Working Capital Management of CCL

Submitted by:MANOJ KUMAR

Content

Introduction of CCLWorking capital managementCash flow management Inventory managementDebtors managementProblems facedFindings Recommendations conclusion

Introduction

o A subsidiary company of coal India limited under ministry of coal and mines govt. of India

o Production: annual production-> 48Mt (approx.). Target-> 50 Mt in the FY 2010-11.

o CSR activities: spent over Rs. 18 Crores.

o Infrastructure:o Mines: total- 63. underground (26), open-cast (37).o Washeries: total- 7. medium cocking coal(4), non-cocking coal(3).o Operating coalfields: 6. East Bokaro, West Bokaro, North Karanpura,

South Karanpura, Ramgarh, Giridih.o Hospitals: central hospitals(2), regional hospitals(7), colliery

hospitals(10), dispensaries(63).o Railway sidings: 28.

Working Capital

o The excess of current assets over current liabilities.o Components -> current asset, Current liabilities, Gross and

net working capital, Gross working capital.o Types -> permanent & Temporary.o Need o Factors determining working capital: manufacturing cycle,

production process, business cycle, seasonal variations, scale of operations, inventory policy, credit policy, accessibility to credit, business standing, growth of business, market conditions, supply situation, environmental factors.

Working capital management in CCL

Requirements:• For purchasing spare parts like nut, bolt etc.• For purchasing of small equipment.• For purchasing fuels.• For payments of wages, carriage etc.

Few points for working capital management in CCL:• Current Assets

Cash Management Debtors Management Inventory Management

• Current Liabilities Creditor’s Management

Cash Flow statement

Additional information to the user about the financial statement.

shows the flow of incoming and outgoing cash. shows the ability of the enterprise to generate cash and to

utilize the cash, and also shows the liquidity of the enterprise. CCL follows AS3, but both (direct and indirect).

Inventory management in CCL

Types: coal, spares, WIP, press, medicine. Inventory department: Material budgeting:

Debtors management in CCL

Cash basis: Sells coal to private parties like TISCO, IISCO. Only 10% cash received.

Credit basis: 90% coal is sold on this basis. Only for government parties. Power sectors: DVC, JSEB, PSEB, HSEB, UPRVUNL. Steel sectors: SAIL, BSP, BSL, RSP, DSP. Other sectors: defense, cement, fertilizer.

Problems faced by CCL in dues payment system

• Quantity problems• Difference in goods quantity supplied by CCL and received by the party.

• Quality problems• CCL supplies C, D, E grade of coal in various industries.• Party’s blame- it received E grade coal while CCL supplied D grade coal.

• Others.• Moisture• Stowing

• Settlement of disputes:• Eastern umpire• Western umpire• Northern umpire• Southern umpire

Findings

Findings

Recommendations

Recommendations

Recommendations

Conclusion

There are many problems faced by CCL in working capital

management.

However, after following suggested recommendations, CCL can

not only get more business benefit but can also approach

towards gaining qualitative advantage.

References

Mr. A.D.WADWA (FINANCE MANAGER C.C.L RANCHI)

Mr. AMIT SHEKHER TIRKEY (RANCHI UNIVERSITY,RANCHI)

Miss. DEEPMALA MAHTO (RANCHI UNIVERSITY, RANCHI)