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CASH FLOW STATEMENT

INTRODUCTION

The cash flow statements primary purpose is to provide information regarding a


companys cash receipts and cash payments. The statement complements the income statement
and balance sheet. It is important to note cash flow is not the same as net income. Cash flow
is the movement of money into and out of your company, and it can be affected by several non
cash transactions.

The cash flow statement became a requirement for publicly traded companies in 1987.
There are various rules governing how information is reported on cash flow statements, as
determined by generally accepted accounting principles (GAAP). While your business may not
be a public company, a cash flow statement is still important to measure and track the flow of
cash into and out of your business.

This Business Builder is designed to show you how to create and understand your cash
flow statement. Cash flow, simply, is the movement of money in and out of your business, or the
inflows and outflows.

MEANING OF CASH FLOW STATEMENT

A cash f low statement of changes in the financial position of a firm on


cash basis .

It reveals the net effects of all business transactions of a during a period


on cash and explains the reasons of changes in cash position between two balance sheet
dates .

It shows the various sources (inflows) and applications (outflows) of cash


during a particular period and their net impact on the cash balance .
DEFINITION

According to FOUKLE (Financial management) The cash flow


statement is a report on the movement of cash or working capital .It explains how
working capital is raised and used during an accounting period .A statement of sources
and application of cash is a technical devices designed to analysis the change in the
financial condition of business enter price between two dates.

OBJECTIVES OF CASH FLOW STATEMENT

To provide information about the cash flow of an enterprise to


financial statement . Which can be basic to assess the ability of the
enterprise for utilize those cash flow .
To enable the users of financial statement to evaluate the timing and
certainty of generation of cash flow .
To classify the cash flow on the basic of operating ,investing and
financial activities .

SCOPE OF CASH FLOW STATMENT

An enterprise should prepare a cash flow statement and should


present it for each period for which financial statement are
presented.
Users of an enterprises financial statement are interested in how
the enterprise generates and use cash and cash equivalent.
This the case regardless the nature of the enterprises activities and
irrespective of whether cash can be viewed as the product of the
enterprise, as may be the cash with a financial enterprise.
Enterprise needs the cash essentially for the same reasons, however
different their principal revenue-producing activities might be. They
need cash to conduct their operations, to pay their obligation, and to
provide return to their investors.
IMPORTANCE

Cash flow statement helps to identify the sources from where cash
inflows has arisen within a particular period and also shows the
various activities where in the cash was utilized.

Cash flow statement is significant to management for proper cash


planning and maintaining a proper matching between cash inflows
and outflows
.
Cash flow statement shows efficiency of a firm in generating cash
inflows from its regular operation.

Cash flow statements report the amount of cash used during the
period in various long term investing activities, such as purchase of
fixed assets.

Cash flow statement report the amount of cash received during the
period through various financing activities, such as issues of shares,
debentures and raising long-term loan.

Cash flow statement helps for appraisal of various capital investment


programs to determine their profitability and viability

USEFULNESS OF CASH FLOW STATEMENT

Helps in predicting the future cash flows


Cash flow statement in used as an indicator for amount ,timing and
certainty of future cash flow on the basis of historical data .

Helps in efficient cash management

One of important function of the management is to manage the


companys resources especially cash , is such that it is made
available sufficiently for discharging the liabilities .

Helps in internal financial management

The cash flow analysis helps the management in repaying its long
term debts by exploring the sources of cash .

Helps in determine the likely cash flow

A projected cash flow statement helps the determine the likely cash
inflow and outflow from the project .

Discloses the movement of cash

The cash flow statement disclose the increase or decrease in cash


and the reason for such changes .

CLASSIFICATION OF CASH FLOW STATEMENT

The cash flow statement during a period is classified into three main
categories of cash inflows and cash outflows .

Cash flow from operating activities .


Cash flow from investing activities, and
Cash flow from financing activities .

CASH FLOW FROM OPERATING ACTIVITIES


Cash receipts from the sale of goods and the rendering of services .
Cash receipts from royalties , fees , commissions and other revenues .
Cash payment to suppliers for goods and services .
Cash payment to and on behalf of employees .

CASH FLOW FROM INVESTING ACTIVITIES

Cash payment to acquire fixed assets (including intangible) ,These payment


include those relating to capitalized research and development costs and
self-constructed fixed assets;
Cash receipts from disposal of fixed assets (including intangible);
Cash payment to acquire shares ,warrants or debt instrument of other
enterprise and interests in joint ventures (other than payment for those
instrument considered to be cash equivalent and those helps for dealing or
trading purposes);
Cash receipts from disposal of shares ,warrants or debt instrument of other
enterprise and interests in joint ventures (other than receipts from those
instrument considered to be cash equivalent and those helps for dealing or
dealing purposes);

CASH FLOW FROM FINANCING ACTIVITIES

Cash proceeds from issuing share or other similar instruments;


Cash proceeds from issuing debentures , loans notes , bonds , and other short
or long-term borrowing; and
Cash repayments of amount borrowed i.e. redemption of debenture, bonds,
etc .
Payment of dividend .

PREPARATION OF CASH FLOW STATEMENT

Comparative balance sheet


Balance sheet at the beginning and at the end of the accounting period are
required to indicate the amount of change that have taken place in assets , liabilities and
capital .

Profit and loss account

This account of the current period enables to determine the amount of cash
provided by or used in operating activities during the accounting period after making
adjustments for non-cash items of current liabilities .

Additional data

In addition to the above statement ,additional data is collected to determine


how cash has been provided or used e .g . sales or purchase of assets for cash .net profit
before taxation and extraordinary items .

Cash flow from operating , investing and financing activities

Cash flow statement .

ADVANTAGES

It shows the actual cash position available with the company between the
two balance sheet dates which fund flow and profit and loss account are
unable to show and therefore it is impotent to make a cash flow report if
you want to know about the liquidity position of the company .

It helps the company in making accurate projections regarding the future


liquidity position of the company and hence arrange for any shortfall in
money by making arrangements in advance and if there is excess than it
can help the company in earing extra return out if idle funds .

Is any discrepancy in the cash position as shown by balance sheet with


cash flow statement than it means that statement are incorrect?
whether company has prepared the financial statement properly or because
if there cash flow statement .

APPLICATION OF CASH FLOW STATEMENT

A cash may take any of the followings

Purchase of fixed assets

Cash may be utilizing for additional fixed assets or replacement of existing


fixed assets .

Payment of long term loans

The payment of long term such as long from financial institution or


debentures result in decrease in cash its therefore an application of cash .

Decreased in different payment liabilities

A payment for plan and machinery purchase on differed payment basis has
to be made as per the agreement it is therefore an application of cash .

Loss on account of operation

Loss suffered on account of business operating will result in outflow of


cash .

Payment of tax

Payment of cash will result in decrease of cash and hence it is an


application of cash .

LIMITATION OF THE CASH FLOW STATEMENT


Cash flow statement cannot be equated with the income statement .

An account statement takes into account both cash as well as non-cash


items and therefore , net cash flow does not necessarily mean net income
of the business .

The cash balance as disclosed by the cash flow statement may not
represent the real liquid position of the business since it can be easily
influenced by postponing purchase and other payments.

Cash flow statement cannot replace the income statement or the fund flow
statement. Each of them has a separate function to perform

Its shows only cash position, it is not possible to arrive at actual profit and
loss of the company by just looking at this statement alone.

In isolation this is of no use and it requires other financial statements like


balance sheet, profit and loss ect,
OBJECTIVES OF THE STUDY

To measure short and long term financial position of the company .


To indicate the efficiency of the company.
To measure the profitability of the company.
To help the company in the process of budgeting and forecasting .
It acts as one of the most powerful tools use for the financial analysis

SCOPE OF THE STUDY

The scope of the present study on composes within its fold a theoretical
frame work of ratio analysis .
In general analysis of ratio trends shows relationship between current assets
and current liabilities, inventory turnover period, capital turnover, debtors
turnover period, return on capital employed .
In addition to that study contains the analysis of financial soundness and
growth of the firm in the term of liquidity .

LIMITATION OF THE STUDY

An account of shortage of time, money and energy this is confined only to


Neyveli Lignite corportation india limited .
Some datas are not given because of confidential .
Only secondary data collected from NLCI, NEYVELI is used for the
study; hence the accuracy of the finding and conclusion of the statement
will depend upon the accuracy of the given data .
REVIEW OF LITERATURE

TITLE: CASH FLOW STATEMENT

AUTHOR: RAMACHADRAN

PUBLISHED: 2002
cash flow statement is a report on the movement of cashs or working
capital . .It explains how working capital is raised and used during an accounting period.

TITLE: CASH FLOW STATEMENT

AUTHOR: S.GURUSAMY

PUBLISHED: 2001

cash flow statement in a statement which highlight the inflow & outflow of cash
during a special period. It indicates the sources from which the cash has been generator
used to which cash been put the resultant change cash balance over the period.
Transaction which increases the cash position of a company is labeled as inflow at
cash those which decrease the cash position outflow of cash.

TITLE: CASH FLOW STATEMENT

AUTHOR: I.PANDEY

PUBLISHED: 2000

According to I.M PANDEY cash may means change in financial resources raising
from change in working capital item and from financing and investing activities of the
enter price which may involve only non-current item.

TITLE: CASH FLOW STATEMENT

AUTHOR: FOUKLE

PUBLISHED: 2008

The cash flow statement is a report on the movement of cash or working


capital. It explains how working capital is raised and used during an accounting period.
A statement of sources and applications of cash is a technical device designed to analyze
the change in the financial condition of business enter price between two dates..

TITLE: CASH FLOW STATEMENT

AUTHOR: ROHIT

PUBLISHED: 2000

Cash flow means inflow and outflow of cash in the organization. It includes
and schedules of change in working capital profit loss or sources of application and cash
flow statement.

TITLE: CASH FLOW STATEMENT

AUTHOR: NANDU

PUBLISHED: 1998

it is a statement of change in financial position prepared to only the sources and


uses of working capital between dates of two balance sheet .

TITLE: CASH FLOW STATEMENT

AUTHOR: R.K.SHARMA

PUBLISHED: 2003
cash flow statement is a method by which we study changes in the financial
position of business enter price between beginning and ending financial statement dates it
is a during statement showing sources and uses of cash for a period of time.

TITLE: CASH FLOW STATEMENT

AUTHOR: GURUSAMY

PUBLISHED: 2001

cash flow statement is a statement which highlight the inflow and outflow of
cash during a specified period it indicates.

TITLE: CASH FLOW STATEMENT

AUTHOR: CHANG

PUBLISHED: 2002

The statement show ability the company to generate cash from its operation after
spending money on the capital expenditure .

RESEARCH METHODOLOGY
RESEARCH INTRODUCTION

Research may be define as the systematic and objectives analyses and recording
of controlled observation that may lead to be development of generalization principles or
theories resulting in principles of theories resulting in perfection and possibly ultimate
control of event.

RESEARCH MEANING

Research in simple terms, refer to a search for knowledge. It also as a scientific


and systematic search for information on a particular topics or issue. It is also known as
scientific investigation .

RESEARCH DEFINITION

According to JOHN W.BETS Research may be define as the systematic


objectives analysis and recording of controlled observation that may lead to the
development of generalization principles or theories resulting in prediction and possibly
ultimate control of events.

RESEARCH DESIGN

A research design is the specification of methods and procedures for acquiring the
information needed to structure or to solve the problem.

SOURCES OF DATA

The method of data collection is classified two types

1. Primary data

2. Secondary data

SECONDARY DATA
The secondary data is the data which have already been collected by someone
and which have already by passed through the statistical process .Most of the data used
for the study in secondary in nature and has been collected as,

Annual report of the company


Financial statement
Auditor report
Referring text book

TOOLS USED FOR STUDY

The researcher used tools to analysis the financial performance of the

Schedule change in working capital


Ratio analysis

CHANGE IN WORKING CAPITAL:

Change in working capital is the net changes in current assets and current
liabilities . its measure of a companys current asset and current liabilities .

STATEMENT OF CHANGE IN WORKING CAPITAL FORMET

Particulars Previous Current Effects of Effects of


years years working working
capital capital
increase decrease
Current assets:
Cash in hand XXX XXX XXX -
Cash at bank XXX XXX XXX -
Bills receivable XXX XXX - -
Sundry debtors XXX XXX XXX
Term party XXX XXX XXX
Investment stock XXX XXX
Invention prepaid XXX XXX XXX
Expenses XXX XXX XXX
Accrued incomes XXX XXX XXX XXX
Total current assets (A) XXX XXX XXX
Current liabilities:
Bills payable XXX XXX XXX -
Sundry creditors XXX XXX XXX -
Outstanding expenses XXX XXX - XXX
Bank over draft XXX XXX XXX -
Short term advance XXX XXX XXX -
Dividend payable XXX XXX - XXX
Proposed dividend XXX XXX - XXX
Provision for taxation XXX XXX XXX XXX
Total current liabilities (B) XXX XXX XXX XXX
Working capital (CA-CL),(A-B) XXX XXX XXX XXX
NET WORKING CAPITAL XXX XXX XXX XXX

RATIO ANALYSIS:

Meaning

Ratio analysis is a form of a statement analysis that is used to obtain a quick


indication of a firms financial performance in several key areas .

Advantages of ratio analysis

It simplifies the financial statement


It helps in comparing companies of different size with each other .
It helps in trend analysis which involves comparing a single over a period.
It high light important information in simple form quickly.

Disadvantages

Financial analysis information is affected by estimates and assumption.


Accounting standard allow different account policies, which impairs
comparability.
Hence ratio analysis is less useful in such situations .

RATIO ARE USING:

Current ratio
Reserves to capital ratio
Cash ratio
Inventory to current asset ratio
Fixed asset turnover ratio
Net profit ratio
Return on investment
Operating profit ratio
Capital turnover ratio
Absolute liquidity ratio

COMPANY PROFILE

PREAMBLE

NLC India limited , a NAVRATNA public sector enterprise ,under the administrative
control of ministry of coal was established in 1956 .NLC a mining and power company
is a pioneer among the public sector undertakings in energy sector .

VISION

To emerge as a leading mining and power company with social


responsiveness accelerating nations growth .

VALUES

National orientation learning and development commitment for excellence


innovation and speed .

MISSION
Continue to develop and sustain expertise in power and mining with focus
on growth and financial strength .
Be socially responsive, achieve sustainable development and be sensitive to
emerging environmental issues .
Strive to achieve excellence in processes and practices .
To nurture talent, encourage innovation and foster collaborative culture .

OVERVIEW OF NEYVELI LIGNITE CORPORATION INDIA

NLC India limited was registered as a company on 14th November, 1956 .


the mining operations n mine-1 were formally inaugurated on 20th may, 1957 by the
prime minister Pandit Jawaharlal Nehru .

NLC is a schedule- A public sector enterprise and listed in both national


stock exchange (NSE) and Bombay stock exchange (NSE). NLC was conferred with
Navratna status by GOI in April 2011 .

NLC India, with around 16154 employees and 14000 contract workman has
attained excellence in production, profitability, industrial relations welfare and peripheral
development activities . NLCs growth is sustained and its contribution to Indias social
and economic development is significant .

NLCI limited is a government owned lignite mining & power generating


company location in cuddalore district, Tamil Nadu .NLCI ltd . operates the largest open
pit mines in india .NLC is administered through ministry of coal .

OPERATIONS
NLCI is a public sector undertaking (PSU), the day to day operating
activities in NLC include

Mining
Power

MINING
Three opencast lignite mines of total capacity of 28.5 million tonnes (MT)
per annum at Neyveli and one open cast lignite mine of capacity 2.1 million tonnes
(MT) per annum at Barsingsar, Rajasthan .

POWER
Five pithrad thermal power station with an aggregate capacity of 3240 MW.
further, NLC has also so far installed nine wind turbine generators of 1.50 MW each,
aggregating to 13.50 MW, thereby increasing the overall power generating capacity to
3253.50MW .

OPERATING UNITS OF THE COMPANY


UNIT CAPACITY
LIGNITE

Mine I 10.5 MTPA

Mine I A 3.0 MTPA

MINE II 15.0 MTPA

Barsingsar Mine 2.1 MTPA

Total 30.6 MTPA


POWER

TPS I 600 MW

TPS II 1470MW

TPS I Expansion 420 MW

TPS II Expansion 500 MW


Barsingsar Thermal 250 MW

Total 3240 MW

ISO CERTIFICATION

All mines units and thermal power plants of NLC have obtained ISO
certification for:

Quality management system (ISO 9001 : 2004)


Environmental management system (ISO 14001 : 2004) and
Occupational health & safety management system (OHSAS 18001 : 1999).

MINING SECTOR

MINE I

The lignite seam was first exposed in August 1961 and regular mining of
lignite commenced in May 1962 .German excavation technology in open cast mining,
using bucket wheel excavators, conveyors and spreaders were used for the first time in
the country in neyveli mine I . The capacity of this mine was 6.5MT which met the fuel
requirement of TS-I .

MINE -II

In February, 1978 government of India sanctioned the second lignite mine


of capacity 4.7 MT of lignite per annum and in February 83, government of India
sanctioned the expansion of second mine capacity from 4.7 million tonnes to 10.5
million tonnes. the method of mining and equipment used are similar to that mine-I .
The lignite seam is the same as of mine I and is contiguous to it .The lignite seam in
mine-II was first exposed in September 1984 and the excavation of lignite commenced in
March,1985 .GOI sanctioned the expansion of mine-II from 10.5 MTPA to 15.0 MTPA
of lignite in October 2004 . Mine II expansion project was completed on 12th March
2010 .The lignite excavated from mine-II meets the fuel requirement of Thermal power
station-II and thermal power station-II expansion under implementation .

MINE-IA

Government of india sanctioned the project mine-I A of 3 million tonnes


of lignite per annum in February 98 . This project is mainly to meet the lignite
requirement of M/s TAQA for their power plant and also to utilize the balance lignite to
the best commercial advantages of NLC .The project was completed on 30th March 2003.

BARSINGSAR MINE

GOI sanctioned implementation of barsingsar mine with a capacity of 2.1


MTPA of lignite per annum in December 2004 .Both overburden and lignite excavation
commenced on 23rd November 2009 and production attained the rated capacity on 311st
January2010 .

POWER SECTOR

THERMAL POWER STATION -I

The 600MW Neyveli thermal power station-I in which the first unit was
synchronized in May 62 and the last unit in September 70 consists of six units of
50MW each and three units of 100MW each .The power generated from thermal power
station-I after meeting NLCs requirement fed into Tamil Nadu electricity board which is
the sole beneficiary .

GOI has sanctioned a 2x500 MW power project (Neyveli new thermal


power plant- NNTPS) in June 2011 as replacement for existing TPS-I .

THERMAL POWER STATION-II

The 1470 MW second thermal power station consists of 7 units of 210


MW each . In February 1978, government of india sanctioned the second thermal power
station of 630 MW capacity (3x210 MW) in Feb 83.
Government of india sanctioned the second thermal power station expansion
from 630 MW to 1470 MW with addition of 4 units of 210 MW each .The power
generated from second thermal station after meeting the needs of second mine is shared
by the southern states viz., Tamil Nadu, Kerala, Karnataka, Andhra Pradesh, and union
territory of Pondicherry .

TPS-I EXPANSION

Thermal power station-I has been expanded based on the additional lignite
available from mine-I expansion .The scheme was sanctioned by government of india in
February 1996 . The unit-I was synchronized in October 2002 and unit-II in July 2003 .
The power generated from this thermal power station after meeting the internal
requirements is shared by the southern states viz., Tamil Nadu, Kerala, Karnataka, and
union territory of Pondicherry .

TPS-II EXPANSION

This project is consisting of two units of 250 MW capacity each. Unit-II


attained commercial operation in April 2015 and unit-I in July 2015 .The lignite
requirement is met by mine-II expansion which has already been commissioned .The
steam generators of this project employee co friendly Circulating Fluidised Bed
Combustion (CFBC) technology . This technology is being adopted for 250 MW capacity
units for the first time in india .

POWER ALLOTMENT FOR SOUTHERN STATES

In MW

BENEFICIARIE TPS I TPS IE TPS II TPS II TPS-II TOTAL


S STAGE-I STAGE- Expansion
II .
Andhra Pradesh 0 44.73 83 0 270.90
Telengana 52.27 97
Karnataka 92.4 84 115 110 401.90
Kerala 58.8 63 90 70 284.20
Tamil nadu 546 193.2 176 265 230 1414.40
Pondicherry 12.6 65 15 15 107.40
NLC mines 54 0 50 50 0 154.80
Unallocated 63 95 125 75 358.50
TOTAL 600 420 630 840 500 2990.00

BARSINGSAR THERMAL POWER STATION

Government of india sanctioned the barsingsar thermal power station 250


MW (2 X 125 MW) in October 2004 .first units was synchronized on 27th October 2009
ad second units was synchronized on 5th June 2010 .unit-I was declared commercial
operation in January 2012 and unit-II in December 2011 .

NLC PROPOSES TO SET UP THE FOLLOWING RENEWABLE


ENERGY PROJECTS

WIND POWER PLANT-NLC Wind Power Project (NWPP) (51 MW)

Work order for setting up of wind power project (34 wind turbo generator
units of capacity 1.5 MW each) was issued on 26th August 2013 . completion schedule
for wind power project is ten month from date of placing work order . the project was
delayed due to progress in transfer of lands to NLC, supplies and erection . the overall
progress of the project is 69% the anticipated date of commissioning is November 2015 .

SOLAR POWER PROJECT at Neyveli (10 MW )

2MW invertors was completed on 14th August 2015 and 10MW solar plant
is ready for commissioning . trial power export to neyveli substation-I started from 12th
August 2015 and 320500 Kwhr has been generated till 31st August 2015 .

SOLAR POWER PROJECT at Barsingsar , Rajasthan (10 MW )

In principle approval of the board obtained on 28.05.2013 for establishing


10 MW solar PV power plant at Barsingsar ,Rajasthan and preliminary activities are
under progress .

POWER GENERATION
NLCI ltd has achieved a higher growth in power generation shows power
generation from 2011-2012 to 2015-2016 .

YEAR POWER GENERATION


2011-2012 16893.11
2012-2013 17895.39
2013-2014 17983.47
2014-2015 17745.89
2015-2016 17122.88

SALES

NLCI ltd has recording a higher sales growth .sales achieved from 2011-
2012 to 2015-2016 .

Table shows the achieved during the year from 2011-2012 to 2015-2016

YEAR SALES
2011-2012 4866.85
2012-2013 5590.07
2013-2014 5967.23
2014-2015 6087.68
2015-2016 6669.05

PROFIT AFTER TAX

NLCI ltd has achieved higher growth in profit after tax .table profit after
tax achieved during the year from 2011-2012 to 2015-2016 .

YEAR PROFIT AFTER TAX


2011-2012 1411.33
2012-2013 1459.75
2013-2014 1501.88
2014-2015 1579.68
2015-2016 1204.15
FUTURE PLANS

NLC proposes to undertake the following projects in the XII/XIII plan:

SI.
NO NAME OF THE PROJECT STATES PLAN
1 Restructuring of mine I&IA (1.5 MTPA of lignite) Tamil Nadu XII
2 Mine II-2nd expansion (3.75 MTPA of lignite) Tamil Nadu XIII
3 Mine III (9 MTPA of lignite) Tamil Nadu XIII
4 Bithnok mine project (2.25 MTPA) Rajasthan XIII
5 Bithnok power project (1 x 250 MW) Rajasthan XII
6 Halda mine project (1.9 MTPA) Rajasthan XII
7 Barsingsar extension TPS/Hadla (1 x 250 MW) Rajasthan XII
8 NUPPL (3 x 660 MW) Uttar Pradesh XII
9 Sirkazhi project (4000 MW in two phases) Tamil Nadu XIII
10 TPS II 2nd expansion (1000MW) Tamil Nadu XIII
11 Solar power at neyveli expansion (15 MW) Tamil Nadu XII
12 Solar power at barsingsar (10 MW) Rajasthan XII
13 solar power at barsingsar expansion (15 MW) Rajasthan XII
NLCI AWARDS IN LAST TWO YEARS

Dates Description
16-12-2016 NLC india limited has bagged three prizes Best PSU implementing
CSR award (2nd place), Best corporate film in Hindi (2nd place) and
Best PUS implementing RTI (special award) at the 38th all india public
relations conference during December 16-12-2016 at Kolkata .
08-07-2016 Golden peacock environment award 2016 instituted by the institute of
directors, New Delhi, at the 18th world congress on Environment
Management jointly hosted by the institute and world environment
foundation at New Delhi, on 08th July 2016 .
09-05-2016 National award for outstanding industrial relation (first runner up) for
the year 2014-15, instituted by the all india organization of employers
(AIOE) an allied body of FICCI, at New Delhi, on 9th may 2016
11-04-2016 SCOPE excellence awards- gold trophy presented to NLC by shri
pranab Mukherjee, Honble president of india, in the 7th public sector
day-2016 celebrations held at Vigyan Bhawan, New Delhi, on April
11,2016 .
21-02-2016 The Ahmedabad and Hyderabad chapters of public relation society of
india (PRSI), a national level professional body in the field of public
relations, has honoured NLC with six awards in recognition of its
performance in various categories during the conference held 25th
Dec2015 & 21st Feb2016 .
18-02-2016 Corporate vigilance excellence award 2015-16 instituted by institute of
public enterprise (IPE), a well-known autonomous, non-profit
organization in Hyderabad at the 7th conclave of vigilance officers held
at Hyderabad, on 18th Feb 2016 .

15-02-2016 Golden peacock award for CSR-2015, instituted by the institute of


directors, New Delhi, at the 10th international conference on CSR a
Mumbai on 15.02.2016.
29-12-2015 Central board of irrigation & power (CBIP) award for excellence in
recognition of its integrated water resources management for
sustainable management of the ground water resources available in the
neyveli hydro-geological basin during the CBIP day celebrations at
New Delhi, on 29th Dec2015 .
27-11-2015 Greentech CSR award (platinum category for the metals and mines
sector) by greentech foundation, a non-profit voluntary organization,
during the 16th annual greentech sustainability and CSR
conference,2015 in recognition of NLC Indias outstanding
achievements in the field of CSR , at New Delhi, 27th Nov 2015.
14-11-2015 vishwamuki rashtriya rajbhasha samman-2015 in recognition of NLC
Indias effective measures taken and quantitative contributions made
towards expanding the usage of official language in the company at
the 4th akhilbharathiya rajbasha sammelan at vizag 14th Nov 2015 .
02-11-2015 In appreciation of the commendable performance of NLC India ltd
under the swachh bharath mission, shri piyush goyal, honble union
minister of state for coal, power and new & renewable energy
(independent charge), felicitated the company in a function held at the
air force auditorium, New Delhi, on November 2, 2015 .

INDUSTRY PROFIFE

INDUSTRY STRUCTURE AND DEVELOPMENT


LIGNITE RESERVE

Major part of the lignite produced in the country is used for power generation
and the demand for lignite is mainly dependent on existing and proposed thermal power
station . As per the report of the working group on coal & lignite for formulation of XII
plans, the projected demand of lignite at the terminal year of XII plan (2016-2017) is
68.60 MT . The actual production achieved during 2015-2016 was 43.93 MT.

In India, lignite deposits are confined in the states of Tamil Nadu ,Gujarat,
Rajasthan, Jammu & Kashmir and Kerala .

The details of state wise resources of lignite as on 01.04.2016 are as under :

SI. PROVED INDICATED INFERRE TOTAL


NO. STATE (MT) (MT) D (MT)
(MT)
1. Puducherry 0.00 405.61 11.00 416.61
2. Tamilnadu 4093.53 22632.87 8953.53 35679.93
3. Rajasthan 1168.53 2670.84 1896.59 5735.97
4. Gujarat 1278.65 283.70 1159.70 2722.05
5. Jammu & Kashmir 0.00 20.25 7.30 27.55
6. Kerala 0.00 0.00 9.65 9.65
7. Paschim banga 0.00 1.13 1.64 2.77
Grand total 6540.71 26014.40 12039.42 44594.53

STRENGTH

Availability of lignite and water for power generation.


Expertise in operation & maintenance in open-cast mining, power generation.
Harmonious industrial relations.
Pioneering position in open-cast lignite mining with SME technology and
lignite fired power station .
Highest domestic credit rating.

WEAKNESS

Mines moving towards higher stripping ratio and consequent increase in


cost of mining .
Necessity of pumping of water below the lignite seam for safe mining
leading to higher cost of production .

OPPORTUNITY

Government of indias commitment to improve the quality of life of its


citizens through higher electricity consumption .
GOI aims to provide each household access to electricity, round the clock
and improve the quality of life of people through 24x7 power supply .
Rise in the per-capita consumption of power .
Launch of 100 smart cities mission by GOI .

THREATS

Resistance to land acquisition, demand for enhanced compensation, demand


for employment .
Higher cost for rehabilitation & resettlement measures for land evictees .
Extreme mining condition resulting from hydro geological, geo-technical
and other condition .
Delay in commissioning of new projects.
Segment wise performance

Covered in the main report.

Outlook

The company is presently operating four lignite mines, three at Neyveli in the state
of Tamil Nadu and one at Barsingsar in the state of Rajasthan with a total installed
capacity of 30.60 MTPA . besides bithnok lignite mines(2.25 MTPA), hadla lignite
mines(1.9 MTPA), barsingsar expansion (0.40 MTPA) and expansion of mine-IA (4.0
MTPA) are also under implementation.

The company has also plans to develop a lignite mine of 5.0 MTPA at Jayam
kondam, Tamil Nadu . with all the above projects, the lignite mining capacity of the
company at the end of the year 2022 would increase to 56.9 MTPA .

In the power sector, with the commissioning of TPS II expansion in June 2015,
the company is presently operating five thermal power stations, four at neyveli and one
at barsingsar with a total installed capacity of 3240 MW and taking into account the
wind power of 51 MW under construction & solar power generation of 10 MW, the total
installed capacity would be 3301 MW .The company is presently implementing 1000 MW
neyveli new thermal power project (replacement to the existing TPS-I of 600 MW
capacity), 250 MW barsingsar extension TPS, and 250 MW bithnok TPS besides solar
power project of 130 MW each in neyveli and barsingsar . with all these projects
presently under implementation, the total power generating capacity would reach to 4461
MW .

Risks and concerns

Resistance to acquisition of land for mining and power projects and


demand for employment by project affected persons .
New land acquisition act .
Financial health of major contractors/vendors and suppliers .
Competition consequent to de-regulation of indian power sector .
Delay in implementation of projects .
Restricted availability of water for power plants .
Surrendering of power and capacity by beneficiaries .
Pressure to regularize contract workers leading to higher manpower costs.

INDUSTRIAL RELATIONS

NLC continues to maintain cordial industrial relations .The joint council of unions
and associations of engineers and officers are functioning in NLC effectively .The
management has a regular system of discussion on common a matter helps to maintain
good industrial relations and to create mutual trust and belief the among the employees .

WELFARE

The company as a model employees lays great stress on the welfare of its
employees and peripheral villages .Some of the salient feature are:

Welfare to employees

Township with over 21000 houses

Subsidized transport

Medicare with 369 bed hospital (being expanded to 500) supported by 5


peripheral dispensaries .

Canteens-8 industrial canteens

Family welfare
Special incentive schemes for small family norm .

Education-34 schools and college in neyveli campus .

Recreation facilities -3 clues .

Sports with all infrastructural facilities .

Postretirement medical assistance .

A crches for children .Health care programmed for school children .

Social welfare peripheral development :

Drinking water to surrounding villages

Irrigation water to 20,000 acres in nearly villages

Facilities for mentally handicapped children .Destitute women and aged people
sneha .

A center for making Jaipur type artificial limb for handicapped


Free medical camps for surrounding: sterilizations .

A school for the speech and hearing impaired sbravanee

DATA ANALYSIS AND INTERPRETATION

TABLE 4.1.1

STATEMENT OF CHANGE IN WORKING CAPITAL FOR THE


YEAR 2011-2012
(In Cr)

Particulars 2011 2012 Increase Decrease


Current assets:
Current investment 103.20 103.20
Inventories 491.71 506.19 14.48
Trade receivable 2202.39 3647.03 1444.64
Cash and cash equivalent 4420.73 3329.10 1091.63
Loans and advance 475.08 406.80 68.28
Other current assets 177.48 156.24 21.24
Total current assets (a) 7870.59 8148.56
Current liabilities:
Trade payable 1400.38 1315.06 85.32
Other current liability 950.59 647.40 303.19
Provision 649.94 798.49 148.55
Total current liability (b) 3000.91 2760.95
Working capital( a-b) 4869.68 5387.61 1847.63 1329.70
Increase in working capital 517.93 517.93
Total 5387.61 5387.61 1847.63 1847.63

INTERPRETATION
From this above statement has been net working capital comparison
between 2011-2012 by which it clearly show that there is increase in the working capital
about difference Rs 517.93 during the year of 2011-2012 .
TABLE 4.1.2

STATEMENT OF CHANGE IN WORKING CAPITAL FOR THE YEAR


2012-2013

Particulars 2012 2013 Increase Decrease


Current assets:
Current investment 103.20 103.20
Inventories 506.19 683.72 177.53
Trade receivable 3647.03 3800.27 153.24
Cash and cash equivalent 3347.08 2876.13 470.95
Loans and advance 390.88 688.87 297.99
Other current assets 176.01 162.46 13.55
Total current assets (a) 8170.39 8314.65
Current liabilities:
Trade payable 718.21 600.11 118.1
Other current liability 1482.10 1628.44 146.34
Provision 798.49 555.79 242.7
Total current liability (b) 2998.8 2784.34
Working capital( a-b) 5171.59 5530.31 989.56 630.84
Increase in working capital 358.72 358.72
Total 5530.31 5530.31 989.56 989.56

INTERPRETATION
From this above statement has been net working capital comparison
between 2012-2013 by which it clearly show that there is increase in the working capital
about difference Rs 358.72 is during the year of 2012-2013 .

TABLE 4.1.3
STATEMENT OF CHANGE IN WORKING CAPITAL FOR THE
YEAR 2013-2014

(In Cr)

Particulars 2013 2014 increase Decrease


Current assets:
Current investment 103.20 103.20
Inventory 683.72 681.69 2.03
Trade receivable 3800.27 2204.45 1595.82
Cash and bank 2876.13 4273.87 1397.74
Loans & advances 688.87 669.96 18.91
Other current assets 162.46 249.36 86.9
Total current assets (a) 8314.65 8182.53
Current liabilities:
Trade payable 431.13 545.60 114.47
Other current liabilities 1672.42 1999.26 326.84
Provision 555.79 523.80 31.99
Total current liabilities (b) 2659.34 3068.66
Working capital (a-b) 5655.31 5113.87 1516.63 2058.07
Decrease in working capital 541.44 541.44
Total 5655.31 5655.31 2058.07 2058.07
INTERPRETATION:

From this above statement has been net working capital comparison between 2013-2014
by which it clearly show that there is decrease in the working capital about difference
Rs 541.44 is during the year of 2013-2014 .

TABLE 4.1.4

STATEMENT OF CHANGE IN WORKING CAPITAL FOR THE


YEAR 2014-2015

(In Cr)

Particulars 2014 2015 increase Decrease


Current assets:
Current investment 103.20 103.20
Inventory 681.69 898.63 216.94
Trade receivable 2204.45 2282.07 77.62
Cash and bank 4273.87 3577.60 696.27
Loans & advances 669.96 524.34 145.62
Other current assets 249.36 199.15 50.21
Total current assets (a) 8182.53 7584.99
Current liabilities:
Trade payable 461.26 631.41 170.15
Other current liabilities 2083.60 2022.09 61.51
Provision 523.80 422.11 101.56
Total current liabilities (b) 3068.66 3075.61
Working capital (a-b) 5113.87 4509.38 457.63 1062.25
Decrease in working capital 604.49 604.49
Total 5113.87 5113.87 1062.25 1062.25

INTERPRETATION

From this above statement has been net working capital comparison
between 2014-2015 by which it clearly show that there is decrease in the working
capital about difference Rs 604.49 is during the year of 2014-2015 .

TABLE 4.1.5
STATEMENT OF CHANGE IN WORKING CAPITAL FOR THE
YEAR 2015-2016

(In Cr)

Particulars 2015 2016 Increase decrease


Current assets:
Current investment 103.20 0 103.20
Inventory 898.63 1491.78 593.15
Trade receivable 2282.07 3787.11 1505.04
Cash and bank 3577.60 3619.98 42.38
Loans & advances 514.38 806.50 292.12
Other current assets 199.15 195.42 3.73
Total current assets (a) 7575.03 9900.79
Current liabilities:
Trade payable 636.94 1172.70 535.76
Other current liabilities 1479.66 1685.90 206.24
Provision 422.11 424.65 2.54
Total current liabilities (b) 2538.71 3283.25
Working capital (a-b) 5036.32 6617.54 2432.69 851.47
Increase in working capital 1581.22 1581.22
Total 6617.54 6617.54 2432.69 2432.69

INTERPRETATION

from this above statement has been net working capital comparison
between 2014-2015 by which it clearly show that there is increase in the working capital
about difference Rs 1581.22 is during the year of 2015-2016 .

TABLE-4.1.6

TABLE OF CHANGE IN WORKING CAPITAL INCREASE/DECREASE

YEAR INCREASE/DECREASE
2011-2012 517.93

2012-2013 358.72

2013-2014 541.44

2014-2015 604.49

1581.22

2015-2016

INTERPRETATION

From this above table is observed that the net working capital in NLCI
LIMITED in the five year statement during period 2011-2016 .The working capital low
in year 2012-2013 is Rs 358.72 and high in year 2015-2016 is Rs 1581.22 .

CHART-4.1.6

CHART SHOWING CHANGE IN WORKING CAPITAL


INCREASE/DECREASE
1800

1600

1400

1200

1000
VALUE

800 1581.22

600

400
517.93 541.44 604.49
200 358.72
0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

YEAR

4.2.1. CURRENT RATIO:

The current ratio is also called working capital ratio .It is used to assess
the short-term financial position of the business concern .In other words, it is an
indicator of the companys ability to meet its short-term obligation .It matches the total
current asset of the company against its current liabilities .
Current assets

Current ratio =

Current liabilities

TABLE 4.2.1

TABLE SHOWING CURRENT RATIO :

( In Crore)

YEAR CURRENT CURRENT RATIO


ASSETS LIABILITIES
2011-2012 8148.56 2760.95 2.95
2012-2013 8314.65 2784.34 2.98
2013-2014 8182.53 3068.66 2.66
2014-2015 7584.99 3075.61 2.46
2015-2016 9900.79 3805.07 2.60

INTERPRETATION :

From the above table -4.1.1 depicts that the level of current ratio can be
measured by using current asset and current liability .current ratio during the year 2011-
2012 was 2.95 and its slightly increased in 2.98 at 2012-2013 .and again the ratio were
to decrease in 2.46 at 2014-2015 and slightly increased in 2.60 at 2015-2016 .this
because of increase and decrease in current asset and current liabilities .

CHART 4.2.1

CHART SHOWING CURRENT RATIO


3.5

2.5

2
RATIO

1.5 2.95 2.98


2.66 2.6
2.46
1

0.5

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

YEAR

4.2.2. RESERVES TO CAPITAL RATIO :

This ratio point out the relationship between reserves and equity share
capital . This ratio indicates the extent of profits that are usually retained by the
company for growth . The formula is :.

Reserves
Reserves to capital ratio = x 100

Equity share capital

TABLE 4.2.2

TABLE SHOWING RESERVES TO SHARE CAPITAL RATIO :

(In Crore)

YEAR RESERVES EQUITY SHARE RATIO


CAPITAL
2011-2012 10362.18 1677.71 617.6
2012-2013 11273.62 1677.71 671.9
2013-2014 12225.91 1677.71 728.7
2014-2015 13193.97 1677.71 786.4
2015-2016 13797.28 1677.71 822.3

INTERPRTATION :

From the above table-4.2.2 depicts that the level of reserves to capital ratio
can be measured by using this reserves and equity capital . Reserves ratio during the year
2011-2012 was 617.6 and its slightly increased 822.3 at 2015-2016 . So the company in
favorable position . This because of increase in reserves and equity share capital .

CHART-4.2.2

CHART SHOWING RESERVES TO SHARE CAPITAL RATIO


900

800

700

600
RATIO

500

400 786.4 822.3


728.7
671.9
300 617.6

200

100

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

YEAR

4.2.3. CASH RATIO

The cash ratio can be measured in terms of relationship between cash and
current liabilities a measures the cash position . The overall cash position can be known
by applying this ratio .
Cash

Cash ratio =

Current liabilities

TABLE -4.2.3

TABLE SHOWING CASH RATIO

(In Cr)

CURRENT
YEAR CASH LIABILITIES RATIO
2011-2012 3329.10 2760.95 1.20
2012-2013 2876.13 2784.34 1.02
2013-2014 4273.87 3068.66 1.39
2014-2015 3577.60 3075.61 1.16
2015-2016 3619.98 3805.07 0.95

INTERPRETATION :

From the above table-4.2.3 it is observed that the cash ratio measuring cash
ratio can be measured by using this cash and current liabilities . cash ratio during the
year 2012-2013 was 1.02 and is slightly increase in 1.39 at 2013-2014 .and the ratio
were to decrease in the year 2014-2015 was 1.16 . this is increase and decrease in cash
and current liabilities .

CHART - 4.2.3
CHART SHOWING CASH RATIO

1.6

1.4

1.2

1
RATIO

0.8
1.39
0.6 1.2 1.16
1.02 0.95
0.4

0.2

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

YEAR

4.2.4. INVENTORY TO CURRENT ASSETS RATIO :

The portion of inventory, which constitutes the current asset is termed as


the Inventory as a percentage of current asset .Current assets means that will either be
used up or converted into cash within a years time or during the normal operating
cycle of the business whichever is lower .The inventory should be maintained at the level
of sales made .
Inventories

Inventory to current assets ratio =

Current assets

TABLE 4.2.4

TABLE SHOWING INVENTORY TO CURRENT ASSETS RATIO

(In Cr)

CURRENT
YEAR INVENTORIES ASSETS RATIO
2011-2012 506.19 8148.56 0.06
2012-2013 683.72 8314.65 0.08
2013-2014 681.69 8182.53 0.08
2014-2015 898.63 7584.99 0.11
2015-2016 1491.78 9900.79 0.15

INTERPRETATION :

From the above table 4.2.4 depicts that the level of inventory to current
asset ratio can be measured by using inventory and current asset .Inventory to current
ratio during the year 2014-2015 was 0.11 and is slightly increased in 0.15 at 2015-
2016 .This because of increase in inventory and current asset .

CHART 4.2.4

CHART SHOWING INVENTORY TO CURRENT ASSETS RATIO


0.16

0.14

0.12

0.1
RATIO

0.08
0.15
0.06
0.11
0.04 0.08 0.08
0.06
0.02

0
2011-2012 2012-2013 2013-2014 Category 4 2015-2016

YEAR

4.2.5. FIXED ASSET TURNOVER RATIO

This ratio establishes the relationship between sales or cost of goods sold
and fixed asset .It determines whether the investments made in fixed asset has really
helped in generating sales .It is calculated by using the following formula.
Sales

Fixed asset turnover ratio =

Fixed assets

TABLE 4.2.5

TABLE SHOWING FIXED ASSETS TURNOVER RATIO

(In Cr)

FIXED
YEAR SALES ASSETS RATIO
2011-2012 4866.85 8253.75 0.58
2012-2013 5590.07 6635.36 0.84
2013-2014 5967.23 6470.62 0.92
2014-2015 6087.68 6425.66 0.94
2015-2016 6669.05 9654.23 0.69

INTERPRETATION :

From the above table-4.2.5 depicts that the level of fixed asset turnover
ratio can be measured by using this sales and net fixed asset .Fixed asset turnover ratio
during the year 2012-2013 was 0.84 and its slightly increase in the year 2013-2014 at
0.92 ratio . And the fixed asset turnover ratio is 0.94 in the year 2014-2015 and
decrease in ratio of 0.69 in the year 2015-2016 .

CHART 4.2.5

CHART SHOWING FIXED ASSETS TURNOVER RATIO


0.6

0.5

0.4
RATIO

0.3
0.5
0.2 0.38 0.37 0.34 0.35

0.1

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

YEAR

4.2.6. NET PROFIT RATIO

Net profit ratio is the ratio of income or profit after tax to net sales . it
indicates with portion of sales is left to the proprietors after all cost charges and
expenses; have been deducted, it is extremely useful to the firm being an indication of
cost control and sales promotion .net profit ratio is a guide as to the efficiency or
otherwise of operating the firm .

Net profit

Net profit ratio = x 100

Net sales

TABLE 4.2.6

TABLE SHOWING NET PROFIT RATIO

(In Cr)

YEAR NET PROFIT NET SALES RATIO


2011-2012 1905.74 4866.85 39.1
2012-2013 1886.31 5590.07 33.7
2013-2014 2282.10 5967.23 38.2
2014-2015 2037.76 6087.68 33.4
2015-2016 1954.26 6669.05 29.3

INTERPRETATION :

From the above table-4.2.6 depicts that the level of net profit ratio can be
measured by using this net profit and sales .net profit ratio during the year 2012-2013
was 33.7 and is slightly increase in 38.2 at 2013-2014 .

CHART 4.2.6
CHART SHOWING NET PROFIT RATIO

45

40

35

30

25
RATIO

20 39.1 38.2
33.7 33.4
15 29.3
10

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

YEAR

4.2.7.CURRENT LIABILITY TO NET WORTH RATIO

It is one of the measures of the solvency of a firm and as a rule of


thumb, should not exceed 60 percent higher percentages mean significant pressure on
future cash flows .
Current liability

Current liability to net worth ratio =

Net worth

TABLE 4.2.7

TABLE SHOWING CURRENT LIABILITY TO NET WORTH RATIO

(In Cr)

CURRENT
YEAR LIABILITY NET WORTH RATIO
2011-2012 2760.95 11989.57 0.23
2012-2013 2784.34 12925.15 0.21
2013-2014 3068.66 13881.07 0.22
2014-2015 3075.61 14772.45 0.20
2015-2016 3805.07 15270.55 0.24

INTERPRETATION :

From the above table -4.2.7 depicts the level of current liability to net
worth can be measured by using this current liability and net worth ratio . current
liability to net worth during the year 2012-2013 was 0.21 and is slightly increase in
0.22 at 2013-2014 . and the year 2014-2015 ratio is decrease in 0.20 and increase in the
year 2015-2016 in 0.24 . this is because of increase and decrease in current liability and
net worth .

CHART 4.2.7

CHART SHOWING CURRENT LIABILITY TO NET WORTH RATIO


0.25

0.24

0.23

0.22
RATIO

0.21 0.24
0.23
0.2 0.22
0.21
0.19 0.2

0.18
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
YEAR

4.2.8. RETURN ON CAPITAL EMPLOYED RATIO

A measure of the returns that a company is realized from its capital .


calculated as profit before interest and tax divided by the difference between total assets
and current liabilities . the resulting ratio represents the efficiency with which capital is
being utilized to generate revenue .
Net profit after tax

Return on capital employed ratio = x 100

Capital employed

TABLE 4.2.8

TABLE SHOWING RETURN ON CAPITAL EMPLOYED RATIO

(In Cr)

NET PROFIT CAPITAL


YEAR AFTER TAX EMPLOYED RATIO
2011-2012 1411.33 13812.30 10.21
2012-2013 1459.75 12690.67 11.50
2013-2014 1501.88 12399.36 12.11
2014-2015 1579.68 12333.60 12.80
2015-2016 1204.15 16054.53 7.50

INTERPRETATION :

From the above table 4.2.8 depicts that the level of return on capital
employed ratio can be measured by using this net profit after tax and capital employed .
return on capital employed ratio in the year 2012-2013 was 11.50 and is slightly
increase in 12.11 at 2013-2014 .

CHART 4.2.8

CHART SHOWING RETURN ON CAPITAL EMPLOYED RATIO


14

12

10

8
RATIO

12.11 12.8
6 11.5
10.21
4 7.5

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

YEAR

4.2.9. CAPITAL TURNOVER RATIO :

This ratio shows the efficiency of capital employed in the business by


computing how many times capital is turned over in a stated period . This ratio is
calculated by using the formula:
Sales

Capital turnover ratio =

Capital employed

TABLE 4.2.9

TABLE SHOWING CAPITAL TURNOVER RATIO

(In Cr)

CAPITAL
YEAR SALES EMPLOYED RATIO
2011-2012 4866.85 13812.30 0.35
2012-2013 5590.07 12690.67 0.44
2013-2014 5967.23 12399.36 0.48
2014-2015 6087.68 12333.60 0.49
2015-2016 6669.05 16054.53 0.41

INTERPRETATION :

From the above table-4.2.3 depicts that the level of capital turnover ratio
can be measured by using this sales and capital employed . Capital turnover ratio during
the year 2011-2012 was 0.35 and is slightly increase in the 0.49 at 2014-2015 .so the
company is favorable position .This is because of increase in sales and capital employed .

CHART 4.2.9

CHART SHOWING CAPITAL TURNOVER RATIO


0.6

0.5

0.4
RATIO

0.3
0.48 0.49
0.44 0.41
0.2
0.35

0.1

0
2011-2012 2012-2013 2013-2014 201402015 2015-2016

YEAR

4.2.10. ABSOLUTE LIQUIDITY RATIO

This ratio is also called, cash position ratio. This ratio establish
relationship between absolute liquid asset and current liabilities . absolute liquid asset
include cash, bank and immediately realizable assets eg, marketable securities . this ratio is
calculate as follows:

Cash in hand & bank

Absolute liquidity ratio =

Current liabilities

TABLE -4.2.10

TABLE SHOWING ABSOLUTE LIQUIDITY RATIO

(In Cr)

CASH IN CURRENT
YEAR HAND & BANK LIABILITIES RATIO
2011-2012 3347.08 2784.95 1.20
2012-2013 2866.64 2784.34 1.02
2013-2014 4273.87 3068.66 1.39
2014-2015 3577.60 3075.61 1.16
2015-2016 3619.98 3805.07 0.95
INTERPRETATION :

From the above table-4.2.10 depicts that the level of absolute liquidity ratio
can be measured by using cash in hand and bank and current liabilities . absolute
liquidity ratio during the year 2012-2013 was 1.02 and is slightly increase in 1.39 at
2013-2014 .

CHART 4.2.10

CHART SHOWING ABSOLUTE LIQUIDITY RATIO


1.6

1.4

1.2

1
RATIO

0.8

0.6

0.4

0.2

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

YEAR

5.1 FINDINGS

Current ratio during the year 2011-2012 was 2.95 and its slightly increase in 2.98
at 2012-2013.
Reserve ratio during the year 2011-2012 was 617.6 and its slightly increase at
2015-2016 .
Cash ratio during the year 2012-2013 was 1.02 and is slightly increase in 1.39 at
2013 .
Inventory to current asset ratio during the year 2014-2015 was 0.11 and is slightly
increase increased in 0.15 in the year 2015-2016 .
Fixed asset turnover ratio during the year 2012-2013 was 0.84 and its slightly
increase in the year 2013-2014 at 0.92.and fixed asset turnover ratio is 0.94 in
the year 2014-2015 and decrease in ratio of 0.69 at 2015-2016 .
Net profit ratio during the year 2012-2013 was 33.7 and is slightly increase in
38.2 in the year 2013-2014 .
Current liability to net worth ratio during in the year 2012-2013 was 0.21 and
slightly increase in 0.22 in the year 2013-2014 .
Return on capital employed ratio in the year 2012-2013 was 11.50 and is slightly
increase in 12.11 in the year 2013-2014 .
Capital turnover ratio during the year 2011-2012 was 0.35 and is slightly increase
in the 0.49 at 2014-2015 .this because of increase in sales and capital employed .
Absolute liquidity ratio during the year 2012-2013 was 1.02 and is slightly
increase in 1.39 at 2013-2014 .
The increase in value of working capital in the all year for satisfaction .
Year of 2013-2014 working capital has been decreasing Rs -541.44 .the working
capital improve in current assets .

5.2 SUGGESTION

The current ratio of the company is in the decreasing till 2011 and 2012 it is
increased .proper care should be taken for the frequent declines .
Company shall take immediate steps to reduce the inventory holding so that it
may improve the profit position .
In 2011-2016 the net profit is increased compare to the other four year .so the
concern should maintain the same position to improve the net profit .
Give more concentration to liquidity ratio and then only the company meet its
current obligation and financial position will be boom .
The company has been purchased many of the fixed assets year by year, that the
company has concentrated more on the fixed assets .so the company can make the
investments in other sources .

5.3 CONCLUSION

The company is performing exceptionally well due to the up wising in the global market
followed by the domestic market .it is an upcoming one with good and innovative ideas
and believed in Improving all the areas of its operations . the company has a good
liquidity position and does not delay its commitment in cash of both its creditors and
debtors .the company being mostly dependent on the working capital facilities, it is
maintaining very good relationship with their banks and their working capital
management is well balanced . the company has a better financial position and the
liquidity position of the company is also found to be good .

BIBLIOGRAPHY

Annual report (2011-2012 to 2015-2016) collected from the NLC India limited,
Neyveli .
Financial management principle and practice

-IM PANDEY
Financial management

-SUDHINDHRA BHAT

REFERENCE WEBSIDE:

www.nlcindia.com

www.wikipedia.com