PROJECT REPORT

A report submitted in partial fulfillment of the requirements for the

Award for Degree of
BACHELOR OF BUSINESS ADMINISTRATION
ON THE TOPIC
MANAGEMENT OF WORKING CAPITAL

BY
ANAND KACHHAP
SPECILIZATION – FINANCE
GOSSNER COLLEGE
DURATION – 18TH NOV.2019 TO 6TH JAN.2020(SEVEN WEEKS)
Under the guidance of
MR.SANTOSH KR. YADAV
& MR. A.D. WADHWA
CENTRAL COALFIELS LIMITED , RANCHI.
ACKNOWLEDGMENT

I would like to thank MR.Santosh kr.Yadav Sir for his constant support , timely
advice and guidance during the whole process of training for completing my project
on WORKING CAPITAL MANAGEMENT .

It was a great pleasure to complete this project with the support of his experience
and help. I am so thankful for the support in my work , carrier and providing
required information. I would also like to thanks C.C.L. for giving me opportunities
to work on project under the guidance of Mr, A.D. Wadhwa Sir ,Mr.Bipin Thomas
Sir and employees of the company.

Secondly, I would also like to thank my friends who helped me a lot in finalizing
this project within the limited time frame.
CHAPTER NO. TITLE PAGE NO.
1 INTRODUCTION OF CCL 1 TO 6
2 WORKING CAPITAL 7 TO 12
MANAGEMENT
3 CASH FLOW MANAGEMENT 13 TO 18

4 INVENTORY MANAGEMENT 19 TO 23

5 DEBTORS MANAGEMENT 24 TO 29

6 PROBLEM FASED BY CCL 30

7 FINDINGS 31

8 SUGGESTIONS 32

9 CONCLUSION 33

10 BIBLOIGRAPHY 34

TABLES OF CONTENTS
INTRODUCTION OF CCL
 CENTRAL COALFEILD LIMITED-THE HISTORICAL MARCH
Central Coalfields Limited is a Category-I Mini- Ratna Company since October 2007. During 2009-10, coal
production of the company reached its highest-ever figure of 47.08 million tones, with net worth amounting
to Rs.2644 crore against a paid-up capital of Rs.940 crore.

Formed on 1st November 1975, CCL (formerly National Coal Development Corporation Ltd) was one of the five
subsidiaries of Coal India Ltd. which was the first holding company for coal in the country (CIL now has 8
subsidiaries).

 EARLY HISTORY –FORMATION OF NCDC (PRE-NATIONALISATION)

CCL had a proud past. As NCDC, it heralded the beginning of nationalization of coal mines in India.

National Coal Development Corporation Ltd (NCDC) was set up in October ,1956 as Government-owned
Company in pursuance of the industrial policy resolutions of 1948 and 1956 of the Government of India. It
was started with a nucleus of 11 old state collieries (owned by the Railways) having a total annual production
of 2.9 million tonnes of coal.

Until the formation of NCDC, coal mining in India was largely confined to the Raniganj coal belt in West Bengal
and the Jharia coalfields in Bihar (now in Jharkhand) and a part of Madhya Pradesh (now Chattishgarh also)
and Orrisa .

From its very beginning, NCDC addressed itself to the task of increasing coal production and developing new
coal resources in the outlying areas, besides introducing modern and scientific techniques of coal mining.

In the Second Five Year Plan (1956-1961) NCDC was called upon to increase its production fron new collieries,
to be opened mainly in areas away from the already developed Raniganj and jharia coalfields .Eight new
collieries were opened during this period and the production increased to 8.05 million tonnes by the end of
second plan.

During Third Five Year Plan (1961- 1966), though the Corporation had built up a much larger production
capacity ,it could not be utilized due to a sluggish domestic coal market Production had, therefore, to be
pegged down and the development of several collieries undertaken from the early part of the Plan period ,
had to be suspended. By this time , the contribution of NCDC to the nation’s coal production (67.72 million
tones) increased to around 9.6 million tones.

With gradual rise in the demand of coal due t commissioning of new power plants and development of other
coal-based industries during fourth Five Year Plan (1956-1974), NCDC’s production increased to 15.55 million
tonnes by the terminal year of Fourth Five Year Plan,i.e.,1973-74

NCDC played a pioneering role in India's coal industry by introducing large-scale mechanization and modern
and scientific methods of coal mining for promoting conservation of high grades of coal and exploiting deep
coking coal seams necessitating heavy capital investment and sophisticated technical skill. NCDC went in for
1
foreign collaboration with countries such as Poland and the USSR besides limited collaboration with Japan,
West Germany and France.

NCDC's role can be truly assessed by its contribution towards growth of new coal resources in, what are
known as, the outlying areas. The opening of new mines in Madhya Pradesh, Orissa and Maharashtra brought
about a significant change in these regions by creating new opportunities of industrialization and employment.
Development of the Singrauli coalfields has brought coal almost to the door steps of northern India.

With the development and application of improved mining techniques, emphasis on planning, design and
research; introduction of modern mine management systems and an enlightened industrial relations policy,
NCDC was able to provide the infrastructure for the total nationalization of coal industry in the country.

 NATIONALIZATION OF COAL MINE

A major event in the history of Indian coal industry during the Fourth Plan Period (1969-74) was the
nationalisation of the erstwhile privately owned coal mines in two phases. In the first phase, the management
of coking coal mines was taken over by the Government of India on 17 th Oct. 1971 and nationalization was
effective from 5th January 1972. A state owned company, Bharat Coking Coal Ltd. was formed for managing
coking coal mines. For convenience of management, BCCL collieries in the East Bokaro coalfields in Bihar (now
Jharkhand) were transferred to NCDC, and its projects in Central Jharia region viz., Sudamdih and Moonidih
deep shaft mines were handed over, in stages to BCCL.

In the second phase of nationalisation, the management of non-coking coal mines in the country, excepting
the captive coal mines of the two steel plants, viz., TISCO and IISCO, was taken over by the Government on
31st January 1973. These mines were subsequently nationalized with effect from 1st May 1973 and another
state-owned company, Coal Mines Authority Ltd. (CMAL) came into being with headquarters at Calcutta (now
Kolkata) to manage and develop NCDC collieries and other newly nationalized units. NCDC itself, in this
process, became a division of CMAL which owned 36 collieries under commercial production in Bihar, Orissa,
Madhya Pradesh and Maharashtra, besides four coal washeries, one by-product coke oven plant, two large
central workshops and manpower of about 71,000.

The formation of CMAL witnessed regrouping of the coal mines into three divisions, namely, Western, Central
and Eastern. The regrouping had to be done for the convenience of management, keeping in view the
geographical location of the collieries.

► As a result, NCDC units located in the States of Maharashtra and Madhya Pradesh, with the exception of
Singrauli Coalfields, became a part of the Western Division.

► The Central Division consisted of all the old collieries of NCDC in Orissa and Bihar (except Sudamdih and
Moonidih which had been handed over to BCCL) and those acquired by CMAL after take-over in Giridih, East
Bokaro, West Bokaro, South Karanpura, North Karanpura, Hutar & Daltonganj Coalfields in Bihar. The Central
Division consisted of 64 collieries, four coal washeries, one by-product coke oven plat, on bee-hive coke plant
and one central workshop having a manpower of 1,11,500.

2
  FORMATION OF CCL

The CMAL, with its three divisions continued upto 1st November 1975 when it was renamed as Coal India
Limited (CIL) following the decision of Govt. of India to restructure the coal industry. The Central Division of
CMAL came to be known as Central Coalfields Limited and became a separate company with the status of a
subsidiary of CIL, which became the holding company.

 VISSION/MISSION
 OUR VISSION

To emerge as a National player in the Primary Energy Sector, committed to provide energy security to the
Country, by attaining environmentally and Socially Sustainable Growth , through best practices from Mine to
Market

 OUR MISSION

The Mission of Central Coalfields Limited (CCL) is to produce and market the planned quantity of Coal and Coal
products efficiently and economically in Eco-Friendly manner, with due regard to Safety, Conservation and
Quality.

 CCL OBJECTIVES

 To optimize generation of internal resources by improving productivity of

resources, prevent wastage and to mobilize adequate external resources to meet investment need.
 To maintain high standards of Safety and strive for an accident free mining of
Coal.
 To lay emphasis on afforestation, protection of Environment and control of
Pollution.
 To undertake detailed exploration and plan for new Projects to meet the
future Coal demand.
 To modernize existing Mines.
 To Develop technical know-how and organizational capability of Coal mining
as well as Coal beneficiation and undertake, wherever necessary, applied research and development work
related to Scientific exploration for greater extraction of Coal.
 To improve the quality of life of employees and to discharge the corporate
obligations to Society at large and the community around the Coalfields in particular.
 To provide adequate number of skilled manpower to run the operations and
impart technical and managerial training for up gradation of skill.
 To improve consumer satisfaction.
 To enhance the CSR activities specifically in the field of Health, Sanitation and
Drinking Water in the Surrounding villages.

3
MANAGEMENT
Mr. GOPAL SINGH
CHAIRMAN-CUM-MANAGING
DIRECTOR

Mr. N.K. AGARWAL

DIRECTOR FINANCE

Mr. VIRENDRA KUMAR

Mr. R.S.MAHAPATRO Mr. BHOLA SINGH
SRIVASTAVA
DIRECTOR DIRECTOR PROJECT &
DIRECTOR
PERSONNEL PLANNING
TECHNICAL/OPERATION

PART-TIME DIRECTORS

DIRECTOR(PE Mr RAM PRAKASH SRIVASTAVA

RSONNEL ),
CIL

IAS JOINT
SECRETARY, Mr ASHISH UPADAHYAYA
MOC
4
NON-OFFICIAL PART-TIME DIRECTORS
Mr BHARAT
Dr SHUBHU BHUSHAN GOYAL
Mrs. JAJULA GOWRI
KASHYAP EX ADD. CHIEF
ADVOCATE
MBBS ADVISOR(COST ) D/O
EXPENDITURE

Mr HARBANS SINGH
Mr SHIV ARORA
EX DIRECTOR GENERAL
C .A APEX, GEOLOGICAL
SURVEY OF INDIA

PERMANENT INVITEE
Mr SALIL KUMAR JHA
CHIEF OPERATION MANAGER, EC RAILWAY

Mr ABOOBACKER SIDDIQUE P
SECRETARY (MINES & GEOLOGY) GOVT. OF JHARKHAND

CHIEF VIGILANCE OFFICER

Mr ASHISH KUMAR SRIVASTAVA

COMPANY SECRETARY
5
 Mr RAVI PRAKASH

COMMAND AREAS OF CCL

 RANCHI
 DHANBAD
 GIRIDH
 DALTONGANJ
 BOKARO
 CHATRA
 PALAMU
 HAZARIBAGH
 RAMGARH

WORKING OF LAST FIVE YEARS

(Rs.in cr)

YEAR 2019 2018 2017 2016 2015

Production Of
Raw Material 68.722 63.405 67.05 61.32 55.65
Current
Asset&Non 13943.7
Current Asset 15716.66 15075.58 7 13982.06 4181.5

Net Worth 5142.72 3816.04 3237.1 6212.1 5812.32

10428.8
Net Sales 11273.99 10870.89 8 10552.22 9474.99
Average Man
Power 39919 41467 42919 44346 45849
Total Equity& 13943.7
Liabilities 15716.66 15075.58 7 13982.06 4181.5

6
7
 WORKING CAPITAL
Working capital management is also one of the important parts of the financial management.Working capital
management refers to the management of working capital i.e. day to day operation fund requires for business. It
is concerned with short-term finance of the business concern.Shortage of fund for working capital may retard
growth of a firm. Which is a closely related trade between profitability and liquidity. Efficient working capital
management leads to improve the operating performance of the business concern and it helps to meet the short-
term liquidity. Hence, study of working capital management is not only an important part of financial
management but also are overall management of the business concern.
Capital are maily divided into two part

Capital

Fixed Capital Working Capital

FIXED CAPITAL
Fixed capital is capitalor money that we invested on fixed asset .The fixed capital is invested for a long
period of a time . ex:Land ,Machine etc
WORKING CAPITAL
It is a another part of a capital which is needed for meeting day to day requirement of any business
concern.It is for a short period of a time.Ex are Creditors,Salary paid to worker,Raw materialetc
COCEPTS OF WORKING CAPITAL
There are mainly two important point by which we classified or understood the concepts of working
capital.This are following
 GROSS WORKING CAPITAL
 NET WORKING CAPITAL

GROSS WORKING CAPITAL

Gross working capital is the capital invested in the total current asset of any business concern

GWC =CA
NET WORKING CAPITAL
Net working capital concern with current asset nd current liability of any business concern.
Net working capital is the exess of current asset over current liability of the concern during a particular period
If the current asset exceed the current liabilities it is said to be positive working capital and a vice versa.
8
 NWC=CA-CL

COMPONENT OF WORKING CAPITAL

Working capital constitue various current asset and current liabilities.This are as follow
Working Capital

Current Current
Assets Liability

Cash in Hand Bills Payable

Cash at Bank Sundry Creditors

Bills Receivable Outstanding Expenses

Short-term Loans and
Sundry Debtors Advances

Shotr-term Loans Advances Dividend Payable

Inventories Bank Overdraft

Prepaid Expenses Provision for Taxation

Accrued Income

TYPES OF WORKING CAPITAL

Working Capital may be classified into three important types on the basis of time.
1. PERMANENT WORKING CAPITAL.
2. TEMPORARY WORKING CAPITAL .
3. SEMI VARIABLE WORKING CAPITAL.

 PERMANENT WORKING CAPITAL

It is also know as fixed working capital .All business concern must have to maintain a certain amount
of capital at minimunm level.The level of permanent working capital depend upon the nature of a
business.

9
 TEMPORARY WORKING CAPITAL
Temporary working capital is knows as variable working capital .It is amount of capital which required
to meet the seasonal demand and some special purpose of any business concern.It futhure divided
into two part
1. Seasonal working capital
2. Special working capital
1. SEASONAL WORKING CAPITAL –The capital required to meet the seasonal need of the business
concern is know as seasonal working capital
2. SPECIAL WORKING CAPITAL –The capital required to meet the special exigencies such as launching
of extensive marketing campains for conducting research etc

 SEMI VARIABLE WORKING CAPITAL

Certain amount of working capital is in the field level up to a certain stage and after that it will increase
depending upon the change of sales or time
NEED OF WORKING CAPITAL
Working capital is an essential part of any business concern.Every business must have to maintain a
certain amount of working capital to met their day to day business requirment.
Working capital required for the following purpose
 For purchased raw material raw material and spares
The basic need of any business concern is iit raw material by which any business produce a
good.It shoull purchase frequently accordind to the need of the business concern.Hence every
business concern have to maintain a certain amount of working capital for raw
material,spares,component etc.
 Payment and wages

Payment and wages is an important part of any business concern.Periodical payment facilities
make employees perfect in their work.So any business concern maintain the adequate amount
of working capital forpayment of rent and wages.
 Day to day expenses
A business concern has to meet various expenditure regarding the operationat daily basis like
fuel,power, office expenses etc

BALANCE WORKING CAPITAL

A business concern must have to maintain a sound working capital postion to improve the efficiency of
business operation and efficient management of finance.Both excessive and inadequate work capital
lead to many problem in business concern
 Causes And Effects Of Exessive working capital
1. Excessive working capital leads to unnecessary accumlation of raw material ,component
and spares.
2. Excessive working capital result of loocking up of excess working capital.
3. It create bad debt reduce collectionperiods etc.
4. It leads to reduce the profit
 Causes And Effect Of Inadequate Working Capital
10
 1. Inadequate working capital cannot buy nets requirment in bulk order
2. The rate of return on investment also fall with the shortage of working capital
3. It becomes diffcult to implement operating plans and activate the firm’s profit target

FACTOR DETERMINING WORKING CAPITAL REQUIREMENTS

Working Capital requirements depends upon various factors. There are no set of rules or formula to
determine the Working Capital needs of the business concern. The following are the major factors which
are determining the Working Capital requirements.
1. Nature of business: Working Capital of the business concerns largely depend upon the nature of the
business. If the business concerns follow rigid credit policy and sell goods only for cash, they can
maintain lesser amount of Working Capital. A transport company maintains lesser amount of
Working Capital while a construction company maintains larger amount of Working Capital.

2. Production cycle: Amount of Working Capital depends upon the length of the production cycle. If
the production cycle length is small, they need to maintain lesser amount of Working Capital. If it is
not, they have to maintain large amount of Working Capital.

3. Business cycle: Business fluctuations lead to cyclical and seasonal changes in the business condition
and it will affect the requirements of the Working Capital. In the booming conditions, the Working
Capital requirement is larger and in the depression condition, requirement of Working Capital will
reduce. Better business results lead to increase the Working Capital requirements.

4. Production policy: It is also one of the factors which affects the Working Capital requirement of the
business concern. If the company maintains the continues production policy, there is a need of
regular Working Capital. If the production policy of the company depends upon the situation or
conditions, Working Capital requirement will depend upon the conditions laid down by the
company.
5. Credit policy: Credit policy of sales and purchase also affect the Working Capital requirements of
the business concern. If the company maintains liberal credit policy to collect the payments from its
customers, they have to maintain more Working Capital. If the company pays the dues on the last
date it will create the cash maintenance in hand and bank.

6. Growth and expansion: During the growth and expansion of the business concern, Working Capital
requirements are higher, because it needs some additional Working Capital and incurs some extra
expenses at the initial stages.

7. Availability of raw materials: Major part of the Working Capital requirements are largely depend
on the availability of raw materials. Raw materials are the basic components of the production
11
 process. If the raw material is not readily available, it leads to production stoppage. So, the concern
must maintain adequate raw material; for that purpose, they have to spend some amount of Working
Capital.

8. Earning capacity: If the business concern consists of high level of earning capacity, they can
generate more Working Capital, with the help of cash from operation. Earning capacity is also one of
the factors which determines the Working Capital requirements of the business concern.

WORKING CAPITAL MANAGEMENT

Working capital is a measure of company’s efficiency and short term financial health. Working capital
involves inventories, accounts receivables and payable, and cash. Decisions relating to working capital and
short term financing are referred to as working capital management. Managing working capital involves
managing to relationship between a company’s current assets and current liabilities. Hence working capital
and its management is essential to ensure that the company is able to continue its operations with
sufficient liquidity and optimum mix of receivables, inventory, cash and creditors.

BASIS OF WORKING CAPITAL MANAGEMENT

Working capital management primarily involves operating for a company and the decisions for its
management are not taken in the same manner as capital formation or investment decision. Working
capital decisions are based on cash flows and profitability.
 Cash flow: cash flow should be adequate to meet a company’s liquidity needs. In business cash is
generated from the realization of debtors and net cash is retained in the business after meeting
expenses of purpose of raw materials, creation of inventory and making payments to creditors. This is
known as the cash conversion cycle- The net number of days from the outflow of cash for raw material
to inflow of cash from the customer. This tool for decision making takes into consideration a holistic
view of business operations and corresponds the time that cash is blocked in business operation. The
faster the conversion cycle the lower net time, which eventually retains liquidity in business
operations.
 Profitability: Management decisions on quantum of credit and inventory depend on the difference
between the income earned due to higher inventory and debtors levels or lower creditor levels and the
costs (incurred/capital costs) associated with it. An optimum balance of working capital levels shall be
based on such profitability concerns prevalent in the industry in which the company operates.

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TYPES OF WORKING CAPITAL MANAGEMENT RATIO

There are three ratios that are important in working capital management: The working capital ratio or
current ratio; the collection ratio, and the inventory turnover ratio.
 Working capital ratio or current ratio
The working capital ratio or current ratio is calculated as current assets divided by current liabilities. It
is a key indicator of a company’s financial health as it demonstrates its ability to meet its short-term
financial obligations.
Although numbers vary by industry, a working capital ratio below 1.0 generally indicates that a
company is having trouble meeting its short-term obligations. That is, the company’s debts due in the
upcoming year would not be covered by its liquid assets. In this case, the company may have to resort
to selling off assets, securing long term debt, or using other financing option to cover its short-term
debt obligation.
Working capital ratio of 1.2 to 2.0 are considered desirable, but a ratio higher than 2.0 may suggest
that the company is not effectively using its assets to increase revenues. A high ratio may
indicate that the company is not securing financing appropriately or managing its working capital
efficiently.

The Collection Ratio

The collection ratio is a measure of how efficiently a company manages its accounts receivables. The
collection ratio is calculated as the product of the number of days in an accounting periods multiplied
by the averages amounts of outstanding accounts receivables divided by the total amount of net credit
sales during the accounting period.

The collection ratio calculation provides the averages number of days it takes a company to receive
payment after a sales transaction on credit. If a company’s billing department is effective at collection
attempts and customers pay their bills on time, the collection ratio will be lower. The lower a company
collection ratio, the more efficient its cash flow.

The Inventory Turnover Ratio

The final element of working capital management is inventory management. To operate with
maximum efficiency and maintain a comfortably high level of working capital, a company must keep
sufficient inventory that ties up working capital.

Companies typically measure how efficiently that balance is maintained by monitoring the inventory
turnover ratio, calculated as revenues divided by inventory cost, reveals how rapidly a company’s
inventory is being sold and replenished. A relatively low ratio compared to industry peers indicates
inventory levels are excessively high, while a relatively high ratio may indicate inadequate inventory
levels.

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CASH MANAGEMENT
Cash management is the process of collecting and managing cash flows. Cash management can be important
for both individuals and companies. In business, it is a key component of a company's financial stability. For
individuals, cash is also essential for financial stability while also usually considered as part of a total wealth
portfolio, Individuals and businesses have a wide range of offerings available across the financial marketplace
to help with all types of cash management needs

Managing cash involves managing the liquidity, or cash assets, available to the company. When cash
management is performed properly, a company has the money it needs to conduct daily business and account
for unexpected expenses while earning investment money from extra cash. Poor cash management can cause
a company to fall short of the money it needs to conduct business. It can also place a company at risk for cash
losses

 Cash management is the process of managing cash inflows and

outflows.
 Cash inflow it deals with money brought into an organization. This can be at the point of sale at
a retail establishment or through an online check-out system that allows the user to pay
electronically. Managing the inflow of cash involves tracking how much cash the company
expects to receive versus the cash inflow it actually receives and devising systems to prevent
losses during the cash inflow process. Losses that happen during cash inflow can include
accounting errors, merchandise discounts, or theft.
 Outflow of cash It means dealing with the cash going out of an organization. This can include
paying employees and paying operating costs. These costs also can include maintenance costs,
electrical bills, and property purchases. Property that a company might buy includes land,
buildings, and equipment needed to conduct business. If cash is not available to pay bills, a
company may suffer production interruptions or financial penalties for the late bills.
 Benefits of Cash Flow Information

 A cash flow statement, when used in conjunction with the other financial statements, provides
information that enables users to evaluate the changes in net assets of an enterprise, its financial
structure (including its liquidity and solvency) and its ability to affect the amounts and timing of cash
flows in order to adapt to changing circumstances and opportunities. Cash flow information is useful in
assessing the ability of the enterprise to generate cash and cash equivalents and enables users to
develop models to assess and compare the present value of the future cash flows of different
enterprises. It also enhances the comparability of the reporting of operating performance by different
enterprises because it eliminates the effects of using different accounting treatments for the same
14
 transactions and events.

 Historical cash flow information is often used as an indicator of the amount, timing and certainty of
future cash flows. It is also useful in checking the accuracy of past assessments of future cash flows and
in examining the relationship between profitability and net cash flow and the impact of changing
prices.

 Cash Flow Statement

CASH IS KING: is a known fact, that it is the basis of any business. No bills, employees or for that not even you
would be paid without cash. Expansions or addition to businesses happen only through cash. In financial
terms, cash flow statement is a statement (report) of flows (both in and out of the business) cash.

A cash flow statement provides information about the changes in cash and cash equivalents of a business by
classifying cash flows into operating, investing and financing activities. It is a key report to be prepared for
each accounting period for which financial statements are presented by an enterprise.

Monitoring the cash situation of any business is the key. The income statement would reflect the profits but
does not give any indication of the cash components. The important information of what the business has
been doing with the cash is provided by the cash flow statement

 Objectives of preparing Cash Flow Statement

 Cash flow statement shows inflow and outflow of cash and cash equivalents from various activities of a
company during a specific period under the main heads i.e., operating activities, investing activities and
financing activities.

 Information through the Cash Flow statement is useful in assessing the ability of any enterprise to
generate cash and cash equivalents and the needs of the enterprise to utilize those cash flows.

 Taking economic decisions requires an evaluation of the ability of an enterprise to generate cash and
cash equivalents, which is provided by the cash flow statement

 CLASSIFICATION OF ACTIVITIES:

Cash flow activities are to be classified into three categories :This is done to show separately the cash
flows generated / used by these activities, there by helping to assess the impact of these activities on the
financial position and cash and cash equivalents of an enterprise.

 Operating activities

 Investing activities

15
 Financing activities

 OPERATING ACTIVITES: Operating activities are the activities that comprise of the primary / main activities
of an enterprise during an accounting period. For example, for a garment manufacturing company,
operating activities include procurement of raw material, sale of garments, incurrence of manufacturing
expenses, etc. These are the principal revenue generating activities of the enterprise.

 INVESTING ACTIVITES: Cash flow from investing activities includes the movement in cash flows owing to
the purchase and sale of assets. It relates to purchase and sale of long-term assets or fixed assets such as
machinery, furniture, land and building, etc.

 FINANCING ACTIVITES: It includes financing activities related to long-term funds or capital of an enterprise.
Financing activities are activities that result in changes in the size and composition of the owners’ capital
and borrowings of the enterprise.

 Advantages of Cash Flow Statement

1. Cash Flow Statements help in knowing the liquidity / actual cash position of the company which funds flow
and P&L are unable to specify.

16
2. As the liquidity position is known, any shortfalls can be arranged for or excess can be used for the growth
of the business

3. Any discrepancy in the financial reporting can be gauged through the cash flow statement by comparing
the cash position of both.

4. Cash is the basis of all financial operations. Therefore, a projected cash flow statement will enable the
management to plan and control the financial operations properly.

5. Cash Flow analysis together with the ratio analysis helps measure the profitability and financial position of
business.

 Disadvantages of Cash Flow Statement

1. Through the cash flow statement alone, it is not possible to arrive at actual P&L of the company as it shows
only the cash position. It has limited usage and in isolation it is of no use and requires BL, P&L for its
projections. Cash flow statement does not disclose net income from operations. Therefore, it cannot be a
substitute for income statement

2. The cash balance as shown by the cash flow statement may not represent the real liquidity position of the
business because it can be easily influenced by postponing the purchases and other payments

3. Cash flow statement cannot replace the funds flow statement. Each of the two has a separate function to
perform.

DAILY CASH FLOW

PROGRESSIVE IN
CF CODE PARTICULAR DAY'S MONTH
OPERATING ACTIVITIES OUTFLOW RS IN LAKH RS IN LAKH
1.11 OPENING BALANCE 51620.07 55321.87
0.12 REALISATION-RAIL SAIL 3650.76 13386.51
1.13 REALISATION-E-AUCTION/ROAD SAIL 1607.64 9104.92

1.14B REMITTANCE RECEIVED-FROM AREA 100 350

1.23 INTEREST AGAINST CLTD A/C 5.54 13.18
1.28A BANK LOAN AGAINST FD 0 -11608.83
TOTAL INCOME 5363.94 11245.78
2.11 SALARY&WAGES 3468 10778
2.14 OVERTIME SPECIAL 284 481
2.15 LTC/LLTC 0 5

17
2.16a NORMAL 0 311
2.16b DIFFERENTIAL 0 4
2.16c DEATH CASE 0 80
2.16d LCS 0 9
2.18 EX/GRATIA 0 15
2.22 LEAVE EN CASHMENT 2 100
2.23 PRP 0 8
TOTAL SALARY&WAGES 3754 11791
3.11 EXPLOSIVE 1 137
3.13 PETROL&DIESEL 155 316
3.14 LUBRICANT 0 47
3.19A SPARES FOR HEMM-AREA PI 3 3
3.19B SPARES FOR HEMM 0 33
3.22 CONSUMABLES FOR HEMM 0 56
3.23 OTHER CONSUMABLES 11 230
TOTAL STORES 170 822
4.12 POWER(OTHERS)/DVD 0 9
TOTAL POWER 0 9
5.11 OTHER CONTRACTORS -MINING 10 37
5.12 OTHER CONTRACTORS -CIVIL (RESI.BIDGS) 1 51
5.14 OUTSOURCING-CONTRACTUAL OBR 159 159
5.15 OUTSOURCING-COAL 107 107
TOTAL OTHER CONTRACTORS 277 354
6.11 PURCHASE REPAIR- HEMM 0 2
6.12 PURCHASE REPAIR-E&M OTHER 0 6
TOTAL PURCHASE REPAIR 0 8
8.11 TRANSPORTATION - COAL 276 361
TOTAL TRANSPORTATION 276 361
9.11 MEDICAL REIMBURSEMENT 4 21
9.12 COST OF MEDICINE/SURGICAL EQUIPMENT 0 36
9.14 OTHER WELFARE/ CD EXPENSES 0 1
9.16 CSR/SWACHH VIDYALAYA ABHIYAN 8 8
TOTAL WELFARE 12 66
10.11 MISC. EXPENSES 18 87
10.13 TRAVELLING ALLOWANCES 3 25
10.14 DEMURRAGE 40 40
10.15 TELEPHONE/FAX/MART 0 1
10.16 SALARY TO PVT.SEC GUARD 5 195

18
10.2 HIRE CHARGES OF VEHICLES 0 9
TOTAL MISC. EXPENSES 66 357
12.11 ADVANCE TO EMPLOYEES 0 2
13.11A NMET 12 30
13.11B MMDR 260 526
13.12 ELECTRICITY DUTY 0 5
13.14 SALES TAX - JHARKHAND 0.02 0.67
13.17a TDS- EMPLOYEES 75 75
13.17b TDS-CONTRACTORS 16 16
13.21 SERVICE TAX 258 258
13.21 CLEAN ENERGY CESS 1385 1385
TOTAL OTHERS 2006.02 2297.67
OPREATING ACTIVITES INFLOW
14.11 REFUND OF SEC.DEP/E. MONEY 0 23

INVESTING ACTIVITES
15.14 SERVICE BUILDING 0 2
15.16 P AND M 0 56

OPERATING ACTIVITIES OUTFLOW

TOTAL 6561.02 16063.67
INFLOW TOTAL 0 23
TOTAL INVESTING ACTIVITIES 0 58
TOTAL AMOUNT 6561.02 16144.67

CLOSING BALANCE 50423 50422.98

19
INVENTORY MANAGEMENT
 INTRODUCTION
The dictionary meaning of word inventory is stock of goods. In financial parlance inventory is define as
the sum of raw materials, semi finished goods, finished goods, spare point of time. The operation
defined would be the amount of all the above to be stocked for the smooth running of plant .For a
marketing manager the inventory is finished goods required for smooth distribution through different
channel.
Inventory management refers to maintaining and adequate supply of material to meet an expected
demand pattern. It thus deals with determination of optimal policy and procedures for procurement.
Management of inventory is a risk return trade- off exercise by manager. Inventory is expressed in
terms of both quantity and monetary value. In terms of quantity, it can be expressed as the number of
units of an item in stock where as in monetary terms it is the sum total of the monetary value of the all
its items of inventory.
 TYPES OF INVENTORY

Inventory can be classified according to their different use and point of entry in the operation as raw
material, consumables, bought out component , work in progress, finished goods, packing material and
spares.
1. Raw material inventory
2. Work in progress
3. Finished goods inventory
4. Material for maintain and repair
 OBJECTIVE OF INVENTORY
 To ensure continuous supply of material to facilitate uninterrupted production.
 Maintain sufficient stocks of raw materials against slack period supplies and benefit from price
changes.
 Maintain sufficient finished goods inventory for smooth sales operation and customer services.
 Reduce the cost of production carrying cost and time.
 To minimise losses through wastages and damages.
20
  To ensure quality goods at reasonable prices.
 It control investment in inventory and keeps it an optimum level.
 To ensure uninterrupted production.
 To facilitate furnishing od data for short term planning and control of inventory.

PURCHASE MANAGEMENT IN CCL

To procure Plant and equipment, spares and other store material with a view to:
1. Maintaining continuity of production by correct supplies in time.
2. Items purchased are most economic taking into account their quality, durability, efficiency etc.
3. Developing vendor relationship to ensure fair play and equity.

Adequate care be taken that the material obtained are of :

I. Right quality.
II. Right quantity.
III. Right time.
IV. Right prices.
V. From right sources.

INVENTORY CONTROL SYSTEM

 ABC INVENTORY CONTROL SYSTEM
ABC Inventory control system is widely used techniques of control of inventory.In this method of
management items are divided into three part A,Band C. A is the most important item and C is the
least important item.
 ITEM A:
In ABC model of inventory control ,items under category A are higest value in term of annual
consumption in production of goods.The amount is 70 percent of total inventory in a
company.This category A item is most important.

 ITEM B:
These are the item that have a medium consumption value. The amount is 20 percent of total
inventory in a company.
 ITEM C:
The category C are the item which has the lowest number of consumption in the porduction of
good in a company. The amount is 10 pencent of total inventory.

ITEM CATEGORY %VALUE AVAILABLE QUANTITY%

A 70 10
B 20 20
C 10 70

21
ECONOMIC ORDER QUANTITY (EOQ):
Economic order quantity is that size of order which gives maximum economy in purchasing any material and
ultimate contribution towards maintaining the material at the optitmum level and at a minimum cost .It is also
called RE-ORDER QUANTITY
EOQ= √(2*O.C.*A.D/C.C)
Where,
O.C.=OREDING COST,THE COST OF PLACING AN ORDER.
A.D.=ANNUAL DEMAND,ANNUAL CONSUMPTION OF MATERIAL IN UNITS.
C.C.= CARRYING COST,THIS IS THE COST OF HOLDING THE STOCK IN STORAGE.

 INVENTORY VALUATION
Inventory valuation is a calculation of the value of the product or material contained in a
company’sinventory at the end of a particular accounting period.

 INVENTORY VALUATION METHODS

The are several method for the valuation of inventory are

1. FIFO
2. LIFO
3. NIFO
4. WAC

 FIFO(First Come First Out): According to the first come first out (FIFO) inventory valuation
method, it’s assumed that inventory items are sold in the order in which they are
manufactured or purchased. The first item purchased is assume to first item sold.
 LIFO(Last come Last out): The last come last out (LIFO) inventory valuation method assumes
that the most recenty purchased or manufacture items are sold first.
 NIFO(NEXT IN FIRST OUT): Is a method of valuation where the cost of a particular item is based
upon the cost of replace the itemrather than on itsoriginal cost.
 WAC(Weighted average cost): The average cost per unit of inventory I.e the ratio of the total
cost of goodsavailable for sale and the total quantity available for sale is applicable in case of
weighted average method of valuationm of inventory.

 VALUATION METHOD USED IN CCL:

22
 CCL uses weighted average cost inventory valuation method

NOTICE INVITING TENDER(NIT): Means the notice issued by publication in the newspapers or through
electronic means for the purpose of inviting bid, or applications for pre qualification ,or expression of interest,
which may include tender notice, invitation for bids, notice for pre qualification or request for expression of
interests.
PURCHASING
One is through headquarter and another one is through area
Mainly purchase is done through tender
 National Tender
 Global Tender

PROCESS OF TENDER:
There are basically two sides of every tender at ccl
 Technical Bid: technical bid includes all the technical aspect of purchase, e.g. size, shape, quality,
quantity etc.

Financial Bid: financial bid includes the cost of purchase

Purchasing can be done at centralized level or area wise or local purchases
INVENTORY OF CCL LAST (5) YEAR
₹ IN
CRORES
AS AT 31-03- AS AT 31- AS AT
PARTICULARS AS AT 31-03-19 AS AT 31-03-18 17 03-16 31-03-15

STOCK OF COAL 1,229.85 1,206.37 1,925.17 1,314,27 1,178.54

COAL UNDER
DEVELOPMENT ____ ___ ___ ___ ___
1,229.85 1206.37 1,314.27 1,178.54
LESS:PROVISION __ ___ 0.65 ___
A.STOCK OF COAL (NET) 1,206.37 1,313.62 1,178.54
STOCK OF
STORES&SPARES(AT COST) 110.39 133.5 208.04 210.68 206.66
STORES IN TRANSIT 8.76 4.42 1.53 3.16 1.25
119.15 137.92 213.84 207.91
LESS:PROVISION 44.79 41.30 41.04
164.78
23
B.NET STOCKS OF
STORES&SPARE(AT COST) 172.54 166.87
WORKSHOP JOBS:
WORK IN PROGES
S & FINISHED GOODS 3.59 2.70
LESS:PROVISION ___ ___

C. NET STOCK OF
WORKSHOP JOBS 3.59 2.7

D. PRESS
WORK IN PROGESS &
FINISHED GOODS 4.08 4.12 0.67 0.99 0.97

E. STOCK OF MEDI CINE OF

CENTRAL HOSPITAL 0.58 0.82 0.58 0.52 0.35

F.PROSPECTING &BORING/
DEVELOPMENT EXP 1.71 1.71
TOTAL(A TO F) 1353.66 1,349.23 2096.26 1492.97 1,351.14

DEBTOR MANAGEMENT
24
 Meaning of Debtors

The most important components of current assets, namely, cash, it was observed that, in order to reduce the
operating cash requirement, collection of debtors/receivables, should be accelerated in such a manner that
the average collection period reduce.
The term ‘debtor’ is used to define as ‘debt owed to the firm by customers arising from sale of goods or
services in the ordinary course of business’
Debtors/Receivables, as asset, represent amounts owed to the firm by customer from sale of good and
services
A firm grants trade credit to maintain its sales from the hands of the competitors and, at the same time, to
attract the potential customers to purchase its products at favourable terms. Trade credit arises only when the
firm sells its product to the customers but does not receive immediate cash, i.e., at the time of credit sales.
Receivables/Debtors are created out of trade credit and which are collected in the near future.
 Characteristics of Debtors:

(i) It involves risk which should carefully be studied since cash sales are riskless whereas, at the time of credit
sales, cash is yet to be received
(ii) It is based on present economic value. At the time of sale the economic value of goods passes immediately,
whereas, the seller expects an equivalent benefit at a later date.
(iii) It implies futurity. The value of goods or services received by the buyer will be payable by him at a future
date .
No doubt debtors/receivables play a significant role in the total current asset composition since their position
is next to inventories. In India, they form about one-third of total current asset
 Objectives of Debtors:

It has already been stated above that accounts receivables/debtors are generated which is collected at a
future date only when the firm grants credit against an ordinary sale of goods or services without receiving
cash. Credit sale is an essential part of the present competitive economic system. It is granted in order to
increase the volume of sales.
As such, debtors/receivables, which are created out of credit sales, are considered as a marketing tool for
increasing sales. It may be mentioned in this respect that credit which is granted to the customer is done in
the ordinary course of the business, i.e., on an open account. In other words, there will be no formal
acknowledgement of debt obligation. But extension of credit involves cost and risk.
Therefore, management should weigh the benefits against cost. As such, the objective of debtors/receivables
management is ‘to promote sales and profits until that point is reached (i.e., optimum point) where the return
on investment in further funding of receivables is less than the cost of funds raised to finance that additional
credit (i.e., cost of capital)’.

 Why Debtor Management Is Important

25
Debtor management has never been as important as it is today. If you are giving credit to your customers,
then effective debtor management is very important Ensure any payment arrangements with a debtor are
confirmed in writing, including details of any key dates. Follow up with the customer to ensure that payments
are made on the key dates. Review dealings with a private company. Obtain individual directors'
guarantees.Ensure tax invoices are prepared correctly in accordance with the customers'/clients' format
requirements and sent to the customers/clients promptly by the stipulated dates. Ensure follow up of
customers'/clients' invoices from the due date to ensure prompt payment or if the customer/client has a
query, resolve the query as soon as possible.Monitor debtors' aged analysis on a weekly basis calculate
debtors' days outstanding and maintain your business' terms of trade (e.g. 30 days). If payment is not
received, ensure prompt referral of problem debtors to a debt collection agency. Utilise a ‘debtors' days
outstanding chart’ to identify the cashflow improvements that would occur if debtors paid in accordance with
your stated debtors payment policy.

 DEBTORS MANAGEMENT IN CCL.

As we have seen most of the sales of CCL is on a credit basis ,therefore debtor management plays very
important role in CCl. The main objective of debtor management is to keep the regular debtor’s balance as
minimum as possible .Sundry debtor’s come in existence when the customer are not able to pay the coal bills
amount in a time In CCL the coal sale is done by two mode one is cash mode and another one is a credit sale.
Credit sale mainly done to government parties.

 SUNDRY DEBTORS OF CCL

1. Power sector-This sector is the the biggest consumer of coal.It is futhure divide into state electricity board
which include ,Delhi vidyut nigam,punjab state electricit board,Uttar pradesh state electricity board etc.Other
than this the important player in electricity is NTPC who buy coal in large quantity.

 CUSTOMERS OF CCL
STATE GOVERNMENT
1.Jharkhand vijili vitran nigam limited.
2.Punjab state power corporation limited.
3.Haryana power corporation limited.
CENTRAL GOVERNMENT
1.Damodar valley corporation.
2. National thermal power corporation limited.

PRIVATE SECTOR
1.Reliance power limited.

26
2.Adani power limited.

 PROBLEM OF DEBTORS PAYMENT IN CCL-

 Quantity problem arises because of once coal is dispatched to the customer ,they are not getting
proper quantity of coal which they have ordered of coal because of theft of coal ,they are comparing
that the quantity of coal which is they have received is not accurate quantity .So the buyer of CCL are
wanted to pay only that amount on quantity which is they have received .so buyer of the CCl wanted to
only in term of coal which they have actual received.
 Difference in goods quantity supplied by CCL and received by the party
 STONE IN COAL-In stone problem party arguments that, there is large
amount of stones are presented in coal which he receives. So he wanted to give payment after
deducting the amount equal to the value of stones he received in the total cost

 TYPES OF DEBTORS
 DISPUTED
 UN DISPUTED

Disputed-When there is difference in opinion about the quality ,quantity, overload or under
load charge etc between CCL .the customer ,the customer with held the payment unto that
extent. This is disputed debt

For example :when CCL sale coal of rupees 100 but the customer who buy the coal they paid
only 70 rupees and the remaining rupees 30 they said that amount they pay later.

 WHY CCL PROVIDE COAL WHEN CCL HAS SO MUCH OF DEBTORS ?

 CCL provide coal because of NATIONAL INTREST because if ccl does not provide coal the
power supply of state was gone on dark .
 When CCL does not provide coal they unable to earn money and does not paid any expenses
,wages etc.

 RECOMMENDATIONS FOR DEBTOR MANGEMENT-

1.Maintain proper negotiation for the quality price of coal.

2.Be carefull about choosing the right kind of collection policy
3.Start securitization scheme for all the states so as to clear the outstanding dues trough long term bounds.

27
 Ranchi

Provisional dues as on Quick Rs. in

31/10/2019 Report Crores

Realisati
Bills of Advan
Advance Dues on Progressi Dues as
October-19 Adju Bad ce as
as on as on Progressive October- ve Prog. Cr on Increase in
CONSUMER (up to stme Debt on
01/04/20 01/04/ Bills 19 (up to Realisati Note 31/10/20 Dues(NET)
31/10/2019 nts s 31/10/
19 2019 31/10/20 on 19
) 2019
19)

10.0
SAIL - 502.43 40.85 326.44 49.72 313.94 - 524.93 - 22.50
0

RINL - 297.77 13.91 156.33 8.61 21.26 - 432.84 - 135.07

TOTAL 10.0
- 800.20 54.75 482.76 58.33 335.20 - - 957.76 - 157.56
STEEL 0

NTPC,
- 132.23 - 19.29 - 50.31 101.21 - (31.02)
BADARPUR

NTPC ,
- 48.26 10.78 341.95 52.02 322.60 72.11 - (4.50) (52.76)
DADRI

NTPC,
- 119.56 77.10 497.71 75.00 472.18 93.61 51.48 - (68.08)
UNCHAHAR

NTPC,
- 13.91 - - - - 13.91 - -
FARAKKA

NTPC,
- - - 0.01 - - 0.01 - 0.01
RIHAND

NTPC,
- 101.32 42.71 170.55 45.00 160.00 106.72 5.15 - (96.17)
TANDA

NTPC,
VINDHYAC - - - 0.01 - - 0.01 - 0.01
HAL

NTPC,
(30.09) - - 7.56 0.21 17.59 0.11 - (40.22) (10.13)
BARH

NTPC,
(1.83) - - - - - - (1.83) -
KORBA

NTPC,
BANGAING (5.94) - - 4.41 - - - (1.53) 4.41
AON

NTPC,
SHAKTINAG - - - - - - - - -
AR

NTPC,
(2.76) - - - - - - (2.76) -
TALCHER

NTPC,
(2.97) - 35.38 346.78 51.00 325.00 22.06 - (3.25) (0.28)
KANTI

NTPC,
(20.42) - - - - - - (20.42) -
SEEPAT

28
 NTPC,
- 5.14 - - - - 5.14 - -
GATOR

NTPC,
(1.17) - - 9.23 - - 8.06 - 9.23
MOUDA

NTPC,
TAMILNAD (5.52) - 3.41 13.68 - 0.46 7.70 - 13.22
U (NTECL)

NTPC,
(2.91) - - 0.97 - - - (1.94) 0.97
SEMADRI

TOTAL
(73.61) 420.42 169.38 1,412.15 223.02 1,279.99 362.86 0.11 - 192.67 (76.45) (230.59)
NTPC

UPRVUNL - 170.01 35.50 469.18 70.86 392.86 23.98 222.35 - 52.34

PSPCL - 56.41 7.19 77.04 45.67 3.03 84.75 - 28.34

(10.0
HPGCL - 7.39 53.93 415.50 42.73 390.82 19.24 2.83 - (4.56)
0)

RVUNL - 0.86 - - - - 0.86 - -

JSEB - 21.58 - - - - 21.58 - -

WBPDCL,
BARKESHW (12.74) - 4.84 30.96 10.00 20.00 0.59 - (2.37) 10.37
AR

WBPDCL,
(48.69) - 10.84 54.02 2.00 28.25 0.89 - (23.81) 24.88
KOLAGHAT

WBPDCL,
SAGARDIG (18.65) - - 19.70 3.00 11.00 0.13 - (10.08) 8.57
HI

E AUCTION
(37.74) - 9.82 30.20 - 0.09 - (7.63) 30.11
RAIL

(10.0
TOTAL SEB (117.82) 256.25 122.12 1,096.60 128.59 888.60 47.95 - 332.37 (43.89) 150.05
0)

BRBCL - 21.66 58.05 319.85 80.00 313.80 2.79 24.92 - 3.26

27.9
DVC - 208.89 95.93 1,066.90 51.00 812.84 80.51 354.54 - 145.65
0

BOKARO
10.0
POWER (93.41) - 19.41 203.57 20.00 170.00 - - (49.84) 43.57
0
SUPPLY CO

ROSA
(54.35) - 61.51 540.37 93.68 524.03 26.07 - (64.08) (9.73)
POWER

BAJAJ
(2.02) - 2.69 37.30 1.00 34.50 0.34 0.44 - 2.46
POWER

TATA
(44.47) - - - (34.39) - - (10.08) 34.39
POWER

TENUGHAT
VIDYUT - 423.70 46.96 282.15 10.00 156.66 14.04 535.15 - 111.45
NIGAM

29
 JHAJHAR (1.12
(19.75) - 41.16 272.59 26.00 246.50 17.28 -* (12.06) 7.69
POWER )

MAITON
(2.44
POWER - 7.17 14.67 117.07 22.00 129.33 7.30 - (14.83) (22.00)
)
LIMITED

JP BINA (8.82) - 4.10 19.24 20.34 0.21 - (10.13) (1.31)

ARAVELLI
(39.99) - 20.10 94.06 62.00 6.61 - (14.54) 25.45
POWER

PRYAGRAJ (4.91) - - - (2.74) - - (2.17) 2.74

TANGENCO (11.61) - 10.30 32.75 20.00 5.01 - (3.87) 7.74

OTHER
27.9 (181.60
POWER (279.33) 661.42 374.88 2,985.85 303.68 2,452.87 160.16 6.44 915.05 351.36
0 )
UTILITIES

TOTAL 1,338.0 (3.45 27.9 (301.94

(470.76) 666.38 5,494.60 655.29 4,621.46 570.97 1,440.09 270.82
POWER 9 ) 0 )

FERTILISER (5.14) - - 13.19 3.75 17.25 - - (9.20) (4.06)

CEMENT (6.17) - - 16.19 5.43 3.67 0.92 - 7.09

DLF/EIPL - 40.33 - - - - 40.33 - -

PVT (6.55 (234.31

(296.71) - 82.42 567.39 84.71 495.37 3.07 - 62.40
PARTIES ) )

TOTAL (6.55 (243.51

(308.02) 40.33 82.42 596.77 88.46 518.05 6.74 - 41.25 65.43
OTHERS ) )

2,178.6 27.9 (545.46

GR. TOTAL (778.78) 803.55 6,574.13 802.08 5,474.71 577.71 - 2,439.11 493.81
2 0 )

ROAD SALE
- - 407.83 3,481.01 407.83 3,481.01 - - - - - -
ADVANCE

GRAND
2,178.6 27.9 (545.46
TOTAL(ADV (778.78) 1,211.38 10,055.14 1,209.91 8,955.72 577.71 - 2,439.11 493.81
2 0 )
.)

30
PROBLEMS FASED BY CCL

1.Quantity problems
:-difference in goods quantity supplied by CCL and recived by the
Party is lesser.

2.Quality problems
:-CCL supplies C,D,E grade of coal in various industries.
:-Party’s blame it recived E grade coal while CCL supplies D grade
Coal.

3.Others
:-Moisture
:-Stowing

4.Settlement of Disputes
:-Eastern umpire
:-Western umpire
:-Northern umpire
:-Southern umpire

31
FINDINGS

1.SLC decides the supplying colliery, the supply date and Quantity.

2.CCl black list the parties for certain duration which are not capable of clearing their disputes.

3.CCl stopped the supply to BSEB for last few years due to delay in payment and misbehaviour of
BSEB officers.

4.CCL is not responsible for the goods which are damaged during the guarantee period.

5.CCL rejects the equipment/machines which fail to meet the quality standards and doesno’t
Make payment.

6.Delay in the delivery of goods by the suppliers leads to reduction in payment amount of 5% per
week.This reduction is limited to 10% but may reach upto 15%.

7.CCL mainly follows cash projection and budget for cash planning and control.Cash flow
Projection is also used to determine the optimum cash balance of CCL.

8.CCL has not fased any kind of liquidity crunch in 5 years , indicate CCL maintains a sufficient cash
balance.

9.No bank loans to fulfil its working capital needs , CCL has enough cash balance to fulfil it day to days
requrements of cash.
10.CCL has taken a loan from the WORLD BANK to fulfil it’s fixed capital requirements.

32
SUGGESTION

#FOR CASH MANAGEMENT

1. Maintain certain cash balance to meet sudden heavy demand.
2. Regular and full bank reconciliation statement and cheque investigation.
3. Prepare the invoice document immediately after the dispatch and mail them to the clients at the earliest.
4. Accelerate the collection by reducing the lag between the time a customer pays the bill and the cheque is
collected.
5. Ensure the proper demarcation between the duties of the individuals who recives cash and those who
record the receipt of cash to avoid misappropriation of cash.

#FOR INVENTORY MANAGEMENT

1. Better coordination among vrious department namely purchase,marketing and financing to help achieve
greater efficiency

2. Simplify the procedures for disposing obsolete and surplus inventories.

3. Set the benchmark with global competitors and use ideas like JIT.

4. Develop long term relationship with vendors for improving quality and quantity of inventory.

5. Try to strike a trade off between the ordering and carrying cost of inventories.

#FOR DEBTORS MANAGEMENT

1. Start securitization scheme for all the states so as to clear the O/S dues through long terms bounds

2. Be careful about choosing the right kind of collection policies.

3. Assign top level of management to set proper standard and practices of debtors management to take
proper action in order to collect the old O/S dues.

4. Maintain proper mutual understanding with customers regarding credits period and timely payment.
Arrange for the periodic bilateral meetings.

5. Maintain proper negotiations for the quality and price of coal. Appoint umpires to settle down the disputes
regarding quality , quantity and price

33
CONCLUSION
After analysing the chart we find that compared to 2015-16 there has been an increase of 11.46% in net stock
of coal. In 2016-17 there is a decrease of -8.16% in the net stock of coal.

In 2016-17, there is an increase of 3.40% in the net stock of stores and spares.
In 2016-17, there is an increase of 32.97% in the net stock of workshop jobs.
In 2015-16, there is an increase of 2.06% in work in progress and finished goods. In 2016-17 there is a
decrease of -32.32% in work in progress and finished goods. In 2018-19, there is a decrease of -0.97% in work
in progress and finished goods.

In 2015-16, there is an increase of 48.58% in the stock of medicine of central hospital. In 2016-17, there is an
increase of 11.53% in the stock of medicine of central hospital. In 2017-18, there is an increase of 41.37% in
the stock of medicine of central hospital. In 2018-19, there is a decrease of -29.26% in stock of medicine of
central hospital.

At last after analysing the data, we can see that there is an increase in inventories in 2018-19 by 0.33% and
also there is an increase in the production in 2018-19 by 1.40%. This shows that there was an increase in
demand in the year 2018-19 which resulted in increase in production and hence the increase in inventories
shows a positive effect for CCL.

So we can conclude that CCL has the proper and efficeint management of its inventories and avoids the
wastage of raw materials and also it keeps check on the purchase of raw materials so that excess raw
materials are not purchased and left idle.

There are many problems faced by CCL in the working capital management, however agter following
suggested suggestions CCL can nit only get more business benefit but can also approach towards gaining
quanlitative advantages.

34
BIBLOGRAPHY
# Mr. SANTOSH KR. YADAV (FINANCE SIR, GOSSNER COLLEGE RANCHI.)

# Mr. A.D.WADWA (FINANCE MANAGER , CCL RANCHI)

# Mr. BIPIN THOMAS (CCL RANCHI )

#GOOGLE CHROME

#WIKIPEDIA

#BOOKS

#VEDIOS
:-HINDI FINANCIAL EDUCTIONS VEDIOS
#ARTICALS

#INTERNET

#YOUTUBE
:-“MIND YOUR OWN BUSINESS” CHANNEL NAME

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