PROJECT REPORT ON ANALYSIS OF WORKING CAPITAL MANAGEMENT IN

HINDALCO INDUSTRIES LTD.

PRESENTED BY -

ABHISHEK RAI 10XQCMA002

INDUSTRY PROFILEThe companies under the India aluminum industry: Hindalco (Hindalco Industries Ltd) Indal (Indian Aluminum Co Ltd) Nalco (National Aluminum Co Ltd) Balco (Bharat Aluminum Co Ltd) Malco (Madras Aluminum Co Ltd) The total production was 610,000 metric tons in 1990-1991 and 707,000 metric tons in 2000-2001.

COMPANY PROFILEHindalco Industries Ltd : The metals flagship company of the Aditya Birla Group. Industry leader in aluminum and copper Hindalco is the world s largest aluminum rolling company and one of the biggest producer s of primary aluminum in Asia. After acquiring NOVELIS INC. Hindalco became world leader in aluminum rolling.

VISION, MISSION & OBJECTIVES VISIONTo be a premium metals major, global in size and reach, with a passion for excellence.

MISSIONTo relentlessly pursue the creation of superior shareholder value, by exceeding customer expectation profitably, unleashing employee potential, while being a responsible corporate citizen, adhering to our values

OBJECTIVES Honesty in every action On the foundation of integrity,doing whatever it takes to deliver, as promised. Missionary Zeal arising out of an emotional engagement with work. Thinking and working together across functional silos, hierarchy levels, businesses and geographies. Responding to stakeholders with a sense of urgency.

ORGANIZATIONAL STRUCTURE

FUNCTIONAL AREASMARKETING DEPARTMENT Sales: Locating new construction opportunities Developing relationships with owners, architects, engineers, attorneys, real estate brokers, etc. Preparing proposals in response to a Request for Proposals (RFPs) Making formal presentations to owners. Marketing: Preparing Requests for Information (RFIs) Assisting in preparing proposals in response to RFIs Assisting in developing formal presentations Maintaining project history files for sales.

FINANCE DEPARTMENT Key tasks of finance department: Financial forecast Project execution report (PER) Accounting and payments Allocation and control of budgets Accounting and payment Procurements Plant internal billing

HR DEPARTMENT Key tasks of human resource department are: Recruitment of employees by conducting interviews or through placement agencies Personnel evaluation Maintain internal code of conduct Manage existing personnel including

PRODUCTION DEPARTMENTProduction is the functional area responsible for turning inputs into finished outputs through a series of production processes. The Production Manager is responsible for making sure that raw materials are provided and made into finished goods effectively. 1. The production and planning department sets standards and targets for each section of the production process. The quantity and quality of products coming off a production line are closely monitored. 2. The purchasing department is responsible for providing the materials, components and equipment required to keep the production process running smoothly. 3. The stores department is responsible for stocking all the necessary tools, spares, raw materials and equipment required to service the manufacturing process.

LOGISTICS & DISTRIBUTION DEPARTMENT Objectives of distribution department To reduce unit transportation cost To reduce delivery time To reduce incidence of stock outs To maintain consistency of delivery To make flexibility of delivery system To distribute goods in a safe channel To distribute goods equally over larger area To maintain price stability in the market

SWOT ANALYSISSTRENGTHS: Family Business with good support as it is part of the Aditya Birla Group. Group with a diversified portfolio. Highly developed infrastructure. Easy availability of raw material. Good product positioning in the market. Use of modern machineries and technologies to ensure minimum wastage and optimum production. One of the low cost Aluminium producers in the world.

WEAKNESSES: High cost of establishment and maintenance of plants. Transportation cost for procurement of raw materials is also high. It has no uniform distribution channels for the rural markets. The prices of the products are comparatively high when compared to products of competitors.

SWOT ANALYSISOPPURTUNITIES: Attractive investment opportunity for expansion and diversification. High level of demand in international markets. New innovative techniques to increase the production capacities. Scope for rationalization on sales tax and excise duty.

THREATS: High competition from competitors. Availability of coal (fuel) and other raw material may become a major constraint. Threat from the local players. Existing threat of Generic competition with respect to various products.

MAJOR FINDINGS The Company is always having a Positive Working Capital in six years As far as change in working capital are concerned it is fluctuating. Sometimes it is Increasing and sometimes it is decreasing in comparison to previous years. The overall liquidity position of Hindalco is good as the company is having ability to meet its short term Obligations. There is very good management of credit in the company as the value of debtor s turnover is very high. The company carries a very small amount of cash and bank balance.So It needs more availability to redeem its loans.

Continued The Company is having effective Debtor s management,as the average collection period is decreasing year after year. The major Portion in capital structure of company is of reserve and surplus which is decreasing as year passes.

SUGGESTIONS They should focus on debtor s side as the number of debtor s goes on increasing per year. The company should adopt proper Sales strategy and their collection facilities. Increase in number of debtors leads to lower working capital. Majority of raw materials is procured either from government organization or it imported from outside India. As a result the lead time tends to be high. So attention should be paid on this. The company should adopt factoring accounting which helps to make sure that there is no any type of fraud in case of management of receivables.

CONCLUSION Hindalco Industries Ltd has shown a sterling Performance, it meet a standalone revenue 18220 Crores which reflect a growth of 4%.Net Profit has also been impressive at 2230.27 Crores. It shown a continuous increase in net profit since last 3 Years. It has a good liquidity position to meet its current dues. Turnover ratio is also very good which reveals that resources are being utilized properly.

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