Fianl Pricol Working

TOPIC
WORKING CAPITAL MANAGEMENT AT

PRICOL LTD
CHAPTER 1:
INTODUCTION, SCOPE AND OBJECTIVES
CHAPTER2: LITERATURE REVIEW
CHAPTER 3:
COMPANY PROFILE-
I.GENESIS OF THE ORGANIZATION.
II. ORGANIZATION STRUCTURE AND HIERARCHIES
1.ORIGIN , VISION & MISSION
2. BUSINESS PROFILE
3. FUNCTIONAL AREAS
4. ORGANIZATIONAL STRUCTURE
5. PRODUCT/ SERVICE RANGES ETC.
6. ACHIEVEMENTS/ RECOGNITIONS
. COMPARATIVE PERFORMANCE OF THE ORGANIZATION
8. SWOT ANALYSIS
9. MARKETING STRATEGIES
CHAPTER 4:
INTRODUCTION TO WORKING CAPITAL
CHAPTER 5:
RESEARCH DESIGN
CHAPTER 6:
INTERPRETATION AND ANALYSIS
CHAPTER 7:
FINDINGS, CONCLUSION, RECOMMENDATION AND LIMITATIONS
BIBLIOGRAPHY
CHAPTER-1
INTRODUCTION
CHAPTER-1
INTRODUCTION
Pricol Limited (formerly known as Premier Instruments & Controls Ltd) was
established in 1974 at Coimbatore in Tamil Nadu, and commenced manufacturing
operations in 1975 in the precision engineering field of automotive instruments.
Today, Pricol is the market leader enjoying about 53% of the automotive
instruments market share. Denso Corporation, Japan is the Joint Venture Partner
with Pricol since 1997.
The company is engaged in the manufacture and export of a complete range of
automotive components starting from instrument clusters, dashboard meters, fuel
sensors, oil pressure switches, speedometer drive cables, fuel cut off valve, filter
suction, etc.
Innovation. And the vision to look beyond. At Pricol, it is this combined power
called Innovision that has set the pace of growth. Innovision helped Pricol set new
standards, redefine its corporate objectives and grow into a new horizon of
opportunity.
Innovision helped Pricol travel beyond products and markets. It paved the way for
the emergence of a new kind of social consciousness. It created a new pathway to
achievements: not in terms of success, but in terms of value added contributions.

Innovision helped Pricol envision a greener future. A future that's synonymous
with the green of prosperity. A future that signals greener pastures of opportunity.
And a future that is greener for the world.
The other group companies English Tools ,Pricol Travels, Pricol Technologies,
Pricol Packing Limited, Pricol Cargo, Xenos Technologies, Pricol Properties
Limited, Pricol Corporate Services Ltd, Synoro Technologies, Pricol Academy of
Excellence, Pricol Software, Carcerano Pricoltech, Ananya Innovations and Pricol
HoldingsLimited
Pricol Limited (formerly known as Premier Instruments & Controls Ltd) was
established in 1974 at Coimbatore in Tamil Nadu, and commenced manufacturing
operations in 1975 in the precision engineering field of automotive instruments.
Today, Pricol is the market leader enjoying about 53% of the automotive
instruments market share. Denso Corporation, Japan is the Joint Venture Partner
with Pricol since 1997.
The company is engaged in the manufacture and export of a complete range of
automotive components starting from instrument clusters, dashboard meters, fuel
sensors, oil pressure switches, speedometer drive cables, fuel cut off valve, filter
suction, etc.
Innovation. And the vision to look beyond. At Pricol, it is this combined power
called Innovision that has set the pace of growth. Innovision helped Pricol set new
standards, redefine its corporate objectives and grow into a new horizon of
opportunity.
Innovision helped Pricol travel beyond products and markets. It paved the way for
the emergence of a new kind of social consciousness. It created a new pathway to
achievements: not in terms of success, but in terms of value added contributions.
Innovision helped Pricol envision a greener future. A future that's synonymous
with the green of prosperity. A future that signals greener pastures of opportunity.
And a future that is greener for the world.
The other group companies English Tools ,Pricol Travels, Pricol Technologies,
Pricol Packing Limited, Pricol Cargo, Xenos Technologies, Pricol Properties
Limited, Pricol Corporate Services Ltd, Synoro Technologies, Pricol Academy of
Excellence, Pricol Software, Carcerano Pricoltech, Ananya Innovations and Pricol
Holdings Limited.
SCOPE
Any countries economic development is depend upon manufacturing, service and
agricultural output. Since independence, in a process of development thorough
industrialization has been engaged by India. In order to connection to the gap of
more than 200 years of immobility, it is decided by the industrial development to
achieve progress through five-year plans. The development of industries does not
happen by itself. A mass of other socioeconomic problems are to be solved before
any perceptible results are achieved. The most widespread of these problems is that
of Human Resources Development and Development of the industry through
employees motivation. It is much easier to set construct building and bridges and
manufacture plants, product then to develop human beings, which requires a long
process of education and training that is both time-consuming and strenuous.
Employee motivation is more important than the job satisfaction for a person. To
serve in a fix and low salary job is very tough for any one presently. Here the
researcher has tried to find the factors contributing towards employees motivation.
Eight important factors contributing towards employees motivation like; training,
humanly behavior of the seniors, good working environment, welfare facilities,
career growth and development facilities, awards rewards and recognition
facilities, job securities and the salary were measured.
OBJECTIVE
Estimation of working capital requirement
Evaluation of working capital management
Evaluation of Liquidity position & working capital utilization
Analysis of relationship between working capital and profitability
Analysis & sources of working capital
Analyzing the level of current assets with relation to current liabilities.

CHAPTER-2
LITERATURE REVIEW
LITERATURE REVIEW
The dominance of labour and capital is often observed due to strike, unprecedented
shop floor events, lockout, lay-off and retrenchment. This dominance can be
viewed as industrial difference or conflict or disputes between labour and capital.
The Industrial Disputes Act, 1947 defined strike and lockout1 as: Strike Sec 2 (q)
of the Act, Strike means a cessation of work by a body of persons employed in
any industry acting in combination, or a concerted refusal, or a refusal, under a
common understanding of any number of persons who are or have been so
employed to continue to work or to accept employment; Lockout Sec 2(1) of the
Act, Lockout means the [temporary closing of a place of employment], or the
suspension of work, or the refusal by an employer to continue to employ any
number of persons employed by him. The following are the different forms of
strikes2 which labour resort to: Economic strike: In this strike, labour stops their
work to enforce their economic demands such as wages and bonus. Workers ask
for increase in wages, allowances like travelling allowance, house rent allowance,
dearness allowance, bonus and other facilities such as increase in privilege leave
and casual leave.
Sit down strike: Usually workers do not absent themselves from their place of
work when they are on strike. They keep control over production facilities. But do
not work. It is also known as pen down or tool down strike. Slow down strike:
Employees remain on their jobs but do not stop work, but restrict the rate of output
in an organized manner. They adopt go-slow tactics to put pressure on the
employers. Wild cat strikes: These strikes are conducted by workers or employees
without the authority and consent of unions. Sympathetic strike: When workers go
on strikes in sympathy with workers of another unit or industry who are already on
strike, it is a sympathetic strike. The members of other unions involve themselves
in a strike to support or express their sympathy with the members of unions who
are on strike in other undertakings. Homicides on shop floor: Assault on
supervisor, harassment on either worker or supervisors, injuring personnel in
production sections, revenge on personnel for disciplinary action.
CHAPTER-3
COMPANY PROFILE
COMPANY PROFILE
Pricols longstanding commitment to social and employee welfare, we are
determined to help create a better society. As good corporate citizens, we feel
responsible to actively contribute our best efforts to enhance the lives of our
society and the environment. Pricol group has initiated We Care, a program which
involves in the CSR activities. As part of We Care, we continuously hold a variety
of events that are in alignment with the above mentioned purpose.
The main focus areas of We Care are:
List of activities for (2015-2016)

Computers donated to a Govt High School in Valavadi village near Udumalpet.
Tree plantation in Govt High School at Valavadi village near Udumalpet.
Water purifiers with UV and Ozone technology are distributed to 22 rural Govt.
schools, Under this project until Feb15. These machines provided with four
years free AMC.
Free public eye camps are being conducted every month across all remote
location and tribal settlements around Coimbatore.
Free surgery was done for more than 140 people through this eye camp.
Free spectacles are provided to school going children, who are diagnosed with
eye defects.
Furniture donation to rural Government schools 20 Chairs were donated to the

computer lab in the Govt. Higher Secondary School at Mathuvarayapuram
village, Coimbatore
A five hours first aid and fire safety training program through certified agencies
are conducted across 12 rural Govt. schools around Coimbatore in the financial
year 2014-15.
Creating sanitation facility for girls in three identified rural Govt schools in
Periyanaikenpalayam, Veerapandi and Rakipalayam village in the financial year
2014-15.
Converted three empty reserve sights at Veerapandi village as tree parks and
maintaining the same.
De-silting and repair of check dam at Annanthambi pallam, Coimbatore

Donated 15 computers to the rural and tribal Govt. schools in
Mathuvarayapuram and Perumalkovilpathy village.
Joy of giving week was observed across all operating locations. 5 essential
groceries (Daal, Sugar, semolina, wheat flour and sunflower oil) were collected
and distributed to 15 charitable institutions across India
Tiled Flooring, water facility and furniture provided to a tribal settlement school
in Perumalkovilpathy village near Coimbatore.
Two pairs of school uniform and a pair of shoes were provided to all school
children in a tribal settlement school in Alandurai village near Coimbatore.
Conducted a mass awareness campaign about cancer at Coimbatore, in tie-up

with Coimbatore Cancer Foundation.
WE CARE for employees

Eye Care Camp for employees: Tie ups with eye hospitals for complete eye
checkups across all Business Units
Art of Living classes across all Business units
Launch second phase of foot-care
Diabetes screening and blood pressure check up
CSR External
Supplying free clean drinking water to 10 needy government schools across our
BUs
Eye camps in villages across our BUs

Donation of computers to needy government schools
Implementation of waste management project with a NGO in Coimbatore in

and around Perianaickenpalayam
We Care Activities Forecast (October 2012 March 2013)
Joy of giving week (Grocery requirements for identified orphanages/ old-age

homes / hospices will be communicated to employees. Boxes to collect the
groceries will be placed at the work stations were employees can contribute
their share towards the cause.)
Eye Camp at identified villages, were the hospitals have not reached before to
conduct any eye camps.
Identify and adopt schools in remote areas, as an initial step, trees will be
planted at those schools and the children of that school will be formed into
teams and given the responsibility to grow the trees. As an encouraging factor
future follow-up will be done and the teams that have well maintained the tree
will receive prizes. In future all programs relating to school will be
implemented on the adopted schools and will contribute for the continuous
development of the school and the children.
List of programs conducted in the year 2011-12
Free eye camp at the village of Perumalkovilpathy, where no eye camps had
been conducted earlier.
Cancer awareness campaign at Brookfields mall, Coimbatore, in tie up with the

Coimbatore Cancer Foundation.
Donation of used computer to a Government school for tribal children. Further
we educate the teachers of that school on computer science and the maintenance
of the donated computer is also borne by Pricol group.
Pricol staffs participation in a rally conducted by Siruthuli on World

Environment Day to bring awareness among the public to protect nature.
ORGANIZATION STRUCTURE AND HIERARCHIES
ORIGIN
VISION & MISSION
Vision
We will strive to attain leadership and excellence in all the products and services
that we provide, through socially and environmentally acceptable means.
Mission
Be Dynamic: Constantly innovate and find better ways to deliver value to our
customers
Constantly Evolve: Improve in every sphere of our activity
Work Passionately: To enhance value to our customers, employees, suppliers and
shareholders
Be Sustainable: Care for the society and environment around us
Core Values
Passion Whatever we do, we do it from the bottom of our heart
Respect We respect those who add value to our lives
Integrity We never compromise on our values.
Collaborate We believe in working towards a unified goal
Ownership We take responsibility for all our actions.
Listen We listen to both the spoken and unspoken before we act
FUNCTIONAL AREAS
PRODUCT AND SERVICES
TWO WHEELER PRODUCT
AUTO DECOMPRESSION UNITS
Arm & Holder type
Arm & Holder are sintered components
Auto Fuel Cocks
Diaphragm single or double
Mounting
2. Flange
1. Nut mounted
mounted
Single 3. Bracket mounted
Single
Diaphragm Single
Diaphragm
Double Diaphragm
Double
Diaphragm
Diaphragm
Flow Rate Range: 15 litres/hour to 30 litres/hour

Options:
With Inlet and Outlet Pipes
With / without reserve facility
Chain Tensioners
Types
1.Rack: Movement of Plunger in steps 2.Screw & Torsion Spring: Movement of

Plunger is continuous 3.Screw & Flat Spiral Spring: Compact and movement of
Plunger is continuous
FUEL LEVEL SENSORS
Types
1.Lever 2.Tubular
Resistance Wire Resistance Wire
Thick-film resistor Thick-film resistor
SMD Resistance
Float: Hard Rubber Float (to suit flexi-fuels)
Fuel Feed Pumps
Electronic Twin Coil
Pumps fuel from tank at bottom to engine on top Inputs to Pump from drive circuit
Discharge:
250 cc / minute minimum
315 cc / minute maximum
500 cc / minute minimum

700 cc / minute maximum
Standard Instrument Cluster
Speedometer : Mechanical Drive (Straight or Angular)

Fuel Gauge : Cross-coil Movement
Pointer : Solid type
Illumination & Warning Indicators : Lamps
DELUXE INSTRUMENT CLUSTER
Speedometer : Mechanical Drive (Straight or Angular)

ELECTRONIC INSTRUMENT CLUSTER
Mechanical Drive (Straight or

Speedometer :
Angular)
TEMPERATURE GAUGE
Clock (12hr / 24hr)
Distance to empty
Battery Voltage / Level Indicator
Service or Maintenance Indication

Mean & Maximum Speed
Fuel Consumption (average

/instantaneous)
OIL PUMPS
Types
With Shock Sensor

1. Reciprocating (For Two Stroke Engines)
Fixed Flow Single Outlet
Variable Flow Single Outlet
Variable Flow Mutiple Outlet
2. Gerotor (For Four Stroke Engines)

Options:
Integrated Filter
Rotating Pump & Stationary Shaft
Twin Rotor with single inlet and double outlet
Integrated Relief Valve
Type of Driven Gear:
1. Plastic moulded
2. Sintered and shaved
3. Sheet Metal and fine blanked
OIL LEVEL SWITCHES
Contact type using Nitrile Rubber Float
speed Sensors
Mechanical
Hub drive Assembly with Gear & Pinion

Electronic:
Wheel mounted Hall IC type
Engine mounted Hall IC type

VEHICLE SECURITY SYSTEM
Model 1 Model 2 Model 3
With Shock Sensor With Immobilizer With Remote Start
Shock Sensor with adjustable

All features as in model 1, and Remote start
sensitivity, or
On/Off through remote Vehicle Immobilizer RPM sense
Ignition security Neutral safety
Minimum cranking
Arm/Disarm chirps
time
Silent Arm/Disarm Remote stop
Vehicle locate in parking area Indicator flash
Panic mode
Code hopping
FOUR WHEELER
ANALOG CLOCKS
Range : 12 Hrs
Diameter : 52 mm
Operating Voltage : 12V DC
Front Ring : Black painted / Chrome plated
Case and Clamp : Zinc plated and passivated / Plastic white
Pointer : Solid / Self-illuminated type
Illumination : Lamp
BRAKE LIGHT SWITCHES
Insulated double terminal type
NC / NO Switching circuit
Optional feature: Water-proof integrated connector
Cigarette Lighters
Cigarette Lighter consists of Socket assembly, Heater assembly, Illumination Ring

assembly
Types
Without illumination
With illumination White / Green
Operating voltage : 12V DC

Optional features : Assembly Wiring Harness
EGR VALVES
diaphragm type
Single Terminal
Isolated Terminals
Setting Pressure : 0.3 to 5 Kg/Cm2
Mounting : As per customer requirement
Operating Voltage : 12 V DC / 24 DC
FUEL LEVEL SENSORS
Types
1.Lever
Wire-wound
Thick-film resistor
2.Tubular
Wire-wound
Thick-film resistor
3.Capacitance (No moving parts)
Earthing : Negative or Insulated
Float :Nitrile Rubber Float (to withstand Ethanol blending in petrol)
Global Presence in 45 Countries
Customers
Employees
Share Holders
Suppliers
/ TFT (Virtual)
Speedometer : Electric Cross-coil / Stepper Motor
Main Odo & Trip : LCD
Tachometer : Electric Cross-coil / Stepper Motor
Fuel Gauge : Cross-coil / Stepper Motor
Temperature Gauge : Cross-coil / Stepper Motor
Illumination & Warning indicators : Lamps / LEDs
Warning Indicators Pointer : Self-illuminated type
Optional feature : Dimmer output for illumination

LCD optional features : Clock (12hr / 24 hr) : Temperature Bar graph
Ambient temperature : Distance to Empty
Fuel Bar graph : Average speed
MECHANICAL INSTRUMENT CLUSTER
Speedometer : Mechanical (with reset assembly)
Tachometer : Cross-coil
Fuel Gauge : Cross-coil
Temperature Gauge : Cross-coil
Pointer : Solid type / Self-illuminated type

MAP SENSORS
Specifications
Work on Piezo Resistive effect
Function is to measure the Absolute Pressure in the Intake Manifold
Fitted on the throttle body
OIL PUMPS
Gerotor type
Chain Driven / Crankshaft Driven
Inbuilt Pressure Relief Valve (Optional)
POWER SOCKETS
Operating voltage : 12V / 24V DC

Optional features : Assembly Wiring Harness, Dust Cap
SPEED SENSORS
Types
1. Hall Effect with biased magnet
Contact type
Non Contact type
2. Magneto Resistive Element (MRE) type Non Contact

3. Proximity Sensor
TEMPERATURE SENSORS
1. Insulated double terminal, Leaded type, NTC Thermistor

2. Non-insulated single terminal, Disc type, NTC Thermistor
Mounting: As per customer requirement

Optional feature : Water-proof integrated connector
Top Dash Tachometers
Diameter : 80 mm / 85 mm (standard)

Illumination : Lamp
Top Dash Tachometers
Illumination : Lamp
VACUUM SWITCHING VALVES
1. On / Off type Used in Euro II cars

On / Off pulses operate the solenoid
VSV either closes fully or opens fully
2. Unlike On / Off type, flow is regulated for various conditions
Duty pulses operate the solenoid
Unlike On / Off type, flow is regulated for various conditions
vehicle Convenience & Security Systems
Model 1 Manual Central Locking

Model 2 Remote Central Locking / Keyless Entry
Model 3 Remote Central Locking / Keyless Entry with Alarm
Model 4 Remote Central Locking / Keyless Entry with Alarm &
Immobilizer (Starter Cut-off)
Model 5 Remote Central Locking / Keyless Entry with Alarm &
Immobilizer & External Sensors (Shock Sensor)
Common convenience features for Models 3, 4 & 5:
Power door lock/unlock, Parking light flash, Chirp while remote lock/unlock,
Silent mode lock/unlock,
Car finder, Panic alarm, Reverse horn, Water-proof remote
Common security features for Models 3, 4 & 5:
Open door indication, Stereo protection, Auto rearm/relock, Passive arming,
Passive locking, Progressive alarm, Door open warning, Nuisance prevention
circuitry
Idle Speed Control Valve
Rotary Solenoid type
Forms part of the Fuel Management System
Controls the volume of air flowing through the throttle valve in accordance
with the signals from ECU
Improves fuel efficiency by reducing and stabilizing the idle speed
Hot water pipe orientation as per customer requirement

WINDSHIELD WASHER SYSTEMS
Windshield washer kit comprises of Pump assembly, Reservoir, PVC tube, Cover
with retaining tag, T Joint, Nozzle assembly
1. Front Washer Nozzle (1 no. 12V DC motor)

2. Front & Rear Washer Nozzle (2 nos. 12V DC motor)
TRACTORS, CONSTRUCTION & INDUSTRIAL
NEUTRAL SAFETY SWITCHES
Types:
Push On/Off
Normally Opened and Normally Closed
OPERATING VOLTAGE
OPERATING TEMPERATURE
Vacuum Switches
Type : Diaphragm
Range : 350 mm Hg to 750 mm Hg
Operating Voltage : 12V / 24V DC
Mounting : As per customer requirement

GAUGES FOR TRACTORS AND OFF-ROAD VEHICLES
1.RPM Meter
Range : 0 to 3500 rpm
Diameter : 80 mm / 85 mm
Front Ring : Black painted /Chrome plated
Illumination : Lamp
2.Fuel Gauge
Range :As per customer requirement

Front Ring :Black painted / Chrome plated
BRAKE LIGHT SWITCHES
Insulated double terminal type
NC / NO Switching circuit
Optional feature: Water-proof integrated connector

CHARGE PUMPS
Charge Pumps is also called as Crescent type Gear Pump.

Application : Gear box and Clutch pack
Working Temperature : -40 C to 120 C
Salient features:
Less wear & tear of pumping elements
Higher operating pressure
Compact size for the given output
Types
Operating voltage : 12V DC

Optional features : Assembly Wiring Harness
EGR Valves
Diaphragm type
Single Terminal
Isolated Terminals
Setting Pressure : 10V to 36V DC
Mounting : 1.3kg
Operating Voltage : 185 mm x 190 mm x 60 mm
FUEL LEVEL SENSORS
Types
1.Lever
Wire-wound
Thick-film resistor
2.Tubular
Wire-wound
Thick-film resistor
3.Capacitance (No moving parts)
Earthing : Negative or Insulated
Float :Nitrile Rubber Float (to withstand Ethanol blending in petrol)
HOUR METERS
Analog or digital
Range : 99999.9
Diameter : 52 mm (standard)
Illumination : Lamp
Instrument Clusters
Tachometer : Cross-Coil / Stepper Motor
Hour Counter : Plunger / LCD
Fuel Gauge : Cross-Coil / Stepper Motor
Temperature Gauge : Cross-Coil / Stepper Motor
Air & Oil Pressure Gauge : Cross-Coil / Stepper Motor
Pointer : Self-illuminated type

MECHANICAL INSTRUMENT CLUSTER
Tachometer : Cross-Coil, with Hour Counter
Fuel Gauge : Cross-Coil
Temperature Gauge : Cross-Coil
Oil Pressure Gauge : Cross-Coil

LOW OIL PRESSURE SWITCHES
Types:
Diaphragm
Polyamide
Rubber
Setting Pressure : 0.3 to 5 Kg/Cm2

NEUTURAL SAFETY SWITCHES
Types
Push On/Off
Normally Opened and Normally Closed
Operating Temperature : -20 C to 130 C
OIL PUMPS
Types
Gerotor type
Chain driven / Crankshaft driven
Inbuilt Pressure Relief Valve (optional)
Operating voltage: 12V / 24V DC
Optional features : Assembly Wiring Harness, Dust Caps

PRESSURE RELIEF VALVE
Diaphragm Type
Opening Pressure: 1.5 Kg/cm2 (standard)
Optional feature : Assembly Wiring Harness can be provided as per

customer requirement
POWER SOCKETS
Types

Optional features : Assembly Wiring Harness, Dust Cap
PRESSURE SENSORS
Types
1. Diaphragm
Polyamide
Metal
2.Terminals
Single Terminal (Screw Type or 6.3 mm blade (spade)
Double Terminal (Screw Type or 6.3 mm blade (spade)
Range : 0-5 / 0-7 / 0-10 Kg/Cm2 or equivalent in PSI

Warning : 0.8 +/-0.2 Kg/Cm2 / 1 +/-0.2 Kg/Cm2 or equivalent in PSI
SPEED SENSORS
Types
1. Hall Effect with biased magnet
Contact type
Non Contact type
2. Magneto Resistive Element (MRE) type Non Contact

3. Proximity Sensor
TEMPERATURE SWITCHES
Types
1. Bimetal (Normally Closed)
2. Snap terminal (Normally Closed)
3. Terminals
Single Terminal
Isolated Terminals
Optional feature: Water-proof Integrated Connector

TEMPERATURE SENSORS
Types
1. Insulated double terminal, Leaded type, NTC Thermistor

2. Non-insulated single terminal, Disc type, NTC Thermistor
Mounting: As per customer requirement
Optional feature : Water-proof integrated connector
WARNING INDICATORS
Types
Single Warning Indicator
4-in-1 warning Indicator
Optional feature: 12V / 24V DC

Illumination : Lamps / LEDs
SERVICES
Quality Policy
Pricol will provide value and satisfaction to customers on products and services.
This will be achieved through:
Systematic training and motivation of employees
Complying with customer requirements and applicable statutory/regulatory

requirements
Continually improving the efficiency and effectiveness of the Quality

Management Systems
TPM Policy
Establish an excellent Total Productive Manufacturing system with total

involvement of all employees to achieve utilization of all resources.
ACHIEVEMENT & RECOGNITION
NEW DELHI: Automotive components manufacturer Pricol Ltd has signed

binding agreements to acquire 100% of the wiping systems business of Ashok
Piramalgroups PMP Auto Components Pvt. Ltd. The acquisition would be
undertaken by Pricol Limited through its wholly owned subsidiaries. The
transaction will be funded by a combination of internal accruals and external debt.
The transaction would be EPS accretive to the shareholders of Pricol and the
profitability is expected to further improve upon integration of the business with
Pricol.
PMP had acquired this business in 2008 from Magna and is presently running
manufacturing facilities in Czech Republic, Mexico and India. The business is
supplying wiper motors to global automotive customers including VW, Fiat, John
Deere, Skoda, Audi, Seat and has a turnover of around Rs. 250Cr currently with a
confirmed order book and revenue visibility of more than Rs. 450Cr in FY 2020.
The acquisition will help Pricol diversify its product offerings and provide access
to manufacturing facilities in Europe and North America, where it currently does
not have a footprint, helping it cement its status as a global supplier. Additionally,
with this acquisition, Pricol will increase its presence with Passenger vehicles
customers diversifying revenue streams and opening up multiple cross selling
opportunities.
Pricol also expects to realize substantial synergies within the first couple of years
to further boost the financial performance of the business. Pricols focus as an auto
component supplier and experience in low cost production and sourcing can be
leveraged by the target businesses for realizing cost savings in sourcing raw
materials and reducing manufacturing overheads. Joint R&D is also expected to
reduce product development costs.
Vikram Mohan, the Managing Director of Pricol, said, This acquisition ties in
well with our long term strategy of driving growth and achieving product
diversification. We believe that wiping systems is a growing product segment
which would be largely immune to the ever changing technological trends in the
automotive sector and the eventual move to electric vehicles. With manufacturing
presence in Czech Republic and Mexico, this acquisition fits in perfectly with our
ongoing plans to establish presence in these regions. We are also very excited
about the potential of this business in the Indian market and confident of extracting
synergies
Harsh Piramal, the Managing Director of PMP Auto Components Pvt. Ltd., said,
PMP has decided to divest this business as part of its strategic portfolio
reallocation where this business has been determined as non-core. We are happy
that an automotive focused group like Pricol is taking over this business and hope
that they will take it to further heights
The transaction is subject to customary closing conditions and the parties to the
transaction are bound by standard confidentiality obligations.
SWOT ANALYSIS
MARKETING STRATEGIES
Pricol had showcased this TFT cluster at Auto Expo 2016. Developed on a multi-
core CPU platform, it enables in-vehicle networking, CAN protocol, Bluetooth and
phone integration.
Vikram Mohan, the 41-year-old managing director of Pricol Ltd, sees himself as a
serial entrepreneur. When this second-generation entrepreneur took over the
current role in the familys automotive components business in 2011, the condition
of the company was far from being ideal.
New to the automotive business, Vikram had the tough challenge of steering
Pricol, a well-established brand, back on track.
The company had industrial relationship (IR) issues, lost business of crucial new
vehicle programmes and, as a result, faced a double whammy of huge losses and
high debts. There were multiple setbacks from 2007 to 2011 which set us back by
6-7 years. Those were the high growth years of the auto industry. Though our peers
grew, we de-grew or remained flat during that time, says Vikram in a candid
interview with Autocar Professional.
Fast forward to 2016, the company, with a redesigned brand identity, now has a
robust growth outlook and healthy order book stretching till 2020, after going
through an intense period of business restructuring.
The company, which closed FY2015-16 at revenues of nearly Rs 1,500 crore and
almost debt- free (Rs 100 crore), is aiming at a healthy 20 percent growth YoY
for the next 4-5 years with a target of Rs 3,000 crore in top-line.
This target is expected to be achieved through both organic and inorganic steps.
The strong demand from the domestic market, growth in exports, a few new
acquisitions in Europe and USA and a couple of greenfield plants will keep
Vikram and his team quite busy. This is in contrast to the 2011 period, when the
companys debt level stood at Rs 340 crore, almost half of the companys turnover.
Past forward
However, the return to profitability and growth of the present day was not a
cakewalk as the company had to take a complete re-look at its business. As part of
the restructuring, Pricol found that it has been highly Coimbatore-centric despite
the absence of any big customer or vendor base there. Therefore, it decided to
expand into other auto clusters in the country. Pricol shut down one plant in
Coimbatore, scaled down operations in another and let go of nearly 1,800
employees. The overall employee base has come down from 7,000 to 5,000 now.
Automation was introduced, end-of-testing, upgrades labs and development
capabilities were scaled up. It has sold a die-cast plant in Coimbatore, shut down
one plant in Pantnagar and expanded the other and also closed a plant in Pune
which was not in a suitable location, and faced IR issues.
The company decided to focus on its strengths and do away with non-core
business. It has divided its business largely into three key areas instrument
cluster and sensors, pumps and mechanical products, and asset management
solutions. We looked at product by product, our cost structure and our leadership
position. Whatever is not fitting in these three verticals is either sold or shut
down, says Vikram.
In order to strengthen its product offerings and achieve leadership in its chosen
business areas, the business strategy has been tweaked to suit the changing market
dynamics. We strategised internally about the future of the instrument cluster in a
car. In 2020, the instrument cluster will cease to exist in large automobiles. It will
be a driver information system and not instrumentations, combined with
entertainment or infotainment, navigation, climate control everything with one-
touch screen panel and a lot of software, elaborates Vikram.
Though Pricol had a strong presence in the domestic passenger vehicle instrument
cluster market earlier, it exited that business by selling it off to Visteon and
Denso because it knew that with the changing dynamics in that segment, it
wouldnt be able to match the development investments by MNCs which have an
advantage of spreading big investments across the globe.
Pricol has enhanced its focus on the two-wheeler instrument cluster business,
where it is the worlds second largest by volume and value terms. It supplies all the
key two-wheeler manufacturers. As part of its new strategy, the company wants to
be present in the top five global two-wheeler markets.
It also plans to focus on instrument clusters for commercial vehicles, tractors and
the off-road segment. These segments, despite being lower in volume terms, offer
greater business opportunity and growth. Our strategy is to be among the top three
players in any geography and product that we operate in. If there is no roadmap to
get there organically or inorganically or we lack the technology, let us not step into
that space. Our inorganic strategy is based on this, elaborates Vikram.
Winning back the business
As a result of the massive restructuring of the business, Pricol is winning orders
and regaining customer confidence. Over the years, its market share has grown
significantly in key market segments including two-wheelers, tractors, CVs and
off-highway.
We have been growing and this year we are expecting 20 percent growth. We are
confident we can sustain this growth till 2020 and perhaps a little higher as many
projects are in the pipeline, avers Vikram.
Pricol supplies water pumps to passenger cars, commercial vehicles and two-
wheelers. It is one of the largest suppliers of pumps to two-wheelers. Besides
instrument clusters and pumps, the company is highly bullish on the telematics and
asset management solutions business. It has won some big global orders from JCB
and is on the verge of becoming a global partner for half-a-dozen other
companies. While this vertical does not offer huge scale, the margins are quite
healthy with sustainable long-term business.
One of the key developments in this vertical is a centralised lubrication system
which it supplies to truck-maker Daimler and a few other companies. In asset
management, we have developed various products and are moving forward. All of
this is done in Coimbatore as we shifted production and substituted it with these
products as we have plants and permanent labour, informs Vikram.
The way forward
According to Vikram, the key for future growth is not just being an Indian
company but become a global company as increasingly vehicle platforms are being
developed globally. One of the major steps in this direction was to expand its
footprint to Indonesia six years ago when a number of Indian two-wheeler makers
ventured into that country. Although Indian companies failed to make inroads in
the second largest two-wheeler market in Asia, Pricol managed to gain some
business there.
The Indonesian plant has ramped up quickly, bagging orders from prominent
players like Honda, Yamaha and Suzuki. Pricol has a near-18 percent market share
in the two-wheeler instrument cluster market and hopes to grow it to a healthy 30
percent. It has recently introduced its range of pumps for two-wheelers. Today
Indonesia is not just catering to the local market but has become a hub for the
ASEAN region including Thailand, Vietnam and the Philippines.
Similarly, Latin America was added to Pricols manufacturing network when it
acquired a company in Brazil a year and half ago. More than the manufacturing,
the companys technology prowess in pumps is what made Vikram invest in it.
Today, it has become the global technical centre for Pricols pumps vertical, which
is expected to be the companys largest revenue generator in the next two years or
so. Currently, driver information systems are the biggest with a 40 percent share
of the companys total revenue. Brazils economic fall may have disturbed Pricols
business plans but Vikram is hopeful of a recovery in that market in 2-3 years.
Acquisitions ahead
As part of its aspirations to go global and fuel its future growth, the company is
aggressively looking at 2-3 acquisitions in Europe and the US. The acquisitions
would be made to plug the gaps in Pricols product portfolio. To fill in those gaps
and gain entry into the larger European market, the company is eyeing two
acquisitions in Europe (one each for pumps and sensors for CVs, tractors, off-road
instrument clusters) and one instrument cluster company in USA. While acquiring
any company, Vikram has set very clear criteria. The criteria to buy a company
are based on five scales including financial health, customer base, local
management expertise, technology roadmap and quality of manufacturing asset.
Unless three of them are complete, we wont buy the company. It took us 2-3 years
to identify the right assets. We have a focused strategy, he says.
After the acquisitions, all the three companies are likely to add anywhere between
Rs 750-1,000 crore to Pricols top-line, taking the company close to its aspiration
of reaching the Rs 3,000 crore revenue mark by 2020. To fund these acquisitions,
the company has earmarked a capex of Rs 400 crore for the next four years by
leveraging its strong balance sheet and profit from the existing business. It could
also raise some funds for the same.
New plants in India
At the home front, Pricol is set to open a greenfield plant in Pune next month.
Moving away from the practice of buying land for a new plant, the company has
adopted an asset-light model. Instead of buying land for a plant which is 50-60 of
the total cost, it is collaborating with an industrial park operator on a build-to-suit
basis. Besides insulating itself from huge investment in real estate, this model
offers flexibility to take faster decisions on shifting production if industry
dynamics change.
The company looks to leverage this model for having constraints with a
geographical presence. As the Pune plant is ready to go live, Pricol is looking to set
up another greenfield plant in the next 24 months to fuel domestic growth. The
greenfield plant will be either in Gujarat or outside of Chennai in Andhra Pradesh
as there are some good policies and power availability is not a problem, says
Vikram.
CHAPTER-4
WORKING CAPITAL PROCESS
WORKING CAPITAL PROCESS
THEORY OF WORKING CAPITAL
MEANING OF WORKING CAPITAL:
Capital required for a business can be classifies under two main categories:
Fixed Capital
Working Capital
Every business needs funds for two purposes for its establishments and to carry out
day to day operations. Long term funds are required to create production facilities
through purchase of fixed assets such as plant and machinery, land and building,
furniture etc. Investments in these assets are representing that part of firms capital
which is blocked on a permanent or fixed basis and is called fixed capital. Funds
are also needed for short term purposes for the purchasing of raw materials,
payments of wages and other day to day expenses etc. These funds are known as
working capital. In simple words, Working capital refers to that part of the firms
capital which is required for financing short term or current assets such as cash,
marketable securities, debtors and inventories.
CONCEPTS OF WORKING CAPITAL:

There are two concepts of working capital:
Balance Sheet concepts
Operating Cycle or circular flow concept
BALANCE SHEET CONCEPT:
There are two interpretation of working capital under the balance sheet concept:
Gross Working Capital
Net Working Capital
The term working capital refers to the Gross working capital and represents the
amount of funds invested in current assets . Thus, the gross working capital is the
capital invested in total current assets of the enterprises. Current assets are those
assets which are converted into cash within short periods of normally one
accounting year. Example of current assets is:
Constituents of Current Assets:
Cash in hand and Bank balance
Bills Receivable
Sundry Debtors
Short term Loans and Advances
Inventories of Stock as:

Raw Materials
Work in Process
Stores and Spaces
Finished Goods
Temporary Investments of Surplus Funds
Prepaid Expenses
Accrued Incomes
The term working capital refers to the net working capital. Net working capital is
the excess of current assets over current liabilities or say:
Net Working Capital = Current Assets Current Liabilities.
NET WORKING CAPITAL MAY BE NEGATIVE OR POSITIVE:
When the current assets exceed 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 are those liabilities which are
intended to be paid in the ordinary course of business within a short period of
normally one accounting year of the current assets or the income of the business.
Examples of current liabilities are:
CONSTITUENTS OF CURRENT LIBILITIES:

Bills Payable
Sundry Creditors or Account Payable
Accrued or Outstanding Expenses
Short term Loans, Advances and Deposits
Dividends Payable
Bank Overdraft
Provision for Taxation, If does not amount to appropriation of profits
The gross working capital concept is financial or going concern concept whereas
net working capital is an accounting concept of working capital.
OPERATING CYCLE OR CIRCULATING CASH FORMAT:
Working Capital refers to that part of firms 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 being constantly converted into cash and these
cash flows out again in exchange for other current assets. Hence it is
also known as revolving or circulating capital. The circular flow concept
of working capital is based upon this operating or working capital cycle

of a firm. The cycle starts with the purchase of raw material and other
resources
And ends with the realization of cash from the sales of finished goods. It
involves purchase of raw material and stores, its conversion into stocks
of finished goods through work in progress with progressive increment
of labor and service cost, conversion of finished stocks into sales,
debtors and receivables and ultimately realization of cash and this cycle
continuous again from cash to purchase of raw materials and so on. The
speed/ time of duration required to complete one cycle determines the
requirements of working capital longer the period of cycle, larger is the
requirement of working capital.

Receivable conversion period Raw material storage
(RCP) conversion period (RMSCP)
Cash received form
Debtors and paid to suppliers
Of raw materials
Sales of finished Raw materials
Goods introduced into process
Finished Goods
Produced
Finished goods conversion Work in process
Period (FGCP) Conversion period
(WIPCP)
The gross operating cycle of a firm is equal to the length of the inventories and
receivables conversion periods. Thus,
Gross Operating Cycle = RMCP + WIPCP + FGCP + RCP
Where,
RMCP = Raw Material Conversion Period
WIPCP = Work in- Process Conversion Period
FGCP = Finished Goods Conversion Period

RCP = Receivables Conversion Period
However, a firm may acquire some resources on credit and thus defer payments for
certain period. In that case, net operating cycle period can be calculated as below:
Net Operating Cycle Period = Gross Operating Cycle Period Payable Deferral period
Further, following formula can be used to determine the conversion periods.
Raw Material Conversion Period = Average Stock of Raw Material.
Raw Material Consumption per day
Work in process Conversion Period = Average Stock of Work-in-Progress
Total Cost of Production per day
Finished Goods Conversion Period = Average Stock of Finished Goods
Total Cost of Goods sold per day
Receivables Conversion Period = Average Accounts Receivables
Net Credit Sales per day
Payable Deferral Period = Average Payable
Net Credit Purchase per day

CLASSIFICATION OR KIND OF WORKING CAPITAL:
Working capital may be classified in two ways:
On the basis of concept
On the basis of time
Om the basis of concept, working capital is classified as gross working
capital and net working capital. The classification is important from the point
of view of the financial manager.
On the basis of time, working capital may be classified as:
Permanent or Fixed working capital
Temporary or Variable working capital.

Kinds of Working Capital
On the basis of concept On the basis of time
Permanent or
Temporary or
Gross Working Net Working
Fixed Working
Variable Working
Capital Capital
t Capital
Capital
Regular Reserve Working Seasonal Working Special Working
Working Capital Capital Capital Capital

1. PERMANENT OR FIXED WORKING CAPITAL:
Permanent or fixed working capital is the minimum amount which is required to
ensure effective utilization of fixed facilities and for maintaining the circulation of
current assets. There is always a minimum level of current assets which is
continuously required by the enterprises to carry out its normal business
operations.
2. TEMPRORAY 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.Varibles
working capital can be further classified as second working capital and special
working capital. The capital required to meet the seasonal needs of the enterprises
is called the seasonal working capital.
Temporary working capital differs from permanent working capital in the sense
that is required for short periods and cannot be permanently employed gainfully in
the business
IMPORATNCE OR ADVANTAGE OF ADEQUATE WORKING
CAPITAL:
Working capital is the life blood and nerve centre of a business . just a circulation
of a blood is essential in the human body for maintaining life, working capital is
very essential to maintain the smooth running of a business. No business can run
successfully without an adequate amount of working capital. The main advantages
of maintaining adequate amount of working capital are as follows:
Solvency of the Business
Goodwill
Easy Loans
Cash discounts
Regular supply of Raw Materials
Regular payments of salaries, wages & other day to day commitments.
Exploitation of favorable market conditions
Ability of crisis
Quick and regular return on investments
High morals
THE NEED OR OBJECTS OF WORKING CAPITAL:
The need for working capital cannot be emphasized. Every business needs some
amount of working capital. The need of working capital arises due to the time gap
between production and realization of cash from sales. There is an operating cycle
involved in the sales and realization of cash. There are time gaps in purchase of
raw materials and production, production and sales,
And sales, and realization of cash, thus , working capital is needed for the
following purposes:
For the purchase of raw materials , components and spaces
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 as packing, advertising etc.
To provide credit facilities to the customers.
To maintain the inventories of raw materials, work in- progress, stores and
spares and finished stock.
FACTORS DETERMING THE WORKING CAPITAL REQUIRMENT:
The working capital requirements of a concern depend upon a large number of
factors such as nature and size of the business, the characteristics of their
operations, the length of production cycle , the rate of stock turnover and the state
of economic situation. However the following are the important factors generally
influencing the working capital requirements.

NATURE OR CHARACTERSTICS OF A BUSINESS: The nature and
the working capital requirement of enterprises are interlinked. While a
manufacturing industry has a long cycle of operation of the working capital,
the same would be short in an enterprises involve in providing services. The
amount required also varies as per the nature, an enterprises involved in
production would required more working capital then a service sector
enterprise.
MANAFACTURE PRODUCTION POLICY: Each enterprises in the
manufacturing sector has its own production policy, some follow the policy
of uniform production even if the demand varies from time to time and other
may follow the principles of demand based production in which production
is based on the demand during the particular phase of time. Accordingly the
working capital requirements vary for both of them.
OPERATIONS: The requirement of working capital fluctuates for seasonal
business. The working capital needs of such business may increase
considerably during the busy season and decrease during the
MARKET CONDITION: If there is a high competition in the chosen
project category then one shall need to offer sops like credit, immediate
delivery of goods etc for which the working capital requirement will be high.
Otherwise if there is no competition or less competition in the market then
the working capital requirements will be low.
AVABILITY OF RAW MATERIAL: If raw material is readily available
then one need not maintain a large stock of the same thereby reducing the
working capital investment in the raw material stock . On other hand if raw
material is not readily available then a large inventory stocks need to be
maintained, there by calling for substantial investment in the same.
GROWTH AND EXAPNSION: Growth and Expansions in the volume of
business result in enhancement of the working capital requirements. As
business growth and expands it needs a larger amount of the working capital.
Normally the needs for increased working capital funds processed growth in
business activities.
PRICE LEVEL CHANGES : Generally raising price level require a
higher investment in the working capital. With increasing prices, the same
levels of current assets needs enhanced investments.

MANAFACTURING CYCLE: The manufacturing cycle starts with the
purchase of raw material and is completed with the production of finished
goods. If the manufacturing cycle involves a longer period the need for
working capital would be more. At time business needs to estimate the
requirement of working capital in advance for proper control and
management. The factors discussed above influence the quantum of working
capital in the business. The assessment of the working capital requirement is
made keeping this factor in view. Each constituents of the working capital
retains it form for a certain period and that holding period is determined by
the factors discussed above. So for correct assessment of the working capital
requirement the duration at various stages of the working capital cycle is
estimated. Thereafter proper value is assigned to the respective current
assets, depending on its level of completion. The basis for assigning value to
each component is given below:
COMPONENTS OF WORKING CAPITAL BASIS OF VALUATION
Stock of Raw Material Purchase of Raw Material
Stock of Work -in- Process At cost of Market value which is lower
Stock of finished Goods Cost of Production
Debtors Cost of Sales or Sales Value
Cah Working Expenses

Each constituent of the working capital is valued on the basis of valuation
Enumerated above for the holding period estimated. The total of all such valuation
becomes the total estimated working capital requirement.
The assessment of the working capital should be accurate even in the case
of small and micro enterprises where business operation is not very large. We
know that working capital has a very close relationship with day-to-day operations
of a business. Negligence in proper assessment of the working capital, therefore,
can affect the day-to-day operations severely. It may lead to cash crisis and
ultimately to liquidation. An inaccurate assessment of the working capital may
cause either under-assessment or over-assessment of the working capital and both
of them are dangerous.
PRINCIPLES OF WORKING CAPITAL MANAGEMENT POLICY:
The following are the general principles of a sound working capital management
policy:
PRINCIPLES OF WORKING CAPITAL MANAGEMNT POLICY
PRINCIPLES OF PRINCIPLES OF PRINCIPLES OF PRINCIPLES OF

MATURITY OF
RISK COST OF EQUITY PAYMENTS
VARIATIONS CAPITAL PRINCIPLES
1. PRINCIPLE OF RISK VARAITAION (CURRENT ASSETS POLICY):
Risk here refers to the inability of a firm to meet its obligations as and when they
become due for payment. Larger investment in current Assets with less
dependence on short term borrowings, increase liquidity, reduces risk and thereby
decreases the opportunity for gain or loss. On the other hand less investments in
current assets with greater dependence on short term borrowings, reduces liquidity
and increase profitability. In other words there is a definite inverse relationship
between the degree of risk and profitability. In other words, there is a definite
inverse relationship between the risk and profitability. A conservative management
prefers to minimize risk by maintaining a higher level of current assets or working
capital while a liberal management assumes greater risk by reducing working
capital. However, the goal of management should be to establish a suitable trade
off between profitability and risk.
2. PRINCIPLES OF COST OF CAPITAL: The various source of raising
working capital finance have different cost of capital and the degree of risk
involved. Generally, higher and risk however the risk lower is the cost and lower
the risk higher is the cost. A sound working capital management should always try
to achieve a proper balance between these two.

3.PRINCIPLE OF EQUITY POSITION: The principle is concerned with
planning the total investments in current assets. According to this principle, the
amount of working capital invested in each component should be adequately
justified by a firms equity position. Every rupee invested in current assets should
contribute to the net worth of the firm. The level of current assets may be measured
with the help of two ratios:
1. Current assets as a percentage of total assets and
2. Current assets as a percentage of total sales
While deciding about the composition of current assets, the financial manager may
consider the relevant industrial averages.
4. PRINCIPLES OF MATURITY OF PAYMENT: The principle is concerned
with planning the source of finance for working capital. According to the
principles, a firm should make every effort to relate maturities of payment to its
flow of internally generated funds. Maturity pattern of various current obligations
is an important factor in risk assumptions and risk assessments. Generally shorter
the maturity schedule of current liabilities in relation to expected cash inflows, the
greater the inability to meet its obligations in time.

CONSEQUENCES OF UNDER ASSESMENT OF WORKING CAPITAL:
Growth may be stunted. It may become difficult for the enterprises to
undertake profitable projects due to non availability of working capital.
Implementations of operating plans may brome difficult and consequently
the profit goals may not be achieved.
Cash crisis may emerge due to paucity of working funds.
Optimum capacity utilization of fixed assets may not be achieved due to non
availability of the working capital.
The business may fail to honour its commitment in time thereby adversely
affecting its creditability. This situation may lead to business closure.
The business may be compelled to by raw materials on credit and sell finished
goods on cash. In the process it may end up with increasing cost of purchase and
reducing selling price by offering discounts . both the situation would affect
profitable adversely.
Now avaibility of stocks due to non availability of funds may result in production
stoppage. While underassessment of working capital has disastrous implications
on business overassesments of working capital also has its own dangerous.

CONSEQUENCES OF OUR OWN ASSESMNET OF WORKING CAPITAL:
Excess of working capital may result in un necessary accumulation of
inventories.
It may lead to offer too liberal credit terms to buyers and very poor recovery
system & cash management.
It may make management complacent leading to its inefficiency.
Over investment in working capital makes capital less productive and may
reduce return on investment.
Working Capital is very essential for success of business & therefore needs
efficient management and control. Each of the components of working capital
needs proper management to optimize profit.
INVENTORY MANAGEMNT: Inventory includes all type of stocks. For
effective working capital management, inventory needs to be managed effectively.
The level of inventory should be such that the total cost of ordering and holding
inventory is the least. Simultaneously stock out costs should be minimized.
Business therefore should fix the minimum safety stock level reorder level of
ordering quantity so that the inventory costs is reduced and outs management
become efficient.
RECEIVABLE MANAGEMENT: Given a choice, every business would prefer
selling its produce on cash basis. However, due to factors like trade policies ,
prevailing market conditions etc. Business are compelled to sells their goods on
credit. In certain circumstances a business may deliberately extend credit as a
strategy of increasing sales. Extending credit means creating current assets in the
form of debtors or account receivables. Investment in the type of current assets
needs proper and effective management as, it gives rise to costs such as :
Cost of carrying receivables
Cost of bad debts losses
Thus the objective of any management policy pertaining to accounts receivables
would be to ensure the benefits arising due to the receivables are more then the
costs incurred for the receivables and the gap between benefit and costs
increased resulting in increase profits. An effective control of receivables
Help a great deal in properly managing it. Each business should therefore try to
find out coverage credit extends to its clients using the below given formula:
Average Credit = Total amount of receivable
(Extend in days) Average credit sale per day
Each business should project expected sales and expected investments in
receivable based on various factor, which influence the working capital
requirement. From this it would be possible to find out the average credit days
using the above given formula. A business should continuously try to monitor
the credit days and see that the average. Credit offer to clients is not crossing
the budgeted period otherwise the requirement of investment in the working

capital would increase and as a result, activities may get squeezed. This may
lead to cash crisis.
CASH BUDGET: Cash budget basically incorporates estimates of future
inflow and outflows of cash cover a projected short period of time which may
usually be a year, a half or a quarter year . effective cash management is
facilated if the cash budget is further broken down into months, weeks or even a
daily basis.
There are two components of cash budget are:
1. Cash inflows
2. Cash outflows
The main source for thses flows are given here under:
1. Cash Sales
2. Cash received from debtors
3. Cash received from Loans, deposits etc.
4. Cash receipts other revenue income
5. Cash received from sale of investment or assets.

CASH OUTFLOWS:
1. Cash Purchase
2. Cash payments to Creditors
3. Cash payment for other revenue expenditure
4. Cash payment for assets creation
5. Cash payments for withdrawals, taxes.
6. Repayments of Loan etc.

CHAPTER-5
RESEARCH DESIGHN
RESEARCH DESIGHN
STATEMENT OF PROJECT
Evaluation, analysis & interpretation of working capital management of
United Engineering Services.
Suggesting ways to improve its working capital utilization.
OBJECTIVE OF RESEARCH
Estimation of working capital requirement
Evaluation of working capital management
Evaluation of Liquidity position & working capital utilization
Analysis of relationship between working capital and profitability
Analysis & sources of working capital
Analyzing the level of current assets with relation to current liabilities.

COLLECTION OF DATA:
Data has been collected from various sources like:
Annual reports of last three years
Manual of concerned departments
Consultants and personnel of United Engineering Services.
Internet sites like www.google.com, www.solidconeyor@indiatimes.com
METHODS OF QUANTATIVE ANALYSIS
Calculation of net working capital requirements.
Ratio analysis
Operating cycle & cash cycle
Cash flow analysis
Determining the Financing mix
Statistical tools like graphical presentation

CHAPTER-6
SALES TO WORKING CAPITAL RATIO
This ratio is computed by dividing working capital by sales. This ratio helps to
measure efficiency of the utilization of net working capital. It signifies that for an
amount of sales. A relative amount of working capital is needed. If any increase in
sales in contemplated, working capital should be adequate & thus this ratio helps
management to maintain the adequate level of working capital
Financial Year FY 05-06 FY 06-07 FY 07-08
Sales to working capital ratio 2.046727 1.294863 1.51595

SALES TO WORKING CAPITAL RATIO
2.046727
2.5 1.515946
1.29486264
2
1.5
1
0.5
0
FY 05-06 FY 06-07 FY07-08
Sales to working capital ratio
CURRENT SCENERIO INTERPRETATION
As seen from the above table the ratio has decreased from 2 (FY 05-06) to 1.29
in (FY 06-07) and then increased to 1.5 (FY 07-08). This ratio is again
indicative of the fact that the year in which the expansion took place the sales
did not match up with the scale of expansion. Otherwise it would have
remained intact and not decreased. The slight increase from 1.29 to 1.51 is
indicative of the fact that the full impact of expansion is being slowly realized
& sales are slowly increasing.
INVENTORY TURNOVER RATIO

This ration indicates the effectiveness and efficiency of inventory management.
This ratio is calculated as cost of goods sold: average inventory shows how
speedily the inventory is turned into accounts receivables through sales. The higher
the inventory turnover ratio (also called stock velocity) the more the efficient
inventory management.
Financial Year FY 05-06 FY 06-07 FY07-08
inventory turnover ratio/ stock velocity 4.351329 3.2479138 2.9936
INVENTORY TURNOVER RATIO
FY07-08
inventory turnover ratio/

FY 06-07
stock velocity
FY 05-06
0 1 2 3 4 5
The stock velocity is decreasing subsequently from 4.35 (FY 06-07) to 2.99 (FY
07-08) which shows inefficiency on the part of inventory management.
Partly the reason for the fall can be attributed to stocking up of inventory for the
trail run & using them in testing the expansion mode machinery.
CURRENT ASSETS TURNOVER RATIO
This ratio is indicated by sales upon current assets. This ratio indicates the
efficiency with which the current assets turn into sales & higher current assets
turnover ratio implies by & large a more efficient use of funds in current assets.
Thus, a high turnover rate indicates reduced lock up of funds in current assets. An
analysis of this ratio over a period reflects working capital management of the firm
current assets turnover ratio 1.52472 1.11371834 1.331807
CURRENT ASSETS TURNOVER RATIO
1.6 1.52472
1.4 1.331807
1.2 1.11371834
1
0.8 current assets turnover
ratio
0.6
0.4
0.2
0
FY 05-06 FY 06-07 FY07-08
The ratio is slightly decreasing from 1.52 (FY 05-06) to 1.11 (FY 06-07) & then
increasing to 1.33 (FY 07-08) which shows that sales increase is not matched by
the increase in current assets in the expansion phase of United Engineering
Services . The reason can be well attributed to the piling up of trial stock and not
full use of the expanded production capacity.
OPERATING RATIOS
Working ratio
Interest coverage ratios
WORKING RATIO
A ratio used to measure a company's ability to recover operating costs from
annual revenue. This ratio is calculated by taking the company's total annual
expenses (excluding depreciation and debt-related expenses) and dividing it by
the annual gross income. A working ratio below 1 implies that the company is
able to recover operating costs, whereas a ratio above 1 reflects the company's
inability to do so.
working ratio 0.381701 0.43002689 0.460848
WORKING RATIO
FY07-08 0.460848
FY 06-07 0.43002689 working ratio
FY 05-06 0.381701
0 0.1 0.2 0.3 0.4 0.5
The ratio consistently has been below 1 which means company can very well take
out its operating costs, though the margin of comfort is slightly decreasing because
of the increase in expenses of the United Engineering Services

CHAPTER-7
FINDINGS, CONCLUSION, RECOMMENDATION AND
LIMITATION
FINDINGS
RUDRAPUR: Industries in Pantnagar area are estimated to have suffered a loss of
over Rs 300 crore after the Centre banned denominations of Rs 500 and Rs 1,000.
The production has also declined by 35% in many of the 452 industrial units in the
industrial estate. The worst hit are automobile factories and those involving
consumer goods.
President of the SIDCUL Entrepreneur Welfare Society, Pantnagar, Ajay Tiwari

told TOI that almost all the units at the Pantnagar industrial estate have suffered a
reduction of 35% in production. Transportation to distant states of east, west and
south India costs around Rs 10,000 per truck for a day and currency crisis has
worsened the situation as these transporters are not accepting banned currency
notes. Keeping in mind the pace of the production in terms of capital involved, the
industrial estate which maintained turnover of thousands of crores every month,
has lost around Rs 300 crore after demonetisation, Tiwari said.
The manufacturers are hopeful that once the flow of currency in the market is
normal, business will be back on track.
Surjeet Singh, unit head of Pricol Ltd, a vendor to Bajaj Auto, said the company
used to manufacture auto parts for 3,800 bikes every day. But soon after
demonetisation, this number has been reduced to 2,500. However, soon after the
publication of this article, Sudeep Dhavakumar, corporate communications
manager of Pricol Limited, denied any hit in production saying that as far as their
organisation was concerned, business outlook continued to be positive and all
business indicators were as usual.
At present, around 452 factories are operating in State Industrial Development

Corporation of Uttarakhand Ltd. (SIDCUL) owned Pantnagar industrial estate.
Luxury items market has been affected but I believe things will soon get back to
normal. The Prime Minister has taken a bold decision and this short-term crisis
once over will bring positive results in the market, said Manager of Henkel Ltd,
Shivendra Singh.
Plant head of the Mahindra & Mahindra tractor division, Avinash Kumar told TOI
that they have not reduced the production for the moment, but they did not have
any fresh order in the past 17 days. "Possibility of decline in production in next
few days can not be ruled out, looking at the currency crisis, said Kumar.
CONCLUSION
Working capital management is an important aspect of any business. Every
business concern should have adequate working capital to run its business
operation. Every concern should have neither redundant of excess working capital
nor inadequate or shortage of working capital. Both excess as well as short
working capital positions are bad for any business.
The three elements of working capital management are cash management
receivable management and inventory management. If a finance manager
maintains these three elements of working capital management properly means the
concern will get dramatic improvement in their sales volume and also in business.
Working capital policies of a firm have a great effect on its profitability, liquidity
and structured health of the organization.
Every concern should adopt some new tread management strategies that will help
in greater productivity, inventory optimization and also better working capital
management. So, it is noted that working capital is a means to run business
smoothly and profitability. Thus, the concept of working capital has its own
important in a going concern.

Good management of working capital is part of good finance management
effective use of working capital will contribute to the operational efficiency of a
department; optimum use will help to generate maximum return.
United Engineering Services is also using SAP 6.0 versions which is very
advanced to do every transaction of any organization. SAP 6.0 also applicable
for e-transaction.
RECOMMENDATION
People should be more accurate about refunding their
Amount directly to their wallet if any delay in payment.
People should update their pay tm or pay u money
Applications from time to time in order to safeguard.
Users should be more careful about the offers, cash

Backs provided by pay tm or pay u money.
The digital payment system has to take necessary steps

To overcome delay in processing of payments.
LIMITATION
The data is collected from a small sample of 70 individuals.
Time period in which the data is collected is between Septembers to
October.
The study is done for only the Bareilly region.
Convenient sampling technique has been used and hence the samples are not
the true representation of the universe.
Personal bias and prejudices of the respondent could have affected the result
of the study.
BIBLIOGRAPHY
I have used the following source for finding the data.
Research Methodology - C.R. Kothari
Website:
https://www.google.co.in/search?q=pricol&oq=pricol+&aqs=chrome.2.6
9i57j35i39l2j69i60j69i61j69i60.4159j0j1&sourceid=chrome&ie=UTF-8
http://profit.ndtv.com/stock/poricol-ltd_pricol ltd/reports
https://en.wikipedia.org/wiki/pricolltd
https://www.google.co.in/search?q=organisation+chart+of+bajaj+auto+ltd&s
afe=strict&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjz29bA45jXAhVI
pI8KHeanA5gQ_AUICigB&biw=1366&bih=662#imgrc=OMSQYo0DG4g_L
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TOPIC

WORKING CAPITAL MANAGEMENT AT

INTODUCTION, SCOPE AND OBJECTIVES

CHAPTER2: LITERATURE REVIEW

II. ORGANIZATION STRUCTURE AND HIERARCHIES

1.ORIGIN , VISION & MISSION

5. PRODUCT/ SERVICE RANGES ETC.

. COMPARATIVE PERFORMANCE OF THE ORGANIZATION

INTRODUCTION TO WORKING CAPITAL

INTERPRETATION AND ANALYSIS

FINDINGS, CONCLUSION, RECOMMENDATION AND LIMITATIONS

established in 1974 at Coimbatore in Tamil Nadu, and commenced manufacturing

operations in 1975 in the precision engineering field of automotive instruments.

with Pricol since 1997.

The company is engaged in the manufacture and export of a complete range of

automotive components starting from instrument clusters, dashboard meters, fuel

the emergence of a new kind of social consciousness. It created a new pathway to

achievements: not in terms of success, but in terms of value added contributions.

And a future that is greener for the world.

Pricol Packing Limited, Pricol Cargo, Xenos Technologies, Pricol Properties

Limited, Pricol Corporate Services Ltd, Synoro Technologies, Pricol Academy of

Excellence, Pricol Software, Carcerano Pricoltech, Ananya Innovations and Pricol

established in 1974 at Coimbatore in Tamil Nadu, and commenced manufacturing

operations in 1975 in the precision engineering field of automotive instruments.

with Pricol since 1997.

The company is engaged in the manufacture and export of a complete range of

automotive components starting from instrument clusters, dashboard meters, fuel

the emergence of a new kind of social consciousness. It created a new pathway to

achievements: not in terms of success, but in terms of value added contributions.

Innovision helped Pricol envision a greener future. A future that's synonymous

And a future that is greener for the world.

Pricol Packing Limited, Pricol Cargo, Xenos Technologies, Pricol Properties

Limited, Pricol Corporate Services Ltd, Synoro Technologies, Pricol Academy of

Excellence, Pricol Software, Carcerano Pricoltech, Ananya Innovations and Pricol

Estimation of working capital requirement

Evaluation of working capital management

Evaluation of Liquidity position & working capital utilization

Analysis of relationship between working capital and profitability

Analysis & sources of working capital

Analyzing the level of current assets with relation to current liabilities.

The main focus areas of We Care are:

List of activities for (2015-2016)

Tree plantation in Govt High School at Valavadi village near Udumalpet.

List of activities for (2014-2015)

Furniture donation to rural Government schools 20 Chairs were donated to the

De-silting and repair of check dam at Annanthambi pallam, Coimbatore

Conducted a mass awareness campaign about cancer at Coimbatore, in tie-up

List of activities for (2013-2014)

WE CARE for employees

Art of Living classes across all Business units

Launch second phase of foot-care

Diabetes screening and blood pressure check up

Eye camps in villages across our BUs

Implementation of waste management project with a NGO in Coimbatore in

We Care Activities Forecast (October 2012 March 2013)

Joy of giving week (Grocery requirements for identified orphanages/ old-age

List of programs conducted in the year 2011-12

Cancer awareness campaign at Brookfields mall, Coimbatore, in tie up with the

Pricol staffs participation in a rally conducted by Siruthuli on World

AUTO DECOMPRESSION UNITS

Arm & Holder type

Arm & Holder are sintered components

Auto Fuel Cocks

Diaphragm single or double