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Case Study

“A study of Working capital management of Hisar Project”- Reliance Infrastructure Limited

India

Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

Case Study “A study of
Working Capital Management -Policies and Practices at SABMiller India”

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Case Study

“A study of Working capital management of Hisar Project”- Reliance Infrastructure Limited

India

Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

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Case Study

“A study of Working capital management of Hisar Project”- Reliance Infrastructure Limited

India

Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

Author Dr Anubha srivastava Sr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida. U. . lecturer (Finance) Amity Business School Noida Co-Author Page | 4 Case Study “A study of Working capital management of Hisar Project”.P.Reliance Infrastructure Limited India Author –Dr.201301.

201301. Anubha Srivastava Sr.Pankaj Ishpujani Management trainee HCL B Serve Noida Summary Page | 5 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida. . U.Reliance Infrastructure Limited India Author –Dr.P.

it has been due to either the lowering of duties by the Page | 6 Case Study “A study of Working capital management of Hisar Project”.Indian beer market is valued at INR 41 billion for the year ending 31 st march 2010 and it is expected to grow at 17. . The effect of this consolidation can be seen in the fact that beer prices in India rarely go down with the competitive pressures of new product or brand launches.P.Reliance Infrastructure Limited India Author –Dr. Lecturer (Finance) Amity Business school Noida. Apart from providing strong growth. whenever beer prices have gone down. In the past. U. Anubha Srivastava Sr.2% for the next year. Indian growth rates compare favorably with the global beer industry. Foreign brewers are eyeing the Indian beer market which is largely untapped and has growth potential.201301. India also provides attractive profit margins due to the consolidated nature of the industry.

due to the positive impact of demographic trends and expected changes. The Indian beer market has been growing rapidly over the last 10 years. like:  Rising income levels  Changing age profile  Changing lifestyles Page | 7 Case Study “A study of Working capital management of Hisar Project”.P. . U. Lecturer (Finance) Amity Business school Noida.government or the deregulation of distribution (leading to lower margins for the distribution channel partners).201301. Anubha Srivastava Sr.Reliance Infrastructure Limited India Author –Dr.

The information gathered is thoroughly discussed with the concerned employees and experts. Anubha Srivastava Sr.The case study attempts to calculate various ratios and working capital requirement of SABMiller India and compare it with the market leader (UBL). U. Since More than 80% of the Indian Beer market is controlled by two major players’ united breweries limited (48%) and SABMiller (37%). Lecturer (Finance) Amity Business school Noida. This study includes secondary data analysis for which data is being collected through the annual reports of both the companies.P. The project is completed at PALS Unit of SABMiller India which is situated in Aurangabad. Page | 8 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr. .201301.

.P.201301. Anubha Srivastava Sr.Reliance Infrastructure Limited India Author –Dr. Lecturer (Finance) Amity Business school Noida. U. . Page | 9 Case Study “A study of Working capital management of Hisar Project”.

Introduction -Globally.P. With a relatively younger population and Page | 10 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida. U.Reliance Infrastructure Limited India Author –Dr. a steady growth of about 10% per year over the last ten years with volumes crossing 172 million cases in 2008-2009 from 70 million cases in 2002. Anubha Srivastava Sr. the Indian beer Industry contributes a meagre 1. .201301.28% of the global sales. over 133 billion litres of beer is sold each year. The industry has been witnessing on an average. In comparison.

With a per capita consumption of 25 litres. it is taxed by most states on the same basis as Spirits. U.201301.000 persons hampering free availability of beer. there is one outlet for every 300 persons. Page | 11 Case Study “A study of Working capital management of Hisar Project”. India has one outlet for every 21. India is seeing an increase in the popularity of beer. In contrast.income levels on the rise.P. Though beer is a milder form of alcohol. In China for instance. China is one of the largest beer consuming nations in the world. Consumption of beer in India is also constrained by lack of adequate market infrastructure.Reliance Infrastructure Limited India Author –Dr.56% between the years 2000 and 2006 to reach a total market volume of 30.47 billion litres. . Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida. Total consumption of beer in China grew by 33. The charge is on absolute alcohol basis.

spirits is larger.Reliance Infrastructure Limited India Author –Dr. whereas in India. The alcoholic beverage industry in India operates under a very complex regulatory environment which is the biggest challenge.Globally on per unit of alcohol basis. varied tax Page | 12 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida. In addition to restrictions on advertising.201301. . India is predominantly a hard liquor market and beer has a minority preference amongst those who consume alcohol. Typically the size of beer volumes in most countries is 7 to 10 times larger than spirits.P. beer bears approximately 50% of levies imposed on Spirits whereas in India taxation is regressive on beer. Anubha Srivastava Sr. distribution infrastructure and retailing. U.

Company Snapshot: SABMiller India. Business Highlights • Brands: Hayward’s 5000. controlled pricing and licensing make operations more complex. though providing entry barriers for new entrants as well.201301. foster’s . consequently leading to higher costs. Peroni SABMiller India is a subsidiary of SABMiller PLC and registered in India as SKOL breweries • Page | 13 Case Study “A study of Working capital management of Hisar Project”. Royal challenge. Hayward’s Black. . U. Knock out..Reliance Infrastructure Limited India Author –Dr. Lecturer (Finance) Amity Business school Noida. Anubha Srivastava Sr.structures.P. .

201301. This case study has been divided into following sections Page | 14 Case Study “A study of Working capital management of Hisar Project”.P. Lecturer (Finance) Amity Business school Noida. The company has invested about INR 1250 mn in the past two years for upgrading its breweries to global standards. . U.• Business strategy – SABMiller has ten owned and one contract brewery located strategically to serve the beer market efficiently • • The company has 37% market share and stands in the second position.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.

Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr. U.P. .201301. Lecturer (Finance) Amity Business school Noida.Section I Section II Section III Section IV Section V Section VI Company profile Nature of Problem Objectives of the study Area of consideration Some key leanings Conclusion & Recommendation Page | 15 Case Study “A study of Working capital management of Hisar Project”.

The CEO is Graham Mackay and Chairman is J. . Page | 16 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr.Section I -Company profile SABMiller PLC is a Public ltd which was founded in the year 1895 in Johannesburg. The headquarters of the company is in city of west minster. South African Republic. United Kingdom. Anubha Srivastava Sr. U.P. It is one of the world’s largest brewing companies with distribution interests in six continents. Lecturer (Finance) Amity Business school Noida.201301. London. SABMiller is listed on London and Johannesburg stock exchanges with a market value of 21 billion Pounds. Company has more than 200 brands of beer with the total employee strength of 70000. Meyer Kahn.

.P.Reliance Infrastructure Limited India Author –Dr. • Europe.In Latin America Company has 17 breweries and 16 bottling plants with approximately 25000 employees.In Europe Company has 23 breweries with approximately 16000 employees. Anubha Srivastava Sr. Page | 17 Case Study “A study of Working capital management of Hisar Project”.201301.The Company is widely spread across the six continents • Latin America. Lecturer (Finance) Amity Business school Noida. U.

Page | 18 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr. U.In North America Company has 8 major breweries with approximately 8600 employees • Africa and Asia – In Africa and Asia Company has 41 breweries and 14 bottling plants with an approximately 14000 employees.Reliance Infrastructure Limited India Author –Dr.• North America.P. • South Africa – In South Africa Company has 7 Breweries and 7 bottling plants with approximately 130000 employees.201301. . Lecturer (Finance) Amity Business school Noida.

Reliance Infrastructure Limited India Author –Dr.201301. marketing Page | 19 Case Study “A study of Working capital management of Hisar Project”. of Mysore breweries (with Knock out Brand ) and in May 2003 of Shaw Wallace ‘s Beer brands (Royal Challenge and Hayward’s SABMiller India which is registered with the name SKOL Breweries ltd in India was incorporated on 18th November 1988 as a public limited company under the companies Act 1956. packaging. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida. the most notable being its acquisition in June 2001 . U. distribution. it is a subsidiary of SABMiller Plc and is primarily engaged in the business of brewing. .Historical Background -This company entered in the Indian market by acquiring Narang breweries and has since acquired several breweries and brands .P.

201301. . Anubha Srivastava Sr.and sale of beer. The hallmark of an original and authentic strong beer. Hayward’s 5000 is synonymous with strong beer and is one of the largest Selling beers in India. Lecturer (Finance) Amity Business school Noida.P. Core Brands of Skol Breweries Hayward’s 5000 -Launched in 1983. U. The company has approximately 37 %( 2009) market share and its biggest competitor is United breweries limited with a 48% (2009) market share. it perfectly Page | 20 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr. SKOL Breweries is one of the largest manufacturers of variety of beer brands in India.

The macho image of the stars goes well with the strong image of the Brand. Sanjay Dutt and Mr.201301. Anubha Srivastava Sr.Reliance Infrastructure Limited India Author –Dr.combines strength and quality to meet the high expectation of today’s demanding consumers. Royal Challenge-Launched in the year 1983.P. . Sunil Shetty as brand ambassadors. The Brand has signed up Bollywood superstars Mr.5%. Royal Challenge Premium lager is the second largest selling mild beer in India. The alcohol content in Hayward’s 5000 beer is approximately 7. Lecturer (Finance) Amity Business school Noida. The brand positioning is that this is the beer for the discerning consumer Page | 21 Case Study “A study of Working capital management of Hisar Project”. U.

Page | 22 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr.201301.who has the confidence to make choice based on superior taste and knowledge and stand apart rather than be part of a crowd.P. .Reliance Infrastructure Limited India Author –Dr. what sets the brand apart is a distinctly smooth and easy flowing taste. Lecturer (Finance) Amity Business school Noida. premium image and path breaking advertising. U. It offers a difference with an edge besides its international class packaging.

Lecturer (Finance) Amity Business school Noida. Darshan as its ambassador. The brand had not been performing up to its potential before it was taken up by the SABMiller on account of production and distribution Page | 23 Case Study “A study of Working capital management of Hisar Project”. . U. Foster’s-SABMiller acquired Foster’s brand in 2006-07.Knock out-Launched in 1984. Anubha Srivastava Sr.“The Strongest Beer” and is the 3rd largest selling strong beer brand in the country. The brand has strong presence in most southern and central states in India.201301. The brand has Kannada action hero Mr.P.Reliance Infrastructure Limited India Author –Dr. knock out has clearly carved for itself a distinctive segment. It has continued to perform well.

Reliance Infrastructure Limited India Author –Dr. Indus Pride-The brand was launched in the year 2008 – 09 it has performed very well in Rajasthan.201301. . The brand has not only stemmed but the brand has grown over 45%.9% of the mainstream mild beer industry which was a 2. In its very first year it has captured 20% of the market. where Page | 24 Case Study “A study of Working capital management of Hisar Project”. Foster’s is a clear leader in the premium segment both in volume and image terms. Anubha Srivastava Sr. U.constraints.8% market share gain over the previous year.P. Foster’s market share YTD March 09 was 11. The Brand is now available all over India. Lecturer (Finance) Amity Business school Noida. It leads the development of what we call the worth more segment in India. It has also been well received in Karnataka.

Reliance Infrastructure Limited India Author –Dr.201301.P. . Lecturer (Finance) Amity Business school Noida.based beverage.it was launched in March 2009. U. This beer has been specially developed in accordance with research findings to suit the Indian tastes. Anubha Srivastava Sr. Indus pride is a mild segment beer and it is India’s first 100% maltbased beer along with a 100% malt. Page | 25 Case Study “A study of Working capital management of Hisar Project”.

It has been very well received in the market. Lecturer (Finance) Amity Business school Noida. U. malts and hop.Peroni -Company introduced its global brand Peroni in Mumbai in 2008.P. It is expertly brewed in Italy to the original recipe in Italy since 1963 and has an unmistakable touch of Italian style. with a clean character and clarity. In Mumbai it already has 35% market share of the imported beer market. This premium beer uses the finest variety of spring.Reliance Infrastructure Limited India Author –Dr.planted barley and the highest quality maize. Peroni Nastro Azzurro is an intensely crisp. dry and refreshing lager. . The brand in India has become the symbol of Italian Page | 26 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr.201301.

It is now available in the cities of Mumbai. Brewery: . Brew houses at PALS: - Page | 27 Case Study “A study of Working capital management of Hisar Project”. BREWING PROCESS AT PALS Brewing: The process of producing beer from malted grains is called brewing. Anubha Srivastava Sr.The place where beer is produced. Lecturer (Finance) Amity Business school Noida. . Delhi and Bangalore. U.P. processed and packaged is called a brewery.201301. Peroni is the most premium beer in the Indian beer Industry. Pune.Reliance Infrastructure Limited India Author –Dr.style in the beer market.

Reliance Infrastructure Limited India Author –Dr. The brew length is of 440 Hl. a wort kettle and a whirlpool. The old Brew house has an adjunct cooker. temperature. The new Brew house is operated through PLC (Programmable Logical Control). .201301. one is ALFA LAVAL Brew house (old) and the other is BRIGGS Brew house (new). The set points of various parameters such as time. Anubha Srivastava Sr. pressure. The brew length is of 110 HL. Lecturer (Finance) Amity Business school Noida. a lauter tun and two wort kettles cum whirlpools. High gravity brew can produce up to 500 HL of beer. flow etc are given to the PLC according to Page | 28 Case Study “A study of Working capital management of Hisar Project”. The new Brew house has a MCV.There are two Brew houses at PALS. High Gravity brew can produce up to 145 HL of beer. a lauter tun. U. a MCV.P.

Anubha Srivastava Sr. U. The inventory.201301.Reliance Infrastructure Limited India Author –Dr. Section II-Nature of Problem In this case study an effort has been made to find out the practices and process adopted by SAB Miller India for working capital management. Lecturer (Finance) Amity Business school Noida.P. cash and debtor management along with creditors management has been analyzed and compared to evaluates the and compare the liquidity and Page | 29 Case Study “A study of Working capital management of Hisar Project”. .which the operation is carried out and the whole process is monitored through SCADA (Supervisory Control and Data Acquisition) by the brewer.

After that the various problems faced by the units are discussed in this case . Lecturer (Finance) Amity Business school Noida. Anubha Srivastava Sr.Reliance Infrastructure Limited India Author –Dr. Further it is a descriptive and analytical case in nature. Better management of working capital means management of working capital in such a way that an adequate amount of working capital is maintained for the smooth functioning of a firm and for the fulfillment of the two Page | 30 Case Study “A study of Working capital management of Hisar Project”. Efficient management of working capital is one of the most important conditions for the success of an enterprise. .201301.efficiency of the company with its rivals Initially the entire brewing process and the financial position of the company were observed. “More business fails for lack of cash than for want of profit”.P. U.

201301. But the proper estimation of working capital actually required. U. While inadequate amount of working capital impairs the firm’s liquidity and holding of excess working capital results in the reduction of the profitability. Anubha Srivastava Sr. credit policy. is a difficult task for the management because the amount of working capital varies across firms over the periods depending upon the nature of the business.Reliance Infrastructure Limited India Author –Dr.most important objectives of any firm and these are profitability and liquidity. Lecturer (Finance) Amity Business school Noida. production cycle. Section III-Objectives of the study Page | 31 Case Study “A study of Working capital management of Hisar Project”.P. . availability of raw material etc.

P.Objectives -The objectives of the project are To study the financial position of SABMiller India and compare it with market leader (UBL)  To comparative analysis between SAB Miller and UBL  To calculate the gross and Net working capital requirement of both the companies Page | 32 Case Study “A study of Working capital management of Hisar Project”. .201301. Lecturer (Finance) Amity Business school Noida. U.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.

P. However sales do not convert into cash. The extent to it. Lecturer (Finance) Amity Business school Noida. U. largely depends on the magnitude of sales. which the profit can be earned. To study the trend of current assets and current liabilities over the last three years and do a comparative analysis Section IV -Area of consideration Need for working capital.201301. For this it is necessary to generate sufficient profits. There is Page | 33 Case Study “A study of Working capital management of Hisar Project”. .Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.The basic objective of financial management is to maximize shareholders wealth.

U. . Anubha Srivastava Sr. There is. Therefore sufficient working capital is necessary to sustain sales activity. a need for working capital in the form of current assets to deal with the problem arising.Reliance Infrastructure Limited India Author –Dr.201301.P. components and spares  To incur day to day expenses and overhead costs such as fuel. Working capital is needed for the following purpose:  For the purchase of raw material. etc. Lecturer (Finance) Amity Business school Noida. Out of the lack of immediate realization of cash again goods sold. power and office expenses.invariable the time gap between the sales of goods and receipts of cash. Page | 34 Case Study “A study of Working capital management of Hisar Project”. therefore.

Lecturer (Finance) Amity Business school Noida. U.201301. . work in progress.  To pay wages and salaries Page | 35 Case Study “A study of Working capital management of Hisar Project”.P.  To maintain the inventories of raw material. To meet selling costs as packing. Anubha Srivastava Sr. stores and spares and finished goods.Reliance Infrastructure Limited India Author –Dr. advertisement etc  To provide credit facilities to the customers.

Lecturer (Finance) Amity Business school Noida.P. U. Anubha Srivastava Sr.865 2007-08 774.RATIO’S ASSOCIATED WITH WORKING CAPITAL MANAGEMENT SABMiller India (Rs) S.183.405 Page | 36 Case Study “A study of Working capital management of Hisar Project”.306.201301.494 2006-07 539.519. .482.NO 1 PARTICULARS OPENING STOCK 2008-09 1.Reliance Infrastructure Limited India Author –Dr.

790.416.160.865 9.176.183.P.519.011. U.644.950 8.2 3 4 CLOSING STOCK AVERAGE STOCK NET SALES 1. Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr.912.80 10.239 1. Anubha Srivastava Sr.201301.365.700. .188 13.081.650.641.511 1.383 Page | 37 Case Study “A study of Working capital management of Hisar Project”.782.037 774.482.494 656.

187 401.907.390.484.472 Page | 38 Case Study “A study of Working capital management of Hisar Project”.344.763. Lecturer (Finance) Amity Business school Noida.941) 344.037. .582. U. Anubha Srivastava Sr.759.201301.Reliance Infrastructure Limited India Author –Dr.875 744.230 7 SUNDRY CREDITORS 1.383 1.214 2.891.777.802 6 SUNDRY DEBTORS 3.P.5 NET PROFIT (648.154 920.667.219.536.

005 683.757 9 10 COST OF GOODS SOLD 6.242.306.111.128. Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.899.230 5.436 4.8 NET CREDIT PURCHASES 7.183.932 Page | 39 Case Study “A study of Working capital management of Hisar Project”.201301.197. U.852.059.498.647.839.P.245. .584 3.830.298 3.990 NET WORKING CAPITAL 1.296 2.611.587.457.

104. .443.201301. Lecturer (Finance) Amity Business school Noida.NO SABMILLER RATIO’S 2009 Page | 40 2008 2007 Case Study “A study of Working capital management of Hisar Project”.160.935 3.695 4.443.985.394.861.11 12 CURRENT ASSETS 6.P.Reliance Infrastructure Limited India Author –Dr.091.058.406.783.741. U.233 7.690 4. Anubha Srivastava Sr.760 CURRENT LIABILITIES 4.828 S.

16 Page | 41 Case Study “A study of Working capital management of Hisar Project”.79 9.74 10.1 Current Ratio 1.06 2 3 Liquidity Ratio Inventory turnover Ratio 0.26 1.28 0.74 13.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida.17 2.201301. U.P.59 1. .

82 81 days 5.Reliance Infrastructure Limited India Author –Dr. U. Lecturer (Finance) Amity Business school Noida.16 7 70 days 5.53 62 days Page | 42 Case Study “A study of Working capital management of Hisar Project”.4 5 6 Debtor turnover ratio Creditor Turnover ratio Average collection period 4.201301. .P. Anubha Srivastava Sr.44 5.83 5.

Lecturer (Finance) Amity Business school Noida.19 1. U.16 2.P.22 Page | 43 Case Study “A study of Working capital management of Hisar Project”.17 65 days 2. Anubha Srivastava Sr.7 9 Average payment period Working capital turnover ratio 62 days 10.37 10 Current asset turnover ratio 2.59 51 days 15. .201301.Reliance Infrastructure Limited India Author –Dr.

33 1.Reliance Infrastructure Limited India Author –Dr.11 Stock working capital ratio 1.201301.P.73 0. . U. Anubha Srivastava Sr.21 Page | 44 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida.

Lecturer (Finance) Amity Business school Noida. .P.UNITED BREWERIES LIMITED (Rs) S.Reliance Infrastructure Limited India Author –Dr. U.201301.NO PARTICULARS 2008-09 2007-08 2006-07 Page | 45 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr.

300 735.000 1.169.634.000 1.630.201301. .500 1.146.1 Opening stock 1.169.650 929. Lecturer (Finance) Amity Business school Noida.123.167.963.634.000 1. U.300 1.399.376.P.Reliance Infrastructure Limited India Author –Dr.771.798.400.123. Anubha Srivastava Sr.650 Page | 46 Case Study “A study of Working capital management of Hisar Project”.000 2 3 Closing stock Average stock 1.167.

984.000 9.000 Page | 47 Case Study “A study of Working capital management of Hisar Project”.699.000 650.725.244.000 6 Sundry debtors 4. U.Reliance Infrastructure Limited India Author –Dr.247.312.982. Lecturer (Finance) Amity Business school Noida.940.709.000 2. Anubha Srivastava Sr.634.4 5 Net Sales Net profit 16.000 13.918.040. .148.611.000 624.201301.000 3.690.P.000 624.

379.000 4.300 5.Reliance Infrastructure Limited India Author –Dr.000 1.000 898.487.257.450.P.000 7.520.424.662.431.330. . Lecturer (Finance) Amity Business school Noida.205.640.000 2.310.734. Anubha Srivastava Sr.637.710.839.000 Page | 48 Case Study “A study of Working capital management of Hisar Project”.208.000 6.000 8 9 10 Net purchases Current assets Current liabilities 8.325.762.7 Sundry creditors 1.201301.000 2.700 5. U.065.000 2.892.026.285.

886. Anubha Srivastava Sr.11 Net Working capital 5.899.000 Page | 49 Case Study “A study of Working capital management of Hisar Project”.201301. .000 3. U.493. Lecturer (Finance) Amity Business school Noida.P.971.644.753.Reliance Infrastructure Limited India Author –Dr.000 2.

UNITED BREWERIES LIMITED RATIO’S S.Reliance Infrastructure Limited India Author –Dr.P.NO RATIO’S 2009 2008 2007 Page | 50 Case Study “A study of Working capital management of Hisar Project”. U.201301. Anubha Srivastava Sr. . Lecturer (Finance) Amity Business school Noida.

18 12.94 2.30 1.201301.72 2.79 Page | 51 Case Study “A study of Working capital management of Hisar Project”.1 2 3 Current Ratio Liquidity Ratio Inventory turnover Ratio 3.09 9. .P.61 11.13 2.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida. U.73 3.

Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr. U.45 6 Average collection period 84 days 71days 62 days Page | 52 Case Study “A study of Working capital management of Hisar Project”.28 5. .13 5.79 5 Creditor Turnover ratio 7.16 6.4 Debtor turnover ratio 4.201301. Lecturer (Finance) Amity Business school Noida.P.07 5.

201301.60 1. Lecturer (Finance) Amity Business school Noida. U.7 8 Average payment period Working capital turnover ratio Current asset turnover ratio 50 days 3.Reliance Infrastructure Limited India Author –Dr.60 66 days 2.00 59days 4.85 9 2.P. Anubha Srivastava Sr.20 2.81 Page | 53 Case Study “A study of Working capital management of Hisar Project”. .

10 Stock working capital ratio 0. Net sales include sale of traded goods and excludes excise duty and discounts.29 0.32 WORKING NOTES 1.P. Page | 54 Case Study “A study of Working capital management of Hisar Project”. U. . Lecturer (Finance) Amity Business school Noida.39 0.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.201301.

2. For the purpose of calculating current assets, in loans and advances only advances

recoverable in cash or in kind or for value to be received, prepaid expenses, rental deposit and other deposit have been taken as short term advances. 3. The formula used to calculate net purchases is Closing stock – opening stock + Cost of goods sold = Net purchases 4. Here net purchases is assumed to be net credit purchases
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Case Study

“A study of Working capital management of Hisar Project”- Reliance Infrastructure Limited

India

Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

5. In case of SABMiller’s COGS the cost of container’s is include which is given only for 2008-09. Henceforth the same proportion of containers has been taken for the year 2007-08 and 2006-07. 6. All the purchases and sales are assumed to be on credit bases

NET SALES

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“A study of Working capital management of Hisar Project”- Reliance Infrastructure Limited

India

Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

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Case Study

“A study of Working capital management of Hisar Project”- Reliance Infrastructure Limited

India

Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

2350 crores. For Year Ending 2008. Anubha Srivastava Sr. 998 Crores (42.7%) and UBL’s Net Sales were Rs.Market Size grew to Rs 3000 crores from Rs 2350 making it a 36% growth in Net sales over the previous year.The above graph explains the Net Sales pattern of SABMiller. UBL. Lecturer (Finance) Amity Business school Noida.4%). For Year Ending 2007. SABMiller’s Net Sales were Rs 864 Crores (36.Reliance Infrastructure Limited India Author –Dr. U. .P. 4100 crores and 4800 crores respectively which means a continuous growth of 17%.Total market size was Rs.Clearly Both UBL and SABMiller dominated Indian Beer market. the Market size from 2007 till 2009 and also the Estimated Market size for 2010 and 2011. During this period Sales of Page | 58 Case Study “A study of Working capital management of Hisar Project”.201301. For the years 2010 and 2011 the estimated Market size is Rs.

1000 crores (1036) leading to a 20% growth over the previous year. .P. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida. 1369 crores leading to 37% growth of Sales over previous year making a total of 45% of their share in the market. U.5% declining from 36. 998 to Rs.Reliance Infrastructure Limited India Author –Dr. At this point SABMiller’s Market share was 34.201301. Clearly UBL’s growth during the year was better then the industry growth hence their market share improved and on the other hand SABMiller’s growth was less than the industry growth. 3500 crores from Rs. Hence their market share declined.Total market size increased to Rs.7%. 3000 crores which made an approximately 17% increase over the Page | 59 Case Study “A study of Working capital management of Hisar Project”.SABMiller crossed Rs. UBL’s Net Sales increased from Rs. For Year Ending 2009 .

5%.1316 crores from Rs.Similarly UBL’s Net Sales Increased to Rs.previous year. .201301. 1036 crores leading to a 27% growth over the previous year.P. SABMiller’s Net Sales increased to Rs.5% from 45%.Reliance Infrastructure Limited India Author –Dr. U.Clearly both companies’ Share increased more than the industry growth therefore market share also improved. UBL’s market share rose to 48. NET PROFIT Page | 60 Case Study “A study of Working capital management of Hisar Project”. Hence SABMiller’s market share improved to 37. 1698 crores from 1369 crores leading to a 24% growth.5% from 34. Lecturer (Finance) Amity Business school Noida. Anubha Srivastava Sr.

Page | 61 Case Study “A study of Working capital management of Hisar Project”.P. U. Anubha Srivastava Sr.Reliance Infrastructure Limited India Author –Dr. Lecturer (Finance) Amity Business school Noida. .201301.

The above graph explains the Net profit pattern for both the companies for the years ending 2007. For the year 2007-08 – SABMiller made a Net Profit 34. 2009.47 crores which made around 4. This is a widely used measure of performance and comparable across companies in similar industries.87 crores which made around 4.92% of Net sales and UBL’s Page | 62 Case Study “A study of Working capital management of Hisar Project”.65% of Net sales and UBL’S Net profit was 65. Lecturer (Finance) Amity Business school Noida. Anubha Srivastava Sr. .P.Reliance Infrastructure Limited India Author –Dr. For the year 2006-07 – SABMiller made a Net profit of 40.56% of Net sales.09 crores which made around 6.32% of Net sales and UBL’s Net profit was 62. 2008.47 crores which was around 3.18 crores which was around 4.201301. For the year 2008-09 – SABMiller’s Net Loss was 64.52% of Net sales. U.

49 crores which made around 3. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida. .Reliance Infrastructure Limited India Author –Dr.Net profit was 62.68% of Net sales. U.201301. UBL has managed to squeeze in profits in the tough time which holds the key for them and Similarly SABMiller’s Net profit also declined however for 2008-09 it was worst where the company made a Net loss of 64 crores.P. CURRENT ASSETS OR GROSS WORKING CAPITAL Page | 63 Case Study “A study of Working capital management of Hisar Project”. Clearly For both the companies the percentage of Net profit is decreasing however UBL has been outperforming and making a good amount of Net profit.

Lecturer (Finance) Amity Business school Noida. Anubha Srivastava Sr.Page | 64 Case Study “A study of Working capital management of Hisar Project”.P. U.201301. .Reliance Infrastructure Limited India Author –Dr.

The reason for such high Currents assets for SABMiller is the huge amount of cash and bank balances maintained by the company. and 2009.P. U. During this year companies made huge investments in existing plant and machinery upgrading their capacity due to this the cash reserves came down completely However again the investments in current assets came up for the year 2008-09 Page | 65 Case Study “A study of Working capital management of Hisar Project”. Then next year for SABMiller it came down to 474 crores and 526 crores for UBL.The above graph shows the pattern of Current assets or gross working capital for SABMiller and UBL for the year ending 2007. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida. 2008.201301. For the year ending 2007 Current assets were 709 crores for SABMiller as compared to 552 crores for UBL. .Reliance Infrastructure Limited India Author –Dr.

CURRENT LIABILITIES Page | 66 Case Study “A study of Working capital management of Hisar Project”. Sufficient working capital helps the company to avoid stoppage of work and effects on profitability. Anubha Srivastava Sr. .P. U.for both the companies it was because of increase in the debtors which were consistently increasing for UBL. Lecturer (Finance) Amity Business school Noida.201301.Reliance Infrastructure Limited India Author –Dr.

201301.Page | 67 Case Study “A study of Working capital management of Hisar Project”. . Anubha Srivastava Sr.P.Reliance Infrastructure Limited India Author –Dr. U. Lecturer (Finance) Amity Business school Noida.

Reliance Infrastructure Limited India Author –Dr. 2008. On the other hand Current liabilities pattern of UBL has been same in those three years which means that their short term liabilities are less as compared to SABMiller. Lecturer (Finance) Amity Business school Noida. . Anubha Srivastava Sr.201301.The above graph explains the current liabilities pattern for SABMiller and UBL for the year ending 2007. This shows that purchases are done heavily on credit basis.P. and 2009. U. Page | 68 Case Study “A study of Working capital management of Hisar Project”. The current liabilities pattern shows that for SABMiller there has been a continuous increase in the three years from 344 crores in 2007 it went to 486 crores in the year 2009.The reason for such an increase is because of the continuous increase in the sundry creditors of the company.

P. U.NET WORKING CAPITAL Page | 69 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr. .201301. Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr.

201301.Page | 70 Case Study “A study of Working capital management of Hisar Project”.P. . Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr. U.

The year 2007. Page | 71 Case Study “A study of Working capital management of Hisar Project”.The above graph explains the Net working capital pattern for SABMiller and UBL for the years 2007. .201301. and 2009. U.P. The trend has been same for both the companies and it is an uneven trend. Lecturer (Finance) Amity Business school Noida. It is clear that the pattern of Net working capital is fluctuating from high to low and then again high.08 has the lowest Net working for the both the companies compared to all the three years. Anubha Srivastava Sr. 2008.Reliance Infrastructure Limited India Author –Dr. The greater the margins better the liquidity of the firm. The Net working capital measures the liquidity of the firm. For the year 2008-09 UBL’S Net working capital was 564 crores which were the highest.

CASH & BANK BALANCES Page | 72 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida. There should be an appropriate amount of Net working capital maintained for the smooth functioning of the business.This is due to the continuous increase in the sundry debtors of UBL.201301. U.Reliance Infrastructure Limited India Author –Dr.P. .

Page | 73 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr. U.Reliance Infrastructure Limited India Author –Dr.201301.P. Lecturer (Finance) Amity Business school Noida. .

It is clear that there has been a huge declined in the cash and bank balances from the year 2007 for both the companies. Lecturer (Finance) Amity Business school Noida. U. The lowest bank balance for SABMiller was 31 crores in the year 2008 and for UBL it was 8 crores in 2008. Anubha Srivastava Sr.Reliance Infrastructure Limited India Author –Dr. UBL had 139 crores as bank balance. Hence it is ascertained that both the company’s Cash balances came down hugely in the year 2008 Page | 74 Case Study “A study of Working capital management of Hisar Project”. 2008. In 2007 where SABMiller had 405 crores as bank balance. . Thereafter the balances reduced drastically for both the companies. and 2009.201301.The above graph explains the pattern of cash and bank balances for SABMiller and UBL for the years 2007.P.

Lecturer (Finance) Amity Business school Noida.AVERAGE COLLECTION PERIOD Page | 75 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr.201301. . Anubha Srivastava Sr. U.P.

201301. . Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr.Page | 76 Case Study “A study of Working capital management of Hisar Project”.P. Anubha Srivastava Sr. U.

2008. However after that it kept on increasing.P. It was the lowest in the year 2007 for both the companies. In the year 2009 the Average collection period was 81 for SABMiller and for UBL it was 84 Overall the Average collection period is increasing for both the companies year after year which is not a good sign. and 2009.201301. There is an increasing pattern of Average collection period for both the companies. . Page | 77 Case Study “A study of Working capital management of Hisar Project”.The above graph shows the pattern of Average collection period for SABMiller and UBL for the years ending 2007. U. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr.

.Reliance Infrastructure Limited India Author –Dr.P. U. Lecturer (Finance) Amity Business school Noida.201301. Anubha Srivastava Sr.AVERAGE PAYMENT PERIOD Page | 78 Case Study “A study of Working capital management of Hisar Project”.

Anubha Srivastava Sr.P. .Page | 79 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr. U. Lecturer (Finance) Amity Business school Noida.201301.

Page | 80 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida. There is a decreasing pattern of Average payment period for both the companies. U. .201301. The above analysis explains that for the year 2009 the Creditors management has been better for SABMiller than UBL. In the year 2007 where it was highest for both the companies and thereafter decreasing every year. Anubha Srivastava Sr.P. 2008.The above graph explains the pattern of Average payment period for SABMiller and UBL for the years ending 2007. It is noticed that for SABMiller the trend is uneven that is from 65 in 2007 to 51 in 2008 and again increasing 62 in 2009. and 2009. of working days and the creditor turnover ratio. It is the relationship between the no.Reliance Infrastructure Limited India Author –Dr.

Lecturer (Finance) Amity Business school Noida.201301.Reliance Infrastructure Limited India Author –Dr.P. .CURRENT RATIO Page | 81 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr. U.

P.201301. U.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.Page | 82 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida. .

201301.Reliance Infrastructure Limited India Author –Dr. U. Hence for 2008 current ratio’s position was favorable for UBL as compared to SABMiller. In 2009 again the current ratio of SABMiller is quite low than the ideal ratio and comparatively UBL’s Current ratio has gone up very high to 3. and 2009.The above graph explains the pattern of current ratio for SABMiller and UBL for the years 2007.73 this is Page | 83 Case Study “A study of Working capital management of Hisar Project”. . Lecturer (Finance) Amity Business school Noida.3 was still above the ideal ratio. In 2008 SABMiller’s Current ratio came down from 2.03 to 1. In 2007 both the companies had current ratio better than the ideal ratio however SABMiller’s current ratio for that period was very close to the ideal ratio. 2008.17 which was very low from the ideal ratio comparatively UBL’s Current ratio 2.P. Anubha Srivastava Sr.

Reliance Infrastructure Limited India Author –Dr. For SABMiller it is essential to reduce their liability otherwise this ratio shows the insolvency of the company. Lecturer (Finance) Amity Business school Noida. Anubha Srivastava Sr.very much above than the ideal ratio.P. U.201301. LIQUIDITY RATIO Page | 84 Case Study “A study of Working capital management of Hisar Project”. .

. Anubha Srivastava Sr.Page | 85 Case Study “A study of Working capital management of Hisar Project”.P.Reliance Infrastructure Limited India Author –Dr. Lecturer (Finance) Amity Business school Noida. U.201301.

P. For the year 2007-08 the ratio falls for both the companies and for SABMiller it was 0.74 and for UBL was 2. 2008. Lecturer (Finance) Amity Business school Noida. U. Anubha Srivastava Sr. and 2009. And for UBL it was 1. The pattern for Liquidity ratio is fluctuating for the past three years.Reliance Infrastructure Limited India Author –Dr.61 which was above the ideal ratio and shows a good liquidity position for the Page | 86 Case Study “A study of Working capital management of Hisar Project”.74 which was less than the ideal ratio this shows that the liquidity position was not good for that year. In 2006-07 liquidity ratio for SABMiller was 1. .201301.09 this is clearly above the ideal ratio which shows their ability of both the companies to cover their short term liabilities.The above graph explains the pattern of Liquidity ratio for SABMiller and UBL for the years 2007.

61.company for the year 2008-09 the ratio increased for both the companies however the increase for SABMiller was marginal leading it to 0. U. STOCK OR INVENTORY TURNOVER RATIO Page | 87 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr.P. .74 and for UBL the increase was heavy which led the ratio to 3.79 from 0.201301.18 from 1. Lecturer (Finance) Amity Business school Noida.Clearly UBL has better liquidity position than SABMiller. Anubha Srivastava Sr.

Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida.201301.Page | 88 Case Study “A study of Working capital management of Hisar Project”. .P. U.

Reliance Infrastructure Limited India Author –Dr.79 In 2007-08 the Stock turnover ratio For SABMiller it was 10.Net Sales/Average inventory In 2006-07 the Stock turnover ratio For SABMiller was 13. clearly only for 2006-07 SABMiller has outperformed Page | 89 Case Study “A study of Working capital management of Hisar Project”.94.P. Anubha Srivastava Sr. U. .16 and for UBL it was 9. and 2009 Stock turnover ratio. It is said that a high turnover ratio indicates the efficient management of inventory more frequently stocks are sold there is an opposite pattern for Inventory turnover ratio for both the companies.59 and for UBL it was 11. In 2008-09 the Stock turnover ratio For SABMiller it was 9.201301.The above graph shows the pattern of Inventory turnover ratio for SABMiller and UBL for the years 2007. 2008. Lecturer (Finance) Amity Business school Noida.28 and for UBL it was 12.13.

Lecturer (Finance) Amity Business school Noida.its competitor and thereafter the ratio has been declining for SABMiller and increasing for UBL for the next two year WORKING CAPITAL TURNOVER RATIO Page | 90 Case Study “A study of Working capital management of Hisar Project”.P.201301.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr. . U.

U. Anubha Srivastava Sr.201301.Page | 91 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr.P. Lecturer (Finance) Amity Business school Noida. .

comparatively it was 4. Lecturer (Finance) Amity Business school Noida.17).Reliance Infrastructure Limited India Author –Dr. .6 for UBL. In the year 2008-09 again the ratio was significant for SABMiller as it was 10. U.The above graph explains the pattern of Working capital turnover ratio for SABMiller and UBL for the year ending 2007. Anubha Srivastava Sr.201301. The above analysis signifies that working capital is better utilized in SABMiller as compared to UBL. and 2009. The working capital ratio has been the lowest for the year 2006-07 for both the companies.P. In the year 2007-08 where the ratio has been highest for SABMiller (15. more the ratio.59 as compared to 3 for UBL. 2008. CURRENT ASSET TURNOVER RATIO Page | 92 Case Study “A study of Working capital management of Hisar Project”. better it is for the company.

P.Reliance Infrastructure Limited India Author –Dr. Lecturer (Finance) Amity Business school Noida. .Page | 93 Case Study “A study of Working capital management of Hisar Project”.201301. Anubha Srivastava Sr. U.

The above graph explains the current assets turnover ratio for SABMiller and UBL for the years ending 2007. Anubha Srivastava Sr.201301. There is an uneven trend which is followed by both the companies however current assets turnover has been lowest in 2006-07 for both the companies and maximum in 2007-08. U. It is to be noted that in all the years UBL’s ratio is more than SABMiller’s. STOCK WORKING CAPITAL RATIO Page | 94 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr. Hence it shows that current assets are more efficiently used in UBL than SABMiller. 2009. 2008. Lecturer (Finance) Amity Business school Noida. .P.

Lecturer (Finance) Amity Business school Noida.Page | 95 Case Study “A study of Working capital management of Hisar Project”.P.Reliance Infrastructure Limited India Author –Dr.201301. . U. Anubha Srivastava Sr.

Page | 96 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr.201301. U. 2008. Lecturer (Finance) Amity Business school Noida. It is noticed that the performance has been consistent for UBL and for SABMiller there was an uneven trend.The above graph explains the pattern of Stock working capital ratio for SABMiller and UBL for the years ending 2007.P. The analysis explains that stock working ratio has been good for UBL as compared to SABMiller for the past three years.33 which is way above the ideal ratio.Reliance Infrastructure Limited India Author –Dr. and 2009. In the year 2007 SABMiller’s STR was better than UBL and in the year 2009 it increased to 1. .

U.P.201301.Total & Net Operating Cycle Period for SABMiller & UBL (2009) Cycle Calculation SABMiller UBL • RMCP RMCP Average Raw material stock X 360 Total Raw material consumption 491730522 X 360 6651961523 = 27 DAYS 336039000 X 360 2141148000 = 24 DAYS RAW MATERIAL CONVERSION PERIOD Page | 97 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr. Lecturer (Finance) Amity Business school Noida. . Anubha Srivastava Sr.

P. Lecturer (Finance) Amity Business school Noida. U.• WPCP WPCP Average Work-in-progress X 360 Total cost of production 153874210 X 360 4256201006 = 13 DAYS ASSUMED WORK IN PROGRESS CONVERSION PERIOD = 13 DAYS Page | 98 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr.201301. Anubha Srivastava Sr. .

.Reliance Infrastructure Limited India Author –Dr.201301.P. Lecturer (Finance) Amity Business school Noida. Anubha Srivastava Sr.• FGCP FGCP Average Finished Goods Total Cost of goods sold X 360 679832914 X 360 6839899584 = 36 DAYS 603385500 X 360 6092195000 = 36 DAYS FINISHED GOODS CONVERSION PERIOD Page | 99 Case Study “A study of Working capital management of Hisar Project”. U.

160. U.• RCP RCP Average Receivable X 360 Total Credit sales 2963281799 X 360 13.239 = 81 DAYS (RMCP+WPCP+FGCP+RCP) 3971837000 x 360 16982709000 = 84 DAYS RECEIVEBLE CONVERSION PERIOD • TOCP 157 DAYS 157 DAYS Page | 100 Case Study “A study of Working capital management of Hisar Project”.201301. Anubha Srivastava Sr.P. Lecturer (Finance) Amity Business school Noida. .Reliance Infrastructure Limited India Author –Dr.176.

DP

DP Average Creditors Total Credit purchase X 360 62 DAYS 50 DAYS

DEFFERED PERIOD • NOCP

TOCP LESS DP

= 95 DAYS

= 107 DAYS

NET OPERATING CYCLE PERIOD

Page | 101

Case Study

“A study of Working capital management of Hisar Project”- Reliance Infrastructure Limited

India

Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

OPERATING CYCLE PERIOD

Page | 102

Case Study

“A study of Working capital management of Hisar Project”- Reliance Infrastructure Limited

India

Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

Page | 103

Case Study

“A study of Working capital management of Hisar Project”- Reliance Infrastructure Limited

India

Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

Page | 104 Case Study “A study of Working capital management of Hisar Project”. .Reliance Infrastructure Limited India Author –Dr. For the year 2009 the Raw material conversion period was 27 days for SABMiller and 24 days for UBL.P. better it is for the company. Anubha Srivastava Sr. Receivables conversion period for SABMiller was 81 days and for UBL it was 84 days. Working capital majorly depends on the length of operating cycle and shorter the cycle net operating cycle period.The above Line graph shows the Total & Net Operating Cycle period for SABMiller & UBL for the year 2009. Work in progress conversion period (13 Days) and finished goods conversion period (36 Days) was same for both the companies. Lecturer (Finance) Amity Business school Noida.201301. U.

P. Deferred payment period for SABMiller was 62 days and for UBL it was 50 days. The cycle period was less for SABMiller as compared to UBL.201301. Section V -Some key leanings Page | 105 Case Study “A study of Working capital management of Hisar Project”. U.After adding all the Total operating cycle period for SABMiller and UBL comes up to 157 days. . Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr. Hence Net operating cycle period for SABMiller was 95 days and for UBL it was 107 days. Anubha Srivastava Sr.

This is because there is a huge potential for beer market in coming years. SABMiller has to make sure that every year the growth in the Net Sales is more than the Industry growth otherwise there are greater chances that market share of SABMiller may decline in the coming years. Anubha Srivastava Sr.5% from 36. Keeping this in mind and looking at the estimated growth in beer market for 2010 and 2011 Page | 106 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr.P. U. .7%. For example – From the analysis and Interpretations it is found that In the year 2007-08 the Net Sales growth in Beer market was 36% and SABMiller’s growth was only 20% hence their share decreased to 34.201301.From the first analysis of Net Sales it is concluded that in order to compete with UBL and improve market share.

Reliance Infrastructure Limited India Author –Dr. For the year ending 2010 – ( 1316+ 17% 0f 1316) =Rs 1539 crores For the year ending 2011.(1539 + 17% of 1539) = Rs 1800 crores Page | 107 Case Study “A study of Working capital management of Hisar Project”.5%. It is very important for SABMiller to grow with minimum of 17%. Lecturer (Finance) Amity Business school Noida. 2. . For the company to maintain the same market share the Net sales for the year ending 2010 and 2011 should be1. U.which is 17%. 1316 crores and their market share was 37.The Net sales of SABMiller for the year ending 2008-09 were Rs. Anubha Srivastava Sr.P.201301.

.Reliance Infrastructure Limited India Author –Dr.This is the minimum amount of Net sales that the company should have in order to maintain the existing market share of 37. Hence SABMiller’s Net Sales should be more than Rs1539 crores for the year ending 2010 and Rs 1800 crores for the year Page | 108 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr.201301.5%. It is recommended that company should look to improve beyond these figures and try best to improve the market share. It is also found that this can be possible as the company has a diversified portfolio. However this is the minimum level of Net Sales and Beer market is set to flourish in the coming years where major foreign players are ready to enter this untapped Indian beer market and there are greater chances that market may grow more than 17%. Lecturer (Finance) Amity Business school Noida. U.P.

. Lecturer (Finance) Amity Business school Noida.The company justified two reasons for losses in the year 2008 -09 and these are- Page | 109 Case Study “A study of Working capital management of Hisar Project”.ending 2011.P. This will lead to company’s consistent growth just like UBL and help them to compete in the market. U. Anubha Srivastava Sr.Reliance Infrastructure Limited India Author –Dr.201301. The reasons for Net Loss in the year 2008-09. The analysis of net profit concludes that the performance of SABMiller was poor in the year 2008-09 and that is why the company went into losses and on the other hand UBL was consistent with the profit even though there were so many fluctuations in the Market.

2. It is found that for the year 2008-09 cost for various segments were more for SABMiller than UBL. Anubha Srivastava Sr. U. The temporary suspension of Charminar Brewery for 38 days in peak season. Cost analysis – The cost analysis explains the reason why company went into losses.Reliance Infrastructure Limited India Author –Dr.1. 3.P. Lecturer (Finance) Amity Business school Noida. . One time Charge of Rs 34 crores during the year due to change in the accounting policy to align accounting as per income tax for treatment of containers. COST DISTRIBUTION Page | 110 Case Study “A study of Working capital management of Hisar Project”.201301.

Reliance Infrastructure Limited India Author –Dr. .Page | 111 Case Study “A study of Working capital management of Hisar Project”.P. Lecturer (Finance) Amity Business school Noida. Anubha Srivastava Sr. U.201301.

The comparison is done keeping Net Sales for the year as the base for both the companies.8% of Net sales for SABMiller and for UBL they were 48.Reliance Infrastructure Limited India Author –Dr. .The pie chart shows the cost distribution for both the companies for the year ending 2008-09.P.2%.201301. Lecturer (Finance) Amity Business school Noida. U. raw material and packing material. This will explain the difference in the occurrence of cost in different departments. Page | 112 Case Study “A study of Working capital management of Hisar Project”. Cost of material which include (Cost of traded goods sold. Malt processing charges) were 51. 1. Anubha Srivastava Sr.

Rent. Telephone and other communication. Advertisement and publicity. Repairs.3% of Net sales for SABMiller and for UBL they were just 29% approximately. Printing and stationary etc) were approximately 37.P.201301. Commission on sales. Travel and conveyance. Training and development. Anubha Srivastava Sr.2. Lecturer (Finance) Amity Business school Noida. Other Expenses which include (Sales scheme expenses.Reliance Infrastructure Limited India Author –Dr. U. Freight outward. Management fees. Page | 113 Case Study “A study of Working capital management of Hisar Project”. .

5% of Net sales for SABMiller and for UBL they were 5. foreign exchange loss) were just 3. Lecturer (Finance) Amity Business school Noida.201301. Staff welfare expenses etc.1%. U.Reliance Infrastructure Limited India Author –Dr. Contributions to provident funds and other funds. .P. Personnel expenses which include (Salaries.3.4% of Net Sales for SABMiller and for UBL they were 5.) were 7. Wages. Borrowing cost which include (Interest. 4.2% of Net Sales. Bank charges. Anubha Srivastava Sr. Page | 114 Case Study “A study of Working capital management of Hisar Project”. Bonus.

U.201301. For the year ending 2009 the current ratio of SABMiller was 1.26 which was way below the Ideal ratio Page | 115 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida. . provision and also the Net profit) and on the other hand this segment doesn’t exist for SABMiller because the first four costs account for 100% of Net sales The amount of current assets is also insignificant for SABMiller as compared to UBL clearly because of which the current ratio of the company is way below than the ideal ratio of 2:1.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.5. Miscellaneous segment in UBL’s Pie diagram include (deprecation.P. Another reason for that cause can be continuous increase in the current liabilities of the company for the last three years.

of 2:1. Another finding is that the current ratio of UBL for the year ending 2009 was 3. U. It shows that there was more than required blockage in the current assets because of which the working capital required was more and henceforth the Borrowing cost of UBL was more than SABMiller.73:1. Anubha Srivastava Sr. It is to be noted that the current liabilities of company are Page | 116 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida. which is way above the ideal ratio. Hence it is important for the SABMiller to increase the current ratio and maintain a minimum of 2:1.Reliance Infrastructure Limited India Author –Dr. Current Ratio can be improved only if there is an increase in current assets of the company and decrease in the current liabilities.201301. . So that it maintains a good liquidity in order to meet its short term liabilities.P.

The conversion period of stock Page | 117 Case Study “A study of Working capital management of Hisar Project”.P.79:1. U. A higher working capital always shows a better a liquidity position for the company.28 in the year 2009. Anubha Srivastava Sr.continuously increasing. The Stock turnover ratio of SABMiller is also decreasing every year.201301. Hence there is a greater need for the company to maintain a bit higher cash balances so that the liquidity ratio reaches to 1:1 from 0. The reason for decline in the Net working capital is the reduction in the cash & bank balances and certainly because of which the liquidity ratio (.Reliance Infrastructure Limited India Author –Dr. Net working capital was very less for SABMiller as compared to UBL for the year ending 2009. .16 it came down to 9. In 2007 where it was 13. Lecturer (Finance) Amity Business school Noida.79:1) was also below the ideal 1:1.

. From the working capital turnover ratio it can be concluded that there is a better utilization of working capital as compared to UBL.201301. However it is also found that the average collection period for the companies is increasing over the years and for SABMiller from 62 days in 2007 it has gone to 81 in 2009.P. U. Page | 118 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida. The average payment period has an uneven trend for SABMiller and for UBL it has a decreasing trend in the year 2009 where Average payment period was 62 days for SABMiller it was 50 days for UBL. Anubha Srivastava Sr.Reliance Infrastructure Limited India Author –Dr. For 2009 the average collection period for UBL was 84 days which means SABMiller’s average collection from debtors was better than UBL.through sales is increasing year after year.

Reliance Infrastructure Limited India Author –Dr. U. Lecturer (Finance) Amity Business school Noida. The above analysis shows that the trend followed by both the companies in past three years has been more or less the same and both have made efforts to increase plant size in Page | 119 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr.P.. .201301. Section VI -Conclusion and Recommendation It can be concluded that UBL follows a liberal strategy towards its debtors and creditors in order to maintain better relationship.

201301. However the following are the major areas that SABMiller should focus in the near future in order to improve its market share and earn a sustainable profit. .  Company’s stock turnover ratio is quite poor it should focus on improving it. Lecturer (Finance) Amity Business school Noida.P.order to produce more.Reliance Infrastructure Limited India Author –Dr.  Increase the amount of cash and bank reserve so that a better liquidity ratio is maintained. U.  Company has to reduce its Raw material conversion period from 27 days as it is too high. Page | 120 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr.

201301. U. Lecturer (Finance) Amity Business school Noida. Since Bottle market is always fluctuating so it is very difficult to control the cost however the factor that can be controlled is the bottle breakage loss.P. Anubha Srivastava Sr.  Another major area of concern for the company is the amount of bottle loss that it is bearing. Current liabilities of SABMiller are increasing every year as compared to UBL’s consistent current liabilities.Reliance Infrastructure Limited India Author –Dr. In bottling Industry the most critical factor is the acquisition and handling of bottles. . So SABMiller should focus on reducing the amount of current liabilities. Page | 121 Case Study “A study of Working capital management of Hisar Project”.

.P. U. This way the policy of Tamil Nadu government will be followed and a major market can also be captured. Anubha Srivastava Sr.  Tamil Nadu is one of the biggest beer markets in India and No brand of SABMiller is sold in that region just because of the governments Policy. This market can certainly be targeted with contract brewing in Tamil Nadu.201301. Page | 122 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida.Recommendations-The following are the ways in which the Sales of the company can be increased.Reliance Infrastructure Limited India Author –Dr.

Lecturer (Finance) Amity Business school Noida.  Concept of Dumping can help SABMiller to Improve SalesPage | 123 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr. Not only just Tamil Nadu rather company should target more on the following five major states of Beer consumption in India to improve its sales figure  As strong beer has 74% market share in India. This can enhance the sales.201301.P. U. Company should focus on developing new strong beer brands as Indian consumers drink beer as an alternative to spirits. .

Page | 124 Case Study “A study of Working capital management of Hisar Project”. U. Lecturer (Finance) Amity Business school Noida. Anubha Srivastava Sr. This way buyer would be attracted and hence cash balances would increase because it is important for company to increase its current cash balances.201301.Reliance Infrastructure Limited India Author –Dr.P. .Other Recommendations• It is recommended that SABMiller should focus on giving more discounts for on spot payment.

Hence by increasing the Average collection period the sales of the company will increase because more buyers would be attracted.P. U.201301.• Company should also focus on increasing the Average collection period because currently the period is 81 days which is less than UBL’s period. . Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr. What selling techniques can be used by SABMiller to enhance there sales in order to increase their market share? Page | 125 Case Study “A study of Working capital management of Hisar Project”. Discussion QuestionsQ.

Anubha Srivastava Sr. What plan should be adopted by SABMiller in order to maximize their production so that wastage can be prevented and demands can be met during season time? Page | 126 Case Study “A study of Working capital management of Hisar Project”.How the current ratio of SABMiller is being affected by the continuous increase of current liabilities over the past three years? Q. . U.P. What is the appropriate level of Working capital ratio that should be maintained by the brewing companies in order to have an optimum level liquidity? Q .Reliance Infrastructure Limited India Author –Dr.Q. Lecturer (Finance) Amity Business school Noida.201301.

. Anubha Srivastava Sr.Reliance Infrastructure Limited India Author –Dr. Lecturer (Finance) Amity Business school Noida. U.Page | 127 Case Study “A study of Working capital management of Hisar Project”.201301.P.

Anubha Srivastava Sr.P. Lecturer (Finance) Amity Business school Noida.201301.Page | 128 Case Study “A study of Working capital management of Hisar Project”.Reliance Infrastructure Limited India Author –Dr. U. .

U. .201301.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.P.Page | 129 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida.

201301.Reliance Infrastructure Limited India Author –Dr. .P. Anubha Srivastava Sr.ANNEXURES SABMILLER INDIA BALANCE SHEETS Page | 130 Case Study “A study of Working capital management of Hisar Project”. Lecturer (Finance) Amity Business school Noida. U.

450 6.000.P.837.837.140.158.863.637.852.201301.000 Page | 131 Case Study “A study of Working capital management of Hisar Project”.979.610.326 1.311.Reliance Infrastructure Limited India Author –Dr.748 2.316.856 1. Lecturer (Finance) Amity Business school Noida.SOURCES OF FUNDS Shareholder's Funds Share Capital Reserves and surplus Share application As at 31st March 2009 As at 31st March 2008 As at 31st March 2007 2. Anubha Srivastava Sr. . U.406.880 4.450 6.311.

201301.744.Reliance Infrastructure Limited India Author –Dr.774.P.money pending allotment of shares Loan Funds Unsecured Loans Deferred tax liability.467 Page | 132 Case Study “A study of Working capital management of Hisar Project”.031. net 6. Anubha Srivastava Sr.422.046 4.170.896 3. U.006 63. Lecturer (Finance) Amity Business school Noida.652.648. .

856.622.P.406 10. Anubha Srivastava Sr.348 13.973.795.105.094 12. U.466.TOTAL APPLICATION OF FUNDS Fixed assets Gross Block 14.507.079 8.556.556.596. Lecturer (Finance) Amity Business school Noida.110. .123.Reliance Infrastructure Limited India Author –Dr.201301.673 13.503 Page | 133 Case Study “A study of Working capital management of Hisar Project”.

Less; Accumulated depreciation Less; Provision for impairment of fixed assets Capital work-in -progress

[2,397,970,441] [143,814,725]

[2,074,943,657] [156,563,671]

[1,525,150,636] [52,523,898]

506,703,130

1,491,630,978

756,309,965

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Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

11,521,028,370 Investments Current Assets, loans and advances Inventories Sundry debtors 1,650,081,511 3,390,344,214 11,359,225

10,233,719,729 11,359,225

7,974,101,934 2,178,050

1,183,482,865 2,536,219,383

774,519,494 1,484,582,230

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Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

Cash and bank balances Loans and advances

317,395,443 1,176,231,356 6,534,052,524

311,251,107 1,242,942,582 5,273,895,937 4,741,406,233

4,047,462,855 1,202,005,377 7,508,569,956 7,091,443,760

Actual current assets

6,104,394,695

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Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

854.P.326 3.861.283.606. U.354.930.684 4.154 3.419.201301.590 4.541.244 5.690 421.901.828 457. Anubha Srivastava Sr.Current liabilities and provisions Current liabilities Provisions 4.Reliance Infrastructure Limited India Author –Dr.058.713.934 Net current assets 1. Lecturer (Finance) Amity Business school Noida.935 361.868.338.715.985.802 Page | 137 Case Study “A study of Working capital management of Hisar Project”. .443.619 854.783.250.193.160.318 3.

457.457.Amalgamation adjustment reserve account Debit balance in Profit and loss account Less.076 1.076 1.069.457.296.Reliance Infrastructure Limited India Author –Dr.944.316] [1.201301.218. Anubha Srivastava Sr.584] Page | 138 Case Study “A study of Working capital management of Hisar Project”. U.236.236.236.961.076 1.232.600. Balance in general reserve 1. Lecturer (Finance) Amity Business school Noida.395 [1.399. .149 1.P.

account 382.556.123.348 64. Lecturer (Finance) Amity Business school Noida.673 SABMILLER INDIA PROFIT AND LOSS ACCOUNTS Page | 139 Case Study “A study of Working capital management of Hisar Project”.P.811 13. .856.622.105.201301.094 12.507.544.833 TOTAL 14. U.891.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.

U.952. gross For the year ended 31st march 2009 For the year ended 31st march 2008 For the year ended 31st March 2007 21.155 96.P.449.487 100. Anubha Srivastava Sr.144.215.894.201301.130 Page | 140 Case Study “A study of Working capital management of Hisar Project”.384.622. .530 17.115 296. gross Sale of traded goods.758.472 13.PROFIT AND LOSS ACCOUNT INCOME Sale of manufactured goods.120. Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr.

912. U.573. Lecturer (Finance) Amity Business school Noida.719.307.Reliance Infrastructure Limited India Author –Dr. Net Income from contract bottling [7.685 Less. Anubha Srivastava Sr.040.037 13.902.239 143.972] 10.365.654.21.641.587 [6.416.234] 8. Discounts Sales.383 Page | 141 Case Study “A study of Working capital management of Hisar Project”.401.644.700.348.109.518.617 [4.201301.P.120 17.160. .279.485.424] 13.701.176. Excise duty Less.022] [1.578] [743.840.

839.584 3.Reliance Infrastructure Limited India Author –Dr.852.912 6.990 Page | 142 Case Study “A study of Working capital management of Hisar Project”.497 13. Lecturer (Finance) Amity Business school Noida.P.899.661 179.390 9.767.917 281.335.276 10.950.Other income Income from marketing operations TOTAL EXPENDITURE Cost of material 185.059.111.214 219.724 331. Anubha Srivastava Sr.866.197.489.743.700.296 2. .188. U.155.222.111.201301.

201301.854.282.469.066.243 603.247.064. Anubha Srivastava Sr.476. U.043 117.982.780 4.P.299.Reliance Infrastructure Limited India Author –Dr.679.864 625.808 858.541.Personnel cost Other expenses Depreciation Provision for impairment of fixed assets 974.306.662.955 [7. . Lecturer (Finance) Amity Business school Noida.471 651.090.427] Page | 143 Case Study “A study of Working capital management of Hisar Project”.928.845] 804.195 [101.581 5.296 5.

366.733.201301.738] 148.685 313. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida.493. U.166.541 408.651.Opening adjustment for returnable containers Borrowing cost [LOSS]/ PROFIT BEFORE TAX Provision for tax 340.545.970 [725.314 453.980 Page | 144 Case Study “A study of Working capital management of Hisar Project”. .Reliance Infrastructure Limited India Author –Dr.223.099 433.P.

758.158 [375.201301.320.678] 35. U.582.648 [63. .160.Reliance Infrastructure Limited India Author –Dr.724] 30.737.744.P.522 70.036] [37. Lecturer (Finance) Amity Business school Noida. Anubha Srivastava Sr.454] Page | 145 Case Study “A study of Working capital management of Hisar Project”.573.783.-Current tax -Pertaining to earlier years [reversal] -fringe benefit tax -deferred tax [credit/charge] [48.24] [13.

-wealth tax [LOSS]/PROFIT AFTER TAX Debit balance in profit and loss account brought forward Debit balance in profit and loss account carried

192,269 [648,759,941] [952,184,208]

238,542 344,777,187 [1,296,961,395] 401,891,802 [1,698,853,197]

[1,600,944,149]

[952,184,208]

[1,296,961,395]

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Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

over to balance sheet EARNINGS PER SHARE Basic earnings per share [2.81] Diluted earnings per share [2.81] 1.52 1.49 2.14 2.13

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UNITED BEWERIES LIMITED BALANCE SHEETS
SOURCES OF FUNDS Shareholder's Funds
Page | 148

As at 31st march 2009

As at 31st march 2008

As at 31st March 2007

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Author –Dr. Anubha Srivastava Sr. Lecturer (Finance) Amity Business school Noida- 201301, U.P.

644. U.048.431.000 3.000 Case Study “A study of Working capital management of Hisar Project”.709.685.410.000 2.P.685.891. Lecturer (Finance) Amity Business school Noida.201301.000 4.538.043.340.043.554. Anubha Srivastava Sr.000 2.310. .387.000 Page | 149 4.106.000 8.000 2.559.Share Capital Reserves and surplus Share application money pending allotment of shares Loan Funds Secured loans 2.Reliance Infrastructure Limited India Author –Dr.427.000 4.

271.744.000 60.Reliance Infrastructure Limited India Author –Dr. net Deferred credit Total Sources 1.044.Unsecured Loans Deferred tax liability.006.988. U.551.000 809.753.152. Lecturer (Finance) Amity Business school Noida.000 4.985.000 10.201301.000 173.000 Page | 150 Case Study “A study of Working capital management of Hisar Project”.166.000 17.000 11.715.398.P.302. Anubha Srivastava Sr. .000 90.000 416.122.

547.APPLICATION OF FUNDS Fixed assets Gross Block Less.062.294. Anubha Srivastava Sr.000 [2.646.149. U.000] 5. Lecturer (Finance) Amity Business school Noida.P.000 [1.000] 7.201301.272.917.547. .000 Page | 151 Case Study “A study of Working capital management of Hisar Project”.018.755.000 955.Reliance Infrastructure Limited India Author –Dr.090. Accumulated depreciation 9.

Lecturer (Finance) Amity Business school Noida.000 5.P.044.000 1.957. U.308.000 590.000 1.Less.630.Reliance Infrastructure Limited India Author –Dr.891.127.709. Anubha Srivastava Sr.940. Provision for impairment of fixed assets Net block Capital work-in progress Investments 6.576. .000 865.308.000 Page | 152 Case Study “A study of Working capital management of Hisar Project”.601.201301.000 1.040.000 1.135.089.699.977.000 4.

000 2.000 140.630.040.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.000 1.000 Case Study “A study of Working capital management of Hisar Project”.123.202. Lecturer (Finance) Amity Business school Noida.167.P.634. loans and advances Inventories Sundry debtors Cash and bank balances Other current assets 1.376.000 Page | 153 1. U.732.312.201301. .Current Assets.000 10.282.643.392.000 417.000 1.769.169.000 4.733.000 3.148.699.000 78855000 2.224.

592.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.972.788.201301.964.065.000 5. U.000 9.647.645.P.171.000 2.291.026.Loans and advances 2.617.300.000 1.064. .734.000 Page | 154 Case Study “A study of Working capital management of Hisar Project”.424.000 6.000 Current liabilities and provisions Current liabilities 2.000 2.728.000 1.175.620. Lecturer (Finance) Amity Business school Noida.

332. Anubha Srivastava Sr.029.735.P.415.000 4.271.000 74.947.693.000 2.Reliance Infrastructure Limited India Author –Dr.201301.000 3.371.545.249.000 Net current assets Amalgamation adjustment reserve account 7.143. U. . Lecturer (Finance) Amity Business school Noida.000 124.000 Page | 155 Case Study “A study of Working capital management of Hisar Project”.000 2.295.Provisions 183.582.368.101.000 2.

201301.271.152.166. Balance in general reserve account Total applications 17.000 11.Reliance Infrastructure Limited India Author –Dr. .000 10.744. Lecturer (Finance) Amity Business school Noida. U.398.000 Page | 156 Case Study “A study of Working capital management of Hisar Project”. Anubha Srivastava Sr.P.Debit balance in Profit and loss account Less.551.

000 19.802. Anubha Srivastava Sr. gross 24.000 For the year ended 31st march 2009 For the year ended 31st march 2008 For the year ended 31st March 2007 Page | 157 Case Study “A study of Working capital management of Hisar Project”.201301.264.604.437. Lecturer (Finance) Amity Business school Noida.844. .UNITED BREWERIES LIMITED PROFIT AND LOSS ACCOUNTS PROFIT AND LOSS ACCOUNT INCOME Sale of manufactured goods.000 14.P.Reliance Infrastructure Limited India Author –Dr. U.481.

000 8.472.991.961.P.690.611.000 9.491.984.190.344.000 764.247.672.000 13.000 492.000 17.Reliance Infrastructure Limited India Author –Dr.700.000 6.000 257.948.709.948.112. U.Less.000 4.201301.559.621.000 Page | 158 Case Study “A study of Working capital management of Hisar Project”.280.475.894. Excise duty Sales.000 13.772.596.000 10. .748.000 16. Net Other income TOTAL INCOME EXPENDITURE Cost of Sales 7. Anubha Srivastava Sr.000 6. Lecturer (Finance) Amity Business school Noida.738.982.000 10.233.

000 1.Other expenses Interest and finance charges Depriciation and Amortization PROFIT BEFORE TAX Provison for tax 4.Reliance Infrastructure Limited India Author –Dr.276.926.000 2. Anubha Srivastava Sr.000 3.000 279.327. Lecturer (Finance) Amity Business school Noida.536.P.000 762.150.711.000 Page | 159 Case Study “A study of Working capital management of Hisar Project”.282.016.517.788.377. .000 428. U.352.000 612.000 949.000 385.000 932.140.201301.303.000 896.709.570.

-Current tax .000 {146.000} {15.201301.940.918.000} Page | 160 Case Study “A study of Working capital management of Hisar Project”.689.000} 650.820.889. .000.000} 624.880.000 {170.912.526.000} {294.549.000} {12.000} {14. Anubha Srivastava Sr.001.Reliance Infrastructure Limited India Author –Dr.P.000} 624.129. U.400.000} {30.725.000} {19.000} {264.deferred tax [ credit]/charge PROFIT AFTER TAX Dividend {294.000 {86.000} {82.658.fringe benefit tax . Lecturer (Finance) Amity Business school Noida.

000} Page | 161 Case Study “A study of Working capital management of Hisar Project”.385.P. .201301.067.000 Transfer to General Reserve Profit carried to balance sheet Profit brought from previous year {65.000 55.000} 389.Reliance Infrastructure Limited India Author –Dr. Anubha Srivastava Sr.000.156.000 489. U. Lecturer (Finance) Amity Business school Noida.000 {70.000.028.538.

Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr.452.62 Page | 162 Case Study “A study of Working capital management of Hisar Project”.49 489.201301.000 2. U. .027.P.29 1.000 2. Anubha Srivastava Sr.Profit carried forward to the balance sheet EARNINGS PER SHARE Basic/Dilluted) 2.385.

. Lecturer (Finance) Amity Business school Noida.Reliance Infrastructure Limited India Author –Dr. U.P. Anubha Srivastava Sr.201301.Page | 163 Case Study “A study of Working capital management of Hisar Project”.