Professional Documents
Culture Documents
ON
RECIEVABLES MANAGEMENT
AT
AMRIT BANASPATI COMPANY RAJPURA
Submitted By:
PARMINDER KAUR
r MBA -8NBPI028
Adam Smith Institute Of Management
Chandigarh
ACKNOWLEDGEMENT
Project is the systematic study to gain knowledge. It is
possible only in the light of guidance, advice and help
from a number of sources, without which a learner is a
soldier in the vast uncharted sea without radar.
“Study of Receivables Management” was assigned
to me by Amrit Banaspati Company Limited as the part of
the curriculum of 2 years Master of Business
Administration.
I would like to say thanks to my Project Supervisor Mr.
Parveen Tarika General Manager {Finance} ABC Ltd.
Rajpura for giving me the valuable time, suggestions and
technical guidance during my hard work without which
my hard work would have been too far from the smart
work which is new mantra of success in this century’s
corporate world.
I am also very thankful to Mr. Bhupinder Singh Senior
Manager {Personnel & Admn. Department} for his
valuable time, guidance, inspiration and continuous
encouragement throughout the period of project.
In the end I would like to thank all my friends and people
who helped me in this project and also in regenerating
my enthusiasm whenever I need it the most. I thank them
again and again for letting me be where I am today.
PREFACE
On the changed scenario of globalization, Indian Economy
is also undergoing changes a far as advancement in
technology up gradation and professionalism is
concerned. To complete with the changing requirements,
the state is duly bound to prepare and produce technical
manpower to as to be par in the global market.
To work and concentrate on various projects in
industries, helps to get an overall view and exposure to
industries and the students are encouraged as it helps in
the overall development of their personality. It increases
the confidence and morale of the students.
Since everyone has his own way of manipulating
the observations and interpreting the results. I present
this report in my own way, I hope it will be appreciated by
all.
MISSION STATEMENT
Present Scenario:
Presently the country has more than 15000 oilseeds
crushing units, more than 600 solvent extractors, more
than 400 vegetable oil refiners and more than 190
vanaspati oil units. All these are working at below 40%
capacity utilization. With such a low capacity utilization
the solvent extraction industry is in doldrums, many of
these units have already shut down.
The country has been importing mainly from Indonesia
and Malaysia. It started with refined oil as there was need
to meet the demand supply gap. But the imports were
cheap that imports crossed many times the gap and this
lead to the current plight of the solvent extraction
industry. Moreover all these imports led to increased
consumption of palm oil and its derivates, while other oil
seeds and oil’s consumption is declining. Most affected
are Soyabean, cottonseed, oilcake, Rapeseed etc. Their
demand has not grown in recent years due to these
cheap imports. This is harming oil seed farmers, as they
are not able to sell these in the market due to lower
realizations. Many have already shifted to other crops and
many are planning to do so in near future. If these
imports continue the oilseeds industry is likely to die very
soon. Taking into consideration all these factors plus
seemingly a selfish motive of increase its customs
collection, the government has been taking these duty
hikes from time to time. But every time the hikes are
more than offset by drop in international prices.
QUALITY POLICY:
PRICING STRATEGY:
DISTRIBUTION OF PRODUCTION:
All the products at ABC Rajpura and are sold in the area
of Punjab, Haryana, Rajasthan, J&K, Himachal Pradesh,
West Bengal and Chandigarh through 30 Depots and 575
stations.
HIE RA R CHY OF A B C L
VC & M D
Sr. Executive
Director
Executive
Director
LIST OF EXECUTIVES
Sh. J.K Khaitan VC & MD
Sh. S.C Aggarwal Sr. Executive Director
Sh. S.A Rahman Executive Director
Sh. A.K Jain Sr. VC {work &SCM}
Sh. Ashish Mittal GM {Marketing & sales}
Sh. Rajesh Aggarwal VP {Accounts}
Sh. Parveen Tarika GM {Finance}
Sh. S.K Handoo Sr. GM {RD & QC}
Sh. Vinay Sharma GM {Commodity}
Sh. R.K Kalia GM {HR & Admn.}
Sh. Sanjeev Goyal GM {IT}
Sh. S.S Brar GM {Production}
Sh. S. Wadhera GM {Engineering}
REFINERY PROCESS
The refinery process of vanaspati is as follows:
PRODUCTS
Gagan Vanaspati
Ginni Gold Refined Sunflower
Ginni Refined Groundnut oil
Ginni Lite Refined Oil
Ginni Refined Cotton Seed Oil
Ginni Gold Soyabean Oil
Ginni Gold Ricebran Oil
Merrigold Table Margarine
Gagan Kachi Mustard Oil
Gagan Salt
Soya Nuggets
GAGAN VANASPATI:
Gagan Vanaspati is India’s largest selling vanaspati. It has won
the hearts of housewives the nation over. Gagan as a cooking
medium enhances the taste and flavor of food. It can be used for
deep frying among others. Gagan being low in free fatty acids is a
healthier cooking medium. Products cooked in Gagan have a
longer shelf life.
Gagan is a recipient of Rome Monde Selection Gold Medal.
NUTRITIONAL INFORMATION
Calories 73
Cholesterol 0
Saturates 24
Sodium 0
NUTRITIONAL INFORMATION
Values are per 10 gm serving
Calories
90 Cholesterol
0 Saturates
7 Poly/mono unsaturated %
NUTRITIONAL INFORMATION
Values are per 10 gm.
Calories
90 Cholesterol
0 Saturates
24 Poly/mono unsaturates %
76
NUTRITIONAL INFORMATION
Values are per 10 gm
Calories
73 Cholesterol
0 Saturates
24
It contains refined Sunflower oil, hydrogenated and liquid
vegetable oils, salt, permitted emulsifying and stabilizing agents,
permitted colors and flavorings agents, Vitamin A 30 IU/g and
Vitamin D 2 IU/g.
It is available in 200 gram & 100 gram cups, 500 gram & 100
gram duplex cardboard packing and 10 gram blister pack.
NUTRITIONAL INFORMATION
Values per 10 gm.
Calories 90
Cholesterol 0
Poly/mono unsaturates % 40-50
Saturates 50-
60
It is made from any or following vegetable oils:
Sunflower, Maize, Kardi, Sesame, Solvent, Extracted Groundnut
and Mustard, Cottonseed, Mahuwa, Palm, Rapeseed Rice Bran,
Soyabean, Sal seed {upto 10 %}.
It contains Vitamin A 30 IU/g and Vitamin D 2 IU/g.
It is available in 15 liter tin.
RAW MATERIAL
Fatty Raw Material: The various edible oils generally used for
the manufacturing are:-
Cottonseed oil
Sesame oil
Rice Bran oil
Mustard oil
Palm oil
Groundnut oil
Sunflower oil
Corn oil
Soya Bean oil
Rapeseed oil
STRENGTHS {Internal}:-
Sound Infrastructure
Efficient Management
Sound Economic Condition
Brand Value
WEAKNESSES {INTERNAL}:-
Limited Network
Poor Technology
Traditional Values and beliefs
OPPORTUNITIES:{External}:-
Tie up with new retailing companies i.e. Reliance, Pantaloon
etc.
Target the market on segmentation or niche basis.
THREATS {External}:-
Local brands in market
More dependency on imports for raw material
RECIEVABLES MANAGEMENT
-AN INTRODUCTION
A sound managerial control requires proper management of liquid
assets and inventory. These assets are a part of working capital
of the business. An efficient use of financial resources is
necessary to avoid financial distress. Trade credit arises when a
firm sells its products or services on credit and does not receive
cash immediately. It is an essential marketing tool, acting as a
bridge for the movement of goods through production and
distribution stages to customers. A firm grants trade credit to
protect its product at favorable terms. Trade credit creates
account receivables or trade debtors that the firm is expected to
collect in the near future. The customers from whom receivables
have to be collected in near future are called trade debtors and
represent the firm’s claim as assets.
CREDIT POLICY
This type of financing helps companies free up capital that is
struck in accounts receivables. Accounts receivable financing
transfers the risk associated with the account receivables to the
financing company; this transfer of risk can help the company
using the financing to shift can help the company using the
financing to shift focus from trying to collect receivables to current
business activities.
POLICY OBJECTIVE
To ensure that all Government accounts receivable are managed
fairly, efficiently and effectively to recover such receivables and
minimize the risk of loss.
A firm may allow a lenient or a stringent credit policy. The firm
following a lenient credit policy tends to sell on credit to customers
on very liberal terms and standards, credit is granted for longer
periods even to those customers whose creditworthiness is not
fully known or whose financial position is doubtful. In contrast, a
firm following a stringent credit policy sells on credit on a selective
basis only to those customers who have proven creditworthiness
and who are financially strong. In practical, firms follow the credit
policy ranging between stringent to lenient.
CREDIT TERMS:
The conditions for extending credit sales are called
credit terms and they include the credit period and cash discount.
In simple words credit terms specify duration of credit and terms
of payment by customers. There is no binding on fixing the terms
of credit. A concern fixes its own terms of credit depending upon
its customers and the volume of sales. The customs of industry
also act as constraints on credit terms of individual concerns.
Investment in accounts receivables will be high if customers will
be allowed extended time period for making payments.
COLLECTION EFFORTS:
These determine the actual collection period.
The lower the collection period, the lower the investment in
accounts receivable and vice versa. Collection efforts of the firm
aim at accelerating collections from slow-payers and reducing
bad-debt losses. The firm should in fact thoroughly investigate
each account before extending credit. It should gather information
about each customer analyses it and then determine the credit
limit. Depending upon the financial condition and past experience
with a customer, the firm should decide about its collection tactics
and procedures.
So, the company does all the sales on cash basis. The selling of
products is the responsibility of dealers. The company gets
advance payments from these dealers for dispatch of products.
So the RECEIVABLE for the company is import of crude oil. The
steps are:
a} The people from Sales Department and Production Department
plan for next order of crude oil according to demand.
b} According to demand they place order to Purchase
department.
c} Purchase Department orders to suppliers for crude oil that is
imported from Kandla Port.
d} The crude oil is brought to the company through two ways :-
a) By Train through Tankers
b) By Road through Wagon
e} Most of the time the oil is brought through tankers. It is hired
from Gujarat.
f} The supplier is fully responsible for secure supply of crude oil to
the company.
EOQ Model:
In 1913, F.W.Harris developed this model to determine
the optimum order quantity. EOQ method is used to identify the
order quantity that would minimize the total cost i.e. the sum of
ordering cost and carrying costs.
The formula to calculate EOQ is:
EOQ= √2*100*90000
=4242.64 mt.
= 4250 mt.
So the optimal order quantity for the company is 4250 metric tone.
At this level the company will be able to minimize total cost.
SUGGESTIONS
As Gagan and Ginni are famous brands among people, so
the company should start credit sales also. It will increase
profits.
There is more lead time i.e. time lag between order
and supply. It is 7 days. It should be reduced to 5
days.
The company must not depend wholly on suppliers for
bringing crude oil as many times there is theft or
leakage of oil.
BIBLIOGRAPHY
www,amritbanaspati.com
www.wikipaedia.org
www.oilworld.com
Annual Report of ABC Ltd.