A Project Report

On

Working Capital Management in Contract Broiler Farming Sector

for

‘’OM CHICKS INDIA PVT. LTD.’’

By

"MR. PRASAD GANESH GAVHANE"

Under the guidance of

"MBA (FINANCE)"

Submitted to

"Savitribai Phule Pune University"

In partial fulfillment of the requirement for the award of the degree of

Master of Business Administration (MBA)

Alard Institute of Management Sciences, Pune

 INDEX

Page No
Sr.
Detailed Contents (only as
No
Guidelines)
1 INTRODUCTION
OBJECTIVE 1
SCOPE 2-3

2 INDUSTRY / SECTOR PROFILE

INTRODUCTION ( limited to 05 pages) 4-11

3 COMPANY PROFILE; Actual data of respective industry)

COMPANY HISTORY 12-14
VISION MISSION 15
ACHIEVMENTS ACCOLADES 16-17
GLOBAL PRESENCE 18-19
OTHER DETAILS 20
4 PRODUCT PROFILE 21

5 LITERATURE REVIEW:
BACKGROUOND SOURCES, INTERNET REFERENCES,
22-37
MODELS (if any), any other supportive information.

6 RESEARCH METHODOLOGY
RES OBJECTIVES, RES DESIGN, RES TOOL, TYPE OF RES, 38-39
SAMPLING, SAMPLING BREAK UP AND SIZE, SAMPLE
40-41
FRAME
DATA COLLECTION- PROCEDURE DISPLAYING FLOW
42-43
CHART

7 DATA ANALYSIS AND INTERPRETATION

TABLES AND GRAPHICAL REPRESENTATION ALONG WITH
44-60
INTERPRETATION.
OBSERVATIONS /FINDINGS/ SUGGESTIONS/
8 61-68
RECOMMENDATIONS/ CONCLUSION
9 LIMITATIONS 69
APPENDIX 70-75
I BIBLIOGRAPHY
ANNEXURE- QUESTIONNAIRE, ANNUAL REPORTS, ANY
ii
OTHER DATA FROM COMPANY/MEDIA.
 INTRODUCTION

Effective financial management is the outcome, among many other things of proper,
management of investment of funds in business funds can be invested for permanent or long-term
purposes, such as acquisition of fixed assets, diversification and expansion of business, renovation or
modernization of plants an machinery and research & development.

Funds are also needed for short-term purpose, i.e., for current operations of the business,
for example, in a manufacturing concern, procurement for raw material, payment if wages, general
expenses. All the goods so manufactured in a given time period, may not be sold in that time frame
itself.

Hence, some goods remain in stock, like raw material, semi finished goods, finished
marketable goods, etc., Funds are thus blocked in a various types of inventory. Every after, sales,
may not necessarily be cash sales, even credit sales may be present. It again constitutes to blockage
of funds.

Working capital refers to a firm’s investment in short-term assets, viz., cash, short-term
securities, debtors, etc., It can also be regarded as that portion of the firm’s total capital which is
employed in short-term operations. It refers to all aspects of current assets and current liabilities. In
simple terms, working capital is the investment needed or day-to-day operations.

Change in its value or without affecting the operations of any firm. Current liabilities are those
liabilities, which are intended to be paid within a year out of the current assets or the firm’s
earnings.

The main aims of working capital management is to manage the current assets and current
liabilities in such a way that satisfactory level of working capital is maintained. This is due to the fact
that if working capital management of the firm is inefficient, it is likely to become insolvent or even
may be forced to bankruptcy. The current assets should be large enough to cover its current
liabilities to ensure a reasonable margin of safety.

OBJECTIVES OF WORKING CAPITAL MANAGEMENT

The primary objective of working capital management is to ensure smooth operating cycle of the
business. Secondary objectives are to optimize the level of working capital and minimize the cost of
such funds.
The superior objective of financial management is wealth maximization and that can be gained
by profit maximization accompanied with sustainable growth and development. For sustainable
growth and development, the objectives of all the stakeholders including customers, suppliers,
employees, etc should be aligned to the growth of the organization.
 A) SMOOTH WORKING CAPITAL OPERATING CYCLE
1. It means raw material should be present on the requirement and it should not be a cause to
stoppages of production.
2. All other requirements of production should be in place before time.
3. The finished goods should be sold as early as possible once they are produced and inventoried.
4. The accounts receivable should be collected on time.
5. Accounts payable should be paid when due without any delay.
6. Cash should be available as and when required along with some cushion.

B) LOWEST WORKING CAPITAL

Working capital here refers to the current assets less current liabilities (net working capital). It
should be optimized because higher working capital means higher interest cost and lower working
capital means a risk of disturbance of operating cycle.

C) OPTIMAL RETURN ON CURRENT ASSET INVESTMENT

The return on the investment made in current assets should be more than the weighted average
cost of capital so as to ensure wealth maximization of the owners. In other words, the rate of return
earned due to investment in current assets should be more than the rate of interest or cost of
capital used for financing the current assets.

D) MINIMIZE RATE OF INTEREST OR COST OF CAPITAL

The cost of capital utilized on working capital should be minimized so as to achieve higher
profitability. If the investment in working capital involves bank finance, interest rates should be
negotiated with the bank.
Cost can be minimized by utilizing long-term funds but in a proper mix. While deciding the mix of
working capital, the fundamental principle of financial management should be kept in mind
that fixed assets and permanent assets should be financed by long term sources of finance of
approximately same maturity and short-term or temporary assets should be financed by short-term
sources of finance.

SCOPE OF WORKING CAPITAL MANAGEMENT

Working capital plays a vital role in business. This capital remains blocked in raw materials, work in
progress, finished products and with customers.

The needs for working capital are as given below:

i. Adequate working capital is needed to maintain a regular supply of raw materials, which in turn
facilitates smoother running of production process.

ii. Working capital ensures the regular and timely payment of wages and salaries, thereby improving
the morale and efficiency of employees.

iii. Working capital is needed for the efficient use of fixed assets.

iv. In order to enhance goodwill a healthy level of working capital is needed. It is necessary to build a
good reputation and to make payments to creditors in time.
v. Working capital helps avoid the possibility of under-capitalization.

vi. It is needed to pick up stock of raw materials even during economic depression.

vii. Working capital is needed in order to pay fair rate of dividend and interest in time, which
increases the confidence of the investors in the firm.

IMPORTANCE OF WORKING CAPITAL:

It is said that working capital is the lifeblood of a business. Every business needs funds in order to

run its day-to-day activities.

The importance of working capital can be better understood by the following:

i. It helps measure profitability of an enterprise. In its absence, there would be neither production

nor profit.

ii. Without adequate working capital an entity cannot meet its short-term liabilities in time.

iii. A firm having a healthy working capital position can get loans easily from the market due to its

high reputation or goodwill.

iv. Sufficient working capital helps maintain an uninterrupted flow of production by supplying raw

materials and payment of wages.

v. Sound working capital helps maintain optimum level of investment in current assets.

vi. It enhances liquidity, solvency, credit worthiness and reputation of enterprise.

vii. It provides necessary funds to meet unforeseen contingencies and thus helps the enterprise run

successfully during periods of crisis.

 COMPANY PROFILE
Om chicks, known for its finest quality and taste is already a favorite among many Indian
households. Reared from the finest breed of carefully selected chicks,om chiks is the leader in the
Indian broiler chicken market.

Om chiks innovation and efforts to maintain consistency, highest quality and hygiene standards are
well appreciated by the many that savor the taste of its good chicken. A well controlled process
ensures you get nothing but the freshest of chicken straight from the farms. Grown in natural
conditions with nutrition rich feed, you can be assured that every bite is tender and juicy.

This superior quality chicken is now available at affordable prices. Through a nationwide network of
over 25,000 retail outlets. The next time you are out shopping, look out for the om chicks Chicken
sign in any of your neighborhood chicken stores. And always ask your retailer for om chiks.

Om Chicks (india) Private Limited is a Private incorporated on 25 May 2011. It is classified as Non-
govt company and is registered at Registrar of Companies, Pune. Its authorized share capital is Rs.
10,000,000 and its paid up capital is Rs. 9,900,000. It is inolved in Agricultural and animal husbandry
service activities, except veterinary activities.[This class includes specialized activities, on a fee or
contract basis, mostly performed on the farm.]

Om Chicks (india) Private Limited's Annual General Meeting (AGM) was last held on 30 September
2018 and as per records from Ministry of Corporate Affairs (MCA), its balance sheet was last filed on
31 March 2018.

Directors of Om Chicks (india) Private Limited are Rajendra Tukaram Thorat, Vanita Rajendra Thorat
and .

Om Chicks (india) Private Limited's Corporate Identification Number is (CIN)

U01400PN2011PTC139652 and its registration number is 139652.Its Email address is
trajuomchick@gmail.com and its registered address is TREASURE PARK, 'C' BUIDING, FLAT NO. 1201,
SANG NAGAR, ARANYESHWAR PUNE MH 411009 IN.

CIN U01400PN2011PTC139652

Company OM CHICKS (INDIA) PRIVATE LIMITED

Name

Company Active
Status

RoC RoC-Pune

Registration no. 139652

Company Company limited by Shares

Category
CIN U01400PN2011PTC139652

Company Sub Non-govt company

Category

Class of Private
Company

Date of 25 May 2011

Incorporation

Age of 8 years, 1 month, 19 days

Company

Activity Agricultural and animal husbandry service

activities, except veterinary activities.[This class
includes specialized activities, on a fee or contract
basis, mostly performed on the farm.