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SUMMER TRAINING REPORT ONSALES & Working Capital ManagementSubmitted in partial fulfillment of the requirement for the award of the degrees

Master's of Business AdministrationKurukshetra University,Kurukshetra (Haryana)(2009-2011)

UNDER THE GUIDANCE OF:MISS GARIMA GOUTAM

SUBMITTED BY:MR. PUNEET ARYA

R.N College of Engg. & Technology

(Panipat)1

CANDIDATES

DECLARATION

I hereby certify that the work which is being presented in the project report entitled Working Capital Management of L. S. M. Co. Ltd. IQBALPUR in the partial fulfillment of the requirements for the award of degree of MASTERS OF BUSINESS ADMINISTRATION in Finance submitted to R.N College of Engg. & Technology, Panipat, is record of my own work carried out for a period of Eight weeks carried in Iqbalpur under the supervision of Mr. Umesh Sharma(Accounts Manager) & Mr. Rajesh Bhasin(Asst. Accounts Manager) and Under the guidance of Ms. Garima Goutam, R.N.C.E.T , Panipat.

Date:-..

Puneet Arya

This is to certify that the above statement made by the candidate is correct to the best of our knowledge. This is his original work. Works of other intellectuals have been duly acknowledged.

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ACKNOWLEDGEMENTA journey is easier when we travel together. Interdependence is certainly more important than independent. I would like to take this opportunity to express my gratitude towards all those people who have helped me either directly or indirectly in the successful completion of my project. First of all, I would like to express my immense thanks to my project guide. A vote of thanks goes to my teacher MS. Garima Goutam (H.O.D) R.N College of Engg. & Technology, Panipat Kurukshetra Technical University, Haryana for showing keen interest in the project & guiding me for time to time. I wish to acknowledge my deep sense of gratitude towards Mr. M.M. Sharma (Vice President/ Chartered Accountant) & Mr. Umesh Sharma (Astt .Accounts manager) LAKSHMI SUGAR MILLS CO. LTD. IQBALPUR for giving me an opportunity to work in this esteemed organization and for the help they provided wherever needed. I am also grateful to my all staff members of company for their individually guidance and willing cooperation throughout my project.

Puneet Arya M.B.A

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CONTENT

Sr. No. 1. 2. 3. 4.

Topic EXECUTIVE SUMMARY COMPANY HISTORY COMPANY HISTORY WORKING CAPITAL MANAGEMENT INTRODUCTION TYPES THE NEED COMPONENTS & SOURCES IMPORTANCE FACTOR AFFECTING WORKING CAPITAL OPERATING CYCLE PRODUCT PROFILE RESEARCH METHODOLOGY RESEARCH DESINE SAMPLING DESIGNE DATA COLLECTION 1. PRIMARY DATA 2. SECONDARY DATA SIGNIFICANCE OF THE STUDY FINDINGS & DATA ANALYSIS LIMITATIONS CONCLUSION BIBLOGRAPHY

Page No. 5 7 10 27

5. 6.

42 47

7. 8. 9. 10. 11.

50 52 59 61 63

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EXECUTIVE SUMMARY

As per the wide range of management requirements about the financial status of the unit, this project report is prepared by taking wide range of objective. The project was carried out to know the working capital management which is affecting the profitability of the firm to achieve these four years balance sheet taking into consideration and different ratios are derived. In addition to knowledge this project report provides the financial position of the unit for the current financial year for various areas. It is also tells about the various policies and accounting standard adopted by the firm.

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BRIEF HISTORY OF THE COMPANYINTRODUCTIONLakshmi sugar mills co. ltd, having its unit 7 registered offices at Iqbalpur, Distt. Haridwar (UK) & head office at 704, Siddhartha building, 96, Nehru place, New Delhi, was incorporated on 16th September 1940 and the company was awarded certificate for commencement of business on 20th September 1940. The company started cane crushing operation at Hamira, in the erstwhile kapurthala state in 1942 and continued its operation there till 1952. as a result of partition of the country, the area under cane cultivation decreased considerably in Hamira and therefore the company shifted its site to the present location at Iqbalpur in district Haridwar- Uttaranchal in 1953. Initially the unit had an installed capacity of approximately 1600 TCD, while shifting the unit its capacity was marginally expanded to 1800 TCD. Later, it expanded to 2500 TCD in 1987 and subsequently to 3000 TCD in 1990-91. The company adopted double carbonation double sulphitation process till 1992-93 seasons. It switched over to the double sulphitation process in 1993-94 season and expanded plant capacity of 3500 TCD from the 1997-98 seasons onwards, thereby effecting considerable saving in the cost of production. In season 2005-06, company has expanded its installed capacity from 3500 TCD to 4500 TCD i.e. by more than 25% of existing installed capacity.

PROMOTERS/MANAGEMENTThe company is being totally managed by its board of directors consisting chairperson-cum-managing director Mrs. Anjali Birla Sawhney (PromoterDirector) Miss. Shreya Sawhney, (Promoter- Director) and two other professional directors. Earlier the company was chaired by its main promoter Mr. Pawan c. sawhney who unfortunate went to his heavenly abode on 13.01.2002. After said demise of her husband Mr. Pawan c. sawhney, Mrs. Anjali Birla sawhney took over the control of companys whole affairs with the complete support of professionals. Mrs. Anjali Birla sawhney is having experience of industries as she is born & belongs to very eminent industrial house i.e. Birla group. She & her daughter Miss. Shreya sawhney are possessing the qualities and knowledge of sugar industry as both belongs to the renowned sugar industrialist families were associated with her husband and father-in-law being the famed sugar industrialist for last more than 30 years.

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Both the promoter directors are well capable of controlling & managing complete affairs of Sugar Company. Other two directors Mr. Mohan.P.Patel & Sh. M.M. Sharma is also possessing experience of more than 15 years in sugar industry and are professionally qualified being chartered accountants. Further the company is being managed through other qualified professionals also who are directly reporting to Chairperson and Directors of the company. The technical managerial team consists of Vice President (O), General Manager (E), General Manager (P), Manager (P), Accounts, Cane & Administrative departments are managed by Manager (A/cs), General Manager (cane), and Factory Manager respectively who are also well qualified & experienced in their own field. With the above team of qualified & experienced management, chairperson is carrying the affairs of the company on the progressive path & better performance from year to year basis.

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COMPANY PROFILEPERSENT SITUATIONThe factory is suitably located with respect to availability of raw material (sugar cane), water, electricity, unskilled, skilled and professional men-power etc. the plant is located in one of the good cane growing area in the state of Uttaranchal.. The factory is located 6 kms from state highway leading to Dehradun which is well connected by road. Iqbalpur railway station is 1 kms from factory. Nearest broad gauge major railway station is situated at Roorkee which is about 12 kms from the factory. The major cities near the vicinity are Dehradun, Hardwar, and Saharanpur at a distance of about 50 to 70 kms and Delhi at a distance of about 165 kms from the factory. The neighboring sugar factories and the competitors in the present market are: R.B.N.S. Sugar mill Laksar, Distt. Haridwar Uttam Sugar mill co. Ltd, Distt. Haridwar Triveni Sugar mill, Deoband, Distt. Saharanpur Daya sugar mill, Distt. Saharanpur The factory has continued to augment its performance, through various addition and modifications in plant and equipment. The layout of plant and machinery is satisfactory. However, sufficient space can be made available for future technology Up-gradation and expansion of the factory through rearrangement. Further Ethanol plant, Distillery ect. Can also be installed based on the sufficient land owned by company at iqbalpur. In the year 2005-06 Company expanded its installed capacity from 3500 TCD to 4500 TCD to get higher profits and financial health. With this expansion, company is getting excise duty exemption as per Notification No.50/2003 Dated 10.06.2003 of the Central Government. At present the company is having installed capacity of 4500 TCD and is able to utilize its installed capacity @ 98% to 110%.

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ORGANIZATION CHART OF L.S.M. Co. Ltd.

Chairperson DirectorVice President (Corp)General Manager (Engg.)

Vice President (Operations)General Manager (Prod) General Manager (Cane) Asstt.Gen. Manager (Cane)

Mgr. Purchase (A/cs) Mgr.

Dy. Mgr. Sale

Godown Officer

Manager (Prod)

Senior Manager (Cane) Cane Manager

Addl.C.E. (Elect.) Accounts A.F.M. Time Office Store Dy. C.E. Dy. C.C.

Office Staff

Tech. Staff

Sr.Mfg. Chemist

Mfg. Lab I/c. Chemist Chemical staff

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DEPARTMENTS OF THE COMPANYPURCHASE DEPARTMENTBooks maintained by Purchase Department:I.INDENT FILE.

II. QUATATION FILE & COMPARATIVE STATEMENT III. PURCHASE ORDER.

ORGANISATION STRUCTURE OF PURCHASE DEPT

Manager Purchase

Purchase Incharge

Assistant purchase officer

Purchase Clerk

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FLOW CHART OF PURCHASE DEPARTMENT

INDENT IS RECEIVED FROM CONSUME DEP. (WHICH IS NOUMBER BY STORE)

ENQUIRY LETTER IS GENERATED

QUOTATIONS RECEIVED FROM PARTIES

COMPARATIVE CHART IS GENERATED

PURCHASE COMMITTEE DISCUSSES COMPARATIVE CHART PURCHASE