A SYNOPSIS ON

WORKING CAPITAL MANAGEMENT

IN RELATION TO

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE OF MASTER IN BUSINESS ADMINISTRATION 2010-12

SUBMITTED BY: ROLL NO.1021002331 NAME: SAURABH SACHDEVA PROJECT GUIDE: DAYALU MISRA

INSTITUTE OF MANAGEMENT TECHNOLOGY

TABLE OF C O N T E N T S Title of the Project Company Profile Statement about the Problem Objective and Scope of the Study Methodology Questionnaire Chapterization Scheme Project Guide

TITLE OF THE PROJECT Working Capital Management NDPL COMPANY PROFILE

North Delhi Power Limited (NDPL), the power distribution arm of Tata Power, serves a populace of 50 lakh inhabiting northern and north-western parts of Delhi. It is a joint venture between Tata Power Company and the Government of NCT of Delhi with the majority stake being held by the Tata Group. The company started operations on July 1, 2002, post the unbundling of the erstwhile Delhi Vidyut Board. With a registered consumer base of around 9 lakh and a peak load of around 1100 MW, the company's operations span 510 sq kms. NDPL has been the frontrunner in implementing power distribution reforms in the capital city and is acknowledged for its consumer friendly practices. Since privatization, the aggregate technical and commercial (AT&C) losses in NDPL areas have shown a record decline. Although the privatization agreement specified an AT&C loss reduction of 17 per cent over a period of five years, NDPL has cut down its losses by over 19 per cent in the first three years of operation. NDPL's focus on technology has won it the Intelligent Enterprise Award 2004 and 2005 instituted by the Indian Express Group for exemplary use of information technology in its operations.

Areas of businessThe company has embarked on a plan to implement high-tech automated systems for its entire distribution network. Systems such as SCADA, GIS and OTS are the cornerstone of the NDPL's distribution automation project. To fight the menace of power theft, the company has adopted modern techniques like the high-voltage distribution system and LT Arial bunch conductor. NDPL is the first distribution utility in the country to provide on-line information on consumption, billing and payment to all its consumers. World-class consumer care and cash collection centers have been set up to ensure excellence in consumer care. The company has also introduced new bill payment avenues such as drop boxes, 'Easy Bill' outlets and round-the-clock electronic kiosks. The company has set up the Centre for Power Efficiency in Distribution (CENPEID), the first institute for skill accreditation and certification for the power distribution sector in India. The Institute is slated be a national resource and shall cater to the skill and management training needs of the sector as a whole.

STATE ABOUT THE PROBLEM

At NDPL a substantial part of the total assets are covered by current assets. Current assets from around 80% of the total assets. However this could be less profitable on the assumption that current assets generate lesser returns as compared to fixed assets. But in todays competition it becomes mandatory to keep large current assets in form of inventories so as to ensure smooth production an excellent management of these inventories has to be maintained to strike a balance between all the inventories required for the production. So, in order to manage all these inventories and determine the investments in each inventories, the system call for an excellent management of current assets which is really a tough job as the amount of inventories required are large in number. Here comes the need of working capital management or managing the investments in current assets. Thus in big companies like NDPL it is not easy at all to implement a good working capital management as it demands individual attention on its different components.

OBJECTIVES AND SCOPE OF STUDY

The objective of the project to achieve in-depth knowledge of working capital management, the different aspects of working capital,the understanding of different policies applied by bank for financing working capital for different firms and at last finding the main components who have higher weightage in financing current asset and current liability which helps in proper management of working capital in NDPL. This working capital cycle may be defined as the intervening period from the time the goods and services enter the business till their realization in cash. This intervening period depends upon the combination of various steps. Acquisition and storage of raw materials. Actual production process that takes place. Storage of finished goods awaiting sales. Sale of finished goods and realization of cash. Working capital needs of the company arise to cover the requirement of funds during this time gap, and the quantum of working capital needs, varies as per the length of this time gap.

METHODOLOGY

INTERNAL DATA

For the purpose of this study primary and secondary data has been used. Primary data about working capital management was obtained through Informal discussions with the managers and other officials of the organization. Secondary data was collected through annual reports of the organization for relevant periods. The data from these reports have been analyzed by using various tools and techniques to evaluate the performance of the organization.

RATIO ANALYSIS
Ratio analysis is a widely used tool of financial analysis. It is defined as a systematic use of ratio to interpret the financial statements so that the strengths and weaknesses of a firm and its historic and current financial condition can be determined.

COMPARATIVE STATEMENT
The statement of changes in financial position is a statement of flows i.e. it measures the changes that have taken place in the financial position of a firm between two balance dates. We have the cash flow statements to measure changes in cash and working capital.

APPENDIX
PERIOD ENDING Assets Current Assets Cash And Cash Equivalents Short Term Investments Net Receivables Inventory Other Current Assets Total Current Assets Long Term Investments Property Plant and Equipment Goodwill Intangible Assets Accumulated Amortization Other Assets Deferred Long Term Asset Charges Total Assets 31-Dec-11 2,064,000 213,000 4,683,000 2,522,000 1,324,000 10,806,000 3,998,000 11,663,000 5,124,000 1,860,000 2,324,000 219,000 35,994,000 31-Dec-10 910,000 1,571,000 4,389,000 2,290,000 991,000 10,151,000 4,475,000 11,228,000 5,169,000 2,044,000 1,356,000 205,000 34,628,000 (in crores) 31-Dec-09 1,651,000 1,171,000 3,725,000 1,926,000 657,000 9,130,000 3,839,000 9,687,000 4,594,000 1,849,000 599,000 232,000 29,930,000

Liabilities Current Liabilities Accounts Payable Short/Current Long Term Debt Other Current Liabilities Total Current Liabilities Long Term Debt Other Liabilities Deferred Long Term Liability Charges Minority Interest Negative Goodwill Total Liabilities Stockholders' Equity 6,494,000 369,000 1,924,000 8,787,000 7,858,000 7,017,000 226,000 23,888,000 6,209,000 1,544,000 7,753,000 4,203,000 4,792,000 646,000 17,394,000 5,271,000 274,000 1,315,000 6,860,000 2,550,000 4,624,000 528,000 14,483,000

Misc Stocks Options Warrants Redeemable Preferred Stock Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity Total Stockholder Equity Net Tangible Assets

(97,000) 30,000 30,638,000 (14,122,000) 351,000 (4,694,000) 12,203,000 5,219,000

41,000 30,000 28,184,000 (10,519,000) 450,000 (952,000) 17,234,000 10,021,000

(79,000) 30,000 24,837,000 (7,758,000) 584,000 (2,246,000) 15,447,000 9,004,000

INCOME STATEMENT
(in crores) PERIOD ENDING Total Revenue Cost of Revenue Gross Profit Operating Expenses Research Development Selling General and Administrative Non Recurring Others Total Operating Expenses Operating Income or Loss Income from Continuing Operations Total Other Income/Expenses Net Earnings Before Interest And Taxes Interest Expense Income Before Tax Income Tax Expense Minority Interest Net Income From Continuing Ops Non-recurring Events Discontinued Operations Extraordinary Items Effect Of Accounting Changes Other Items Net Income Preferred Stock And Other Adjustments Net Income Applicable To Common Shares 31-Dec-11 13,796,000 7,586,000 6,210,000 5,149,000 412,000 649,000 (25,000) 564,000 290,000 274,000 112,000 (60,000) 162,000 162,000 162,000 31-Dec-10 13,591,000 7,370,000 6,221,000 5,150,000 1,071,000 6,000 983,000 274,000 709,000 177,000 (94,000) 532,000 532,000 532,000 31-Dec-09 12,730,000 6,810,000 5,920,000 4,903,000 1,017,000 (11,000) 947,000 266,000 681,000 159,000 (59,000) 522,000 522,000 522,000

PROFITABILITY STATEMENT
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PROFITABILITY ANALYSIS (in crores) Year Particulars Net Sales Cost of Goods Sold Operating Profit Before Interest Operating Profit After Interest Profit/Loss Before Tax Profit/Loss After Tax Dividend Payout/Drawing

2009 12730 6900 5830 5830 681 522 0.41

2010 13591 7370 6221 1071 709 532 0.53

2011 13,796 758 6210 649 274 162 0.65

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CHAPTERIZATION SCHEME

DETAILS

PAGE NO.

1. Company Profile 2. Theoretical Background 3. Working Capital Evaluation 4. Performance Analysis 5. Conclusion

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BIBLIOGRAPHY
1. WWW.NDPL.COM 2. WWW.GOOGLE.COM 3. COMPANYS INTERNAL SOFTWARES LIKE SAP, BIRD. 4. MANUALS, MAGAZINES PRINTED BY NDPL.

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PROJECT GUIDE
CURRICULUM VITAE

DAYALU MISRA
Neelkanth Apartments, Flat No. BF3, Near Durga Ashram, Chhattarpur New Delhi-100074 Email: dayalu.misra@gmail.com Mobile: 9873514133

CAREER OBJECTIVE:
Seeking a job which gives me a platform to use and apply my analytical skills, my ability to identify and follow financial trends leading to the development of the company and also my professional growth. SUMMARY OF SKILLS AND EXPERIENCES

Over 10 years of experience in Finance & Accounting including Closing & Reporting, Analysis of numbers, Reconciliations, Vouching, Cash Book Maintenance, PF & ESI related jobs.

Presently working with Genpact India as an Assistant Manager. Completed on-site transition of Intercompany Accounts from Montreal, Canada. Having a good knowledge of Oracle11i, MS-Excel, MS-Word, Outlook, Internet and Tally. Effective communicator with excellence in MIS. ORGANIZATIONAL EXPERIENCE

Genpact India, Gurgaon Present Position: Assistant Manager

April, 2006

JOB PROFILE o Performing Closing & Reporting and Analysis of Numbers. o Managing Working Capital o Transition of Inter Company account from GE Capital - Canada (Montreal). Reconciled the account which was un-reconciled for more than 5 years. o Reviewing Reconciliation for Cash, Intercompany, Receivables and Payables for GE Capital Businesses. o Research and Root Cause Analysis of Open Items. o Regular communication with GE customer to clear open items. o Preparation and posting of correctional Journal entries. o Manage other MIS work.

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Orthonova Hospital,

New Delhi Mar, 2006 Position: Accounts Exec. o

Oct, 2003

JOB PROFILE Preparation of all Bank and Debtors reconciliations and general ledger entries. o Preparation of all kind of vouchers. o Preparation of TDS calculation, TDS certificate and filing of TDS return. o Preparation of payroll accounts. o Preparation of P&L and Balance Sheet.

Sumit Suri & Associates (Chartered Accountants),

New Delhi

Aug, 2000

Sep, 2003 Position: Accounts Assistant

JOB PROFILE

o Preparation of vouchers, data punch from cash, bank and journal voucher.
o Preparation of Bank reconciliation. o Preparation of Debtors reconciliation. o Prepared TDS calculation and return for various clients. o Preparation of P&L and Balance Sheet. PROFESSIONAL EXPERTISE: o Continued improvement concepts o Team spirit o Sharing best practices with other team o Troubleshooting and problem solving skills o Ability to adjust in different industries, Cultures and environments EDUCATIONAL QUALIFICATION:

o MBA Finance from Institute of Management Technology, Ghaziabad in 2010.

o Bachelor in Commerce from University of North Bengal with second division in 1998.

SYSTEM KNOWLEDGE: o Oracle11i, Business Object, MS Excel, Word, PowerPoint, Internet & Tally PERSONAL DETAIL:

Fathers Name Contact No. Date of Birth

Late Sh Asharfi Misra 91 - 9873514133

: (Mobile) :

December 23rd, 1976 : F6381383

Valid Passport No.

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DAYALU MISRA

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