A SUMMER TRAINING REPORT ON

“WORKING CAPITAL MANAGEMENT”

AT
CENTRAL COALFIELDS LIMITED
RANCHI (Head Quarter)

Submitted in Partial fulfilment for the award of degree of

MASTER OF BUSINESS ADMINISTRATION
By
VAIBHAV KUMAR CHAURVEDI
MBA/40054/18

DEPARTMENT OF MANAGEMENT
BIRLA INSTITUE OF TECHNOLOGY, MESRA
(LALPUR EXTENSION CENTRE), RANCHI 834001
2019
 CERTIFICATE OF APPROVAL

The foregoing project entitled “Working capital Management” is hereby

approved as a creditable study of research topic has been presented
satisfactory manner to warrant its acceptance as prerequisite to the
degree for which it has been submitted.
It is understood that by this approval, the undersigned do not
necessary endorse any conclusion drawn or opinion expressed therein,
but approve the project for the purpose for which it is submitted.

(INTERNAL EXAMINAR) (EXTERNAL EXAMINAR )

 ACKNOWLEDGEMENT

The satisfaction and Euphoria that accompany the successful

completion of the work that would be incomplete unless we mention the
people, as an expression of gratitude, who made it possible and whose
constant guidance and encouragement served as a beacon of light and
crowned my efforts with success. This report would have been
impossible but for the support and guidance we have received from
various at different stages of the project. Our sincere thanks to our guide
Dr. Soumitro Chakravarty for his excellent guidance, encouragement
and patience has made possible the successful completion of this
project. Last but not least we extend our sincere thanks to the entire
team for providing us their time and active co-operation and all who have
helped us directly or indirectly in this project.

VAIBHAV KUMAR CHATURVEDI

(MBA/40054/18)
 CONTENTS
1. Introduction

2. Company Profile

3. Research Objectives

4. Research Methodology

5. Data Analysis

6. Recommendations

7. Suggestions

8. Limitations

9. Bibliography

10.Annexure
 OBJECTIVES OF THE STUDY

 To study and analyse the working capital policy of the CENTRAL

COALFIELDS LIMITED.

 To study the affairs of the company with reference to the working

capital management and methods of its estimation used in the
company.

 To understand the general performance of the company.

 To use quantities data for defining company’s financial

performance.

 To know the profitability, production and efficiency of the firm.

 To study the methods of financing working capital.

 To analyses the performance effectiveness of the company

RESEARCH METHODOLOGY

BUSINESS RESEARCH DESIGN:

Descriptive Research Design is the design followed in the study. As a part of

exploratory research, primary data has been collected and for the descriptive
purpose secondary data has been collected. Both these types of data have been
used for the study of derivative market and its knowledge in the minds of the
investors.

DATA:

The data which have been collected for this research purpose are taken
from the market in the form of primary data and secondary data .

a. Primary Data:

The primary data which have been used here is collected with the help interaction
with Nodal Manager of marketing and sales department.

b. Secondary Data:

The secondary data have been collected through available documents

like articles on derivative, newspapers and websites.
ABOUT CCL
HISTORY

CENTRAL COALFIELD LIMITED,THE HISTORICAL

SEARCH

Central Coalfields Limited is a Category-I Mini-Ratna Company since

October 2007. During 2009-10, coal production of the company reached
its highest-ever figure of 47.08 million tones, with net worth amounting to
Rs.2644 crore against a paid-up capital of Rs.940 crore.

Formed on 1st November 1975, CCL (formerly National Coal

Development Corporation Ltd) was one of the five subsidiaries of Coal
India Ltd. which was the first holding company for coal in the country
(CIL now has 8 subsidiaries) .miHistorical March

Early History – Formation Of NCDC (Pre-Nationalisation)

CCL had a proud past. As NCDC, it heralded the beginning of

nationalization of coal mines in India.

National Coal Development Corporation Ltd. (NCDC) was set up in

October, 1956 as Government-owned Company in pursuance of the
Industrial Policy Resolutions of 1948 and 1956 of the Government of
India. It was started with a nucleus of 11 old state collieries (owned by
the Railways) having a total annual production of 2.9 million tonnes of
coal.

Until the formation of NCDC, coal mining in India was largely confined to
the Raniganj coal belt in West Bengal and the Jharia coalfields in Bihar
(now in Jharkhand), besides a few other areas in Bihar (now in
Jharkhand) and a part of Madhya Pradesh (now Chattishgarh also) and
Orissa.
From its very beginning, NCDC addressed itself to the task of increasing
coal production and developing new coal resources in the outlying
areas, besides introducing modern and scientific techniques of coal
mining.

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

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

With gradual rise in the demand of coal due to commissioning of new

power plants and development of other coal-based industries during
Fourth Five Year Plan (1969-1974), NCDC's production increased to
15.55 million tonnes by the terminal year of Fourth Five Year Plan, i.e.,
1973-74.

NCDC played a pioneering role in India's coal industry by introducing

large-scale mechanization and modern and scientific methods of coal
mining for promoting conservation of high grades of coal and exploiting
deep coking coal seams necessitating heavy capital investment and
sophisticated technical skill. NCDC went in for foreign collaboration with
countries such as Poland and the USSR besides limited collaboration
with Japan, West Germany and France.
NCDC's role can be truly assessed by its contribution towards growth of
new coal resources in, what are known as, the outlying areas. The
opening of new mines in Madhya Pradesh, Orissa and Maharashtra
brought about a significant change in these regions by creating new
opportunities of industrialization and employment. Development of the
Singrauli coalfields has brought coal almost to the door steps of northern
India.

With the development and application of improved mining techniques,

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

Nationalisation of Coal Mines:

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

► As a result, NCDC units located in the States of Maharashtra and

Madhya Pradesh, with the exception of Singrauli Coalfields, became a part
of the Western Division.

In the second phase of nationalisation, the management of non-coking

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

► The Central Division consisted of all the old collieries of NCDC in

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

Formation of CCL :
 The CMAL, with its three divisions continued upto 1st November 1975
when it was renamed as Coal India Limited (CIL) following the decision
of Govt. of India to restructure the coal industry. The Central Division of
CMAL came to be known as Central Coalfields Limited and became a
separate company with the status of a subsidiary of CIL, which became
the holding company .
VISION :
To emerge as a National player in the Primary Energy Sector, committed
to provide energy security to the Country, by attaining environmentally
and Socially Sustainable Growth , through best practices from Mine to
Market.

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

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

COMPANY PROFILE :

Number of Mines : 62 Operative Mines (22 Underground & 40

Opencast Mines)
Washeries : 7 Washeries
5 Coking Coal Washeries (Kathara, Rajrappa, Kedla & Sawang, Kargali)
2 Non-Coking Coal Washeries (Piparwar & Giddi)
Repair/Workshops : 1 Central Workshop (ISO 9001) at Barkakana
5 Regional Repair/Workshops (3 w/s are ISO 9001) at Jarandih, Tapin
North, Dakra, Giridih & Bhurkunda.
Operating Coalfields : 7 Coalfields (East Bokaro, West Bokaro,
North Karanpura, South Karanpura, Ramgarh, Giridih & Hutar).

Geological Coal Reserves in CCL Command Area up to

300m & above depth (as on 01.04.2015).
COMPANY MANAGEMENT
1. Director Finance Director Technical/Operation
Mr. N. N. Thakur

2. Director Mr. Virendra Kumar Srivastava

Technical/Operation

3.Director personnel Mr. R. S. Mahapatro

4.Director Project & Mr. Bhola Singh
Planning
5. Part-Time Directors Mr. Ram Prakash Srivastava

6.Non Official Part Time Dr. Shubhu Kashyap

Directors Mr. Bharat Bhushan Goyal,
Ex-Addl. Chief Adviser (Cost) D/O
Expenditure

7.Permanent Invitee Mr. Salil Kumar Jha

Chief Operation Manager,EC
Railwary

Mr. S.K. Burnwal , IAS

Secretary (Mines & Geology)
Govt. of Jharkhand

8.Chief Vigilance Officer Mr. Ashish Kumar Srivastava

9.Company Secretary Mr. Ravi Prakash

Mega Projects

The main strength of CCL, so far as coal production is concerned, is its

large opencast mines with mechanised coal production, mostly through
shovel-dumper combination and surface Miner. Some of the large
opencast mines (producing more than 2 MTY) are,

Piparwar Ashok
KDH OCP Amlo OCP
OCP OCP
Kalyani Amrapali
Magadh Purnadih
OCP OCP OCP OCP
North
Karo OCP Konar OCP Urimari
OCP

Piparwar OCP was commissioned with Australian collaboration in early

90s and is equipped with a unique "in-pit coal crushing and conveying
system" the only unit of its kind engaged in the coal production in India.
Ashok OCP produces coal by adopting "Surface Miner" technology. The
technological growth has been phenomenal considering the fact that a
number of OC mines used to be worked with manual labour in the past.

Future projects
CCL has a definite plan of growth. It has envisaged commissioning of a
number of green field and expansion projects, both opencast and
underground, during XI Plan with state-of-the-art technologies. The
process of land acquisition and obtaining various approvals/clearances
has started in mines
INTRODUCTION

Working capital denotes amount of capital needed day to day activities.

In simple words working capital is the difference between the current

assets and current liabilities. Working capital measures company
efficiency and liquidity of the business.
Working capital is needed in every business , for example if we want to
maintain our customer then we will have to keep some quantity of ready
stock at all the times with us.
We will also have to give credit to the customers if whole of the market is
giving credit to the customers. otherwise our product will not get sold
and if give them credit then we will have to invest in debtors.
Woking capital is calculated as under:-
Current assets – currents liabilities

Currents assets :- currents assets includes

Cash
Bank
Debtors
Stock
Bills receivables
Current liabilities : current liabilities includes
Creditors
Bills payables
Outstanding expenses

Types of working capital : there are basically four types of working

capital
1. Gross Working Capital
2. Net Working Capital
3. Permanent Working Capital
4. Temporary Working Capital

1. Gross working capital : It means total amount investment in

current assets.it includes assets such as cash, account receivables,
inventory.

2. Net Working Capital : it means if we deduct current liabilities

from current assets then balance will be known as net working
capital.

3. Permanent Working Capital :

In every business there is a minimum level of activity at
all the times and to maintain this minimum level of activity we need
certain amount of investment in working capital, which must be
maintained at all the time in the business . this minimum level of
activity is known as permanent working capital.

4. Temporary Working Capital :

In every business, the level of activity changes over
and above the minimum level of activity, for carrying out which we need
additional capital amount of working capital. This additional amount is
known as temporary working capital.

Adequate Working Capital Advantage :-

1. Solvency of the Business:
Adequate working capital helps in maintaining solvency of the business
by providing uninterrupted flow of production.
2. Goodwill:
Sufficient working capital enables a business concern to make prompt
payments and hence helps in making goodwill
3. Easy Loans:
A concern having adequate working capital, high solvency and good
credit standing can arrange loans from banks and others on easy and
favourable terms.
4. Cash Discounts:
Adequate working capital also enables a concern to avail cash discounts
on the purchases and hence it reduces costs.
5. Regular Supply of Raw Materials:
Sufficient working capital ensures regular supply of raw
materials and continuous production.
2.Working capital management :
working capital management is to deploy such amount of current assets
and current liabilities so as to maximize short-term liquidity. The
management of working capital involves managing inventories, accounts
receivable and payable as also cash.

Two steps involved in the working capital management

are as follows:

(i) Forecasting the amount of working capital; and

(ii) Determining the sources of working capital.

Importance of Working Capital Management:

Significance of Working capital management ensures that that the
company has enough monetary liquidity to meet short-term debts.
Structuring an effective working capital management is a great way to
enhance the income. Ratio analysis and management of individual
components of working capital are two primary importance of working
capital management.
1. Ratio Analysis: Process of determining and analysing numerical
relationships in accordance to financial statements like balance sheets,
income statements and cash inflow statements is known as ratio
analysis. The primary purpose of ratio analysis is to appraise the
operating and financial performance of an economic activity and
determine its efficiency, profitability, liquidity and solvency. It also helps
in getting a brief idea about comparative valuation by comparing ratios of
different companies in the same sector.

2. Inventory Management: Inventory management has huge

importance of working capital management, it involves overseeing the
purchase of new items and managing the existing ones. It aims to create
such a purchase plan that will ensure effective delivery of materials. Two
most used inventory management strategies are ‘Just-in-Time Method’
and ‘Material Required Planning.’ In former one the firm plans to receive
items at the time of need rather than maintaining high inventory levels,
and the latter one is based sales forecasts.

3. Cash Management: Cash management is process of collecting,

managing and utilizing the cash inflow to optimize the short-term
financial stability. The key component in accomplishing this task is
solvency as an importance of working capital management. Successful
cash management is useful when any unexpected demand for cash
occurs unexpectedly.

4. Increasing Profitability and Returns on Capital:

Management concerning account payable and receivables looks
excellent significant driver for increasing profitability of small businesses.
In addition, when companies using low working capital can publish the
best greater return on capital so that shareholders will always get
advantage of high returns for all dollar invested in your business.
What happened if we have not manged working capital
properly :
If we have not managed working capital
properly then we have to face many problems in business that are as
follows:-

1.Financial Insolvency and Lower Credit Score :

When you’re unable to repay debts
but are still running your business with low operating costs, creditors will
try to get their funds back.

2. Bankruptcy :
When revenue is non-existent and your business’s
bank account is almost empty, it might seem impossible to stay afloat.
Between paying bills, marketing your business, and paying off debt, your
funds are no longer fluid.

3. Decline In Profit And Rate Of Return:

:if we retain high amount of working
capital then excess working capital will be idle, that will be unutilized due
to which profit and rate of return decrease.

4.Difficulity In Obtaining Loan :

If we have not managed working capital properly
then in market our goodwill be damaged no one will provide loan to
business.

Inventory Management :
inventory management supervises the flow of goods
from manufacturers to warehouses and from these facilities to point of
sale. A key function of inventory management is to keep a detailed
record of each new or returned product as it enters or leaves a
warehouse or point of sale.
Inventory management software systems
Inventory management software systems generally began as simple
spreadsheets that tracked the quantities of goods in a warehouse, but
have become more complex. Inventory management software can now
go several layers deep and integrate with accounting and ERP systems.
The systems keep track of goods in inventory, sometimes across several
warehouse locations. The software also calculates the costs -- often in
multiple currencies -- so that accounting systems always have an
accurate assessment of the value of the goods.

One of the advantages of ABC analysis is that it provides better control

over high-value goods, but a disadvantage is that it can require a
considerable amount of resources to continually analyze the inventory
levels of all the categories.

Inventory control is the area of inventory management that is concerned

with minimizing the total cost of inventory, while maximizing the ability to
provide customers with products in a timely manner. In some countries,
the two terms are used as synonyms.

The inventory management process :

Inventory management is a complex process, particularly for larger
organizations, but the basics are essentially the same regardless of the
organization's size or type. In inventory management, goods are
delivered into the receiving area of a warehouse in the form of raw
materials or components and are put into stock areas or shelves.

Compared to larger organizations with more physical space, in smaller

companies, the goods may go directly to the stock area instead of a
receiving location, and if the business is a wholesale distributor, the
goods may be finished products rather than raw materials or
components. The goods are then pulled from the stock areas and moved
to production facilities where they are made into finished goods. The
finished goods may be returned to stock areas where they are held prior
to shipment, or they may be shipped directly to customers.

Inventory management uses a variety of data to keep track of the goods

as they move through the process, including lot numbers, serial
numbers, cost of goods, quantity of goods and the dates when they
move through the process.

Inventory Management Process :

• puchase
Purchase of
material

• storage
Store of
material

• Issue of
Issue material

Purchase Of Material :
A purchase requisition is a form used as a formal
request to the purchasing department to purchase materials.
ADVERTISEMENTS: This form is prepared by the store keeper for
regular stock materials and by the departmental head for
specific materials not stocked as regular items.
 For purchase of material following 5-R concept should be
considered:

Right
Quality

Right Right
Time Quantity

Right Right
Source Price

5-R Principal

1.Right Quantity :

The purchaser must buy the materials in the right quantity to

ensure that there is no stoppage of production or no extra stock piling.
Normally, the inventory control wing of purchase (stores) department,
fixes up the economic order quantity (EOQ), i.e., the quantity which
should be purchased at a time to get the maximum benefit at minimum
total cost.

This requirement is mentioned in the purchase order and it is necessary

to see that the materials are delivered.

2.Right Quality :

The quality requirement should be determined first and then

correctly specified. Ambiguity in defining quality is one of the major
problems in purchasing. This can be avoided by ensuring that the
supplier really understands exactly what is required by the purchaser. If
the supplier does not understand the quality requirements correctly,
certain wrong types of materials would be supplied.

This, in its turn, may lead to various problems like production stoppages,
rejection of finished product(s) by quality control people, and the
emergence of a high quantity (percentage) scrap, at the end of the
production process. All these amount to waste.

Right quality means that the quality should be just right, neither too high
nor too low. A production process would always like to have the best
quality available in order to make sure that the end product is of best
quality available in case of spares and components. It is necessary to
ensure that the machine does not go out of control due to poor quality of
such materials.

It is important for the purchaser to know the exact purpose for which the
materials are required and he must try to convince the production people
to accept the materials which would serve the purpose. At the same time
he must not take any undue risk in buying inferior materials which might
be more expensive in the long run.

3.Right Price :

It is not easy to determine the right price of material. However,

through cost and value analyses one can guess what an item should
cost. Thereafter, the purchaser’s negotiation skill, his relations with the
supplier and the nature of competition in the market will together
determine the actual purchase price.
This function is of prime importance because this is where the purchaser
can be really of much help to the company. But to perform this function
properly, the purchaser must have a thorough idea about the market
prices, especially the current prices of raw materials, their likely future
trends, and environmental conditions which affect prices. The purchaser
should not be forced by the seller to accept any price quoted by the
supplier. There are various ways of determining the right price.

4.Right source :

Right source means the source which is reliable in all respect such
as quality, delivery, after sales service, etc. It is obvious that when all the
other things have been done right (i.e., selection of right quality, quantity
and prices), the source of supply from where the materials have been
obtained should be automatically right.

However, there are cases where anomaly occurs and it is, therefore,
necessary to get the materials from the right source.

For source selection or to develop the right source of supply

initial information about the name and address of the suppliers can be
had with the help of the following:
(1) Suppliers’ catalogue

(2) Trade requisition and directories

(3) Trade journals

(4) Yellow pages of telephone directory

5.Right time :

Just as one has to buy the materials in the right quantity, he must
also obtain them exactly when required. The delivery timings are again
fixed by the stock control department. It is the primary duty of the
purchase department to follow up the orders and to ensure that the flow
of materials remains unchanged.

It should also be seen that the materials are delivered exactly on time.
This function is very important in India as the suppliers often fail to
maintain the delivery schedule..

Just In Time Methodology :

Just-in-time (JIT) methodology, in which products arrive as they are
ordered by customers, and which is based on analysing customer
behaviour. This approach involves researching buying patterns,
seasonal demand and location-based factors that present an accurate
picture of what goods are needed at certain times and places. The
advantage of JIT is that customer demand can be met without needing
to keep quantities of products on hand, but the risks include misreading
the market demand or having distribution problems with suppliers, which
can lead to out-of-stock issues.

TENDER : Tender is an offer to do work or supply goods at a fixed

price. The tenderer bid process is designed to ensure that the work to be
done is given out in a fair way. ... Once the client entity accepts a tender,
it is binding on both parties.

A tender is, in essence, a type of transaction model used by large

organizations, government bodies, companies and NGOs in order to find
contractors for particular projects or procurement's. Basically, it is a
bidding process utilized by both public and private organizations. Most
organizations use Requests for Tender (RTF) to invite bids for large
projects, procurement's or contracts from all qualified suppliers or firms in
a given industry.

Tender is issued at three level :

1.Local or state level

2.National level

3.Global tender

1.Local or state level :

the tender notice is published in all appropriate media but

only in the country in which the action is being carried out. The reasons
of local tender are many such due to increasement of small scale
industry in state or due to government of rules and regulation. If the
amount of tender is no more then local tender is issued.
 Level Of Tenedr
Local
National
Global

2.National level : In national tender, the tender notice is published in

all appropriate media but only in the country in which the action is being
carried out. Tender at national level is issued when amount of tender is
medium .

3.Global tender : In global tender is issued at global or international

level to take advantage of cost and techniques.
Debtors management : Debtors management means taking
decision on various policies regarding debtors .
The term ‘debtor’ is used to define as ‘debt owed to the firm by
customers arising from sale of goods or services in the ordinary course
of business’.
A firm grants trade credit to maintain its sales from the
hands of the competitors and, at the same time, to attract the
potential customers to purchase its products at favourable terms.
Trade credit arises only when the firm sells its product to the
customers but does not receive immediate cash, i.e., at the time of
credit sales. Receivables/Debtors are created out of trade credit and
which are collected in the near future.

Various aspects of debtors management are as follows :

(a) Credit policy
(b) Credit analysis
(c) Receivables control

Debtors management in CCL

Debtors

E-
Power Auction
I. Power Sectors:

Coal
Power Water
Solar
Nuclear
1.Coal :
the crucial role played by coal in India’s industrial and economic
fortunes was recently emphasized by the Supreme Court’s observation –
”Coal is king and paramount Lord of industry … Industrial greatness has
been built up on coal … In India, coal is the most important indigenous
energy resource and remains the dominant fuel for power generation …
“ A quick look at where the Coal and Power sectors stand today in India.
Similar to the rest of the world, India depends on coal for most of its
electricity production. India has about 300 billion tonnes of proven coal
reserves but the real challenge is to be able to realize this mineral wealth
in an economically sustainable way.
At the time of independence, most coal mines were privately owned.
However, the Government of India acquired all privately held coal mines
and brought them under Coal India Limited (CIL) in 1973. Today, CIL is
the predominant producer of coal in the country, while some coal is also
produced by Singareni Collieries and Coalfields Ltd. (SCCL), a few
privately owned mines and captive mines. The Government of India holds
90% stake in CIL.
 2.water :

India is blessed with immense amount of hydro-electric potential and

ranks 5th in terms of exploitable hydro-potential on global scenario. As
per assessment made by CEA, India is endowed with economically
exploitable hydro-power potential to the tune of 1 48 700 MW of installed
capacity. The basin wise assessed potential is as under :-

Indus Basin 33,832

Ganga Basin 20,711
Central Indian River system 4,152
Western Flowing Rivers of southern India9,430
Eastern Flowing Rivers of southern India 14,511
Brahmaputra Basin 66,065
Total 1,48,701

In addition, 56 number of pumped storage projects have also been

identified with probable installed capacity of 94 000 MW. In addition to
this, hydro-potential from small, mini & micro schemes has been
estimated as 6 782 MW from 1 512 sites. Thus, in totality India is endowed
with hydro-potential of about 2 50 000 MW.

3.Solar :

Grid interactive solar energy is derived from solar photovoltaic cells

and CSP Plants on a large scale. The grid connection is chosen due to
following reasons:
 Solar Energy is available throughout the day which is the peak load
demand time
 Solar energy conversion equipment have longer life and need lesser
maintenance and hence provide higher energy infrastructure security
 Low running costs & grid tie-up capital returns (Net Metering)
 Unlike conventional thermal power generation from coal, they do not
cause pollution and generate clean power

 Abundance of free solar energy throughout all parts of world (although

gradually decreasing from equatorial, tropical, sub-tropical and polar
regions). Can be utilized almost everywhere.

4.Nuclear :
As of March 2018, India has 22 nuclear reactors in operation in
7 nuclear power plants, having a total installed capacity of 6,780
MW. Nuclear power produced a total of 35 TWH and supplied 3.22% of
Indian electricity in 2017. However, capacity factors have been
improving in recent years.

II. E-Auction :
E-auction is the process of conducting an auction to sell assets, natural
resources or other goods through online competitive bidding. The
successful bidders then deposit the balance amount, after which they
are issued a delivery order against which they can take delivery of the
asset or resource from the seller.

Sale of coal in CCL

In CCL coal was sold basically on two bases:

Sale of Coal

Cash Credit

10% 90%
 CCL sold coal in cash basically to
private parties like:
 TISCO
 IISCO
 VSP etc.
In cash sale payments are taken in
advance before dispatching the coal
and payments taken through
Demand Draft or Cheque.
CCL big share of total sale is made on
credit basis. Credit sale of coal is only
given to Government parties.
These Government parties are also
made payments through Demand
Draft or Cheque.
Some of the main Govt. parties are
discussed below.

1. Power Sectors:
I. State Electricity Boards
a) JSEB (Jharkhand State Electricity Board)
b) HSEB (Haryana State Electricity Board)
c) DVB (Delhi Vidyut Board)
d) PSEB (Punjab State Electricity Board)
e) UPRVUNL (Uttar Pradesh Rajya Vidyut Udyog Nigam Ltd.)

f) TVNL (Tenughat Vidyut Nigam Limited)

g) In every state level some “Thermal Power Stations”
are situated, where CCL supply coal to produce power.
Because in India these Thermal Power Stations produce
60-70% of total required power.

h) NTPC (National Thermal Power Corporation), DVC (Delhi

Vidyut Corporation)
i) NTPC is a big Government organization and is one of the
best customers of CCL. It consumes about 40-42% of total
coal produced by the CCL. Their payment system is very
good. They settle their dues time to time. DVC is also one
of the best customers of CCL. As NTPC, DVC’s payment
system is also very good.
2. Steel Sectors:
I. SAIL (Steel Authority of India Limited)
a) BSP (Bhilai Steel Plant)
b) BSL (Bilaspur Steel Ltd.)
c) RSP (Rourkela Steel Plant)
d) DSP (Durgapur Steel Plant)

II. Private Steel Parties

a) TISCO
b) IISCO
c) VSP

3. Other Sectors
d) Defence
e) Cement
f) Private Parties – JSMDC
g)
h) CCL has 64-65 mines, spread all over the country. CCL
supply coal to different parties with the help of “SLC”
(Standing Linkage Committee) which is situated in Kolkata
head office. SLC two or three months previously decide that
which colliery supply coal to which party, this system is
called Standing Linkage. According to this linkage mines
supply coal to different parties.
i) SLC formed by the combination of 3 different parties:
j) Consumer
k) Company
l) Railway
m) SLC takes linkage decision after agreement with these three
parties.
n) After taking the linkage decision coal dispatched to different
parties through mainly Railway and Road transport.
o) After dispatching the coal, company makes bills and sends
it to the relative customers.
Problems/Disputes Faced by the CCL in Payments:
p) Quality Problems
q) Quantity Problems
r) Under loading / Over loading
s) Moisture Problem
t) Over loading / Under loading charge
u) Stone Problem

 Quality Problems :
Sometimes CCL supply other grade of coal to party but party said
that it receives another grade of coal then, it wanted to give payment
according to the rate of other grade of coal but CCL wanted payment
according to another grade of coal this create problems in the time
of payment.
 Quantity Problem:
Quantity problems arise because parties not getting the dispatched
quantity of coal because of theft ness and loss due to transportation.
For example CCL dispatch 1000 MT coal to a party but party only
receives 800 MT coal finally. This creates problems in payment
because CCL wanted full payment of 1, 000 MT coal but party gives
payment of only 800 MT coal.

 Moisture Problem:
In moisture problems party claims that he receives moisture coal
and after getting coal dry, the weight of coal is get down. This also
creates disputes in payment.
 Stone Problem:
In stone problem party arguments that, there is large amount of
stones are presented in coal which he receives. So he wanted to
give payment after deducting the amount equal to the value of
stones he received in the total coal.
Settlement of Disputes:
If any dispute arises between CCL and parties then, there are two
methods used to settle the disputes:
 Internal Settlement
 External Settlement

 Internal Settlement
If both parties wanted to settle the disputes by their mutual
agreement, this is called “Internal Settlement”. In internal settlement
both parties wanted to settle the dispute through “Negotiation”
carried out in good faith.
For the purpose of conducting negotiation, each party shall
designate in writing to the other party a representative, who shall be
authorized to negotiate on its behalf with a view to resolving any
dispute. Each such representative shall remain authorized until his
replacement by the party he represents.

The representative of the party which considers that a dispute has

arisen shall give to the representative of the other party a written
notice setting out the material particulars of the “Dispute Notice”.
Within thirty days, or such longer period as may be mutually agreed,
of the dispute notice having been delivered to the other party. The
representatives of both parties shall meet in person, to attempt in
good faith and using their best at all times, to resolve the dispute.
Once the dispute is resolved, the terms of the settlement shall be
reduced in writing and signed by the representatives of the parties.

 External Settlement
If any dispute is not resolved by internal settlement then, this dispute
goes for the External Settlement.
In external settlement firstly CCL write letter to middle management
of related party to settle the dispute and if middle management not
take any kind of action to resolve the dispute then, matter goes to
top management. If top management is also not clear the dispute
then matter finally goes to government.
For settlement of dispute government appointed four zonal umpires
these are:
 Eastern Umpire
  Western Umpire
 Northern Umpire
 Southern Umpire
The matter related to that zone, the umpire of that zone listen to both
party’s argument. After analysing the both party’s argument, he gives the
final decision which both parties must be accepted.

Collection prioritization method :

Improve collection efforts and increase your accounts
receivable by identifying accounts with the highest payment potential,
analysing industry trends and testing new strategies. Experian’s
advanced scoring and segmentation tools arm you with complete
portfolio intelligence, while our ongoing portfolio monitoring helps boost
debt recovery.
Collection management system :
A comprehensive collection system is critical to keeping
your company solvent. Collections is a unified debt management system
that includes data connectivity, decisioning, workflow, and self-service
capabilities that can be managed by business users. The result is a
more effective, customer-focused collections process that turns even
hard to find and difficult debtors into valuable customers while increasing
recoveries and reducing costs.
Monitor unpaid debt :
Know when customers who’ve gone into arrears
become solvent. We monitor your debtor accounts and let you know
when a customer’s ability to pay has improved so you can immediately
return to working the account and collect the unpaid balance.
BENEFIT OF DEBTORS MANAGEMENT :

What benefits do companies who utilize accounts receivable

management software often recognize? To put it most simply, using
accounts receivable management software is like hiring the perfect
employee who always follows your direction, never lets anything fall
through the cracks, and works 24/7! While this is attractive enough by
itself, let’s get into the tangible benefits of implementing account
receivable management software. Companies who utilize this
technology see some amazing results.
IMPROVE CASH POSITION
You have bills you have to pay. If you don’t get paid on time you will
inevitably run into dry spells when you owe more than you’re taking in.
By focusing on your accounts receivable, utilizing best practices,
reminding customers to pay, identifying invoices earlier in the process,
and making it easier for customers to pay – you will have a very clear
picture of your cash position. Some account receivable management
applications include a statistical cash forecast based on your customer’s
historical payment history, so you know what cash you should receive in
the next week out to the next month.

INCREASE CONTROL OVER CASH AND WORKING

CAPITAL
Understanding your cash position and improving accounts receivable
performance is key to managing and improving working capital. By
managing working capital effectively, you have the insights you need to
make strategic investment decisions such as capital equipment
purchases, new employee hires, facility expansion, and other
investments to grow your business; further you will have more cash on
hand by improving your invoice collection process.

INCREASE ACCOUNTS RECEIVABLE MANAGEMENT

EFFICIENCY
How much time do you waste trying to figure out who to call, when, and
why, and how long does it take you to get the information you need to
resolve issues so you can get paid? The answer – a LOT more time than
you think. According Pay stream Advisors, companies that use accounts
receivable management software to get organized and to automate
mundane tasks can:

o Reduce time spent prioritizing and preparing for calls from 15% to
6%.
o Reduce time spent managing disputes from 40% to 13%.
o Increase the time they spend soliciting customers for payment
from 20% to 62%
IMPROVE CUSTOMER COMMUNICATION
A/R management software should make it easier for you to
communicate with customers. From one screen you can typically review
account information, create emails, attach invoices, create mail merge
documents, and log phone calls. And best of all, every communication is
stored for future review and analysis. Save time and better serve your
customers through improved communication tools embedded in more
advanced accounts receivable management systems.

IMPROVE CUSTOMER SERVICE AND SATISFACTION :

Most customers want to pay you on time, and it’s often your fault they
pay late. Either you didn’t send the invoice early enough for them to
make an on-time payment, or there was a problem with the invoice, and
they won’t pay until it’s fixed. What’s the impact of these preventable
issues on customer satisfaction? They’re significant. Consider that about
50% of all invoice issues are related to missing or incorrect purchase
order information on your invoices – a problem that is very much
preventable. Further, consider how frustrated your customers will be if
you continually call them for late payment when it’s your fault they didn’t
get the invoice soon enough, or when it’s your fault that you continually
exclude their PO from the invoice.
Account receivable management software can automate invoice delivery
to customers, alert you to problems with invoices such as missing
purchase orders, and provides everything you need in one centralized
location so you can serve your customers better, wasting less of their
time, and improving your relationship so they will buy more products and
services down the road.

REDUCE ADMINISTRATIVE COSTS :

It’s the digital age. Are you still mailing statements and invoices or
sending them via fax? Midmarket and enterprise A/R management
business applications are designed to automate every activity that
shouldn’t require human intervention. Why pay someone to print, fold,
and stuff envelopes when you can probably automate those
communications for most, if not all, of your customers. Further, what will
you save in paper, toner, envelopes, postage, and lost time in this
antiquated process.

SHORTEN THE SALES TO PAYMENT CYCLE :

When a distributor or manufacturer makes a sale they incur hard costs
for the inventory and labour required to full fill the order. When a service
organization secures approval for a new project they allocate expensive
resources to provide the service. The key to a successful business is the
ability to get paid as soon as possible on the products or services they
provide. You rely on your accounting system to create the sales order
and the invoice, but then your accounts receivable software takes over.
Invoices can be automatically sent to customers the day they’re created,
and a built-in customer portal and online bill pay capabilities allow your
customers to pay you via credit card or ACH, giving customers more
options to pay you sooner.

MINIMIZE CREDIT RISK :

How much credit should you extend to customers? What’s your risk that
they won’t pay? Every company that extends credit is taking a calculated
risk of getting paid on perishable time or inventory. But that’s the nature
of businesses today – customers expect credit terms, and competitors
extend credit so everyone has to do the same. But there are ways to
reduce your risks. You can rely on information from third party credit
bureaus, which is helpful for new customers, and you can monitor your
existing customer relationships for customers that are slowly becoming
higher risk accounts. Many A/R management software applications allow
you to store credit reports from bureaus, send out credit applications and
file them against account records, create your own credit scoring
formulas, colour code customers by risk level, and setup alerts to notify
you of customers with excessive broken promises, disputes, or accounts
that take longer to pay their bills. Note that there are many accounts
receivable software solutions that specialize in business credit
management that offer little in respect to collections automation while
other applications are stronger in collections with very little credit
functionality.
CASH MANAGEMENT :

Meaning of cash :

Cash, the most liquid asset and also referred to as the life blood of a
business enterprise is of vital importance to the daily operations of
business firms. Its efficient management is crucial to the solvency of the
business because cash is the focal point of the funds flow in a business.
Cash plays a very important role in the entire economic life of an
organization. A firm needs cash to make payments to its suppliers, to incur
day to day expenses and to pay salaries, wages, interest and dividend
etc. Cash is money that is easily accessible either in the bank or any
business.

Cash management :

Cash management refers to the collection, concentration, and

disbursement of cash. The goal is to manage the cash balances of an
enterprise in such a way as to maximize the availability of cash. Factors
monitored as a part of cash management include a company's level of
liquidity, its management of cash balances, and its short-term investment
strategies.

Cash management is particularly important for new and growing

businesses. Cash flow can be a problem even when a small business has
numerous clients, offers a product superior to that offered by its
competitors, and enjoys a sterling reputation in its industry.
 Receivables

Liquidatity
Evaluation Managemen
t

cash
management

Forcasting Payments

Collections

Companies suffering from cash flow problems have no margin of safety

in case of unanticipated expenses. They also may experience trouble in
finding the funds for innovation or expansion. It is, somewhat ironically,
easier to borrow money when you have money. Finally, poor cash flow
makes it difficult to hire and retain good employees.

Following are the importance of cash management :

1. Reduced risk
2. Streamlined processes
3. Faster access to Cash and Data
4. No more downtime
5. Customizable solutions
6. A true partnership

1.Reduced risk :
Many cash management providers also implement a custom cash-in-
transit pickup and delivery schedule to make sure the operation always
has the right amount of cash on hand. Too little cash and businesses can
experience crippling shortages. Too much money in the safe can create a
liability for customers and employees and increases the risk of potential
robbery. Not only does a smart safe solution keep cash secure, it also
helps eliminate the need for employee trips to the bank, further reducing
the chance of either internal or external theft.

2.Streamlined processes :
Not only does a reduction of touch points reduce risk, it increases
operational efficiency and cost savings. With cash management solutions
in place, employees spend less time training or having to learn
complicated, often outdated cash-handling processes. Many smart safe
solutions include built-in tutorials, which free up employees’ time for tasks
that are more vital (and more profitable) to the core business. And built-in
diagnostic systems help employees troubleshoot potential issues, helping
minimize safe downtime for maintenance.

3.Faster access to cash and data :

Transparency is one of the key benefits of cash management.
Streamlined and automated processes, and solutions such as smart
safes, give businesses faster access to their cash. More technologically
driven cash management providers also offer real-time access to
reporting data and account information through online customer portals.
This visibility can facilitate better decision-making, allowing businesses to
more effectively manage and scale their operations.

4.No more downtime :

In the fast-paced world of quick-serves, no one can afford downtime,
whether from cash shortages, human error, or maintenance issues.
Superior cash management capabilities can help eliminate the possibility
of downtime with advanced monitoring and diagnostics. Features such as
predictive maintenance and remote diagnostics reduce the need for in-
person visits from techs. Remote system monitoring and built-in wireless
connectivity help the provider stay on top of possible issues and solve
problems before they happen. This helps ensure that the whole system is
up and running at optimal efficiency.

5.Customizable solutions :
No two operations have the same needs. And there’s certainly no one-
size-fits-all cash management solution. The right cash management
provider should be able to accommodate a business’ specific needs,
whether it’s a small local chain, a larger regional operation, or a national
corporation. Designing the best system can include developing a tailor-
made cash-in-transit schedule, outfitting restaurant units with the right
smart safe configuration, and giving businesses better, quicker access to
their reporting information.

6.A true partnership

Ultimately, the goal of cash management is to help businesses save—and
make—money. It’s in the cash management provider’s best interest to
make sure its customers are happy, safe, and profitable. That involves
really knowing how the business runs and asking the right questions. The
provider will then be able to offer recommendations on the best solutions
for the business operation. And service shouldn’t stop at installation. Cash
management providers should also offer outstanding customer service
and support, helping solve, or even anticipate problems, giving
businesses added peace of mind.

Problem faced in cash management : following types of problem

faced during cash management

1. Problem collecting receivables

2. Business is saddled with bad debts
3. Weak sales
4. Huge overhead costs
5. Weak gross margins

1. Problem collecting receivables : Money tied to receivables

is just paper profit, and it is not useful to your business until you’ve
actually collected and put the monies back into the business. The
challenge will be collecting all those receivables, and collecting
them on time.

2. Business is saddled with bad debts : If your attempts to

collect on the receivables are futile – e.g. the other parties have
filed for bankruptcy or the cost of pursuing the debt is more than
what you will collect – the receivables then become bad debts. Bad
debts are typically written off as an expense. But the more bad
debts you have, the smaller the amount of cash that you can use
for your business.
3. Weak sales :Your sales are the heart of your cash flow. The
persistent lack of sales can affect how your cash coming in to your
business and liquidity. It is important to analyse why sales are weak
and what opportunities can be done to reverse the trend. There are
a number of factors that may result in weak sales, such as product
line up, labour costs and even overcapacity.

4. Huge overhead costs : Another common cause of cash flow

problem is when the business spends too much on overhead.
Overhead costs include all costs of providing goods and services
other than direct labour and direct material.

5. Weak gross margins : Cash flow problems result if prices are

too low, direct costs are too high, or a combination of both
problems.

Cash Inflow and Outflow

Cash Inflow : cash inflow is money received by organization from

its operation activities, Financing activities and investment activities.
Cash inflow is important to major health of the organization’s position.
cash inflow tell from what way company received cash.

Cash inflow of can CCL is from the followings activities :

Cash Inflow

Sale Of Coal

Sale Of Investment

Issue Of Shares
Borrowings
Cash inflow from operating activities : operating activities are
those activities that relates to day life of business. Cash inflow from
operating activities are major sources of incomes of any company or
an organization .CCL received cash in the term of sale of coal to
customers

The potential customers of CCL can be understand by following table

:-

1.Power Sectors 2.Steel Sectors 3.Other Sectors

I. State I. SAIL a) Defe

Electricity (Steel nce
Boards Authority b) Cem
a) JSEB of India ent
(Jharkha Limited) c) Railw
nd State a) BSP ay
Electricity (Bhilai
Board) Steel
b) HSEB Plant)
(Haryana b) BSL
State (Bilasp
Electricity ur
Board) Steel
c) DVB Ltd.)
(Delhi c) RSP
Vidyut (Rourk
Board) ela
d) PSEB Steel
(Punjab Plant)
State d) DSP
Electricity (Durga
Board) pur
e) TVNL Steel
(Tenugha Plant)
t Vidyut
 Nigam
Limited)
f) NTPC
(National
Thermal
Power
Corporati
on), DVC
(Delhi
Vidyut
Corporati
on

II. Private
Steel
Parties
d) TISCO
e) IISCO
f) VSP

For sale of coal CCL uses E-Auction :

About E-Auction :
Coal distribution through e-Auction has been
introduced with a view to provide access to coal for such buyers who are
not able to source coal through the available institutional mechanism. In
the long run it is expected that e-Auction may help in creating spot as well
as future market of coal in the country.

The purpose of e-Auction is to provide equal opportunity to

purchase coal through single window service to all intending Buyers.

E - Auction has been introduced to facilitate across the country

wide ranging access to book coal on-line for all sections of coal Buyers
enabling them to buy coal through a simple, transparent and consumer
friendly system of marketing and distribution of coal.

Cash inflow from investing activities : Inflow Of CCL From

Investing Activities is From :

 Sale of fixes assets

 Sales of investment

 Interest/dividend received from investment

Cash inflow from financing activities : Inflow Of CCL From

Activities Is From :

 Issue of equity shares

 Short term borrowings

 Long term borrowings

Cash outflow : Cash outflow is the total outgoing funds from a

company in a given period of time. Cash outflows include
expenses such as salaries, supplies, and maintenance, as well
as paying dividends or servicing any debt held by the company.

Cash Outflow : Cash outflow is the total outgoing funds from a

company in a given period of time. Cash outflows include expenses such
as salaries, supplies, and maintenance, as well as paying dividends or
servicing any debt held by the company. A company may be required to
seek additional financing if cash outflows exceed cash inflows. So it can
be conclude that cash outflow contain two type of expenditures
1.Capital expenditure
2.Revenue expenditure
 1.capital expenditure
capital expenditure is the use of funds or assumption
of a liability in order to obtain or upgrade physical assets. The intent
is for these assets to be used for productive purposes for at least one
year. This type of expenditure is made in order to expand the
productive or competitive posture of a business. Examples of capital
expenditures are funds paid out for buildings, computer equipment,
machinery, office equipment, vehicles, and software.

Accounting Treatment of capital expenditure : capital

expenditure is recorded as an asset, rather than charging it
immediately to expense. It is classified as a fixed asset, which is then
charged to expense over the useful life of the asset, using
depreciation.
2.Revenue expenditure : Revenue expenditure is a cost that is
charged to expense as soon as the cost is incurred. By doing so, a
business is using the matching principle to link the expense incurred
to revenues generated in the same reporting period. This yields the
most accurate income statement results. There are two types of
revenue expenditure:

 Maintaining a revenue generating asset:- This includes repair

and maintenance expenses, because they are incurred to support
current operations, and do not extend the life of an asset or improve
it.
 Generating revenue:- This is all day-to-day expenses needed to
operate a business, such as sales salaries, rent, office supplies, and
utilities.

Accounting Treatment of Revenue expenditure : Revenue

expenditure is charged from profit and loss account. In other words it is
charged immediately as when it occurred.
o
 DATA ANALYSIS AND INTERPRETATION

Statement for changes in working capital from year 2012 to year2016

of CCL :

Particulars 2012 2013 2014 2015 2016

Current Assets 8514.89 8521.30 7680.77 7478.95 7553.11

Less: Current liabilities 5201.51 4181.50 4250.67 4017.45 4351.98

Working Capital 3313.38 4339.80 3430.10 3461.50 3201.13

Working Capital
5000

4500

4000

3500

3000

2500

2000

1500

1000

500

0
2012 2013 2014 2015 2016

Current Ratio: This ratio shows the relationship between current assets and
current liabilities of a company. It is an important measure of analysing the firm's
ability to pay off its current obligations out of its short-term resources. The
higher the CR, the higher is the amount available per rupee of current
obligations and accordingly, the higher is the feeling of safety and security. The
rule of thumb about the CR is 2:1.
  Current ratio = Current assets / Current liabilities

Particulars 2012 2013 2014 2015 2016

Current Assets 8514.89 8521.30 7680.77 7478.95 7553.11

Less: Current liabilities 5201.51 4181.50 4250.67 4017.45 4351.98

Current Ratio 1.6370 2.0378 1.8069 1.8616 1.7355

current ratio
2.5

1.5

0.5

0
2012 2013 2014 2015 2016

Observation:
The current ratio in CCL registered a fluctuating trend during the period 2012-
22016. It varied between 1.63 in 2012 and 1.73 in the year 2016. On an average,
the CR in CCL was 1.06 during the period 2012- 2016
As a conventional rule ,a current ratio of 2:1 or more considered satisfactory.
The central coalfields limited (ccl) has a current ratio less than 2:1 every year
,during the period 2012-2016 . Therefore ,it may be interpreted to be
insufficient liquid.
Statement For Inventory Figure For Five Year From
2012 To 2016 of CCL

Particulars 2012 2013 2014 2015 2016

1103.2 1067.2 1178.5
Stock of Coal 1379.68 3 8 4 1314.27
Coal Under Development
Less : Provision 0 0 0 0 0.65
1103.2 1067.2 1178.5
(A) Stock of Coal (Net) 1379.68 3 8 4 1313.62

Stock of Stores & Spare Parts (at 179.5

cost 8 182.79 185.77 206.66 210.68
Stores-in-transit 5.41 6.1 0.67 1.25 3.16
Less : Provision 38.12 39.22 39.26 41.04 41.3

000(B)Net Stock of Stores & 172.5

146.87 149.67 147.18 166.87
Spare Parts 4
Workshop Jobs :
Work-in-progress and Finished
1.85
Goods 2.4 1.68 2.7 3.59
Less : Provision
(C )Net Stock of Workshop
1.85 2.4 1.68 2.7 3.59
Jobs

D Press :

work-in-progress and Finished

Goods 1.06 1.25 1.18 0.97 0.99
( E )Stock of Medicine at Central
0.37
Hospital 0.32 0.3 0.35 0.52
( F )Prospecting &
Boring/Development Exp 1.72 1.72 1.71 1.71 1.71

1258.6 1219.3 1351.1

Total (A to F) 1531.5 4 3 4 1492.97
Statement for calculation of total increase or
decrease in stock level from 2012 to 2016

Years 2012 2013 2014 2015 2016

Total (A to F) 1531.5 1258.64 1219.33 1351.14 1492.97
Increas/Decreas (N.Y.-P.Y.) -272.86 -39.31 131.81 141.83
In Percentage -17.8165 -3.12321 10.81004 10.49706

Presentation of year wise stock changes from 2012

to 2017 in graphical bar chart form :
years 2012 2013 2014 2015 2016
1531.5 1258.64 1219.33 1351.14 1492.97
Cells
Observations
It is evident from above that the Inventory of CCL shows a fluctuating trend
during 2012-2016. The average of this ratio during the period of 2012-2016 was
1370.71 . It can also be observed from above table that stock level started
improving after reaching at the lowest 1219.33 in the year2014 .

Statement of Coal Sale Outstanding as on 07/05/2019:

Dues as Increase
Dues as on
CONSUMER on in
01/04/2019
07/05/2019 Dues(NET)
SAIL 497.5430711 484.027613 -13.51546

RINL 294.70 301.04 6.34

TOTAL STEEL 792.25 785.07 (7.18)

NTPC, BADARPUR 128.61 128.61 -

NTPC , DADRI 37.12 86.12 49.00

NTPC, UNCHAHAR 110.00 156.99 46.99

NTPC, FARAKKA 13.91 13.91 -

NTPC, TANDA 89.77 108.76 18.99

NTPC, KANTI - 5.48 5.48

TOTAL NTPC 379.42 499.87 120.45

UPRVUNL 177.46 212.09 34.63

PSPCL 58.21 72.20 13.99

HPGCL - 56.83 56.83

RVUNL 0.86 0.86 -

TOTAL SEB 258.11 363.56 105.45

BRBCL 8.16 13.13 4.97

DVC 232.20 277.11 44.91

ROSA POWER - 15.28 15.28
TENUGHAT VIDYUT
NIGAM 405.35 413.34 7.99

JHAJHAR POWER - 6.19 6.19

MAITON POWER LIMITED 1.89 6.88 4.99

OTHER POWER
UTILITIES 647.59 731.92 84.33

DLF/EIPL 40.33 40.33 -

TOTAL OTHERS 40.33 40.33 -

4,213.81 4,819.92 606.12
GR. TOTAL

Cash Flow Statement From 31.03.2017 To 31.03.2016 :-

31.03.201 31.03.201
Particulars 7 6
Amount (In Amount (In
Cash Flow From Operating Activities crore) crore)
Total Comprehensive Income Tax 2393.65 3174.1
Adjustment For :
Depreciation / Impairment Of Assets 377.39 412.54
Interest From Bank Deposit -258.68 -332
Finance Cost Related To Financing Activity 71.78 77.26
Interest/Dividend From Investment -23.25 -31.38
Profit Or Loss On Sale Of Assets 0.56 0.68
Provision Made And Write Off During The Year 471.5 280.72
Liability Write Back During The Year -185.44 -4.23
Stripping Activity Adjustment 91.03 -225.83
Operating Profit Before Current/ Non- Current
Assets And Liability 2938.54 3351.86
Adjustment For
Trade Receivables 71.64 59.43
Inventory -605 -141.83
Short/Long Term Loans /Advances And Other
Non
Current Assets -638.86 -428.62
Short/Long Term Liability And Provisions 797.04 92.96
Cash Generated From Operations 2563.36 2933.8
Income Tax Paid /Refund -992.51 -1204.04
(A
Net Cash Flow From Operating Activities ) 1570.85 1729.76
Cash Flow From Investing Activities
Purchase Of Fixed Assets -1134.56 -632.95
Investment In Bank Deposit 258.78 332
Change In Investment -28.8 403.79
Investment In Subsidiary -3.2
Interest Pertaining To Investing Activities
Interest / Dividend From Investment 23.25 31.38
(B
Net Cash Flow From Investing Activities ) -884.53 134.22
Cash Flow From Financing Activities
Repayment Of Borrowing
Short Term Borrowing 1374.78 929
Interest And Finance Cost Pertaining To
Financing Activities -71.88 -77.26
Receipts Of Shifting And Rehabilitation Fund
Dividend Paid -3634.04 -1711.74
Dividend Distribution Tax -739.8 -348.47
Buyback Of Equity Share Capital
(C
Net Cash Used In Financing Activities ) -3070.94 -1208.47
Net Increase/Decrease In Cash And Bank
Balances (A+B+C) -2384.62 655.51
Cash And Bank Balance (Opening Balances) 4058.77 3403.26
Cash And Bank Balance (Closing Balances) 1674.15 4058.77

From the above cash flow statement it can be concluded that there is
decrease in cash balance from 4058.77 crore to 1674.15 crore.
 RECOMMENDATIONS

A well designed and implemented working capital management is

expected to contribute positively to the creation of a firm’s value. The
trend in working capital needs and profitability of firms are examined to
identify the causes for any significant differences between the
industries. High investment in inventories and receivables is associated
with lower profitability.

A firm is required to maintain a balance between liquidity and

profitability while conducting its day today operations. Liquidity is a
precondition to ensure that firms are able to meet its short-term
obligations and its continued flow can be guaranteed from a profitable
venture. The importance of cash as an indicator of continuing financial
health should not surprising in view of its crucial role within the
business. This requires that business must be run both efficiently and
profitably. In the process, and asset-liability mismatch may insolvency.
On the other hand, too much focus on liquidity will be at the expense of
profitability.
How to Improve Working Capital Management (Suggestion)
1. The essence of effective working capital management is
proper cash flow forecasting. This should take into account the impact of
unforeseen events, market cycles, loss of a prime customer, and actions
by competitors. The effect of unforeseen demands on working capital
should be factored in.
2. It pays to have contingency plans to tide over unexpected events.
While market leaders can manage uncertainty better, other companies
must have risk management procedures. These must be based on an
objective and realistic view of the role of working capital.
3.Addressing the issue of working capital on a corporate-wide basis
has certain advantages. Cash generated at one location can well be
utilized at another. For this to happen, information access, efficient
banking channels, good linkages between production and billing,
internal systems to move cash and good treasury practices should be
in place.
4.An innovative approach, combining operational and financial skills
and an all encompassing view of the company’s operations will help in
identifying and implementing strategies that generate short term cash.
This can be achieved by having the right set of executives who are
responsible for setting targets and performance levels. They are then
held accountable for delivering. They are also encouraged to be
enterprising and to act as change agents.
5.Effective dispute management procedures in relation to customers
will go along way in freeing up cash otherwise locked in due to disputes.
It will also improve customer service and free up time for legitimate
activities like sales, order entry, and cash collection. Overall, efficiency
will increase due to reduced operating costs.
6.Collaborating with your customers instead of being focused only on
your own operations will also yield good results. If feasible, helping
them to plan their inventory requirements efficiently to match your
production with their consumption will help reduce inventory levels.
This can be done with suppliers also.
 Working capital management is an important yardstick to measure a
company’s operational and financial efficiency. This aspect must form
part of the company’s strategic and operational thinking.
LIMITATIONS
1. Even though it can point we in the right direction towards what is
the answer, it is usually inconclusive.
2. It provide qualitative data. Interpretation of such information can be
judgmental and biased.
3. It involves a smaller sample, hence the results cannot be
accurately interpreted for a generalized population.
4. the data is being Mostly collected through secondary research,
then there is a chance of that data being old and is not updated.

BIBIOLIOGRAPHY

 M. Y. KHAN and P. K. JAIN,FINANCIAL MANAGEMENT

 I. M. KHAN FINANCIAL MANAGEMENT

 Company records : final accounts of CCL and other records

o (http://www.centralcoalfields.in/prfnc/pdf/ccl_anl_rprt.pdf)
 Through Various other websites
 From magazines
 From other publications

ANNEXURE
QUESTIONNAIRE
Q. 1 What IS the objective of Working Capital Management? (Tick more
than one if necessary)
I. Efficient use of current assets
II. II) Liquidity and profitability
III. III) Liquidity profitability and efficient use of current assets iv)
IV. Profitability
V. Confer strictly to Govt regulation
VI. Any other (Please Specify)

Q 2 Which of the following forms the basis for working capital

determination ..
I) Production
II) Sales
III) Operating Cycle
IV) Installed capacity
V) Capacity actually used
VI) Any other
Q.3 Do you review your working capital norms ? Yes/No If yes how often
?
i) Monthly
ii) Quarterly
iii) Yearly
iv) Any other
Q.4 Were there any excess working capital situations ? Yes/No if yes,
how was the surplus utilised ?
I. Temporarily invested
II. Invested in long-term securities
III. Invested in fixed assets
IV. Utilised for repayment of debt
V. Any other (please specify)

Q.5 : What is the approach of financing of working capital?

i) Hedging approach
ii) Conservative approach
iii) Any other (please specify)
Q.6 What are the major forms of financing working capital requirements
? (Tick more than one if necessary)
i) Current liability
ii) Cash credit
iii) Deferred credit 9 0 ;
iv) Working capital loan from central government
v) Equity /long term loans
vi) Any other (please specify)