SUMMER TRAINING PROJECT REPORT

ON

WORKING CAPITAL MANAGEMENT

AT

RADICO KHAITAN LIMITED

Submitted in Partial Fulfillment of

Master of Business Administration

Programme: 2008-2010
OF

ADVANCE INSTITUTE OF MANAGEMENT

NH-24 Hapur-Delhi Bypass, Gaziabad-110044

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

SUBMITTED BY:
HASEEB MOHAMMED KHAN

ACKNOWLEDGEMENT

In fine acknowledgement is due, and is here by made to Mr.

SANJEEV AGARWAL (Sr. Account executive)-Accounts
guided in the preparation of the report. It could not have been
completed. It is my pleasure to get training under his guidance.
I express my deep sense of gratitude to him for his interest, proper
guidance, encouragement and co-operation in the preparation of
the training report in time and in such and elegant form. My
summer training report could not have become a reality without the
aid and assistance of him, so I tender sincere thanks from the core
of my heart.
I would like to thank Mr. K.P.SINGH (Director - O), Mr.
S.Pande (AGM) & Mr.Alok Agarwal for give me the approval to
this project in the organization.

HASEEB MOHAMMED KHAN

(M.B.A)

PREFACE

The summer training report is the WORKING CAPITAL

MANAGEMENT of RAMPUR DISTILLERY, A UNIT OF
RADICO KHAITAN Ltd. The merit of this report is that
Readers a fairly complete idea about the corporation.

The objective of this report is to gain knowledge about the

Operation, organization, management, financial assistance
, financial position and working results of the Corporation.

HASEEB MOHAMMED KHAN

(M.B.A)

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

 BRANDS DETAILS

RADICO KHAITAN LTD.

ABOUT THE COMPANY

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

RADICO KHAITAN LTD.

THE BRAND STORY

Radico Khaitan Ltd today has three millionaire brands in its portfolio. Radico's
flagship brand, 8 PM Whisky, launched in 1999, was a runaway success. In the
first year alone, it sold one million cases - a record for any Indian or foreign brand
operating in India. This also made it the first brand in the liquor industry to make
it to the Limca Book of Records.
Drinks International, the acclaimed international liquor magazine has rated 8 PM
whisky as the fastest growing whisky in the world in the regional category (200405). The other millionaire brands are: Contessa Rum has won the prestigious
Monde Selection award for its overall quality for the past three executive years.
It has a large market share in the defense market... Old Admiral Brandy has also
been rated by Drinks International as the fastest growing Brandy in the world in

the regional category (2004-05 and 2005-06) also it has won the Monde
Selection award for its overall quality in 2004-05.
Today, Radico Khaitan has brands that straddle almost every market segment whisky, rum, brandy, vodka & gin - and price category. Its fine blends, consistent
quality, distinctive packaging and superior value have resonated with customers.

RADICO KHAITAN LTD.

THE INTERNATIONAL LINK

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

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

STRONG FINANCIALS
Radico Khaitan is not just a company of great brands; it is a company of great
financials. The equity shares of the company are quoted on the Mumbai and

National Stock Exchanges, and the company has more than 35,000
shareholders. It is the most profitable company in the domestic liquor industry.

RADICO KHAITAN LTD.

ORGANISATION STRUCTURE
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RADICO KHAITAN LTD.

Management

Dr. LALIT KHAITAN

CHAIRMAN & MANAGING DIRECTOR
RADICO KHAITAN LTD.
A veteran of the Indian liquor industry
(over 45 years), Dr. Khaitan oversees
the entire business of Radico Khaitan.
He has been instrumental in improving
quality standards and seeking and
achieving customer satisfaction, leading
to substantial growth in sales and
revenues, and increased market shares.
In the process, he has succeeded in
transforming Radico Khaitan from a
small, behind-.
Dr. Khaitan has been widely recognized
for his contribution to the liquor industry. He has been associated the-scenes
player to a Rs. 995 crore company, the most profitable in its sector, and a soughtafter partner by leading international liquor brands seeking to enter the Indian

market. His unique management style has helped maintain Radico as an open,
ethical and transparent organization with a number of developmental projects,
has represented India with several international delegations, and is involved in
social & educational activities across India. He is currently:
Chairman, U.P. Committee of PHD Chamber of Commerce and
Industry
Member, Managing Committee, ASSOCHAM
Member, Managing Committee, All India Distillers Association
Member, Managing Committee, U.P. Distillers Association
Trustee, Khaitan Public School, Noida

Mr. ABHISHEK KHAITAN

MANAGING DIRECTOR
RADICO KHAITAN LTD
Mr. Abhishek Khaitan is a Bachelor of
Engineering (Industrial Production) from
Bangalore, and has done a Managerial
Finance & Managerial accounting course at
Harvard, USA.
He joined Radico Khaitan in 1997, and
supervised

the

establishment

of

the

company's Marketing Division in the same

year. The first brand to be launched by the
division, 8 PM Whisky, was a runaway
success. In the first year alone, it sold one million cases - a record for any Indian
or foreign brand operating in India. This also made it the first brand in the liquor
industry to make it to the Limca Book of Records.
Under Abhishek Khaitan's leadership, Radico Khaitan's brand portfolio is wide
and deep, with brands that straddle almost every market segment, taste
preference and price category.
To recognize Mr. Abhishek Khaitan's contribution to Indian Industry, Economic
Development & Research Association bestowed the

Bhartiya Udyog Ratan Award

him. The World Economic Progress Society has honored him with the
Industrial Excellence Award.

on

National

RADICO KHAITAN LTD.

DIVISION OF THE COMPANY

Mr. RK Mehrotra
(President - Finance)
Mr. Mehrotra oversees the financial affairs of Radico Khaitan. He has been
associated with the company since 1991.
A Chartered Accountant by profession, Mr. Mehrotra has a vast and rich career
spanning more than 40 years. He is a member of the All India Management
Association.
Mr. KP Singh
(President - Operations)
Mr. Singh, whole time Director, oversees Radico Khaitan's operations, and heads
its' distillery unit at Rampur. He has been associated with the company for over a
decade.
Mr. Singh is a qualified technocrat with over 30 years of experience in the liquor
industry.

Mr. Raju Vaziraney

(President - Sales & Marketing)
Mr. Vaziraney oversees Radico Khaitan's Civil Marketing and Defence
Marketing Brands Divisions; he also handles the country liquor brands
of the company.
Mr. Vaziraney has a Masters degree in Economics, and Diplomas in Sales &
Marketing in Corporate Law, and Business Management. He has about 15
years of experience in sales in the liquor industry.

Mr. KS Raju
(Executive Vice President - Manufacturing & Operations)

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

Mr. Sanjay Lamba

(Executive- Vice President- Exports & IBD)
Mr. Lamba oversees export of Radico's brands to various markets and also
heads the International brands divisions where Radico has marketing &
distribution tie-up with some of the liquor majors of the world.
Mr. Lamba is a qualified Chartered Accountant and today has a vast experience
of 15 years in varied sectors.

Mr. KS Raju (Executive Vice President - Manufacturing & Operations)

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

BOARD OF DIRECTORS

DR. LALIT KHAITAN

CHAIRMAN & MANAGING DIRECTOR
RADICO KHAITAN LTD.
An eminent industrialist, Dr. Khaitan has been at the
helm of affairs of the Company for more than 25 years.
He is on the Managing Committee of a number of
associations, including the PHD Chamber of Commerce & Industry, ASSOCHAM,
All India Distillers Association, U.P. Distillers Association and Confederation of
Indian Industry.
During his illustrious career Dr. Khaitan has won several awards in recognition of
his services. These include:" 'Indira Gandhi National Unity Award', instituted by
All India National Unity Conference, presented by the Ex-President of India, Giani
Zail Singh" 'Vijay Ratna Award', instituted by the International Friendship Society
of India, presented by the then Prime Minister of India, Shri Chandra Sekhar
" 'National Builder of Eminence in the Ninetees' award, instituted by the
International Business Council.
MR. ABHISHEK KHAITAN
MANAGING DIRECTOR, RADICO KHAITAN LTD.
Mr. Khaitan has a Bachelors Degree in Engineering in
Industrial Production and qualifications in Managerial
Finance and Managerial Accounting an alumnus of
Harvard University, U.S.A. He is a young and talented
industrialist, and has been responsible for the exponential growth of the
Company.

MR. KARNA SINGH MEHTA

DIRECTOR, RADICO KHAITAN LTD.
MANAGING PARTNER, S.S. KOTHARI & CO. (A
LEADING FIRM OF CHARTERED ACCOUNTANTS)
Mr. Mehta is a leading Chartered Accountant, with vast
and rich experience in the field of Finance and Accounting.
He is on the Board of Directors of a number of leading Indian companies. He is
also a Member of the managing committees of several associations, including
PHD Chamber of Commerce & Industry.

MR. ASHUTOSH PATRA

DIRECTOR< RADICO KHAITAN LTD.
MANAGING PARTNER, O.P. KHAITAN & CO. (A LEADING
LAW FIRM)
Mr. Patra has over 25 years of experience in the legal field. He
is an eminent Supreme Court lawyer and a leading legal
expert.
MR. K.P. SINGH
WHOLE TIME DIRECTOR DESIGNATED AS
PRESIDENT (OPERATIONS), RADICO KHAITAN LTD.
Mr. Singh, a qualified technocrat, has over 30 years of
experience in the liquor industry and has been associated
with Radico Khaitan Ltd. for over a decade. He oversees
the operations of the Company, and heads its Distillery
Unit at Rampur.

MR. SANJAY JALAN

DIRECTOR, RADICO KHAITAN LTD.
Mr. Jalan, a practicing Chartered Accountant, has over 15
years of experience in Finance and Accounting, and is a
Director in a number of companies.

MR. RAGHUPATI SINGHANIA

DIRECTOR, RADICO KHAITAN LTD.
MANAGING DIRECTOR, J.K INDUSTRIES LTD
Mr. Singhania, an eminent industrialist, is the Managing
Director of J.K. Industries Ltd. He is also a Director in
many other companies of the J.K Group, including J.K.
Corp Ltd., Vikrant Tyres Ltd., and J.K. Drugs and Pharmaceuticals Ltd.

MR. AMIT BURMAN

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

VISION OF THE COMPANY

MISSION OF THE COMPANY

RADICO KHAITAN LTD.

RADICO'S CORE VALUES

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

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

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

RESPECT FOR PEOPLE

Radico will value differences in individual perspectives. Radico want individuals
to dream, create and experiment in pursuit of opportunities and achieve
leadership through teamwork.

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

RADICO KHAITAN LTD.

CORPORATE GOVERNANCE

Corporate Governance at Radico means the framework to encourage the

efficient use of resources and equally to require accountability for the

stewardship of those resources. The aim is to align as nearly as possible the

interests of individuals, corporations and society.

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

RADICO KHAITAN LTD.

CORPORATE SOCIAL RESPONSIBILITY PROGRAMME

HUNAR

In accordance with Radico's mission to work towards the up-liftment of local

artisans and to promote the UP handicraft, Zardozi and Chikan work it had
launched 'Radico- Chikankari Aur Zardozi Pratiyogita' in association with the
Indian Academy of Art & Culture, U.P.
The competition was organized to bring out the creativity of the artisans and to
look for young talent in the field of Chikankari & Zardozi. The event was
promoted through mobile vans, pamphlet distribution in the areas where the
artisans live. There were two levels of judging eminent personalities from
Lucknow judged the first level and in the second level Mrs. Jaya Prada, Mrs.
Kiran Khaitan, Mrs. Sucheta Merh & Mr. Swapan both designers from Kolkatta
judged the first three winners.
The artisans were awarded with cash prizes.
The artisans have been empanelled by Radico Khaitan Ltd to form a group called
"HUNAR. To get employment for the artisans is the cause towards which the
group Hunar is working.

RADICO KHAITAN LTD.

ENVIRONMENT FRIENDLY

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

RADICO KHAITAN LTD.

Balance Sheet

------------------- in Rs. Cr. ------------------Mar '04

Mar '05

Mar '06 Mar '07

12 moths 12 moths 12 moths 12 moths

Sources Of Funds
Total Share Capital

19.29

19.29

19.29

19.29

12
moths

76.97

Equity Share Capital

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

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

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

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

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

12 moths 12 moths 12 moths 12 moths

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

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

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

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

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

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

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

1.86
32.98

2.50
40.13

21.78
51.11

18.24
13.82

29.67
17.17

RADICO KHAITAN LTD.

RAMPUR DISTILLERY
Rampur Distillery is one of the largest distilleries in India and a leading
manufacturer of Extra Neutral Alcohol (used in manufacturing Indian Made
foreign Liquor) it also manufacturers Rectified Spirit (used in manufacturing of
lower segments Country Liquor) and manufacturing of Anhydrous Alcohol or
Ethanol or Gasohol (used in Petrol Mixing) and the recent addition of grain
distillery . Today with a production capacity of 60 million liters p. a and with the
recent addition of the grain distillery which has taken the capacity up to 90 million
lit p.a. it is one of the largest distilleries in the country The Unit has a series of
firsts to its credit:
It is the first Indian distillery to obtain ISO 9001:2000 certifications. It has
achieved capacity utilization of over 100% in the alcohol plant. It is the first
environment-friendly distillery in the country.

RADICO KHAITAN LTD.

CAPACITY
Molasses Distillery 60 million liters per annum.
Grain Distillery 30 million liters per annum.
Malt Distillery 720 thousand liters per annum.

EFFLUENT TREATMENT PLANT

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

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

RADICO KHAITAN LTD.

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

BACKWARD INTEGRATION
The very first backward integration project has come in the form of setting up a
fully automatic 750 ml Kidney shape PET bottle manufacturing plant in low cost
and tax benefited area like Uttranchal. The unit started with production rate of 85
lacs bottle per year in October 2004 and is now geared up to produce 255 lacs
PET bottles to cater Radico's own captive consumption of approx. 150 lacs bottle
per year and rest is being sold to outside clients in similar businesses. The unit

has not only eliminated the pressure of PET bottle suppliers but has also
provided a kind of diversified manufacturing base for future business exploration.

OWN BOTTLING UNITS

Rampur Distillery has 14 state-of-the-art bottling lines, including those imported

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

STRATEGIC BOTTLING UNITS

Radico Khaitan Ltd is working continuously towards increasing its reach through
the strategic bottling

units across the

country. The

focus underlines

comprehensive quality control and enhanced market penetration. Strategic

Bottling Units through out India.

NORTH

N V Distilleries & Breweries Ltd., (Punjab)

Gwalior Distillers, Gwalior (Madhya Pradesh)

Patiala Distillers & Manufacturers Ltd., Baddi

(Himachal Pradesh)

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

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

IFP Agro Industries Ltd., Kolkatta,

(West Bengal)

Seven Sisters Trade & Distilleries (P) Ltd.,

Guwahati.(Assam)

Bacchus Bottling (P) Ltd., (Orissa)

United Brothers Distilleries (P) Ltd.,

(Arunachal Pradesh)

SOUTH

Kamal Wineries, Hyderabad (Andhra Pradesh)

Kapitan Distillery, Hyderabad (Andhra Pradesh)

Ravikumar Distilleries (Pondicherry)

United Distillery, Calicut, (Kerala)

south

Sri Venkateswara Distilleries, Bangalore,

(Karnataka)

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

Midas Golden, Chennai, (Tamil Nadu)

Devicolam Distilleries, Kochi, (Kerala)

WEST

Tilaknagar Industries Ltd, Tilaknagar,

(Maharashtra)

Gemini Distilleries (P) Ltd. (Goa)

Ajantha Distilleries Ltd, Nagpur.

(Maharashtra)

West
Welcome Distilleries, Bilaspur.
(Chattisgarh)

Silver star Distillery, (Daman)

RADICO KHAITAN LTD.

CORPORATE SERVICES

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

RADICO KHAITAN LTD.

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

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

RADICO KHAITAN LTD.

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

PRODUCTION
The Production Department is responsible for operations in Radico Khaitan's
bottling units. It works towards the smooth production and delivery of all the
Radico Khaitan brands as per market needs.

BRANDS
Radico made its foray into the International Market a few years back and today
Radico's brands are present in more than 30 countries. Radico has been
consistently providing excellent quality in terms of both product and packaging
along with outstanding service. Two of our brands 8 PM Whisky and Old Admiral
brandy featured in Drinks International Magazine as the fastest growing brands in
the world in the regional category. Three of its brands, Contessa XXX Rum, 8 PM
Bermuda White Rum and Old Admiral brandy have won Silver Medal in

prestigious Monde Selection for overall quality their brands have already attained
the leadership position in many countries.
Radico Khaitan is now breaking into newer and sophisticated markets with liquor
brands developed to appeal to a wider palate.

WHISKY
The base for Indian whisky is ENA. The other ingredients used are matured
Indian malt sprit, Scotch whisky concentrate, added flavors, and caramel & dm
water. All these ingredients are not added at a time but different stages.
1. Special appointment whisky
2. 8pm oryale whisky
3. Whitefield whisky

4. 8pm whisky
5. Radico gold supreme whisky
6. Radico gold whisky
7. Contessa deluxe whisky
8. Rampur no.1 whisky

BRANDY
Brandy is a Dutch word means (Brunt Wine). In India they make brandy by
blending with ENA, matured grape spirit, added flavoring.
1. Contessa Brandy
2. Old Admiral Brandy
3. White Field Brandy
4. 8pm Excellency Brandy

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

5. Rampur No.1
6. Big Hit Rum
7. Contessa White Rum

GIN
Gin is alcoholic liquor obtained by distilling grain mash or redistilling sprit with
botanicals such as juniper berries, angelica, lemon and orange peels, cassia
bark, coriander and cardamom.
1. Contessa Gene
2. Big Hit Gene
3. Magic Moment Gene

RAW MATERIAL
For the production of alcohol, materials containing sustaining amount of glucose
Content can be used as a raw material. But for commercial production, common
raw materials used are as follows:
1. Molasses
2. Cane Juice
3. Sweet Potato
4. Sugar Beet

5. Grain (Barley, Rice)

FUNCTIONS
Purchasing of packing materials, engineering goods, and logistics etc.
function is done here.
The packing materials include carton, monochrome, bottles, and caps
label etc.
The procurement of packing materials is done on the basis of
1. Forecast from marketing department for the month.
2. Tentative planning based on last month.
3. Production schedule.
Packing material accounts for 80% of all other. Material and it is the main
requirement for distillery. Hence it is essential to have a proper stock of
the material as per the requirement.
Label is the most critical packing material as it involves different labels for
the different states as the rules and regulations are different in different
states.
For finalization the vendor for packing material purchase committee where
vendor is introduced .There are number of suppliers for packing material
and purchasing is done by share of business.

 For the engineering material indenter raise the indent and the quotations
are called for the same. Then comparative is done and after that finalizing
the terms and conditions purchase order is released.
Logistics of country liquor is taken care of here. The procedure for
dispatch of country liquor is that the marketing department sends indent
according to the demand.
For the country liquor it is the policy of state govt. that distillers should
have their own depots and this depots will sell to retail vendors who will
sell called as CL2A.
Transportation annual rate contract is done and the documents that are to
be carried along with the CL includes excise pass PD25, invoice and
challan.

SOME BRAND OF COMPANY

8 PM Royale whisky
8 PM Royale whisky , which extends the 8PM brand franchise to the prestige semi
premium whisky segment , is made with international quality spirit and imported scotch
with matured malt spirits. The mellow taste comes from years of being matured in
wooden casks in meticulously guarded environs.

Whytehall whisky
Whytehall whisky was rewarded with silver medal at the international wine and spirit
competiton 2007 held at U.K. it is a distinguished blends of aged scotch malts and the
finest Indian spirits, skillfully blended to give a rich , warm , fullbodied whisky with a
grace ful after note that lingers.

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

old admiral brandy

The phenomenally successful old admiral brandy is our third million case
Brand . in spite of India being a predominantly whisky- drinking country, old admirl
brandy has received an overwhelming response from trade channel and consumers a like ,
to record exponential growth, year-on-year.

8 PM Bermuda white rum

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

8PM WHISKY
8PM WHISKY, radico flagship brand, is a perfact balance of strength and smoothness, it
is one of the finest whiskies in the regular segment . the strong positioning of A TIME
FOR FRIEND has ensured a distinctive identity for the brand.since its launch in 1999,
backed by fine product quality, superior packaging it has been a run away success.

SOME NEWS RELATED WITH RADICO

contents
WORKING CAPITAL
CONCEPT OF WORKING CAPITAL

FACTORS INFLUENCING WORKING CAPITAL

TYPES OF WORKING CAPITAL ON
THE BASIS OF CONCEPT
TYPES OF WORKING CAPITAL ON
THE BASIS OF REQUIREMENTS
NEED OF WORKING CAPITAL
OPERATING CYCLE OF WORKING CAPITAL
MANAGEMENT OF WORKING CAPITAL
ADVANTAGES
FINDINGS
BIBLIOGRAPHY

RADICO KHAITAN LTD.

Meaning of working capital

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

1) fixed capital
2) working capital
Every business needs funds for its establishment and
to carry out its day-to-day operations. Long-term
funds are required to create production facilities
through purchase of fixed assets such as plant and
machinery, land Building, furniture etc. Investment in
these assets represents that part of firm's capital
which is blocked on A permanent or fixed bassis and
is called fixed capital. Funds are also needed for
short-term purpose for the purchase of raw
materials ,paymentof wages and other day-to-day
xpenses,etc. these funds are known as Working
capital.
"Working capital is the amount of funds
necessary to cover the cost of operating the
enterprises."

RADICO KHAITAN LTD.

CONCEPT OF WORKING CAPITAL

There are two concepts of working capital.

1) Gross working capital

2) Net working capital
In the broad sense , the term working capital refers to
the gross working capital and represents the amount
of funds invested in current assets. Thus, the gross
working capital is the capital invested in total
current assets of the enterprise.current assets are
those assets which in the ordinary course of business
can be converted In to cash with in the short period of
normally one accounting year .

RADICO KHAITAN LTD.

CONSTITUTENTS OF CURRENT ASSETS

1) Cash in hand and bank balances.

2) Bills Receivables.
3) Sundry debtors.
4) Short-term loans and advances.
5) Inventories of stocks, as:
a) Raw materials,
b) Work in process
c) Finished goods.
6) Temporary investment of surplus funds.
7) Accrued incomes.

RADICO KHAITAN LTD.

In narrow sense, the term working capital refers to

the net working capital. Net working capital is the

excess of Current assets over current liabilities, or

say:
Net Working capital = Current Assets Current
liabilities
Net working capital may be positive or negative .
When the current assets exceed the current liabilities
the working capital is positive and the negative
working capital results when the current liabilities are
more than the current assets.

RADICO KHAITAN LTD.

CONSTITUENTS OF CURRENT LIABILITIES

1) Bills payable.

2) Sundry creditors or account payable.

3) Short term loans. Advances and deposits.
4) Accrued or out standing expenses.
5) Dividends payable .
6) Bank over draft.
7) Provision for taxation . if it does not amount
to appropriation of profits

RADICO KHAITAN LTD.

The gross concept is some times preferred to the

net concept of working capital for the following
reason :
1) It enables the enterprise to provided correct
amount of working capital at the right time .

2) Every management is more interested in the

total current assets with which it has to operate
than the sources From where it is made available.
3) The gross concept takes in to consideration the
fact that every increase in the funds of the
enterprise would increase its working capital .
4) The gross concept of working capital is more
useful in determining the rate of return on
investments in working capital.

RADICO KHAITAN LTD.

The net working capital concept, however, is

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

2) It indicates the margine of protection available

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

RADICO KHAITAN LTD.

Characteristics of current assets

They have a short life span. Cash

balances are held only for a week or so

accounts receivables typically are held for a

duration of 30-60 days and inventory may
be held for 30-100 days.

They are rapidly transformed in to other

assets form . cash is utlised to purchase raw
material. Raw material is converted to work
in progress which is converted to finished
goods. Finished good are sold for cash or
credit, which creates accounts receivables
are finally realised in cash.

RADICO KHAITAN LTD.

Based on these characteristics of current assets,

following implications arise1) Working capital involves making frequent
decision.

2) The difference between profit and present

value is insignificant.
3) Since the various components of working
capital closely interact with each other ,
decision pertaining to one component must
be taken after given consideration to the
effect on other components.

RADICO KHAITAN LTD.

FACTORS INFLUENCING WORKING CAPITAL

REQUIREMENTS

Nature of the business :This is one of the primery factors influencing the
working capital requirements of a firm . For
instance, a service firm like a hotel has a short
operating cycle since it sells mostly on a cash basis
and has lower working capital requirement. A

manufacturing firm , on the other hand , has a longer

operating cycle and invests more in its current assets.
It thus has greater working capital requirement.
Seasonality of operations:some firms' products sell only during particular
seasons . for instance, air conditioners sell more
during the summer than in the winter. Such firms
have greater working capital requirement during peak
.

RADICO KHAITAN LTD.

seasons and lower requirements during other seasons

. Firms whose sales are not affected by seasons have
stable working capital requirement.
Market condition :The level of competition existing in market also
influences working capital requirement. When
competition is high, the company should have
enough inventories of finished goods to meet a

certain level of demand. Otherwise customers are

highly likely to switch over the competitor's products.
Supply condition :if supply of raw material and spares is timely and
adequate , the firm can get by we they comparatively
low inventory level. If supply is scarce and un
predictable or available during particular season , the
firm will have to obtain raw material when it is
available.

RADICO KHAITAN LTD.

Types of working capital

On the basis of the requirement
Permanent working capital:It refers to the minimum amount of the investment
which should always be there is the fixed or
minimum current assets such as cash and bank
balance , debtors, and other short- term assets i.e
inventory etc .in order to carry out business smoothly.

This investment is a regular type permanent working

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

RADICO KHAITAN LTD.

With the growth of the business, the size of this

component of working capital also increases.
This hard core working capital is very important
from finance point of view. It should be financed
from long term sources of fund .for this purpose
besides ploughing back of profits, shares and
debentures can be issued to raise necessary
funds.

Temporary working capital:The amount of temporary this hard core working

capital identification is working capital keeps on
fluctuating from time to time on the business
activities. It may be divided in to two parts . i.e
seasonaland special working capital . Seasonal
working capital is required to meet the seasonal
demand d of busy period or season occurring at
stipulated intervals. While special working capital is

RADICO KHAITAN LTD.

Required to meet extra ordinary needs for

contingencies such as rising prices, fire strikes
unexpected competition or big advertisement
campaign.

RADICO KHAITAN LTD.

Need of working capital :Working capital is needed for the following

purposes
1) for the purchase of raw materials, components
and spares.
2) To pay wages and salaries.

3) To incur day to day expenses and overhead costs

such as fuel , power and office expenses. Etc.
4) To meet the selling costs as packing, advertising,
etc.
5) To provide credit facilities to the customer.

RADICO KHAITAN LTD.

Operating cycle of working capital

Every business undertaking requires funds for two
purposes: investment in fixed assets and investment
in current assets. Funds required to invest in stock,
debtors and current assets keep on changing shape
and volume.
For example , a company has some cash in the
beginning. The cash may be paid to the suppliers of
raw materials , to meet labor costs and other overheds

. these three combined would generate work in

progress which will be converted into finished goods
on the completion of the production process on sale ,
these finished goods get converted in to debtors and
when debtors pay , the firm will again have cash .
This cash will again be used for financing raw
material, work- in- progress, finished goods, debtors
and finally again cash. This time period is known as
the working capital cycle of the firm.

RADICO KHAITAN LTD.

ACCOUNT
RECEIVABLES
CASH

FINISHED
GOODS

RAW
MATERIALS

WORK - IN PROCESS

RADICO KHAITAN LTD.

Management of working capital

According to smith , working capital management is
considered with the problem that arises in attempting
to manage the current liabilities and the inter
relationship that exist between them .
The basic objective of working capital management
is to manage the firm's current assets and liabilities in
such a way that a satisfactory level of working capital
is maintained i.e., it is neither excessive not
inadequate. In other words, it must have an optimum
size.
Thus we can say that working capital management
has these objective :

RADICO KHAITAN LTD.

Maintenance of working capital and availabity of

funds at the time of needs.
As a matter of the fact, a business can not survive in
the absence of a satisfactory ratio between its current
assets and current liabilities further more its ability to
prosper will largely be determined by the omposition
of the current assets tools.

RADICO KHAITAN LTD.

Components of management of working

capital
Working capital management bears the following
components Estimating the working capital requirement i.e
forcasting of working capital.
Finding out the optimum level of investment in
various current , namely cash, account receivable
, and stocks. In other words , determining the
size of working capital.
Finding out the optimum mix of short term
funds in relation to long term capital.
Finding out all appropriate sources of working
capital.

RADICO KHAITAN LTD.

Inventory management:Inventory is the one of the most important component

Of working capital and its proper management can
not be under stressed. Fundamentally, inventory
consists of raw material, work in progress and
finished goods. The proportion of inventories to fixed
assets is quite high ranging from 25% to 45% in the
manufacturing sector.
Hence inventory management is crucial for all
managers irrespective of functional specialization.
Since a number of industrial relations disputes in
manufacturing industries are linked to production
bonus and incentives relating to inventories
irrespective of the market need for inventory , the
manager must understand this point well. Every
member of the organization feels its impact and yet
scant respect is paid to it. Hence managers should
take note of some of these important criteria for
insuring proper management.

RADICO KHAITAN LTD.

 Maintaining a proper level of stock.

ABC analysis to control high value items .
Proper ordering policies .
Pricing of raw material work in progress and
finished goods.
Control over wastage and obsolescence.

RADICO KHAITAN LTD.

Account receivable:This is also a forms an important part of working

capital and depends on the credit policy adopted by
the firm namely.
How much credit to be given
For how long is it given
Discounts for early payment
Collection and recovery efforts

RADICO KHAITAN LTD.

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

is required to
1) Meet day to day expenses
2) As a hudge against uncertainties.
Too much cash is not good nor is having too little a
healthy practices . Good companies usually have a
practices to plant surpulus cash in risk free securities
or inter company deposits. On the other hand ,
companies with a deficit tend to borrow at a high
rate of interest indicating a lack of planning . a
sudden surge in business may spur the need of
working capital and its may also require additional
interest to be paid and again planning is important.
The key to all management and especially working
capital management is to plan work . this also
Important aspect of working capital management and
good companies have the practice of planning their
needs well in advance.

RADICO KHAITAN LTD.

Advantages of adequate working capital :No business can run successfully without an adequate
amount of working capital. The main advantages of
maintaining adequate amount of working capital are
as follows:
1) Solvency of the business : adequate working
capital helps in maintaining solvency of the
business by providing uninterrupted flow of
production.
2) Goodwill : sufficient working capital enables a
business concern to make a prompt payments
and hence helps in creating and maintaining
goodwill.
3) Easy loans : a concern having adequate
working capital , high solvency and good credit
standing can arrange loans from banks and
others on easy and favorable terms.

RADICO KHAITAN LTD.

4) Cash discount : adequate working capital also

enables a concern to avail cash in purchase and
hence it reduces cost.
5) Regular supply of raw materials : sufficient
working capital ensures regular supply of raw
materials and continuous production.
6) Exploitation of favorable market conditions :
only concerns with adequate working capital can
exploit favorable market condition such as
purchasing its requirements in bulk when the
prices are lower and by holding its inventories
for higher prices .
7) Ability to face crisis : adequate working capital
enables a concern to face business crisis in
emergencies such as depression because during
such periods, generally, there is much pressure
on working capital.

RADICO KHAITAN LTD.

31ST

GROSS WORKING CAPITAL AS AT

MARCH, 2007
ACCURED INCOME

611.27

INVENTORIES

73.79

SUNDARY DEBTORS

129.58

CASH AND BANK BALANCE

14.87

LOANS AND ADVANCES

195.51

TOTAL GWC

425.02

NET WORKING CAPITAL AS AT

31ST MARCH, 2007
CURRENT LIABILITIES

98.44

NET WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITIES

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

RADICO KHAITAN LTD.

FINDINGS
The second largest liquor producer
company in India.
In defence it is the largest supplier of
Indian liquor.
Funding with in the company for
regular expances has to be properly
taken care off.

RADICO KHAITAN LTD.

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