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WORKIG CAPITAL
CHAPTER – 1
INTRODUCTION
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INTRODUCTION OF WORKING CAPITAL MANAGEMENT :-
Working capital refers to that part of the firm’s capital which s required for financial short –term
or current assets such as cash, marketable securities, debtors & inventories. Funds thus invested
in current assets keep revolving fast and are being constantly converted into cash and these cash
flows out again in exchange for other current assets. Hence, it is also known as revolving or
circulating capital or short – term capital.
Working capital management is concerned with the problems arise in attempting to manage the
current assets, the current liabilities and the inter relationship that exist between them.
The term current assets refers to those assets which in ordinary course of business can be or will
be turned into cash within one year without undergoing a diminution in the value and without
disrupting the operation of the firm. The major current assets are cash, marketable securities,
account receivable and inventory. Current liabilities were those liabilities which intended at their
inception to be paid in ordinary course of business within the year out of the current assets or
earnings of the concern. The basic current liabilities are accounts payable, bills payable, bank
over – draft and outstanding expenses.
The goal of working capital management is to manage the firm’s current assets and current
liabilities in such a way that the satisfactory level of working capital is mentioned.
DEFINITION :-
According to Guttmann & Dougall-
”The excess of current assets of a business(i.e. cash, accounts receivable, inventories) over
current items owned to employees and others (such as salaries & wages payable, accounts
payable, taxes owned to government)”. Capital required for a business can be classified under
two main categories.
1. Fixed capital
2. Working capital
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Every business needs funds for two purposes for its establishment and to carry out its day - to –
day operations. Long terms fund are required to create production facilities through purchase of
fixed assets such as plant & machinery, land, buildings, furniture etc. investments in these assets
represent that part of firm’s capital which is blocked on permanent or fixed basis and is called
fixed capital. Funds are also needed for short – term purposes for the purchase of raw material,
payment of wages and day – to – day expenses etc.
The gross working capital is the capital invested in the total current assets of the enterprise
current assets are those assets which can convert into cash within a short period normally one
accounting year.
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CONSTITUENTS OF CURRENT ASSETS :-
1) Cash in hand and cash at bank
2) Bills receivable
3) Sundry debtors
4) Short term loans and advances
5) Inventories of stock as:
a. Raw material
b. Work in process
c. Stores and spares
d. Finished goods
6) Temporary investment of surplus funds.
7) Prepaid expenses
8) Accrued income
9) Marketable securities.
In a narrow sense, the term working capital refers to the net working. Net working capital is the
excess of current assets over current liability or we can say as
Net working capital can be positive or negative. When the capital assets exceeds the current
liabilities are more than the current assets. Current liabilities are those liabilities, which are
intended to be paid in the ordinary course of business within a short period of normally one
accounting year out of the current assets or income business.
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2. On the basis of time.
3. On the basis of concept, working capital can be classified as gross working capital and
net working capital.
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Temporary working capital differs from permanent working capital in the sense that is required
for short periods and cannot be permanently employed gainfully in the business.
Adequate working capital helps in maintaining the solvency of the business by providing
uninterrupted of production.
GOODWILL:-
Sufficient amount of working capital enables a firm to make prompt payments and maintain the
goodwill.
EASY LOANS:-
Adequate working capital also leads to high solvency and credit standing can arrange loans from
banks and other on easy and favorable terms.
CASH DISCOUNTS:-
Adequate working capital also enables a concern to avail cash discounts on the purchases and
hence reduces cost.
Sufficient working capital ensures regular supply of raw material and continuous production.
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REGULAR PAYMENT OF SALARIES, WAGES AND OTHER DAY TO DAY
COMMITMENTS:-
It leads to the satisfaction of the employees and raises the morale of its employees, increases
their efficiency, reduces wastage and cost and enhances production and profits,
The requirements of working is very limited in public utility undertakings such as electricity,
water supply and railways because they offer cash sale only and supply services not products,
and no funds are tied up in inventories and receivables. On the other hand the trading and
financial firms requires less investment in fixed assets but have to invest large amount of
working capital along with fixed investments.
Greater the size of the business, greater is the requirement of working capital.
3. PRODUCTION POLICY :-
If the policy is to keep production steady by accumulating inventories it will require higher
working capital.
The longer the manufacturing time the raw material and other supplies have to be carried for
a longer in the process with progressive increment of labor and service costs before the final
product is obtained. So working capital is directly proportional to the length of the
manufacturing process.
Long term sources of permanent working capital include equity and preference shares, retained
earnings, debentures and other long term debts from public deposits and financial institution. The
long term working capital needs should meet through long term means of financing. Financing
through long term means provides stability, reduce risk or payment and increases liquidity of the
business concern. Various types of long term sources of working capital are summarized as
follow:
1. ISSUE OF SHARES:-
It is the primary and most important sources of regular or permanent working capital. Issuing
equity shares as it does not create and burden on the income of the concern. Nor the concern
is obliged to refund capital should preferably rasie permanent working capital.
2. RETAINED EARNINGS:-
Retained earnings accumulated profits are a permanent sources of regular working capital. It
is regular and cheapest. It creates not charge on further profits of the enterprises.
3. ISSUE OF DEDENTURES:-
It creates a fixed charge on future earnings of the company. Company is obliged to pay interest.
Management should make wise choice in procuring funds by issue of debentures.
1. COMMERCIAL BANK:-
A commercial bank constitutes significant sources for short term or temporary working
capital. This will be in the form of short term loans, cash credit, and overdraft and though
discounting the bills of exchanges.
2. PUBLIC DEPOSITS:-
Most of the companies in recent years depend on this source to meet their short term
working capital requirements ranging for six month to three years.
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3. VARIOUS CREDITS:-
Trade credit, business credit papers and customer credit are other sources of short term
working capital. Credit from suppliers, advances from customers, bills of exchange, etc
help to raise temporary working capital.
If we have insufficient working capital and try to increase sales, we can easily over
stretch the financial resources of the business. This is called overtrading. Early warning
signs include:
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DIFFERENT ASPECTS OF WORKING CAPITAL MANAGEMENT:-
Management of inventory
Management of receivables/debtors
Management of payable/creditors
MANAGEMENT OF INVENTORY:-
Inventories constitute the most significant part of current assets of a large majority of companies.
On an average, inventories are approximately 60% of current assets. Because of large size, it
requires a considerable amount of fund. The inventory means and includes the goods and
services being sold by the firm and the raw material or other components being used in the
manufacturing of such goods and services.
NATURE OF INVETORY:-
The common type of inventories for most of the business firm may be classified as raw- material,
working – in – progress, finished goods.
RAW MATERIAL:-
It is basic inputs that are converted into finished products through the manufacturing
process. Raw materials inventories are those unit which have been purchased and stored
for future productions.
WORKING – IN – PROGRESS:-
Working – in – process is semi – manufactured products. They represent product that
need more work before them become finished products for sale.
FINISHED GOODS:-
These are completely manufactured products which are ready for sale. Stocks of raw
material and working – in process facilitate production, while stock of finished goods is
required for smooth marketing operations. Thus inventories serve as a link between the
production and consumption of goods. The level of three kinds of inventories for a firm
depends on the nature of business. A manufacturing firm will have substantially high
levels of all the three kinds of inventories. While retail or wholesale firm will have a very
high level of finished goods inventories and on raw material and working – in – process
inventories.
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So operating cycle can be known as following:-
TRANSACTIONS MOTIVE:-
It emphasizes the need to maintain inventories to facilitate smooth production and sales
operation.
PRECAUTIONARY MOTIVE:-
It necessitates holding of inventories to guard against the risk of unpredictable changes in
demand and supply force and other factors.
SPECULATIVE MOTIVE:-
It influences the decision to increase or reduce inventory levels to take advantage of price
fluctuations.
MANAGEMENT OF RECEIVABLES/DEDTORS:-
The receivables (including the debtors and the bills) constitute a significant portion of the
working capital. The receivables emerge whenever goods are sold on credit and payments are
deferred by customers. A promise is made by the customer to pay cash within a specified period.
The customer from whom receivable or book debts have to be collected in the future are called
trade debtors and represents the firm’s claim or assets. Thus, receivable is such type of lone
extended by the seller to the buyer to facilitate the purchase process.
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Receivable management may be defined as collection of steps and procedure required to
properly weight the costs and benefits attached with credit policy.
The receivable management consists of matching the cost of increasing sales (particularly credit
sales) with the benefits arising out of increased sales with the objective of maximizing the return
on investment of the firm.
NATURE:-
The term credit policy is used to refer to the combination of three decision variables:
1. CREDIT STANDARDS:
It is the criteria to decide the type of customers to whom goods could be sold on credit. If
a firm has more slow – paying customers, its investment in accounts receivable will
increase. The firm will also be exposed to higher risk of default.
2. CREDIT TERMS:-
It specifies during of credit and terms of payment by customer investment in accounts
receivable will be if customers are allowed extended time period for making payments.
3. COLLECTION EFFORTS:-
It determine the actual collection period. Lower the collection period, the lower the
investment in accounts receivable and vice versa.
MANAGEMENT OF CASH:-
Cash management refers to management of cash balance and balance and also includes the short
terms deposits. Cash is the important current asset for the operations of the business. Cash is the
basic input needed to keep the business running on a continuous basis. It is also the ultimate
output expected to be realize by selling the service or product manufactured by the firm. The
term cash includes coins, currency, and cheque hold by the firm and balance in the bank
accounts.
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Investing surplus cash. Sale generate cash which has to be disbursed out. The surplus cash has to
be invested while deficit has to borrow. Cash management seeks to accomplish this cycle at a
minimum cost and it also seeks to achieve liquidity and control.
Transaction motive:
Precautionary motive
Speculative motives
Compensatory motive
Transaction motive: - This refers to the holding of cash to meet routine cash Requirement to
finance. The transactions, which a Firm carries on in the ordinary course of business.
1. Precautionary motive: This implies the needs to hold cash to meet Unpredictable
contingencies such as strike, sharp increase in Raw materials prices. If a firm can borrow at
short notice to Pay them unforeseen contingency, it will need to maintain Relatively small
balances and vice-versa.
2. Speculative motives: It refers to the desire of the firm to take advantage of opportunities
which present themselves at unexpected Movements and which are typically outside the normal
course Of business.
3. Compensatory motive: Bank provides certain services to their client free of cost. They
therefore, usually require client to keep Minimum cash balance with them to earn interest and
thus compensate them for the free service so provided.
Management of Payables/Creditors:-
Over-zealous purchasing function can create liquidity problems. Consider the carefully to
enhance the cash position. Purchasing initiates cash outflows and Creditors are a vital part of
effective cash management and should be managed Following:
Who authorizes purchasing in our company-is it tightly managed or spread among a number
of people?
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Do we use order quantities which take account of stock-holding and
Purchasing costs?
Do we know the cost to the company of carrying stock?
Do we have alternative source of supply?
How many of our suppliers have a returns policy?
Are we in a position to pass on cost increases quickly through price?
Increase?
1 It concerned with the formulation of policies with regard to Profitability, liquidity and risk.
2. It is concerned with the decision about the composition and level of Current assets.
3. It is concerned with the decision about the composition and level of current liabilities
1 Ratio analysis
3. Budgeting.
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METHODS OF WORKING CAPITAL ANALYSIS
There are so many methods for analysis of financial statements but ITC LTD. used the following
techniques:-
Trend analysis
Ratio analysis
When two or more than two years figures are compared to each other than we called comparative
size statements in order to estimate the future progress of the Business, it is necessary to look the
past performance of the company. These Statements show the absolute figures and also show the
change from one year to another.
TREND ANALYSIS:-
To analyze many years financial statements ITC LTD. uses this method. This indicates the
direction on movement over the long time and help in the financial Statements. Procedure for
calculating trends:-
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To show the position of the cash and cash equivalents
RATIO ANALYSIS:-
Ratio analysis is the process of the determining and presenting the relationship of The items and group of
items in the statements.
3. Helpful in forecasting.
6. Effective control.
Types of ratio:-
Liquidity ratio: They indicate the firms’ ability to meet its current obligation out of current
resources.
Leverage or Capital structure ratio: This ratio discloses the firm’s ability to meet the interest
costs regularly and long term solvency of the firm.
Debt equity ratio: - Long term loans / Shareholders funds or net Worth
Debt to total fund ratio: - Long terms loans/ share holder funds Fund + long-term loan
Activity ratio or Turnover ratio: - They indicate the rapidity with which The resources available
to the concern are being used to produce sales.
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Stock turnover ratio: - Cost of goods sold/Average stock Average stock=Opening stock + closing
stock/2)
Activity ratio or Turnover ratio: - They indicate the rapidity with which The resources
available to the concern are being used to produce sales.
Debtors turnover ratio: - Net credit sales/ Average debtors +Average B/R
Average collection period: - Debtors/R /Credit sales per (Credit sales per day=Net credit sales
of the year/365)
Creditors Turnover Ratio: - Net credit purchases/ Average Creditors +Average B/P )
fixed Assets Turnover ratio: - Cost of goods sold/Net fixed Assets (Net Fixed Assets = Fixed
Assets – depreciation)
Profitability ratios for income ratios:-The main objective of every Business concern is to
earn profits. A business must be able to earn adequate profit in relation to the risk and capital
invested in it.
Gross profit ratio: - Gross profit / Net Sales * 100 (Net sales= Sales – Sales return)
Net profit Ratio: - Net profit / Net sales * 100 (Operating Net Profit= operating net profit/ Net Sales
*100 or Operating Net profit= gross profit – operating expenses)
Operating Ratio: - Cost of goods sold + Operating Expenses/Net Sales * 100 (Cost of goods
sold = Net Sales – Gross profit, Operating expenses = Office & administration expenses +
Selling & distribution expenses + Discount + bad debts + interest on short term loans)
Earning per share (E.P.S.):- Net Profit – dividend on preference Share / No. of equity shares
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Dividend per share (D.P.S.):- Dividend paid to equity share Holders / No. of equity shares *100.
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CHAPTER-II
RESEARCH
METHODOLOGY
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RESEARCH METHODOLOGY:-
This type of analysis helps the management of the company to plan its future polices according
to the external environment. Any sound research must have an proper design to achieve the
required result, this study is constructed on the basis of descriptive design. The methodology, I
have adopted for my study is the various tools, which basically analyze critically financial
position of to the organization:
V. TREND ANALYSIS
The above parameters are used for critical analysis of financial position. With the Evaluation of
each component, the financial position from different angles is tried to be presented in well and
systematic manner. By critical analysis with the help of Different tools, it becomes clear how the
financial manager handles the finance Matters in profitable manner in the critical challenging
atmosphere, the Recommendation is made which would suggest the organization in formulation
of a healthy and strong position financially with proper management system.
RATIO ANALYSIS:-
The above parameters are used for critical analysis of financial position. With the evaluation of
each component, the financial position from different angles is tried to be presented in well and
systematic manner. By critical analysis with the help of different tools, it becomes clear how the
financial manager handles the finance matters in profitable manner in the critical challenging
atmosphere, the recommendation are made which would suggest the organization in formulation
of a healthy and strong position financially with proper management system. I sincerely hope,
through the evaluation of various percentage, ratios and comparative analysis, the organization
would be able to conquer it’s in efficiencies and makes the desired changes.
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ANALYSIS OF FINANCIAL STATEMENTS:-
FINANCIAL STATEMENTS: -
It may show position at a moment in time, as in the case of balance sheet or may reveal a series
of activities over a given period of time, as in the case of an income statement. Thus, the term
‘financial statements’ generally refers to the two statements
2. To provide other needed information about charges in such economic resources and
obligation.
3. To provide reliable information about change in net resources (recourses less obligations)
missing out of business activities.
4. To provide financial information that assets in estimating the learning potential of the
business.
1. Financial statements do not given a final picture of the concern. The data given in these
statements is only approximate. The actual value can only be determined when the business is
sold or liquidated.
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2. Financial statements have been prepared for different accounting periods, generally one year,
during the life of a concern. The costs and incomes are apportioned to different periods with a
view to determine profits etc. The allocation of expenses and income depends upon the personal
judgment of the accountant. The existence of contingent assets and liabilities also make the
statements imprecise. So financial statement are at the most interim reports rather than the final
picture of the firm.
3. The financial statements are expressed in monetary value, so they appear to give Final and
accurate position. The value of fixed assets in the balance sheet neither represent the value for
which fixed assets can be sold nor the amount which will be Required to replace these assets.
The balance sheet is prepared on the presumption of a going concern. The concern is expected to
continue in future. So fixed assets are shown at cost less accumulated depreciation. Moreover,
there are certain assets in the balance sheet which will realize nothing at the time of liquidation
but they are shown in the balance sheets.
CALCULATIONS OF RATIOS:-
Ratios are relationship expressed in mathematical terms between figures, which are connected
with each other in some manner.
CLASSIFICATION OF RATIOS:-
Ratios can be classified in to different categories depending upon the basis of Classification the
traditional classification has been on the basis of the financial statement to which the
determination of ratios belongs. These are:-
Composite ratios
RESEARCH DESIG:-
For the proper analysis of data simple statistical techniques such as percentage Where use. It
helped in making more accurate generalization from the data available.
Balance sheet
Schedules
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INDUSTRY PROFILE
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ITC COMPANY PROFILE:-
ITC is one of India's foremost multi-business enterprises with a market capitalization of US $ 50
billion and Gross Sales Value^ of US $ 10 billion. ITC is rated among the World's Best Big
Companies, Asia's 'Feb. 50' and the World's Most Reputable Companies by Forbes magazine and
as 'India's Most Admired Company' in a survey conducted by Fortune India magazine and Hay
Group. ITC also features as one of world's largest sustainable value creator in the consumer
goods industry in a study by the Boston Consulting Group. ITC has been listed among India's
Most Valuable Companies by Business Today magazine. The Company is among India's '10
Most Valuable (Company) Brands', according to a study conducted by Brand Finance and
published by the Economic Times. ITC also ranks among Asia's 50 best performing companies
compiled by Business Week.
ITC's aspiration to create enduring value for the nation and its stakeholders is manifest in its
robust portfolio of traditional and Greenfield businesses encompassing Fast Moving Consumer
Goods (FMCG), Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, and
Information Technology. This diversified presence in the businesses of tomorrow is powered
by a strategy to pursue multiple drivers of growth based on its proven competencies, enterprise
strengths and strong synergies between its businesses.
The competitiveness of ITC's diverse businesses rest on the strong foundations of institutional
strengths derived from its deep consumer insights, cutting-edge Research & Development,
differentiated product development capacity, brand-building capability, world-class
manufacturing infrastructure, extensive rural linkages, efficient trade marketing and
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distribution network and dedicated human resources. ITC's ability to leverage internal
synergies residing across its diverse businesses lends a unique source of competitive advantage
to its products and services.
Within a relatively short span of time, ITC has established vital brands like Aashirvaad,
Sunfeast, Fabelle, Sunbean, Dark Fantasy, Mom's Magic Bingo!, Yippee!, Candyman, mint-o,
Kitchens of India, Farmland, B Natural, ITC MasterChef in the Branded Foods space;
Essenza Di Wills, Fiama, Vivel, Engage, Savlon, Charmis, Shower to Shower and
Superia in the Personal Care products segment; Classmate and Paperkraft in Education &
Stationery products; Wills Lifestyle and John Players in the Lifestyle Apparel business;
Mangaldeep in Agarbattis and Aim in the Safety Matches segment. This growth has been rated
by a Nielsen Report to be the fastest among the consumer goods companies operating in India
Itc brands are designed and customized to delight your diverse tastes, needs and lifestyles. With
quality and innovation at the core alone with contemporary packaging, customer insights and a
formibale nationwide distribution network, it is our unwavering commitment to exceed your
expectations, everyday.
ITC's world class Indian Brands. Delighting 125
million households
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ITC PRODUCTS BRAND:-
i.
Aashirvaad is Indian’s no.1 Atta brand, trusted by over 2, 5 cr households.
ATTA
All India (urban + rural) market share of aashirvaad Atta based on Nielsen retail audit mat may
2017.
Itc entered branded Atta market with the launch of aashirvaad Atta in may 2002 and within a
short span become the no.1 branded packaged Atta across the country. Aashirvaad promises
you only the most delightful roties straight from your kitchen complete with love and care
through your preparation
ii.
Sunfeast biscuits have always stood for quality and are wholesome biscuits.
SUNFEAST CAKES
Sunfeast dark fantasy yumfills - a deliciously soft pie cake, filled with luscious cream and
enrobed generously by a smooth and rich chocolate layer
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iii.
Kitchens of India capture the rich heritage of authentic Indian cuisine, it translates their regality
into a mouthwatering household experience.
Dal makhani
The range captures the best of indian cuisine from all corners of the country. These dishes are recreated
by itc master chefs following the traditional methods of preparations and made available to you in
convenient shelf stable ready – to – dine daily treats range.
iv.
B natural’s products have the goodness of fruits and are luscious, thick and taste closest to the
natural taste of fruits
Mixed fruits
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v.
Fabelle chocolates are itc’s premier offering in the luxury chocolate space. Made frome cocoas
sourced from the most exotic cocoa growing regions of the world and combined with unique
ingredients, fabelle offers an immersive and participative chocolate experience.
We’ve reimagined chocolate and changed the way it should look, taste and feel, with our new
range of luxury chocolate bares, inspired by rich desserts.
Today, ITC is India's leading Fast Moving Consumer Goods Company, the clear market leader
in the Indian Paperboard and Packaging industry, a globally acknowledged pioneer in farmer
empowerment through its wide-reaching Agri Business and a trailblazer in green hoteliering.
ITC InfoTech, a wholly-owned subsidiary, is one of India's fast-growing IT companies in the
mid-tier segment. This portfolio of rapidly growing businesses considerably enhances ITC's
capacity to generate growing value for the Indian economy.
The Company's 'e-Choupal' initiative has enabled Indian agriculture significantly enhance its
competitiveness by empowering Indian farmers through the power of the Internet. This
transformational strategy has already become the subject matter of a case study at Harvard
Business School apart from receiving widespread global acclaim.
As one of India's most valuable and respected corporations, ITC is widely perceived to be
dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a
commitment beyond the market". In his own words: "ITC believes that its aspiration to create
enduring value for the nation provides the motive force to sustain growing shareholder
value. ITC practices this philosophy by not only driving each of its businesses towards
international competitiveness but by also consciously contributing to enhancing the
competitiveness of the larger value chain of which it is a part." ITC group directly employs more
than 32,000 people and the Company's Businesses and value-chains generate around 6 million
sustainable livelihoods many of whom live at the margin in rural India.
Global Exemplar in Sustainability
Acknowledged as a global exemplar in sustainability, ITC is the only enterprise in the world, of
comparable dimensions to be carbon-positive, water-positive, and solid waste recycling
positive. A testimony to its commitment to a low carbon growth path - over 43% of the total
energy requirements of ITC is met from renewable sources. All ITC's premium luxury hotels are
LEED (Leadership in Energy and Environmental Design) Platinum certified making it the
"greenest luxury hotel chain" in the world. ITC's Paperboards and Paper business is an icon of
environmental stewardship.
ITC's production facilities and hotels have won numerous national and international awards for
quality, productivity, safety and environment management systems. ITC was the first company
in India to voluntarily seek a corporate governance rating.The Company continuously endeavors
to enhance its wealth generating capabilities in a globalizing environment to consistently reward
more than 8, 57,000 shareholders, fulfill the aspirations of its stakeholders and meet societal
expectations
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Why is sustainability important?
For over a century, the world has witnessed remarkable material progress. However, this
progress has come at a tremendous price, creating some of the most serious challenges facing the
world today, including that of poverty, growing inequity and increasing joblessness.
Compounding these challenges are the threats of global warming and environmental degradation.
The model of industrial growth pursued since the Industrial Revolution has paid scant attention
to the planet and its resources. The debilitating impact on air, water, soil and bio-diversity not
only threatens the present but the socio-economic security of future generations as well.
India mirrors these challenges. The country is home to 17% of the world's population, but has
only 2.4% of its arable land, 4% of water and 1% of forest resources. India is poised to become
the world's most populous nation by 2025. To ensure food, water, energy and livelihood security
to the teeming millions is a daunting task. Addressing social challenges like multi-dimensional
poverty and job creation has also become crying priorities. Unstable societies cannot foster
sustainable economic growth. The need of the hour is a new model of development that will
simultaneously fuel economic growth, create sustainable livelihoods and replenish the
environment.
Any sustainable solution to addressing the grave challenges facing the world today requires the
concerted efforts of all sections of society - policymakers, regulators, business, NGOs and civil
society. At ITC, we believe that with their immense managerial and innovative capacity,
businesses can contribute significantly towards making a transformational change in society.
Inspired by this opportunity to serve larger societal purposes, we articulated a Vision two
decades ago to make the Company a National Champion by adopting the credo of 'Putting India
First' ' keeping Country before Corporation and the Institution before Individual. This resolve to
build an exemplary Indian enterprise led to the creation of innovative business models that
synergized the creation of economic wealth with the formation of ecological and social capital as
a unified strategy
Sustainability in Action
Our focus has been on spurring innovative strategies that would enable us to make a growing
contribution along the triple bottom lines of building economic, environmental and social capital.
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Matching internal competencies with the emerging opportunities in a fast growing and rapidly
evolving economy, we created multiple drivers of growth for the Indian economy through a
carefully chosen diversified portfolio of businesses.
Efforts were made to create world-class Indian brands that would help in capturing and retaining
more value for the Indian economy. The vitality of such brands also serve as market anchors to
enhance the competitiveness of the entire value chain, including that of farmers and rural
communities. To ensure a positive environmental footprint, we adopted a low-carbon growth
strategy which focused on enhanced use of renewable energy sources as well as reduction in
specific energy consumption. Efforts to reduce specific water consumption at our units and
augment rainwater harvesting activities contributed to the imperative need to ensure water
security. Focused waste management initiatives like our flagship Wow (Well-being Out of
Waste) programme contribute to addressing yet another national priority.
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