EXECUTIVE SUMMERY The major objective of the study is to proper understanding the working capital of NALCO & to suggest

measures to overcome the shortfalls if any. Funds needed for short term needs for the purpose like raw materials, payment of wages and other day to day expenses are known as working capital. Decisions relating to working capital (Current assets-Current liabilities) and short term financing are known as working capital management. It involves the relationship between a firms short-term assets and its short term liabilities. By definition, working capital management entails short-term definitions, generally relating to the next one year period. The goal of working capital management is to ensure that the firm is able to continue its operation and that it has sufficient cash flow to satisfy both maturing short term debt and upcoming operational expenses. Working capital is primarily concerned with inventories management, Receivable management, cash management & Payable management. Inventories management at NALCO: NALCO is a large scale manufacturing company involved in mining of Bauxite and production of Aluminum. Therefore, it has to maintain large quantity of inventories at production units for its smooth running and functioning. Cash management at NALCO: NALCO has been accumulating huge cash surpluses over last several years, which enables the organization to maintain adequate cash reserves and to generate required amount of cash. Receivables management at NALCO: NALCO has set up its marketing office at all metro cities in India i.e. Mumbai, Kolkata, New Delhi, Chennai, Bangalore, and Pondicherry. This marketing office obtains sales order from Aluminum users in India as well as globally. On the basis of order received for different products it marks production planning of different i.e. Ingot sow ingot, Billets, Wire etc.

INTRODUCTION

Working Capital:The life blood of business, as is evident, signified funds required for day-to-day operations of the firm. The management of working capital assumes great importance because shortage of working capital funds is perhaps the biggest possible cause of failure of many business units in recent times. There it is of great importance on the part of management to pay particular attention to the planning and control for working capital. An attempt has been made to make critical study of the various dimensions of the working capital management of NALCO, a Star Trading House with NAVRATNA Status.

Decisions relating to working capital and short term financing are referred to as working capital management. These involve managing the relationship between a firm's short-term assets and its short-term liabilities. The goal of Working capital management is to ensure that the firm is able to continue its operations and that it has sufficient money flow to satisfy both maturing short-term debt and upcoming operational expenses. Objective of the study:The following are the main objective which has been undertaken in the present study: 1. To determine the amount of working capital requirement and to calculate various ratios relating to working capital. 2. To make an item wise study of the components of the working capital. 3. To suggest the steps to be taken to increase the efficiency in management of working capital.

Place of study:The project study is carried out at the Finance Department of NALCO Corporate office Situated at Bhubaneswar, ORISSA. The study is undertaken as a part of the PGDM curriculum from 02 MAY 2009 to 02 JULY 2009 in the form of summer placement.

Study design and methodology:Two types of data are collected, one is primary data and second one is secondary data. The primary data were collected from the Department of finance, NALCO. The secondary data were collected from the Annual Report of NALCO, NALCO website, etc.

Limitations:There may be limitations to this study because the study duration (summer placement) is very short and its not possible to observe every aspect of working capital management practices.

Working Capital
Every business needs investment to procure fixed assets, which remain in use for a longer period. Money invested in these assets is called Long term Funds or Fixed Capital. Business also needs funds for short-term purposes to finance current operations. Investment in short term assets like cash, inventories, debtors etc., is called Short-term Funds or Working Capital. The Working Capital can be categorized, as funds needed for carrying out day-to-day operations of the business smoothly. The management of the working capital is equally important as the management of long-term financial investment. Every running business needs working capital. Even a business which is fully equipped with all types of fixed assets required is bound to collapse without

o o o o

adequate supply of raw materials for processing; cash to pay for wages, power and other costs; creating a stock of finished goods to feed the market demand regularly; and, The ability to grant credit to its customers. All these require working capital. Working capital is thus like the lifeblood of a business. The business will not be able to carry on day-to-day activities without the availability of adequate working capital. Working capital cycle involves conversions and rotation of various constituents Components of the working capital. Initially cash is converted into raw materials. Subsequently, with the usage of fixed assets resulting in value additions, the raw materials get converted into work in process and then into finished goods. When sold on credit, the finished goods assume the form of debtors who give the business cash on due date. Thus cash assumes its original form again at the end of one such working capital cycle but in the course it passes through various other forms of current assets too. This is how various components of current assets keep on changing their forms due to value addition. As a result, they rotate and business operations continue. Thus, the working capital cycle involves rotation of various constituents of the working capital. While managing the working capital, two characteristics of current assets should be kept in mind viz. (i) short life span, and (ii) swift transformation into other form of current asset. Each constituent of current asset has comparatively very short life span. Investment remains in a particular form of current asset for a short period. The life span of current assets depends upon the time required in the activities of procurement; production, sales and collection and degree of synchronization among them. A very short life span of current assets results into swift transformation into other form of current assets for a running business.

These characteristics have certain implications: Decision regarding management of the working capital has to be taken frequently and on a repeat basis. The various components of the working capital are closely related and mismanagement of any one component adversely affects the other components too. The difference between the present value and the book value of profit is not significant.

The working capital has the following components, which are in several forms of current assets: o Stock of Cash o o o o Miscellaneous current assets like short term investment loans & Advances

A number of definitions have been formulated: perhaps the most widely acceptable would be; WORKING CAPITAL represents the excess of CURRENT ASSETS over CURRENT LIABILITIES The same may be designated in the following equation:

WORKING CAPITAL= CURRENT ASSETS CURRENT LIABILITIES: Funds thus invested in current assets keep revolving fast and are being constantly converted in to cash and this cash flows out again in exchange for other current assets. Thus it is known as revolving or circulating capital or short term capital. These are two concepts of working capital:a. Gross Working Capital. b. Net Working Capital. Gross working capital is the total of all current assets. Net working capital is the difference between current assets and current liabilities. Though the later concept of working capital is commonly used it is an accounting concept with little sense to say that a firm manages its net working capital. What a firm really does is to take decisions with respect to various current assets and current liabilities. The constituents of current assets and current liabilities are shown in table A. Constituents of Current Assets and Current Liabilities Current Assets

Inventories Raw materials and components, Work in progress, Finished goods, others Trade Debtors. Loans and Advances. Investments. Cash and Bank balance. Current Liabilities

Sundry Creditors. Trade Advances. Borrowings. Provisions.

The working capital needs of a business are influenced by numerous factors. The important ones are discussed in brief as given below: Nature of Enterprise The nature and the working capital requirements of an enterprise are interlinked. While a manufacturing industry has a long cycle of operation of the working capital, the same would be short in an enterprise involved in providing services. The amount required also varies as per the nature; an enterprise involved in production would require more working capital than a service sector enterprise. Manufacturing/Production Policy

Each enterprise 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 others may follow the principle of 'demand-based production' in which production is based on the demand during that particular phase of time. Accordingly, the working capital requirements vary for both of them. Working Capital Cycle In manufacturing concern, working capital cycle starts with the purchase of raw materials and ends with realization of cash from the sale of finished goods. The cycle involves the purchase of raw materials and ends with the realization of cash from the sale of finished products. The cycle involves purchase of raw materials and stores, its conversion in to stock of finished goods through work in progress with progressive increment of labor and service cost, conversion of finished stick in to sales and receivables and ultimately realization of cash and this cycle continuous again from cash to purchase of raw materials and so on. Operations The requirement of working capital fluctuates for seasonal business. The working capital needs of such businesses may increase considerably during the busy season and decrease during the slack season. Ice creams and cold drinks have a great demand during summers, while in winters the sales are negligible. Market Condition If there is high competition in the chosen product 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. Credit Policy The credit policy is concerned in its dealings with debtors and creditors influence considerably the requirements of the working capital. A concern that purchases its requirements on credit and sells its products/services on cash requires lesser amount of working capital. On the other hand a concern buying its requirements for cash and allowing credit to its customers, shall need larger amount of funds are bound to be tied up in debtors or bills receivables. Business Cycle Business Cycle refers to alternate expansion and contraction in general business activities. In a period of born i.e. when the business is prosperous there is a need for larger amount of working capital due to increase in sales, rise in prices, optimistic expansion of business etc. On the country at he time of depression i.e. when there is a down swing of the cycle, business contracts, sales decline, difficulties are faced in collections from debtors and firms may have a large amount of working capital lying ideal Availability 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 raw material stock. On the other hand, if raw material is not readily available then a large inventory/stock needs to be maintained, thereby calling for substantial investment in the same.

Growth and Expansion Growth and expansion in the volume of business results in enhancement of the working capital requirement. As business grows and expands, it needs a larger amount of working capital. Normally, the need for increased working capital funds precedes growth in business activities. Earning Capacity and Dividend policy Some firms have more earning capacity than others due to the quality of their products, monopoly conditions etc. Such firms with high earning capacity may generate cash profits from operations and contribute to their capital. The dividend policy of a concern also influences the requirements of the working capital. A firm that maintains steady high rate of cash dividend irrespective of its generation of profits needs more capital than the firm retains larger part of its profits and does not pay high rate of cash dividend. Price Level Changes Generally, rising price level requires a higher investment in the working capital. With increasing prices, the same level of current assets needs enhanced investment. Manufacturing 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 times, 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 working capital requirement is made keeping these factors in view. Each constituent of working capital retains its 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. Other Factors Certain other factors such as operating efficiency, management ability, irregularities a supply, import policy, asset structure, importance of labor, banking facilities etc. also influences the requirement of working capital. Component of Working Capital Basis of Valuation

Stock of raw material Purchase cost of raw materials Stock of work in process At cost or market value, whichever is lower Stock of finished goods Cost of production Debtors Cost of sales or sales value Cash 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. WORKING CAPITAL MANAGEMENT Working Capital Management refers to management of current assets and current liabilities. The major thrust of course is on the management of current assets .This is understandable because current liabilities arise in the context of current assets. Working Capital Management is a significant fact of financial management. Its importance stems from two reasons: Investment in current assets represents a substantial portion of total investment. Investment in current assets and the level of current liabilities have to be geared quickly to change in sales. To be sure, fixed asset investment and long term financing are responsive to variation in sales. However, this relationship is not as close and direct as it is in the case of working capital components. The importance of working capital management is effected in the fact that financial manages spend a great deal of time in managing current assets and current liabilities. Arranging short term financing, negotiating favorable credit terms, controlling the movement of cash, administering the accounts receivable, and monitoring the inventories consume a great deal of time of financial managers. The problem of working capital management is one of the best utilization of a scarce resource. Thus the job of efficient working capital management is a formidable one, since it depends upon several variables such as character of the business, the lengths of the merchandising cycle, rapidity of turnover, scale of operations, volume and terms of purchase & sales and seasonal and other variations. CONSEQUENCES OF UNDER ASSESSMENT OF WORKING CAPITAL o Growth may be stunted. It may become difficult for the enterprise to undertake profitable projects due to non-availability of working capital. o achieved. o o Optimum capacity utilization of fixed assets may not be achieved due to non availability of the working capital. o situation may lead to business closure. o The business may be compelled to buy raw materials on credit and sell finished goods on cash. In the process it may end up with increasing cost of purchases and reducing selling prices by offering discounts. Both these situations would affect profitability adversely. o Non-availability of stocks due to non-availability of funds may result in production stoppage. dversely affecting its credibility. This not be

o While underassessment of working capital has disastrous implications on business, over assessment of working capital also has its own dangers.

CONSEQUENCES OF OVER ASSESSMENT OF WORKING CAPITAL o o It may lead to offer too liberal credit terms to buyers and very poor recovery system and cash management. o o Over-investment in working capital makes capital less productive and may reduce return on investment. Working capital is very essential for success of a business and, therefore, needs efficient management and control. Each of the components of the working capital needs proper management to optimize profit. The working capital in certain enterprise may be classified into the following kinds.

1. Initial working capital. The capital, which is required at the time of the commencement of business, is called initial working capital. These are the promotion expenses incurred at the earliest stage of formation of the enterprise which include the incorporation fees. Attorney's fees, office expenses and other expenses. 2. Regular working capital. This type of working capital remains always in the enterprise for the successful operation. It supplies the funds necessary to meet the current working expenses i.e. for purchasing raw material and supplies, payment of wages, salaries and other sundry expenses. 3. Fluctuating working capital. This capital is needed to meet the seasonal requirements of the business. It is used to raise the volume of production by improvement or extension of machinery. It may be secured from any financial institution which can, of course, be met with short term capital. It is also called variable working capital. 4. Reserve margin working capital. It represents the amount utilized at the time of contingencies. These unpleasant events may occur at any time in the running life of the business such as inflation, depression, slump, flood, fire, earthquakes, strike, lay off and unavoidable competition etc. In this case greater amount of capital is required for maintenance of the business. Financing Working Capital Now let us understand the means to finance the working capital. Working capital or current assets are those assets, which unlike fixed assets change their forms rapidly. Due to this nature, they need to be financed through short-term funds. Short-term funds are also called current liabilities. The following are the major sources of raising short-term funds: I. Suppliers Credit

At times, business gets raw material on credit from the suppliers. The cost of raw material is paid after some time, i.e. upon completion of the credit period. Thus, without having an outflow of cash the business is in a position to use raw material and continue the activities. The credit given by the suppliers of raw materials is for a short period and is considered current liabilities. These funds should be used for creating current assets like stock of raw material, work in process, finished goods, etc. ii. Bank Loan for Working Capital This is a major source for raising short-term funds. Banks extend loans to businesses to help them create necessary current assets so as to achieve the Required business level. The loans are available for creating the following current Assets: Stock of Raw Materials Stock of Work in Process Stock of Finished Goods Debtors Banks give short-term loans against these assets, keeping some security margin. The advances given by banks against current assets are short-term in nature and banks have the right to ask for immediate repayment if they consider doing so. Thus bank loans for creation of current assets are also current liabilities. iii. Promoters Fund It is advisable to finance a portion of current assets from the promoters funds. They are long-term funds and, therefore do not require immediate repayment. These funds increase the liquidity of the business. Management of Inventory Inventories constitute the most significant part of current assets of a large majority of companies in India. On an average, inventories are approximately 60 % of current assets in public limited companies in India. Because of the large size of inventories maintained by firms maintained by firms, a considerable amount of funds is required to be committed to them. It is, therefore very necessary to manage inventories efficiently and effectively in order to avoid unnecessary investments. A firm neglecting a firm the management of inventories will be jeopardizing its long run profitability and may fail ultimately. The purpose of inventory management is to ensure availability of materials in sufficient quantity as and when required and also to minimize investment in inventories at considerable degrees, without any adverse effect on production and sales, by using simple inventory planning and control techniques.

Needs to hold inventories:There are three general motives for holding inventories: Transaction motive emphasizes the need to maintain inventories to facilitate smooth production and sales operation.

Precautionary motive necessities holding of inventories to guard against the risk of unpredictable changes in demand and supply forces and other factors. Speculative motive influences the decision to increases or reduce inventory levels to take advantage of price fluctuations and also for saving in re-ordering costs and quantity discounts etc. Objective of Inventory Management:The main objectives of inventory management are operational and financial. The operational mean that means that the materials and spares should be available in sufficient quantity so that work is not disrupted for want of inventory. The financial objective means that investments in inventories should not remain ideal and minimum working capital should be locked in it. The following are the objectives of inventory management:-

o To ensure continuous supply of materials, spares and finished goods. o To avoid both over-stocking of inventory. o To maintain investments in inventories at the optimum level as required by the operational and sale activities. o To keep material cost under control so that they contribute in reducing cost of production and overall purchases. o To eliminate duplication in ordering or replenishing stocks. This is possible with the help of centralizing purchases. o To minimize losses through deterioration, pilferage, wastages and damages. o To design proper organization for inventory control so that management. Clear cut account ability should be fixed at various levels of the organization. o To ensure perpetual inventory control so that materials shown in stock ledgers should be actually lying in the stores. o To ensure right quality of goods at reasonable prices. o To facilitate furnishing of data for short-term and long term planning and control of inventory Management of cash Cash is the important current asset for the operation of the business. Cash is the basic input needed to keep the business running in the continuous basis, it is also the ultimate output expected to be realized by selling or product manufactured by the firm. The firm should keep sufficient cash neither more nor less. Cash shortage will disrupt the firms manufacturing operations while excessive cash will simply remain ideal without contributing anything towards the firms profitability. Thus a major function of the financial manager is to maintain a sound cash position. Cash is the money, which a firm can disburse immediately without any restriction. The term cash includes coins, currency and cheques held by the firm and balances in its bank account. Sometimes near cash items such as marketing securities or bank term deposits are also included in cash. Generally when a firm has excess cash, it invests it is marketable securities. This kind of investment contributes some profit to the firm. Need to hold cash The firms need to hold cash may be attributed to the following three motives:-

The Transaction Motive: The transaction motive requires a firm to hold cash to conduct its business in the ordinary course. The firm needs cash primarily to make payments for purchases, wages and salaries, other operating expenses, taxes, dividends, etc. The Precautionary Motive: A firm is required to keep cash for meeting various contingencies. Though cash inflows and outflows are anticipated but there may be variations in these estimates. For example a debtor who pays after 7 days may inform of his inability to pay, on the other hand a supplier who used to give credit for 15 days may not have the stock to supply or he may not be in opposition to give credit at present. Speculative Motive: - The speculative motive relates to the holding of cash for investing in profit making opportunities as and when they arise. The opportunities to make profit changes. The firm will hold cash, when it is expected that interest rates will rise and security price will fall. Key Working Capital Ratios The following, easily calculated, ratios are important measures of working capital utilization. Ratio Stock Turnover (in days) Formulae Average Stock * 365/ Cost of Goods Sold Result Interpretation =x On average, you turn over the value of your entire days stock every x days. You may need to break this down into product groups for effective stock management. Obsolete stock, slow moving lines will extend overall stock turnover days. Faster production, fewer product lines, just in time ordering will reduce average days. =x On average, you pay your suppliers every x days. If days you negotiate better credit terms this will increase. If you pay earlier, say, to get a discount this will decline. If you simply defer paying your suppliers (without agreement) this will also increase - but your reputation, the quality of service and any flexibility provided by your suppliers may suffer. =x times Current Assets are assets that you can readily turn in to cash or will do so within 12 months in the course of business. Current Liabilities are amount you are due to pay within the coming 12 months. For example, 1.5 times means that you should be able to lay your hands on $1.50 for every $1.00 you owe. Less than 1 times e.g. 0.75 means that you could have liquidity problems and be under pressure to generate sufficient cash to meet oncoming demands. Similar to the Current Ratio but takes account of the fact that it may take time to convert inventory into cash.

Payables Ratio (in days)

Creditors * 365/ Cost of Sales (or Purchases)

Current Ratio

Total Current Assets/ Total Current Liabilities

Quick Ratio

(Total Current Assets Inventory)/ Total Current

=x times

Working Capital Ratio

Liabilities (Inventory + Receivables Payables)/ Sales

As % Sales

A high percentage means that working capital needs are high relative to your sales.

RATIOS

CURRENT RATIO:
YEAR current assets current liabilities current ratio 2007-08 106923201.70 64055893.22 0.60 2008-09 2009-10 137341092.40 241577351.84 62804493.00 86452796.00 2.19 2.79 2010-11 292738642.52 107239936.90 2.73

CURRENT RATIO
3.00 2.50 2.00 1.50 1.00 0.50 0.00 2007-08 2008-09 2009-10 2010-11 CURRENT RATIO

QUICK RATIO:
YEAR quick assets current liabilities quick ratio 2007-08 102825208.67 64055893.22 1.61 2008-09 2009-10 133131691.44 237323393.84 62804493.00 86452796.00 2.12 2.75 2010-11 289262339.52 107239936.90 2.70

quick ratio
3.00 2.50 2.00 1.50 1.00 0.50 0.00 2007-08 2008-09 2009-10 2010-11 quick ratio

ABSOLUTE LIQUID RATIO:

YEAR absolute liquid assets current liabilities absolute liquid ratio 2007-08 48349191.68 64055893.22 0.75 2008-09 2009-10 82192211.44 161880566.95 62804493.00 86452796.00 1.31 1.87 2010-11 193215974.91 107239936.90 1.80

absolute liquid ratio

2.00 1.50 1.00 0.50 0.00 2007-08 2008-09 2009-10 2010-11

absolute liquid ratio

STOCK TURNOVER RATIO:

YEAR COGS Av, inventory stock turnover ratio 2007-08 63255898.61 1945847.00 32.51 2008-09 2009-10 86813559.00 112687675.00 2079539.00 4658383.00 41.75 24.19 2010-11 150963727.00 2532708.00 59.61

stock turnover ratio

70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 2007-08 2008-09 2009-10 2010-11 stock turnover ratio

WORKING CAPITAL TURNOVER RATIO:

YEAR net sales net working capital WCTR 2007-08 271184091.00 42867328.38 6.33 2008-09 2009-10 334926277.00 436395459.00 74536598.94 155124556.00 4.49 2.81 2010-11 530127362.00 185498706.00 2.86

WCTR
7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 2007-08 2008-09 2009-10 2010-11 WCTR

OPERATING PROFIT RATIO:

YEAR EBIT NET sales operating profit ratio 2007-08
37554582.60

271184091.00 13.85

2008-09 2009-10 30013102.14 82573178.46 334926277.00 436395459.00 8.96 18.92

2010-11
63025413.59

530127362.00 11.89

operating profit ratio

20.00 15.00 10.00 5.00 0.00 2007-08 2008-09 2009-10 2010-11 operating profit ratio

NET PROFIT RATIO:

YEAR
PAT

2007-08
37554568.75

2008-09
30013093.18

2009-10
81801649.46

2010-11
61641838.64

NET sales net profit ratio

271184091.00 13.85

334926277.00 436395459.00 8.96 18.74

530127362.00 11.63

net profit ratio

20.00 15.00 10.00 5.00 0.00 2007-08 2008-09 2009-10 2010-11

net profit ratio

RETURN ON ASSET RATIO:

YEAR EBIT total assets return on assets 2007-08 37554582.60 202984931.50 18.50 2008-09 2009-10 30013102.14 82573178.46 23129024.27 336896575.67 129.76 24.51 2010-11 63025413.59 419409555.21 15.03

return on assets
140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 2007-08 2008-09 2009-10 2010-11 return on assets

RETURN ON INVESTMENT RATIO:

YEAR PAT total assets return on investment 2007-08 37554568.75 202984931.50 0.19 2008-09 2009-10 30013093.18 81801649.46 23129024.27 336896575.67 1.30 0.24 2010-11 61641838.64 419409555.21 0.15

return on investment
1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2007-08 2008-09 2009-10 2010-11 return on investment

SCHEDULE OF WORKING CAPITAL CHANGES:

PARTICULARS CURRENT ASSETS cash bank balance FDR with banks sundry debtors closing stock advance income tax advance to others advance recoverable prepaid expense security deposit interest accrued on FDR CURRENT LIABILITIES Sundry creditors consultancy fees payable security received expenses payable other liabilities HDFC car loan Hdfc o/d TDS Payable kotak mahindra car loan CBOP car loan G.E Equipment loan TOTAL NET INCREASE IN WC 41007735 8898314 17501985 7220249 8652185 0 0 2300572 420070 326795 124891 42935384 10207666 18984288 8488376 14216980 5372874 4653481 2380888 0 0 0 1927649 1309352 1482303 1268127 5564795 5372874 4653481 80316 420070 326795 124891 53914738 30374150 23540588 2718371 3355011 155807186 43548571 2426097 11822868 3338596 1398720 1827861 610960 7223112 1827558 13439427 177948990 61405372 2639320 12297909 5057472 1645018 836983 866860 7273733 890813 10084416 22141805 17856801 213223 475041 1718876 246298 990878 255900 50622 2010 2011 INCREASE DECREASE

Working capital changes:

current assets
Cash Bank Balances FDR with Bank Sundry Debtors Closing Stock Advance Income Tax Interest Accrued on FDR Advance to Others Advance Recoverable Prepaid Expenses Security Deposit Advance against Land & Building total current assets current liabilities Sundry Creditors Consultation Fees Payable Security Received Expenses Payable Other Liabilities Kotak Mahindra Car Loan CBOP Car Loan G.E. Equipment Loan HDFC Bank Ltd.(O/D) TDS Payable HDFC Bank Ltd.(Car Loan)

2007-08

2008-09

2009-10

2010-11

2718371 1827558 1768176 657878 3355011 13439427 5502767 20955746 41078228 60578588 155807186 177948990 61405372 38390668 31820164 43548571 2426097 2639320 1926792 2232286 12297909 2363178 5724688 11822868 7223112 7273733 1755384 700715 3338596 5057472 3423178 3164419 1398720 1645018 533437 1412702 1827861 836983 2171201 1977115 610960 866860 510192 616792 7500000 7500000 7500000 7500000 106923202 137341092 241577352 292738643

total current liabilities net working capital

26630650 6086362 11855802 1286980 4297626 3243927 1881826 1078282 1024440 6669998 0 64055893 42867308

26407074 6824165 12764949 1472465 5370299 5273238 1192222 724290 595929 0 2179862 62804493

41007735 8898314 17501985 7220249 8652185 420070 326795 124891 0 2300572 0

42935384 10207666 18984288 8488376 14216980 0 0 0 4653481 2380888 5372874

86452796 107239937

74536599 155124556 185498706

net working capital

200000000 180000000 160000000 140000000 120000000 100000000 80000000 60000000 40000000 20000000 0 2007-08 2008-09 2009-10 2010-11

net working capital

FUND FLOW STATEMENT: