mandeep (825)
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A
PROJECT REPORT
ON
WORKING CAPITALMANAGEMENT
AT
BALLARPUR INDUSTRIES LTD.
(UNIT SHREE GOPAL, YAMUNA NAGAR)
Submitted to
MAHARSHI MARKANDESHWAR
UNIVERSITY,MULLANAIn the partial fulfillment of the award of
Master Of Business Administration(Session 2007-2009)
Submitted By:
MANDEEP KAUR
Roll No.- 1207825
Class – M.B.A 3RD SEM
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DEPARTMENT OF BUSINESS MANAGEMENT
MAHARISHI MARKANDESHWAR INSITUTE
OF MANAGEMENT
CONTENTS
PREFACE
CERTIFICATE FROM THE ORGANISATION
ACKNOWLEDGEMENT
DECLARATION
INTRODUCTION
HISTORY & BACKGROUND
LOCATION OF BILT
VARIOUS DEPARTMENT S AT UNIT SHREE GOPAL
ORGANISATION STRUCTURE
EXECTIVE SUMMARY
INTRODUCTIONINTRODUCTION TO WORKING CAPITAL
LITERATURE REVIEW
RESEARCH METHODOLOGY
OBJECTIVE OF THE STUDY
LIMITATION OF THE STUDY
INDUSTRY PROFILE
STRUCTURE OF FINANACE DEPARTMENT
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COMPANY PROFILE
SWOT ANALYSIS, SUGGESTION ,CONCLUSION
PREFACE
MBA is stepping - stone to Management career. In order
to achieve practical, positive and concrete results the
theoretical knowledge must be supplemented with exposure
to real environment.
Theoretical knowledge without practical knowledge is of
little value. Theoretical studies in classroom are not
sufficient to understand the functioning of complex and large
sized organization. Therefore, it becomes necessary to
undergo any project work. Practical supplements the
theoretical studies i.e.; it covers what is left uncovered in the
classroom. It exposes a student to invaluable treasure of
experiences.
I took my project work with BILT. Project work is a part
of our curriculum, which helps us to correlate our theoretical
concepts with practical experiences. The topic that I have
taken for project is "WORKING CAPITAL MANAGEMENT "
has been suggested to me by finance department (BILT UNIT
Shree Gopal). Accomplishment and achievement of goals is
the major aim of any organization. These goals are achieved
by proper planning. Working capital management and
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inventory management plays an important role in achieving
these goals. As blood is essential in human body to live,
working capital is also essential to carry out day - to - day
operations of an organization. If a company has adequate
working capital, it can raise loans easily, purchase raw
materials timely etc. and overall, it helps in maintaining
goodwill.
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ACKNOWLEDGEMENT
Heartfelt thanks to those who support
me…
It often happens that one is at loss of words when one
is really thankful and sincerely wants to express one's
feeling of gratitude towards other.
I am earnestly grateful to Mr. RAKESH CHAWLA
Manager (Finance) Ballarpur Industries Ltd.; Yamuna
Nagar for providing me an opportunity to undertake project
work in their esteemed organization and practical training
which will go long term in shaping my career.
I also express my deepest respect to Mr. SL ARORA
(Assistant manager) for their caring and guiding support
and for giving a very patient hearing whenever I need and
provided me a lot of practical training, which helps us in
future too. He directly made a significant contribution to
emergence to this project report.
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I am deeply indebted to all my faculty members of the
institute for their valuable contribution during the academic
session & guidance in preparation of this project report.
Finally, it is efforts of my parents and esteemed friends
and the Almighty GOD who have been a source of strength
and confidence for me in this endeavor.
(MANDEEP
KAUR)
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DECLARATION
This is to certify that I MANDEEP KAUR the student of
MAHARISHI MARKANDESHWAR INSITUTE MGT.studying
in MBA (IIIrd Sem.). Roll no. 1207825 has undergone
summer/industrial training in Ballarpur Industries Ltd. (BILT),
Yamuna Nagar for six weeks and have submitted a
project/industrial report on the title "Working Capital
Management “ as assigned by the Company, for partial
fulfillment of Degree of Master of Business Administration
(M.B.A.) to MAHARISHI MARKANDESHWAR
UNIVERSITY ,MULLANA..
I solemnly declared that the work done by me is
original and no copy of it has been submit to any other
Universities for award of any other
degree/diploma/fellowship or on similar title and topic.
Signature of Student
(MANDEEP KAUR)
Countersigned
Mr .Sanjeev MarwahDirector M.M.IM
MULLANA.
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INTRODUCTIO
N
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HISTORY AND BACKGROUND
Ballarpur Industries Limited (BILT) IS known as the backbone of
the Thapar group. The founder of the Thapar group was Late Lala
Karam Chand Thapar (1900 - 1962). One of the most illustrious
industrial chains in India, Thapar group consists of many major
industries such as paper, chemicals, glass, pulp, china clay,
electronic etc.
LALA KARAM CHAND started his career 1922 as a coal agent. In
a short span of time he was known as a coal king. After improving
his financial position KCT thought for entering into industries.
Foundation Company of England initially promoted the company
in 1927 by the name of M/s Punjab Pulp & Paper Company. The
foundation Company pushed up its turbine but something went
wrong & the entire generating set was blown, the mill was laid
shut for 6 months & was ultimately auctioned.
At present Unit SHREE GOPAL is producing around 250 TPD of
paper. This unit consists of Six paper machines
• Two coating plants
• Three finishing houses
• Two power houses
• One caustic soda plant
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• New pulp mill
BALLARPUR INDUSTRIES LIMITED, popularly known as BILT is
'efficiently managed, 'financially sound', and 'self sufficient' and
'self made company' is the flagship of the coveted THAPAR
GROUPS.The THAPAR Group has a wide range of activities like
paper, engineering, leather etc.
There are 54 companies and 84 plants under this group. Some of
the main companies under this group are Crompton greaves,
K.C.L; BROEOS JCT Limited, BILT.
BALLARPUR INDUSTRIES LTD.(BILT) promoted by LM THAPAR is
the leader in Indian paper industry with an annual production
capacity of 460000 MT spread over in five manufacturing
facilities produces ordinary and superior varieties of writing,
printing, and specialty papers etc.
BILT, which is originally incorporated in 1945 as BALLARPUR
Straw Board Mills, has changed its name in march 1946 to
BALLARPUR paper and straw board mills and again it was
changed to the present name in October 1975. Since then the
company has grown to be a leader in paper industry by
continuous expansion and modernization of its capacity and plant
and strategic acquisitions. In 1969 the company has merged
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SHREE GOPAL paper Mills with itself and the company which has
acquired the Sinar Mass Pulp and paper (India) Ltd. now BILT
Graphic papers Ltd. (BGPL) which has state of the art 15000 TPA
paper plant and a market leader in the high end coated art paper
and art paper board segment in India is planning to bring the
paper unit of BGPL into its fold and consolidating its paper
operation under one umbrella.
The company which was one of the most diversifiedcompanies
in the pre - liberalization era of industrial licensing withinterests in
paper, chemicals (phosphoric Acid, STPP, Chlor, Alkalies),Vanaspati
& Edible oils and Glass has decided to focus on its corecompetence
that is paper and exit from non - core business. First majorsteps on
these lines were initiated in the year 1994 - 1995 withhaving off
Glass business. Therefore the company sold its vananspatiand
Edible oils business.
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In 1996 - 97 and is 1998, the chemical division of the company
with its plant at Karwar, Karnataka and which has interests in
phosphates, Chlor Alkali and Bromine Chemicals Ltd. (now
Solaries Chem. Tech. Ltd.). To complement its restructuring and
to enable it to emerge as a stronger and more competitive
organization, the company is implementing a project involving
modernization and expansion of capacity at its Units in Shree
Gopal, Ballarpur and Sewa by 105000 TPA.
The project will be implemented in two
phases:- I n the first phase, the capacity expansion
of 35000 TPA and 28000 TPA is planned over a two - year period
from 2000 - 01 to 2002 - 03 for Units Sewa and Shree Gopal.
In the second phase, 42000 TPA of capacity is expected to
come on stream at Unit Ballarpur by 2003 - 04. During the year
2001 - 02, the company has completed the up gradation of Pulp
Mill at Unit Sewa resulting in increasing in capacity by 37 tones
from the earlier 125 tones of unbleached pulp per day. The
company has also completed installation of a 2.4 meter wide
blade coater at Unit Shree Gopal in FY 2001 - 02. BILT entered
into strategic alliance with IIansol of South Korea to provide world
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class blade coated paper to the Indian customer. It is the first
company in the world to commercially exploit the fractionation of
bamboo and has applied for the world patent for this process. It
has also entered into direct retail distribution with the launch of
A4 size 100 - sheet pack of Royal Executive Board.
Mr. Gautam Thapar, Managing Director of BILT, has been
associated with BILT since 1986 when joined the company as
Shop Floor Management Apprentice - Paper Mills and was
instrumental in turning around BILT in the late 1990s.
BILT consists of Five units:-
1) Ballarpur Unit, Distt. Chanderpur, Maharashtra
2) Shree Gopal Unit, Yamunanagar, Haryana
3) Sewa Unit, Orissa
4) Asthi Unit, Maharashtra
5) Unit Choudhwar, Orrisa
From the beginning in paper, BALLARPUR INDUSTRIES
LIMITED is now a multifaceted enterprise with interest allied to as
well as remarkably varied from paper. The operations of the
company traverse products divisions as well as international
boundaries, making it today the core of the THAPAR GROUP and
forming together with subsidiary and associates companies a
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group in itself with its center of operations at its head office New
Delhi.
LOCATION OF BILTUNIT SHREE GOPAL is situated in the heart of Yamuna
Nagar city. The unit is spread over an area of 3sq. km and also
has modern residential colony for its employees with all modern
amenities like - hospital, school, club, playground, community hall
etc.
The unit is situated in the midway to the railway station and
the bus stand. It has got its own residential colony. There is no
problem of waste disposal. The unit has its own railway line
running inside so that transportation of raw material is facilitated.
There are main gates for entry and watchmen are there to look
after
One gate opens in the main market of the Yamuna Nagar and the
other two in the different direction, which make it well connected
to the other parts of the city. BILT is a small town itself with all
facilities available.
VARIOUS DEPARTMENTS AT
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UNIT SHREE GOPAL
ADMINISTRATIVE DEPARTMENT
1. PDC-People development and communication:- This
department is primarily concerned with the training,
selection recruitment, promotion, demotion, labour welfare,
retirement, work culture and awareness.
2. Accounts Department- :- The function of this
department is to maintain every detail and record of all the
transactions covered by different department
3. General Store department :- These people are
concerned with procurement and storage of process
material.
4. Marketing & Sales department:- Sailing out finished
paper is their main activity.
5. Raw material department:- Each and every product
required for paper making is arranged/ purchased by this
department.
6. Traffic department:- This department includes wing
section, raw material section, transport section etc.
PROCESS DEPARTMENT:
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1. Pulp Mill:- its function includes manufacturing of pulp and
stock preparation.
2. Machine house :- It controls the working of various paper
machine and prepare the paper of required quantity.
3. Coating plant:- Primary function of this department
concern with coating of paper as per requirements.
4. Soda recovery plant:- Function of this department is to
look after the process of recovery of useful chemical from
waste liquor.
5. Caustic soda chlorine plant( CSCP):- This department
supervises the production of Hcl and NaOH.
ENGINEERING DEPARTMENTS:-
1.Electrical engineering:- This department attaches itself with
the maintenance of installation of electrical machine, distribution
and generation of electrical energy and various other electrical
installation at the unit.
2.Machine engineering:- This department is concerned with
the maintenance of various machine, boiler operations etc.
3.Civil engineering:- All the construction work like- building of
roads , sanitary, waste disposal, water supply etc. are under their
control.
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4.Instrumentation engineering:- Maintenance of all the
electrical controls of the machines is carried out under the expert
guidance.
5.Power house:- Having the total installed capacity of 25MW
and maintain by two power house, old and new, this department
backup's, the total power demand of the unit efficiently and
effectively.
OGRANISATION STRUCTURE
V.P. and M.D.
GROUP II HEAD
CHIEF GENERAL
MANAGER
PEOPLE
DEVELOPMENT &
COMMUNICATION
COMMERCIAL
& RAW MATERIAL
RESEARCH
ANDDEVELOPMEN
PAPER
PRODUCTION
ENGG.
SERVICES
MEDICAL
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EXECUTIVE SUMMARY
UNIT SHREE GOPAL
Unit Shree Gopal is situated at Yamuna Nagar in Haryana. It
contributes about 30% towards total production of paper
manufactured by BILT. This mill was taken by Thapar in 1936-37.
It took over years in the process of rebuilding, expansion and
diversification.
The unit employs 3605 people and manufactures quality-writing,
printing and coated paper. The unit has six large and high - speed
machines that takes in all kinds of raw materials like grasses,
baggage, cotton waste to turnout special paper with an exquisite
finish.
The unit has also three - pulp machine to convert raw material
into pulp for paper, capacity of seven - paper machine is 70000
tonnes of paper, along with that unit also has got two paper
coating machines with a capacity of production 17000 tonnes of
coated paper. Originally Punjab pulp and paper mills, it was
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promoted by Lala Kashi Ram in 1928 acquired by Late Lala Karam
Chand Thaper in 1936.
AREA & PRODUCTION
Total Area : 206 Acres
Factory Area : 155 Acres
Colony Area :s 51 Acres
Turnover : Rs. 24-26 crore per month
Production : App. 6000 MT per month
Dispatch : App. 6000 MT per month
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INTRODUCTION
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INTRODUCTION TO WOKING CAPITAL
MANAGEMENT
Meaning of working Capital
Capital required for a business can be classified under two
main categories .
1. Fixed capital
2. Working capital
Every business needs funds for two purposes - for its
establishment
and to carry out its day to day operation.
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 represent
that part of firm's capital which is blocked on a permanent or
fixed basis and is called fixed capital. Funds are also needed for
short term purpose for the purchase of raw materials, payment of
wages and other day to day expense, etc. These funds are known
as working capital which is required for financing short term of
current assets such as cash, marketable securities, debtors and
inventories. Funds thus invested in current assets keep revolving
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fast and are being constantly converted into cash and this cash
flows out again in exchange capital of short term capital.
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CONCEPTS OF WORKING CAPITAL
There are two concepts of working capital:
a. Gross working capital.
b. 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 sets of the enterprise.
Current assets are those assets which in the ordinary course
of business can be converted into cash with a short period of
normally one accounting year. Examples
CONSTITUENTS OF CURRENT ASSETS
1. Cash in hand and bank balance
2. Bills receivables.
3. Sundry debtors.
4. Short term loans and advances.
5. Inventories of stocks, as:
(a) Raw materials.
(b) Stores and spares.
(c) Work in process.
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(d)Finished goods.
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6. Temporary investments of surplus funds.
7. Prepaid expenses.
8. Accrued incomes.
In a narrow sense. The term working capital refers to the net
working capital
.
Net working capital may be positive or negative.
Constituents of current liabilities.
i. Bills payable.
ii. Sundry creditors.
iii. Accrued or outstanding expenses.
iv. Shorts - term loans, advances and deposits.
v. Dividends payable.
vi. Bank overdraft.
vii. Provision for taxation.
Gross working capital concept is financial or going concernconcept
whereas net working capital is an accounting concept of workingcapital.
Net W.C = current assets – current
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These two concepts of working capital are not exclusive, ratherboth have
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their own merits, the gross concept is sometimes preferred to the
net concept of working capital for the following reasons:
It enables the enterprise to provide e correct amount of working
capital at the right time.
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.
The gross concept takes into consideration the fact
that every increase in the funds of the enterprise would
increase its working capital.
The net working capital concept, however is also important for
the following reason:
It is a qualitative concept which indicates the firm's ability to
meet its operating expenses and short term liabilities.
It indicates the margin of protection available to the short term
creditors.
It is and indicator of the financial soundness of an enterprise.
It suggests the need for financing a part of the working capital
requirements out of permanent sources of funds.
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To conclude, it may be said that both, gross and net,
concepts of working capital are important aspects of the working
capital management.
The net concept of working capital may be suitable only for
proprietary form of organizations such as sole trader of
partnership firms. But the gross concept is very suitable to the
company form of organization where there is a divorce between
ownership, management and control.
NEED OF WORKING CAPITAL MANAGEMENT
For the efficient operation of the business, working capital is
required along with the fixed capital, working capital is needed
for the purchase of raw material and for the payment of various
day to day expenses. There will be hardly any business, which
does not require any working capital. The need of working capital
is different in different business. Financial management aims at
maximizing the wealth of shareholder. To achieve the objective, it
is necessary to earn adequate profits. The profit depends largely
on sales but sale don’t result in to cash immediately. To increase
sales goods are to be sold on credit, the collection of which takes
place time term. Thus there exit a gap between the sales of
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goods and realization of cash. During this period expenses
incurred to continue business operations. For this purpose,
working capital is requried. The need of working capital can be
explained with the help of operating cycle or cash cycle.
Operating cycle means that time period which is required to
convert raw material in to cash. In manufacturing enterprise raw
material purchased with cash, than raw material is converted into
work-in-process, which is the term gets converted in to finished
goods ; both receivable through sales and lastly cash is received
from debtors and bill receivable.
In operating cycle following events are included:
1. Conversion of cash into raw material.
2. Conversion of raw material into work-in-process.
3. Conversion of work-in-process finished goods.
4. Conversion of finished goods in to debtors and bill receivable.
5. Conversion of debtors and bill receivable through sales in to
cash.
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OPERATING CYCLE
The greater the period of operating cycle, more will be the
requirement of working capital. Business enterprises engaged in
manufacturing work have larger duration of operating cycle as
compared to those engaged in trading business in such
enterprise cash is directly converted in to finished goods.
Because no business is able to match its cash flow and out flows,
therefore the business needs to maintain some cash to pay its
current liabilities in time. Similarly, to maintain supply of goods to
meet the demand in the market, the stock of raw material has to
DEBTORS AND BILL
CASH
WORK-IN-PROCESS
FINISHED
RAW MATERIAL
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maintain. Firm has to sell on credit due to the competition. Thus,
business needs adequate working capital.
CLASSIFICATION OR KINDS OF WORKING
CAPITAL
Working capital may be classified in two ways:
1. On the basis of concept.
2. On the basis of time.
On the basis of concept. Working capital is classified as
gross working capital and net working capital as discussed
earlier. This classification is important form the point of view
of the financial manager. On the basis of time working
capital may be classified as:
1. Permanent or fixed working capital.
2. Temporary or variable working capital.
Permanent or fixed working capital. Permanent or fixedworking
Capital is the minimum amount which is required to ensureeffective
utilization of fixed facilities and for maintaining the circulation of current
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Assets. There is always a minimum level of current assets whichis
continuously required by the enterprise to carry out its normalbusiness
operations for example. Every firm has to maintain a minimumlevel of raw
material , work in process finished goods and cash balance .
This minimum level of current assets is called permanent or
fixed working capital as this part of capital is permanently
blocked in current assets. As the business grows, the
requirements of permanent working capital also increase due
to the increase in current assets. The permanent working
capital required to ensure circulation of current assets from
cash to inventories, from inventories to receivables and from
receivables to cash and so on reserve working capital is the
excess amount over the requirement for regular working
capital which may be provided for contingencies that may
arise at unstated periods such as strides rise in prices,
depression, etc.
Temporary or variable working capital. Temporary
or variable working capital is the amount of working capital
which is required to meet the seasonal demands and some
special exigencies. Variable working capital can be further
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classified as seasonal working capital and special working
capital. Most of the enterprises have to provide additional
working capital. Special working capital is that pat of working
capital which is required to meet special exigencies such as
lunching of extensive marketing campaigns for conducting
research, etc. the temporary working capital differs from
permanent working capital in the sense that it is required for
short periods and cannot be permanently employed gainfully
in the business.
KIND OF WORKING CAPITAL
WORKING CAPITAL
ON THE BASIS OF
TIME
ON THE BASIS OF
CONCEPT
VARIABLE
W.C
FIXED
W.C
NET
W.C
GROSS
W.C
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PERMANENT AND TEMPORARY WORKING
CAPITAL
IN SHORT RUN
PERMANENT
TEMPORARY
TIME
AMOU
NT
OFWORK
INGCAPITAL(RS)
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PERMANENT AND TEMPORARY WORKING
CAPITAL
IN LONG RUN
PERMANENT
TEMPORARY
TIME
A
MOUNT
OFWORK
INGCA
PITAL(RS)
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FACTOR AFFECTING OF WORKING CAPITAL
Business should prepare its financial plan in such a way that it
has neither surplus nor inadequate working capital. The need of
every business are different but generally the factor must be
considered while determining the requirement of working capital.
1. Nature of the business.
2. Growth and expansion.
3. Production cycle.
4. Business fluctuations.
5. Production policy.
6. Credit policy.
7. Availability of raw material.
8. Availability of bank credit.
9. Turnover on inventories.
10. Magnitude of profit.
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11. Level of Texas.
12. Dividend policy.
13. Depreciation policy .
14. Price level change.
15. Operating efficiency.
IMPORTANCE OR ADVANTAGES OF ADEQUATE
WORKING CAPITAL
Working capital is the life blood and nerve center of a
business. Just as circulation of blood is essential in the human
body for maintaining life, working capital is very essential to
maintain the smooth running of a business. Business can run
successfully without and 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 prompt payments and hence in creating
and maintaining goodwill.
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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.
4. Cash discounts: Adequate-working capital also enables
concern to avail cash discounts on the purchases and hence
it reduces costs.
5. Regular supply of raw materials: Sufficient working
capital ensures regular supply of raw materials and
continuos production.
Regular payment of salaries, wages and other day to day
commitments: A company which has ample working capital can
make regular payment of salaries, wages and other day to day
commitments which wastage and costs and enhances production
and profits.
6. .Exploitation of favorable market conditions: Only
concerns with adequate working capital can exploit favorable
market conditions such as purchasing its requirements in bulk
when the prices lower and by holding its inventories for higher
prides.
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7. Ability to crisis: Adequate working enables a concern
to face business crisis in emergencies such as depression
because during such periods, generally, there is much pressure
on working capital.
.
8. High morale : Adequacy of working capital creates an
environment of Security, confidence, high morale and creates
overall efficiency in a business.
EXCESS OR INADEQUATE WORKING
CAPITAL
Every business concern should have adequate working capital to
run its business operations. It should have neither redundant or
excess working capital position are bad for any business however
out of the inadequacy of working capital which is more dangerous
from the point of view of the firm.
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Disadvantages of excessive working
capital
1. Excessive working capital means idle funds which earn no
profits for the business and hence the business cannot earn
a proper rate of return on its investments.
2. When there is a redundant working capital, it may lead to
unnecessary purchasing and accumulation of inventories
causing more chances of theft, waste and losses.
3. Excessive working capital implies excessive debtor and
defective credit policy which may cause higher incidence of
bad debts.
4. It may result into over all insufficiency in the organization.
5. When there is excessive working capital, relations with
banks and other financial institutions may not be
maintained.
6. Due to low rate of return on investment, the value of shares
may also fall.
7. The redundant working capital gives rise to speculative
transactions.
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DISADVANTAGE OF INADEQUATE WORKING
CAPITAL
1. A concern, which has inadequate working capital, cannot
pay its short-term liabilities in time. Thus, it will loss its
reputation and shall not be able to get good credit facilities.
2. It cannot buy its requirements in bulk and cannot avail of
discounts, etc.
3. It becomes difficult for the firm to exploit favorable market
condition and undertake profitable projects due to lack of
working capital.
4. The firm cannot pay day to day expenses of its operation
and it creates inefficiencies, increases costs and reduces
the profits of the business.
5. It becomes impossible to utilize efficiently the fixed assets
due to non - availability of liquid funds.
6. The rate of return on investments also falls with the
shortage of working capital.
:
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.
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LITERATU
REREVIEW
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PERFORMAS FOR ESTIMATION OF WORKING
CAPITAL REQUIREMENTS FOR TRADING
CONCERN
STATEMENT FOR WORKING CAPITAL REQUIREMENTS
AMOUNT Rs
Current Assets:
1. Cash
2. Debtors or receivables (for………..month’s sales)
…………
3. Stocks(for…….. month’s sales)
4. Advance payments if any
5. Others
Less: current liabilities:
1. Creditors (for ………..month’s purchase)
…
2. Lag in payment of expenses
(outstanding expenses, if any)
WORKING CAPITAL(C.A.-C.L)
………….
Add: provision/margin for contingencies
Net working capital required.
…………..
……….….
…….……
…………..
…………..
…………..
………….
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STATEMENTS FOR WORKING CAPITAL REQUIREMENTS
AMOUNT Rs
Current Assets:
1. Stock of raw material (for…..month’s of
consumption)
2. Advance payment if any
a. Raw materials
…
b. Direct labour
…
c. Overheads…
3. Stocks of finished goods (for…..month’s sales)
a. Raw materials
b. Labour
…
c. Overheads
4. Sundry debtors (for…. Month’s sales)
a. Raw materials
b. Labour
c. Overheads
5. Payment in advance if any
6. Balance of cash
7. Any other (if any)
Less: Current liabilities:
1. Creditors (for ………..month’s purchase)
……
2. Lag in payment of expenses
(outstanding expenses, if any)
…………..
……….….
…….……
…………..
…………..
…………..
………….
…………….
…………..
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WORKING CAPITAL (C.A.-C.L)
………….
Add: provision/margin for contingencies
Net working capital required.
SCHEDULE OF CHANGE IN WORKINGCAPITAL
Particulars Year 2003 Year 2004 Effect on W.CIncrease Decrease
CURRENT ASSETSInventories 312181368 249232511 - 62948857Sundry Debtors 176256 876 166547181 - 9709695Cash & Bank 1231881 1176728 - 55153Loan & Advances 53602290 52926780 - 639510Total Assets(A) 543272415 469919200CURRENT LIABILITIESAcceptances 1437839 1064519 373320 -Due to small scale
Industries
13330138 31946661 - 18616523
Other creditors 474508263 351553825 122954483 -Security Deposit 161577377 191870540 - 30293163Advance Receipt from
customer
6087877 7771805 - 1683928
Provision for gratuity 106843171 116083324 - 9240153Total of CurrentLiabilities (B)
763784665 700290674
W.C. (A-B) (220512250) (230371474)Neg. decreases in W.C. 9859224 9859224
Total (230371474
)
(230371474
)
133186982 13318698
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Particulars Year 2002 Year 2003 Effect on W.CIncrease Decreas
CURRENT ASSETSInventories 336074005 312181368 - 23892637Sundry Debtors 200989466 176256 876 - 247 3259Cash & Bank 2249618 1231881 - 1017737Loan & Advances 56318650 53602290 - 2716360Total Assets(A) 595631739 543272415CURRENT LIABILITIESAcceptances 3404117 1437839 1966278 -Deferred payment
Liabilities under redis.
2533119 - 2533119 -
Due to small scale
Industries
14112955 13330138 782817
Other creditors 493824840 474508263 19316577 -
Security Deposit 11195540 161577377 - 15038183Advance Receipt from
customer
1236874 6087877 - 4851003
Provision for gratuity 103986848 106843171 - 2856323Total of CurrentLiabilities (B)
630294293 763784665
W.C. (A-B) (34662554) (220512250)Neg. Decrease in W.C. (185849696) 185849696
Total (220512250
)
(220512250) 210448487 2104484
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Particulars Year 2001 Year 2002 Effect on W.CIncrease Decrease
CURRENT ASSETSInventories 362672305 336074005 - 26598300Sundry Debtors 282410719 200989466 - 81421253Cash & Bank 1344047 2249618 905571 -Loan & Advances 65326757 56318650 - 9008107Total Assets(A) 711753828 595631739CURRENT LIABILITIESAcceptances 6432112 3404117 3027995 -Due to subsidiary Co. 4381456 - 4381456 -Deferred payment
Liabilities under redis.
7913800 2533119 5380681 -
Due to small scale
Industries
13589233 14112955 - 523722
Other creditors 490210619 493824840 - 3614221Security Deposit 4320837 11195540 - 6874703Advance Receipt from
customer
4962697 1236874 3725823 -
Provision for gratuity 102737318 103986848 - 1249530
Int. on loan accrued butnot due
317860 - 317860 -
Total of CurrentLiabilities (B)
634865932 630294293
W.C. (A-B) 76887896 (34662554)
Decrease in W.C. 111550450 111550450
Total 76887896 76887896 129289836 12928983
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COMMENTS: -
The above schedule of change in working capital depicts :-
1. Current Liability & provision increase by 1.5
Crore due to better bargaining with vendors and
having more credit period facilities as compared to
last year.
2. Debtors decrease by 0.97 Crore due to debtors
realization .
3. Cash and bank balance decrease on the basis of
current requirement.
4. Inventory decrease by 6 crore due to decrease in
finished stock and unfinished stock by 4 crore which
offset by increase in tools and spares by 2 crore.
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RESEARCH
METHODOLOGY
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METHODOLOGY
SOURCE:
It was decided that necessary information for the studycould be
Obtained from the staff level and concerned officers of thefinance
Department.
INSTRUMENT:
Major instrument for acquiring the information was a
catalogue of the company and discussion to concerned officers.
FIELD WORK:
The collection of data was during the period of 02-06-2005
to 13-07-2005 very well cooperation was given by the employees
working in the industry.
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OBJECTIVES OF THE STUDY
As BLOOD is essential for human body to live, the same way
FINANCE is essential for organization to survive. Thus to maintain
proper use of finance in an organization finance department is
required.
The finance department is the major department in an
organization as it is concerned with the procurement and efficient
utilization of funds in order to maximize profit and reduce cost of
production.
Finance department is not only concerned with their day - to -
day activities but they also give more attention to the area where
funds are indirectly
Present study is conducted to achieve the following specific
objectives:-
1. To know the functioning of the finance department of BILT.
2. To analyze the liquidity position of the organization.
3. To examine profitability position of the management.
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4. To find out the weaknesses and to suggest various
suggestions.
5. To study the performance of BILT.
6. To know about certain innovations made in the organization as
compared to past.
7. To prepare report on study thus conducted blocked .
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Research Methodology For The Report
RESEARCH DESIGN
I have used Descriptive Research as a tool to study
labour welfare measures of workers. Descriptive research
studies are those studies, which are concerned with specific
predictions, with narration of facts and characteristics concerning
individual, group or situation.
Scope of Study
This study is made to know the best of labour welfare
activities so that it can be implemented for better efficiency
and better achievement. The research studies the
‘RELEVANCE OF LABOUR WELFARE’ . It also attempts to
analyze the views and attitudes of workers on various
labour welfare measures for workers.
Area Of Study
The units selected for the purpose of study is M/s. Ballarpur
Industries Limited, Unit Shree Gopal, Yamuna Nagar and
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deals with respect to labour welfare measures being
implemented in the mentioned organization.
DATA COLLECTION
The task of data collection begins after a research problem
is being defined and research design chalked out.
Data types
a) Primary Sources
b) Secondary Sources
A . Primary Sources :
The primary data are those which are collects fresh and for
the first time, and thus happen to be original in character.
B . Secondary Sources :
The secondary data are those which have already been
collected by someone and which have already been passed
through the statistical process.
Collection Of Data For Project
PRIMARY SOURCE —Personal Interviews, Questionnaires,Observation
SECONDARY SOURCE— Books, Journals, Magazines,
Newspaper, Reports, Internet.
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In order to collect the information for the research study I used
the questionnaire which had both open-ended and close-
ended questions. The questionnaire was filled by the
investigator herself because most of the workers were not
able to go through the questionnaire. The questions were
explained to them in Hindi and the replies were sought. So
filling-up of the questionnaire was followed
DATA ANALYSIS
After the data collection, various parameters have been
used for the purpose of data analysis & the
information collected has been presented in different
tables & on the basis of these tables analysis &
interpretation has been made & the same has been
presented in the form of Bar Diagrams, Doughnuts
SAMPLING DESIGN
A sample design is a definite plan for obtaining a sample
from a given population. There are many sample design from
which a researcher can choose. Researchers must prepare
/select a sample design which should be reliable and
appropriate for their research only.
& Pie-Diagrams, with the brief interview with the worker
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D. SAMPLING UNIT
The first step in developing any sample design is to clearly
define the set of objectives technically called universe to be
studied. The universe of my study includes the corporate
houses whether big or small. These are the organization
which are indulged in providing welfare amenities to labour
for their betterment thereby improving the lot of working
class & make a worker a good employee and a good citizen.
Sample Size
This refers to the organizations surveyed. Although large
samples are more reliable but due to shortage of time and
money this organization has been selected.
Sample Size : 50
Type Of Question : Close-ended & Open-ended
Instrument Used : Questionnaire, Personal
Interviews
Area covered : Yamuna Nagar
Type Of Universe : Finite
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Sampling Techniques
This refers to procedure by which the organizations have
been chosen. This is :
Non-Random Sampling : Convenience Sampling
Judgement Sampling
LIMITATION OF THE STUDY
The major limitations of my study are as under: -
1. LIMITED TIME: -Although the staff of BALLARPUR
Industries LTD, was very efficient and highly
cooperative and they devoted enough of their valuable
time on us but because of time constraint we were not
able to devote as much time with their employees.
2. SECRECY: - Some of the information was kept
confidential and was not disclosed to any person
whosoever.
A
MJOY
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3. LACK OF COMPARATIVE DATA:- Due to non-
availability of other industries in the paper market we
were not able to compare the data of one organization
with another.
Inspite of these difficulties we still put our best efforts in
try to do the full justice to the subject matter and in
completion of the report.
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INDUSTRY PROFILE
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Structure of Finance Department
MANAGER OPF FINANCE
Mr. Rakesh Chawla
Dy. MANAGER OPF FINANCE
Mr. Sandeep Mittal
A.M.
MR.S.L. ARORA
(FIXED ASSETS, CASH)
A.M.
MR.R.K. THAKRAL
(BILLS PAYABLE)
A.M.
MR. N. AHUJA
(B/R)
D.M.
MR.ASHOK
CHOPRA
A.M.
MR.
JOYDEEP
OFFICE/EXECUTIVES
STAFF
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BOARD OF DIRECTORS
MR. L.M. THAPAR
(Chairman)
MR. GAUTAM THAPAR
(Vice-Chairman & Managing Director)
MR. R.R. VEDERAH
(Deputy Managing Director)
MR. B. HARIHARAN
(Group Director Finance)
MRS. NEERJA SHARMA
(General Manager & Company Secretary)
OTHER DIRECTORS OF BANKERS (UNIT SHREE
GOPAL)THE COMPANY PUNJAB NATIONAL BANK
MR. R.K. AHOOJA STATE BANK OF
PATIALA
MR. SUBIR BISHT ALLAHABAD BANK
DR. RAM . S. TARNEJA INDIAN OVERSEAS
BANK
DR. CHERIF SEDKY
MR. SHARDUL . S. SHORFF
MR. SANJAY LABROO
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REGISTERED OFFICEP.O. Ballarpur Paper Mill’sDistt. Chandrapur
(Maharashtra)
AUDITORS HEAD OFFICEK.K. Mankeshwar & Co. Thapar House 124,
Janpath(C.A.) New Delhi New Delhi
Price Water House OPERATING OFFICE(C.A.) New Delhi First India Place
Tower C Mehrauli GurgaonRoad
Gurgaon(Haryana)
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COMPANY PROFILE
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OTHER BUSINESS :
Leather – Toscana Shoes (Noida- Banglore).
Construction material- ALL (Haryana).
Media – The Pioneer Limited (Lucknow & Delhi).
BILT has a turn over of 15000 crores (2001-2002) and an annual
growth rate of 30 percent. It contributes to 3/5th of countries
values added and speciality papers and accounts for 20% of the
countries over all paper production. 45% of coated papers 90%
of the industrial paper laminates and 95% of back centered
boards produced in India are accounted by BILT.
BILT started with Shree Gopal Paper Mill in Yamuna Nagar in
thirties. Later it over took Ballarpur paper and Straw Boards
mills in Chanderpur Distt. They both in 1945 were merged to
form Ballarpur Industries Limited.
Special varieties of paper for everyday use like Sunlit bond
paper which is must for a presentable writing are made in
BILT. The Sunlit cartridge and Sunshine, super fine
cartridge are highly
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valued drawl The precious educational certificates are made on
BILT's Super Lucky Ivory Bonds. Life Insurance policies and
railway tickets are printed on BILT's Red Fort Policy Bond and
Lucky Parachement papers.
BILT is the sole makers of certain types of surface papers for
high speed quality printing. They are the only manufacturers of
Premium personal letter head or the top corporate executives.
BILT is heading towards fast development globalization of paper
industry.
CORE VALUE
HONESTY : We will be principled , straight-forward and fair in
all our dealing.
INTEGREITY: We will maintain the highest standards of
professionalism.
FLEXIBILITY: We will adopt our selves to always stay a step
ahead of change.
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RESPECT FOR INDIVIDUALS: We will give each person room
to contribute and grow.
RESPECT FOR KNOWLEDGE: We shall acquire and apply
leading edge expresses in all aspects of our business.
TEAM PERFORMANCE: The team comes first none of us is as
good as all of us.
VISION
Our aspiration is to become a leading creator of shareholder
value in the paper industry.
To achieve this, we will use the ENERGY of our people,
develop and implement LEADING EDGE technologies and draw on
both to deliver EFFECTIVE world class solutions to our customers.
As per the leading company in Thapar Groups:
Maximize shareholders value by the speed and quality of their
response
to market forces and business opportunities.
Be market leader in their core business.
Achieve and sustain global competitiveness in all their
business.
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Be the preferred supplier by providing their customer products
and
Service that always exceeds their requirements.
Grow as institution of strength of their people.
Be industry leaders in their commitment to safety and the
environment.
MISSION
To consistently out perform expectations and deliver
superior value to both our customers and stakeholders.
To achieve this, we will ENERGISE our people with a positive
culture that rewards INNOVATION, breeds INITIAIVE and
encourages INTELLIGENT risk taking.
SWOT ANALYSIS
STRENGTHS:
Maximum variety of paper and high quality.
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New pulp mill.
Good employer - employee relationship.
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Efficient management.
Totally computerized.
Team building.
Fulfilling social responsibility by keeping environment clean.
OPPORTUNITIES:
BILT have technology tie - up with world class popular companies.
BILT has 25% share in paper in India.
BILT has reached in Growth Stage.
WEAKNESS:
Shortage of funds.
Unnecessary blockage of funds.
Flow of funds controlled by head office.
THREATS:
Imported paper.
Government policies.
Increasing competition.
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SUGGESTION
Total liabilities of outsiders should be decreased.
Net profits need to be improved.
As capital has risen, so sales should also be improved upon to achieve
success.
Current liabilities are to be decreased.
Current assets are to be increased for the proper and smooth functioning
of business
Over all Management should be improved.
Expenditure should be decreased.
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CONCLUSION
"Success is achieved bythose who try where thereis nothing to loose by
trying and a great deal togain if successful, by all
means try "
-W. Clement Stone
The study has its own importance in its own way. With the
help of this study one can know about the struggle and
success of BILT. Efforts, which is due to its efficient
management
This study will definitely increase the morale of each
employee and by studying this, managers come to know that
what effective measures can be taken to maintain the
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effective use of working capital in the organization and thus
to achieve goals of the organization
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BIBLIOGRAPAHY
Web site:-
www.bilt.com
www.indiainformation.com/com./boll/di00/limit
Text Book:-
ADVANCED ACCOUNTANCY -SHASHI K. GUPTA
FINANCIAL ACCOUNTANCY -M.Y. KHAN
FINANCIAL ACCOUNTANCY - I.M. PANDEY
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