SUMMER INTERNSHIP PROJECT

ON WORKING CAPITAL MANAGEMENT IN

CENTRAL COALFIELDS LIMITED.

SUBSIDIARY OF COAL INDIA LIMITED

Priya n ka K u m a ri
P G D M IB
 COMPANY PROFILE

C.C.L S.E.C.L
Ranchi Bilaspur
W.C.L
Nagpur

N.C.L
Singrauli
CIL

M.C.L
Sambalpur

E.C.L B.C.C.L
Asansol Dhanbad
 Introduction To CCL

• C . C . L ( C e n tra l C o a lfie ld s Lim ite d ) is a su b sid ia ry

u n it o f
 C o a l In d ia Lim ite d .

•C . C . L . h a s b e e n a w a rd e d a s th e miniratna company.
•C.C.L provides coal to different power sectors and
steel
 sectors in India.
• Headquarter of C.C.L is situated in Ranchi.
 Project

• Detailed study and analysis of the working capital

management in Central Coalfields Limited.
.
•

 Working capital management in C.C.L

In C.C.L working capital management is done on



three basis:


1. Cash management

2. Debtors management

3. Inventory management


Working Capital Turnover Ratio

600000
500000120
 Cash Management

C a sh m a n a g e m e n t is co n ce rn e d w ith th e m a n a g in g


o f: -
• C a sh flo w – In sid e th e firm a n d O u tsid e th e firm
• C a sh b a la n ce s h e ld b y th e firm a t a p o in t o f tim e
b y fin a n cin g d e ficit o r in ve stin g su rp lu s fu n d s.

 Customers
• Jh a rkh a n d sta te e le ctricity b o a rd ( JS E B )
• Pu n ja b sta te e le ctricity b o a rd ( P S E B )
• H a rya n a sta te e le ctricity b o a rd ( H S E B )
• D e lh i V id yu t co rp o ra tio n ( D V C )
• N a tio n a l th e rm a lp o w e r co rp o ra tio n ( N T P C )
• S te e l se cto r like
 1.Steel authority of India limited (SAIL)
 2.Vizag steel plant etc.
• Other sector includes
 1.Defence
 2.Chemical industry etc.

•
 Debtors Management

CCL sells coal to it’s customers on two basis:

1.cash

2.credit

CCL sells 10%of it’s production on cash and the rest 90% on credit.

 The Sector wise position of Debtors as
on 31 March 2009
Sector As on 31.03.2009 As on 31.03.2008
(figs. In crores) (figs.in crores)

power 777.71 617.43

Steel 358.54 219.28

others 12.53 10.97

total 1148.78 847.68

 Sundry Debtors

sundry debtors
year amoun (Rs.in lakh)
2000 82909
2001 62982.85
2002 62846.16
2003 66868.3
Debtors Turnover Ratio

500000

400000 8
 Inventory Management

• Inventory management of CCL is working

directly under the Chief Material
Manager (CMM).
• In CCL the inventory includes:
 1.Coal as on 31st march of the year end
 2.Spares and stores
 3.Finished goods and work in progress
 4.Press
 5.Medicine

 Valuation Method

•Earlier FIFO (first in first out) method was used in

valuation
 but now Weighted Average Method is used in
C.C.L.
•The inventory management followed in C.C.L
follows ABC
 analysis method.

 Inventory Department In C.C.L

Following diagram
Contd.

INVENTO
year amt(R
2000
2001
2002
 Inventory Turnover Ratio

5
000
00

4
000
00
6
 Conclusion
The
 overall performance of Central Coalfields
Limited is on a good track. The financial
performance of the company is appreciable. The
profit has almost doubled to Rs.1500 crores in 2009-
2010 from the previous year profit of Rs.763.80
crore.

The surplus fund is deposited to the banks in the



form of fixed deposit. There is no bank loan in

respect of CCL to fulfill its working capital needs.
This shows that CCL has enough cash balance to
 Suggestions

 For Cash management

1. Firm should try to prepare the invoice documents
immediately after the dispatch of goods and
should mail them to the clients at the earliest.
2. Collection can be accelerated by reducing the lag
between the time a customer pays the bill and
the cheque is collected.



 Contd.

 For Inventory Management

1. Better coordination among various department
namely purchase, marketing and finance will
help in achieving greater efficiency in
inventory management.
2. Ideas like JIT can be used to improve inventory
management.



 Contd.
 For debtors management
1.There must be proper negotiation for the quality


and price of coal so as to minimize the disputed

amount.
2.Securitization scheme should be started for all


the states so as to clear the outstanding dues

through long term loans.


•
