Working Capital Project 2

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE
CHAPTER-1 INTRODUCTION
1.1 Introduction of the study
Working capital management (WCM) is the management of
short term financing requirement of firm. This includes maintaining
optimum balance of working capital components receivable, inventory
and payables and using the cash efficiently for day-to-day operations.
Optimization of working capital balance means minimizing the working
capital requirements and realizing maximum possible revenues. Efficient
WCM increase firms free cash flow, which in turn increases the firms
growth opportunities and return to shareholders. Even though firms
traditionally are focused on long term capital budgeting and capital
structure, the recent trend is that many companies across different
industries focus on WCM efficiency.
Empirical result shows that ineffective management of working capital
management is one of the important factors causing industrial sickness.
Modern financial management aims at reducing the level of current
assets without ignoring the risk of stock outs. Efficient management of
working capital is thus an important indicator of sound health of an
organization which requires reduction of unnecessary blocking capital of
in order to bring down the cost of financing. In the light of the above, an
attempt is made in this study to look into the working capital
management in iron mining industry.
1.2 Statement of the problem
Working capital management is very important component of corporate

finance because it directly affects profitability of a company. Efficient
management
of
working
capital
means
management
of
various
components of working capital in such a way that an adequate amount of

working capital is maintained for smooth running of a firm and for
fulfillment of twin objectives of profitability and liquidity. Hence, the topic
Bellari Institute of Technology & Management, Bellary
Page 1
selected
in
the
studying
THE
IMPACT
OF
WORKING
CAPITAL
MANAGEMENT ON PROFITABILITY AND WORKING CAPITAL LEVERAGE

ON ASSETS IN IRON MINING INDUSTRY, NMDC LTD ( NATIONAL MINERAL
DEVELOPMENT CORPORATION), AT DONIMALI.
1.3 Need of the study
Working capital is the life blood and nerve center of business. Working
capital is very essential to maintain smooth running of a business. No
business can run successfully without an adequate amount of working
capital. The main advantages or importance of working capital are as
follows:
1. Strengthen the short term solvency
Working capital helps to operate the business smoothly without any
financial problem for making the payment of short-term liabilities.
Purchase of raw materials and payment of salary, wages and overhead
can be made without any delay. Adequate working capital helps in
maintaining solvency of the business by providing uninterrupted flow
of production.
2. Enhance Goodwill
Sufficient working capital enables a business concern to make prompt
payments and hence helps in creating and maintaining goodwill.
Goodwill is enhanced because all current liabilities and operating
expenses are paid on time.
3. Regular supply of Raw Material
Quick payment of credit purchase of raw material ensures the regular
supply of raw materials from suppliers. Suppliers are satisfied by
payment on time. It ensures regular supply of raw materials and
continuous production.
4. Smooth business operation
Working capital is really a life blood of any business organization which
maintains the firm in well condition. Any day to day financial
requirement can be met without any shortage of fund. All expenses
and current liabilities are paid on time.
5. Ability to face crisis
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Adequate working capital enables a firm to face business crisis in

emergencies such as depression.
1.4 Objectives of the study
Study of Working capital is the most widely used and powerful technique
of financial analysis. The main objective of present study is to know the
financial condition of the company.
To analyze the investment in various current assets of the company.
To compute working capital ratios.
To compute profitability ratios.
To analyze the impact of working capital on profitability.
1.5 Scope of the study
The scope of project is only on Donimalai (DIOM) branch of NMDC Ltd.

The data collected and analyzed for previous 4 years, from 2010-11 to
2013-14. This study made only on limited area, i.e. DIOM of NMDC Ltd.
1.6 Research methodology
Research methodology is a way to systematically solve the research

problem. It may be understood as a science of studying how research is
done systematically. In that various steps, those are generally adopted by
researcher in studying his problem along with the logic behind them.
The procedures by which researchers go about their work of describing,
explaining and predicting phenomenon are called Methodology.
Research design
: Descriptive and Analytical Research.
Data collection sources: Primary and Secondary data.
Primary Data:
The Primary Data is that, which is collected for first time which is original
in nature. In this study the Primary Data has been collected from personal
interaction with finance manager and other staff members.
Secondary Data:
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The Secondary Data are those which have already collected and stored.
Secondary data easily get those secondary from records, annual reports
of the company etc. It will save the time, money and efforts to collect
data. The major source of data for this project was collected through
annual reports, profit and loss account of 4 years period & some more
information collected from internet and text sources.
Data analysis tools: Current ratio, Quick ratio, Return on total assets,
working capital turnover ratio, inventory turnover ratio.
1.7 Review of Literature
Working capital management can be considered as an important source

of profitability of a firm. Many researchers investigated the impact of
working capital management on profitability.
1. Smith (1980) conducted a study on profitability and liquidity and
suggested that working capital management directly influence risk
and profitability of a firm. Hence it can be inferred that effective
working capital management can increase the financial strength of a
business.
2. Soenen (1993) also performed an analysis of working capital
management and its relationship with financial performance. His study
was based on firms and after the study he suggested that if the length
of net trade cycle increases then it affects the return on investment
negatively.
3. Lamberson (1995) observed the impact of economic activity on the
working capital management policy. For this he took a sample of 50
small firms of us for a time period of 12 years i.e. 1980-1991. He found
tha,t economic expansion do not cause an increase in the investment
of working capital during a specific period.
4. Afza and Nazir (2008) reviewed their previous study to estimate the
impact of different type of working capital management policies on
financial performance of firms in different sectors. For this they used a
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sample of 263 non-financial firms belonging to 17 different sectors

listed at KSE from 1998-2003.
5. Danuletiu (2010) conducted an analysis on 20 companies of alba
country. He assessed the effect of working capital management
efficiency on the financial performance of these companies for a
period of five years i.e. 2004 to 2008. For his analysis he used Net
Working Capital (NWC) as a measure of longterm financial balance,
Working Capital Necessary (WCN) as a measure of short- term
financial balance and Net Treasury (NTt) a difference of both NWC and
WCN.
6. Singh and asress (2011) also examined the effect of working capital
solvency level on profitability by their study a sample of 449 Indian
manufacturing firms. The study was based on a period of 10years i.e.
1999-2008. For this purpose, Working Capital Requirement (WCR) was
selected as dependent variable and Total Operating Cost (TOC), Cyles
(n) and operational breakeven point (obep) as independent variables.
1.8 Limitation of the study
The study conducted and done is analytical subject to the following

limitation
The study is mainly carried out based on the secondary data
provided on the financial statement.

The financial statement is generally based on historical or original
cost. The current economic condition is ignored.
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CHAPTER-2 INDUSTRY PROFILE

2.1 Introduction
Iron is the second most abundant metallic element in the Earths crust and
accounts for 5.6% of the lithosphere. The principal minerals of iron are the
oxides (Hematite and magnetite), hydroxide (limonite and goethite),
carbonate (siderite) and supplied (pyrite). Iron, like most metals, is found in
the earths crust only in the form of an ore, i.e. combined with other
elements such as oxygen or sulfur.
Hematite and magnetite are two important iron ore from which iron is
extracted. Of these, hematite is considered to be superior owing to its high
grade. It is the basic raw material for iron and steel industry. Steel is an alloy
that consists mostly of iron and has carbon content between 0.2% and 2.1%
by weight, depending on the grade. Steel is crucial to the development of
any modern economy and is considered to be the backbone of human
civilization. The level of per capita consumption of steel is treated as an
important index of the level of socioeconomic development and living
standards of the people in any country. It is a product of large and
technologically complex industry having strong forward and backward
linkages in term of material flow and income generation.
History
India is one of the earliest manufacturers and users of iron and steel in the
world. This is indicated from a number of references available in the annals
of metallurgical history. A survey of literature reveals many documentary
evidences, such as making of various surgical instruments in the 3 rd/4th
century B.C. by Sushrut, presentation of a gift of 30lb of Indian iron by King
Porus to Alexander the great on the bank of Jhelum (around 326 B.C.) and
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the use of different weapons in various shapes and sizes in the ancient
tomes.
The first signs of use of iron come from the Sumerians and the Egyptians,
where around 4000 B.C., a few items, such as the tips of spears, daggers and
ornaments, were being fashioned from iron recovered from meteorites.
Because meteorites fall from the sky some linguists have conjectured that
the English word iron (OE isem), which has cognates in many northern and
western European languages, derives from the Etruscan aisar which means
the god.
Summary
India is one of the leading producers of iron ore, with estimated total
resources of over 28.5 billion tons (bt) of hematite (Fe203) and magnetite
(Fe304) taken together. Of the 294 iron ore mines in 2012, compared to 336
in 2010, 34 were in public sector while the remaining 260 were owned by
private firms in 2012. In 2013, production was estimated at 142.9 million
tons (Mt), which is expected to increase to 284Mt in 2020 growing at
compound annual growth rate (CAGR) of 7.4%. Simultaneously, iron ore
consumption over the forecast period (2014-2020) is projected to increase to
238.3Mt in 2020.
Indian scenario
India is an important producer of iron ore in the world contributing more than
7% of the production and ranking fourth in term of quantity produced
fallowing China, Brazil and Australia. As per UNFC system (United Nations
Framework Classification) as on 1.4.2005, India possesses total hematite
resources of 14630 Mt of which 7004 Mt are reserves and 7626 Mt are
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remaining resource. Major hematite resources are located mainly in

Jharkhand-4036 Mt (28%), Orissa-4761 Mt (33%), Chattisgarh-2731 Mt (19%),
Karnataka-1676 Mt (11%) and Goa-713 Mt (5%). The balance resources are
spread over the state of Maharashtra, Madhya Pradesh, Andhra Pradesh,
Rajasthan, Uttar Pradesh and Assam and altogether contain around 4% of
hematite. Total resources of iron ore in India as on 1.4.2010 is about 28562
Mt.
Future Scenario
Total reserves of iron ore in India, including magnetite have been estimated
at approximately 17 billion tons. Fortunately, ores are of a fairly good quality.
Current Scenario
Indias iron ore exports have gone down by 28.16% during April-December of
the current fiscal to 11.17 Mt as gloom continues over the sector due to the
regular scenario mineral industries. India, once the third largest exporter of
iron ore, had exported 15.55 Mt of the mineral in the corresponding period of
last fiscal, data released by Federation of Indian Mineral Industries (FIMI)
showed. We expect the situation to continue as long as government policy
does not change.
Indian iron ore exports have been hurt badly in last few years due to mining
bans in Goa and Karnataka, which led to drastic fall in domestic production
as well. Increase in export duty to 30 percent on both types of iron ore,
lumps and fines, in December 2012, had also impacted the sector.
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Presently, low grade iron ore (or fine) are being exported from Odisha,
Jharkhand, Rajasthan and Madhya Pradesh as mining is still banned in Goa.
Export of mineral is not permitted from Karnataka at present.
The Goa government had issued a notification to sell about 15 Mt iron ore
through exports, as per a Supreme Court order. However, none of it is
expected to be exported.
Industry is estimating that Indias total iron ore production in the present
fiscal will be around 140 Mt, almost the same last year.
Iron Ore Mining Companies in India
National Mineral Development Corporation Ltd (NMDC Ltd).

Odisha Mining Corporation Ltd.
Sesa Sterlite Ltd.
Steel Authority of India Ltd.
Tata Steel Ltd.
Goa Iron ore mining.
Page 9
2.2 Company Profile (NMDC LTD, OVERALL)

Incorporated in 1958 as a Government of India fully owned public
enterprise. NMDC is under the administrative control of the Ministry of
Steel, Government of India. Since inception involved in the exploration of
wide range of minerals including iron ore, copper, rock phosphate, lime
stone, dolomite, gypsum, bentonite, magnetite, diamond, tin, tungsten,
graphite, beach sands etc.
NMDC is India's single largest iron ore producer, presently producing about
30 million tonnes of iron ore from 3 fully mechanized mines viz., Bailadila
Deposit-14/11C, Bailadila Deposit-5, 10/11A (Chhattisgarh State) and
Donimalai Iron Ore Mines (Karnataka State). NMDC Projects have following
accreditations
ISO 9001: 2008 - QMS Certification for all its iron ore mines and R&D
Centre
ISO 14001:2004 - EMS Certification for all its production mines
OHSAS 18001:2007 - OHMS Certification for all its production mines
Strong back up of an ISO 9001 certified R&D Centre, which has been
declared as the "Centre of Excellence" in the field of mineral processing by
the Expert Group of UNIDO.
Page 10
NMDC has made valuable and substantial contribution to the National efforts
in the mineral sector during the last five decades and has been accorded the
status of schedule-A Public Sector Company. In recognition to the Company's
growing status and consistent excellent performance, the Company has
been categorized by the Department of Public Enterprises as "NAVRATNA"
Public Sector Enterprise in 2008.
Consistent profit making and dividend paying company.
Results
2011-12
2012-13
2013-14
Ore
27.26 MT
27.18 MT
30.02 MT
Sales
27.30 MT
26.27 MT
30.50 MT
Income
Rs 13,301 crore
Rs 13,127 crore
Rs. 14.167 crore
Profit before tax
Rs. 10,759 crore
Rs. 9,465 crore
Rs. 9,759 crore
No.
5924 (31.03.12)
5777 (31.03.13)
5664 (31.03.14)
Iron
Production
(L+F)
Iron
Ore
(L+F)
of
Employees
Page 11
The story of NMDC is woven around the dreamy hills and the deep jungle
land of Bastar in Chhattisgarh, known as Dandakaranya from the epic
periods. The Bailadila iron ore range - "The hump of an ox" - in the local
dialect, was remote, inaccessible and replete with wild life. The range
contains 1200 million tonnes of high grade iron ore distributed in 14
deposits. The entire area was brought to the mainstream of civilization by
the spectacular effort of NMDC by opening-up of mines. Today, Bailadila is a
name to reckon with in the world iron ore market because of its super high
grade iron ore. Bailadila complex possesses the world's best grade of hard
lumpy ore having +66% iron content, with negligible deleterious material
and the best physical and metallurgical properties needed for steel making.
NMDC is presently producing about 20 million tonnes of iron ore from its
Bailadila sector mines and 10 million tonnes from Donimalai sector mines.
Because of its excellent chemical and metallurgical properties, the

calibrated ore from Bailadila deposits has substituted the iron ore pellets in
sponge iron making and hence became an important raw material for three
major gas-based sponge iron steel producers like Essar Steel, Ispat
industries and Vikram Ispat. In addition to these three, the entire
requirement of the Visakhapatnam Steel Plant is also being met from
Bailadila.
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The demand for steel will continue to grow in the years to come and this in
turn would call for increased demand for iron ore. NMDC is gearing itself to
meet
the
expected
increase
in
demand
by
enhancing
production
capabilities of existing mines and opening up new mines - Deposit -11B in

Bailadila sector and Kumaraswamy in Donimalai sector. The production
capability would increase to around 50 million tonnes per year in coming
years.
For Value addition NMDC is in the process of developing a 3 mtpa steel
plant at Jagdalpur and 2 pellet plants at Donimalai (1.2 mtpa) and at
Bacheli (2 mtpa). Besides, NMDC has acquired Sponge Iron India Limited
with plan for expansion to produce billets.
Foreign Venture: M/s NMDC has also prestigious foregin venture also
such as:
Exploration of gold in Madagascer.
Exploration of gold in Tanzania.
Exploration of diamond in Namibia.
India is in 4th place among twenty top crude steel producing countries in
world in previous years. Still India keeps its place in global market.
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Achievement of NMDC during the year 2013-14(Overall)
Turnover
Rs. 12,058 Crore
Profit before tax

(Including
Rs. 9,759 Crore

discounted
operation)
Cash profit
Rs. 9,865 Crore
Net profit
Rs. 6,420 Crore
Total assets
Rs. 31,477 Crore
Net worth
Rs. 29,983 Crore
Book value per share
Rs. 75.62
Earnings per share
Rs. 16.19
Return on capital employed
27%
Return on net worth
21%
Dividend
Interim
300%
l
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550%
ll
..
Final
Value added per employee
Rs. 178.54 Lakh
Output per man shift
30.47 Tonnes
(Iron Ore)
Introduction to DIOM (Donimalai Iron Ore Mines)
The saga of NMDC includes the pioneering exploration activity carried out for
developing iron ore mines in Karnataka in various regions like Kudremukh,
Donimalai, Bababudan, Kumaraswamy and Ramandurg. NMDC developed the
Donimalai mine in this area to export ore to Japan and South Korea . ISO
9002 Certification awarded in February, 1999.
Commissio
ned:
Average
October, 1977
+ 65% Fe
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grade:
Balance
reserves:
Product:
Capacity:
Port of
Export:
27.92 million tonnes(April,08)

Lump 31.5 mm +6.3mm Fines: -10mm
4.0 million tonnes of ROM ore/year
a. Chennai outer harbor. Capable of handling ships

of 1,30,000 DWT - 532 Kms. rail Link
b. Marmagoa port, Goa. Capable of handling
panamax size vessels - 370 Kms rail link
No. Of.
1286 (as on 30/04/2012)
Employees
Company Profile (Donimalai Iron Ore Mines)
Page 16
Donimalai Iron ore mine is an operating unit of National Mineral Development

Corporation Ltd is committed to achieve sustained consistency in quality of
Iron ore mined, processed and produced by adopting and continuously
improving
scientific
quality
management
systems
through
active
involvement of all the employees to ensure optimum satisfaction of all the

stake holders.
N.M.D.C developed the Donimalai mine in this area to export ore to Japan
and South Korea.
From above information a common question will arise in new persons mind.
I.e. where is this Donimalai Iron Ore Mine situated in India? Answer for that
question is;
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Forming part of Narasingapura village panchayat, Donimalai is situated in

Sandur taluk of Bellary District in Karnataka. It is an approachable by road
from Sandur, which is 10 kms away.
Donimalai derives its name from the shape of hill in the local language i.e.
Kannada, Doni means BOAT and Malai means HILL. The hill range is in
the shape of inverted boat and hence named as Donimalai.
Construction of Donimalai started in 1972 and commercial production started
in 1977 October, which is connected by rail and road to all major cities in the
country. The basic mineral of iron at Donimalai in hematite and from this
different product like basic grade lump ore, fine ore are produced after
processing of Run Off Mine Ore ( ROM ).
The Donimalai Mine came into operation with a capital investment of Rs.41
crores of which foreign exchange component is Rs 2.4 crores. An about 7
million tons of excavation is done per annum.
Page 18
Valued customers of DIOM

Rashtriya Ispat Nigam Ltd., (VSP)
KIOCL Ltd.,
Essar Steels Ltd.,
JSW Steel Ltd.,
Ispat Industries Ltd.,
CG based Sponge Iron Units.
Welspun Max Steel Ltd.,
Visveswaraya Iron & Steel Plant.
Aparant Iron & Steel Co. Ltd.,
Tata Metalliks Ltd.,
Southern Iron & Steel Co. Ltd.,
MMTC Ltd.,
Vikram Sponge Iron Ltd.,
Social Service of DIOM

1.
2.
3.
4.
5.
Construction of Multipurpose community hall.

Construction of Anganavaadi schools & class rooms.
Providing electrical fitting & water supply.
Visit of doctor to nearby village, health camps.
Providing bus facility for marketing, attending schools by student in
different region like Sandur, Yeswanth pura.

6. Free hospital facilities to their employees as well as to their family
members.
7. Financial assistance to farmers in the year 2005.
8. Donation for development of Jubilee Park at Bellary.
9. Temple renovation work, repairs and maintenance work of road.
Various Department in DIOM- NMDC Ltd.

There are seven departments:
1. Personnel department.
2. Mining department.
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3.
4.
5.
6.
7.
Materials management department.

Information system.
Civil department.
Finance department.
Service department.
1. Personnel department
Establishment section:
This section deals with
attendances
particulars
of
employees,
workmens and medical facilities. It also deals with bills, scholarship to

children of the employees, calculation of the gratuity, insurance or
salary certificate, services certificate etc., of the employees working in
NMDC.
Estate section:
This section deals with preparation of seniority list of the employees,
allotment of houses according to the seniority of the employees,
allotment of houses on rental basis, outside parties calculation of rent
etc.
2. Mining department
This is very big department consisting of 202 staff consisting workmen,
junior officer, executive headed by DGM. Mining, heavy earth moving
machineries are run in the field, records, conducting weekly meetings deals
by this department. The main aim is to achieve quality production with
available resources in fixed time. Maintenance and services are also taken
care by this department.
Plant divisions:
Plants in NMDC, DIOM divided into 3 i.e. crushing plant where ore is
crushed, screening plant where ore is screened and loading plant
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where ore is loaded into wagons. The plant mechanical aspects headed
by charges of respective plants.
Service division:
This department mainly deals with the electrical work of the township
i.e. wiring, attending to the complaints, taking care of sub stations etc.
3. Material department
This department is divided into 3 department i.e. purchase section, stores
section and inventory control section.
Purchase section:
This section deals with purchase of required items for the project. The
purchase are made on the basis of issue of limited tender enquires and
receiving quotations, scrutiny of offers by committee, placing order
etc.
Stores section:
The stores section is divided into 2 i.e. Main stores and Valley stores
(sub store). The main stores deals with maintaining stock of heavy
earth moving equipments i.e. spares, parts etc., maintaining of
records etc., the valley stores also deals with keeping stock of spares
and materials etc.
Inventory control:
This section deals with maintaining records of items according to value,
code vendor etc. this section also deals with the items of moving and
non-moving nature.
4. Finance and accounts department

Establishment: maintaining attendance, bills, medical bills and other
miscellaneous works are taken care by this department.
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Compilation section: budget cost, final reports, balance sheet, profit

and loss accounts etc. are prepared in this section.
Budget costing: budget for capital items, moving and non-moving
items, their costs etc. are worked out in this section.
2.3 Vision, Mission, Quality Policy and Promoters

Vision:
Donimalai iron ore mine is an operating unit of NMDC Ltd is committed to
achieve sustained consistency in quality of iron ore mine, processed and
produced by adopting continually improving scientific quality management
system through achieves involvement of all the employees to ensure
optimum satisfaction of all the stakeholders.
Mission:
To emerge as a global environment friendly mining organisation with International
Standards of excellence, rendering optimum satisfaction to all its stake holders.
Quality Policy:
Donimalai iron ore mine, an operating unit of NMDC Ltd, is committed to
achieve sustained consistency in quality of iron ore mined, processed and
produced
by
adopting
and
continually
improving
scientific
quality
management system through active involvement of all employees to ensure

optimum satisfaction of all stakeholders.
Promoters:
Central government of India (90%).
Page 22
And other shareholders (10%).
2.4 Production and Services

Donimalai iron ore mines has the fallowing range of products.
Lump
Donimalai iron ore lump size 6mm-30mm.
Fines
Donimalai iron ore fines size is 10mm.
Production
Iron ore
(lakh tonnes)
Sponge iron
Achievement
2012-13
2013-14
% of change
271.84
300.25
10.45%
36289.00
29734.36
(-)18.06%
(tonnes)
2.5 Area of Operation

Statutory auditors
On the basis of comptroller and auditor general of India, New Delhi, and the
company appointed the fallowing firms of chartered accountants as statutory
auditors of the company for the year 2013-14.
SL.N
Unit
Statutory Auditors
o
1
Head office, R & D Center, SIU & Consolidation
M/s, Venugopal &Chenoy

Chartered Accountants
Page 23
Kirandul, Bacheli, Raipur, NSP, Jagdalpur
Hyderabad 500 001

M/s, Brahmayya & Co,
Central work shop
Vizag office
Donimalai
Visakhapatnam 530 003

M/s, P K Subramaniam &
Co,
Panna
Raichur 584 001

M/s, Gopal Gupta & Co,
Allahabad 211 001
2.6 Infrastructure Facilities

Fully mechanized mines:
1.
Infrastructure
Construction of roads and bridges.
Electrification of home lights & public buildings.
Construction of house for slum dwellers.
Provision of drinking water.
2. Health care
Free medical treatment at project hospitals.
Medical camps.
3. Literacy and education

NMDC is siksha sahayog yojana.
Residential school at nagarnar.
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Education improvement program.

Balika siksha yojana.
2.7 Competitors
Jindal iron and steel company limited.

Kudremukh Iron Ore Company limited.
Sesa Goa limited.
Resurgere mines & minerals India limited.
Essel mining & industry limited.
2.8 SWOT Analysis

Strengths
Larger reserves of high grade of iron ore consisting principally of hematite ore with Fe
content of predominantly > 64%.
Largest producer of iron ore by volume.
Resources making the Company a low cost producer - the Company's

cost of production are competitive with those of the leading iron ore
producers in the world. The Company is seeking to further cover its
cost across all of its operations.
Financial strength characterized by high net worth, zero debt, good

credit rating.
Good work culture - skilled, experienced and dedicated workforce.

Good Brand image of NMDC's iron ore in domestic/international
market.
Highly mechanized iron ore mines.
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Availability of technology and infrastructure of existing projects in

Bailadila to add new projects in the area with comparatively less
investment.
Core competence in iron ore mining.
Developing expertise in international acquisition space.
Weakness
Geographically remote location of the projects acting as deterrent in
attracting and retaining talent and also for reaching supplies and
services.
Delay in forest and environmental and other clearances affecting time

schedules for opening and commissioning new mines and affecting our
investment plans.
Extreme foggy weather conditions causing stoppage of mining

operations at Bailadila complex during monsoon months.
The Company has not diversified into other sector. As such, any
adverse impact on the mining sector hits the profitability of the
Company.
Opportunities
Continue diversifying and expanding its mining activities and products.
Expand and establish its presence as an integrated producer of iron
and steel.
Continue to be a low cost, efficient and environmentally friendly mining
Company.
Augment resources, improve infrastructure and enhance technology
through joint ventures and commercial tie-ups - the company seeks to
Page 26
augment its resources and reserves, improve its infrastructure and

enhance its technology through joint ventures and commercial tie-ups.
Financial powers for investment in new projects as a Navaratna
Company.
Threats
Disturbances due to Maoists activities in Bailadila area.
Intense competition from private sector in securing fresh mining
leases, resulting in denial of leases in many cases and litigation
delaying actions. Inability to secure additional reserves of iron ore that
can be mined at competitive costs or cannot mine existing reserves at
competitive costs, profitability and operating margins may be affected.
Entry of MNCs and other Indian private companies into iron ore mining.
The industry being cyclic in nature, NMDC is exposed to sharp
fluctuations in demand for its products.
The Company faces risks in respect of high inventory of stocks and its
disposal.
2.9 Future growth and prospects

Bailadila deposit-11/B: As part of plan to enhance production, the
construction of Deposit 11B mine at an expanded capacity of 7.0
Million Tons of ROM per annum has been taken up.
Kumaraswamy Iron Ore Project: As an addition to present
Donimalai Iron Ore Mine and augmenting production capacity towards
Page 27
achieving the target of 50 MTPA in NMDC and 12 MTPA in Karnataka,

the construction of Kumaraswamy Iron Ore Mine with capacity of 7.0
MTPA was taken up with an estimated capital outlay of Rs. 898.55 Crs.
MECON is appointed as EPCM consultant. The entire project is being
executed through six packages. Orders are placed for Crushing Plant
Package, Downhill conveyor Package, Electrics and Substation package
and Service Centre facilities packages and the works are in progress.
Civil works are completed for Primary & Secondary Crusher house,
Dumper platform, Mine office Building. Erection & trial runs of Primary
& Secondary Crusher is completed. Civil & Structural works of Downhill
conveyor system are under progress. The project is expected to be
complete during the FY 2014-15.
MTPA Pellet Plant at Donimalai: One of the main objectives of this
project is to prolong the life of Tailing Dam at Donimalai by using the
slimes for making pellets. M N Dastur & Co. is appointed as EPCM
consultant. Execution of Project is divided into Six Packages. The
estimated capital expenditure is Rs.572 Crores. All the packages are
ordered. Major civil works completed. Major Technological equipment
erection is completed and some of the equipment trial runs taken.
Project is scheduled to be completed in FY 2014-15.
Doubling of Railway Line: NMDC has entered into a MoU with Indian
Railways on 21.12.2012 for the above work of 150 km length at an
estimated cost of Rs.826.57 Crores at 2010-11 price level for which an
amount of Rs.75 Crores has been deposited by NMDC during May
2013.
Steel Plant at Bellary: In pursuance of the MoU signed between the
Government of Karnataka and your Company, action for setting up of 3
Page 28
MTPA Integrated Steel Plant at Bellary, in the State of Karnataka has

been initiated by the Company. Acquisition of about 3000 acres of land
for the proposed steel plant through Karnataka Industrial Areas
Development Board (KIADB) was under progress subsequent to
publication of statutory preliminary notifications in the gazette of
Karnataka in this respect.
Reclaimer in operation at Donimalai Mines, NMDC Ltd
2.10 Financial Statement (Overall)

Page 29
Page 30
Page 31
CHAPTER-3 THEORETICAL BACKGROUND OF THE STUDY

3.1 Meaning of working capital
The working capital is refers to the excess of current assets over the current
liabilities in the liquid portion of total enterprises capital which constitutes a
margin of buffer for maturing obligations with in the ordinary operating cycle
of business.
The term working capital literally means capital used for conducting the day
to day operation. It refers to that part of total capital which is used for
carrying out the routine and regular business operations. In short, it is the
amount of funds used for financing the short-term operation.
Definition of working capital
According to principals board of the American Institute of certified public USA
has defined:
Working capital is sometimes called networking is represented by the excess
of current assets over the current liabilities and identified the relatively liquid
portion of total enterprises capital which constitutes a margin of buffer for
operating cycle of business.
According to Weston and Brigham:
Working capital refers to a firm investment in short-term assets cash, shortterm security, accounts receivables and inventory.
3.2 Nature of working capital

1.
2.
3.
4.
Current assets and current liabilities.

Negative or positive in nature.
Short period.
Out flow and inflow of cash.
Page 32
3.3 Factor affecting working capital

1.
2.
3.
4.
5.
6.
7.
8.
9.
Nature of business.
Production policy.
Market condition.
Seasonal fluctuations.
Growth and expansion activities.
Operation efficiency.
Credit policy.
Sales growth.
Dividend policy.
3.4 Concept of working capital

There is two categories of working capital are as follows:
Working capital
Gross working capital
Net working capital
Page 33
Gross working capital

Gross working capital refers to the firms investment in current asset.
Current assets are those assets which can be converted into cash within an
accounting year or operating cycle and include cash, short-term securities,
debtors (accounts receivable or book debts) bills receivable and stock
(inventory).
Gross working capital concepts focuses attention on two aspects of current
assets management
Optimize investment in current assets.
Financing of current assets.
The consideration of the level of investments in current assets should avoid
two danger points excessive and inadequate investment in current assets.
Net working capital (defined in two ways)

It is the excess of current assets over current liabilities.
It is that portion of a firms current assets which is financed by longterm funds.
Net working capital refers to the difference between current assets and
current liabilities. Current liabilities are those claims of outsiders which are
expected to mature for payment within an accounting year and include
creditors (accounts payable), bills payable and outstanding expenses. Net
working capital can be positive or negative. A positive net working capital
occurs when current assets are in excess of current liabilities. A negative net
working capital occurs when current liabilities are excess of current assets.
Page 34
3.5 Types of working capital

Permanent/fixed working capital.
Temporary/variable working capital.
Permanent / fixed working capital

It refers to that minimum amount of investment amount of investment in
all current assets which is required at all times to carry out the minimum
level of business activities. In other words, it represents the current
assets which are required on a continuing basis over the entire year. This
part of working capital is fixed irrespective of changes in the operation.
There is a need for current assets for smooth flow of operating cycle
which is a continuous process. Hence the need for current assets is felt
regularly. In any business certain fixed portion of current asset is always
required referred to as permanent or fixed working capital.
Page 35
It is a type of working capital which keeps on fluctuating from time to

time depending on business activities. It indicates the need for additional
current asset required at different times.
Temporary or variable or fluctuating working capital
Additional inventory has to be procured to support sales during

peak sales period.
Investment in inventories decreases during depression period.
Thus it is extra working capital required to support the changing in the

production and
sales activities. It is usually financed from short term
sources of finance such as bank credit.

Working capital may be changed in the fallowing circumstances:
Changes in sales
The changes in sales and operating may be either in the form of
increase or decrease. An increase in the volume of sales in bound to be
accompanied by higher level of cash, inventory and receivable, the
decline in sales has exactly the opposites effect a decline in the need
for working capital. A change in the operating expenses rises or decline
as similar effect as the level of working capital.
Policy changes
The second major cause of changes in the level of working capital is

policy changes because it is initiated by the management. There is
wide choice in the matter of current policy. The term current asset
policy may be defined as the relationship between current assets and
sales volume. A term fallowing a constructive policy in this aspect
having a high level of current assets in relation to sales says
deliberately option for less conservative policy and vice-versa.
Technology changes
Page 36
Technology changes can be cause significant in the level of working

capital. If a new place emerges as a result of technological
development, then shorten the operating cycle.
3.6 Operating cycle

Operating cycle is defined as the time gap between sales and their actual
realization into cash. The operating includes three steps, which is as
follows:
The first steps, the cash gets converted into inventory. This includes
purchases of raw materials, conversion of raw material into work in
progress, finished goods and finally the transfer of goods to stock at the
end of the manufacturing process.
The second step, of the cycle the inventory is connected into receivables
as credit sales are made to customers.
Third step, presents the stages when receivable are collected this step
complete the operating cycle. The firm has moved from cash to inventory
to receivables and to cash again.
Operating cycle
Page 37
3.7 Financing of working capital requirements

Another commonly used source for financing working capital needs is the
banking finance. Fallowing forms are help to know about banking finance to
fulfill the working capital requirements.
Bank overdraft.
Cash credit.
Bills discounting.
Working capital loan.
Regulations of bank finance.
Tondon committee.
Chore committee recommendation.
3.8 Estimating working capital requirements

A firm as to ensure a balance between the two and for doing this it is of
paramount importance to prepare an estimate of working capital is also
known as working capital. A statement showing estimate of working capital
is also known as working capital budget. The greatest advantage of
preparation of working capital budget is that it facilitates planning of the
level of holding current assets.
Fallowing steps are taken in predict the working capital requirements
Estimating the current assets

In the prediction of working capital it essential to predict the current assets.
Current liabilities current assets include the fallowing assets.
Stock of raw material, work in progress and finished goods.
Sundry debtors.
Page 38
Any advance payment of expanses.

Cash and blank balances.
For the forecast the level of inventories, it is necessary to calculate the
expected holding period of each type of inventory or stock. In case of
debtors, on an average how much credit will be allowed to the debtors
should be estimated. For advance payments it is necessary to estimate the
amount that will have to be paid as advance. As far as cash and bank
balance should be estimated.
Estimating the current liabilities

The second step in estimating working capital requirement is to estimate the
current liabilities. The current liabilities include trade creditors, bills payables,
bank overdraft, and expenses due but not paid and other short term
liabilities. In estimating creditors and bills payable, how much credit will be
allowed by the creditors, should be estimated carefully.
Page 39
3.9 Working capital leverage

Working capital leverage reflects the sensitivity of return on investment
(earning power) to changes in the level of current assets. . To express the
formula for working capital leverage we will use the following symbols:
Working capital leverage (WCL) = CA / TA

CA
CA
value of current assets (gross working capital)
CA
change in the level of current assets
FA
value of net assets
TA
value of total assets (TA = CA + FA)
EBIT =
earnings before interest and taxes
ROI
return on investment defined as EBIT / TA
If there is decrease in current assets:

Working capital leverage (WCL) = CA / TA - CA
If there is increase in current assets:

Working capital leverage (WCL) = CA / TA +
CA
CHAPTER-4 DATA ANALYSIS AND INTERPRETATION

Page 40
4.1 The investment in various current assets.

Table
4.1.1
showing
investment
in
various
current
assets.
(Amount in crores)
Particulars/years
2011
2012
2013
2014
CURRENT ASSETS
Inventories
Trade receivables
Cash
and
bank
28.02
16.42
10.59
68.67
468.31
1.44
133.23
489.87
3.53
97.97
904.33
5.20
balances
Short-term
loans
20.55
127.47
142.48
43.57
and advances
Other
current
0.012
0.026
0.051
75.58
665.90
769.14
1051.12
assets
Total
current
asset
Graph 4.1.1 showing the total current assets
Total current assets
Amount in crores
1200
1000
800
600
400
200
0
2011
2012
2013
2014
Years
4.2 Calculation of NET WORKING CAPITAL

Table
4.2.1
showing
Net
working
capital
(Amount in crores)
Page 41
Particulars/years
2011
2012
2013
2014
CURRENT ASSETS
Inventories
Trade receivables
Cash
and
bank
28.02
16.42
10.59
68.67
468.31
1.44
133.23
489.87
3.53
97.97
904.33
5.20
balances
Short-term
loans
20.55
127.47
142.48
43.57
and advances
Other
current
0.012
0.026
0.051
75.58
665.90
769.14
1051.12
94.57
92.54
97.80
204.40
103.04
211.63
124.32
216.35
Total current
187.12
302.21
314.67
340.67
liabilities(B)
NET WORKING
-111.54
363.69
454.47
710.45
assets
Total current
asset(A)
CURRENT
LIABILITIES
Trade payable
Other
current
liabilities
Short
term
provisions
CAPITAL(A-B)
Graph 4.2.1 showing NET WORKING CAPITAL
Page 42
Net working capital
Amount in crores
800
700
600
500
400
300
200
100
0
-100
-200
2011
2012
2013
2014
Years
Interpretation:
From the above analysis in the year 2011 there is negative working capital.
Negative working capital means that the business currently is unable to
meet its short-term liabilities with its current assets. Therefore, an immediate
increase in sales or additional capital into the company is necessary in order
to continue its operations.
From the year 2012 onwards there positive working capital and it has been
increasing. Positive working capital means that the business is able to
pay off its short-term liabilities. Also, a high working capital can be a signal
that the company might be able to expand its operations.
Page 43
4.3 Computation of Working Capital Ratios

Current ratio/ Working Capital ratio.
This ratio is also called as working capital ratio. It is an index of the short
term solvency of concern. It shows the extent to which current assets may
diminish in value carrying any losses in respect of the payment to short term
creditors. Thus, it is an indication of the ability of enterprise in regard to
meeting its current liabilities. A current ratio of 2:1 is considered as
satisfactory.
Current Ratio =
Table
Current Assets
Current Liabilities
4.3.1
showing
current
ratio
(Amount in crores)
Years
Current assets
Current
(Amt in crore)
liabilities
Current ratio
2011
75.58
(Amt in crore)
187.12
2012
665.90
302.21
2.20:1
2013
769.14
314.67
2.44:1
2014
1051.12
340.67
3.08:1
.40:1
Page 44
Graph 4.3.1 showing current ratio

Current Ratio
3.5
3
2.5
2
Ratio
1.5
1
0.5
0
2011
2012
2013
2014
Years
Interpretation:
From the above analysis, the current ratio is less than 1 in the year 2011.
If current ratio is below 1 (current liabilities exceed current assets), then
the company may have problems paying its bills on time. However, low
values
do
not
indicate
critical
problem
but
should
concern
the
management.
From the year 2012 the current ratio is higher than 2:1 and has been
increasing which is considered as acceptable, because the higher the current
ratio is, the more capable the company is to pay its obligations.
Page 45
Current ratio gives an idea of company's operating efficiency. A high ratio

indicates "safe" liquidity, but also it can be a signal that the company has
problems getting paid on its receivable or have long inventory turnover, both
symptoms that the company may not be efficiently using its current assets.
Liquid Ratio/ Acid Test Ratio/ Quick Ratio

Quick ratio is the second ratio to measure the solvency of the company. This
ratio is very useful to test the ability of the firm to meet its short term
obligation out of short term assets. Quick ratio of 1:1 is considered a fair
indication of the good current financial position of enterprise.
Quick assets refers to the assets, which can convert into cash as early as
possible, it wont take lot of time like current assets.
Quick ratio=
Quick assets
current liability
(Quick Assets = Current Asset-Inventory)

Table 4.3.2 showing quick ratio
(Amount in
crores)
Year
Quick assets
Current
(current
liabilities
Ratio
assetsinventory)
2011
47.56
187.12
.25:1
2012
597.23
302.21
1.98:1
Page 46
2013
635.91
314.67
2.02:1
2014
953.15
340.67
2.80:1
Graph 4.3.2 showing Quick ratio
Quick ratio
3
2.5
2
Ratio
1.5
1
0.5
0
2010.5
2011
2011.5
2012
2012.5
2013
2013.5
2014
2014.5
Years
Interpretation:
From the above analysis the quick ratio is less than 1 in the year 2011.
A quick ratio lower than 1:1 may indicate that the company relies too
much on inventory or other assets to pay its short-term liabilities.
From the year 2012 the quick ratio is 1.98 and is been increasing constantly.
If quick ratio is higher, company may keep too much cash on hand or have
Page 47
a problem collecting its accounts receivable. Higher quick ratio is needed

when the company has difficulty borrowing on short-term notes.
A quick ratio higher than 1:1 indicates that the business can meet its current
financial obligations with the available quick funds on hand.
Inventory/stock turnover ratio

It is ascertain by dividing the cost of goods sold by the average inventory.
This ratio is known as Inventory turnover ratio.
This ratio establishes the relationship between the cost of goods sold during
a given period and average amount of inventory held during that period. This
ratio reveals the number of times stock is replaced during a given accounting
period.
Inventory turnover ratio=
Cost of goods sold

Sales
(COGS=Total Expenses-Selling Expenses)

Table 4.3.3 showing Inventory turnover ratio
(Amount in
crores)
Years
COGS
Sales
(total
(Iron ore)
Ratio
expensesselling
expenses)
Page 48
2011
411.06
1931.20
.21:1
2012
438.32
1911.47
.23:1
2013
987.09
2736.56
.36:1
2014
1057.75
3140.07
.34:1
Pie chart 4.3.3 showing Inventory turnover ratio
Inventory turnover ratio

18%
30%
20%
32%
2011
2012
2013
2014
Interpretation:
Low inventory turnover ratio is a signal of inefficiency, since inventory
usually has a rate of return of zero. It also implies either poor sales or excess
Page 49
inventory. A low turnover rate can indicate poor liquidity, possible

overstocking, and obsolescence, but it may also reflect a planned inventory
buildup in the case of material shortages or in anticipation of rapidly rising
prices.
High inventory turnover ratio implies either strong sales or ineffective
buying (the company buys too often in small quantities, therefore the buying
price is higher).A high inventory turnover ratio can indicate better liquidity,
but it can also indicate a shortage or inadequate inventory levels, which may
lead to a loss in business.
High inventory levels are usual unhealthy because they represent an
investment with a rate of return of zero. It also opens the company up to
trouble if the prices begin to fall.
A good rule of thumb is that if inventory turnover ratio multiply by gross
profit margin (in percentage) is 100 percent or higher, then the average
inventory is not too high.
Debtor Turnover Ratio
Debtors turnover ratio measures the liquidity of the firms. It is similar to
inventory turnover ratio. It is the technique which indicates the number of
items debtors are converted into cash and gives the same idea of credit and
collection is also high and the amount blocked in debtors is for short period.
This ratio shows the efficiency achieved in using the funds invested in
receivables. Funds invested in receivable are not available for other
profitable uses.
It indicates the speed with which debtors are being collected. The higher the
turnover ratio indicates the better will be trade credit management or more
chance of bad debts and the lower turnover ratio and long collection period
Page 50
reflects the managements inefficiency in collecting the dues or less chance

of bad debts.
Debtor turnover ratio=
Sales
Sundary Debtor ' s
Table 4.3.4 showing debtors turnover ratio
(Amount in
crores)
Years
Sales
Debtors
Ratio
(Trade
Receivables)
2011
1931.19
468.31
4.08
2012
1911.47
1642.46
1.18
2013
2736.56
489.87
5.59
2014
3140.07
904.33
3.47
Graph 4.3.4 showing Debtors turnover ratio
Page 51
Debtor turnover ratio

6
5
4
Ratio
3
2
1
0
2010.5
2011
2011.5
2012
2012.5
2013
2013.5
2014
2014.5
Years
Interpretation:
A high receivables turnover ratio implies either that the company
operates on a cash basis or that its extension of credit and collection of
accounts receivable are efficient. Also, a high ratio reflects a short lapse of
time between sales and the collection of cash, while a low number means
collection takes longer.
The lower the ratio is the longer receivables are being held and the risk to
not be collected increases. A low receivables turnover ratio implies that
the company should re-assess its credit policies in order to ensure the timely
collection of credit sales that is not earning interest for the firm.
Working Capital Turnover Ratio

Page 52
Working capital is concerned directly to the sales. Working capital is excess

of current assets over current liabilities. This ratio indicates weather business
is being operated on small or large amount of working capital in relation to
sales.
The efficiency of money used as working capital is determined by computing
how many times the working capital is turned over a given period.
Table 4.3.5 showing working capital turnover ratio
(Amount in
crores)
Year
Net sales
Net working
Ratio
capital
(As per table
2011
1931.19
4.2.1)
-111.54
2012
1911.47
363.69
5.26
2013
2736.56
454.47
6.02
2014
3140.07
710.45
4.42
-17.31
Page 53
Graph 4.3.5 showing working capital turnover ratio

Working Capital Turnover Ratio
10
5
0
Ratio
2011
5.26
6.02
2012
2013
4.42
2014
-5
-10
-15
-17.31
-20
Years
Page 54
4.4 Computation of Profitability Ratio

This ratio of net profit sales. It indicates relationship between net profit and
net sales in terms of percentage. Net profit is the balance of P&L account
which is calculated after charging all operating and non-operating expenses
and incomes.
Net profit ratio=
Net Profit
100
Net Sales
Table 4.4 showing Net Profit Ratio
(Amount in
crores)
Years
Net profit
Net sales
Percentage
2011
1527.28
1931.19
79.08%
2012
1442.15
1911.47
75.44%
2013
1789.71
2736.56
65.40%
2014
2155.35
3140.07
68.64%
Graph 4.4 showing Net Profit Ratio
Page 55
Net profitability ratio

90.00%
80.00%
70.00%
60.00%
Percentage
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2010.5
2011
2011.5
2012
2012.5
2013
2013.5
2014
2014.5
Years
Interpretation:
The profit margin ratio directly measures what percentage of sales is made
up of net income. In other words, it measures how much profits are produced
at a certain level of sales.
This ratio also indirectly measures how well a company manages its
expenses relative to its net sales. That is why companies strive to achieve
higher ratios. They can do this by either generating more revenues why
keeping expenses constant or keep revenues constant and lower expenses.
Since most of the time generating additional revenues is much more
difficult than cutting expenses, managers generally tend to reduce spending
budgets to improve their profit ratio.
Like most profitability ratios, this ratio is best used to compare like sized
companies in the same industry. This ratio is also effective for measuring
past performance of a company.
Page 56
4.5 Computation of Working Capital Leverage

Working capital leverage reflects the sensitivity of return on investment
(earning power) to changes in the level of current assets.
Workingcapital leverage=
Current Asset
Total Asset ( Current Asset )
Table 4.5 showing various requirement for computation of Working capital

leverage
(Amount in
crores)
Page 57
Particular
Current
2011
2012
2013
2014
88.54
678.92
781.35
1082.89
240.52
1640.07
175.79
201.75
329.06
842.99
957.14
1284.64
1527.28
1442.15
1789.71
2155.35
assets
Net fixed
asset
Total asset
Earning
before tax
Note: NMDC Ltd has no Interest to be paid
Table 4.5.2 showing working capital leverage assuming 20% increase in

current asset
(Amt in crores)
Years
Current
Asset(CA)
Total Asset(TA)
+ CA
Working
capital
(= TA + .20*CA)
leverage
2011
2012
2013
88.54
678.92
781.35
346.77
978.77
1113.41
CA
TA + CA
.25
.69
.70
Page 58
2014
1082.89
1501.22
.72
Graph 4.5 showing working capital leverage assuming 20% increase in
current asset
Working capital leverage
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0.7
0.69
0.72
0.25
2011
2012
2013
2014
Years
Page 59
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Working Capital Project 2

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IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

1.2 Statement of the problem

Working capital management is very important component of corporate

components of working capital in such a way that an adequate amount of

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

MANAGEMENT ON PROFITABILITY AND WORKING CAPITAL LEVERAGE

1.3 Need of the study

Bellari Institute of Technology & Management, Bellary

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

Adequate working capital enables a firm to face business crisis in

1.4 Objectives of the study

1.5 Scope of the study

The scope of project is only on Donimalai (DIOM) branch of NMDC Ltd.

1.6 Research methodology

Research methodology is a way to systematically solve the research

Bellari Institute of Technology & Management, Bellary

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

1.7 Review of Literature

Working capital management can be considered as an important source

Bellari Institute of Technology & Management, Bellary

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

sample of 263 non-financial firms belonging to 17 different sectors

1.8 Limitation of the study

The study conducted and done is analytical subject to the following

provided on the financial statement.

Bellari Institute of Technology & Management, Bellary

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

CHAPTER-2 INDUSTRY PROFILE

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

remaining resource. Major hematite resources are located mainly in

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

Iron Ore Mining Companies in India

National Mineral Development Corporation Ltd (NMDC Ltd).

Bellari Institute of Technology & Management, Bellary

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

2.2 Company Profile (NMDC LTD, OVERALL)

ISO 14001:2004 - EMS Certification for all its production mines

OHSAS 18001:2007 - OHMS Certification for all its production mines

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

Consistent profit making and dividend paying company.

Rs. 14.167 crore

Profit before tax

Rs. 10,759 crore

Rs. 9,465 crore

Rs. 9,759 crore

Bellari Institute of Technology & Management, Bellary

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

Because of its excellent chemical and metallurgical properties, the

Bellari Institute of Technology & Management, Bellary

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

capabilities of existing mines and opening up new mines - Deposit -11B in

Bellari Institute of Technology & Management, Bellary

IMPACT OF WORKING CAPITAL MANAGEMENT & WORKING CAPITAL LEVERAGE

Achievement of NMDC during the year 2013-14(Overall)

Rs. 12,058 Crore

Profit before tax

Rs. 9,759 Crore

Rs. 9,865 Crore

Rs. 6,420 Crore

Rs. 31,477 Crore

Rs. 29,983 Crore