVISION

(Personal Care Products) and the Health Care Division into single SBUs. This initiative will eliminate

overlaps and reduce costs by leveraging synergies of scale.

Re-engineering internal operations to leverage strengths and synergies, improve scale, reduce cost and

optimize efficiencies are key for improved value creation. To derive maximum values on these

parameters, Dabur has emerged its erstwhile Subs- The Family Product Division and Health Care

Products Division into one.


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The common arrangement will eliminate any overlaps in the distribution and retail network, provide

economies of scale and help the Company be more responsive to market needs. Focus will be on

product categories and resources will be pooled to strengthen individual categories with aggressive

sales and marketing initiatives.

This move will inject a new impulse in Dabur and also boost the Companys sales efforts.


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DEMERGING FOR VALUE CREATION

The demerger of Daburs FMCG and Pharmaceutical businesses is a value-enhancing move

representing a win-win situation for both these businesses. A clear line of sight and focused growth

strategies would provide exponential growth opportunities and greater value for shareholders.

This demerger of Daburs FMCG and Pharmaceutical business is a major restructuring move

undertaken by the Company to provide greater focus and independence to the two businesses.

The FMCG business, which will be the main business of Dabur India, will concentrate on

strengthening its core competencies in Personal Care, Health Care and Ayurveda.

The new Pharmaceutical Company- Dabur Pharma Ltd.- will focus on its expertise in Allopathy,

Oncology Formulations and Bulk drugs. The Company is already a leader in the Oncology segment in

India and will follow aggressive strategies to pursue its global ambitions.

Both these companies will have dedicated management teams, with the freedom and resources to

pursue their independent growth strategies.

Dabur believes that the sum of parts will far exceed the value of the single entity.


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INTRODUCTION TO WORKING CAPITAL

Working Capital is the Life-Blood And Controlling Nerve Center of a Business

The term Working Capital refers to the capital required for day-to-day operations of a business

enterprise. It is represented by excess of Current assets over Current Liabilities. It is necessary for

any organization to run successfully its affairs, to provide for adequate working capital. Too large

investment in Current Assets means blocking the capital that can be used productively elsewhere. On

the other hand too little investment can be expensive. For example, insufficient inventory may cause

loss of sales to Customers.

Current Liabilities:

Current Liabilities are debts payable within an accounting period. Current assets are converted intocash to pay current liabilities.

Current Liabilities include:

Bills Payable

Sundry creditors or Accounts Payable

Accrued or Outstanding expenses

Short term loans, Advances or deposits.

Dividends Payable

Bank Overdraft

Provision for taxation, if it does not amount to appropriation of profits.

It is a conventional rule to maintain the level of current assets twice the level of current liabilities. A

weak liquidity position poses a threat to the solvency of the company and makes it unsafe and

unsound. A negative working capital means a negative liquidity and at times it may prove to be

harmful for the companys reputation. Excessive liquidity is also bad. It may be due to

mismanagement of current assets. Therefore prompt and timely action should be taken by the

management to improve and correct the imbalances in the liquidity position of the firm.


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Gross Working Capital is a Going Concern/Financial Conceptwhere as the Net Working Capital

is anAccounting Conceptof working capital.

Working capital is therefore:-

WORKING CAPITAL =

Current Assets

||

stock+ debtors + cash

- Current liabilities

The importance of having working capital is best understood as 'costs expended before payment

received for goods/service provided to the customer'. Therefore, no capital means no production and no

customers, which means no capital...

There are basically two concepts of working capital-

Gross Working Capital:

It is the amount of capital invested in the total Current assets of the enterprise. Current assets are

those assets, which in ordinary course of business can be converted into cash within a short period

of normally one accounting year.

Net Working Capital:It refers to the difference between net current assets and liabilities. Current liabilities are those

claims of outsiders, which are expected to mature for payment within an accounting year. Net

working capital can be positive or negative. A positive net working capital will arise when current

assets increase current liabilities. A negative working capital will arise when current liabilities are

in excess of current assets.

Current Assets:

Current assets, sometimes called liquid assets, are those resources of a firm, which are either held in the

form of cash or are expected to be converted in cash within the accounting period in one-year duration.

The operating cycle is the time taken to convert the raw materials into finished goods and convert

receivables (goods sold on credit) into cash.

Current Assets include:

Cash in hand
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Bank balances

Bills Receivables

Sundry Debtors (less provision for bad debts)

Short term loans and advances

Inventories of stocks, as:

Raw material

Work in progress

Stores and spares

Finished Goods

Temporary Investments of surplus funds

Prepaid expenses

Accrued Incomes.

Current Liabilities:

Current Liabilities are debts payable within an accounting period. Current assets are converted into

cash to pay current liabilities.

Current Liabilities include:

Bills Payable

Sundry creditors or Accounts Payable

Accrued or Outstanding expenses

Short term loans, Advances or deposits.

Dividends Payable

Bank Overdraft

Provision for taxation, if it does not amount to appropriation of profits.


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It is a conventional rule to maintain the level of current assets twice the level of current liabilities. A

weak liquidity position poses a threat to the solvency of the company and makes it unsafe and

unsound. A negative working capital means a negative liquidity and at times it may prove to be

harmful for the companys reputation. Excessive liquidity is also bad. It may be due to

mismanagement of current assets. Therefore prompt and timely action should be taken by the

management to improve and correct the imbalances in the liquidity position of the firm.

Gross Working Capital is a Going Concern/Financial Conceptwhere as the Net Working Capital is an

Accounting Conceptof working capital.


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IMPORTANCE OF WORKING CAPITAL

Working capital constitutes part of the Crown's investment in a department. Associated with this is an

opportunity cost to the Crown. (Money invested in one area may "cost" opportunities for investment in

other areas.) If a department is operating with more working capital than is necessary, this over-

investment represents an unnecessary cost to the Crown.

OBJECTIVE:

The objective of working capital management is to maintain the optimum balance of each of the

working capital components. This includes making sure that funds are held as cash in bank deposits for

as long as and in the largest amounts possible, thereby maximizing the interest earned. However, such

cash may more appropriately be "invested" in other assets or in reducing other liabilities. Other

objectives of working capital management are as follows: -

To identify cash flow cycles of the firm.

To maintain the level of current assets twice the level of current liabilities.

To help the company to maintain good business relations.

To determine the future capital, liquidity position and other requirements of

the company.

Working capital management takes place at two levels:

Ratio analysis can be used to monitor overall trends in working capital and to identify

areas requiring closer management.

The individual components of working capital can be effectively managed by using

various techniques and strategies.

When considering these techniques and strategies, departments need to recognize that each department

has a unique mix of working capital components. The emphasis that needs to be placed on each

component varies according to department. For example, some departments have significant inventory

levels; others have little if any inventory.


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Furthermore, working capital management is not an end in itself. It is an integral part of the

department's overall management. The needs of efficient

Working capital management must be considered in relation to other aspects of the department's

financial and non-financial performance.

FACTORS DETERMINING THE WORKING

CAPITAL REQUIREMENTS

Nature or Characteristics of Business-The working capital requirements of an enterprise arebasically related to the conduct of the business. Every company according to their nature of

business has to maintain a certain level of working capital.

Production Policy-The production policies pursued by the management has a significant

effect on the requirements of working capital of the business. The production schedule has a

great influence on the level of inventories. The decision of the management regarding

automation, etc., will also have its effect on working capital requirements.

Seasonal Variations-Most firms experience seasonal and cyclical fluctuations in the demand

for their products and services. These business variations effect the working capital

requirement, specially the temporary working capital requirement of the firm. When there is

an upward swing in the economy, sales will increase; correspondingly, the firms

investment in inventories and book debts will also increase. Under boom, additional

investment in fixed assets may be made by some firms to increase their productive capacity.

This act of the firm will require further additions of working capital. When there is a

decline in the economy sales will fall and consequently, levels of inventories and book

debts will also fall.

Credit policy-A company which allows liberal credits to its customers, may have higher

sales but will need more working capital as compared to a company which has an efficient


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debt collection machinery and observing strict terms. The working capital requirements can

also be affected by the credit facilities enjoyed by the company.

Rate of growth of Business-As a company grows; it is logical to expect that a large amount

of working capital will be required. It is, of course, difficult to determine precisely therelationship between the growth in the volume of business of a company and the increase in

its working capital. The composition of working capital in a growing company also shifts

with economic circumstances and corporate practices.

Business cycle-Different phases of business cycle i.e., boom, recession, recovery etc. also

affect the working capital requirement. In case of boom condition business activities expand

.As a result, the need for cash, inventories etc. increases resulting in more and more funds

blocked in these current assets. In case of recession period, there is usually dullness in

business activities and there will be an opposite effect on the level of working capital

requirement. There will be a fall in inventories and cash requirements etc.

Manufacturing Process/ Length of product cycle-The manufacturing process comprises of

the purchase and use of raw materials and the production of finished goods. Longer the

manufacturing cycle, larger will be the firms working capital requirements


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RESEARCH METHODOLOGY

Meaning of Research

Redman and Mory define research as a systemized effort to gain new knowledge. Some people

consider research as a movement, a movement from the known to the unknown.

Research is an academic activity and as such the term should be used in a technical sense. According to

Clifford Woody, research comprises defining and redefining problems, formulating hypothesis or

suggested solutions; collecting, organizing and evaluating data; making deductions and reaching

conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating

hypothesis.

Objectives of Research

i) The purpose of research is to discover answers to questions through the application

of scientific procedures. The main aim of research is to find out the truth which is hidden and

which has not been discovered as yet. To safeguard the interest of consumer and organization

by securing the highest level of mutual understanding and goodwill among all those sections in

the industry which participate in the process of achieving organizational objective.ii) To avoid consumer conflict and develop harmonious relations, which are an

essential factor to growth of any company.

iii) To establish harmonious relationship between operative staff and management by

providing safeguard to their respective interests and developing understanding and goodwill

between them.

Dabur India Ltds objective is to always attain, maintain and exceed standards in Quality and

Customer Satisfaction. No compromise with quality is the major objective of Dabur Pharma Ltd..

Dabur Pharma Ltd. focus mainly on the following

To focus on quality

To promote team work

Employee commitment to quality is encouraged, valued and rewarded.

Employee training programs on quality measurement and improvements.

Providing services to the customer with exactly what they want at the right time.


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Maintaining the long term benefit.

Significance of Research

All process is born of inquiry. Doubt is often better than overconfidence, for it leads to inquiry and

inquiry leads to invention. Is a famous Hudson Maxim in context of which the significance of

research can well be understood. Increased amounts of research make progress possible.

Research inculcates scientific and inductive thinking and it promotes the development of logical

habits of thinking and organization.The role of research in several fields of applied economics,

whether related to business or to the economy as a whole, has greatly increased in modern times. The

increasing complex nature of business and government has focused attention on the use of research in

solving operational problems. Research, as an aid to economic policy, has gained added importance,

both for government and business.

Research Methodology

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically. In it we study the various steps

that are generally adopted by a researcher in studying his research problem along with the logic behind

them. It is necessary for the researcher to know not only the research methods or techniques but also the

methodology.There are two main categories of research methods.Secondary research uses research

that has already been done by someone else. For example, marketers often find information compiled

by the U.S. Census very useful. However, in some cases, information specific enough to satisfy a firms

needs is not publicly available. For example, a firm will have to run its own research to find out

whether consumers would prefer that more vanilla taste be added to its soft drink brand. Original

research that a firm does for it is known asprimary research.

There is no one perfect primary research method. Each has strengths and weaknesses, and thus

the appropriate method must be selected based on research needs.

Surveys are useful for getting a great deal of specific information. Surveys can contain open-

ended questions (e.g., "In which city and state were you born?") or closed-ended, where the

respondent is asked to select answers from a brief list (e.g., "__Male ___ Female.") Open ended

questions have the advantage that the respondent is not limited to the options listed, and that the


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respondent is not being influenced by seeing a list of responses. However, open-ended questions are

often skipped by respondents, and coding them can be quite a challenge. In general, for surveys to yield

meaningful responses, sample sizes of over 100 are usually required because precision is essential. For

example, if a market share of twenty percent would result in a loss while thirty percent would be

profitable, a confidence interval of 20-35% is too wide to be useful.

Surveys come in several different forms. Mail surveys are relatively inexpensive, but response

rates are typically quite lowtypically from 5-20%. Phone-surveys get somewhat higher response

rates, but not many questions can be asked because many answer options have to be repeated and few

people are willing to stay on the phone for more than five minutes. Mall intercepts are a convenient

way to reach consumers, but respondents may be reluctant to discuss anything sensitive face-to-face

with an interviewer.

Surveys, as any kind of research, are vulnerable to bias. The wording of a question can

influence the outcome a great deal. For example, more people answered no to the question "Should

speeches against democracy be allowed?" than answered yes to "Should speeches against democracy be

forbidden?" For face-to-face interviews, interviewer bias is a danger, too. Interviewer bias occurs when

the interviewer influences the way the respondent answers. For example, unconsciously an interviewer

that works for the firm manufacturing the product in question may smile a little when something good

is being said about the product and frown a little when something negative is being said. The

respondent may catch on and say something more positive than his or her real opinion. Finally, a

response bias may occurif only part of the sample responds to a survey, the respondents answers

may not be representative of the population.

Experiments are used when the researcher wants to rule out all but one explanation for a

particular observation. Suppose, for example, that we observe that sales of our brand increase when we

send out coupons. However, retailers may also give us better shelf space when the coupon is out; thus,

we cant tell if it was the coupon or the shelf-placement that caused sales to increasethe two variables

are confounded. In an experiment, we carefully control what varies. In this case, we invite in one

hundred people and ask them to shop in a simulated store. Half of the respondents are randomly

selected and get a coupon; the others do not. Since the only difference here was whether the subjects

got a coupon or not, we can be more confident that differences in brand choice were due to the coupon.

Experiments do, however, have a serious drawback in that the consumer is removed from his or her

natural surroundings. For example, if we pay some consumers to come into a lab and watch TV "as you


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normally would," these consumers, figuring that they are being paid, may give more attention to the

advertisements than they would at home.

Focus groups involve getting a group of 6-12 consumers together to discuss product usage.

Focus groups are especially useful if we do not have specific questions to ask yet, since we dont know

what consumers concerns might be. We start out talking broadly about the need that a product might

serve, and only gradually move toward the product itself. For example, a firm considering the

marketing of sugar free cookies might start out its group talking about snackswhy people consume

them and the benefits they expect. Gradually, we then move toward concerns people have about snacks.

Eventually, we address sugar content and concerns that consumers have about that. Only toward the end

of the session do we show consumers the actual product we are considering and ask for feedback. We

postpone our consideration of the actual product toward the end because we want to be sure that we

find out about the consumers needs and desires rather than what he or she thinks about the specific

product we have on the drawing board right now (that product can be changed, and it can be

repositioned). Drawbacks of focus groups include high costs and the fact that generalization toward the

entire population is difficult for such small sample sizes. The fact that focus groups involve social

interaction also means that participants may say what they think will make themselves look good rather

than what they really believe (the social desirability bias).

Personal interviews involve in-depth questioning of an individual about his or her interest in

or experiences with a product. The benefit here is that we can get really into depth (when the

respondent says something interesting, we can ask him or her to elaborate), but this method of research

is costly and can be extremely vulnerable to interviewer bias.

Projective techniques are used when a consumer may feel embarrassed to admit to certain

opinions, feelings, or preferences. For example, many older executives may not be comfortable

admitting to being intimidated by computers. It has been found that in such cases, people will tend to

respond more openly about "someone else." Thus, we may ask them to explain reasons why a friend

has not yet bought a computer, or to tell a story about a person in a picture who is or is not using a

product. The main problem with this method is that it is difficult to analyze responses.

Observation of consumers is often a powerful tool. Looking at how consumers select products

may yield insights into how they make decisions and what they look for. For example, some American

manufacturers were concerned about low sales of their products in Japan. Observing Japanese

consumers, it was found that many of these Japanese consumers scrutinized packages looking for a


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name of a major manufacturerthe product specific-brands that are common in the U.S. (e.g., Tide)

were not impressive to the Japanese, who wanted a name of a major firm like Mitsubishi or Proctor &

Gamble. Observation may help us determine how much time consumers spend comparing prices, or

whether nutritional labels are being consulted.

Physiological measures are occasionally used to examine consumer response. For example,

advertisers may want to measure a consumers level of arousal during various parts of an

advertisement.

Segmentation

Although the text makes references to segmentation, this issue is not discussed explicitly in

much detail. However, segmentation is important in consumer analysis because understanding the

consumer will allow us segment the market more meaningfully.

Segmentation basically involves dividing consumers into groups such that members of a

group (1) are as similar as possible to members of that same group but (2) differ as much as

possible from members other segments. This enables us then to "treat" each segment differently

e.g., by:

Providing different products (e.g., some consumers like cola taste, while others prefer lime)

Offering different prices (some consumers will take the cheapest product available, while others

will pay for desired features)

Distributing the products where they are likely to be bought by the targeted segment.

Useful segment structure includes:-

Each segment must have an identityi.e., it must contain members that can be described in

some way (e.g., price sensitive) that behave differently from another segment.

Each segment must engage in systematic psychologys (e.g., a price sensitive segment should

consistently prefer the low price item rather than randomly switching between high and low

priced brands).

Each segment must offer marketing mix efficiency potentiali.e., it must be profitable to

serve. For example, a large segment may be profitable even though the competition it attracts


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tends to keep prices down. A smaller segment may be profitable if, for example, it is price

insensitive or can be targeted efficiently. Some segments are not cost effective.

Data Source

The data can be collected from two sources, i.e. Primary and Secondary. I have collected entire data of

this project on ITC Ltd. from SECONDARY SOURCES like websites i.e. www.daburindia.com,

www.wikipedia.com, www.google.com, books like India today, outlook, business week, newspapers

and magazines.


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FINDINGS

IT INITIATIVES

In Dabur India Limited knowledge and technology are key resources which have helped the Company

achieve higher levels of excellence and efficiency. Towards this overall goal of technology-driven

performance, Dabur is utilizing Information Technology in a big way. This will help in integrating a

vast distribution system spread all over India and across the world. It will also cut down costs and

increase profitability.

Our major IT Initiatives

Migration from Baan and Mfg ERP Systems to centralized SAP ERP system from 1st April

2006 for all business units.

Implementation of a country wide new WAN Infrastructure for running centralized ERP

system.

Setting up of new Data Centre at KCO Head Office.

Extension of Reach System to distributors for capturing Secondary Sales Data.

Roll out of IT services to new plants and CFAs.

Future Challenges

Forward Integration of SAP with Distributors and Stockists.

Backward Integration of SAP with Suppliers.

Implementation of new POS system at Stockist point and integration with SAP-ERP.

Implementation of SAP HR and payroll.

SAP Roll-out to DNPL and other new businesses.

FINANCING OF WORKING CAPITAL


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There are two types of working capital requirements in a company-

i) Permanent or Fixed Working Capital Requirements

ii) Temporary or Variable Working Capital Requirements

Depending on the above mentioned requirements following are the sources of financing working

capital-

SOURCES

Long Term Sources Short Term Sources

Shares Commercial Banks

Debentures Commercial paper

Public Deposits Trade Creditors

Loans from Financial inst. Installment credit

Accounts payables

Accrued Expenses

SOURCES OF WORKING CAPITAL


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DABURIndia Limited as a successful Company in FMCG sector has the following sources available

for the fulfillment of its working capital requirements in order to carry on its operations smoothly.

BANKS:

THESE INCLUDE THE FOLLOWING BANKS:

Punjab National Bank

Standard Chartered Bank Ltd.

Hong Kong and Shanghai Banking Corp. Ltd.

State Bank Of India

HDFC Bank Ltd.

IDBI Bank Ltd.

Citibank

COMMERCIAL PAPERS:

Commercial Papers have become an important tool for financing working capital requirements of a

company.

Commercial Paper is an unsecured promissory note issued by the company to raise short- term funds.

The buyers of the Commercial Papers include banks, insurance companies, unit trusts and companies

with surplus funds to invest for a short period with minimum risk.

Dabur India Limited issues Commercial Papers and had commercial worth Rs. 1000 lacs in the year

2002-03.


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SWOT ANALYSIS

(Strengths, Opportunities, Weaknesses, and Threats)

In any organization, strength and weaknesses indicate the capability and preparedness of the

organization to respond to the business opportunities likely to be available in the environment and the

extent to which it is able to use its strengths to neutralize the threats, SWOT analysis is done for thepurpose of generating a corporate plan. It is a macro level process which has to be interpreted at

different micro level like technical, financial, human resource etc.

Strengths:-

1. Dabur India is the one of the famous consumer goods company in India

2. Dabur has completed almost 160 years.

3. One of the fastest growing company in ayurvedic and other personal care products

4. Maintaining good Customer Relationship globally.

5. Dabur India Ltd. is selling the many imported ayurvedic and life saving drugs which increases

the image of the company.

6. Strong foundation laid by top management.

7. Well developed R&D team

8. Organization improves the quality of product and service continuously.

9. Proper motivation programme for employees

10. Proper strategic decision.

11. Salary structure is good enough as compare to other pharmaceutical companies.

Weaknesses:-

1. Company does not give enough focus on existing product.2. No grievance handling programme for employees.

3. No strong pressure on Employees.

4. Inventory management is poor.

Opportunities:-

1. Dabur India ltd. is introducing more ayurvedic and other personal products so in this segment

growth is very high.

2. R & D is bringing lots of new molecules which can grave market share.

3. 49 patent applications after getting approved will make Dabur patent holder.

4. Can remove the paper work and can start online paper work.

Threats:-

1. Employee turnover.

2. New Technology.

3. Government Policies.

4. Quality of products.

5. Natural calamities


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COMPETITORS

MARICO LTD.

Marico groups history can be traced back to 1862 when Kanji Morarji, started a small trading business

in Mumbai. The family set up the Bombay Oil Industries Ltd (BOIL) in 1948 with manufacturing

facilities in Mumbai for coconut oil extraction plant, vegetable oil refinery and a chemical plant. Marico

was incorporated in 1988 to take over the then 40-year old consumer products business of BOIL. The

division was engaged in marketing of coconut oil, edible oil, instant starch, fruit jams etc Earlier the

brands of Saffola and Parachute were owned by Bombay Oil Industries Limited and Marico was given

access to use these brands for perpetuity. In FY00, the brands were transferred to the company for a

consideration of Rs300mn.Marico has 5 factories, located at Sewree in Mumbai, Jalgaon in

Maharashtra, Palakkad in Kerala, Saswad in Pune and Ponda in Goa.

Marico is the market leader in the hair oil segment, with its Parachute and Hair & Care brands. It is also

one of the leading players in the branded edible oil segment with strong brands like Saffola and

Sweekar. Besides hair and edible oil, the company has a presence in niche segments like Instant Starch

(Revive), Anti lice shampoo (Mediker) and food products like jams and sauces (Sil). Marico also has a

fee based marketing arrangement with Procter & Gamble (P&G) for marketing a few P&G brands

through its own network. Parachute, Saffola and Sweeker are the key earnings drivers, contributing to

almost 80% of Maricos turnover.

Fast moving consumer goods (FMCG) business is built on the two pillars of brand equity and

distribution network. Brand equities are built over a period of time by consistent high quality and

aggressive advertisement and marketing. Availability near the consumer through a wide distribution

channel is another crucial success factor, as products are small value, frequently purchased, daily use

items. Competition is intense, and players have to remain cost effective and provide value for money to

consumers to retain market shares. The company is, at present, highly dependent on its three main

brands -- Parachute, Saffola and Sweekar. The growth in this category will be difficult to sustain in the
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longer run due to increasing competition. Recently, Hindustan Lever acquired Cococare (it already has

Nihar under its fold), which will see an intensification of competition in the coconut oil category.

Marico has maintained Parachute market share despite severe competition. New edible oil products are

launched with 'Good for Health' positioning under the Saffola brand and catering to regional taste

requirements through the Sweekar franchise. In the hair oil segment, the company has successfully

launched value added Parachute variants. A new brand Shanti Amla, in the amla hair oil category

dominated by Dabur, has been launched during FY02 and has been extremely successful.

HINDUSTAN LEVER LTD.

Three Unilever companies were merged in 1956 to form HLL. These companies were Hindustan

Vanaspati Manufacturing Company -edible oil (established in 1931), Lever Brothers India Limited-

soaps (1933) and United Traders-personal products (1935). Ponds joined the Unilver fold through a

global acquisition in 1986. In the last decade, HLL has expanded its operations by the merger and

takeover route. It acquired TOMCO a Tata group company (1993), merged Unilever group companies

Brooke Bond Limited (1996) and Ponds' India (1998), and has acquired cosmetic business of another

Tata group company Lakme (1998).

Hindustan Lever Limited is the largest FMCG Company in the country, with a turnover of Rs118bn.

The companys business sprawls from personal and household care products to foods, beverages and

specialty chemicals. The company has a dominating market share in most categories that it operates in

such as toilet soaps, detergents, skincare, hair care, color cosmetics, etc. It is also the leading player infood products.

HLL is the market leader in the detergent and toilet soap industry with market share of 60% and 40%

respectively. HLLs turnover has now grown to Rs118bn, with soaps and personal products

contributing 57% to turnover and beverages and food products contributing to 29% of turnover.
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In 2001, soaps business (Rs21bn) grew by 1% and detergent sales (Rs20bn) grew by 7%. Other

personal products (household care, oral acre, skin care, hair care, color cosmetics) registered a 14%

growth to Rs24.6bn. Expansion of the foods business, which has been identified as a major growth area,

has not been as fast as anticipated. Beverage sales move largely with commodity price trends, which

have remained on a downtrend.

Britannia Industries Ltd.

Britannia was incorporated in 1918 as Britannia Biscuits Co Ltd in Calcutta. In 1924, Pea Frean UK

acquired a controlling stake, which later passed on to the Associated Biscuits International (ABI) a UK

based company. During the 50s and 60s, Britannia expanded operations to Mumbai, Delhi and

Chennai. In 1987, Nabisco, a well known European food company, acquired ABI. In 1989, J M Pillai,

a Singapore based NRI businessman along with the Groupe Danone acquired Asian operations of

Nabisco, thus acquiring controlling stake in Britannia. In 1977, the Government reserved the industry

for small scale sector, which constrained Britannia's growth.

Britannia's controlling stake is jointly with Groupe Danone and Nusli Wadia. Groupe Danone is one of

the leading players in the world in bakery products business. It acquired interest in Britannia Industries

in 1989 and acquired controlling stake in 1993.Nusli Wadia group is one of the leading industrial

houses in the country, with interests mainly in textiles and petrochemicals.

Britannia's plants are located in the 4 major metro cities - Kolkatta, Mumbai, Delhi and Chennai. A

large part of products are also outsourced from third party producers. Dairy products are out sourced

from three producers - Dynamix Dairy based in Baramati, Maharashtra, Modern Dairy at Karnal in

Haryana) and Thacker Dairy Products at Howrah in West Bengal.Britannia is the market leader in the

organized biscuit and bakery product market in India. Biscuits contribute to more than 80% of

Britannia's total turnover. Other products include bread and cakes. Britannia diversified into dairy

products in 1997 with processed cheese.


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The entry of new MNCs has not posed a direct threat to Britannia, as these MNCs have positioned

their brands in the premium/health segment. Britannia has maintained market leadership with a 40%

volume share and 48% value market share in the organized sector. FMCG major HLL is expected to

venture into the segment. Britannia has been aggressive in new launches and marketing during the last 2

years anticipating the competition. It has also recently acquired Kwality Biscuits, gaining a strong

foothold in the southern market.

Nestle India Ltd.

Nestle was promoted by Nestle Alimentana, Switzerland, a wholly owned subsidiary of Nestle

Holdings Ltd., Nassau, Bahama Islands. Nestle is one of the oldest food MNC operating in India, with a

presence of over a century. For a long time, Nestle Indias operations were restricted to importing and

trading of condensed milk and infant food. Over the years, the Company expanded its product range

with new products in instant coffee, noodles, sauces, pickles, culinary aids, chocolates and

confectionery, dairy products and mineral water.

Nestle was incorporated as a limited company in 1959. Nestle S A Switzerland, is one of the leading

companies in the global foods industry. The principal activities of the group encompass beverages (with

Nescafe as the flagship brand), milk products, processed foods, cooking aids, bakery products,

chocolates, confectioneries, pharmaceutical products (ophthalmic, surgical instruments etc).

Nestle has a presence in 83 countries worldwide. It has a total number of 509 factories out of which 220

are located in Europe, 153 in America and 136 in Africa, Asia and Oceania. Nestle started its

manufacturing operations with Milkmaid in 1962 at Moga factory. Manufacturing of Nescafe started in

1964 at the same factory. The company set up another factory at Cherambadi in Tamil Nadu, for

manufacture of infant foods, coffee etc. The company set up its Nanjangad (Karnataka) factory in 1989

and the Samlakha (Haryana) factory in 1992. The Ponda (Goa) factory started operations in 1995.

The Company set up its sixth manufacturing unit in 1997 at Bicholim in Goa.
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Nestl India manufactures products of truly International quality under brand names such as

MILKMAID, EVERYDAY, CERELAC, LACTOGEN, MAGGI, NESCAFE, NESCAFE SUNRISE,

NESTEA, MILO, KITKAT, MILKY BAR, MUNCH, POLO, NESTLE MILK, NESTLE DAHI,

NESTLE FRUIT N MILK and NESTLE FRUIT N DAHI.Nestle registered robust profit growth of

46% to Rs1.73bn in 2001. Profit would have been higher but for the additional costs associated with the

new businesses of water, liquid milk and chilled dairy products. Sales rose by 14.5% to Rs19.21bn.

Domestic sales grew by 14.1% to Rs16.11bn. Exports, contributing 16% to turnover, increased by

16.7% to Rs3.1bn. 74% of the exports continue to be to its key market Russia. The company

has also reported a strong 55% growth in net profit in 2001.Sales have registered a 17.4% growth

mainly driven by higher domestic sales in the chocolate and culinary product segments.

Cadbury India Ltd.

Cadbury was originally incorporated as a wholly owned subsidiary of Cadbury Schweppes Overseas

Ltd (CSOL) in 1948. The companys original name was Cadbury Fry (India) Ltd.In 1982; the name was

changed to Hindustan Cocoa Products. The current name was restored in Dec 89. In 1986, Cadbury

forayed into biscuits with Cadbury Butter, Glucose and Bournvita brands. The business however, could

not take off and was discontinued 3-4 years later. In 1989, Cadbury diversified into ice creams with

Dollops and Lopstop brands, which were sold off to Brooke Bond in 1994.

Cadburys manufacturing operations started in Mumbai in 1946, which was subsequently transferred to

Thane. The company, way back in 1964, pioneered cocoa farming in India to reduce dependence on

imported cocoa beans. In 1977, the company also took steps to promote higher production of milk . In

1995, Cadbury expanded Malanpur plant in a major way. The Malanpur plant has modernized facilities

for Gems, Eclairs, and Perk etc.
http://rds.yahoo.com/S=96062857/K=logo+of+cadbury/v=2/SID=w/TID=I045_80/l=II/R=7/SS=i/OID=0db75a77799f48d2/SIG=1j9bsc18e/EXP=1121401593/*-http%3A/images.search.yahoo.com/search/images/view?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dlogo%2Bof%2Bcadbury%26ei%3DUTF-8%26fr%3Dsfp%26fl%3D0%26x%3Dwrt&h=75&w=120&imgcurl=www.poshpic.com%2Fdavidwardfilms%2Fimages%2Ffilm_of_the_film%2Fcadbury_logo.jpg&imgurl=www.poshpic.com%2Fdavidwardfilms%2Fimages%2Ffilm_of_the_film%2Fcadbury_logo.jpg&size=2.9kB&name=cadbury_logo.jpg&rcurl=http%3A%2F%2Fwww.poshpic.com%2Fdavidwardfilms%2Ffilm_of_the_film.html&rurl=http%3A%2F%2Fwww.poshpic.com%2Fdavidwardfilms%2Ffilm_of_the_film.html&p=logo+of+cadbury&type=jpeg&no=7&tt=113&ei=UTF-8


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Cadbury has been losing market share, but continues to dominate the chocolate market with about 65%

market share. Nestle has emerged as a significant competitor with about 24% market share Cadbury

reported sales of Rs6.26bn in 2001.

The Cadbury management has been unable to achieve the volume growth targets set during the last two

years. The company remains dependent on a single category Chocolates to drive growth.

COMPARISON OF WORKING CAPITALS OF DIFFERENT COMPANIES

(Amt In Rs. Millions)

Company Name F/Y Current

Assets

Current

Liabilities

Net Working

Capital

Dabur India Ltd. 2005-06 251.971 322.222 -70.25

Britannia Industries Ltd. 2005-06 2399.61 2356.68 42.93

Hindustan Lever Ltd. 2005-06 38788.80 39802.49 -1013.69

Marico Industries Ltd. 2005-06 1917.21 1066.10 851.11

Cadbury India Ltd. 2005-06 2175.90 1352.40 823.50

Nestle India Ltd. 2005-06 5512.44 8100.8 -2588.36


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WORKING CAPITAL GRAPHS

The above chart displays the working capital scenario at Dabur

IndiaLtd. Dabur has been constantly reducing its working capital and in the year

2003-2004 a steep decline has taken place in the companys working capital,

reducing it to a negative of Rs.-243.99 millions. This has proved the managerial

efficiency at Dabur in its Finances.

The company has reduced its payment period from 39 days to a negative of 5 days,

which shows that the company has enough of funds available on credit from its

suppliers, and is collecting money from its debtors at a faster pace to avoid much of

the bad debts.

- 2 4 3 . 9

1 8 6 7 . 3

2 3 8 4 . 9 2 3 0 0 . 7

2 9 7 5 . 9

- 1 0 0 0

0

1 0 0 0

2 0 0 0

3 0 0 0

2 0 0 8 2 0 0 7 2 0 0 6 2 0 0 5 2 0 0 4

W o r k in g C a p ita l O f D a b u r I


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The above graph displays the working capital for various years of Cadbury

IndiaLtd.

The working capital of this company has been constantly increasing except for the

year 2002-2003 where it has declined. This shows that Cadbury India Ltd. has

lots of cash blocked in the form of current assets. Hence because of it the working

capital of the company is positive and high.

The company needs to strengthen its cash policies and reduce its money being

blocked in the current assets. Also by decreasing the payment period the company

can improve upon the working capital.

823.5

1307.7

1079.83941.34

638.47

0

500

1000

1500

2007 2006 2005 2004 2003

Working Capital Of Cadbury India Ltd.


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The above graph displays the working capital scenario ofHindustanLeverLimited

the largest FMCG Company in the world. The company has been having an enormous

cash reserves for planning out its future investments. The working capital has been

almost nil and negative since the past few years, showing that the company has an

excellent and well planned finances.

A company with a negative working capital has a faster collection period and a

slower payment period.

Through this managerial efficiency the company is able to generate good profits and

pay off good dividends to its shareholders, thereby keeping them happy.

-1,013.69

300.96

1,714.39

-3,733.77

1,872.48

-4,000.00

-3,000.00

-2,000.00

-1,000.00

0.00

1,000.002,000.00

2007 2006 2005 2004 2003

Working Capital Of Hindustan Lev

Ltd.


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BritanniaIndustriesLtd. working capital was on an increasing step since 2000

till 2003, when finally the company realized it had to do something to control its

blockage of free cash in the current assets. Thereby through its managerial skills

and efficient functioning the company reduced its working capital from Rs 746.65

crores in 2002-2003 to Rs 42.93 crores in financial year 2003-2004, a decline of

almost 94%.

42.93

746.65

592.21

256.96

51.57

0

200

400

600

800

2008 2007 2006 2005 2004

Working Capital Britannia Indust

Ltd.


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The above graph displays the working capital of NestleIndiaLtd., which has

been negative sine the year 2000-2001.

In the financial year 2003-2004 the working capital of the company was Rs

1388.53 millions and in the year it 2003-2004 it further declined to Rs 2588.56

millions, i.e. its working capital almost doubled from 2003 to year 2004.

A brilliant and efficient; working and managerial scenario is depicted through the

working capital of the company.

851.11 827.67

594.86466.88 494.22

0

200

400

600

800

1000

2008 2007 2006 2005 2004

Working Capital Of Marico Industries

Ltd.

Working Capital Of Nestle India Ltd.

-2588.36

-1388.53

-743.81

-317.74

-745.12

-3000

-2500

-2000

-1500

-1000

-500

0

2004 2003 2002 2001 2000


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The graph shown depicts the working capital from year 2000-2004 for Marico

IndustriesLtd. another renowned FMCG Company.

The working capital of the company has been increasing continuously, showing that

the company is blocking its cash available in the current assets or is incurring large

bad debts. The management of the company needs to look into the matter andimprove upon the working capital.


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Analysis

Dabur India Ltd- the company has enough of funds available on credit from its

suppliers, and is collecting money from its debtors at a faster pace to avoid much of the bad

debts. All the data show that how the company manages its funds to secure top position in the

world. This is what Dabur India has done. By bringing down its working capital to a negative

figure and through an efficient management it has become the FOURTH LARGEST FMCG

Company.

Cadbury India Ltd- This shows that Cadbury India Ltd. has lots of cash

blocked in the form of current assets. Hence because of it the working capital of the company

is positive and high.

Hindustan Lever Ltd -The working capital has been almost nil and negative

since the past few years, showing that the company has an excellent and well planned

finances. A company with a negative working capital has a faster collection period and a

slower payment period. Through this managerial efficiency the company is able to generate

good profits and pay off good dividends to its shareholders, thereby keeping them happy.

Nestle India Ltd- A brilliant and efficient; working and managerial scenario is

depicted through the working capital of the company.

Marico Industries Ltd - The working capital of the company has been

increasing continuously, showing that the company is blocking its cash available in the

current assets or is incurring large bad debts. The management of the company needs to look

into the matter and improve upon the working capital.


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SUGGESTIONS

The suggestion that the company should follow is as follows:

The company should put more emphasis on high society by providing them with high endproducts rather than concentrating on rural areas as the company provides lot of products to

rural people which are concerned with them.

The company should have stability in the profits of their products and should keep their product

at maturity stage in product life cycle. They can earn maximum profits at this stage.

If it leads to decline stage then the company has to end the product and the sales will decline

gradually.


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CONCLUSION

Profitability Position-Profitability refers to the ability of the business to earn profit. It

shows the efficiency of the business. Profitability position of a company can be judged by

the profitability ratios of the company as these ratios measure the profit earning capacity of

the company. The inter firm comparison shows that HLL is the company which is having

the best profitability position among all the companies with the help of which we can

conclude that HLL is having a good profit earning capacity .

Liquidity or short term financial position-liquidity shows the financial soundness of the

business and also whether the current assets of the company are sufficient to meet its short

term liabilities. Inter firm comparison shows that all the companies are having current ratio

less than 2:1 which shows that the short term financial position of the is not supposed to be

very sound. In the same way, standard liquid ratio sis 1:1 ,the inter firm comparison shows

that only Cadbury is the company which has better capacity to meet its current obligations

and along with Cadbury , Marico is also having a better liquidity position than other

companies.

Solvency or long term financial position- Solvency means the ability of the business to

meet its outside liabilities and by solvency position we mean the long term financial

position of the company. Inter firm comparison shows that all the companies are having a

good solvency position which can be determined by the different ratios used to calculate the

solvency position.

Turnover position-Turnover means sales which has direct relationship with the

performance of the business. More sales means the business is more active and has better

performance, lesser sales shows inactivity of the business, poor performance and lesser

productivity. The inter firm comparison shows that all the companies have a good turnover

which shows that all the companies are performing well, but among all the companies

Nestls turnover is more than other companies.


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LIMITATIONS

Although the project has been worked out at its best yet there are some limitations, which cannot be

overlooked. Had these limitations been overcome, the findings would be accurate.

Some of the limitations are:

1) Time constraint:

Time was really a limiting factoring the project. Its really difficult to work out such a large project

between two months time.

2) Data constraint:

All the data that has been collected for this project, has been taken from secondary sources like

websites, magazines, newspapers and book.


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BIBLIOGAPHY

The following sources have been sought for the preparation of this report.

Khan and Jain, Financial Management, 4th edition, Dhanpat Rai and Sons publications ltd, NewDelhi.

Philip Kotler, Marketing Management, 9th edition,

OTHER SOURCES-Other sources include annual report of Dabur India ltd. ,Hindustan lever

ltd., articles from news papers like Economic times, Business world, Times of India(business

section),magazines like Business India, Business world, Business today.

WEBSITES

www.indiainfoline.com

www.dabur.com

Documentary sources

www.daburpharma.com

www.google.com

www.knowthis.com

www.consumerpsychologist.com

www.icicidirect.com

www.studyfinance.com


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DEPARTMENT OF MANAGEMENTMAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIES

Attendance Sheet

Name of the Student : Aakansha PahlajaniUniversity Enrollment No. : 02414701709Name of the Supervisor from the Industry : Ms. Supriya Maheshwari (Faculty MAIMS)

S.No. Date Time ProgressReport

Signature ofthe student

Signature ofSupervisor(Institute)

1

2

3

4

5

6

7

8

9

Final Project-Aakansha Rough

Documents