DECLARATION

I hereby declare that the study entitled “WORKING CAPITAL MANAGEMENT”

in the context of WTTIL” being submitted by me in the partial fulfilment of the

requirement by the IIMS, Meerut is a record of my own work. The study was

conducted at Finance Department, WTTIL.

RAJNI SHARMA

Roll No. – 907570074

M.B.A.. III Sem

1
 ACKNOWLEDGEMENT

Behind every study their stands a myriad of people whose help and contribution make

it successful. Since such a list will be a prohibitively long, I may be excused for

important omissions.

The guidance, help and co-operation of my supervisor Mr. Pankaj Kumar

(Accountant, WTTIL), is gratefully acknowledged with profound gratitude.

I have been benefited from discussion with Dr. Ruchi Tyagi (Head of the

Department) & Mr. Nitin Sharma (faculty, Finance, IIMS, Meerut).

I am also thankful to all others in Finance Department, Wttil, who provided me with

all the required information for my project.

RAJNI SHARMA

2
 PREFACE

With the ongoing revolution in M.B.A. where Innovations are taking at the blink of

eye; it is impossible to keep the pace with the emerging trends.

Excellence is an attitude that that whole of human race is born with. It is the

environment that makes sure that whether the result of this attitude is visible or

otherwise. A Well planned, properly executed and evaluated Industrial training helps

a lot in inculcating a professional attitude. It provides a linkage between the

student and industry to develop an awareness of industrial approach to problem

solving, based on a broad understanding of process and mode of operation of

organization.

During this period, the student gets the real experience for working in the actual

Industry environment. Most of the theoretical knowledge that has been gained during

the course of their studies is put to test here. Apart from this the student gets an

opportunity to learn the latest technology , which is immensely helps in them in

building their career .

I had the opportunity to have a real experience on many ventures, which increased my

sphere of knowledge to great extent. I got a chance to learn many new technologies

and was also interfaced to many instruments. And all this credit goes to

organization Wttil

3
 ABSTRACT

This project is based on the study of working capital management in

Wttil. An insight view of the project will encompass – what it is all about,
what it aims to achieve, what is its purpose and scope, the various
methods used for collecting data and their sources, including literature
survey done, further specifying the limitations of our study and in the last,
drawing inferences from the learning so far.
Wttil, is a leading domestic Sugar Manufacturing company. to
institutional clients as well as in retail segment. It also offers hardware
support services to existing clients through annual maintenance contracts,
network consulting and facilities management.
The working capital management refers to the management of working
capital, or precisely to the management of current assets. A firm’s
working capital consists of its investments in current assets, which
includes short-term assets—cash and bank balance, inventories,
receivable and marketable securities.
This project tries to evaluate how the management of working capital is
done in Wttil through inventory ratios, working capital ratios, trends,
computation of cash, inventory and working capital, and short term
financing.

4
 CONTENTS

1. Preface
2. Acknowledgement
3. Abstract
4. Introduction of Wttil
5. Research methodology
6. Meaning of working capital
7. Analysis of working capital management-Wttil
a. Debtors management
b. Inventory management
c. Cash management
8. SWOT analysis
9. Findings
10. Limitations
11. Suggestion & Recommendation
12. Conclusions
13. Bibliography

5
 COMPANY PROFILE
Wireless-TT Info Services Limited

Wireless TT Info Services Ltd (WTTIL), a wholly-owned company of Tata

Teleservices Ltd, is a leading provider of telecom infrastructure, systems, networks

and services on a shared, multi-tenancy basis, with over 10,000 cell towers across

India.

WTTIL builds, operates and provides telecommunication infrastructure, equipment,

systems, networks and services for transmission of voice and data communications.

The company owns more than 10,000 cell sites and towers in India. 

WTTIL is a wholly-owned company of Tata Teleservices Ltd, a pioneer in wireless

telephony in India, providing voice, text, and image & data communications services

to more than 19 million customers in over 3,400 towns in 20 Indian circles.

TATA Teleservices Ltd

A Tata Group enterprise, Tata Teleservices Ltd was the first company in India to

launch CDMA mobile services, currently offers services under the brand name 'Tata

Indicom.' The company, which heralded convergence technologies in the Indian

telecom sector, is today the market leader in the fixed wireless telephony market with

a total customer base of over 3.8 million.

Tata Teleservices’ bouquet of telephony services includes Mobile services, Wireless

Desktop Phones, Public Booth Telephony and Wireline services. Other services

include value added services like voice portal, roaming, post-paid Internet services, 3-

way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling

card services and enterprise services.

6
Some of the other products launched by the company include prepaid wireless

desktop phones, public phone booths, new mobile handsets and new voice & data

services such as BREW games, Voice Portals, picture messaging, polyphonic ring

tones, WAP, JAVA, graphics, and interactive applications like news, cricket,

astrology, etc.

History

The company was incorporated on 17th March 2004. The company was first

incorporated as Tata Tele Info Ltd, and changed its name to “Wireless-TT Info

Services Ltd” on 31st March 2005.

WTTIL has been formed to develop, operate and provide telecommunication

infrastructure, equipment, systems, networks and services for transmission of voice

and data communications.

Board of Directors

Mr. Subodh Bhargava

Chairman, Tata Communications Ltd., & Wartsila India Limited

Mr. Subodh Bhargava holds a Degree in Mechanical Engineering from the University

of Roorkee. He started his career with Balmer Lawrie & Co., Kolkata before joining

7
the Eicher group of companies in Delhi in 1975. On March 31, 2000, he retired as the

Group Chairman and Chief Executive and is now the Chairman Emeritus, Eicher

group.

He is the past President of CII and the Association of Indian Automobile

Manufacturers; and the Vice President of the Tractor Manufacturers Association.

Over several years, he has been a key spokesperson for Indian industry, contributing

to and influencing government policy while simultaneously working with industry to

evolve new responses to the changing environment.

He was a member of the Insurance Tariff Advisory Committee, the Economic

Development Board of the government of Rajasthan. He was also the chairman of the

National Accreditation Board for Certifying Bodies (NABCB) under the aegis of the

Quality Council of India (QCI).

Mr. Bhargava has been closely associated with technical and management education

in India. He was the Chairman of the Board of Apprenticeship Training and Member

of the Board of Governors of the University of Roorkee; The Indian Institute of

Foreign Trade, New Delhi; Indian Institute of Management, Indore; the

Entrepreneurship Development Institute of India, Ahmedabad..

He is currently on the Board of Governors of IIM ( Lucknow ) and other Institutions

for Engineering and Business Management Education; the Centre for Policy

Research; Member, Technology Development Board, Ministry of Science &

Technology, Govt. of India.

8
 

He has been conferred with the first IIT Roorkee Distinguished Alumnus Award in

2005 by Indian Institute of Technology, Roorkee. Mr Bhargava is the Chairman of

Tata Communications Limited and also Wartsila India Limited and Director on the

boards of several Indian Corporates such as Tata Steel Limited; Tata Motors Limited ;

Larsen & Toubro Ltd. ; Batliboi Limited ; Carborundum Universal Limited ;

GlaxoSmithKline Consumer Healthcare Limited ; Samtel Color Limited ;  SRF

Limited and TRF Limited.

Mr Arunkumar R Gandhi

Chairman

Mr Gandhi became an executive director of Tata Sons in August 2003, and is a

member of the Tata Group Corporate Centre. He is a fellow member of the Institute of

Chartered Accountants of England and Wales, and that of India. He is an associate

member of the Chartered Institute of Taxation, London.

Prior to joining Tata Sons, he was a senior partner at M/s N M Raiji & Company from

July 1969 to July 2003. He became a senior partner in 1993. During his tenure with

the firm, he handled a variety of client engagements, including advisory services

relating to mergers and acquisitions, national and international tax issues, structuring

9
efficient investment routes, and designing employee stock option plans. He is also on

the panel of arbitrators of the Indian Merchants’ Chamber.

He is a director of Raychem RPG Ltd, Bayer Diagnostics India Ltd, Benares Hotels

Ltd, The Paper Products Ltd, Tata Sons Ltd, UltraTech Cement Ltd, Tata Asset

Management Co. Ltd, E2E Serwizsol Ltd, Tata Tea (GB) Ltd, Tata Tea Inc., Indo

Maroc Phosphore S.A and VSNL Singapore Pte. Ltd. He is a member of the Audit

Committee of The Paper Products Ltd and UltraTech Cement Ltd. He is also the

Chairman of the Audit Committee and Shareholders/Investors Grievance Committee

of Bayer Diagnostics India Ltd.

Mr. Anil Kumar Sardana

Managing Director, Tata Teleservices Limited

Mr Anil Kumar Sardana is the Managing Director of Tata Teleservices Ltd, India’s

fastest growing telecom service provider and also serves on the Boards of other Tata

Group companies. Ever since he took over the reins of TTSL, he has given a new

thrust to growth and performance of the Company which is resulting into better

market penetration and acquisitions by the company. Prior to taking over the reins of

TTSL, Mr Sardana was Executive Director on the board of Tata Power Company

Limited, responsible for the Strategy and Business Development functions. During his

Tata Power days, he was associated with turnaround of a Retail distribution company

taken over from State-owned enterprise as its Managing Director & CEO. The

10
company reached a point of performance in four years wherein recognitions came in

from all quarters on new benchmarks & new initiatives in the area of consumer care.

The company is today recognized as a benchmark case-study in power distribution,

globally.

Mr. Sardana has been bestowed with numerous recognitions, significant among them

being the “Best CEO Award in 2006 and 2007” from two key South Asian Energy

Sector Associations.

Mr Sardana has more than 29years of experience in the Infrastructure sector. Over the

years, he has successfully managed turnaround and change management in two key

organizations and established Independent/JV companies from concept to benchmark

performance standards. He has in the past held Chairmanship of Telecom &

Broadband Committee of CII & Membership of the CII National Committee on

Corporate Social Responsibility and was the Chairman of the CII CSR Sub-committee

(Northern Region), as also the Sub-committee of Power, Water and Energy. He was

also the Chairman of the Tata’s Northern Regional Forum for two years.

A graduate in Engineering (BE) from the Delhi College of Engineering, he also holds

a Post-Graduate degree in Cost Accountancy (ICWAI) and a Post Graduate Diploma

in Management, and has attended a Top Management Program at the Indian Institute

of Management, Ahmedabad.

Contact

Corporate Communications Department 

11
 Tata Teleservices Limited 

Tel +91 11 66558100 & +91 11 66551013, +91 9212105151 

Fax +91 11 66558100 

www.tatateleservices.com

Mr S K Gupta

Director

Group Telecom Advisor, Tata Teleservices Limited

Shri Shailendra Kumar Gupta was born on September 9, 1942. He earned a Bachelor

of Science degree from Lucknow University and a degree in electrical engineering

from Roorkee University in 1964, where he was a Gold Medallist. He was

immediately absorbed as a Lecturer in Electrical Engineering at Roorkee University.

Mr Gupta joined the Indian Telecom Service in September 1965 and held various

responsible positions in the Department of Telecommunications and Mahanagar

Telephone Nigam Limited in the fields of planning, installation, maintenance, training

and management of telecommunication systems.

Some of the important postings were:

 Chief General Manager, Gujarat Telecom Circle

12
 Principal General Manager (Operations), Mahanagar Telephone Nigam Ltd.,

Delhi  

 General Manager (Projects Management), General Manager (Long Distance)

and General Manager (South), General Manager (Corporate Office), MTNL, Delhi

 General Manager Telephones, Jaipur

 District Manager Telephones, Allahabad  

 Director Switching and Deputy General Manager, Advanced Level Telecom

Training Centre, Ghaziabad - an ITU / Government of India establishment

 Assistant Director General, Telecom Headquarters, New Delhi.

 He was deputed through the United Nations to Malawi, Africa as a switching

telecom expert during 1982-83.

Mr Gupta first took charge of Videsh Sanchar Nigam Limited (VSNL) as its chairman

and managing director in September 1999 He has been closely associated with various

international telecom bodies including INTELSAT, the Commonwealth

Telecommunication Organisation (CTO), Asia Pacific Telecommunications (APT),

the International Maritime Satellites (INMARSAT), and the South Asian Association

for Regional Co-operation (SAARC) Telecom Projects.

In pursuance to the government policy and consequent to disinvestment of VSNL in

February 2002,VSNL was acquired by the Tata Group.

13
Mr S G Murali

Director

Chief Financial Officer, Tata Teleservices Limited

Mr S G Murali, Chief Financial Officer, Tata Teleservices Ltd, has been associated

with the Company from the project phase. Murali joined Tata Communication

Limited (licensed to operate in GSM Mobile services in Andhra Pradesh Circle) in

1997, the first telecom venture of the Group and subsequently moved to Tata

Teleservices in June 1999.

During his long tenure with Tata Teleservices, he has been a part of the Management

Team in building up strong Accounting Systems & Financial Controls, Corporate

Planning, Business Support and Revenue Assurance. With his in-depth understanding

of the Telecom business, he has been able to provide strong support to the business

from a financial perspective.

Prior to joining Tata Teleservices, Mr Murali was the Vice President (Finance) at

President Park Properties Public Company Limited (Bangkok), which gave him

exposure to working in an international environment. Earlier, he worked with

Metallurgical & Engineering Consultants (India) Limited, a turnkey project

management consultancy organisation in 3 projects over 3.5 years and also with

Companies including Ashok Leyland and Blaze Enterprise during the beginning of his

career.

14
Having been in senior management roles for some years now, Mr Murali has a good

understanding of business needs as well as experience of managing large teams.

Mr Murali is a Graduate in Physics from the University of Madras. He is also a fellow

member of the Institute of Chartered Accountants of India and an Associate Member

of the Institute of Cost Accountants of India.

Mr. Sunil Kanoria

Director

Mr. Sunil Kanoria, a seasoned businessman, is by qualification a Chartered

Accountant and possesses a vital experience in the infrastructure sector including

infrastructure leasing & finance and renting of infrastructure equipments. He is on the

Board of Quippo and Srei Group Companies including the following Companies:

SREI Infrastructure Finance Limited - Vice Chairman & Director

SREI Equipment Finance Pvt. Ltd. – Joint Managing Director

NAC Infrastructure Equipment Limited -  Director

Quippo Infrastructure Equipment Limited -VCMD

Quippo Oil and Gas Infrastructure Limited - Director

GoIndustry Quippo Valuers and Auctioneers Pvt. Limited. -  Director

15
He is also member in the renowned Committees including ASSOCHAM,

Construction Industry Development Council, Indian Society for Trenchless

Technology and Finance Industry Development Council.

Mr. Hemant Kanoria

Director

Mr. Hemant Kanoria, a well-known personality in finance sector and currently

holding the position of Chairman & Managing Director of SREI Infrastructure

Finance Ltd. He is also on the Board of Quippo and Srei Group Companies including

the following Companies:

SREI Equipment Finance Pvt. Ltd. – Joint Managing Director

Quippo Construction Equipment Limited -  Director

Quippo Oil and Gas Infrastructure Limited - Director

GoIndustry Quippo Valuers and Auctioneers Pvt. Limited - Director

Mr. Satish Mandhana

Director

16
Mr. Satish Mandhana is a Managing Director (Investments) of IDFC Private Equity

Company Limited, has over 25 years of private equity and corporate finance/ business

strategy experience. He is member of CCI Committee on Company Law & Taxation.

He has completed MBA from Faculty of Management Studies, Delhi University and

BE in Industrial Engineering from IIT, Roorkee.

Mr. Amit Jain

Director

Amit Jain is based in and working at Oman Investment Fund (OIF), owned by the

Govt. of Oman. At OIF, Amit is responsible for deal sourcing, structuring,

negotiations and managing due-diligence for potential Private Equity transactions.

Amit has led the investment process across geographies and sectors. He is also

responsible for portfolio management for companies in Asia and . 

Prior to OIF, Amit worked as a Management Consultant at Delta Partners in ,

providing strategic advice to C level executives at large telecom operators in Middle

East and . Earlier, Amit worked with Electronics for Imaging in , conducting technical

due-diligence, developing new businesses and managing project for blue chip High

Tech companies. 

Amit has received an MBA from INSEAD in / and holds a degree in Computer

Science & Engineering from IIT Kanpur in .

17
Mr. Dipankar Chatterji

Director

Mr Dipankar Chatterjee has recently joined the TRF Ltd Board as an Independent and

Non-Executive Director. A Fellow of the institute ofChartered Accountants of India,

Mr Chatterjee served in a multi-national company from 1969-1972, before venturing

into public practice from 1972 onwards. He joined L B Jha & Co, Chartered

Accountants in 1975 and is presently a senior partner in the firm. 

Mr Chatterjee is also on the Board of three nationalize banks, a public sector mutual

fund, an associate company of State Bank of India and a State Industrial Development

Corporation. Mr Chatterjee’s list of achievements is lengthy and impressive. Apart

from being on the Board of various companies, he is:

•    Vice-President of one of the top 10 B Schools in the country

•    On the Advisory Committee of the B School run by IIT Kharagpur.

•    Was appointed by RBI as a member of the Pasmanabhan Committee set up to

review RBI's supervision over Banks. 

•    Was appointed on a committee set up to revamp NABARD's supervisory role. 

•    Was appointed as expert witness by Commercial Court of London in Litigation

pertaining to the Indian security scam of 1992. 

18
Mr Chatterjee is also on the Board of foreign companies/ organisations, such as, 

•    Institute Of Management Technology Fz-Llc  

•    International Infrastructure Services Fz Llc

Is/has been on the Board of three nationalised Banks, a public sector Mutual Fund, a

Stock Exchange, an associate company of State Bank of Indiaand a State Industrial

Development Corporation.

He has been nominated on the Board of Directors of various companies by

Banks/Financial Institutions.

Is/has been on the Board of a large number of companies.

Was appointed,

· By Reserve Bank Of India (RBI) as a member of the Padmanabhan Committee set

up to review RBI's supervision over Banks

· On a Committee set up to revamp NABARD's supervisory role

· As an expert witness by Commercial Court of London in litigation pertaining to the

Indian security scam of 1992

· By Indian Banking Association (IBA) on a Committee set up to review the

effectiveness of Bank audits

· On a Committee to advise on privatization of electricity distribution in Orissa

· On a Committee to advise on restructuring of public sector undertakings inWest

Bengal

· On a Committee to formulate plans for the industrial development of the State of

Assam

· Member of Kelkar Committee on Direct Taxes

· Member of Regional Direct Tax Advisory Committee, Government of India.

19
· Founder Member of Services Export Promotion Council set up by Government of

India.

· Member of Indo-UK Accountancy Board set up by Ministry of Commerce to

negotiate WTO related modalities for trade in accounting services between the two

countries.

· Member of Advisory Council for B School, run by IIT Kharagpur.

· Vice President of Management Committee of one of the top 10 B-School's in the

country.

· Member of Steering Committee for the North East set up by the Planning

Commission of India.

Other positions held include,

· Member of the Central Council of the Institute of Chartered Accountants ofIndia

· Chairman of the Auditing Practices Committee of the Institute of Chartered

Accountants of India

· Chairman of the Eastern India Regional Council of the Institute ofChartered

Accountants of India.

He was also

· President (Eastern Region) of the Indo-American Chamber of Commerce 

· Chairman (Eastern Region) of Confederation of Indian Industry (CII)

He is currently,

· Chairman of North East Council of CII

· Member of the National Council of CII.

Promoters

Tata Teleservices Ltd (TTSL)

20
A Tata Group enterprise, Tata Teleservices Ltd was the first company in India to

launch CDMA mobile services, currently offers services under the brand name 'Tata

Indicom.' The company, which heralded convergence technologies in the Indian

telecom sector, is today the market leader in the fixed wireless telephony market with

a total customer base of over 3.8 million.

Tata Teleservices’ bouquet of telephony services includes Mobile services, Wireless

Desktop Phones, Public Booth Telephony and Wireline services. Other services

include value added services like voice portal, roaming, post-paid Internet services, 3-

way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling

card services and enterprise services.

Some of the other products launched by the company include prepaid wireless

desktop phones, public phone booths, new mobile handsets and new voice & data

services such as BREW games, Voice Portals, picture messaging, polyphonic ring

tones, WAP, JAVA, graphics, and interactive applications like news, cricket,

astrology, etc.

TTSL has hived off the passive infrastructure to WTTIL by way of business

transfer agreement effective October 31, 2007

21
 Why WTTIL?
Welcome to the world of career opportunities at Wireless-TT Info Services Ltd

(WTTIL).

WTTIL aims at being the best provider of telecom infrastructure assets and services in

the world, and is therefore focussed on achieving business competitiveness,

leveraging global opportunities and acquiring global capabilities.

With attractive compensation and benefits packages, and motivating & challenging

environments and jobs, WTTIL is committed to being the preferred employer with its

most valuable asset – its people.  WTTIL offers highly critical and extremely

challenging roles in the telecom infrastructure vertical and like its parent companies,

its talent management goals are geared towards creating a pipeline of potential

leaders.

WTTIL is part of the trusted Tata Teleservices – which in turn is part of the INR Rs

96723 Crore (US$ 22 billion) Tata Group - India's largest private-sector employer that

has over 98 operating companies worldwide, about 290,000 employees and more than

2.8 million shareholders. With a committed investment of INR 36,000 Crore (US$ 7.5

billion) in Telecom (FY 2006), the Group has a formidable presence across the

telecom value chain. WTTIL’s parent company Tata Teleservices has a strong

workforce of 6,000. In addition, TTSL has created more than 20,000 jobs, which

include 10,000 indirect jobs through outsourcing of its manpower needs.

Current Opportunities

Current Opportunities

We have exciting opportunities in the following fields for all levels:

 Business Development

22
 Supply Chain Management

 Telecom Infrastructure Projects

 Telecom Infrastructure Operations and Maintenance

Interested Candidates can upload their resume to us and we'll get in touch with you

about suitable opportunities.  

What is WTTIL? What are the services provided by WTTIL?

Wireless-TT Info Services Ltd (WTTIL), a wholly-owned company of Tata

Teleservices Ltd, is a leading provider of telecom infrastructure – networks, systems

and services and hi-end voice, data & image transfer solutions – on a shared, multi-

tenancy basis. It builds, operates and provides telecom infrastructure, equipment,

systems, networks and services for transmission of voice and data communications.

The company owns more than 10,000 cell sites and towers in India.

What is Site Finder?

WTTIL has provided the Site Finder service through this Website. The Site Finder

enables WTTIL to display all information about its towers in a single online real-time

managed system that provides a  fully-searchable interface that is integrated with

Maps; enabling viewing tower locations on satellite maps.

The Site Finder provides you with all the tower information that would help you make

a decision about the viability of a cell site and location. With this unique service,

customers can view detailed information of the tower structure including pictures and

create an online request through eQuicklooks for further information about the tower.

An ‘Add to Favourites’ facility helps you select your preferred towers and add them

to your “favourites list.” 

23
You can search by Radius / Latitude / Longitude and/or Region or drill down via an

integrated Map-based search.The Site Finder has an integrated Map-search facility to

allow map-based searches in the first instance.

How do I access Site Finder?

You can view the Site Finder by clicking on "Site Finder" in the left navigation menu.

Without a registered account, you can perform a free search for information on all the

cell sites. However, to be able to raise eQuicklooks, you would need to register with

us for an account.

Click on “Need Access” and enter your details in the e-mail.  We will send you details

of your Login ID and password, subject to terms and conditions.

Do I require a Login to access Site Finder? How do I get a Login ID?

Site Finder can be accessed without a registered account and you can access

information on all the towers and cell sites listed in the Site Finder. However, in order

to be able to raise eQuicklooks, you would need to register with us for a login

account.

Click on “Need Access” and enter your details in the e-mail. Your email is sent to the

relevant WTTIL authorities who would consider your application. If your application

is approved by WTTIL, an email would be sent to you with the details of your Login

ID and password.

What should I do in case I forget my password?

Click on “Forgot Password” button on the login page.  We will send you details of

your Login ID and the password.

24
 How do I Search for tower information?

You can perform a Search in two ways: 

 Site Search Box on the left navigation throughout the Website: Choose the

Circle name from the dropdown, or enter the location address. Click on Search. The

search results are displayed in a table and a Map. You find two tabs – “Search

Results” and “Map.” Click on the “view” link against the tower record in the search

results table, to view the complete tower specs, including documents, pictures, and

panoramic videos. Click on the “Map” tab to view the tower’s location on a Map and

its satellite images.   

 Search form in the main Site Finder screen: Enter the key criteria such as

longitudes, latitudes, location name, site name etc, in the search form and click on

“Search.” The search results are displayed in a table and a Map. You find two tabs –

“Search Results” and “Map.” Click on the “view” link against the tower record in the

search results table, to view the complete tower specs, including documents, pictures,

and panoramic videos. Click on the “Map” tab to view the tower’s location on a Map

and its satellite images. 

How do I compare towers?

Select the towers from the results table by clicking on the “Add to Compare” link.

You can add up to 5 towers for comparison. You can see the selected sites on top of

the search results grid. Click on “Compare Sites.”  You can also de-select any of the

selected sites and add a new selected site to the comparison list. The comparison chart

is displayed in a pop-up.

25
How do I add cell sites and towers that I prefer to My Favourites list?

Using ‘Add to My favourites” facility, you can avoid searching for your preferred

sites every time you visit this Website. To use the “Add to Favourites” facility, you

need to be an authorised customer. Select your preferred tower from the search results

table and click on the “View” link. In the site pack details page, click on the “Add to

Favourites” button on the right. All your selected towers are listed in your “My

Favourites” link in the left navigation menu.

What are eQuicklooks?

Using ‘eQuicklooks” facility, a customer can inform WTTIL about their interest for

tenancy or sharing for a particular tower and initiate the process through direct online

enquiries. WTTIL users can then use the same service to respond to the requests and

take the sharing process forward.

How do I inform WTTIL that I am interested in further details on tenancy and

sharing?

Using ‘eQuicklooks” facility, you can inform WTTIL about your interest for

tenancy/sharing in a particular tower and initiate the process of direct enquiry to take

the sharing process forward.

To use the “eQuicklooks” facility, you need to be an authorised customer. Select your

preferred tower from the search results table and click on the “View” link. In the site

pack details page, click on the “eQuicklook” button.

An email, addressed to WTTIL, is generated. You can either “Save” the request for

reference at a later point of time, or “Send to WTTIL.” An email is sent to the

26
relevant WTTIL authorities, who send their responses online to take the process

forward.

How can I check WTTIL’s response to my requests for details on tenancy and

sharing?

Using ‘eQuicklooks” facility, you can inform WTTIL about your interest in a

particular tower and initiate the process of direct enquiry (as explained in the earlier

section). Once WTTIL receives your request, work queues are generated for you. You

can see the requests sent by you in your “Sent eQuicklooks” work queues. Once the

WTTIL user responds with the details, you can see their response in your “Received

eQuicklook” work queues.    

   

Work queues are the screens that help you manage the different tasks that you have to

perform. Work Queues help you view, manage and track all your tasks pertaining to

eQuicklooks.

How can the WTTIL User check a customer’s request for details on tenancy and

sharing?

Using ‘eQuicklooks” facility, customers inform WTTIL about their interest in a

particular tower and initiate the process of direct enquiry (as explained in the earlier

sections).

Once a request is raised, you as WTTIL user can see the request sent to you in your

“Received eQuicklooks” work queues. You can respond with the necessary details

and click on “Send to Sharer” to take the process forward, and you can view these

responses from your “Sent eQuicklooks” work queues. Any further responses from

27
the customer can be seen in your “Received eQuicklook” work queues.    

   

Work queues are the screens that help you manage the different tasks that you have to

perform. Work Queues help you view, manage and track all your tasks pertaining to

eQuicklook

28
 CONSOLIDATED INCOME STATEMENT
Quarterly Results – Q3FY’08

1. Revenue at 332.9 crores , up 33.87% Y-o-Y

2. PBT at 8.00 crores , up 26.48% Y-o-Y
3. PAT at 4.93 crores , up 25.42% Y-o-Y

Quarterly Results – Q2FY’08

1. Revenue at 284.2 crores , up 38% Y-o-Y

2. PBT at 9.56 crores , up 53% Y-o-Y
3. PAT at 6.28 crores , up 27% Y-o-Y

Quarterly Results - Q1FY’08

1. Revenue at 244.86 crores, up 48.82% Y-o-Y

2. PBT at 8.03 crores, up 255.30 % Y-o-Y
3. PAT at 5.06 crores, up 246.31% Y-o-Y

Half Yearly Results – H1FY’08

1. Revenue at 529.07 crores, up 43.04% Y-o-Y

2. PBT at 17.60 crores, up 107.32 % Y-o-Y
3. PAT at 11.34 crores, up 77.24% Y-o-Y

Nine Months Results – 9MFY’08

1. Revenue at 862.06 crores, up 39.35% Y-o-Y

2. PBT at 25.60 crores, up 72.81% Y-o-Y
3. PAT at 16.27 crores, up 82.20% Y-o-Y

29
Year Results – FY’08

1. Revenue at 1111.24 crores, up 25.79% Y-o-Y

2. PBT at 33.49 crores, up 35.51% Y-o-Y
3. PAT at 23.35 crores, up 43.56% Y-o-Y

Financial Performance - Infocomm

Quarterly Results – Q3FY’08

1. Revenue at 305.99 crores , up 40.81% Y-o-Y

2. PBIT at 10.42 crores , up 22.24% Y-o-Y

Quarterly Results – Q2FY’08

1. Revenue at 253.50 crores , up 53.8% Y-o-Y

2. PBIT at 9.67 crores , up 62.5% Y-o-Y

Quarterly Results – Q1FY’08

1. Revenue at 222.54 crores up 168.3% Y-o-Y

2. PBIT at 10.27 crores up 344% Y-o-Y

Half Yearly – H1FY08

1. Revenue at 476.04 crores up 160% Y-o-Y

2. PBIT at 19.86 crores up 223% Y-o-Y
Nine Months Results – 9MFY’08

30
1. Revenue at 782.03 crores up 160% Y-o-Y
2. PBIT at 19.86 crores up 52.07% Y-o-Y

Year Results – FY’08

1. Revenue at 1013.84 crores up 135% Y-o-Y

2. PBIT at 41.74 crores up 201.3% Y-o-Y

31
 GROWTH OF WTTILA

Segmental Growth

Revenue mix (FY04-FY07)

32
33
Quarterly Comparison

34
35
36
37
 SWOT ANALYSIS

STRENGTH (S): -

 Low cost producer of quality equipment due to cheap labour and fully depreciated

plants.

 Flexible manufacturing set up.

 Entry barrier due to high replacement cost of its manufacturing facilities.

 Comprehensive turnkey experience from product design to commissioning.

WEAKNESSES (W): -

 High working capital requirement due to its exposure to cash starved SEBs (State

electricity boards).

 Inability to provide project financing.

OPPORTUNITIES (O): -

 High-expected growth in power sectors (7000 MW/p.a.needs to be added).

 High growth forecast in India’s index of industrial production would increase

demand for industrial equipment such as motors and compressors.

THREATS (T): -

 Technical suppliers are becoming competitors with the opening up of the Indian

economy.

 Fall in global power equipment prices can effect profitability.

38
 RESEARCH OBJECTIVES

To study working capital management in Wttil.

1. To study the inventory management.

2. To study the cash management

3. To study the debate management

39
 SCOPE OF THE STUDY

This project is vital to me in a significant way. It does have some

importance for the company too. These are as follows –

This project will be a learning device for the finance student.

Through this project I would study the various methods of the
working capital management.
The project will be a learning of planning and financing working
capital.
The project would also be an effective tool for credit policies of the
companies.
This will show different methods of holding inventory and dealing
with cash and receivables.
This will show the liquidity position of the company and also how do
they maintain a particular liquidity position.

40
 RESEARCH METHODOLOGY

Research methodology is a systematic way, which consists of series of action steps,

necessary to effectively carry out research and the desired sequencing to these steps.

The marketing research is a process of involves a no. of inter-related activities, which

overlap and do rigidly follow a particular sequence. It consists of the following steps:-

 Formulating the objective of the study

 Designing the methods of data collection

 Selecting the sample plan

 Collecting the data

 Processing and analyzing the data

 Reporting the findings

Objective of Study

Research Design

Sample Design

Data Collection

Data Analysis

Report of findings

41
 RESEARCH DESIGN

Research design specifies the methods and procedures for conducting a particular

study.

A research design is the arrangement of conditions for collection and analysis of the

data in a manner that aims to combine relevance to the research purpose with

economy in procedure. Research design is broadly classified into three types as

 Exploratory Research Design

 Descriptive Research Design

 Causal Research Design

I have chosen the descriptive research design.

42
DESCRIPTIVE RESEARCH DESIGN:

Descriptive research studies are those studies which are concerned with described the

characteristics of particular individual.

In descriptive as well as in diagnostic studies, the researcher must be able to define

clearly, what he wants to measure and must find adequate methods for measuring it

along with a clear cut definition of population he want to study. Since the aim is to

obtain complete and accurate information in the said studies, the procedure to be used

must be carefully planned. The research design must make enough provision for

protection against bias and must maximize reliability, with due concern for the

economical completion of the research study.

43
 COLLECTION OF DATA

DATA COLLECTION

The study was conducted by the means of personal interview with respondents and

the information given by them were directly recorded on questionnaire.

For the purpose of analyzing the data it is necessary to collect the vital information.

There are two types of data, this are-

 Secondary data

SECONDARY DATA:-

Secondary data means data that are already available i.e. they refer the data which

have already been collected and analyzed by someone else. When the researcher

utilizes secondary data, than he has to look into various sources from where h e can

obtain them, in this case he is certainly not confronted with the problems that are

usually associated with the collection of original data. Secondary data may either be

published data or unpublished data. Usually published data are available in:

 Annual financial documents of Wttil

COLLECTION TECHNIQUE:

Descriptive method is used in collection the data.

44
45
MEANING OF WORKING CAPITAL

Working Capital is commonly defined as the difference between current assets and

current liabilities. Efficient working capital management requires that firms should

operate with some amount of working capital, the exact amount varying from firm to

firm and depending, among other things on the nature of industry.

Capital required for a business can be classified in two main categories viz.

1) Fixed capital, and

2) Working capital.

Every business needs funds for two purposes-for establishment and to carry out its

day-to-day operations. Long-term funds are required to create production facilities.

Through purchase of fixed assets such as plants and machinery, land, building,

furniture, etc. Investments in these assets represents that part of firm’s capital which is

blocked on permanent or fixed basis and is called fixed capital. Funds are also needed

for short-term purpose for the purchase of raw material, payment of wages and other

day-to-day expenses, etc. These funds are known working Capital. In simple words,

working capital refers to that part of the firm’s capital, which is required for

financing short-term or current assets such as cash, marketable securities,

debtors and inventories. Funds thus invested in current assets keep revolving fast

and are being constantly converted into cash and this cash flows out again in

exchange for other current assets. Hence, it is also known as revolving or circulating

capital or short-term capital

46
CLASSIFICATION OF WORKING CAPITAL

Working Capital may be classified on two basis: -

a) On the basis of Concept: -

On the basis of concept, working capital can be classified as,

 Gross Working Capital

 Net Working Capital

b) On the basis of Time: -

On the basis of time, working capital can be classified as,

 Permanent or Fixed Working Capital

 Temporary or Variable Working Capital

Gross Working Capital: -

The Gross Working Capital is the Capital invested in the total current assets of the

enterprises. Current assets are those assets, which can be converted into cash within a

short period, normally an accounting year.

Gross Working Capital = Total Current Assets

Net Working Capital: -

The term Net Working Capital refers to the excess of current assets over current

liabilities, or say,

Net Working Capital = Current Assets – Current Liabilities

Net Working Capital can be positive or negative. When the current assets exceeds

the current liabilities the working capital is positive and the negative working capital

results when the current liabilities are more than the current assets. Current liabilities

47
are those liabilities, which are intended to be paid in the ordinary course of business

within a short period of normally one accounting year out of the current assets of the

income of the business. The gross working capital concept is financial or going

concern concept whereas net working capital is an accounting concept of working

capital. Both the concepts have their own merits.

The gross concept is sometime preferred to the concept of working capital for the

following reasons: -

 It enables the enterprise to provide correct amount of working capital at correct

time.

 Every management is more interested in total current assets with which it has to

operate then the sources from where it is made available.

 It takes into consideration of the fact every increase in the funds of the enterprise

would increase its working capital.

 The concept is also useful in determining the rate of return on investments in

working capital.

 The net working capital concept, however, is also important for the following

reasons:-

 It is a qualitative concept, which indicates the firm’s ability to meet its operating

expenses the short-term liabilities.

 It indicates the margin of protection available to short term creditors.

 It is an indicator of financial soundness of enterprise.

 It suggests the need of financing a part of working capital requirement out of the

permanent sources of funds.

48
Permanent or Fixed Working Capital: -

Permanent or fixed capital is the minimum amount, which is required to ensure

effective utilization of fixed facilities and for maintaining the circulation of current

assets. Every firm has to maintain a minimum level of current assets is called

permanent or fixed working capital as this part of working capital is permanently

blocked in current assets. As the business, grow the requirement of working capital

also increases due to increase in current assets.

Temporary or Variable Working Capital: -

Temporary or variable working capital is the amount of working capital, which is

required to meet the seasonal demands and some special exigencies. Variable working

capital can further be classified as seasonal working capital and special working

capital. The capital required to meet the seasonal need of the enterprise is called the

seasonal working capital. Special working capital is that part of working capital which

is required to meet special exigencies such as launching of extensive marketing

campaign for conducting research etc.

Temporary working capital differ from permanent working capital in the sense that it

is required for short periods and cannot be permanently employed gainfully in

business

49
NEEDS AND OBJECTIVES FOR WORKING CAPITAL

Every business needs some amount of working capital. The needs for working

capital, arises due to time gap between production and realization of cash from sales.

There is an operating cycle involved in sales and realization of cash. There are time

gaps in purchase of raw material and production, production and sales, and

realization of cash.

Thus, working capital is needed for the following purposes: -

 For the purchase of raw material, component and spares.

 To pay wages and salaries.

 To incur day- to- day expenses and overhead costs such as fuel, power and office

expenses etc.

 To meet the selling costs such as packing, advertising etc.

 To provide credit facilities to the customers.

 To maintain the inventories of raw material, work in progress, store, spares, and

finished stock

.For studying the need of working capital in a business, one has to study the business

under varying circumstances such as new concern, as a growing and one, which has

attained maturity. A new concern requires a lot of funds to meets its initial

requirement such as promotion and formation etc. These expenses are called

preliminary expenses and are capitalized. The amount needed for working capital

depends upon the size of the company and the ambition of its promoters. Greater the

size of the business unit, generally will be the requirement of the working capital. The

requirement of the working capital goes on increasing with the growth and expansion

of the business until its gains maturity. At maturity, the amount of working capital

required is called normal working capital.

50
 FACTORS DETERMINING THE WORKING CAPITAL REQUIREMENT

1. NATURE OF BUSINESS :-

The requirement of working capital is very limited in public utility undertaking such

as Electricity, Water Supply and Railways because they offer cash sales only and

supply services not products and no funds are tied up in inventories and receivables.

On the other hand, the trading and financial firm requires less investment in fixed

assets but have to invest large amounts in current assets. The manufacturing

undertaking requires sizable amount of working capital along with fixed investments.

2. PRODUCTION POLICY :-

The determination of working capital needs depends upon the production policy of

the business. The demand for certain products is seasonal i.e.; such products are

purchased in certain months of a year. For such industries, two types of production

policy can be followed. Firstly they can produce the goods in the months of demand

or secondly, they produce for the whole year. If the second alternative were followed,

it would mean that until the time of demand finishes, product would have to be kept

in stock. It would require additional working capital.

3. LENGTH OF PRODUCTION CYCLE :-

The longer the manufacturing time, the raw material and other supplies have to be

carried for a longer time in the process with progressive increment of labor and

service costs before the final product is obtained. Therefore, working capital is

directly proportional to the length of the manufacturing process.

51
4. RATE OF STOCK TURNOVER :

There is an inverse co-relationship between the quantum of working capital and the

velocity or speed with which the sales are effected. A firm having a higher rate of

stock turnover will need lower amount of working capital as compared to a firm

having a low rate of turnover.

5. CREDIT POLICY :

Credit policy affects the working capital requirements in two ways:

(a) Terms of credit allowed by customer to the firm,

(b) Terms of credit available to the firm.

A concern that purchases its requirements on credit and sells its product/services

on cash requires lesser amount of working capital and vice-versa.

6. WORKING CAPITAL CYCLE :-

The speed with which the working cycle completes one cycle determines the

requirements of working capital. Longer the cycle larger is the requirement of

working capital.

DEBTORS

CASH FINISHED
GOODS

RAW MATERIAL WORK IN

PROGRESS

52
7. RATE OF GROWTH AND EXPANSION OF BUSINESS: -

The larger size businesses require more permanent and variable working capital in

comparison to small business. If a company is growing, its working capital

requirements will also go on increasing. Thus, the growing concerns require more

working capital as compared to the stable industries.

8. SEASONAL VARIATION: -

Generally, during the busy season, a firm requires larger working capital than in the

slack season.

9. BUSINESS FLUCTUATION: -

In period of boom, when the business is prosperous, there is a need for larger amount

of working capital due to rise in sales, rise in prices, optimistic expansion of business

etc. On the contrary in time of depression, the business contracts, sales decline,

difficulties are faced in collection from debtors and the firm may have a large amount

of working capital idle.

10. EARNING CAPACITY AND DIVIND POLICY :-

Some firms have more earning capacity than other due to quality of their products,

monopoly conditions, etc. Such firms may generate cash profits from operations and

contribute to their working capital. The dividend policy also effects the requirement

of working capital. A firm maintaining a steady high rate of cash dividend irrespective

of its profit needs more working capital than the firm that retain larger part of its

profits and does not pay so high rate of cash dividend.

53
11. PRICE LEVEL CHANGES: -

Price level changes also affect working capital needs. If the prices of different goods

increase, to maintain same level of production, more working capital is needed.

12. AVAILABILITY OF RAW MATERIAL: -

Availability of raw material on the continuos basis affects the requirement of

working capital. There are certain types of raw materials, which are not available

regularly. In such a situation firm requires greater working capital to meet the

requirements of production. Some raw materials are available in particular season

only for example wool, cotton, oil seeds, etc. They have to keep greater working

capital.

13. MAGNITUDE OF PROFIT :-

Magnitude of profit is different for different businesses. Nature of product, control on

the market and ability of managers etc. determine the quantum of profit. If the profit

margin is high, it will help to arrange funds internally, which will also increase the

working capital.

14. OTHER FACTOR: -

Operating efficiency

a) Management ability

b) Irregularities of supply

c) Import policy

d) Asset structure

e) Importance of labor

54
55
 MANAGEMENT OF WORKING CAPITAL

Management of working capital means management of all aspects of current assets

and current liabilities. Basically, Working capital management is concerned with

the problems that arise in attempting to manage the current assets, current

liabilities and the inter relationship that exist between them.

Financial management should determine the quantum and structure of current assets.

It should also see that current assets are financed from the proper sources.

Management should also see that current liabilities are paid in time, while managing

the working capital.

The main objective of working capital management is to manage current assets and

current liabilities in a manner so that working capital can be kept in a satisfactory

level. It is also taken in to account that the working capital should be neither excessive

nor inadequate. The amount of current assets should be adequate to pay the current

liabilities in time and adequate security margin can be maintained. Accordingly,

proper balance among the different constituents of current assets is maintained so that

no current has more than require amount invested in it.

Management of working capital affects profitability, risk and liquidity of the business

significantly. Management should, therefore, maintain proper balance among these

factors while managing working capital. If the quantum of working capital is more, it

will increase liquidity, but decrease profitability and risk. If working capital relatively

declines, it will decrease liquidity but cause an increase in profitability and risk. If

business wants to earn more profit, it will have to bear higher risk. Risk means

inability of the firm to pay current liabilities in time.

56
Working capital management is three dimensional in nature: -

1) It concerned with the formulation. It of policies with regard to profitability,

liquidity and risk.

2) It is concerned with the decisions about the composition and level of current

assets.

3) It is concerned with the decisions about the composition and level of current

liabilities.

57
 Policies regarding to Profitability,

Liquidity and Risk.

Composition of level of Composition of level of current assets current

liabilities

Dimensions of working capital.

58
 EXISTING SYSTEM OF WORKING CAPITAL IN WTTIL

To maintain the optimum level of working capital in such a big organization is really a

challenging task. The three basic components that determine the level of working

capital in any organization are: -

 Cash

 Debtors B/R

 Inventory.

On the basis of our research in the WTTIL , these basic components are managed in the

organisation, in the under mentioned manner.

59
ANALYSIS OF WORKING CAPITAL

(Rs. in Lacs)

Particulars YEARS
2007-
2002-03 2008-05 2005-06 2006-07
04
Current Assets
Debtors 53645 57350 54076 50904 41417
Inventory 33849 37166 47369 43461 32370
Cash 12 11 17 23 527
Loan and Advaces 5440 6076 13367 6573 5730
Total 92945 100603 114829 100962 80044
Current Liabilities
Sundry Creditors 15701 15753 18630 19718 15562
Adv.from Customers 31634 26695 27107 33275 29360
Other liabilities 1687 826 2665 1966 1980
Provisions 19129 17002 15963 16682 14473
Total 68151 60276 64365 71641 14473
Net Working Capital 24794 40327 50463 29320 18668
Turnover 97100 81498 71799 108811 101335
Working Capital to

Turnover

60
 GRAPHICAL REPRESENTAION OF WORKING CAPITAL IN WTTIL

18668 24794
29320

40327

50463

2002-03 2003-04 2004-05 2005-06 2006-07

Interpretation: -

If we see from the above table, it can be clearly seen that net working capital has

come down to 293 crores in 2006-07 from 504 crores in 2008-05.

Moreover if we compare no. of days of net working capital to turnover, it has also

comes down to 99 days from 256 day in previous year.

This improvement does not come accidentally but considerable measures have been

taken to control working capital in organization in financial year 2006-07.

There is direct relation of working capital requirement with Debtors and Inventory.

Above data indicates that company has taken certain strategic measures to manage its

Debtor and Inventory

Following are the measures: -

61
 Special task forces were built up from debtors and Inventory Management at

senior level.

 Regular follow up at senior level.

 A close contact with the customers.

 Proper age- wise analysis of the debtors.

 Proper classification between collectible Debtors and bad debts.

 Bad debts written off as early as possible after making all efforts for its collection.

 Product cycle minimized so that cost of the product does not become high to the

agreed amount because of time factor.

 Formation of specific group in each area to identify the wastage elements and seek

participation of all.

 Formulation of action plan to eliminate/minimize wastage.

 Identification of corrective actions and their implementation.

62
63
 INTRODUCTION

It is very difficult for the organization to sell always on cash basis in today’s

competitive market. In almost every business, we have to sell on credit basis.

The basic objective of management of sundry debtor is to optimize the return on

investment on this asset. It is obvious that if there are large amounts tied up in sundry

debtors, working capital requirement would be high and consequently interest charges

will be high. In such cases, the bad debts and cost of collection of debts would be

high. On the other hand if the credit policy is very tight, investment in sundry debtors

is low but the sale may be restricted, since the competitors may offer more liberal

credit term.

We have limited resources and therefore every resource has its own opportunity cost.

Therefore, the management of sundry debtors is an important issue and requires

proper policies and efficient execution of such policies.

Debtors and cost of debtors have direct relation; cost will increase due to increase in

debtors and vice versa. It depend on the credit sale of concern and credit period

(collection period) allowed to customer. It is in interest of customer to pay as late as

possible, and company whom made sales, would like to collect their debtor as early as

possible. There is a conflict between the two aspects.

Debtor management is the process of finding the equilibrium at which company agree

to receive its payment without hampering or having any adverse effect on its sales and

customer agree to pay at their economical buying concept.

64
Sundry debtor level depends on two measure issues: -

One is volume of credit sales and another is credit period allowed to customer. It is

the essence of every business that to sale on credit and allow credit period to the

customer in such a competitive market, following factors may be considered before

allowing credit period to the customer: -

 Nature of the product

 Credit worthiness of the customer, which varies from customer to customer.

 Quantum of advance received from customers

 Credit policy of company, say number of days allowed to customer for payment to

the customers.

 Cost of debtors

 Manufacturing cycle time of the product etc.

Debtors Management: -

There are mainly three aspects of Management of Debtors

1. Credit Policy: -

The credit policy is to determine. It involves a trade off between the profits on

additional sale that arises due to credit being extended on one hand and the cost of

carrying those debtors and bad debts losses on the other.

65
2. Credit Analysis:-

This requires to determine as how risky is to advance credit to a particular customer.

3. Control of Receivables: -

This requires to the firm to follow up debtors and decide about a suitable credit

collection policy. It involves both lying down of credit policy and execution of such

policies.

There is a cost of maintaining receivables, which comprises Cost of: -

 The company require additional funds as resources are blocked in receivables

which involves a cost in the form of interest (loan fund) or opportunity cost (own

fund).

 Administrative cost which includes record keeping, investigation of credit

worthiness etc.

 Collection cost

 Defaulting cost or Bad debts

66
DEBTORS MANAGEMENT IN HEEP -

WTTIL is engaged in the manufacturing business of heavy electrical equipments,

where cycle time of the product is 18- 24 months and most of the contracts take

approximately 3-5 years to complete. Customers of WTTIL. are broadly divided into

following categories: -

 State electricity board

 Electronics Project

 Public Sector Under takings

 Railways

 Government Departments

 Private Sectors

 Exports

67
In most of the contracts, payments of WTTIL. are made in following stages: -

Payment Terms

Advance from customers

At the time of dispatch of goods

At the time of MRC (material receipt at site) Deferred payment

after commissioning of project with certain test

However, the above terms may vary from contract to contract.

Based on the above payment terms, WTTIL. categories their debtors into two parts: -

 Collectible debtors

 Deferred debtors

Collectible debtors are those, which are due for payment as on now and there is no

credit time allowed to the customer say payment at the time of dispatch.

Deferred debtors are those, which will become due on the occurrence of a particular

event such as issuing of MRC (material Receipt Certificate) from customer or

completion of contract with certain tests etc.

The position of collectible and deferred debtors in last few years along with its

comparison in no’s of days to turnover in WTTIL , are as follows.

(Rs.in lacs)

YEARS
Particulars
2002-03 2007-04 2008-05 2006-07 2007-08
Collectible
27950 35001 30638 28958 21373
Debtors
Collectible

Debtors to 105(D) 157(D) 156(D) 97(D) 77(D)

Turnover
Deferred
25722 22354 23439 21946 18372

68
 Debtors
No. of Days
97(D) 100(D) 119(D) 74(D) 66(D)
to Turnover
Provisions 4168 4291 5252 4945 4648
Total Debtors 49504 53064 48825 45959 36769
Total Debtors
186 238 248 154 132
to Turnover
Turnover 97100 81498 71799 108811 101335

Formula used for the calculation of debtor collection period: -

*D stands for days.

Collectible Debtor to Turnover:

Collectible debtors / turnover * 365

Collectible Debtors to turnover are the relationship between collectible debtors and

turnover, in no of days.

Deferred Debtor to Turnover:

Deferred debtors / turnover * 365

Deferred debtors to turnover are the relationship between Deferred debtors and

turnover, in no of days.

Total Debtors to Turnover:

= Total debtors/turnover*365

Total debtors to turnover are the relationship between Total debtors and turnover, in

no of days.

69
 Graphical presentation of the above data is as follows:

Analysis Of Debtors

300
248
250 238
No.Of Days

200 186
157 156 154
150 132
105 119
100 97
100 97
74 77
66
50

0
2003-04 2004-05 2005-06 2006-07 2007-08

Years

Interpretation: -

If we analyze the position of debtors, period of collectible debtors to turnover and

total debtors to turnover has come down from 130 days to 97 days and 248 days to

154 days respectively in few years. Debtors level of 154 days in the industry where

cycle time is 2 years (appro.) is considerably good and shown an improvement from

the past.

Although the balance of debtor comes down considerably but still there is scope in

Debtors Management for the company.

70
STEPS INVOLVED IN MANAGEMENT OF DEBTS: -

The following steps are involved in debtors management

 There should a close contact with the customers.

 There should be proper age- wise analysis of the debtors.

 There should be proper classification between collectible Debtors and bad debts.

 Bad debts should be written of as early as possible after making all efforts for its

collection.

 Product cycle should be minimized so that cost of the product should not become

high to the agreed amount because of time factor.

 There must be a provision of discount for early payment of debts by the

customers.

 Regular checking of the records of the debtors is essential so as to analysis the

current position of that organization.

 While making a policy, regarding the debtors the point should be considered that

customer having excellent past record, follow the lenient policy is adopted for

doubtful customers.

 Manage the working capital according to need as recovering the debt from

customer as early as possible while, get extension of payment of dues on the

company of others as suppliers of raw material as late as possible.

71
Age-wise analysis of sundry debtors as on 31.03.2000 is as follows:

(Rs. In crores)

1) Less than 6 months 2478.76

2) 6 months to 1 year 386.33

3) 1 year to 3 years 1116.72

4) More than 3 years 604.99

TOTAL 4586.80

72
TRENDS OF SUNDRY DEBTORS: -

(Rs.in Lakhs).

Head of Des. 2004-05 2005-06 2006-07 2007-08

a/c
181 State Elec. Board 10385 10308 13387 10970
182 O.P.P.S. 10282 10050 10482 11540
183 P.S.U. 1873 1767 2094 1954
184 GOVT. 313 9 359 276
186 PVT. PARTIES 1073 689 982 877
187 EXPORTS 118 118 62 0
Total 24043 22941 31744 25617

collectible

collections
188 Fright recoverable 43 13 47 Nil
189 Deferred debtors 14116 21191 20700 22149
190 Debtors deferred 4079 4531 1654 1290

under WTTIL
TOTAL 45849 53671 57355 59867

73
 CREDIT GRANTING DECISIONS: -

CREDIT GRANTING
DECISIONS

NO GRANT
CREDIT CREDIT

74
75
 INVENTORY MANAGEMENT

Introduction

Inventories constitute most significant part of current assets, in most of the companies

in India. To maintain a large size of inventory, a considerable amount of fund is

required. It is, therefore, absolutely imperative to manage inventories efficiently and

effectively in order to avoid unnecessary investment. A firm neglecting the

management of inventories will be jeopardizing its long-run profitability and may fail

ultimately. It is possible for a company to reduce its levels of inventories to a

considerable degree, e.g.10% to 20%, without any adverse effect on production and

sales, by using inventory planning and control techniques. The reduction in

‘excessive’ inventories carries a favorable impact on a company’s profitability.

There are at least three motives for holding inventories:

1-To facilitates smooth production and sales operation (transaction motive).

2-To guards against the risk of unpredictable changes in usage rate and delivery time

(precautionary motive).

3- To make advantage of price fluctuations (speculative motive).

OBJECTIVE: -

Inventories represent investment of a firm’s funds. The objective of the inventory

management should be the maximization of the value of the firm. The firm should

therefore consider:

76
(a) costs,

(b) return, and

(c) Risk factors in establishing its inventory policy.

Two types of costs are involved in the inventory maintenance:

1-Ordering costs: - Requisition, placing of order, transportation, and staff services.

Ordering costs are fixed per order size increases.

2-Carrying costs: - Warehousing, handling, clerical and staff services, insurance and

taxes. Carrying cost increases.

The firm should minimize the total cost (ordering cost + carrying cost). The economic

order quantity (EOQ) of inventory will occur at a point where the total cost is

minimum. The following formula can be used to determine EOQ:

EOQ=(2AO/C)^1/2

Where,

A= Annual requirement.

O= Per order cost.

C= Per unit carrying cost.

77
WHEN SHOULD THE FIRM PLACE AN ORDER TO REPLENISH

INVENTORY?

The inventory level at which the firm places order to replenish inventory is called

reorder point. It depends on (a) the lead time and (b) the usage rate.

Under perfect certainty about the usage rate, the instantaneous delivery (i.e. zero lead

time0, the reorder point will be equal to:

Lead-time *Usage rate +Safety

stock.

The firm should strike a trade-off between the marginal rate of return and marginal

cost of funds to determine the level of safety stock.

A firm, which carries a number of items in inventory, which differ in value, can

follow a selective control system. A selective control system, such as the A-B-C

analysis, classifies inventories in to three categories according to the value of item:

A-Category consists of highest value items,

B- Category consists of high value items,

C-Category consists of lowest value items.

More categories of inventories can also be created. Tight control may be applied for

high-value items and relatively loose control for low-value items.

FUNCTION OF INVENTORY CONTROL

78
Functions to be performed in the field of Inventory Control are:

1 Setting up norms for carrying Inventory.

2 Determining what items to be stocked.

3 Setting rules for Inventory replenishments.

4 Receiving, storing and issuing inventory items as needed.

5 Maintaining records of inventory quantities and values.

6 Identifying and deposing of slow moving, non-moving, obsolete or damage

inventories.

7 Furnishing summary information on inventory position for control purposes.

Locations of position responsible for performing each of these functions in

organisation structure greatly vary from company to company.

In WTTIL determination of product material or direct work order material (what?) to

be carried in Inventory is more or less automatic result of product design formulation

and is given in material forecast for a work order. Indirect materials consumed in

manufacturing process such as electrodes, brazing alloys, tooling etc. are usually

given by process engineering or at times by design departments.

Balance great bulk of indirect materials is made up of repair parts and general

supplies. Responsibility for specific (what?) items to be carried in inventory rests with

Works Engineering.

With respect to raw materials and purchased parts, responsibility for determining

(when?) and how much to buy is a sign to relevant product manufacturing i.e.

production planning and material planning groups. However a strict budgetary control

and allocation to specific work order control on high value items is exercised by

Inventory control department organized separately under Material

79
Management.Purchase department attached to manufacturing department determines

(where?) to buy.

Determination of indirect material (when?) and how much to buy and (where?), is

done by central group under Material Management by consolidating requirements of

all sections and while looking at consumption trends over a No. Years.

Again a strict budgetary control and control on high value items for their allocation is

exercised by Inventory control group.

Receiving and storing is done by Central Stores CSX under Material Management

Department.

Issuing Inventory is done by CSX on demand from manufacturing and is controlled

by Material Planning.Again some on

Line checks are proposed to be introduced at raising of Store Issue voucher stage

itself, for high value items so that induction is controlled strictly as per requirement of

production schedule based on lead time for manufacture to keep WIP inventory under

control.

Records of Inventory are maintained on a main frame computer centrally arranged

having shared access from all functions for their specific use.

Inventory Record Keeping and Related Procedures

How well Inventory records are maintained has a major bearing on the effectiveness

of Inventory control program. Mostly information recorded in WTTIL. system is:

 Name of the part or material

 Short description

 Identifying No called Material code

 Unit of measurement

80
 Location in store (custody)

 Bin no.

 Opening, received, issue, closing quantity and value.

These records are maintained in an online system on main frame computer user

departments have shared access for posting and retrieval of information.

There is a system for reserving specific items as customer specific, which is done by

tagging on the item.

Posting of withdrawals or issue from inventory is done on specific authorization by a

document called Store Issue voucher.

81
 INVENTORY MANAGEMENT IN WTTIL

 WTTIL produces long production cycle items against the firm orders from

customers. Because of this as well as sizeable imported raw materials and

compulsory bulk purchase of items like steel and copper in line with availability

from SAIL and MMTC, the company has to carry high level of inventories.

RS/LACS

PARTICULARS YEARS
2002-03 2007-04 2008-05 2005-06 2006-2007
Raw materials &
7996 5702 7953 10012 7639
components
Material with fabricators
222 202 143 152 99
Stores & spares
3188 2928 2756 2728 2333
Material in transit
3185 2987 2718 2866 1466

F.goods at plant 3197 923 1050 1300 931

F.goods with customers 0 0 0 0 0

WI.P
14070 22776 30833 25121 18488
Transfer in transit
1673 966 852 1281 1413
Material with ROD
119
Total 33531 36603 46305 43461 32370
TURNOVER 97100 81498 71799 108811 10335
Average inventory 31247.5 35067 41454 44455
Inventory turn over ratio
3.1 2.2 1.7 2.4
Days of inventory holding 118 157 211 149

Formula used: -

Inventory Turnover Ratio = Sales / Average Inventory

Days Of Inventory Holding =365 / inventory Turnover Ratio

82
If we see from the above table that the days of inventory holding in the year 2006-07

has come down to 149 days from 211days in the previous year. Inspite of increase in

turnover i.e. 108811 in 2006-07 from 71799 in the year 2008-05the days of inventory

holding decreases. This indicates that the company is using effective strategy to bring

down its inventory level. This makes very less investment in inventory.

It is in the interest of every organization to minimize its inventory level. Following is

the process through which the company can achieve the optimum inventory level.

STANDARD TAKING ACTUAL COMPARISION OF

INVENTORY INVENTORY ACTUAL WITH
LEVEL LEVEL STANDARD

TAKE ANALYSING REASON VARIATION/

CORRECTIV OF DEVIATION
E ACTIONS VARIATION/DEVIATIO
N

NEED OF INVENTORY MANAGEMENT

 Stiff competition, globalization of trade and liberalization.

 Achieving, increasing and positive EVA.

 Cost reduction.

 Energy conservation.

 Conservation of natural resources.

 Better, work environment.

 Improved health and safety.

83
 Enhanced public image.

84
 GRAPH OF INVENTORY IN WTTIL

50000 46305
42606
40000 36603
33531
30000 28964

20000 Inventory

10000

0
2002-03 2003-04 2004-05 2005-06 2006-07

By the graphical representation, we can understand that the level of inventory is

coming down .It comes down because company takes some effective measures to

control the level of inventory. Those steps are following steps to control its inventory:

85
STRATEGIES/MEASURES

 Formation of specific group in each area to identify the wastage elements and seek

participation of all.

 Identification of wastage.

 Formulation of action plan to eliminate/minimize wastage.

 Review of status.

 Identification of corrective actions and their implementation.

 Highlighting the gains.

Suggestion: -

After analyzing the steps taken by the company there are some suggestions to

manage the Inventory

 There should proper analysis of requirement of raw material

 Order should be placed according to the lead-time.

 Wastage should be avoided.

 There should be proper coordination between the Inventory Department and

Production Department

86
87
MANAGEMENT OF CASH

It is the duty of the finance manager to provide adequate cash to all segments of the

organization. At the same time, he /she has also to ensure that no funds are block in idle

cash as this will involve cost in terms of interest to the concern. A sound cash

management scheme has to maintain the twin objective of liquidity and cost.

Meaning of cash management

The term cash management refers to the management of cash and ‘near cash assets’

while cash includes coins, currency notes, cheques, bank drafts, and the demand

deposits, the near cash assets include marketable securities and time deposits with banks.

Such securities and deposits are eaWttily convertible into cash.

MOTIVES FOR HOLDING CASH

In spite of the fact that cash does not earn any substantial return for the business, it is

held by the concern with the following motives.

1. Transaction motive. A Company enters a variety of business transactions

resulting both inflow and outflow of cash; at times the cash outflow exceed the cash

inflow. In order to meet the business obligations in such situation, it is necessary to

maintain adequate cash balance. Thus, a firm with the motive of making routine business

payments maintains cash balance.

2. Precautionary motive: A firm holds cash balance to meet sudden cash needs arising

out of unexpected contingencies such as floods, strikes, obsolesces, sharp increase in

88
prices of raw materials, presentation of bills for payment earlier than expected date.more

amount of cash will be kept by the firm if there is more possibility of such contingencies.

3. Speculative motive: WTTIL also keeps cash balance to take advantage of

unexpected business opportunities. Such motive is there of speculative nature.

4. Compensation motive. Banks provide certain services to their customers free of

charge. So they usually require the customers to keep minimum cash balance with them

which enables them to earn interest and compensate for the free services rendered.

89
Reasons of cash management:

Cash management involves the following four basic problems.

1. Controlling level of cash. One of the basic objectives of cash management is to

minimize the level of cash balances with the firm. This objective is sought to be

achieved by means of the following:

i) Preparing cash budget. Cash budget is the most important device for planning

and controlling the use of cash. It involves the future receipts and payments of the

firm. On the basis of this information the finance manager can determine the future

cash needs of the firm.

ii) Providing for unpredictable discrepancies. Cash budget shows discrepancies

between cash receipts and payments on the basis of normal business activities.

iii) Availability of alternative source of funds: a firm may need not keep large cash

balance. If it has arrangements with banks for borrowing money in times of

emergencies.

2. Controlling of cash inflow: in order to prevent fraudulent diversion of cash

receipt and speeding up collections of cash, an adequate control on cash inflow is

necessary. A properly installed internal check system can, to a great extent, a

minimize the possibility of fraudulent diversion of cash. Speedier collection of cash

can be made possible by adoption of the following two techniques:

90
i) Concentration banking system: it is a system of decentralizing collection of

account receivables. According to this system, WTTIL’s branch offices are authorized

to collect the payment from the customers, and deposit in the local bank accounts.

This system facilities fast movement of funds. This system is good in case of the firms

having their spread over a large area.

ii) Lock box system: This system is more popular in the U.S.A. and is further step in

speeding up collection of cash. This system has been devised to element delay arising

in cash of the concentration banking system on account of a time gap between actual

receipt of cheques by the regional collection centers and its deposits in the local bank

account. Under this system WTTIL hires a post office box and instruct its customers

for there remits to the box. It also reduces the chances of frauds in the cash collection

process and controls the cash inflows better. In order to avoid the unnecessary pockets

of idle funds, the company should maintain minimum number of bank accounts.

3. Controlling outflows of cash: - an efficient control over cash outflows is equally

important for conserving cash and reducing financial requirements. Control over

cash outflows signifies slow disbursement. In order to control the outflows of cash

efficiently, a firm should keep in view the following considerations:

i) Centralized system for cash payments: should be followed as compared to

decentralized system in cash of collections. All payments should be made from a

single control account, i.e., from the central office of the company. However, the

local office of the company may pay local expenses.

ii) Payment should be made on the due dates, neither before nor after. The

company should neither lose cash discount nor its prestige on account of delayed

91
 payments. The company should, there fore, made payments within the terms

offered by the suppliers.

iii) Playing float, technique should be used by the company for maximizing the

availability of funds. The term ‘float’ means the account tied up in checks which

have been issued by WTTIL but not have been yet been presented for payment

by the creditors. As a result of a time lag between issue of a cheque and its actual

presentation, the actual bank balance of a firm may be more than the balance

shown in the books. The difference is called ‘payment of float’. The longer the

‘float period’ the greater would be the benefit of the firm.

92
TOOLS OF CASH CONTROL

1. Cash Budget: It is the most significant tool of controlling the use of cash. It

provides a comparison between actual and budgeted cash receipts and

disbursements locating the points of deviations, if any. The financial manager,

after ascertaining the reasons for deviations between the actual and budgeted

figures, can take the necessary action to remove.

2. Inflows and outflows of cash: in order to check the change in cash position of the

firm from one period to another, a cash flow statement is prepared. It helps

management in controlling inflows and outflows of cash.

3. Ratio analysis: Ratio analysis is also an important tool of cash control. Different

financial ratios are used for this purpose. These ratios include current ratio,

liquidity ratio, receivables turnover ratio, and inventory turnover ratio and cash

position ratios.

93
 ANALYSIS OF CASH MANAGEMENT WITH THE HELP OF CERTAIN

RATIO’S: -

(Rs.in

Crores)

DES. FORMUL 1997-1998 1998-1999 1999-2000 2008-05 2006-07

A
Current Current 75870/5873 88350/6355 95591/5526 108343/5787 94848/6552

Ratio asset/current 8 6 4 9 8

liab. =1.29:1 =1.39:1 =1.72:1 =1.87:1 =1.44:1

Liquidit Liquid asset 51491/5873 54819/6355 58988/5526 62038/57879 52242/6552

y ratio /current liab 8=0.87:1 6 4 =1.07:1 8

=0.86:1 =1.06:1 = 0.79:1

Interpretation: - As we know that the current ratio of any company may be 2:1 but

according to the U.S.A. Accounting standard any company should maintain a ratio of

1.33:1. Moreover, as we can see from the above table the current ratio of WTTIL is

1.29:1 in 1997-98, which is not favorable from the

94
 2 1.87
1.72
1.5 1.39 1.44
1.29
1.06 1.07
1 0.87 0.86 0.79
0.5

0
2003-04 2004-05 2005-06 2006-07 2007-08

current ratio liquidity ratio

Company’s point of view but this ratio is favorable from the shareholder’s point of

view. But in the year 2004-05, the current ratio goes to 1.39:1 which is quite better for

the companies point of view .It means that the company is quite able to meet out its

liabilities. The current ratio of the company is continuously rising i.e.2006-07 is

1.72:1 and in 2007-08 is 1.87:1 which is highest in the last five years.

In 2006-07, the current ratio goes down to 1.44:1 due to increase in the current

liabilities and decrease in current assets as compared to previous year. Current assets

decrease due to decrease in inventory, which is 46305 in 2008-05 & 42606 in 2006-07.

It indicates the ideal stock is less, which is favorable for the company. It indicates the

company is in position to meet its liabilities.

Now we compare the company’s position according to the liquidity ratio. As we know

the standard of the liquid ratio is 1:1.

In 1997-98 the liquid ratio of the company is 0.87:1 which is less than the standard ratio

this indicates the liquidity position of company is not good The liquidity ratio follows

95
 the same trend in the year 2002-03 i.e. 0.86:1 is due to large amount of current

liabilities as compared to liquid assets.

However, in the year 2007-04 the liquidity ratio goes up to 1.07:1, which is more than

the standard ratio. This indicates that the company has followed some strategy to

maintain its standard liquidity position. The ratio is a 1.06:1 in the year 2008-05.

However, in the year the ratio goes down to 0.79:1, which is due to increase in current

liabilities and decrease in current assets

In Year 2006-07

CURRENT ASSETS = 52242

CURRENT LIABILITIES = 65528

Which is less then the previous year.

In addition, the numbers of debtors of the company are increase. This is not better from

the management point of view. As more of amount is blocked in, the debts and the

chances of bad debts will be increased.

CURRENT LIABILITIES

50000
Years
40017
40000 Sundry Creditors
33275
31634
AMOUNT

30000 26695 27107 Advances from

Customers
18630 19718
20000 1570114534 15753 Other Liabilities
11990 10569
8875 9477 Provisions
10000 6825
3021 1687 2665 1966
0 0 0 826 0 0
0
YEARS

96
Organisation(WTTIL, )

The chief executive (Normally Executive Director/G.G.M.),who reports to the

chairman and

97
 FINDING

 The working capital position of the company is sound and the

various sources through which it is funded are optimal.
 The company has used its dividend policy, purchasing, financing
and investment decisions to good effect can be seen from the
inferences made earlier in the project.
 The debts doubtful have been doubled over the years but their
percentage on the debts has almost become half. This implies a
sales and collection policy that get along with the receivables
management of the firm.
 The returns have been affected by a marked growth in working
capital and though a 29.75% in 2006 return on investment is good,
but it got reduced as compared to 39.01% return in 2005.
 The various ratios calculated are an indicator as to the fact that the
profitability of the firm and sales are on a rise and also the deletion
of the inefficiencies in the working capital management.
 The firm has not compromised on profitability despite the high
liquidity is commendable.
 Wttil has reached a position where the default costs are as low as
negligible and where they can readily factor their accounts
receivables for availing finance is noteworthy.

98
 LIMITATION

 The study is limited to three years only.

 Price level changes are not considered.

 Time is short for deep research.

 Separate records of the all units are not available.

 No comparison made with other firm’s ratio while during the study

period and making conclusion time.

 The readjusted and regroup figure slightly affects the ratio figures.

 Study is limited with the one unit of Wttil.

 The data is used in the project have been taken from annual report only.

Hence, grouping and sub grouping and annuliasation of data may slightly

affect the results.

99
 CONCLUSION

 By studying last two years performance of the company, we say that the working

capital of the company is increasing.

. The operational performances of the company are continuously rising because of

the increase in the sales of the companies’ products.

. The Debt Equity Ratio of the company is increasing as company is now paying its

debt due to which the company Liquidity ratio is falling.

100
 BIBLOGRAPHY

M.Y.KHAN AND P.K. JAIN FINANCIAL MANAGEMENT

(Tata McGraw- Hill Publishing Company Limited, NEW DELHI)

 LK NARANG AND SP JAIN FINANCIAL MANAGEMENT

(KALYANI PUBLISHERS,NEW DELHI),2000.

C.R. KOTHARI, Research methodlogy.

Web sites:

www.Wttil.com

www.google.com

101