CHAPTER 1

INTRODUCTION

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 INTRODUCTION:

“Allocating recourses to Investment without a sound concept of divisional and

corporate strategy is a lot like throwing darts in a dark room.”

In day to day business, working capital gets major importance. It may be define as, excess of
current asset over current liabilities. According to Shubin working capital means, it is the
amount of funds necessary for the cost of operating the enterprise. Thus, working capital in
going concern is revolving fund. It consist of continues conversion of cash in to inventory,
inventory into sales or debtors, debtors into marketable investment or cash. So in short we
can say working capital is nothing but circulation of Current Assets.
Investment opportunities have to be identified or created. They do not occur automatically.
Investment proposals of various types may originate at different levels within a firm but
efficient allocation of capital is the most important finance function in the modern times.

Management is an art of anticipating and preparing for risks, uncertainties and overcoming
obstacles. An essential precondition for sound and consistent assets management is
establishing the sound and consistent assets management policies covering fixed as well as
current assets. In modern financial management, efficient allocation of funds has a great
scope, in finance and profit planning, for the most effective utilization of enterprise resources,
the fixed and current assets have to be combined in optimum proportions. Working capital in
simple terms means the amount of funds that a company requires for financing its day-to-day
operations. Finance manager should develop sound techniques of managing current assets.
Working capital refers to the investment by the company in short terms assets such as cash,
marketable securities. Net current assets or net working capital refers to the current assets less
current liabilities. In the business the Working capital is comparable to the blood of the
human body. Therefore the study of working capital is of major importance to the internal
and external analysis because of its close relationship with the current day to day operations
of a business. The inadequacy or mismanagement of working capital is the leading cause of
business failures. To meet the current requirements of a business enterprise such as the
purchases of services, raw materials etc. working capital is essential. It is also pointed out that
working capital is nothing but one segment of the capital structure of a business.

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WORKING CAPITAL MANAGEMENT:

Working capital management refers to a company's managerial accounting strategy designed

to monitor and utilize the two components of working capital, current assets and current
liabilities, to ensure the most financially efficient operation of the company. The primary
purpose of working capital management is to make sure the company always maintains
sufficient cash flow to meet its short-term operating costs and short-term debt obligations.

BREAKING DOWN 'WORKING CAPITAL MANAGEMENT':

Working capital management commonly involves monitoring cash flow, assets and liabilities
through ratio analysis of key elements of operating expenses, including the working capital
ratio, collection ratio and the inventory turnover ratio. Efficient working capital management
helps with a company's smooth financial operation, and can also help to improve the
company's earnings and profitability. Management of working capital includes inventory
management and management of accounts receivables and accounts payables.

ELEMENTS OF WORKING CAPITAL MANAGEMENT:

The working capital ratio, calculated as current assets divided by current liabilities, is
considered a key indicator of a company's fundamental financial health since it indicates the
company's ability to successfully meet all of its short-term financial obligations. Although
numbers vary by industry, a working capital ratio below 1.0 is generally indicative of a
company having trouble meeting short-term obligations, usually due to insufficient cash flow.
Working capital ratios of 1.2 to 2.0 are considered desirable, but a ratio higher than 2.0 may
indicate a company is not making the most effective use of its assets to increase revenues.

The collection ratio, also known as the average collection period ratio, is a principal measure
of how efficiently a company manages its accounts receivables. The collection ratio is
calculated as the number of days in an accounting period, such as one month, multiplied by
the average amount of outstanding accounts receivables, with that total then divided by the
total amount of net credit sales during the accounting period. The collection ratio calculation

3
provides the average number of days it takes a company to receive payment, in other words,
to convert sales into cash. The lower a company's collection ratio, the more efficient its cash
flow.

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
has to carefully balance sufficient inventory on hand to meet customers' needs while avoiding
unnecessary inventory that ties up working capital for a long period of time before it is
converted into cash. Companies typically measure how efficiently that balance is maintained
by monitoring the inventory turnover ratio. 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 indicates the efficiency of inventory
ordering can be improved.

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 CHAPTER NO 2
INTRODUCTION TO THE PROBLEM

5
TITLE OF THE TOPIC

The topic selected was

“A Study on Working Capital Management at Sheng Li Telecom Ltd, Pune”

STATEMENT OF THE PROBLEM

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.
It helps measure profitability of an enterprise. In its absence, there would be neither
production nor profit.
A firm having a healthy working capital position can get loans easily from the market
due to its high reputation or goodwill.
Sufficient working capital helps maintain an uninterrupted flow of production by
supplying raw materials and payment of wages.
Sound working capital helps maintain optimum level of investment in current assets.
It provides necessary funds to meet unforeseen contingencies and thus helps the
enterprise run successfully during periods of crisis.

PURPOSE OF THE STUDY

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

Adequate working capital is needed to maintain a regular supply of raw materials,

which in turn facilitates smoother running of production process.
Working capital ensures the regular and timely payment of wages and salaries,
thereby improving the morale and efficiency of employees.
Working capital is needed for the efficient use of fixed assets.
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.
Working capital helps avoid the possibility of under-capitalization.

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OBJECTIVE OF THE STUDY:

To analyze the concept of working capital & find out various element of working
capital adopted in Sheng li Telecom Ltd.
To study the working capital cycle of Sheng li Telecom Ltd for 5 Years.
To calculate ratio related working capital and determine financial position of the
factory.
To study whether working capital management contributes to the profitability of the
company.
The goal of Working Capital Management is to manage the firm's Assets and
Liabilities in such a way that a satisfactory level of working capital is maintained.

SCOPE OF THE STUDY:

 The scope of the study is restricted to the Working capital management of 5 years
from 2014 to 2018 for Sheng li Telecom Ltd. Located at Sheng Li Telecom India
Private Limited, Office No. 3, Sixth Floor, 25, NIBM Rd, Kondhwa, Pune,
 In Working Capital Management is concerned with the problems that arise in
attempting to manage the Current Assets, the Current Liabilities and the inter-
relationship that exists between them.
 This is so because if the firm cannot maintain a satisfactory level of working capital, it
is likely to become insolvent and may even be forced into bankruptcy.
 The Current Assets should be large enough to cover its current liabilities in order to
ensure a reasonable margin of safety.
 The interaction between current assets and current liabilities is, therefore, the main
theme of the theory of management of working capital.

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1.5 Hypothesis
The following are the hypothesis of the study:
 The firm is facing difficulty in paying short-term debt.
 The firm is not properly managing the sundry debtor.
 The current liabilities are increasing than current assets year by year.

1.6 Research Methodology

Research methodology is a way to systematically solve the research problem. It may be
understood as a science of studying how research is done scientifically. In it various steps are
generally adopted by a research in studying his research problem along with the logic behind
it.
In preparing of this project the information collected from the following sources.

1. Define research problem

2. Research design

3. Collection of data

4. Analysis of data

5. Data interpretation and report writing

1.7 DATA COLLETION:

1.7.1 Primary Data:
The primary sources data will collect first hand information from respondent in Exact
Enterprises the questionnaire and oral interview will conducted by the researcher for
collection of requisite data. This will be got from from management and non management
staff

1.7.2 Secondary Data:

Secondary data is collected through internal sources and external sources. Secondary data is
also called as ‘Historical Data’. The required data collected from annual report, books and
website which are related to the project

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1.8 Limitations of the study
Some complexities & limitations during the study in the data collection stage as below: -
 The study duration (summer in plant) is short.

 The analysis is limited to just three years of data study (from year 2013 to year 2017) for

financial analysis.

 Limited interaction with the concerned heads due to their busy schedule.

 The findings of the study are based on the information retrieved by the selected unit.

 Some data is confidential therefore it is not given to trainee.

 As per company policy there is a restriction on disclosing some data.

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 CHAPTER 3
COMPANY PROFILE

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 COMPANY PROFILE

LOCATION:

Sheng Li Telecom India Private Limited

Office No. 3, Sixth Floor, 25, NIBM Rd, Kondhwa, Pune, Maharashtra 411048, India

Sheng Li Telecom India Private Limited is a Private incorporated on 21 August 2012. It is

classified as Non-govt..Company and is registered at Registrar of Companies, Pune. Its
authorized share capital is Rs. 25,000,000 and its paid up capital is Rs. 25,000,000.It is
involved in Telecommunications [Production of radio and television programs, whether or
not combined with broadcasting, is classified under class 9213.

Sheng Li Telecom India Private Limited's Annual General Meeting (AGM) was last held on
25 September 2016 and as per records from Ministry of Corporate Affairs (MCA), its balance
sheet was last filed on 31 March 2018.

Sheng Li Telecom India Private Limited's Corporate Identification Number is (CIN)

U64204PN2012PTC144442 and its registration number is 144442.Its Email address is
rupali@shenglitel.com and its registered address is Office No. 3, C-2, BRAMHA ESTATE
KONDHWA, PUNE MH 411048 IN.

11
Sheng Li Telecom International Limited initiated by providing voice services through strict
quality standards and innovative business strategies it was quickly recognized as a vital
partner by major tier 1 carriers and mobile operators around the world. Today Sheng Li
Telecom International Limited offers direct termination globally through its worldwide
network of direct inter connections and carries over 450 MN minutes a month. Sheng Li
Telecom International Limited currently offers a complete suite of solutions in VOIP ranging
from DID services, to our reseller platform for Wholesale and retail VoIP termination, VoIP
Origination and Hosted Pbx, among other services.

Sheng Li Telecom International Limited is a privately owned fast growing

Telecommunication service provider company registered in Hong Kong. Actively involved in
different telecommunication related services and infrastructure projects.

Over the years, Our Company has earned a reputation of providing quality services to meet
requirements of major wholesale voice & calling card players and build environment in
Middle East & Asia.

Our dedication and flexibility allow us to provide clients with the highest level of services,
regardless of their size, location or geographical regions.

They are a privately owned fast growing Telecommunication service provider company.
Actively involved in different telecommunication related services and infrastructure projects.

Over the years, our associate companies has earned a reputation of providing quality services
to meet requirements of major wholesale voice & calling card players and build environment
globally.

Today, our associate company carries 450MN minutes globally per month. Over the time,
they have experienced substantial growth in both volume and diversity. They are based in
Hong Kong, USA & Pune in India.

Our dedication and flexibility allow us to provide clients with the highest level of services,
regardless of their size, location or geographical regions..

12
Experience the difference with us.
What you buy is peace of mind. Without round the clock 24/7 customer service you can take
time-out and leave the rest to us.
Multi Country Multi Currency Payment Acceptance Options
They accept payments across all three of our locations, making it easier for our customers as
they’ll as carriers to take advantage of local payments in UAE , Singapore and Hong Kong.
Sheng Li Telecom International Limited is managed by highly skilled and experience team of
Telecommunication professionals.

PRODUCTS INTERNET:

Would you rather wait one second, one minute, or more for an important file to download?

Standard Internet connections from telephone companies weren’t built for stuff like this.

Our Internet service is built to handle the speed of your business, because they know that
waiting is never an option.

WALLET FRIENDLY:

They offer a wide range of Packages suited to your requirements.

Whether you are an avid surfer, you have a love for YouTube or have been bit by the social
networking bug; they have a package designed with you in mind.

MEDIA RICH:

Our network is optimized for seamless media connectivity.

Say goodbye to buffering, they are here to ensure that your video runs smoothly always.

You can now upload your favorite’s videos now with ease! And watch them with your family
over and over again too!

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SHENG LI APP:

Take charge of your Internet, anywhere you go.

Track usage, renew your connection, and diagnose a problem in connectivity right on your
mobile device.

SECURITY & SURVEILLANCE SYSTEMS:

They offer security systems to protecting homes, workplaces and secure yourself and your
employees. Turnkey based security systems for Buildings and Apartment complexes.

1. Analog Cameras
2. Analog DVR's
3. IP Cameras
4. IP DVR's

A surveillance camera is a great way to provide security for your home or workplace. As well
as providing you with video footage of any events which may happen, they also act as a
visible deterrent to criminals.

They have a range of security cameras, ensuring there is one suitable for every budget. Our
range runs from state-of-the-art HD security cameras with 3 megapixel sensors, optical zoom,
and pan and tilt functions, through to our great value D1 advanced series range.

When connected to a Swann CCTV DVR all of our cameras can be accessed remotely from
your Smartphone, tablet or desktop.

Allowing you to check in on your home or monitor staff at work wherever you are. Many of
our security cameras can also be set to be motion activated, recording footage when motion
triggers them.

They offer solutions for

1. Traffic Monitoring
2. Retail Monitoring

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 3. Crime Monitoring

LEASED LINES:

They Provide Fiber connectivity and Leased Lines from your location to any location across
India. They are called upon by major telecom operators to provide last mile connectivity
when the last mile is simply unreachable

USER FRIENDLY:

Traffic handover interface type is Ethernet: ‘Plug & play’.

No routers & converters required – Simplifying management

Cost Saving

No modems required which reduces CAPEX & OPEX

Termination on customer LAN switches.

Bandwidth up gradation without additional port deployment.

Lower total cost of ownership

SCALABLE:

Scalability in steps of 1Mbps without any hardware changes

Purchase bandwidth on demand increased productivity

WI-FI HOTSPOTS:

Walled Gardens and Hotspots

Wi-Fi Internet access in common areas and public places.

Single ID Sign-On with password via SMS protects your residents from hacking and guards
them against identity theft using client isolation technology.

15
Integrated complete network management, monitoring and maintenance.

Easy to log on! subscribers use their User ID’s, receive a password via SMS and they are
online.

Advertising opportunities on the Walled garden as well as via the SMS sent

PROJECT MANAGEMENT:

Turnkey project management for Townships and Developers.

Installation of Fiber cable bringing Broadband and Land Line services to be brought into
premises up to the Central Management Room.

Installation of copper / fiber multi pair cable carrying Intercom, Land Line and Broadband
Services from Central Management Room to each building.

Installation of EPABX for Intercom Services.

Installation of Telephone Exchange for Land Line Services.

Integration of CCTV at the main gate, common areas and lobbies of each building.

Installation of RFID based Vehicle Access Control and boom barrier.

Stationing of support staff for the site as well as management of billing for each service and
collection of the fees for the same.

BOARD OF DIRECTORS:

Sheng Li Telecom India Private Limited is a company registered in India having its registered
office at Office No. 3, C-2, Brahma Estate, Kondhwa, Pune, Maharashtra, India - 411048.
The company was registered on August 21, 2012 with Registrar of Companies Pune as a
Private Company limited by shares. Riyaz Aziz Abdul Shaikh, Dwayne Michael Pereira are
directors in the company.

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BOARD OF DIRECTORS OF SHENG LI TELECOM INDIA PRIVATE
LIMITED COMPANY:

Director Name Din Number Designation Director Since

Riyaz Aziz Abdul Shaikh 03267040 Director August 21, 2012
Dwayne Michael Pereira 05269576 Director August 21, 2012

VISION:
Our Vision is to be a leading reliable communication partner in regional and international
markets.

MISSION:
Our Mission is to provide world-class telecommunication services to enable our customers to
be competitive.

CORE VALUES:

 Integrity
 Quality
 Reliability
 Innovation

OUR PARTNERS:

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18
19
 CHAPTER 4

THEORETICAL PROSPECTIVE

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REVIEW OF LITERATURE:

Working Capital is the key difference between the long term financial management and short
term financial management in terms of the timing of cash. Long term finance involves the
cash flow over the extended period of time i.e. 5 to 15 years, while short term financial
decisions involve cash flow within a year or within operating cycle. Working capital
management is a short term financial management.
Working capital management is concerned with the problems that arise in attempting to
manage the current assets, the current liabilities & the inter relationship that exists between
them. The current assets refer to those assets which can be easily converted into cash in
ordinary course of business, without disrupting the operations of the firm.

COMPOSITION OF WORKING CAPITAL:

Major Current Assets

1) Cash
2) Accounts Receivables
3) Inventory
4) Marketable Securities

Major Current Liabilities

1) Bank Overdraft
2) Outstanding Expenses
3) Accounts Payable
4) Bills Payable
The Goal of Capital Management is to manage the firm s current assets & liabilities, so that
the satisfactory level of working capital maintained. If the firm cannot maintain the
satisfactory level of working capital, it is likely to become insolvent & may be forced into
bankruptcy. To maintain the margin of safety current asset should be large enough to cover
its current assets. Main theme of the theory of working capital management is interaction
between the current assets & current liabilities.

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CONCEPT OF WORKING CAPITAL:

1) Gross Working Capital

2) Net Working Capital

 Gross working capital: -

It is referred as total current assets. Focuses on, Optimum investment in current assets:
Excessive investment impairs firm s profitability, as idle investment earns nothing.
Inadequate working capital can threaten solvency of the firm because of its inability to meet
its current obligations. Therefore there should be adequate investment in current assets.
Financing of current assets:
Whenever the need for working capital funds arises, agreement should be made
quickly. If surplus funds are available they should be invested in short term securities.
 Net working capital (NWC) defined by 2 ways,
Difference between current assets and current liabilities Net working capital is that
portion of current assets which is financed with long term funds.

NET WORKING CAPITAL = CURRENT ASSETS - CURRENT LIABILITIES

If the working capital is efficiently managed then liquidity and profitability both will
improve. They are not components of working capital but outcome of working capital.
Working capital is basically related with the question of profitability versus liquidity &
related aspects of risk.

IMPORTANCE OF WORKING CAPITAL:

Working capital is required to run day to day business operations. Firms differ in their
requirement of working capital (WC). Firm s aim is to maximize the wealth of share holders
and to earn sufficient return from its operations. WCM is a significant facet of financial
management. Its importance stems from two reasons: Investment in current asset represents a
substantial portion of total investment. Investment in current assets and level of current
liability has to be geared quickly to change in sales. Business undertaking required funds for

22
two purposes: To create productive capacity through purchase of fixed assets. To finance
current assets required for running of the business.

The importance of WCM is reflected in the fact that financial managers spend a great deal of
time in managing current assets and current liabilities. The extent to which profit can be
earned is dependent upon the magnitude of sales. Sales are necessary for earning profits.
However, sales do not convert into cash instantly; there is invariably a time lag between sale
of goods and the receipt of cash. WC management affect the profitability and liquidity of the
firm which are inversely proportional to each other, hence proper balance should be
maintained between two. To convert the sale of goods into cash, there is need for WC in the
form of current asset to deal with the problem arising out of immediate realization of cash
against good sold. Sufficient WC is necessary to sustain sales activity. This is referred to as
the operating or cash cycle.

WORKING CAPITAL CYCLE:

A firm requires many years to recover initial investment in fixed assets. On contrary the
investment in current asset is turned over many times a year. Investment in such current
assets is realized during the operating cycle of the firm. Each component of working capital
(namely inventory, receivables and payables) has two dimensions ... TIME ......... and
MONEY. When it comes to managing working capital - TIME IS MONEY. If you can get
money to move faster around the cycle (e.g. collect dues from debtors more quickly) or
reduce the amount of money tied up (e.g. reduce inventory levels relative to sales), the
business will generate more cash or it will need to borrow less money to fund working
capital. As a consequence, you could reduce the cost of bank interest or you'll have additional
free money available to support additional sales growth or investment. Similarly, if you can
negotiate improved terms with suppliers e.g. get longer credit or an increased credit limit; you
effectively create free finance to help fund future sales.
It can be tempting to pay cash, if available, for fixed assets e.g. computers, plant, vehicles etc.
If you do pay cash, remember that this is now longer available for working capital. Therefore,
if cash is tight, consider other ways of financing capital investment - loans, equity, leasing
etc. Similarly, if you pay dividends or increase drawings, these are cash outflows and, like
water flowing downs a plughole, they remove liquidity from the business.

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OPERATING CYCLE:
The working capital cycle refers to the length of time between the firms paying the cash for
materials, etc., entering into production process/stock & the inflow of cash from debtors
(sales), suppose a company has certain amount of cash it will need raw materials. Some raw
materials will be available on credit but, cash will be paid out for the other part immediately.
Then it has to pay labor costs & incurs factory overheads. These three combined together will
constitute work in progress. After the production cycle is complete, work in progress will get
converted into sundry debtors. Sundry debtors will be realized in cash after the expiry of the
credit period. This cash can be again used for financing raw material, work in progress etc.
thus there is complete cycle from cash to cash wherein cash gets converted into raw material,
work in progress, finished goods and finally into cash again. Short term funds are required to
meet the requirements of funds during this time period. This time period is dependent upon
the length of time within which the original cash gets converted into cash again. The cycle is
also known as operating cycle or cash cycle.

Working capital cycle can be determined by adding the number of days required for each
stage in the cycle. For example, company holds raw material on average for 60 days, it gets
credit from the supplier for 15 days, finished goods are held for 30 days & 30 days credit is
extended to debtors. The total days are 120, i.e., 60 15 + 15 + 15 + 30 + 30 days is the total of
working capital. Thus the working capital cycle helps in the forecast, control & management
of working capital. It indicates the total time lag & the relative significance of its constituent
parts. The duration may vary depending upon the business policies. In light of the facts
discusses above we can broadly classify the operating cycle of a firm into three phases viz.
1. Acquisition of resources.
2. Manufacture of the product and
3. Sales of the product (cash / credit).

First and second phase of the operating cycle result in cash outflows, and be predicted with
reliability once the production targets and cost of inputs are known.
However, the third phase results in cash inflows which are not certain because sales and
collection which give rise to cash inflows are difficult to forecast accurately.

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OPERATING CYCLE CONSISTS OF THE FOLLOWING:
Conversion of cash into raw-materials;
Conversion of finished stock into accounts receivable through sales; and
Conversion of accounts receivable into cash.
In the form of an equation, the operating cycle process can be expressed as follows Operating
cycle = R + W + F + D+ C
W = Work in progress holding period
F = Finished goods storage period
D = Debtors collection period
C = Credit period availed

The studies described so far, are the important studies conducted abroad. A number of studies
on working capital management have been conducted in India also.
The following discussion describes Indian studies. Studies on Working Capital Management
in India, this part briefly reviews the studies conducted in India in respect of working capital
management in Indian industries.

The sugar industry had inefficient utilization of working capital largely due to the
accumulation of stock with the factories. As regards financing of working capital, the study
showed that internal sources had contributed very little towards the financing of working
capital. It was 11.87 per cent in the cement industry, 15.03 per cent in sugar and 31.25 per
cent in fertilizer industry, 17.78 per cent being the average. However, this study failed to put
into sharp focus the various problems involved in the management of specific working capital
accounts. Appavadhanulu(1971)recognizing the lack of attention being given to investment in
working capital, analyzed working capital management by examining the impact of method
of production on investment in working capital.

He emphasized that different production techniques require different amount of working

capital by affecting goods-in-process because different techniques have differences in the
length of production period, the rate of output flow per unit of time and time pattern of value
addition. Different techniques would also affect the stock of raw materials and finished
goods, by affecting lead-time, optimum lot size and marketing lag of output disposals. He,
therefore, hypothesized that choice of production technique could reduce the working capital
needs. He estimated the ratio off work-in-progress and working capital to gross output and

25
net output in textile weaving done 60during 1960, on the basis of detailed discussions with the
producers and not on the basis of balance sheets which might include speculative figures. His
study could not show significant relationship between choice of technique and working
capital. However, he pointed out that the idea could be tested in some other industries like
machine tools, ship building etc. by taking more appropriate ratios representing production
technique correctly. Chakraborty (1973) approached working capital as a segment of capital
employed rather than a mere cover for creditors. He emphasized that working capital is the
fund to pay all the operating expenses of running a business. He pointed out that return on
capital employed, an aggregate measure of overall efficiency in running a business, would be
adversely affected by excessive working capital. Similarly, too little working capital might
reduce the earning capacity of the fixed capital employed over the succeeding periods.

The study revealed that cash working capital requirement were less than average working
capital as per balance sheet for Hindustan Lever Ltd. and Guest, Keen and Williams Ltd.
61indicating the need for effective management of current assets. Cash working capital
requirements of Dunlop and Madura Mills were more than average balance sheet working
capital for all year’s efficient employment of resources. For Union Carbide Ltd., cash
working capital requirements were more in beginning years and then started reducing in the
later years as compared to conventional working capital indicating the attempts to better
manage the working capital. Chakraborty emphasized the usefulness of Concepts in the
determination of future cash requirements on the basis of estimated sales and costs by internal
staff of the firm. OC concept can also be successfully employed by banks to assess the
working capital needs of the borrowers. Misra(1975) 26studied the problems of working
capital with special reference to six selected public sector undertakings in India over the
period 1960-61 to 1967-68. Analysis of financial ratios and responses to a questionnaire
revealed somewhat the same results as those of NCAER study with respect to composition
and utilization of working capital.

It also revealed that long-term funds as a percentage of total working capital registered an
upward trend, which was mainly due to restricted flow of bank credit to the industries. Kamta
Prasad Singh, Anil Kumar SinhaandSubas Chandra Singh(1986) examined various aspects of
working capital management in fertilizer industry in India during the period 1978-79 to 1982-
93. Sample included public sector unit, Fertilizer Corporation of India Ltd. (FCI) and its
daughter units namely Hindustan Fertilizers Corporation Ltd., the National Fertilizer Ltd.,
26
Rashtriya Chemicals and Fertilizers Ltd. and Fertilizer (Projects and envelopment) India Ltd.
and comparing their working capital management results with 63Gujarat State Fertilizer
Company Limited in joint sector. On the basis of ratio-analysis and responses to a
questionnaire, study revealed that inefficient management of working capital was to a great
extent responsible for the losses incurred by the FCI and its daughter units, as turnover of its
current assets had been low.

FCI and its daughter units had high overstocking of inventory in respect of each of its
components particularly stores and spares. Similarly, quantum of receivables had been
excessive and their turnover very low. However, cash and liquid resources held by FCI and
its daughter units had been much lower in relation to operation requirements. So far as
financing of working capital was concerned, long-term funds had been financing a low
proportion of current assets due to rapid increase of current liabilities. The profitability
providing an internal base for financing of working capital, had been very low in these
undertakings.

The study further showed that all the firms in the industry had made excessive use of bank
borrowings to meet their working capital requirement vis-à-visthe norms suggested by
Tandon Committee. Vijay Kumar and Venkatachalam (1995) 30studied the impact of working
capital on profitability in sugar industry in Tamil Nadu by selecting a sample of 13
companies; 6 companies in co-operative sector and 7 companies in private sector over the
period 1982-83 to 1991-92. They applied simple correlation and multiple regression analysis
on working capital and profitability ratios.

They concluded through correlation and regression analysis that liquid ratio inventory
turnover ratio, receivables turnover ratio and cash turnover ratio influenced the profitability
of sugar industry in Tamil Nadu. They also estimated the demand functions of working
capital and its components i.e. cash, receivables, inventory, gross working capital and net
working capital, by applying regression analysis. They showed the impact of sales and
interest rate on working capital and its components. When only sales was taken as
independent variable, coefficient of sales was more than unity in all the equations of working
capital and its components showing more than unity sales elasticity and diseconomies of
scale.

27
When sales and interest rate were taken as independent variable, sales elasticity was again
more than unity in demand functions of working capital and its components except cash. So
far as capital costs were concerned, 65these had negative signs in all the equations but
significant only in inventory, gross working capital and net working capital showing negative
impact of interest rates on investment in working capital and its components. Thus study
showed that demand for working capital and its components was a function of both sales and
carrying costs.

28
 CHAPTER 5

METHODOLOGY

29
4.1 INTRODUCTION:

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying. Now research is done systematically. In that various
steps, those are generally adopted by a researcher in studying his problem along with the
logic behind them. It is important for researcher to know not only the research method but
also know methodology. The procedures by which researchers go about their work of
describing, explaining and predicting phenomenon are called methodology.” Methods
comprise the procedures used for generating, collecting and evaluating data. All this means
that it is necessary for the researcher to design his methodology for his problem as the same
may differ from problem to problem. Data collection is important step in any project and
success of any project will be largely depend upon how much accurate you will be able to
collect and how much time, money and effort will be required to collect that necessary data,
this is also important step. Data collection plays an important role in research work. Without
proper data available for analysis, you cannot do the research work accurately.

Research is any organized enquiry carried out to provide information for solving problems.
Research is a systematic enquiry that provides information to guide decisions. More
specifically, it is a process of determining, acquiring, analyzing and synthesizing, and
disseminating relevant data, information and insights to decision makers in ways that
mobilize the organization to take appropriate actions that, in turn, maximize business
performance.
Note: - The study covered by me for completion of the research is exploratory and
descriptive type of research.

4.2 SOURCE OF DATA COLLECTION:

1. PRIMARY DATA COLLECTION TECHNIQUE:

The information about the company data is gathered from the discussion with the guide,
staff, and also referred some textbooks. The data collected by me especially for the purpose
for the study. Since it is a descriptive research design the primary information is collected
through discussion with the managers of Sheng li Telecom Ltd, staff members, etc.
The information needed for conducting this study is collected through “Personal
Interviewing”. This method is best for the descriptive research design. Moreover, it helps to

30
clarify the doubts immediately by conducting discussion with the experts, company
authorities and staff members.

2. SECONDARY DATA COLLECTION TECNIQUE:

Data collected from a source that has already been published in any form is called as
secondary data. Secondary data is often readily available. After the expense of electronic
media and internet the availability of secondary data has become much easier. Mostly the
secondary data is collected from books, journals and periodicals.

Secondary Data:
For conducting the detailed study of this topic it is necessary to have some of the
secondary information which is collected from:

 Balance Sheet of Sheng li Telecom Ltd Pune for last 5 years

 Profit and Loss Account for last 5 years.
 Annual Reports 2014-2018 of Sheng li Telecom Ltd, Pune.

4.3 PRIMARY DATA:

Data that has been collected from first-hand-experience is known as primary data.
Primary data has not been published yet and is more reliable, authentic and objective.
Primary data has not been changed or altered by human beings; therefore its validity is
greater than secondary data.

Importance of Primary Data:

Importance of Primary data cannot be neglected. A research can be conducted without

secondary data but a research based on only secondary data is least reliable and may
have biases because secondary data has already been manipulated by human beings. In
statistical surveys it is necessary to get information from primary sources and work on
primary data.

31
Sources of Primary Data:

Sources for primary data are limited and at times it becomes difficult to obtain data from
primary source because of either scarcity of population or lack of cooperation. Regardless of
any difficulty one can face in collecting primary data; it is the most authentic and reliable
data source. Following are some of the sources of primary data.

Experiments: Experiments require an artificial or natural setting in which to perform

logical study to collect data. Experiments are more suitable for medicine, psychological
studies, nutrition and for other scientific studies. In experiments the experimenter has to keep
control over the influence of any extraneous variable on the results.

Survey: Survey is most commonly used method in social sciences, management, marketing
and psychology to some extent. Surveys can be conducted in different methods.

 Questionnaire: is the most commonly used method in survey. Questionnaires are a

list of questions either open-ended or close -ended for which the respondent give
answers. Questionnaire can be conducted via telephone, mail, live in a public area, or
in an institute, through electronic mail or through fax and other methods.
 Interview: Interview is a face-to-face conversation with the respondent. In interview
the main problem arises when the respondent deliberately hides information otherwise
it is an in depth source of information. The interviewer can not only record the
statements the interviewee speaks but he can observe the body language, expressions
and other reactions to the questions too. This enables the interviewer to draw
conclusions easily.
 Observations: Observation can be done while letting the observing person know that
he is being observed or without letting him know. Observations can also be made in
natural settings as well as in artificially created environment.

4.4 SECONDARY DATA:

Importance of secondary data:

Secondary data can be less valid but its importance is still there. Sometimes it is difficult to
obtain primary data; in these cases getting information from secondary sources is easier and

32
possible. Sometimes primary data does not exist in such situation one has to confine the
research on secondary data. Sometimes primary data is present but the respondents are not
willing to reveal it in such case too secondary data can suffice: for example, if the research is
on the psychology of transsexuals first it is difficult to find out transsexuals and second they
may not be willing to give information you want for your research, so you can collect data
from books or other published sources.

Sources of Secondary Data:

Secondary data is often readily available. After the expense of electronic media and internet
the availability of secondary data has become much easier.

 E-journals: e-journals are more commonly available than printed journals. Latest
journals are difficult to retrieve without subscription but if your university has an e-
library you can view any journal, print it and those that are not available you can
make an order for them.
 General Websites; Generally websites do not contain very reliable information so
their content should be checked for the reliability before quoting from them.
 Weblogs: Weblogs are also becoming common. They are actually diaries written by
different people. These diaries are as reliable to use as personal written diaries.

For conducting the detailed study of this topic it is necessary to have some of the secondary
information which is collected from:
The study that is conducted being descriptive one the research source of data used is one
types:
Secondary Data:
 Balance Sheet of Sheng li Telecom Ltd for last 5 years
 Profit and Loss Account for last 3 years.
 Journals – Annual Reports 2014, 2015, 2016, 2017, 2018 of Sheng li Telecom Ltd.

Website (www.shenglitelecom.com)

www.google.com

Unpublished Personal Records: Some unpublished data may also be useful in some cases.

33
 CHAPTER - 6

DATA ANALYSIS &

INTERPRITATION

34
DATA ANALYSIS & INTERPRITATION:

This chapter includes analysis and interpretation of data of “Sheng Li Telecom. Pune”. The
unique features of each item have been analyses& interpreted in this chapter.

WORKING CAPITAL MANAGEMENT:

The principal of working capital for calculation purposes.

A] Current assets:
There is the direct relationship between current asset and working capital. Therefore,
1) If the amount of current asset increases, the working capital also increases.
2) If the amount of current asset decreased, the working capital also decreases.

B] Current liabilities:
There is inverse relationship between the current liabilities and working capital. Therefore
1) If the amount of current liabilities increases, the working capital also decreases.
2) If the amount of current liabilities is decreases, the working capital also increases.

35
Q. What are the sources of funds taken in year?
TABLE NO. 4.1: Sources of Funds: - (amount in crore)

Particulars 2014 2015 2016 2017 2018

Shares 14.94 22.86 26.22 27.22 29.37

(Source: - balance sheet)

Chart Title

Source of fund

29.37
26.22 27.22
22.86

14.94

2014 2015 2016 2017 2018

INTERPRETATION:-

The source of funds is increasing through the respective year. So there is increasing in the
fund as we can see from the above table. The share capital is increase from 14.94 in 2012 to
29.37 in 2016. Share capital indicated in the above table is totally paid up in the respective
years.

36
Q. What are the reserve and surplus of the organization?
TABLE NO. 4.2: Reserve & Surplus:- (amount in crore)

Particulars 2014 2015 2016 2017 2018

reserve & surplus 40.37 42.75 48.06 53.80 59.22

(Source:- balance sheet)

Chart Title

Reserve & Surplus

59.22
53.8
48.06
42.75
40.37

2014 2015 2016 2017 2018

INTERPRETATION:-
Factory earned surplus of Rs 40.37 in the year 2014. In year 2015 it increased at 42.75 and
till the year 2017 it increased at 59.22.As we see from the above chart we can easily sees the
reserve and surplus is increase respectively

37
Q. How are the investment in the organization?
TABLE NO. 4.3: Investment :- (amount in crore)

Particulars 2014 2015 2016 2017 2018

Investment 2.22 4.12 7.21 2.81 3.11

(Source:- balance sheet)

4
Investment

0
2014 2015 2016 2017 2018

INTERPRETATION:

From the above table and graph we can easily knows the changes occurs during the
respective year. The above table shows the investment in year 2014 is 2.22, it increased to
year 2015 at 7.21 but it decreased in year 2015& 2016 at 2.81,3.11 respectively.

38
Q. Explain the fixed assets of the organization?

TABLE NO. 4.4 : Fixed Assets :- (amount in crore)

Particulars 2014 2015 2016 2017 2018

Fixed 61.99 79.74 95.79 108.42 140.65

Assets

(Source:- balance sheet)

160

140

120

100

80
Fixed Assets (Amount in crore)

60

40

20

0
2013 2014 2015 2016 2017

INTERPRETATION:

The above table shows that fixed assets are increasing in their respective years. As we see the
changes of the fixed assets of 2014 is 61.99 till 2018 which is 140.65. The fixed assets of the
organization increase so that there is improving in the organization on fixed assets.

39
Q. The Statement showing changes in Working Capital.

TABLE NO. 4.5: Statement showing change in Working Capital (amount in crore)

Particulars 2015 2016 Increased Decreased

Current Assets

Cash & Bank 22.40 3.46 - 18.94

Inventory 175.42 126.24 - 49.18

Advance 3.72 10.19 6.47 -

Debtors 3.79 16.43 12.64 -

Total (A) 205.33 147.32

Current Liabilities

Creditors 130.72 118.44 12.28 -

Provisions 0.73 0.78 0.05

Total (B) 131.44 119.22

Net Working Capital 164.27 182.41

(A-B)
Increased working 18.14 18.14
capital
Total 182.41 182.41 57.5 57.5

INTERPRETATION:
From the above graph we can clearly see there is changes in the cash bank and inventory
decreased by 18.94 and 49.18 in the currents assets and in advance and debtors there is
increased in the rate by 6.47 and 12.64.And also in current liabilities there is also change in
the rate it means that there increased and decreased in the rate of the company.

40
Q. what are the total current assets of the organization?
TABLE NO. 4.6: Total Current Assets: (amount in crore)

Sr. no. Particulars 2014 2015 2016 2017 2018

1 Cash & Bank 22.40 3.46 15.25 8.88 8.08

2 Inventory 175.42 126.24 171.50 241.76 203.26

3 Advance 3.72 10.19 12.63 18.71 39.84

4 Debtors 3.79 16.43 23.16 26.36 50.45

Total Current Assets 205.33 147.32 222.54 295.71 301.63

INTERPRETATION:

The above table shows the current assets of the factory from 2014 to 2015. It can be seen that
in 2014 current asset was 205.33, then in 2014 current asset decreased at 147.32 and again
2017-18 current asset are increased rapidly.

41
Q. Explain the total current liabilities of 5 years?
TABLE NO. 4.7: Total Current Liabilities (amount in crore)

Current Liabilities 2014 2015 2016 2017 2018

Creditors 66.46 37.58 73.50 130.72 118.44

Provisions 0.26 0.53 0.68 0.73 0.78

Total Current Liabilities 66.72 38.11 74.18 131.44 119.22

INTERPRETATION:

The above table indicates current liabilities during the period under the study i.e. year 2015-
16 decreased & in 2017-18 It was been seen that the year current liabilities were increased &
again in 2017 current liability were decreased.

42
Q. What are the total working capital?
TABLE NO. 4.7: Total Working Capital (amount in crore)

Particulars 2014 2015 2016 2017 2018

Current Assets

Cash & Bank 22.40 3.46 15.25 8.88 8.08

Inventory 175.42 126.24 171.50 241.76 203.26

Advance 3.72 10.19 12.63 18.71 39.84

Debtors 3.79 16.43 23.16 26.36 50.45

Total (A) 205.33 147.32 222.54 295.71 301.63

Current Liabilities

Creditors 66.46 37.58 73.50 130.72 118.44

Provisions 0.26 0.53 0.68 0.73 0.78

Total (B) 66.72 38.11 74.18 131.44 119.22

Net Working
Capital

(A-B) 138.61 118.20 296.75 164.27 182.41

INTERPRETATION:

The above table indicates that the net working capital was highest in 2016 at 296.75 & in
2015 it was the lowest at 118.2.As there always increase and decrease in the rate there is
always change in the working capital of the organization

43
Q. Show your current ratio of 5 years?
TABLE NO. 4.8: Current Ratio (amount in crore)

Particulars 2014 2015 2016 2017 2018

Current Assets 205.33 147.32 222.54 295.71 301.63

Current Liabilities 66.72 38.11 74.18 131.44 119.22

Ratio 3.07 3.86 3.00 2.24 2.53

INTERPRETATION:

Current Assets
Current Ratio¿
Current Liabilities

Current ratio indicates the increased trend in year of 2014-15 It was satisfactory & the firm
will meet its current obligation. But in 2014-15 current ratio was decreased & in 2017 it was
increased by 2.24 to 2.53.

44
Q. Explain the Working Capital Turnover Ratio?
TABLE NO. 4.9: Working Capital Turnover Ratio: (amount in crore)

Particulars 2014 2015 2016 2017 2018

Net Sales 187.20 116.94 183.57 260.75 310.80

Working Capital 138.61 118.20 296.75 164.27 182.41

Ratio 1.35 0.98 0.61 1.58 1.70

INTERPRETATION:

Net Sales
Working Capital Turnover ratio¿
WorkingCapital

The working capital turnover ratio establishes the relationship between cost of goods sold and
working capital.
In the above table it was clear that in 2014-15 there was over investment in working capital
which adverse to organization and the ratio is reduced, on account of increased in stock. In
2015-16 less investment in working capital which inverse to the organization. The ratio is
increased, on account of decreased in stock.

45
Q. Show the results of Current Asset Turnover Ratio of the organization?
TABLE NO. 4.10: Current Asset Turnover Ratio (amount in crore)

Particulars 2014 2015 2016 2017 2018

Net Sales 187.20 116.94 183.57 260.75 310.80

Current Assets 205.33 147.32 222.54 295.71 301.63

Ratio 0.91 0.79 0.82 0.88 1.03

INTERPRETATION:

Sales
Current Asset Turnover Ratio¿
Current Asset

The ratio establishes relationship between sales & current asset. From the above table clear
that in 2014 the ratio is 0.91 & 2015 it is decreased at 0.79. And from 2014 -15 the ratio is
increased rapidly.

46
Q. Does working capital contribute to the profitability of the organization?

Ans : YES NO

80%

70%

60%

50%
YES
40% NO
NILL
30% NO RESPONSE
20%

10%

0%

70% YES 20%NO 5% NILL 5% NO RESPONSE

INTERPRETATION:
From the above we can see that working capital does contribute to the profitability of the
organisation and also duing the interview many of the employee disclose the question where
few didn`t answer the question.

47
Q. Is working capital helpful for maintaining the balance record of all the expenditure
and expense?

ANS: YES NO
90%
80%
70%
60%
50% YES
40% NO
NILL
30% NO RESPONSE
20%
10%
0%

80% YES 10% NO 5% NILL 5% NO RESPONSE

INTERPRETATION:
From the above we can easily identify the question because most of the employee tends to
answer the question almost all of them answer still few reject to answer it.

48
Q . Is it helpful for the liquidity of the company?

Ans : YES NO
80%

70%

60%

50%
Yes
40% NO
NO RESPONSE
30%

20%

10%

0%

75% YES 15%NO 10% NO RESPONSE

INTERPRETATION:
From the above graph we can know that most of the employee had given a positive answer so
the working capital is very helpful to the liquidity of the company.

49
Explain the Debtors turnover ratio?
TABLE NO. 4.12: Debtors turnover ratio (amount in crore)

Particulars 2014 2015 2016 2017 2018

Sales 187.20 116.94 183.57 260.75 310.80

Debtors 3.79 16.43 23.16 26.36 50.45

Ratio 49.39 7.11 7.92 9.89 6.16

INTERPRETATION:

Net Credit Sales

Debtor’s Turnover Ratio¿
Average Debtors

A high ratio is indicative of shorter time lag between cash sales and cash collection. in 2013
ratio is high and in 2014 it is reduced at 7.11. which was a bad sign as it reflect debt are being
collected slowly. After 2014 it is increased to 2015 & again decreased in 2016.

50
 CHAPTER - 7

FINDINGS, CONCLUSION AND

SUGGESTIONS

51
6.1 FINDINGS

1) Share capital indicated in the above table is totally paid up in the respective years.
2) Factory earned surplus of Rs 40.37 in the year 2014. In year 2015 it increased at 42.75
and till the year 2018 it increased at 59.22.
3) The above table shows the investment in year 2013 is 2.22, it increased to year 2016
at 7.21 but it decreased in year 2016 & 2017 at 2.81,3.11 respectively.
4) The above table shows that fixed assets are increasing in their respective years.
5) The above table shows the current assets of the factory from 2014 to 2015. It can be
seen that in 2014 current asset was 205.33, then in 2015 current asset decreased at
147.32 and again 2017-18 current asset are increased rapidly.
6) The above table indicates current liabilities during the period under the study i.e. year
2015-16 decreased & in 2017-18 It was been seen that the year current liabilities were
increased & again in 2018 current liability were decreased.
7) The above table indicates that the net working capital was highest in 2016 at 296.75
& in 2017 it was the lowest at 118.2.
8) Current ratio indicates the increased trend in year of 2014-15 It was satisfactory & the
firm will meet its current obligation. But in 2014-15 current ratio was decreased & in
2017 it was increased by 2.24 to 2.53.
9) The ratio establishes relationship between quick asset & quick liabilities. The ratio
indicates the immediate solvency of concern. In the theory quick ratio of 1:1 is the
standard it means that for every rupee of quick liabilities there is quick asset. The
concern should be in a position to meet quick liabilities when they become due.

10) From the above table it is clear that the ratio was below standard. And the quick assets
were increasing year by year so the concern was trying to reach the standard of 1:1.
11) The working capital turnover ratio establishes the relationship between cost of goods
sold and working capital.

12) In the above table it was clear that in 2014-15 there was over investment in working
capital which adverse to organization and the ratio is reduced, on account of increased
in stock. In 2015-16 less investment in working capital which inverse to the
organization. The ratio is increased, on account of decreased in stock.

52
 13) The ratio establishes relationship between sales & current asset. From the above table
clear that in 2015 the ratio is 0.91 & 2016 it is decreased at 0.79. And from 2014 -15
the ratio is increased rapidly.
14) Inventory turnover ratio for the year 2014 is highest which indicates achievement of
maximum sales turnover with minimum expenses compared to year 2014 to 2015.

15) A high ratio is indicative of shorter time lag between cash sales and cash collection. in
2014 ratio is high and in 2015 it is reduced at 7.11. Which was a bad sign as it reflect
debt are being collected slowly. After 2015 it is increased to 2016 & again decreased
in 2016.

16) Does the working capital contribute to the profitability of the organization?
17) Is working capital helpful for maintaining balance record of all the expenditure and
expenses?
18) Is it helpful for the liquidity of the company/organization?

53
6.2 CONCLUSION

Working capital refers to the cash a business requires for its day to day operation or more
specifically for financing the conversion of raw material into finished goods, which the
factory sells. The main objective of the research was to study to working capital management
of the factory. There were various factors which affects the working capital. Working capital
turnover ratio was favorable in company. This ratio indicates extent of working capital. This
should always be moderate.

Current ratio and Acid test ratios for the factory were favorable throughout the research
period which proves the efficiency of factory management. Current asset turnover ratio was
increasing which shows the efficiency utilization of inventory. So from the study it was
observed that the working capital management of the factory is very good.

The goals of working capital management are to manage the firm’s current assets and
liabilities in such a way that a satisfying level of working is maintained. Working capital
management in general refers to the excess of current assets over current
liabilities .management of working capital therefore ,is concerned with problem that arise in
attempting to manage the current assets, currents liabilities and the inter-relationship that
exist between them.

54
6.3 SUGGESTIONS

Sheng Li Telecom is the soul of telecommunication in the city and is playing a pivotal role in
making surplus telecommunication company through efficiently administering the system of
technology.

1) For improvement of organization’s profitability, much emphasis is needed to improve

the better working capital management by decreasing the current liabilities through
reducing of unplanned over head expenses. In such process, current assets position
will be improved through collection of revenue from its service as well as recovery of
past dues from consumers, Govt. and other agencies etc.

2) The company should give more attention on increasing its collection of revenue from
wheeling of power and should give more emphasis to curtail unplanned expenses to
decreases the loss. Further, the management should focus on shortening its average
collection period by changing its credit terms and conditions.

3) By taking the above remedial measures, the organization can be an EVA+ company
with due emphasis on proper way of managing the working capital.

55
 BIBLIOGRAPHY

56
  Reference Books:

 I. M. Pandey (2006) “Financial Management” - Vikas Publishing House Pvt.

Ltd., New Delhi.

 P. Chandra (2007) “Fundamentals of Financial Management” - Tata Mc Grow

Hill, New Delhi.

 Internet sites

www.telecomindusrty.com viewed on 3rdseptember 2017 at 07:00 pm

 www.telecomindia.com viewed on 7rdseptember 2017 at 10:00 pm

 Other

 Annual report of five years (2014-2018) of Sheng Li Telecom Telecom, Ltd,

Pune.

57
 APPENDIX

58
 Balance Sheet
PROFIT & LOSS ACCOUNT Debit Side

As On 31st March (2014-2018) (Amounts are in crore)

Particulars 2014 2015 2016 2017 2018

Cane Purchase &

Related Expenses 135.56 86.26 129.61 212.00 234.68
Wired Parts
Purchase TAX 4.65 - 3.08 6.36 7.36

Raw Material&
Transport Expenses 22.95 23.10 30.05 30.67 31.12

Material Supply &

Related Expenses
0.24 0.03 0.01 0.02 0.04
Salary & Wages
Expenses

Spars & Repairs 7.96 8.47 8.14 10.88 17.12

Expenses

Production& Selling 11.48 13.69 14.85 17.53 17.47

Expenses

Administrative 1.31 1.55 2.55 2.73 2.27

Expenses

Interest 5.32 2.65 4.19 4.57 6.10

Depreciation 7.38 8.47 15.67 13.55 11.00

Loss On Sub- 2.35 2.55 3.17 3.71 3.67

Production Assets
1.27
Loss On Other Raw - - - - -
Supply Business

Net Profit 1.61 - .01.01 - 2.37

0.34 - 5.67.33 8.12.59 -

Total 201.20 146.80 217.04 310.19 334.89

59
 PROFIT &LOSS ACCOUNT
As On 31st March (2014-2018)
Credit side (Amounts are in crore)
2014 2015 2016 2017 2018
Particulars
Sugar Sales 187.20 116.94 183.57 260.75 310.80
Sales Of By- 12.30 4.17 9.35 34.03 19.33
Product
Other Income 1.62 3.41 17.96 9.90 4.17

Profit On Diesel 0.05 0.09 - - -

& Petrol

Distillery
Income - - 6.15 5.49 0.68

Net Loss
- 22.17 - 0.0027 -

Total 201.20 146.80 217.04 310.19 334.98

60
 THE STATEMENT OF BALANCE SHEET
As On 31st March (2014-2018) (Amounts are in crore)
Liabilities 2014 2015 2016 2017 2018

Net Sales 187.20 116.94 183.57 260.75 310.80

Share Capital 14.94 22.86 26.22 27.22 29.37

Working Capital 138.61 118.20 296.75 164.27 182.41

Reserve & Surplus 40.37 42.75 48.06 53.80 59.22

Secured Loan 11.21 110.91 128.33 143.84 199.17

Unsecured Loan 8.77 24.42 44.92 44.37 29.63

Deposits 23.15 20.33 19.67 18.64 18.07

Current Liabilities &

Other Provisions
67.41 38.12 74.18 131.45 119.23
 Govt. Liabilities

 Raw Bills &

11.44 7.66 14.08 19.30 14.64
Other Recovery.

61
  Other Liabilities

 Creditors 42.35 14.74 42.01 86.12 68.31

 Provisions

 Subtotal
(Creditors +
12.65 15.18 17.41 25.29 35.48
Provisions)
66.46 37.58 73.50 130.72 118.44
Interest Payable
0.26 0.53 0.68 0.73 0.78

Profit & Loss A/C

66.72 38.11 74.18 131.44 119.22
 Previous Year
Profit

 Current Year 3.36 2.93 1.16 1.89 0.16

Profit

0.55 - - - -

0.20 - - - -

0.34

- - - -

Total 269.80 262.34 342.57 421.24 454.89

62
 THE STATEMENT OF BALANCE SHEET
As On 31st March (2014-2018) (Amounts are in crore)
2014 2015 2016 2017 2018
Assets

Cash & Bank Balance 22.40 3.46 15.25 8.88 8.08

 Cash In Hand 0.22 0.46 0.22 1.29 1.41

 Cash At Bank 22.18 3.00 15.03 7.59 6.97

 Bank

 Balance/Deposits - - - 1.22 1.01

Quick Asset 29.91 21.08 51.04 53.95 98.37

Investment 2.22 4.12 7.21 2.81 3.11

Average Inventory 87.71 150.83 148.57 206.63 222.51

Advances & Other 7.52 26.62 35.79 45.07 90.29

Receivable

 Advance
3.38 9.98 12.32 18.40 39.50
 Deposits 0.33 0.20 0.31 0.31 0.33
 Debtors 3.79 16.43 23.16 26.36 50.45
Receivable

Current Assets
205.33 147.32 222.54 295.71 301.63
 Consumable
Stores 8.57 7.12 5.95 7.43 9.79

 Closing Stock 166.85 119.12 165.54 240.33 193.47

Fixed Assets

61.99 79.74 95.79 108.42 140.65

63
Prepaid Expenses 0.23 0.50 1.05 0.43 4.03

 Next Year 0.21 0.27 0.31 0.39 0.35

Expenses

 Distillery Unit
0.02 0.20 0.03 0.04 0.04
 Automobile Dept
- 0.01 0.01 - -
 Machine Unit

 Engine. Collage
- 0.01 0.66 - -
 Co- Generation
- - 0.0012 - -
Project

- - 0.02 - 3.63
Accumulated Loss

 Previous Year
Loss - 21.62 15.95 7.82 5.45

 Current Year
Loss
- 22.17 21.62 15.95 7.28

- 0.55 (-)5.67 0.81 2.37

Total 269.80 262.34 342.57 421.24 454.89

64