PROJECT REPORT ON

TO STUDY THE WORKING CAPITAL MANAGEMENT OF DABUR INDIA LTD.

SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION 2009-2012 UNDER THE GUIDANCE OF MS. SUPRIYA MAHESHWARI FACULTY, MAIMS SUBMITTED BY:
AAKANSHA PAHLAJANI Roll no-02414701709 BATCH No.2009-2012(BBA SEM 3rd)

Maharaja Agrasen Institute of Management Studies Affiliated to Guru Gobind Singh Indraprastha University, Delhi
PSP Area, Plot No. 1, Sector 22, Rohini Delhi 110086

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.

2.3.2 2.3.3

Data Collection 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

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: Place:

Signature: Name: Aakansha Pahlajani University Enrollment No: 02414701709

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

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 Pahlajani 02414701709

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 LimitedHealth 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

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 20042005 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.

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.

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 popular brands. 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.

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.

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.

 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.

 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 share for 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.

 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

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.

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

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. NARANGP.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- Rural development 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.

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 highgrowth 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 Date of Birth- 10.07.1951 MR R.C.BHARGAVA DR. S NARAYAN Date of Birth- 20.06.1943

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.

D a b u r s S B U s A n d T hei r S ha r e I n S a l es
D abur A y u rv e d ic S p e c ia litie s 27%

F a m ily P ro d u c ts H e a lth C a re D ivis io n P ro d u c ts 45% D a b u r A y u rv e d ic S p e c ia litie s

F a m ily P ro d u c ts D iv is io n

H e a lth C a re P ro d u c ts 28%

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. INNOVATION Continuous 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.

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

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

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

ORAL CARE:

Dabur Red Gel Dabur Red Toothpaste Dabur Lal Dant Manjan Dabur Binaca Toothbrush

REAL:

Real Fruit Juice Real Activ

HOMMADE:

Cooking Pastes Coconut Milk Tomato puree

Dashmularishta Ashokarishta Lauhasava Mahanarayan Tail Juritap

Madhuvani Lavan Bhaskar Churna

HEALTH CARE:

Dabur Chyawanprash Pudinhara Hajmola Tablets Dabur Honey Shilajit

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

DR.BURMAN (RUSSIA)

Health Supplements Ayurvedic Toothpastes

DABUR MANUFACTURING FACILITIES IN INDIA

DABUR WORLD WIDE

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 its products in more than 50 countries all over the world. DABUR products 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.

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.

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.

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 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.

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 Concept where as the Net Working Capital is an Accounting Concept of working capital.
Working capital is therefore:-

WORKING

CAPITAL =

Current stock + debtors + cash

Assets ||

- 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

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.

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 Concept where as the Net Working Capital is an Accounting Concept of working capital.

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

areas requiring closer management. 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.

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 are basically 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

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 the relationship 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

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) iii)

To avoid consumer conflict and develop harmonious relations, which are an essential factor to growth of any company. 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.

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 as primary 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 openended 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

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

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

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

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.

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

There are two types of working capital requirements in a companyi) ii) capitalPermanent or Fixed Working Capital Requirements Temporary or Variable Working Capital Requirements

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

SOURCES

Long Term Sources

Short Term Sources

Shares Debentures Public Deposits Loans from Financial inst.

Commercial Banks Commercial paper Trade Creditors Installment credit Accounts payables Accrued Expenses

SOURCES OF WORKING CAPITAL

DABUR India 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.

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 the purpose 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

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

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 Limitedsoaps (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 in food 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.

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.

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.

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.

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 Dabur India Ltd. Britannia Industries Ltd. Hindustan Lever Ltd. Marico Industries Ltd. 2005-06 2005-06 2005-06 2005-06 251.971 2399.61 38788.80 1917.21 Current Liabilities 322.222 2356.68 39802.49 1066.10 Net Capital -70.25 42.93 -1013.69 851.11 Working

Cadbury India Ltd. Nestle India Ltd.

2005-06 2005-06

2175.90 5512.44

1352.40 8100.8

823.50 -2588.36

WORKING CAPITAL GRAPHS

W o r k in g C a p ita l O f D a b u r In d ia L td .
3000 2000 1000 0 -1 0 0 0 -2 4 3 .9 9 2008 2007 2006 2005 2004 2 9 7 5 .9 8 2 3 8 4 .9 42 3 0 0 .7 7 1 8 6 7 .3 1

The above chart displays the working capital scenario at Dabur

India Ltd. 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.

Working Capital Of Cadbury India Ltd.

1500 1000 500 0 2007 823.5

1307.7

1079.83

941.34 638.47

2006

2005

2004

2003

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

Working Capital Of Hindustan Lever Ltd.

1,872.48 1,714.39 2,000.00 1,000.00 300.96 0.00 -1,000.00 -1,013.69 -2,000.00 -3,000.00 -3,733.77 -4,000.00 2007 2006 2005 2004 2003

The above graph displays the working capital scenario of Hindustan Lever Limited 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.

W orking Capital Britannia Industries Ltd.

800 600 400 200 42.93 0 2008 2007 2006 2005 746.65 592.21

256.96 51.57 2004

Britannia Industries Ltd. 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%.

Working Capital Of Nestle India Ltd.

0 -500 -1000 -1500 -2000 -2500 -3000 -2588.36 2004 2003 2002 2001 2000 -1388.53 -743.81 -317.74 -745.12

The above graph displays the working capital of Nestle India Ltd., 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.

Working Capital Of Marico Industries Ltd.

1000 800 600 400 200 0 851.11 827.67 594.86 466.88 494.22

2008

2007

2006

2005

2004

The graph shown depicts the working capital from year 2000-2004 for Marico Industries Ltd. 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 and improve upon the working capital.

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

depicted through the working capital of the company.

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.

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 end products 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.

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.

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.

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, New Delhi. 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

DEPARTMENT OF MANAGEMENT MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIES Attendance Sheet Name of the Student : Aakansha Pahlajani University Enrollment No. : 02414701709 Name of the Supervisor from the Industry : Ms. Supriya Maheshwari (Faculty MAIMS) S.No. 1 2 3 4 5 6 7 8 Date Time Progress Report Signature of Signature of the student Supervisor (Institute)

9 10 *Minimum (8out of 10) 80% attendance compulsory.