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A STUDY ON

“WORKING CAPITAL MANAGEMENT”


WITH REFERENCE TO
KAMAKSHI STEELS PVT. LIMITED, VIJAYAWADA.
(A Project report submitted to Jawaharlal Nehru Technological University,Kakinada in Partial
fulfillment of the Requirements of awarding the Degree)

MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY
P.NAGA RAJU
Regd. No: 16ME1E00A4

UNDER THE GUIDANCE OF


Mr. G.PRABHU
M.B.A, M.COM, M.H.R.M, AP-SET
ASSISTANT PROFESSOR

DEPARTMENT OF MANAGEMENT STUDIES


RAMACHANDRA COLLEGE OF ENGINEERING
(AFFILIATED TO JNTU, KAKINADA, APPROVED BY AICTE, NEWDELHI)
NH-5 BYPASS ROAD, VATLURU (V), NEAR ELURU, PEDAPADU(M),
W.G. (D), A.P – 534007.
2016-2018

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DECLARATION

I, hereby declare that this project report A STUDY ON “WORKING CAPITAL

MANAGEMENT” WITH REFERENCE TO KAMAKSHI STEELS PVT.

LIMITED, VIJAYAWADA. is a bonafide work done and submitted to the

JNTU, Kakinada, Department of Management Studies, RAMACHANDRA

COLLEGE OF ENGINEERINGis an original work carried out by me and is

not submitted to any other purpose or published any time before. The

information & findings of this report are based upon the information collected by

me during the study period.

Place: P.NAGA
RAJU
Regd.No:
16ME1E00A4
Date:

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CERTIFICATE

This is to certify that, the project entitles “ WORKING CAPITAL

MANAGEMENT” WITH REFERENCE TO KAMAKSHI STEELS PVT.

LIMITED, VIJAYAWADA. submitted by P.NAGA RAJU, in partial fulfillment of

the requirements for awarding a Degree in MASTER OF BUSINESS

ADMINISTRATION, from Jawaharlal Nehru Technological Unviersity Kakinada,

Under the guidance and supervision of Mr. G.PRABHU ,

RAMACHANDRA COLLEGE OF ENGINEERING, VATLURU, ELURU

during the year 2016-18.

PROJECT GUIDE HOD

EXTERNAL EXAMINER

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ACKNOWLEDGEMENT

I take this opportunity to express my regards to Dr.DOLA

SANJAY.S,M.Tech, Ph.D, Principal of Ramachandra College of Engineering,

Vatluru, Eluru, for his encouragement during the period of my MBA program and

permission to do this project work.

I also express my happiness for being a student of the Department of

Management Studies, RAMACHANDRA COLLEGE OF ENGINEERING and

co-ordinate under the guidance of K.J.N.V. NARASAREDDY HEAD OF THE

DEPARTMENTof management studies for his valuable suggestions and

encouragement, guiding me at every stage for successful completion of this project.

I really appreciate all thesupport and help extended by my project guide Mr.

G.PRABHU ASSISTANT PROFESSOR and the faculty members of M.B.A

department in RAMACHANDRA COLLEGE OF ENGINEERING.

I really thank all the supporting authorities and workers of KAMAKSHI

STEELS PVT. LIMITED, VIJAYAWADA.

P.NAGA RAJU
Regd.No: 16ME1E00A4

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CHAPTER - I

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INTRODUCTION
Financial management is that managerial activity which is concerned with
the planning and controlling of the firm’s financial resources .It was a branch of
economics till 1890, and as a separate discipline, it is of recent origin. Still, it as no
unique body of knowledge of its own, and draws heavily on economics for its
theoretical concepts even today.
The subject of financial management is of immense interest to both
academicians because the subject is still developing, and there are still certain areas
where controversies exist for which no unanimous solutions have been reached as
yet. Practicing managers are interested in this subject because among the most
crucial decisions of the firm are those which relate to finance, and an understanding
of the theory of financial management provides them with conceptual and analytical
insights to make those decisions skillfully.
OBJECTIVES OF FINANCIAL MANAGEMENT
The firm’s investment and financing decision’s are unavoidable and
continuous .in order to make them rationally, the firm must have a goal. It is
generally agreed in theory that the financial goal of the firm should be shareholders
wealth maximization (swm) as reflected in the market value of the firm shares.
Financial objectives is two types
· Profit maximization
· Wealth maximization
PROFIT MAXIMIZATION
Firms producing good’s and services may function in a market economy, or in a
government controlled economy in a market economy price of good and services are
determined in competitive markets .firms in a market economy are expected to produce
goods and services desired by society as efficiently as possible. Goods and services in a
great demand and command higher prices. This results in higher profits for firms, more
of such good and service are produced higher profit opportunities attract other firms to
produce such goods and services ultimately with intensifying competition an
equilibrium price is reached at which demand and supply match
.producers drops such good and services in favor of more profitable opportunities in
the allocation of resources for various productive activities .

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The business man by directing industry in such a manner has its produce may
be of greater value intends only his own gain and he is in this as in many other cases
lead by an invisible hand to promote and which was not part of his intention
.pursuing his own interest he frequently promoters that of society more effectually
than he really intends to promote it.
WEALTH MAXIMIZATION
Shareholders wealth maximization means maximizing the net present value
of a course of action to shareholders .Net present value (npv) are wealth of a course
of action is the difference between the present value of it’s benefits of net present
value of it’s cost’s .A financial action that has a posit ive npv creates wealth for
shareholders and therefore is desirable .A financial action resulting in negative npv
should be rejected since it would destroy shareholders wealth .Between mutually
exclusive projects the one with the highest npv should be adopted npv’s of a firms
project’s are addititive in nature .That is
NPV (A) +NPV (B) =NPV (A+B)
These problems are handled by selection an appropriate rate (The
shareholder opportunities cost of capital)for discounting the expected flow of future
benefits .It provides an unambiguous measure of what financial management should
seek to maximize in making investment and financing decision on behalf of
shareholders maximizing the shareholders economic welfare is equivalent to
maximizing the utility of their consumption over time .With their wealth
maximized ,shareholders can adjust their cash flows in such a way as to optimize
their consumption .From the shareholders point of view ,the wealth created by a
company through it’s actions is reflected in the market value of the companies
shares .the wealth maximization principle implies that the fundamental objective of
a firm is to maximize the market value of its shares.
Working capital is the lifeblood and nerve center of a business. Just
circulation of blood is essential in the human body for maintaining life; working
capital is very essential to maintain the smooth running of a business. No business
can run successfully without an adequate amount of working capital.
Every business needs funds for two purposes:- for its establishment and carry
out its day-to-day operations. Working capital management is concerned with the
problems that arise in attempting to manage the current assets and current liabilities

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and the interrelationship between them. Its operation goal is to manage the current
assets and current liabilities. In such a way that it is a satisfactory level of working
capital i.e., current assets – current liabilities with reference to the management of
working capital, net working capital represents that part of the current assets, which
financed with long-term funds.
The success of any organization mainly depends upon the four functional
areas of management namely finance, production, marketing, and personnel
management. Finance is defined as a provision of money at the time it is required.
Every enterprise weather big, medium or small needs finance to carry on its
operations and to achieve its targets.
Inventory Management depends upon the working capital management of
the firm. The working capital management provides the various objectives.
· Underline the need for investing in current assets and elaborate the
concept of working operating cycle.
· Highlight the necessity of managing current assets and current
liabilities.
· Explain the principles of current assets investment and financing.
· Focus of proper mix of short term and long term financing for current
assets.

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NEED FOR THE STUDY

The need for working capital to run day-to-day activities cannot be over
emphasized we will hardly find a business firm which does not require any amount
of working capital. We know that a firm should aim at maximizing the wealth of its
shareholders. In its endeavor to so, a firm should earn sufficient return from its
operations. Earning a steady amount of profit requires successful sales activity. The
firm has to invest enough funds in currant assets for generating sales. Current assets
are needed because sales don’t convert into cash instantaneously. This is always an
operating cycle involved in the conversion of sales into cash.
The firm should maintain a sound working capital position. It should have
adequate working capital to run its business operations. Both excessive as well as
inadequate working capital positions are dangerous from the firm’s point of view.
Excessive working capital means ideal furans, which earn no profits for the firm.
Paucity of working capital not only impairs the firm profitability but also
results in production interruptions and inefficiencies. So the firm should maintain
the balanced working capital.

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SIGNIFICANCE OF THE STUDY:-

In a perfect world would be necessity for current assets and current liabilities
because it would be no uncertainty, no transaction costs, information search costs,
scheduling costs, or production and technology constraints. However, the world in
which we live is not perfect.
So, organization may be faced with an uncertainty regarding availability of
sufficient quantity of critical inputs in future at reasonable price. This may
necessitate the holding of inventory i.e., current assets.
To ensure that each of the current assets is efficiently managed to ensure the
overall liquidity of the unity and at the same time not keeping too high level of any
of them working capital management is a must.
Working capital attains a proper balance between the amount of
current assets and the current liabilities in such a way that the firm is always able to
meet its financial obligations whenever due.

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OBJECTIVES OF THE STUDY
To determine the trends in working capital components, so as to find the
inference of each component on working capital of the firm.
To determine the working capital position in the organization by interpreting
various ratios like Working Capital Turnover ration, Creditors Turnover ratio,
Debtors Turnover ratios & Liquidity ratios.
To study the Liquidity solvency and capability position of VIJAYTMT (P)
LTD, VIJAYAWADA.
To offer suggestions for the improvement of financial position of VIJAYTMT
(P) LTD, VIJAYAWADA.
To evaluate the working capital practices of the company through
financial ratios.

To known about cause of changes in working capital from time to time.

To find the percentage of investment In each component of current asset.

To find out the sources of working capital finance of the company.

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RESEARCH METHODOLOGY
Research can be defined as the search for knowledge, or as any systematic
investigation, with an open mind, to establish novel facts, usually using a scientific
method.
Research Methodology defined as a highly intellectual human activity used in the
investigation of nature and matter and deals specifically with the manner in which
data is collected, analyzed and interpreted
The primary purpose for research is discovering, interpreting, and the development
of methods and systems
RESEARCH
Research simply means a research for facts answers to questions and
solutions to problems it is a purposive investigation. It is an organized inqury it
seeks to find explanations to un explained phenomenon to clarify the doubt ful
propositions and to correct the misconceived facts.
RESEARCH METHODOLOGY OF STUDY
The system of collecting data for research projects is known as research
methodology. The data may be collected may be collected for either theoretical or
practical research for example management research may be may be strategically
conceptualized a long with operational planning methods and management.
Some important factors in research data. Ethics and the reliability of measures
most of your works is finished by the time you finish the analysis of your data.
Formulating of research questions along with sampling weather probable or non
probable is followed by measurement that includes surveys and scaling. This is followed
by research design. Which may be either experimental or quasi experimental.
STEPS IN RESEARCH PROCESS:
1. Formulating the Research Problem
2. Developing the objectives
3. Selecting Research Method
4. Collecting the Data
5. Analysis of Data
6. Generalization and Interpretation
7. Preparation of the Report or Presentation

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METHODS OF DATA COLLECTION
• Primary data
• Secondary data
PRIMARY DATA:
I have collected information by discussing with Financial
Department,
Practical concepts learned during the project in the company.

SECONDARY DATA:
The past five years balance Sheets and Profit & Loss Account statement
of the
company. Theoretical and practical concepts learned during the MBA
course.
Data collected from different text books relating to Financial
Management and Web sites.
TYPES OF RESEARCH
• Descriptive research
• Analytical research
• Applied research
• fundamental research
• Quantitative research
• Qualitative research
• Continuous research
• Exploratory research

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CHAPTER - II

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INDUSTRY PROFILE
Steel has been the key material with which the world has reached to a
developed position. Steel occupies the foremost place amongst the materials in use
today and pervades all walks of life. All the key discoveries of the human genus for
instance, steam engine, railway, means of communication and connection,
automobile, aero planes and computers are in one way or other, fastened together
with steel and with its sagacious and multifarious application steel is a versatile
material with multitude of useful properties, making it indispensable for furthering
and achieving continual growth of the economy be construction manufacturing
infrastructure or consumables. All the engineering like bars, rods, channels. Earlier
when the alloy of steel was not discovered, iron was used for the said purposes but
iron is usually prone to rust and is not so strong.

Steel is a highly wanted alloy over the world. All the countries need steel for
the infrastructure development and overall growth. Steel has a variety of grades i.e.
above 2000 but is mainly categorized in divisions-steel flat and steel long,
depending on of the shape of steel manufactured. Steel flat include steel products in
flat, plate, sheet or strip shapes. The plate shaped steel products are usually 10 to
200 mm and thin rolled strip products are 1 to 10 mm in dimension. Steel flat is
mostly used in construction, shipbuilding, pipes, bar or rod shape like reinforce rods
made of sponge iron. The steel long products are required to produce concrete
blocks, bars, tools, gears and engineering products.
Steel was discovered by the Chinese under the reign of Han dynasty in 202
BC till 220 AD. Prior to steel, iron was a very popular metal and it was use all over
the globe. Even the time period of around 2 to 3 thousand years before Christ is
termed as iron age as iron was vastly use in that period in each and every part of life.
But, with the change in time and technology, people were able to find an even
stronger and harder material than iron that was steel. Using iron had some
disadvantages but this alloy of iron an carbon fulfilled all that iron couldn’t do. The
Chinese people invented steel as it was harder than iron and it could serve better if it
is used in making weapon. One legend says that the sword of the first Han emperor
was made of steel only.

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From china, the process of making steel from iron spread to its south and
reached India. High quality steel was being produce in southern India in as early as
th
300 BC. Most of the steel then was exported from Asia only. Around 9 century
AD, the smiths in the Middle East developed techniques to produce sharp and
th
flexible steel blades. In the 17 century, smiths in Europe came to know about a
new process of cementation to produce steel. Also, other new and improve
technologies were gradually developed and steel soon became the key factor on
which most of the economies of the world started depending.
GLOBAL PROUCTION OF CRUDE STEEL
It is interesting to note that the world’s total crude steel production grow at
much slower rate during the first half of the century and the growth rate picked up at
a significant rate after the second world war. That was the period when the steel
industry developed in Western Europe and the USA followed by the Soviet Union,
Eastern Europe and Japan. However, steel consumption in the developed countries
has reached a high stable level and growth has tapered off. With a meagre
production level of 28.3 million tonnes in 1900, the production crossed the first
th
hundred mark in 1927(101.8 million tonnes). Thus, over the course of the 20
century, global steel production grew an astounding rate from a mere 28 million tons
at the beginning of the century to 1330 million tonnes at the end of 2008. Today, it is
difficult to imagine a world without steel.
Among the top steel producing countries of the world, the U.S.A
maintained its position as the biggest steel producer until seventies when the erstwhile
U.S.S.R taken over the U.S.A and has remained on the top of the world since then. In
this process Japan also developed its steel industry significantly and took over the U.S.A
to become the second biggest producer in the world. After being in the focus in the
developed world for more than a century, attention has now shifted to the developing
regions. In the west, steel is referred to as a sunset industry. In the developing countries,
the sun is still rising, for most it is only a dawn, towards the end of the last century,
growth of steel production was in the developing countries such as China, South Korea,
Brazil and India. Steel production and consumption grew steadily in China in the initial
years but later it picked momentum and the closing years of the century saw it racing
ahead of the rest of the world.

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Asian now accounts for the lion’s share of total world production, the credit
goes to China. Chinese production has increased by nearly 314% in just 10 years.
Due to this, Asia now accounts for 54% of world steel production, up from 38% 10
years ago. This figure could go up further as major players set up plants to cater to
upcoming markets and the raw material reserves available here. The comparison of
year-wise crude steel production between India and the world from the year 2002 to
2010 and country-wise crude steel production during 2010 are given below.

COMPARISION OF CRUDE STEEL PRODUCTION BETWEEN


INDIA AND THE WORLD DURING 2009-2017

India World
Year
Million Growth Million Growth

Tones Rate (%) Tones Rate (%)

2009 25.161 282.03 845.0 34.02

2010 25.981 294.48 848.5 34.57

2011 28.800 337.29 886.7 40.63

2012 31.100 372.21 962.5 52.66

2013 32.650 395.75 1056.7 67.60

2014 38.100 478.50 1139.6 80.75

2015 49.450 650.84 1239.5 96.59

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2016 53.100 706.26 1343.5 113.08

2017 55.050 735.86 1329.7 110.90

THE STATUS OF INDIAN STEEL INDUSTRY


COUNTRY PRODUCTION
(IN MILLION
TONNES)

China 501

European Union 198

Japan 119

USA 91

Russia 69

India 55

“The growth of crude steel production in India is v ery high when compare to
the crude steel production in the world and India occupies sixth position during
2012”.
CONSUMPTION OF CRUDE STEEL
The consumption of steel rose from 28 million tons in 1900 to 780 million
tons in 2000, an average annual increase of 3.3% per year. In 1900, the USA was
producing 7% of the world’s steel. With post war industrial development in Asia that
region now (at the turn of the century) accounts for almost 40%, with Europe
(including the former Soviet Union) producing 36% and North America 14.5%.
Steel consumption in the developed countries has reached a high stable level
and growth has tapered off.
Growth of the Chinese steel industry appears to be staggering. However, when
one considers that china has a population of 1.3 billion, the per capital steel
consumption is around or below that of the developed countries. Indeed, while China

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has been progressively raising steel. It is only now that China has become a net
exporter of steel. This indirectly means that China has also reached a level of
production saturation and its steel industry is more likely to witness more of
consolidation and reorganization in coming years rather than any major expansion
of its assets.
Amongst the other newly steel-producing countries, South Korea has stabilized
at around 46-48 million tonnes, and Brazil at around 30 plus million tonnes. This brings
the focus of the industry to India. Considering a steel consumption of 300 kg per man
per year to be a fair level of economic development, India will have to come up to
somewhere around 300 million tonnes, if it is to fulfil its ambitions of being a developed
country. That of course is a long journey from the present production level of around of
around 50 million tonnes but one must consider its past before coming to a conclusion
about its potential. India was producing only around a million tonnes of steel at the time
of its independence in 1947. By 1991, when the economy was opened up steel
production grew to around 14 million tonnes. Thereafter, it doubled in the next 10 years,
and then it is doubling again, maybe over a slightly longer span. Steel production in
India expected to reach 124 million tons by 2014 and 275 million tons by 2020 which
could make her second largest steel market.
In the developed countries, the trend is on consolidation of industry. Cross
border mergers have been taking place for several years. The focus is on
technological improvements and new products.
Globally, the steel industry became a billion tone industry in 2004. How
much more it will grow will depend primarily on how much more steel is consumed
in the developing countries.
DEVELOPMENT OF STEEL INDUSTRY IN INDIA
The development of steel industry in India should be viewed in conjunction
with the type & system of government that had been ruling the country. The
production of steel in significant quantity started after 1900. The growth of steel
industry can be conveniently studied by dividing the period in to pre & post-
independence era (or before 1950 & after 1950). The total installed capacity for
ingot steel production during pre-independence era was 1.5 MT/year, which has
risen to about 9 MT of ingot by the seventies.

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S.No STEEL PLANT FOREIGN COLLOBORATION
1 Durgapur steel Plant British
2 Bhilai Steel Plant Erstwhile, USSR
3 Buckaroo Steel Plant Erstwhile, USSR
4 Rourkela Steel Plant German

WORLD STEEL INDUSTRY


Steel, the recycled material is one of the top products in the manufacturing
sector of the world. The Asian countries have their respective dominance in the
production of the steel all over the world. India being one among the fastest growing
economies of the world has been considered as one of the potential global steel hub
internationally. Over the years, particularly after the adoption of the liberalization
policies all over the world, the World steel industry is growing very fast.
Steel Industry is a booming industry in the whole world. The increasing
demand for it was mainly generated by the development projects that have been
going on along the world, especially the infrastructural works and real estate
projects that has been on the boom around the developing countries. Steel Industry
was till recently dominated by the United Sates of America but this scenario is
changing with a rapid pace with the Indian steel companies on an acquisition spree.
In the last one year, the world has seen two big M&A deals to take place
The Mittal Steel, listed in Holland, has acquired the world's largest steel
company called Arcelor Steel to become the world's largest producer of Steel named
Arcelor-Mittal.
Tata Steel of India or TISCO (as listed in BSE) has acquired the world's fifth
largest steel company, Corus, with the highest ever stock price. It has been observed that
Steel Industry has grown tremendously in the last one and a half decade with a strong
financial condition. The increasing needs of steel by the developing countries for its
infrastructural projects have pushed the companies in this industry near their operative
capacity. The most significant growth that can be seen in the Steel Industry has been
observed during the period 1960 to 1974 when the consumption of steel around the
whole world doubled. Between these years, the rate at which the Steel Industry grew has
been recorded to be 5.5 %. This roaring market saw a phase of

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deceleration from the year 1975 which continued till 1982. After this period, the
continuous fall slowed down and again started its upward movement from the early
1990s.
Steel Industry is becoming more and more competitive with every passing
day. During the period 1960s to late 1980s, the steel market used to be dominated by
OECD (Organization for Economic Cooperation and Development) countries. But
with the fast emergence of developing countries like China, India and South Korea
in this sector has led to slipping market share of OECD countries. The balance of
trade line is also tilting towards these countries. The main demand creators for Steel
Industry are Automobile industry, Construction Industry, Infrastructure Industry, Oil
and Gas Industry, and Container Industry.
GLOBAL SCENARIO
In 2011 the World Crude Steel output reached 1343.5 million metric tons and
showed a growth of 7.5% over the previous year. It is the fifth consecutive year that
world crude steel production grew by more than 7%.
China remained the world’s largest Crude Steel producer in 2009 also (489.00
million metric tons) followed by Japan (112.47 million metric tons) and USA (97.20
million metric tons). India occupied the 5th position (53.10 million metric tons) for
the second consecutive year.
The International Iron & Steel Institute (IISI) in its forecast for 2011 has
predicted that 2011 will be another strong year for the steel industry with apparent
steel use rising from 1,202 million metric tonnes in 2009 to 1,282 million metric
tonnes in 2011 i.e. by 6.7%. Further, the BRIC (Brazil, Russia, India and China)
countries will continue to lead the growth with an expected increase in production
by over 11% compared to 2009.
DOMESTIC SCENARIO
The Indian steel industry have entered into a new development stage from 2007-
08, riding high on the resurgent economy and rising demand for steel. Rapid rise in
production has resulted in India becoming the 5th largest producer of steel.

It has been estimated by certain major investment houses, such as Credit


Suisse that, India’s steel consumption will continue to grow at nearly 16% rate
annually, till 2014, fuelled by demand for construction projects worth US$ 1 trillion.

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The scope for raising the total consumption of steel is huge, given that per capita
steel consumption is only 40 kg – compared to 150 kg acro ss the world and 250 kg
in China.
The National Steel Policy has envisaged steel production to reach 110
million tonnes by 2019-20. However, based on the assessment of the current
ongoing projects, both in Greenfield and Brownfield, Ministry of Steel has projected
that the steel capacity in the county is likely to be 124.06 million tonnes by 2014-15.
Further, based on the status of MOUs signed by the private producers with the
various State Governments, it is expected that India’s steel capacity would be nearly
293 million tonne by 2020.
PRODUCTION
1. Steel industry was delicensed and decontrolled in 1991 & 1992 respectively.
2. Today, India is the 7th largest crude steel producer of steel in the world.
3. In 2016-17, production of Finished (Carbon) Steel was 59.02 million tonnes.
4. Production of Pig Iron in 2016-17 was 5.289 Million Tonnes .
5. Last 5 year's production of pig iron and finished (carbon) steel
is Given below:
(In Million Tonnes)
Category 2012-13 2013-14 2014-15 2015-16 2016-17
Pig Iron 3.228 4.695 4.993 5.314 5.289
Finished 40.055 44.544 55.416 58.233 59.02
Carbon
Steel

DEMAND AVAILABILITY PROJECTION


Demand Availability of iron and steel in the country is projected by Ministry
of Steel annually. Gaps in Availability are met mostly through imports. Interface
with consumers by way of a Steel Consumer Council exists, which is conducted on
regular basis. Interface helps in redressing availability problems, complaints related
to quality.
STEEL PRICES
Price regulation of iron & steel was abolished on 16.1.1992. Since then steel
prices are determined by the interplay of market forces. There has been an up-trend in

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the domestic steel prices since 2008-09 and the trend accentuated since January this
year.
Rise in raw material prices, strong demand in the international and domestic
market and up-trend in the global steel prices have been some of the reasons cited
by the industry for increase in the steel prices in the domestic market.
The mismatch in demand and supply is considered to be the main reason on
the demand side for the rise in steel prices. Honourable Steel Minister has held
discussion with all major steel investors including Arcellor-Mittal, POSCO, Tata
Steel, Essar, Ispat and also SAIL, RINL to explore the possibility of expediting the
ongoing as well as envisaged steel projects.
The Government also took various fiscal and other measures for stabilizing the
steel prices like exempting pig iron, non alloy steel and steel making inputs like
zinc, ferro-alloys and metcoke from customs duty; withdrawing DEPB benefits on
export of various categories of steel products and bringing back railway freight on
iron ore from classification 180 to 170 for domestic steel producers.
In May 2010, the Government imposed 15% export duty on semi finished
products, and hot rolled coils/sheet, 10% export duty on cold rolled coils/sheets and
pipes and tubes and 5% export duty on galvanized steel in coil/sheet form in order to
further curtail rising prices and increase supply of steel in the domestic market.
IMPORTS OF IRON & STEEL
1. Iron & Steel are freely importable as per the extant policy.
2. Last five years import of Finished (Carbon) Steel is given below:-
YEAR QTY. (IN MILLION TONNES)
2012-2013 2.109
2013-2014 3.850
2014-2015 4.436
2015-2016 6.581
2016-2017 5149

EXPORTS OF IRON & STEEL


1. Iron & Steel are freely exportable.
2. Advance Licensing Scheme allows duty free import of raw materials for exports.
3. Duty Entitlement Pass Book Scheme (DEPB) introduced to facilitate exports.

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Under this scheme exporters on the basis of notified entitlement rates, are
granted due credits which would entitle them to import duty free goods. The DEPB
benefit on export of various categories of steel items scheme has been temporarily
withdrawn from 27th March 2014, to increase availability in the domestic market.
Exports of finished carbon steel and pig iron during the last five years
Exports (Qty. in Million Tonnes)
Year Finished (Carbon) Steel Pig Iron
2012-2013 4.381 0.393
2013-2014 4.478 0.440
2014-2015(Prov. estimated) 4.750 0.350
2015-2016 4.627 0.560
2016-2017 3.482 0.350
(Prov. estimated)

OPPORTUNITIES FOR GROWTH OF IRON AND STEEL IN


PRIVATE SECTOR
THE NEW INDUSTRIAL POLICY REGIME
The New Industrial policy has opened up the iron and steel sector for private
investment by (a) removing it from the list of industries Reserved for public sector
and (b) exempting it from compulsory licensing. Imports of foreign technology as
well as foreign direct investment are freely permitted up to certain limits under an
automatic route. Ministry of Steel plays the role of facilitator, providing broad
directions and assistance to new and existing steel plants, in the liberalized scenario.
THE GROWTH PROFILE
(a) STEEL
The liberalization of industrial policy and other initiatives taken by the Government
have given a definite impetus for entry, participation and growth of the private sector in
the steel industry. While the existing units are being modernized/expanded, a large
number of new/Greenfield steel plants have also come up in different parts of the
country based on modern, cost effective, state of-the-art technologies. At present, total
(crude) steelmaking capacity is over 34 million tonnes and India, the 8th largest
producer of steel in the world, has to its credit, the capability to produce a variety of
grades and that too, of international quality standards. As per

25
the ratings of the prestigious "World Steel Dynamics", Indian HR Products are
classified in the Tier II category quality products – a major reason behind their
acceptance in the world market. EU, Japan has qualified for the top slot, while
countries like South Korea, USA share the same class as India.
(b) PIG IRON
In pig iron also, the growth has been substantial. Prior to 1991, there was
only one unit in the secondary sector. Post liberalization, the AIFIs have sanctioned
21 new projects with a total capacity of approx 3.9 million tonnes. Of these, 16 units
have already been commissioned. The production of pig iron has also increased
from 1.6 million tonnes in 1991-92 to 5.28 million tonnes in 2004-05. During the
year 2005-06, the production of Pig Iron was 5.221 million tonnes. India is the fifth
largest producer of steel in the world. India Steel Industry has grown by leaps and
bounds, especially in recent times with Indian firms buying steel companies
overseas. The scope for steel industry is huge and industry estimates indicate that
the industry will continue will to grow reasonably in the coming years with huge
demands for stainless steel in the construction of new airports and metro rail
projects. The government is planning a massive enhancement of the steel production
capacity of India with the modernization of the existing steel plants.
INDUSTRY STATISTICS
Government targets to increase the production capacity from 56 million
tones annually to 124 MT in the first phase which will come to an end by 2014 – 15.
Currently with a production of 56 million tones India accounts for over 7% of the
total steel produced globally, while it accounts to about 5% of global steel
consumption. The steel sector in India grew by 5.3% in May 2014. Globally India is
the only country to post a positive overall growth in the production of crude steel at
1.01% for the period of January – March in 2014.
EXPORT
About 50% of the steel produced in India is exported. India’s export
of steel during April – December 2010 was 64.4 MT as a gainst 9.7 MT in
December 2009. In February 2014, steel export increased by 17% to 12.6 MT from
10.8 MT in the same month last year. More than 50% of steel from India is exported
to China. The Government’s decision to reduce export duty on iron ore lumps from
15% to 5% has given a major boost to the export of steel.

26
HURDLES
Power shortage hampers the production of steel Use of outdated
process for production Lags behind in the production of stainless steel Deficiency of
raw materials required by the industry Labor productivity is low. It is 144 tons per
worker per year against 600 tons in Western Europe as per estimates inadequate
shipment capacity and transport structure
STRENGTHS
There are many strong points of the industry that makes it one of the leading
names in the global steel industry. The rate of labor wage in India is among one of
the lowest in the world thereby making large scale production feasible. The boom
witnessed in the automobile industry has ensured that the demand for steel is
increasing gradually and will continue to do so in the near future. There is huge
manpower in India which is another reason why steel production in India is high and
the industry is doing pretty well both nationally and internationally.
INVESTMENTS
Numerous steel companies some major projects in the pipeline to invest in
India Steel industry. Steel companies have earmarked more than 100 million USD
for the setting up of sponge iron units in Koppal and Bellary in Karnataka. As per
Investment Commission of India more than 30 billion USD are in the pipeline for
investment over the next five years.
TOP TEN STEEL PRODUCING COUNTRIES
Major steel producing countries over the world for the period Jan-June 2009
is as follows
S.No Country Production
(Million Metric Tones)

1 China 237.5

2 EU 27 108.3

3 Japan 59.4

4 USA 48.5

5 Russia 30.8

27
6 S Korea 25.7

7 India 22.9

8 Ukraine 21.3

9 Brazil 16.3

10 Turkey 12.6

INTERNATIONAL STEEL IRON INSTITUTE


The world Steel Dynamics has pointed out 12-world class steel makers
keeping in view various criterions. The parameters undertaken are like operating
costs, ownership of lower cost ore and coal, productive workforce, quality products,
balance sheet, market for the product and domestic growth rate of the industry.

28
CHAPTER - III

29
COMPANY PROFILE
M/s. VIJAYTMT PRIVATE LIMITED is a Private Limited Company
th
Registered under The Companies Act, 1956 on 11 day of May 1996 with the object
of carrying out the Business of Heavy Structural Fabrication, erection of steel
structures, manufacturing and trading of colour coated sheets, manufacturing and
trading of billets, ingots, rolling products and other allied products/activities under
the name and style of VIJAYTMT Private Limited.
The Unit was well located and possessing the unique advantages and merits
of meeting major requirement at lower cost of production, by virtue of its ideal
location. With the core competency and team spirit of the Management, the
Company is happy to integrate all the facilities that facilitates cost of Production at
lower levels with the experienced personnel supervision and minimizes the
wastages. In this way VIJAYTMT provides readymade solutions to customers, at
record time of completion apart from savings in manufacturing margin as compared
to market prices and also transportation costs.
QUALITY POLICY
We are one of the leading manufactures of Pre Engineered building systems,
Structures & Profiled Roofing Sheets.
WE ARE COMMITTED TO:
· Ensure quality at every stage of Manufacturing
· Provide best services at lower cost
· Ensure Customer satisfaction through involvement of employees and Training.
CONTINUALLY IMPROVING:
· Quality standards basing on National and International standards on Quality
Management System.
OUR STRENGTHS:
· Our skilled and qualified engineers
· Our cost effective solutions
· Our unwavering commitment to high-quality
· 24*7 support services
· Fast turn around
· World-class infrastructure
· Ability to handle complex work
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· Our learning & development model
VIJAYTMT VISION STATEMENT
To achieve sustainable growth, we have established a vision with clear goals. Profit:
Maximizing return to shareowners while being mindful of our overall
responsibilities.
People: Being a great place to work where people are inspired to be the best they can
be.
Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and
satisfy peoples: desires and needs.
Partners: Nurturing a winning network of partners and building mutual loyalty.
Planet: Being a responsible global citizen that makes a difference.
VIJAYTMT MISSION STATEMENT
Everything we do is inspired by our enduring mission:
· To Refresh the World... in body, mind, and spirit.
· To Inspire Moments of Optimism... through our brands and our actions.
· To Create Value and Make a Difference... everywhere we engage."
·

VIJAYTMT CORPORATE OBJECTIVES


S t r a t e g i cp l a n n i n g& s e t t i n g o b j e c t i v e s
V I J A Y T M T h a s t h e f o l l o w i n gC o r p o r a t e O b j e c t i v e s :
1 . •We aim to increase earnings per share by 10% by 3 1.03.2014

2. •We aim to achieve a market share of 10% by 31.03.2 014


INTRODUCTION
Objectives set out what the business is trying to achieve.
Objectives can be set at two levels:
(1) CORPORATE LEVEL
These are objectives that concern the business or organization as a whole
No.1of the above is the Corporate Level Objective of VIJAY TMT
(2) FUNCTIONAL LEVEL
E.g. specific objectives for marketing activities

31
No.2 of the above is the Corporate Level Objective of VIJAY TMT
both corporate and functional objectives conform to the commonly used SMART
criteria.
The SMART criteria (an important concept which you should try to remember and
apply in exams) are summarized below

Structures

Set of the elements (columns, beams, tie-beams, etc.)


constituting the frame of a building.
Flooring

Horizontal composite surfaces or decks parting two


successive floors in a building and collecting the building's
operation excess loads.

Roofing
Range of products used in roof covering (roofing panels,
sunbreakers, etc.)

Cladding & Walling


Elements constituting the shell of a building (cladding
panels, cassettes, etc.)

Systems & Solutions


Innovative steel construction elements and systems
providing sustainability, safety, and many other advantages
to a building.

Civil Engineering

Steel solutions for infrastructure, bridges, etc.

Flat steels, coils, plates and sheets


Flat finished products for construction applications. Stainless
steels, Hot rolled steels, Cold rolled steels, Coated steels,
Heavy plates, etc.

Concrete Reinforcing Steel


Range of steel bars for concrete reinforcement, rebars and
steel fibers.

32
Specific - the objective should state exactly what is to be achieved. Measurable -
an objective should be capable of measurement – so that it is possible to determine
whether (or how far) it has been achieved
Achievable - the objective should be realistic given the circumstances in which it is
set and the resources available to the business. Relevant - objectives should be
relevant to the people responsible for achieving
them
Time Bound - objectives should be set with a time-frame in mind. These deadlines
also need to be realistic.
PROMOTORS
The Project was initiated by Late Sri M RAMPRASAD, who is an associate
of Sri Jalagam Vengala Rao (ex. Minister) and K.L Rao(Engineer) AND do not need
any introduction to the Krishna District. Sri M RAMPRASAD has executed many
projects in India and Abroad since 1965. Further details and Photographs are
available in company web site www.vijaytmt.com

TYPES OF STEEL PRODUCTS


WORKS EXECUTED:
(ABROAD)
1).M/S.P.T. Txmaco Jaya, Pamalong, Indonesia
2).M/S.P.T. Tanan Synthetics, Samarang,Central Java, Indonesia
3).M/S.P.T. Bilma, Precast Housing Project, Jakartha, Indonesia.
4).M/S.P.T.Wastra ina, batu, Eastern Java, Indonesia.
5).M/S.Expansion of Taman Synthetics for Polyster Chips, Samarang, Indonesia.
WORKS EXECUTED:
(ANDHRA PRADESH)
1) M/S. I.T.C. Limited, (ILTD Division), Chirala.
2) M/S. RAK Ceramics, Kakinada
3) M/S. Bommidala Bros., Limited, Guntur. (Tobacco Exporters).
4) M/S. Golden Tobacco Co., Limited, Guntur & Branches.
5) M/S. National Seeds Corp., Limited, Vijayawada.
6) M/S. Jayalakshmi Cotton & Oils Limited, Perecherla, Guntur.
7) M/S. G.P. Industries Limited, Chilakalurpet, Guntur Dist.,

33
8) M/S. Dhanalakshmi Cotton & Rice Mills Limited, Chilakalurpet, Guntur Dist.,
9) M/S. Jayalakshmi Tobaccos Limited, Guntur.
10) M/S. Coromandel AgroProducts & Oils Limited, Chirala.
11) M/S. Idupulapadu Spinning Mills Limited, Chilakalurpet.
12) M/S. S.R.M.T. Limited, Visakhapatnam.
13) M/S. K.C.P. Industries Limited, Vuyyuru & Challapalli.
14) M/S. Savani Transport Limited, Vijayawada.
15) M/S. Dolphin Constructions Limited, Visakhapatnam.
16) M/S. VIJAYA TMTLimited, Yanam.
17)M/S. Central Warehousing Corp., Vijayawada.
18)M/S. Kanakadurga Agro Oils Limited, Vijayawada.
19)M/S. M.L.Agro Products Limited, Martur.
20)M/S. Mahi Agro Products Limited, Gundlapalli, Prakasam Dist.
21)M/S. Maddi Lakshmaiah & Co.Limited, Kakinada Port.
22)M/S. Premier Tobacco Packers Limited, Guntur.
23)M/S. Trans Continental Tobacco (India) Pvt Limited, Guntur.
24)M/S. Indian Tobacco Traders, Tangutur, Prakasam Dist.
25)M/S. Anjaneya Storage Complex, Ongole. Prakasam Dist.
26)M/S. A.T.D.C. Limited, Guntur.
27)M/S. Kirby Building Systems India Ltd., Medak Dist.
WORKS EXECUTED:
TAMILNADU, KARNATAKA & ORISSA:
1) M/S. Sundaram Clayton Limited, Chennai.
2) M/s. DELL (India) Limited, Sriperambadur.
3) M/s. Lakshmi Machines and Tools, Coimbature
4) M/S. Sundaram Fastners Limited, Madurai.
5) M/S. Adarsh Vidyalaya, Chennai.
6) M/S. Venkatesh Paper Boards Limited, Udumalpadu, Tamilnadu.
7) M/S. Annamalair Textiles Limited, Dindigul, Tamilnadu.
8) M/S. Golden Tobacco Co.., Limited, Davanagere.
9) M/S. Central Warehousing Corp., Gulbarga.
10) M/S. Central Warehousing Corp., Golden Studios, Chennai.
11) M/S. Indian Tobacco Traders, Hunsur, Karnataka.

34
12) M/S. K.S. Subbaiah Pillai & Co., Limited, Hosur Road, Bangalore.
13) M/S. Indian Oil Corporation Godowns, (Sri Cherukuru Ramarao), Chennai.
14) M/S. Virat Crane Agritech Limited, Berhampur, Orissa.
13) M/S. Golden Tobacco co Limited, Hebbalu, Devanagere, Karnataka.
15) M/s. Lloyd Insulations India Ltd, Chennai
MANUFACTURING PROCESS
PRODUCTS:
M/s. VIJAY TMT Private Limited is the pioneer and Leader in the field of
Pre-Engineered Building Systems and Structures in Andhra Pradesh. We offer high
quality of widest product range, unmatched quality at Highly Competitive Prices.
We provide comprehensive solutions to industrial & commercial projects including
Designing, Fabrication, Supply, and Erection.
STRUCTURES:
We purchase Steel Tubes, M.S Angles, H.R Coils, H.R Sheets, M.S Plates,
H.R Plates, M.S Sheets etc., as Raw Material. These items will be undergoing the
process of cutting, putting holes, welding etc., with the help of Machinery support
available at our work shop, as per the designs prescribed by our in house drawings
department or as per the drawing provided by the client, as the case may be .
Structures of different kinds such as Pre-fabricated Building System Structures or
Pipe Structures so manufactured/ Fabricated will be tested for quality by Quality
control department by applying Dye-Penetration Test and Radiography Test. We also
conduct the x-ray test on the important components of structures of vital kind. Final
Structures will be coated with Red Oxide and Paints as required by the customer and
the same will be dispatched by Trolleys to the work sites, where they are supposed
to be erected.
ROOFING SHEET:
We also manufacture Profiled Color Coated and galvanized roofing sheet.
Our peculiarity is that we can manufacture the sheets to any length without any
jointing. As per this feature there will not be any leakages or jointing costs towards
bolts or labor.
OTHER MATERIALS AND TURBO VENTILATORS:
Insulation is the hot subject in the Market. In order to maintain weather
condition comfortable and not to allow the heat inside the room Insulations/Puff

35
material will be used. This is a pure bought out item. Similarly Ventilators will be
fixed on the top of the roof to send out the hot vapors so generated in the room area
without incurring the Exhauster Fan’s capital cost and recurring cost of Power to
run, in addition to pretty look.
ERECTION:
Thus the Structure, Sheets, Insulation Material and Turbo Ventilator will be
sent to proposed site. They will be assembled and fixed with elegant and good
outlook.
Ours is the ISO 9001:2008 Company and structures manufactured by us
confirm Standards: I.S 10748, I.S 226 and ASTM A 36.

MANAGEMENT
Sri P.SIVA RAMA KRISHNA Sri P. Siva.Rama Krishna is the eldest son of
Sri Koganti Satyam and associated with Sri Koganti Satyam for over 3 decades at
work shop as well as work sites. Same contacts with the business circles and
associates are being continued with the same spirit. Inquiries and Order book
positions are very comfortable and in fact increased as being reflected in Turnover.
Import of key machinery is another key managerial decision from the cost effective
country China with the innovative spirit of Sri P. Siva Rama Krishna, so that the cost
of production and margin are comfortable.
Sri M Ram Prasad is Graduate in Commerce and having good experience in
Iron and structural fabrication field. His leadership and professional Management
and blessings in the project are the real assets to the firm and it is sure in his
participation the leadership firm will grow to the new heights. He is taking care of
all the Production, Planning, Finance and marketing aspects.
Sri P. VENKATESWARA RAO Sri P. Venkateswara Rao is a Graduate in
Management (M.B.A) from Nagarjuna University and is the brother of Sri. M Ram
Prasad His was vested with the responsibility to take care the works under execution
at various sites and to co-ordinate timely supply of men, material and all other
aspects that are required to complete the work as per the schedule.
Sri Venkateswara Rao is having high degree of specialization skills in Human
Resources, which is required to complete the project with the vital role of labour, which
is a key factor now days. His association with the Company is valued one.

36
It is the right time and place to disclose the presence of such experienced
team of experts to continue the traditional methods, systems and business circles to
work hard and promote the Productive Activity, which will not only generate profits
alone but also employment, local production of quality materials, at best possible
competitive prices.

INFRASTRUCTURE
LOCATION:
The location of the Company was well located on the National High Way
No: 5, at VIJAYAWADA. Company is enjoying almost 3 acres of land belongs to
promoters at nominal lease, at the above location and having convenient sheds and
area for fabrication. Unit is possessing excellent machinery that is enough flexible to
cater the fabrication needs and different clientle. Newly added Roofing sheets, are
adding further glitters with low cost of production. The Land is situated on N.H No:
5. itself and close to Vijayawada. Vijayawada is the Trading Centers in the State of
Andhra Pradesh for all kinds of commodities, Construction materials and for other
Industrial Products. Activity of I.T Park, SEZ are located near by to this place say
below 5 KMs. Airport is close enough at 5 K.Ms. Present location is ideal and
convenient to locate centrally and to cater the local needs with low transport costs
with the surrounded best greenery. The Company is provided with wide roads and
need not incur any expenditure towards development of roads. The existing Land is
sufficient for the present scale of setup and the land is widely available in the event
of future expansion, after achieving substantial constructive growth. And the
Location is most suitable for implementation of the Project for manufacture of all
types of Heavy Structural Fabrications.
WATER:
“Water“as it is do not participate in the manufactu ring process. Hence no huge
quantum of water is required either at present or nearby future. Requirement of water is
confined to cleaning or for general sanitation only. Total Water requirement per day is
about 3000 Liters. Water table is good in this Area, which is in the Krishna Basin and
the Water is potable. Ground water is abundantly available at this location and from
which we can draw water in addition to provision by way of a Pond for storing Water is
available at the premises, so that there no problem for water even in hot summer. As
being experiencing since past 5 years, no problems is envisaged for

37
meeting the requirement of water for Industrial as well as for domestic purposes of
the Unit.
POWER:
At the Engineering Industry of our nature, power is required to run the
machinery to cut/shape/weld/fabricate the Iron/Steel as per the designs that suits to
the need/location of the customer. Power is required can be drawn from APSEB.
Key success of a structure depends on the design, and selection of suitable option to
use the machinery, that can give desired results. Now a days there is a lot of craze
for the excellent looking shape of Shed that may be office/factory. Even in power cut
times, Unit can conveniently depend on APSEB for its Power requirement for
fabrication, by adopting suitable planning and sequence in designs.
RAW MATERIALS:
The Unit requires different sizes and kinds of Plates, Pipes, H.R Coil Sheets,
Rounds, Flats, Squares and other similar products as demanded by the Market. At
present the Company is able to produce 12000 Mt. of pre-fabricated building
systems, for which the major Raw material “Steel”, which is abundantly available at
Vijayawada and surrounding, places. Vizag Steel, Essar Steels and Tata Steels are
the quality suppliers in addition to Locally made re-rolled and local brands. It is
estimated that about 100000 tons of Steel per day is being traded at Vijayawada
alone. The Unit’s requirement can easily be procured at Vijayawada. No problems
are envisaged in obtaining the iron and other consumables.
TRANSPORTATION:
The Factory is situated in the main heart land of Industries, which was
supported with good roads, hence Transportation was developed hence no problems
are expected in this area. The Factory is well connected by Rail, Road to all parts of
the State. There is no problem for transportation of Raw materials to the Factory and
for marketing of finished product.
WASTAGE/EFFLUENT GENERATION:
Scrap results in the process of cutting the Steel, which can be sold in the open
market. This fabrication waste is Hot in market and will move very fast, in view of its
quality rather than Commercial Scrap available in market. Rolling mills prefer to use
this Heavy quality, in view of its quality. About 2% quantity of Scrap comes out of

38
manufacturing process every day and the same will be disposed off by way of sale
by the Company. No effluent or pollution will be emitted during the process.
LABOUR:
Both Skilled and Un-skilled Labour are required for the Industry. At the Core
Areas like drawing the program Company is having its regular personnel on rolls. In
respect of carrying out the designed program at the major areas we have our staff on
rolls. Balance Labor will be employed through contractors. Fabrication batches /
workers are available “Contract Basis” for fabricat ion as well as erection. The
sturdy Labour from Bihar, Tamilnadu and Orissa comes in batches in addition to our
local labour force. Loading and un-loading operations will be taken care by the
Cranes. We have 3 Nos. of cranes to meet the unloading, internal movement and
loading of the materials. Labour forces are available in respect of activities like
Parlin designing, feeding the same to the Cold Forming Machine etc.
DESIGNING:
Just like building plans, structural works will be designed keeping in view
the Wind Preassure in the specified location, moisture content in the air (higher in
case of costal or sea/river ends) and soil conditions. Loose soil requires cautious
designing and consumes more material whereas the hard or hill soil consumes less
quantity of foundations and provides better cost effectiveness.
Success of our VIJAYTMT is its design engineering. We have qualified and
well experienced staffs, who are working on these areas regularly, in addition to
consultants at Hyderabad.
Design provides excellent look in addition to strength.
All the newly paved settings are having excellent crimping, and generating
further inquiries.

39
DIFFERENT KINDS OF MACHINERY FACILIES AVAILABLE AT OUR WORK SHOP:
Sl. Name of the Machine Quantity
1 Farming Machine with Cutter 1 No.
2 Air Compressors 3 Nos.
3 Pipe Cutting Machines 2 Nos.
4 Shearing Machine ( Metres) 1 No.
5 Diesel Generator - 125 KVA 1 No.
6 Hacksaw Cutting Machine 1 No.
7 Hydraulic Punching Machine (Rod Cutting) 1 No.
8 Hydraulic Bending Machine 1 No.
9 Bench Grinding Machines 2 Nos.
10 Power Pressing Machines 1 No.
11 Threading Machine 1 No.
12 Teeth Grinding Machine 1 No.
13 Bench Vice 2 Nos.
14 Hydraulic Punching Machine (Rod Cutting & Punching) 1 No.
15 Vertical Drilling Machine 1 No.
16 Radial Drilling Machine 1 No.
17 Mechanical Drilling Machines 2 Nos.
18 Drilling Machine 1 No.
19 Bench Drilling Machines 2 Nos.
20 Milling Machines 1 No.
21 Hand Drilling Machine 1 No.
22 Magnet Drilling Machine 3 Nos.
23 MIG Welding Machine 13 Nos.
24 Rectifiers 6 Nos.
25 Arc Welding Machines 10 Nos.
26 Lathe 1 No.
27 Broch Cutting & Drilling Machines 2 Nos.
28 Pug Cutting Machines 12 Nos.
40
29 Grinding Motors (Big) Angle 9 Nos.
30 Grinding Motors (Small) Angle 5 Nos.
31 Hand Drilling Machine - Big 2 Nos.
32 Sand Blasting Machine 1 No.
33 Die Grinding Machine 1 No.
34 Pneumatic Grinding Machine 2 Nos.
35 Spray Painting Machine 1 Set
36 E.O.T Crane - 7.5 MT 1 No.
37 Hydraulic Punch (Imported) 1 No.
38 Mobile Cranes (11 Tons) 1 No.
39 Mobile Cranes (12 Tons) 2 Nos.
40 Roll Forming Mill - Sheet Profiling Machine 1 No.
41 Z' Purlin Mill/Folding Machine 1 No.
42 Beam Welding Line Machine 1 No.
MARKET:
By virtue of hailing from the family of structural engineering, The Managing
Director of the Company Sri P. Siva Rama Krishna, being the heir or Sri VIJAYTMT
Gopala Rao, is having good image and introduction in the Business Circles. When the
Quality was given prime importance it became the Success secret of the company.
This is Core Sector and Sensitive Commodity. There is vast market for the
Steel Industry with the present trend of encouraging Industrial Development. Many
SEZs are granted and about to commence their activities. Huge quantity of steel is in
Demand for the Irrigation and other Major projects as proposed by the present
Governments in addition to various schemes of residences to the poor.
The Company is taking up Heavy structural fabrication alone now, in spite of
many activities narrated. Production per day during First, Second, Third and
subsequent years of operation, which will be Fabricated for the Regular Clientle
Industries/ Mills in the State or to the New Enterprises are conservatively shown.
The main advantage for this Unit is the Low Cost of Production due to locational
advantage and The Unit also enjoys the advantage of Low cost of Transportation of its
Raw Material as well as Finished Products. Also. The vast experience in construction
Industry of Sri P. Siva Rama Krishna, Managing Partner is the added flavour to the
Company to get new orders to the Unit. As per the inquiries

41
and estimations being received, there are enough orders to make a good beginning
and we are the trend setters and price deciders in the market, in view of above
merits. This will be an added advantageous position in the markets. The Economical
Cost of Production coupled with good demand for the fabrication enable the
Company to market its Products on Sound Lines.

42
CHAPTER - IV

43
WORKING CAPITAL MANAGEMENT
DEFINITION
According to Ralph Kennedy and Steward Mc Muller, “ a study of working
capital is of major importance to internal and external analysis because of its close
relationship with the current day to day operations of business”.
According to Shubin “working capital is the amount of funds necessary to cover the
cost of operating the enterprise”
Capital required for the business is divided into two aspects. They are
1. Fixed capital
2. Working capital
1. FIXED CAPITAL
It is the amount of money required to maintain the fixed assets of the concern.
2. WORKING CAPITAL
The amount of money required to meet day to day transactions of the business is
termed as working capital.
MEANING
Working capital refers to the funds invested in current assets i.e. investment
in stocks, sundry debtors, cash and other current assets. Current assets are essential
to use fixed assets profitably. For example, a machine cannot be used without raw
material. Thus, it is obvious that certain amount of funds is always tied up in raw
materials and work in progress, finished goods. However, the business also enjoys
credit facilities from its suppliers who may supply raw materials on credit and the
firm may not pay immediately all expenses. Therefore, certain amount of funds is
automatically available to finance the current assets requirements. However, the
requirements for current assets are usually greater than the amount of funds payable
through current liabilities. In other words, current assets are to be kept at a higher
level than the current liabilities.
CONCEPTS OF WORKING CAPITAL
The concepts of working capital are:
1. Gross working capital
2. Net working capital

44
1. GROSS WORKING CAPITAL
It refers to the firm’s investment in the current assets. Current assets are the
assets which can be easily converted into cash within one accounting year. The
Gross working capital focuses attention on two aspects of assets management.
a. The way to optimize the investment in current assets.
b. The opportunity to finance the current assets.
2. NET WORKING CAPITAL
It is excess of current assets over the current liabilities. Current liabilities are
those claims of outsiders which are expected to mature for payment within one
accounting year. Net working capital can be positive or negative. A positive net
working capital indicates the excess of current liabilities over the current assets. Net
working capital is a qualitative concept and indicates the liquidity position of the
firm. It suggests the extent to which the working capital may be financed by
permanent source of funds.
APPROACHES OF WORKING CAPITAL
Depending upon the mix of the short and long term financing, the approach
followed by any company fall under these 3 categories;
1. Conservative approach
2. Aggressive approach
3. Sources of working capital
1. CONSERVATIVE APPROACH
In this approach the financing of permanent assets and a part of temporary
current assets is done with the long term financing. When there is no need of
temporary current assets the idle amount of long term financing can be invested in
the tradable securities and conserve liquidity.
2. AGGRESSIVE APPROACH
In this approach the short term financing is used more to finance a part of its
permanent current assets. Some times in a more aggressive way the short term
financing is used for financing the fixed assets.
3. SOURCES OF WORKING CAPITAL
The sources of financing for working capital are of two types. They are
permanent and temporary sources of working capital. The working capital investment in
minimum level of current assets is permanent working capital. The working capital

45
to meet the seasonal contingencies is called temporary or variable working capital.
The fixed proportion of working capital should be generally financed from the fixed
capital sources while the temporary or variable working capital requirements of a
concern from the short term sources of finance.
PERMANENT SOURCES OF WORKING CAPITAL
The permanent working capital source of finance is having an uninterrupted
finance for a long period. There are 5 important sources of permanent working
capital.
They are:
1. Shares
2. Debentures
3. Public Deposits
4. Ploughing back of profits
5. Loans from Financial Institutions
1. SHARES
Generally a company should raise the maximum amount of working capital
by issue of shares. The preference shares carry a preferential right in respect of
dividend at a fixed rate. An equity share does not have such obligation. A company
should not issue deferred shares according to the companies act.
2. DEBENTURES
Debentures are an instrument issued by the company acknowledging its debt
to the holder. A fixed rate of interest is paid on the debentures secured or paid in
prior to the unsecured debenture holders. The company enjoys benefits.
3. PUBLIC DEPOSITS
They are the fixed deposits accepted by the business directly from the public.
It has both advantages and rangers. The R.B.I has also laid down certain limits on
the non-banking concerns.
4. PLOUGHING BACK OF PROFITS
It is an internal source of financing and reinvestment of the surplus earnings
of the business. It is the cheapest and cost free of finance. Excessive resort to
ploughing back of profits leads to over capitalization and speculation.

46
5. LOANS FROM FINANCIAL INSTITUTIONS
Financial institutions like commercial banks, IFCI, LIC provide short term,
medium, long term source of finance suitable to meet the demands working capital. A
fixed rate of interest is charged against such loans and is paid by way of installments.
TEMPORARY SOURCES OF WORKING CAPITAL
The temporary sources of working capital are
1. Indigenous Bankers. 6. Accrued Credits
2. Trade Credit 7. Deferred Expenses
3. Installment Credit 8. Commercial Paper
4. Advances 9. Commercial Banks

5. Accounts Receivable Credit


1. COMMERCIAL BANKS
The commercial banks are the most important short term source of finance
that provides, the major part of working capital loans. The different forms in which
the banks normally provide loans and advances are- loans, cash credits, overdrafts,
purchasing, and discounting of bills.
The working capital management or short term financing management is
concerned with decisions relating to current assets and current liabilities. The key
difference between long term financial management and short term financial
management is in terms of timing of cash. Long term financial decisions involve
cash flow to an extended period of time (5-15 years/more); short term financial
decisions typically involve cash flows with in operation cycle of the firm of the
working capital management is the significant fact of the financial management
2. TRADE CREDIT
It is the credit extended by the suppliers of the goods and the normal course
of business. The credit worthiness of a firm and the confidence of its suppliers are
the main basis of securing trade credit. There are some advantages such as
convenient method of finance, flexibility as the credit increases.
3. INSTALLMENT CREDIT
In this method the assets are purchased and the possession of goods is taken
immediately but the payment is made in installments over a predetermined period of
time.

47
4. ADVANCES
Firms having loan predicting cycle take advances from their customers and
agents against their orders. This act as a cheap source of finance and minimizes their
investment in working capital.
5. ACCOUNTS RECEIVABLE CREDIT
It is the services offered to manage the financing of debts arising out of the
credit sales. This service is no dew available in India only on resource basis. It has
certain limitations such as the cost of factoring is high Perception of financial
weakness about the firm availing these services.
6. ACCRUED EXPENSES
These are the expenses, which have incurred but not yet paid. It varies with
the change in the level the activity of the firm. The frequency and magnitude of
accruals is beyond the control of the management.
7. PREFERRED INCOMES
These are the funds are incomes received by the firm for which it has to
supply goods in future. These funds increase the liquidity of a firm and constitute an
important source of short term finance.
8. COMMERCIAL PAPER
It is unsecured promissory notes issued by the firms to raise short term funds.
The maturity period of a commercial paper ranges from 91 to 180 days. The
drawback is that it can be reduced only after the maturity date.
PRINCIPLES OF WORKING CAPITAL MANAGEMENT
In examining the management of current assets certain principles have to
born in the mind. These principles are the answers that are to be sought to the
following questions.
1) The needs of invest funds in the current assets.
2) Amount of funds to be invested in each type of current assets.
3) The required proportion of the long term funds to finance current assets.
4) The appropriate sources of funds needed to finance the current assets

48
3.1 Constituents of Current Assets and Current Liabilities
Current Assets Current Liabilities
Inventories Sundry creditors
Raw Material components Trade advances
Work in progress Borrowings
Finished goods Commercial banks
Others Others
Trade Debtors Provisions
Loans and advances
Investments
Cash and bank balances

OBJECTIVES OR NEED OF WORKING CAPITAL


The need for working capital cannot be emphasized. Every business needs
some amount of working capital. The need for working capital arises due to the time
gap between production and realization of cash from sales. It requires
1. For the purchase of materials, components and spares.
2. To pay wages and salaries.
3. To incur day-to-day expenses and overheads such as fuel, power and
office expenses etc.
4. To meet the selling costs as packing, advertising etc.
5. To provide credit facilities to the customers.
6. To maintain the inventories of raw materials, work in progress, stores,
spares, and finished stock.
IMPORTANCE OF WORKING CAPITAL
Working capital is just like the heart of the business. If it becomes weak; the
business can hardly prosper and service. It is an index of solvency of a concern. Its
proper circulation provides to the business the right amount of cash to maintain in
business. Without adequate amount of working capital, production interruption may
take place and results in reduction of profit. Just as circulation of blood is very
necessary in human body to maintain life, smooth flow or circulation of working
capital is necessary to the health of the enterprise. “The prime object of management
is to make profit whether or not this is accomplished in most business depends
largely in the manner in which the working capital is administered.

49
ADVANTAGES OF ADEQUATE WORKING CAPITAL
The main advantages of maintaining adequate amount of working capital are
as follows:-
1. Good solvency position in the business
2. Goodwill, it is easy to get loans
3. Cash discounts
4. Regular supply of raw materials
5. Regular payment of salaries, wages and other day to day commitments
6. Exploitation of favorable market conditions
7. Ability to face crisis
8. Quick and regular return on investment
9. High morale
DISADVANTAGES OF EXCESSIVE WORKING CAPITAL
1. Excessive working capital means idle funds, which earn no profit for the
business, and hence the business cannot earn a proper rate of return on its
investment.
2. Where there is a redundant working capital, it may lead to unnecessary
purchasing and accumulation of inventories causing more chances of theft,
waste and losses.
3. Excessive working capital implies excessive debtors and defective credit
policy, which may cause higher incidence of bad debts.
4. It may result in overall inefficiency in the organization.
5. When there is excessive working capital, relations with banks and other
financial institutions may not be maintained.
6. Due to low rate of return on investments the value of shares may also fall.
7. The redundant working capital gives rise to speculative transactions.
FACTORS DETERMINING THE WORKING CAPITAL REQUIREMENTS
A firm should plan its operations in such a way that it should have neither too
much nor too little working capital. The working capital requirements are
determined by a wide variety of factors.
1. NATURE AND SIZE OF BUSINESS:
Working capital requirements of a firm are influenced by the nature of its
business. Trading and financial firms have a very small investment in fixed assets, but

50
require a large sum of money to be invested in working capital. Whereas public
utilities have a very limited, need for working capital and have to invest abundantly
in fixed assets. Their working capital requirements are nominal because they may
have cash sales only and supply services but not products. Working capital needs of
most manufacturing concerns fall between too extreme requirements of trading firms
and public utilities. Such concerns have to make adequate investments in current
assets depending upon the total assets structure and other variables. The size of the
business that is measured in terms of scale of operations also has an impact on the
working capital needs.
2. MANUFACTURING CYCLE
The manufacturing cycle comprises of the purchase and use of raw material
in the production of finished goods. As the
firm’s manufacturing cycle is lengthy, the working capital requirement of the
firm is large.
3. SALES GROWTH
The working capital needs of firm increase as its sales grow. Current assets
will have to be employed before growth takes place. A growing firm needs to invest
funds in fixed assets in order to sustain its growing production and sales. This in turn
increase investment in current assets to support enlarged scale of operations, A
growing firm needs funds continuously.
4. DEMAND CONDITIONS
The business variations such as seasonal and cyclical fluctuations in the
demand for products and services affect the working capital requirements. When
there is an upward swing in the economy, sales will increase. Correspondingly, the
firm’s investment in inventories and book debts will also increase. During boom,
additional investments in fixed assets may be made by some firms to increase their
productive capacity. These act as further additions to working capital.
5. PRODUCTION POLICY
To reduce working capital problems arising due to changes in demand for the
firm’s products, a steady production policy may be maintained. If the firm’s
productive capacities can be utilized for manufacturing varied products, it can have
the advantage of diversified activities and solve its working capital problems.

51
6. PRICE LEVEL CHANGES
Generally, rising price levels will require a firm to maintain
higher amount of working capital. However, companies, which can immediately
revise their product prices with rising price levels, will not face a severe working
capital problem.
7. OPERATING EFFICIENCY AND PERFORMANCE
The operating efficiency of the firm relates to the optimum utilization of
resources at minimum costs. The use of working capital is improved and the pace of
cash cycle is accelerated with operating efficiency .Better utilization of resources
improves profitability and thus helps in decreasing the pressure on working capital.
A high net profit margin contributes towards the working capital pool. In fact, the
net profit is a source of working capital to the extent it has been earned in cash. A
firm can enhance its working capital funds by saving taxes through appropriate tax
planning.
8. FIRM’S CREDIT POLICY
The credit policy of the firm affects working capital by influencing the level
of book debts. The credit terms to be granted to customers may depend upon norms
of the industry to which the firm belongs. The firm should be discretionary in
generating credit terms to its customer. Depending upon the individual case different
terms may be given to different customer’s .A liberal credit policy without rating the
credit worthiness of customers will be detrimental to the firm and will create a
problem for collecting funds later on. Slack collection procedures result in increase
of book debts. The firm should follow a rationalized credit policy based on the credit
standing of customers and other relevant factors.
SHORT LIFE SPAN AND SWIFT TRANSFORMATION
In management of working capital two characteristics of current assets must
be born in mind.
· Short life span
· Swift transformation into other asset form.
Current assets have a short life span cash balances are held idle for a week or
two, Accounts receivable may have a life span of 30 to 60 days, and inventories may
be held for 30 to 100 days. The life span of current assets depends upon the time

52
required in the activities of procurement, production, sales and collection and the
degree of synchronization among them.
The nature of current assets is that they are swiftly transformed into other
assets form. Cash is used for acquiring raw materials. Raw materials are transformed
into finished goods, finished goods are generally sold on credit, credit into accounts
receivable. Finally accounts receivable on realization generate cash.
The swift transformation of current assets and the short life span of the
components of working capital can be seen in the current asset cycle. However, this
short life span and swift transformation has certain implications.

Decisions relating to working capital management are repetitive and


frequent.
The difference between profits and present value is insignificant.
The interaction among working capital components implies that
efficient management of one component cannot be undertaken without
simultaneous consideration of other components.

CYCLE AND CASH CYCLE


Investment in working capital is influenced by 4 key events in the production
and sales cycle of the company.

53
1. Purchase of Raw material
2. Payment of Raw material
3. Sale of finished goods
4. Collection of cash for sales
These key events affect the cash flow. The firm begins with the purchase of
raw material, which is paid after a delay, and which represents the accounts payable
period. Customers pay their bills sometimes after the sales period that elapses
between the date of sales and the date of collection of receivables is the accounts
payable period.
OPERATING CYCLE
The time that elapses between the purchase of raw materials and the
collection of cash for sales is referred as operating cycle. The operating cycle is the
sum of the inventory period and the accounts receivable period.The behavior of the
overall operating cycle and its individual components of a firm are monitored
through time series analysis and cross section analysis. In the Time series analysis
the duration of the operating cycle and its individual components is compared over a
period of time for the same firm. In the cross section analysis the duration of the
period cycle and its individual components is compared with that of the other firms
of a comparable nature.
The operating cycle of the firm begins with Acquisition of raw materials and
ends with the collection of receivables. It may be divided into 4 stages.
1. Raw material and stores stage
2. Work in progress stage
3. Finished goods, inventory stage
4. Debtors collection stage

54
Order placed Cash received
Stock arrives

Inventory Accounts
Period Receivable

Period
Firms receive invoice Accounts
Payable
Period
Cash paid for materials
Operating cycle
Cash cycle

USES OF OPERATING CYCLE


The operating cycle is helpful to the company in 2 ways.
1. It helps in forecasting working capital requirements.
2. Control of working capital can be done efficiently by the use of operating
cycle.
DETERMINATION OF THE LENGTH OF OPERATING CYCLE
The length of the operating cycle of a manufacturing firm is
1. Inventory conversion period
2. Book debts conversion period
1) INVENTORY CONVERSION METHOD
It is the total time needed for producing and selling the product. It includes
the Raw material conversion period, work-in-progress, conversion period and the
finished goods conversion period.
2) BOOK DEBTS CONVERSION PERIOD
The book debts conversion period is the time required to collect outstanding
amount from the customers. The total of inventory conversion period and book debts

55
conversion period is the gross operating cycle. The difference operating cycle and
the payable deferral period is net operating cycle.
3) CASH CYCLE
Cash cycle is the length between the payment for raw material purchases and
collection for sales. Cash cycle is equal to the operating cycle less the accounts
payable period. It also represents time interval over which additional funds called
working capital should be obtained in order to carry out the company operations. If
depreciation is excluded from expenses in computation of operating cycle, the next
operating cycle also represents cash conversion cycle.
CASH MANAGEMENT
Cash the most liquid asset, is of vital importance to the daily operations of
the company. Cash management is concerned with the management of
1. Cash flows into and out of the firm
2. Cash flow within the firm
3. Cash balance held by the firm at a point of time by financing deficit or
investing surplus cash.

Collections

Information Borrow for


and control invest
Payments

Cash Management Cycle

Sales generate cash, which has to be disturbed out. The surplus cash has to be
invested while deficit has to be borrowed. Cash management seems to accomplish
this cycle at minimum cost. At the same time, it also seeks to achieve liquidity and
control. The management of cash is important because it is difficult to predict cash

56
flows accurately. Particularly the inflows and that there is no perfect coincidence
between the inflows and outflows of the cash.
In order to resolve the uncertainties about the cash flows, the firms should
develop appropriate strategies for cash management. The firm should evolve
strategies regarding the following four facts of cash management. They are

1. CASH PLANNING
Cash flows and outflows should be planned to project cash surplus or deficit
for each period of the planning period.

2. MANAGING THE CASH FLOWS


The flow of cash should be properly managed.
3. OPTIMUM CASH LEVEL
The firm should decide about the appropriate level of cash balances.
4. INVESTING SURPLUS CASH
The surplus cash balances should be properly invested to earn profits.
MOTIVES FOR HOLDING CASH
There are three possible motives for holding cash.
Transactive
Precautionary
Speculative
TRANSITIVE MOTIVE
Firms need cash to meet their transaction needs. The collection of cash is not
perfectly synchronized with the disbursement of cash. Hence, some cash balance is
required as a buffer.
PRECAUTIONARY MOTIVE
There may be uncertainty about the magnitude and timing of cash flows from
sale of goods and services, sale of assets, and issuance of securities. To protect it
against such uncertainties, a firm may require some cash balance.
SPECULATIVE MOTIVE
Firms would like to tap profit making opportunities arising from fluctuations
in commodity prices, interest rates, and foreign exchange rates. A cash rich firm is

57
better prepared to exploit such bargains. Hence the financial manager should
establish reliable forecasting and reporting system improve cash collections and
disbursements and achieve optimal conservations and utilization of funds.
CASH BUDGETING
Cash budgeting or short term cash forecasting is the principle tool of cash
management. Cash budgets, routinely prepared by business firms are helpful in
Estimating cash requirements.
Planning short term financing.
Scheduling payments in connection with capital expenditure
projects. Planning purchases of material.
Developing credit policies.
The principle method of short term cash forecasting the receipts and
payments method, sometimes the adjusted net income method is used though this
method is employed mainly for long-term cash forecasting.
LONG TERM CASH FORECASTING
Long term forecasts are generally prepared for a period ranging from two to
five years and serve to provide a broad brush picture a firms financing needs and
availability of invest file surplus in the future. The receipts and disbursements
method is used for preparing the long term cash forecast.
MONITORING COLLECTIONS AND RECEIVABLES
The efficiency of cash management can be enhanced by properly monitoring
the collections and disbursements. The following are useful.
PROMPT BILLING
By preparing and sending the bills promptly, a firm can ensure remittance. It
should be realized that it is in the area of billing that the company’s control is high
and there is an opportunity to free up cash. To tap this opportunity the treasurer
should work with the controller and others in accelerating invoice date, mailing bills
promptly, and identifying payment locations.
CONTROL PAYABLES
When a firm issued a cheque is reduces in balances in its book, the balance in
the bank book is not reduced till the bank makes the payment.
The amount of cheques issued by the company but not paid for by the referred to
as the ‘payment float’, the amount of cheques de posited by the firm in the bank but

58
not cleared is referred to as the ‘collection float’. The difference between “payment
float and collection float is referred to as Net float”.
When the Net float is positive the balance in the books of the bank is higher
than the balance in the books is less than the balance in the books of the firm. As
long as the books of the bank show a positive balance, a negative cash balance in the
books of the firm may not be viewed with alarm. If a firm enjoys a positive net float
it may issue cheques even if it means having an over draft. Such an action referred
to as “playing the float”.
OPTIMAL CASH BALANCE
If a firm maintains a small cash balance it has to sell its marketable securities
more frequently than if it holds a large cash balance. Hence, the trading or transaction
costs will tend to diminish if the cash balance becomes larger. However, the opportunity
costs of maintaining cash rise as the cash balance increases. The optimal cash balance is
one where the total cost of holding cash (which consists of trading costs and opportunity
costs) are at minimum for at a particular size of cash balances.
CONTROL OF ACCOUNT RECEIVABLES
Traditionally two methods have been commonly suggested for monitoring
accounts receivables.
1. Days sales outstanding
2. Ageing schedule
Day’s sales outstanding at a given time may be defined as the ratio of the
accounts receivables outstanding at that time to average daily sales figures during
receiving 30 days, 60 days and 90 days.
The ageing schedule classifies outstanding account receivable at a given
point of time into different age brackets.
The actual as is compared with standard as to determine whether accounts
receivable are in control.
Credit management in practice needs to be strengthened along several lines.
1. Explicit articulation of credit policy.
2. Better coordination between sales, production & finance departments.
3. A well defined collection programme.

59
CHAPTER - V

60
DATA ANALYSIS AND INTERPRETATION
TABLE4.1.A
CHANGES IN WORKING CAPITAL FOR THE YEAR 2012-13
(Rs in’ lakhs)
PARTICULARS 2012 2013 INCREASE DECREASE
Current Asset
Inventories 3849.09 4333.89 484.80 ….

Debtors 3227.02 2620.87 ….


606.15

Cash and Bank 979.44 1053.99 74.55 ….

Interest Accrued on

Deposits & 117.54 144.56 27.02 ….


Investments

Total Current Assets 8173.09 8153.31


(A)

Current Liabilities

Current Liabilities 2524.01 2699.31 ….


175.3

Provisions 329.27 517.04 ….


187.77

Total Current 2853.28 3216.35


Liabilities (B)

Net Working Capital 5319.81 4936.96


(A-B)

Decrease in Working 382.85 382.85


capital

Total 5319.81 5319.81 969.22 969.22

SOURCES: COMPANY ANNUAL REPORTS

61
TABLE4.1.B
CHANGES IN WORKING CAPITAL FOR THE YEAR 2013-14
(Rs. In’ lakhs )
PARTICULAR 2013 2014 INCREASE DECREASE
S

Current Asset

Inventories 4333.89 510.35 676.46 ….

Debtors 2620.87 3378.97 758.10 ….

Cash and Bank 1053.99 845.93 …. 208.06

Interest Accrued
on

Deposits & 144.56 189.30 44.74 ….


Investments

Total Current 8153.31 9424.54


Assets (A)

Current
Liabilities

Current 2699.31 3558.35 …. 859.04


Liabilities

Provisions 517.04 342.55 174.49 ….

Total Current 3216.35 3900.90


Liabilities (B)

Net Working 4936.96 5523.64


Capital (A-B)

Increase in 586.68
Working capital

Total 5523.64 5523.64 1653.79 1653.79

SOURCES:COMPANY ANNUAL REPORTS

62
TABLE4.1.C
CHANGES IN WORKING CAPITAL FOR THE YEAR 2014-15
(Rs. In’ lakhs)
PARTICULARS 2014 2015 INCREASE DECREASE

Current Asset

Inventories 510.35 4390.10 …. 620.25

Debtors 3378.97 2596.89 …. 782.08

Cash and Bank 845.93 965.14 119.21 ….

Interest Accrued on

Deposits & 189.30 227.71 38.41 ….


Investments

Total Current Assets 9424.54 8179.84


(A)

Current Liabilities

Current Liabilities 3558.35 3713.57 …. 155.22

Provisions 342.55 115.01 227.54 ….

Total Current 3900.90 3828.58


Liabilities (B)

Net Working Capital 5523.64 4351.26


(A-B)

Decrease in Working 1172.38 1172.38


capital

Total 5523.64 5523.64 1557.54 1557.55

SOURCES:COMPANY ANNUAL REPORTS

63
TABLE4.1.D
CHANGES IN WORKING CAPITAL FOR THE YEAR 2015-16
(Rs. In’ lakhs)
PARTICULARS 2015 2016 INCREASE DECREASE

Current Asset

Inventories 4390.10 3233.11 …. 1156.99

Debtors 2596.89 2646.55 49.66 ….

Cash and Bank 965.14 1247.54 282.4 ….

Interest Accrued on

Deposits & 227.71 248.38 …. 29.33


Investments

Total Current Assets 8179.84 7375.58


(A)

Current Liabilities

Current Liabilities 3713.57 2710.55 1003.02 ….

Provisions 115.01 114.91 0.1 ….

Total Current 3828.58 2825.46


Liabilities (B)

Net Working Capital 4351.26 4550.12


(A-B)

Increase in Working 198.86 198.86


capital

Total 4550.12 4550.12 1335.18 1335.18

SOURCES:COMPANY ANNUAL REPORTS

64
TABLE4.1.E
CHANGES IN WORKING CAPITAL FOR THE YEAR 2016-17
(Rs. In’ lakh)
PARTICULARS 2016 2017 INCREASE DECREASE

Current Asset

Inventories 3233.11 3589.72 356.61 ….

Debtors 2646.55 3148.81 502.26 ….

Cash and Bank 1247.54 897.97 …. 349.57

Interest Accrued on

Deposits & 248.38 32.18 …. 216.2


Investments

Total Current Assets 7375.58 7668.68


(A)

Current Liabilities

Current Liabilities 2710.55 3307.03 …. 596.48

Provisions 114.91 88.19 26.72 ….

Total Current 2825.46 3395.22


Liabilities (B)

Net Working Capital 4550.12 4273.46


(A-B)

Decrease in Working 276.66 276.66


capital

Total 4550.12 4550.12 1162.25 1162.25

SOURCES:COMPANY ANNUAL REPORTS

65
TABLE4.2
OVERALL CHANGES IN WORKING CAPITAL FROM THE YEAR 2012-13
TO 2016-17
(Rs. In’ lakh)
Year Opening Closing Increase Decrease
Working Working (Rs. In (Rs. In Lakhs)
Capital Capital Lakhs)
(Rs. In (Rs. In Lakhs)
Lakhs)

2012-13 5319.81 4936.96 382.85 ….

2013-14 4936.96 5523.64 586.68 ….

2014-15 5523.64 4351.26 …. 1172.38

2015-16 4351.26 4550.12 198.86 ….

2016-17 4550.12 4273.46 …. 276.66

SOURCES: COMPANY ANNUAL REPORTS


GRAPH 4.1
OVERALL CHANGES IN WORKING CAPITAL

1400
1172.38
1200
Increase
1000
(Rs.in
800 lakh's)
Decrease
586.68
600 (Rs.in
lakh's)
382.85
400 276.66

200 198.86

2012-13 2013-14 2014-152015-162016-17


2010-11 2011-12 2012-13 2013-14 2014-15

66
INTREPRETATION:-
Table 4.2 explains the trend of working capital in the past five years. Here the
networking capital means the excess of current liabilities. In the above table the net
working capital is fluctuating arbitrarily from year to year.
In the year 2012-13, the net working capital showing a increasing trend
which due to decrease of low level of average collection period of receivable and a
corresponding increase in the average payment period. In this year the cash and bank
has shown more than proportionate increase than that of previous year.
In the year 2012-13, & 2013-14 the net working capital showing increasing
trend sue to decrease of average collection period and a corresponding increase in
the average payment period.
In the year 2014-15, the net working capital is showing decreasing trend
which is due to low level of average collection period of receivable i.e., cash
realization period of credit sales but a higher average payment period of payables.

67
TABLE 4.3
CURRENT RATIO:

The Current Ratio is calculated to measure the liquidity position of the


company. The standard norm of this ratio is 2:1 that is for two rupees of Current
Assets there should be one rupee of Current Liabilities.

Current assets
Current ratio= -------------------------
Current liabilities

(Rs. In’ lakh)


YEAR CURRENTS CURRENT RATIO
ASSETS LIABILITIES

2012-13 8153.31 3216.35 2.53


2013-14 9424.54 3900.90 2.41
2014-15 8179.84 3828.58 2.13
2015-16 7375.58 2825.46 2.61
2016-17 7668.68 3395.22 2.25
SOURCES: COMPANY ANNUAL REPORTS

68
GRAPH 4.2
Current Ratio

Ratio
3 2.53 2.41 2.61

2.5 2.13 2.25


2
1.5
1
Ratio
0.5
0
2012-13 2013-14 2014-152015-16 2016-17
2010-11 2011-12 2012-13 2013-14 2014-15

INTREPRETATION:-
Table 4.3 explains the current ratio is a measure of firm’s short-term solvency.
As conventional rules a current ratio of 2:1 is satisfactory.
VIJAYA TMT limited has a current ratio in the year 2012-13 was recorded
2.53and in the year 2013-14 it was 2.41after 2014-15 it was in decreasing trend but
during in the year 2016-17 the ratio is 2.25which is above the standard ratio.

69
TABLE4.4
Quick Ratio
The Quick Ratio is a measure of the firm’s short-term solvency. The standard norm
of this ratio is 1:1 that is for one rupee of Current Asset’s there should be one rupee
of Current Liabilities.

Current assets-stock
Computation Formula = -----------------------------------
Current liabilities
(Rs. In’ lakh)
YEAR QUICK ASSETS CURRENT RATIO
LIABILITIES

2012-13 3066.4 3216.35 0.095

2013-14 3254.80 3900.90 0.083


2014-15 3584.23 3828.58 0.936

2015-16 3878.48 2825.46 1.373


2016-17 3798.28 3395.22 1.118

SOURCES: COMPANY ANNUAL REPORTS

70
GRAPH 4.3
Quick Ratio

Ratio
1.5 1.373
1.118
0.936
1
Ratio
0.5
0.095 0.083
0
2012-13 2013-14 2014-15 2015-16 2016-17
2010-11 2011-12 2012-13 2013-14 2014-15

INTREPRETATION:-
Table4.4 explains the establishes relationship between the quick assets
&current liabilities. As asset is liquid if it can be converted into cash immediately or
reasonably soon without loss of value the accepted standard is 1:1.
The quick ratio of VIJAYA TMT Limited was favorable in the year of 2012-
13 and 2013-14 as 0.095and 0.083, where as in the year of 2013-14, it was in
increased to 0.936 and in the year of 2014-15, it was increased. At last the
company’s overall liquidity position is good.

71
TABLE 4.5
Absolute Liquid Ratio
Absolute Liquid Ratio
ABSOLUTE RATIO: -----------------------------------
Current liabilities

(Rs. In’ lakh)


YEAR CASH CURRENT LIABILITY RATIO
2012-13 1053.99 3216.35 0.32
2013-14 845.93 3900.90 0.21
2014-15 965.14 3828.58 0.25
2015-16 1247.54 2825.46 0.44
2016-17 897.97 3395.22 0.26

SOURCES: COMPANY ANNUAL REPORTS

72
GRAPH 4.4
Absolute Liquid Ratio

Ratio
0.5 0.44

0.4 0.32

0.3 0.25 0.26


0.2 0.21 Ratio

0.1
0
2012-13 2013-14 2014-15 2015-16 2016-17
2010 -11 2011 -12 2012 -13 2013 -14 2014 -15

INTREPRETATION:-
Table4.5 explains establishes the relationship between cash and current
liabilities. Cash is the most or absolute liquid asset for any firm. The accepted
standard ratio is 1:2. The absolute liquidity ratio of VIJAYA TMTlimited was not up
to the mark during all the years. From the year 2014-15, it shows an increasing trend
up to next year. In the year 2012-13 is very low compared to remaining years.
During the year of 2016-17 it was 0.26 that means it has never reached the standard
of 0.5. The situation is due to very small balance of cash maintained by the firm for
its working capital requirements.

73
TABLE 4.6
Inventory Turnover Ratio
Cost of Goods Sold
Inventory Turnover Ratio -----------------------------------
Average Inventory

(Rs. In’ lakh)


YEAR COST OF GOODS SOLD AVERAGE STOCK RATIO
2012-13 14420.63 5128.38 0.35
2013-14 14676.58 5230.3 0.35
2014-15 13491.06 4937.45 0.36
2015-16 15774.54 4450.69 0.28
2016-17 16537.24 4411.79 0.26
SOURCES: COM PANY ANNUAL REPORTS
GRAPH 4.5
Inventory Turnover

Ratio
0.4 0.35 0.35 0.36

0.3 0.28 0.26


0.2 Ratio

0.1
0
2012-132013-14 2014-152015-162016-17
2010-11 2011-12 2012-13 2013-14 2014-15

INTREPRETATION:-
Table4.6 explains the ratio indicates the efficiency of the firm in selling its
product. It is calculated by dividing the cost of goods sold with average inventory.
For VIJAYA TMT Limited, the efficiency is increasing. In the year of 2014-15 it is
.36, which is highest recorded. After that it went on decreasing to lowest of 0.26 in
2016-17 it shows that there is no proper control over the inventory by the
management.

74
TABLE 4.7
HOLDING PERIOD RETURN
(In’ Days)

YEAR NUMBER OF INVENTORY HOLDING


DAYS IN YEAR TURNOVER RATIO PERIOD RETURN

2012-13 365 0.35 1042.85


2013-14 365 0.35 1042.85
2014-15 365 0.36 1013.88
2015-16 365 0.28 1303.57
2016-17 365 0.26 1403.84
SOURCES: COMPANY ANNUAL REPORTS
GRAPH 4.6
Holding Period Return

Holding period return


1500
1303.57 1403.84
1042.85 1042.85 1013.88
1000
Holdin
g
500 period
return
0
2012-132013-14 2014-152015-162016-17
2010-11 2011-122012-132013-142014-15

INTREPRETATION:-
Table4.7 explains the ratio indicates the speed with which the stock or
inventory gets converted into cash i.e., sales the lower the period, the better liquidity
of the inventory.
VIJAYA TMT Limited showed a holding period return of nearly 37 days in
the year of 2012-13, which is very better compare to other years. Then it is gradually
increased to 98 days in 2016-17 which means the liquidity of inventory is not better.

75
TABLE 4.8
CHANGING STOCK
(Rs. In’ lakh)
YEAR OPENING CLOSING INCREASE/DECR
STOCK STOCK EASE

2012-13 971168 1281178 310010


2013-14 1281178 1654822 373644
2014-15 1654822 1175261 479561
2015-16 1175261 845943 329318
2016-17 845943 1299341 453398
SOURCES: COMPANY ANNUAL REPOTS
GRAPH 4.7
Changing Stock

Increase/Decrease
600000

500000 479561 453398

400000 373644 329318


310010
300000 Increase/Decrease

200000

100000

0
2012-13 2013-14 2014-15 2015- 16 2016- 17
2010 -11 2011 -12 2012 -13 2013 - 14 2014 - 15

INTREPRETATION:-
Table4.8 explains statement showing about the details of the VIJAYA TMT at
the opening of the year and at the closing. In the year 2013-14 there is deficit in the
stock at the end of the year.

76
TABLE 4.9
Overall production in (Sqr.mts.) from 2007-08 to 2011-12
(Rs. In’ lakh)
YEAR PRODUCTION IN
(SQR.MTS).

2012-13 9816420
2013-14 10317820
2014-15 8766518
2015-16 8931062
2016-17 9790420
SOURCES: COMPANY ANNUAL REPORTS
GRAPH 4.8
Production in (Sqr.mts.) from 2012-13 to 2016-17.

Production in (Sqr.mts).
10500000 10317820
10000000 9816420 9790420
9500000
87665188931062
9000000
Production
8500000 in
8000000 (Sqr.mts).

7500000
2012-13 2013-14 2014-15 2015-16 2016-17
2010-11 2011-122012-132013-142014-15
INTREPRETATION:-
Table4.9 explains represents the overall production of VIJAYA TMTLimited,
for the past 5 years. From the above, it is clear that the overall production of the
company is increasing every year from 2012-13 to 2014-15 and there is fall in the
year of 2016-17

77
TABLE 4.10
Debtors Turnover Ratio
(Rs. In’ lakh)
YEAR SALES AVERAGE DEBTORS RATIO
2012-13 14420.63 5847.89 2.46
2013-14 14676.58 5999.84 2.44
2014-15 13491.06 5975.86 2.25
2015-16 15774.54 5243.44 3.01
2016-17 16537.24 6099.19 2.71
SOURCES: COMPANY ANNUAL REPORTS
GRAPH 4.9
Debtors Turnover Ratio

Ratio
4
3.01
2.46 2.44 2.71
3 2.25
2 Ratio
1
0
20102012-13-11 20112013-14-12 20122014-15-13 20132015--1614 20142016-17-15

INTREPRETATION:-
Table4.10 explains Book debts are expected to be converted into cash over a
short period and therefore are included in current assets. The liquidity position of the
firm depends on the quality of debtors to a great extent. The ratio indicated the
number of times on an average that the turnover takes place each year. Generally the
higher the ratio the more efficient is the management of credit.
VIJAYA TMT Limited maintained a good ratio of 3.01 in the year of 2015-16
and it was decreased to2.25 in the year of 2014-15, which not good compared to all
the previous years.

78
TABLE 4.11
Average Collection Period
(Rs. In’ lakh)
YEAR NO. OF DAYS DTR PERIOD

2012-13 365 2.46 148.37


2013-14 365 2.44 149.59
2014-15 365 2.25 162.22
2015-16 365 3.01 121.26
2016-17 365 2.71 134.68
SOURCES: COMPANY ANNUAL REPORTS
GRAPH 4.10
Average Collection Period

Period
180 162.22

160 148.37 149.59


140 134.68
121.26
120
100
Period
80
60
40
20
0
20122010-13-11 20132011-14-12 20142--1513 20132015-1614
2016014-17-15

INTREPRETATION:-
Table4.11 explains the ratio indicates the period in which debt can be
recovered. From the above table in the year of 2013-14 is 149.59which is good,
where it was increased in the year of 2014-15 is 162.22 in the year of 2015-16,
which is not good.

79
TABLE 4.12
SALES TO NET WORKING CAPITAL RATIO
(Rs. In’ lakh)
YEAR SALES NET WORKING RATIO
(RS.IN LAKHS) CAPITAL (RS. IN LAKHS)

2012-13 14420.63 4936.96 2.92


2013-14 14676.58 5523.64 2.66
2014-15 13491.06 4351.26 3.10
2015-16 15774.54 4550.12 3.47
2016-17 16537.24 4273.46 3.86
SOURCES: COMPANY ANNUAL REPORTS
GRAPH 4.11
Net Working Capital Ratio

Ratio
5 3.86

4
2.92 3.1 3.47
3 2.66
Ratio
2
1
0
2012-13 2013 -14 2014-15 2015 16 2016 17
2010 -11 2011 -12 2012 -13 2013 - 14 2014 -15

INTERPRETATION:-
Table4.12 explains the ratio indicates the relationship between the sales and
the net working capital VIJAYA TMT Limited has randomly increased and
decreased over the years. It reached 3.86in the year of 2016-17.
The higher the ratio, more efficient is the management in converting the
working capital into sales. In 2012-13 the working capital turnover ratio is 2.92 and
it is decreased in the next year. It again showed an increase in year 2016-17.up to
3.86 and it was declined in the year of 2013-14 as 2.66.

80
TABLE 4.13
TOTAL ASSETS TO NETWORKING CAPITAL
(Rs. In’ lakh)
YEAR TOTAL NET WORKING RATIO
ASSETS CAPITAL

2012-13 14534.19 4936.96 2.94


2013-14 13727.47 5523.64 2.48
2014-15 12709.18 4351.26 2.92
2015-16 11690.25 4550.12 2.56
2016-17 10899.34 4273.46 2.55
SOURCES: COMPANY ANNUAL REPORTS
GRAPH 4.12
Networking Capital

Ratio
3 2.94 2.92

2.8
2.6 2.56 2.55 Ratio
2.48
2.4

2.2
2012-13 2013-14 2014-15 2015-16 2016-17
2010-11 2011-12 2012-13 2013-14 2014-15

INTREPRETATION:-
Table4.13 explains total assets to net working capital ratio reflect the total
assets of the firms networking capital during the year.
The ratio during the year 2012-13 is 2.94 and in the year 2013-14 increased
the ratio. after the ratio has fall down in the year 2016-17 to 2.55, which is the
highest of all of the accounting years.

81
TABLE 4.14
Gross to Working Capital Ratio
(Rs. In’ lakh)
YEAR GROSS PROFIT WORKING CAPITAL RATIO
2012-13 21216.22 4936.96 4.30
2013-14 21421.22 5523.64 3.87
2014-15 21462.22 4351.26 4.93
2015-16 21476.56 4550.12 4.72
2016-17 21749.24 4273.46 5.09
SOURCES: COMPANY ANNUAL REPORTS
GRAPH 4.13
Gross to Working Capital Ratio

Ratio

6 4.93 5.09
5 4.3 4.72
4 3.87
3 Ratio

2
1
0
20122010-13-11 20112013--1412 20142012-15-13 20152013-16-14 20162014-17-15

INTREPRETATION:-
Table4.14 explains Gross profit is obtained by deducting the cost of goods
sold from the net sales. Thus ratio establishes the relationship between gross profit
and working capital. It is profit before expenses, interest and tax. It measures the
firm’s ability to sell the product.

82
TABLE 4.15
Net Profit Working Capital Ratio
(Rs. In’ lakh)
YEAR NET PROFIT WORKING CAPITAL RATIO
2012-13 14534.07 4936.96 2.94
2013-14 13726.46 5523.64 2.48
2014-15 12709.18 4351.26 2.92
2015-16 11689.96 4550.12 2.56
2016-17 10899.34 4273.46 2.55
SOURCE: COMPANY ANNUAL REPORTS
GRAPH 4.14
Net Profit Working Capital

Ratio
3 2.94 2.92

2.8
2.6 2.56 2.55 Ratio
2.48
2.4

2.2
2012-13 2013-14 2014-15 2015-16 2016-17
2010-11 2011-12 2012-13 2013-14 2014-15

INTREPRETATION:-
Table4.15 explains Net profit is obtained when operating expenses, interest
and taxes are subtracted from the gross profit. The net profit margin ration
establishes relationship between net profit and sales and indicates management
efficiency in manufacturing and administrating and selling the products. The ratio
measures the overall profitability and the firm’s ability.

83
CHAPTER - VI

84
FINDINGS
· In the years 2012-2017, all the years operating cycle shows a net decrease in
working capital.
· Year by year current liabilities are increased.
· There is no proportionate change in the position of current assets compared
to current liabilities.
· Current ratio accepting norm is 2:1 company’s current ratio is not up to the
acceptable norm.
· Current liabilities and current assets are also facing changing trends in the
year 2012-2017.
· The debt equity ratio of the company is in declining trend.
· The reserves and surplus to capital ratio is increased by 5.38.
· The return on investment is increased from 0.044 to 0.053 compared with the
previous year both the profit and share holder funds. It leads to and increases
in the ratio.
· The proprietary ratio has shown an increasing trend.
· So many fluctuations are there in working capital position.
· Total debt of the company is more than three times than net worth.
· Company is maintaining reserves and surplus to capital in the ratio of more
than 1:3.
· Return on investment is very, very low because of low net profit.
· Share holders’ funds are very low when compared with total assets of the
company.

85
SUGGESTION
• Company has to maintain 2:1 ratio of current assets and current liabilities. But the
company current liabilities are more, so company has to increase its current
assets.
• Due to heavy dependence on debt funds, banks and returns are not up to the
satisfaction of share holders.
• Without proper maintenance of working capital, company never turned to
profitability position. So bank has to improve working capital management.
• Company has to review its policies towards working capital management.
• Better to improve share holders funds than debt funds. Which deteriorate its
interest burden?
• To attract more share holders funds bank has to improve its profitability.
• To get more profits bank has to change its policies, procedures towards the proper
planning of working capital management.
• Bank has to improve its absolute liquids assets because their main business is
lending.
• Bank always change its policies towards accepting more deposits.
• Management has to take steps not only for the improvement of working capital
but also towards the overall performance of the bank.
• .

86
CONCLUSION
The subject of financial management is of immense interest to both
academicians because the subject is still developing, and there are still certain areas
where controversies exist for which no unanimous solutions have been reached as
yet. Practicing managers are interested in this subject because among the most
crucial decisions of the firm are those which relate to finance, and an understanding
of the theory of financial management provides them with conceptual and analytical
insights to make those decisions skillfully.

The need for working capital to run day-to-day activities cannot be over
emphasized we will hardly find a business firm which does not require any amount
of working capital. We know that a firm should aim at maximizing the wealth of its
shareholders. In its endeavor to so, a firm should earn sufficient return from its
operations. Earning a steady amount of profit requires successful sales activity. The
firm has to invest enough funds in currant assets for generating sales. Current assets
are needed because sales don’t convert into cash instantaneously. This is always an
operating cycle involved in the conversion of sales into cash.

The firm should maintain a sound working capital position. It should have
adequate working capital to run its business operations. Both excessive as well as
inadequate working capital positions are dangerous from the firm’s point of view.
Excessive working capital means ideal furans, which earn no profits for the firm.

Paucity of working capital not only impairs the firm profitability but also
results in production interruptions and inefficiencies. So the firm should maintain
the balanced working capital.

Steel has been the key material with which the world has reached to a
developed position. Steel occupies the foremost place amongst the materials in use
today and pervades all walks of life. All the key discoveries of the human genus for
instance, steam engine, railway, means of communication and connection,
automobile, aero planes and computers are in one way or other, fastened together
with steel and with its sagacious and multifarious application steel is a versatile

87
material with multitude of useful properties, making it indispensable for furthering
and achieving continual growth of the economy be construction manufacturing
infrastructure or consumables. All the engineering like bars, rods, channels. Earlier
when the alloy of steel was not discovered, iron was used for the said purposes but
iron is usually prone to rust and is not so strong.

Steel is a highly wanted alloy over the world. All the


countries need steel for the infrastructure development and overall growth. Steel has
a variety of grades i.e. above 2000 but is mainly categorized in divisions-steel flat
and steel long, depending on of the shape of steel manufactured. Steel flat include
steel products in flat, plate, sheet or strip shapes. The plate shaped steel products are
usually 10 to 200 mm and thin rolled strip products are 1 to 10 mm in dimension.
Steel flat is mostly used in construction, shipbuilding, pipes, bar or rod shape like
reinforce rods made of sponge iron. The steel long products are required to produce
concrete blocks, bars, tools, gears and engineering products.

Working capital refers to the funds invested in current assets i.e. investment
in stocks, sundry debtors, cash and other current assets. Current assets are essential
to use fixed assets profitably. For example, a machine cannot be used without raw
material. Thus, it is obvious that certain amount of funds is always tied up in raw
materials and work in progress, finished goods. However, the business also enjoys
credit facilities from its suppliers who may supply raw materials on credit and the
firm may not pay immediately all expenses. Therefore, certain amount of funds is
automatically available to finance the current assets requirements. However, the
requirements for current assets are usually greater than the amount of funds payable
through current liabilities. In other words, current assets are to be kept at a higher
level than the current liabilities.

88
APPENDIX

89
BIBLIOGRAPHY

MY.KHAN&P.K.JHIN, “Financial Management”, Tata MC Grawhill, New


Delhi, 2007.
I.M.PANDEY, “Financial Management”, vikas publishing house private
limited, New Delhi, 1997.
PRASANA CHANDRA, “Financial Management”, Tata MC Grawhill, New
Delhi, 1996.
Dr.S.N.MAHESWARI, “Financial Management”, vikas publishing house
private limited, 1996.
TAMES C VANHORES, “Financial Management and Policy”, prentice Hall
Of India, New Delhi.
CHANDRA BOSE.D, “Fundamentals Of Financial Management And
Policy”, prentice Hall Of India.
Annual Report of VIJAYTMT (P) LTD,
Financial statement of VIJAYTMT (P) LTD,

Web sites
www.vijaytmt.com
www.kamakshisteels.com

90