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SUMMER TRAINING REPORT ON
Cash Management System
Undertaken at
“DABUR INDIA LTD.”
BACHELOR OF COMMERCE (Hons.)
BY ABHISHEK S. IYER
07017788813
Vivekananda School of Business Studies
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SUMMER TRAINING REPORT ON
Cash Management System
Undertaken at
“DABUR INDIA LTD.”
BACHELOR OF COMMERCE (Hons.)
BY ABHISHEK S. IYER
Vivekananda School of Business Studies
To Whom It May Concern
I A B H I S H E K S. I Y E R Enrolment No. 07017788813 from BCOM 5TH^ SEM of the Vivekananda Institute of Professional S t u d i e s , Delhi hereby declare that the Summer Training Report (BCOM 309) entitled CASH MANAGEMENT SYSTEM at DABUR INDIA LTD. is an original work and the same has not been submitted to any other Institute for the award of any other degree.
Date: Signature of the Student
Certified that the Summer Training Report submitted in partial fulfillment of Bachelor of Commerce (Hons) [BCOM (Hons.)] to be awarded by G.G.S.I.P.University, Delhi 2013-16 , and Enrolment No. 07017788813 has completed under my guidance and is satisfactory. Date:
Signature of the Guide
Name of the Guide:
Designation:
ON COMPANY’S LETTER HEAD
CERTIFICATE
This is to certify that Abhishek S. Iyer , a student of Bachelor of Commerce (Hons.) (B.com (h) , a class of 2013, Vivekananda Institute of Professional Studies , Affiliated to GGSIP University bearing Enrolment No. 07017788813 , has undertaken the Summer Internship Training at DABUR INDIA LIMITED during 1st^ June 2015 to 31st^ July under my supervision & guidance. He has conducted a study & completed the Project on Cash Management System (CMS).
Seal of Organization Signature of the Guide Date: Name of the Guide: Mr. Rakesh Arora Designation: Zonal Financial Manager (ZFM) Address:
ACKNOWLEDGEMENT
I would like to take this opportunity to thank and extend my sincere gratitude towards Mr. Rakesh Arora, Dabur India Ltd. & Mr. Randhir Singh Azad, School of Business Studies (SBS),VIPS, G.G.S.I.P University whose valuable guidance and knowledge helped me to work on this project. This project could not have been completed so successfully without their valuable guidance and support.
Abhishek S. Iyer
(07017788813)
B.com (Hons.)
Components of Cash Management
1.1.1. Account Reconciliation: Managing cheques, monitoring their clearance, and keeping track of the true cash balance can be an overwhelming task for businesses because of the huge number of cheques that are processed on a daily basis. Hence banks offer account reconcilement services wherein corporate customers can upload details about the cheques issued on a daily basis. And at the end of the month, the bank statement shows information on cheques which have been cleared and those which have not. This system is also helpful in the process known as „positive pay‟, used by banks to prevent cheques from being fraudulently cashed if they are not on the list.
1.1.2. Cash Concentration: This is a quick and cost-effective method of moving funds from different accounts spread across the country to a single monitored and managed account. This allows businesses to maximize the use of available cash, and to optimize returns on consolidated balances.
1.1.3. Financial Risk Management: Risk management is the process of measuring risk, and developing and implementing strategies to manage and mitigate risk. Financial risk management plays an important role in cash management, because it focuses on managing risks in relation to changes in interest rates, commodity prices, stock prices, exchange rates, among others.
1.1.4. Liquidity Management: Forecasting the cash needs of a business is essential for managing cash flows, short-term borrowings, among others in an efficient manner, in order to ensure that such cash needs can be met if and when they arise. This requirement is addressed through liquidity management services offered by banks. Liquidity management
comprises of activities that release the investments locked in working capital, enabling it to contribute to higher profits. It also refers to the specific services provided by banks to enable their customers optimize their interest revenues and reduce interest costs.
(b) Why Cash Management?
- Complete Visibility: Corporate customers increasingly expect superior cash forecasting ability, for which they need complete enterprise level visibility into cash balances and movement of cash. This is provided by banks in the form of status reports, direct enquiry, and through consolidated view of accounts held with branches/banks across the globe.
- Rich Reporting Modules: In order to make corporate customers understand the need to adopt cash management services, banks are showing cost-benefit analysis reports, and demonstrating the benefits offered by cash management using graphs and illustrations. 3. Integrated Services: Corporate customers prefer a single platform for all their financial needs in place of disparate systems. Hence the focus is on integrating cash management systems with other activities involving the bank. For example, linking of ERP solutions with banking systems facilitates cash management by enabling effective trade finance process and investment management, among others.
- Remote Deposit Capture and Straight- Through Processing - (STP): In order to accelerate transactions businesses are looking for solutions that offer straight through processing capability. For example, corporate customers are trying to streamline their transactions and reduce downtime, for which banks offer STP services which enable businesses to conduct entire trade processes and payments electronically. And to better serve the needs of corporate customers, banks look to technology vendors who offer optimal solutions that can enable more efficient cash management.
1.3 Scope of Project:
Cash management solutions are now widely being adopted, and hence there is likely to be an increase in the number of vendors offering these solutions. Correspondingly, corporate customers are also likely to become more demanding, thereby promoting more intense competition amongst vendors. Here are some areas with scope for improvement which vendors can focus on, to provide better services than their competitors:
Eliminating Disparate Systems : Different cash management solutions are being offered for diverse segments. And as businesses grow, managing these disparate systems is increasingly becoming a challenge. Hence vendors should come up with a single platform which can support various cash management products and services as the business grows. Customizable Solutions : Banks today offer similar solutions to all corporate customers irrespective of their size and business. Hence vendors should try to come up with a customizable platform which can cater to the specific needs of different businesses. Unified System : Integration of corporate customer systems with banking systems can be very helpful in reconciliation of internal systems with banking systems, and can support account management between the bank and customer. And this offers great scope for vendors. Today, banks are leveraging cash management systems as a tool to build long-term trust with corporate customers, because these systems will empower bank‟s customers to be empowered and manage their liquidity position at any given time, thus building a trust and strengthening the relationship that goes beyond transaction banking
1.4 Company Profile 1.4.1 Name of the firm/company:- Dabur India Limited Corporate Office: Kaushambi Ghaziabad - 201010 Uttar Pradesh, India Tel: +91 (0120) 3982000 (30 Lines); +91 (0120) 3962100, 39412525, 4182100 Registered Office: 8/3, Asaf Ali Road, New Delhi – 110 002 Tel : +91 (011) 23253488
1.4.2 Dabur India Ltd. - Corporate Profile
Dabur India Ltd is one of India‟s leading FMCG Companies with Revenues of over ` 7,806.4 Crore & Market Capitalization of US $5 Billion. Building on a legacy of quality and experience of over 131 years, Dabur is today India’s most trusted name and the world’s largest Ayurvedic and Natural Health Care Company.
Dabur India is also a world leader in Ayurveda with a portfolio of over 250 Herbal/Ayurvedic products. Dabur's FMCG portfolio today includes five flagship brands with distinct brand identities -- Dabur as the master brand for natural healthcare products, Vatika for premium personal care, Hajmola for digestives, Réal for fruit juices and beverages and Fem for fairness bleaches and skin care products.
Dabur today operates in key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care and Foods. The company has a wide distribution network, covering over 5.8 million retail outlets with a high penetration in both urban and rural markets.
1.4.3 Company’s vision & mission :
VISION
"Dedicated to the health and wellbeing of every household"
PRINCIPLES
OWNERSHIP
This is our company. We accept personal responsibility, and accountability to meet business needs.
PASSION FOR WINNING
We all are leaders in our area of responsibility, with a deep commitment to deliver results. We are determined to be the best at doing what matters most.
PEOPLE DEVELOPMENT
People are our most important asset. We add value through result driven training, and we encourage & reward excellence.
CONSUMER FOCUS
We have superior understanding of consumer needs and develop products to fulfill them better.
TEAM WORK
We work together on the principle of mutual trust & transparency in a boundary-less organization. We are intellectually honest in advocating proposals, including recognizing risks.
INNOVATION
Continuous innovation in products & processes is the basis of our success.
INTEGRITY
We are committed to the achievement of business success with integrity. We are honest with consumers, with business partners and with each other.
MISSION
To maximize shareholders‟ value, by offering superior quality nature based products, that contributes in improving consumers‟ life in personal care, health care and foods.
1.4.4 Product range of the company:
DABUR INDIA LTD. (PRODUCT LINE CATEGORY)
HEALTH CARE
SUPPLEMENTS
DIGESTIVES
OTC- HEALTH CARE
PERSONAL CARE
HAIR CARE
ORAL CARE
SKIN CARE
FOOD PRODUCTS
REAL
ACTIV
BURSST
HOMMADE
LEMONEEZ
CAPSICO
HOME CARE
ODOPIC
ODOMOS
ODOMOS NATURALS
ODONIL NATURE SPRAY
SANI FRESH (SHINE)
Home Care
Ethical
Professional Range – Fem
1.4.5 Organization structure of the company:
1.4.6 Market share & position of the company in the industry:
COMPANY NAME LAST PRICE (^) CHANGE%^ 52 WK HIGH^ 52 WK LOW MARKET CAP
HUL 896.20 - 1.18 979.00 665.00 193,920.
Dabur India 297.15 0.19 304.00 200.45 52,203.
Godrej Consumer 1230.00 0.33 1261.85 872.65 41,885.
Marico 435.25 0.18 466.30 243.40 28,077.
Colgate 2046.00 - 0.59 2198.50 1465.00 27,824.
Table 1 : Market share & position of the company in the industry
1.5 Industry Profile:
A. Established in 1884 - more than 125 Years of Trust & Excellence
B. Among top 4 FMCG companies in India
C. World‟s largest in Ayurveda and natural healthcare
D. Revenue of 41.1 billion and profits of 5.7 billion in FY2010-
E. Strong brand equity
o Dabur is a household brand
o Vatika and Real are Superbrands
Hajmola , Real & Dabur ranked among India‟s Most Admired Brands
F. 11 Brands with sales of over ` 1 billion each
G. Wide distribution network covering 2.8 million retailers across the country 17 world class manufacturing plants catering to needs of diverse markets
H. Strong overseas presence with c. 30% contribution to consolidated sales
Chapter 2:
Cash Management System at Dabur India Ltd
The company maintains bank accounts in all towns through Dabur owned Depots.
(Cheques/ drafts received from customers (now here customers are referred to as stockiest) in nearby places are sent for local clearing to initially collect funds in these bank accounts.
This has reduced the average collection period (as compared to the time it would take if customer cheques were first received at head office and then sent for out-station clearing) thereby increasing the velocity of cash inflows. Funds thus collected at the depot towns are each day transferred to the company‟s head office or corporate bank accounts.
The company has a “sweeping arrangement” with the bank at head-office by which any of the funds transferred from the depot towns are automatically applied towards settling the company‟s cash credit loan from the bank and reducing its debit balance. These steps have resulted in reducing and controlling the cost of interest to the company. When the company has surplus funds, the company invests the same in short- term investments or instruments like Mutual funds and Govt. securities.
2.1 Process of Cash Management through Banking Department
Stockiest
PSBC
Invoice Generates Parking
Sorting
Filling Posting
Cheque Deposit in Bank
Acknowledgment