Ratio analysis of NCL by Shrawan Dwivedi

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  • 1. A PROJECT REPORT ON“RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED”ATNORTHERN COALFIELDS LIMITEDSINGRAULISubmitted toSINHGAD INSTITUTE OF BUSINESS ADMINISTRATION & RESEARCHIn Partial Fulfillment of Requirementsfor the Award ofPost Graduate Diploma in ManagementBYSHRAWAN KUMAR DWIVEDIPGDM (Finance) IIIrd SemesterUnder the Guidance ofPROF. SIDDHARTH KARALEACADEMIC YEAR 2009-2011SINHGAD INSTITUTE OF BUSINESS ADMINISTRATION & RESEARCHS.No. 40/4A + 4B/ 1, Near PMC Octroi Post, Kondhwa- Saswad Road,Kondhwa (Bk.), Pune – 411048
  • 2. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED2 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com
  • 3. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED3 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com
  • 4. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED4 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comCERTIFICATEThis is to certify that SHRAWAN KUMAR DWIVEDI student of SINHGADINSTITUTE OF BUSINESS ADMINISTRATION & RESEARCH, Pune hascompleted his/ her summer training at NORTHERN COALFIELDS LIMITED,SINGRAULI on the topic of RATIO ANALYSIS OF NORTHERN COALFIELDSLIMITED and has submitted the Summer Training Project Report in partial fulfillment ofPGDM for the academic year 2009 -2011.He has worked under our guidance and direction. The said report is based on bonafideinformation.PROF. SIDHHARTH KARALE PROF. AVADHOOT D. POLProject Guide DirectorDate:-Place:-
  • 5. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED5 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENTMy acknowledgement deeply thanks the co-operation received from all the employees ofNorthern Coalfields Limited, Singrauli as a whole for providing me the opportunity to learnfrom them there systematic approach of accomplishing the work. I also convey my gratitude toits employees especially the Finance Department for intending all the help I needed and thecongenial working environment they provided me during my project they were so helpful that Inever felt that I am working with the persons senior to me age wise as well as experience wise.With their guidance co-operation and best wishes it would have been possible for me to completemy training and report satisfactorily.I express my deep sense of gratitude of Mr. S. Mazumdar of NCL for his constant supervisionduring the entire project work. I am truly grateful to all the Finance Managers who gave me vitalinformation related to my project work. I express my sincere thank to Mr. C.P. Singh (Dy.ChiefFinance Manager) Mr. B.P.Pathak (Sr. A.O.), Mr. V.S. Mohanti (Sr. A.O.), and Mr.Rajendra Prasad Dwivedi (Sr. S.K.), whose selected views, morale support and properguidance has been possible for bringing out this project report in a schedule time and with a niceget up.I also wish to express a special thanks to Prof. Avadhoot Pol (Director SIBAR), Prof. R.M.Indi (Dean Management Programmes). A big thank to Prof. Siddhart Karale and all teachingand non- teaching staff members, the Sinhgad Institute of Business Administration & Research,Pune for their support. The support is gratefully acknowledged.I would also like to thank to my all family members specially Vineet and Vinay whose moralesupport helped me to complete my project successfully.Lastly, a big thanks to all those who helped me sparing time even through their busy scheduleand for being kind enough to help me whenever needed them.- Shrawan Kumar Dwivedi
  • 6. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED6 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comSINHGAD INSTITUTE OF BUSINESS ADMINISTRATION ANDRESEARCH, KONDHWA (BK)DECLARATIONI herby declare that the project titled “RATIO ANALYSIS OF NORTHERN COALFIELDSLIMITED” is an original piece of research work carried out by me under the guidance andsupervision of Prof. SIDDHARTH KARALE. The information has been collected fromgenuine & authentic sources. The work has been submitted in partial fulfillment of therequirement of PGDM .Place:Date: Shrawan Kumar Dwivedi9595302505shrawan.sibar@gmail.com
  • 7. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED7 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comExecutive SummaryIndia is the third largest coal producer in the world and the eighth largest importer. With annualproduction of 310 million tonnes and imports of almost 25 million tonnes, coal provides one-third of energy supply in India. The Indian government forecasts huge increases in electricitycapacity based on coal, and a financially viable electricity industry will be necessary to supportreforms in the coal industry. This report describes the Indian coal sector, and comments ongovernment policies and the performance of Indias largely state-owned coal companies. There isa substantial need for reforms in Indias coal sector to improve efficiency and competitiveness.With the growth of the Indian economy due to various factors like Industralization, Growth ofInfrastructure, Institutional Development etc. the power is going to be the main key for anydevelopment so the Coal is wodely used by the power industries for generating the power.Financial statement analysis is important to board of the Directors, Managers, Payers, Lenders,and others who make judgments about the financial health of organizations. One widely acceptedmethod of assessing financial statements is ratio analysis, which uses data from the balance sheetand income statement to produce values that have easily interpreted financial meaning. Thepurpose of this project was to get awareness about how an organization works.The project was carried out for study and analyzing the financial condition of NorthernCoalfields Limited with special reference of Jayant Project. It was done to know that what is thecurrent financial scenario of the company. In this project report I have made Ratio Analysis foranalyzing that that what are the different ratios available in the organization and what is currentgrowth comparing to the last year.
  • 8. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED8 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comTABLE OF CONTENTSChapterNo. Sr. No. ParticularsPageNo.ChapterI Introduction1.1 Introduction of the topic 91.2 Objectives of the study 111.3 Significance of te Study 111.4 Limitations & Future Scope 11ChapterII Research Methodology 12ChapterIII Organizational Profile 143.1 About the Organization 163.2 Vision, Mission of the Organization 193.3Historical Background of theOrganization 203.4Different Departments of theOrganization 213.5Organizational Structure of theOrganization 233.6 Current Status of the Organization 263.7 Future Plans of the Organization 293.8 Awards and Achievements 30ChapterIV Data Analysis 31ChapterV Summary & Conclusions 455.1 Major Findings & Suggestions 465.2 Conclusions 47ChapterVI Reference Section 48
  • 9. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED9 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comLIST OF TABLESTABLE NO. TITLE OF THE TABLE PAGE NO.Table no. 3.1 Projects of NCL 17Table no. 3.2 Coal Resources in NorthernCoalfields Limited26Table no. 3.3 Payment to Central/ StateExchequer44LIST OF FIGURESLIST OF FIGURESTABLE NO. TITLE OF THE FIGURE PAGE NO.Figure no. 3.1 Consumer Profile 22Figure no. 3.2 Cost of Production 27Figure no. 3.3 Status of Outstanding Dues 28Figure no. 3.4 Comparison of theproduction between NCLand Jayant project28
  • 10. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED10 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comCHAPTER IINTRODUCTION
  • 11. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED11 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comINTRODUCTION OF THE TOPICTo analyze the financial position of NORTHERN COALFIELDS LIMITED, different toolsare used, of Ratio Analysis. Financial analysis involves the use of various financial statements.These statements do several things. First the balance sheet and the second is income statement.The Balance sheet summarizes the assets, liabilities, and owner’s equity of a business at a pointin time, while the income statement summarizes revenues and expenses of a firm over aparticular period of time. A conceptual framework for financial analysis provides the analystwith an interlocking means for structuring the analysis.A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical valuestaken from an enterprises financial statements. Often used in accounting, there are manystandard ratios used to try to evaluate the overall financial condition of a corporation or otherorganization. Financial ratios may be used by managers within a firm, by current and potentialshareholders (owners) of a firm, and by a firms creditors. Security analysts use financial ratios tocompare the strengths and weaknesses in various companies. If shares in a company are traded ina financial market, the market price of the shares is used in certain financial ratios.Values used in calculating financial ratios are taken from the balance sheet, income statement,statement of cash flows or (sometimes) the statement of retained earnings. These comprise thefirms "accounting statements" or financial statements. The statements data is based on theaccounting method and accounting standards used by the organization.Financial ratios quantify many aspects of a business and are an integral part of financialstatement analysis. Financial ratios are categorized according to the financial aspect of thebusiness which the ratio measures. Liquidity ratios measure the availability of cash to pay debt.Activity ratios measure how quickly a firm converts non-cash assets to cash assets. Debt ratiosmeasure the firms ability to repay long-term debt.Profitability ratios measure the firms use of itsassets and control of its expenses to generate an acceptable rate of return. Market ratios measureinvestor response to owning a companys stock and also the cost of issuing stock.Financial ratios allow for comparisons• between companies• between industries• between different time periods for one company• between a single company and its industry averageRatios generally hold no meaning unless they are benchmarked against something else, like pastperformance or another company. Thus, the ratios of firms in different industries, which facedifferent risks, capital requirements, and competition are usually hard to compare.
  • 12. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED12 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com1.2 Objectives of the reportTo get awareness about the financial techniques.To find out NCL’s ability to meet the current obligation.To analyze the financial statement of NCL.To understand how effectively NCL utilizes its assets in producing Coal.1.3 Significance of the study:The present study dealt with the current financial status of the Northern CoalfieldsLimited. It provides a broad view regarding Coal Production in NCL as well as in India. And thisproject also tells, what is the current financial condition of the NCL in India? And How they arecontributing towards the coal production?. In this context, we will address the following questions:1. To analyze the current financial condition of NCL, Singrauli2. To know the contribution of the NCL in the Indian Coal Industry.1.4 Limitations & Future Scope:Limitations :Less response by some of the staff membersDue to new in the department some of the staff members not provided some kindof information.Problems in collection of the data of past years because the database is maintainedby the headquarter and they don’t allow to provide these information to theoutsiders.Two months period for understanding all the working procedure of any particularorganization is not sufficient.Scope :In this project I have done the financial analysis of the company so the scope of thestudy is that this report can be used as a financial statement of the company. Thisreport shows different financial aspects of the Northen Coalfields Limited. Thisreport also contains the information related the various projects run by the NCL andwhat is their contribution in Coal production.
  • 13. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED13 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comCHAPTER IIRESEARCHMETHODOLOGY
  • 14. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED14 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comRESEARCH METHODOLOGY :Research in common parlance refers to a search for knowledge. One can also defineresearch as a scientific and systematic search for pertinent information on a specific topic.Research methodology is a way to systematically solve the research problem. Researchmethodology just does not deal research method but also consider the logic behind the method. Itfacilitates the researcher with reason for evaluating the research problem.Definition:According to Redman and Mory“Research is systematized effort to gain new knowledge”.According to Clifford Woody“Research comprises defining and redefining problems, formulating hypothesis orsuggested solutions, collecting organizing and evaluating data , making deductions and reachingconclusions and at last carefully testing the conclusions to determine whether they fit theformulating hypothesis”.The research is done through :Journals : I have used the the organizational journals published by the company forcollecting the data.Annual Reports : Annual reports are the best way to collect the information about thecompany. If we are going to conduct any research work in the field of Finance then wemust should have to refer the company’s Annual Report.Plant visit : By visiting the Plant I came to know that what is the real scenario, what isthe position of the company? How the work flows ? etc. then I collected the relaventinformation which I was needed to complete my project.Personal discussion and interaction : I have Discussed with the concernedpeople and thus collected information for the research.
  • 15. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED15 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comCHAPTER IIIORGANIZATIONALPROFILE
  • 16. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED16 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comNORTHERN COALFIELDS LIMITED(A Government of India’s Mini ratna Enterprise)P.O.:Singrauli, Dist.:Singrauli (M.P.), PIN.:486889EPABX-07805-266670, 266393 Fax - 07805-266640E mail : nclsgr@hotmail.com, nclsgr@yahoo.comWebsite : http://www.ncl.nic.in
  • 17. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED17 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com3.1 About the CompanyNorthern Coalfields Limited (NCL) – A ProfileNCL is a subsidiary of Coal India Limited (CIL). It was founded inthe year (1984). Earlier it was a subsidiary of Central CoalfieldsLimited (CCL). It is among the top PSUs in India.NCL is the only subsidiary of CIL producing 100% of coal fromopencast mines. There is steep rise in the coal demand on NCL tomeet the power and energy needs of the country . (44.43MT in 2002-03 to 78.44MT in 2011-12). The major demand of coal on NCL isfrom power sector, which contributes more than 96% of the totaldemand.The CILs production level in the year 2011-12 is projected as 619.67 million tones out of which NCLscontribution will be 78 million tonnes.In NCL there are four existing & completed projects with production capacity of 20.00MTpa , sixongoing projects recently approved with the sanctioned capacity of 57.50 mtpa. Two new expansionprojects are awaiting Government approval , and one extension project is under formulation .The NCL supplies coal to pithead power plants of national thermal power corporation (NTPC), UttarPradesh rajya vidyut utpadan nigam Ltd (UPRVUNL) and Renupower division of M/s. HindalcoIndustries having installed capacity of 11155MW. NCL is also supplying coal to power plants ofrajasthan state Electricity Board and Delhi Vidyut Board (DVB) and to other industries like Aluminium(Hindalco), Chemicals etc.In December 2008, NCL achieved its company-wide ISO 9001:2000 certification. It is alsopreparing to implement a company-levelIntegrated Management System tosimultaneously comply with ISO 9001, ISO14001, OHSAS 18001, and SA 8000; which willcover all its mining establishments, other supportunits, and all headquarters function .
  • 18. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED18 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comProjects of NCLSl.No.Project Existing Capacity (MT)Incremental/NewTotal Actual08-09Production(MT)Target09-1011-121 AmloriExpansion4.00 6.00 10.00 5.28 5.50 8.502 BinaExtension4.50 1.50 6.00 5.44 5.50 6.003 Block B - 3.50 3.50 3.50 3.00 3.004 DudhichuaExpansion10.00 5.00 15.00 13.27 12.75 15.005 JayantExpansion10.00 5.00 15.00 13.02 12.75 15.006 Jhingurda 3.00 - 3.00 3.86 4.00 -7 KakriExtension3.00 - 3.00 2.93 3.00 3.008 KhadiaExpansion4.00 6.00 10.00 3.68 4.00 8.009 Krishnashila - 4.00 4.00 1.08 3.00 4.0010 NigahiExpansion10.00 5.00 15.00 11.66 13.00 15.0048.50 36.00 84.50GrandTotal84.50-3.00*= 81.5063.65 66.50 78.00* Jhingurda Project will exhaust by 2011-12Table no. 3.1The area of Singrauli Coalfields is about 2202 Sq.Km. The coalfield can be divided into two basins, viz.Moher sub-basin (312 Sq.Km.) and Singrauli Main basin (1890 Sq.Km.). Major part of the Moher sub-basin lies in the Singrauli district of Madhya Pradesh and a small part lies in the Sonebhadra district ofUttar Pradesh. Singrauli main basin lies in the western part of the coalfield and is largely unexplored. Thepresent coal mining activities and future blocks are concentrated in Moher sub-basin. The explorationcarried out by GSI/NCDC/CMPDI has proved abundant resource of power grade coal in the area. This inconjunction with easy water resource from Govind Ballabh Pant Sagar makes this region an ideal locationfor high capacity pithead power plants. The coal supplies from NCL has made it possible to produceabout 10515 MW of electricity from pithead power plants of National Thermal Power Corporation(NTPC), Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd (UPRVUNL) and Renupower division of M/s.Hindalco Industries. The region is now called the "power capital of India". The ultimate capacity ofpower generation of these power plants is 13295 MW and NCL is fully prepared to meet the increased
  • 19. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED19 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comdemand of coal for the purpose. In addition, NCL is also supplying coal to power plants of RajasthanRajya Vidyut Utpadan Nigam Ltd, Delhi Vidyut Board (DVB) and Hariyana State Electricity Board.NCL, through its community development programmes, has significantly contributed towardsimprovement and development of the area. It is helping local tribal, non-tribal and project-affectedpersons in overall improvement of quality of their life through self-employments schemes, impartingeducation and providing health care.NCL is the only subsidiary of CIL prroducing 100% of coal from opencast mines. There is steep rise inthe coal demand on NCL to meet the power and energy needs of the country. (44.43 MT in 2002-03 to78.44 MT in 2011-12). The major demand of coal on NCL is from power sector, which contributes moethan 96% of the total demand. The CIL’s production level in the year 2011 – 12 is projected as 619.67million tonnes out of which NCL’s contribution will be 78 million tonnes.In NCL there are four existing & completed projects with production capacity of 20.00 Mtpa, six ongoingprojects recently approved with thesanctioned capacity of 57.50 mtpa.Two new Expansion Projects areawaiting Government approval, andone extension project is underformulation. The additional productioncapacity of the three new projects is11.00 mtpa.The NCL supplies coal to pitheadpower plants of National ThermalPower Corporation (NTPC), Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd. (UPRVUNL) andRenupower division of M/s. Hindalco Industries having installed generating capacity of 11155 MW. NCLis also supplying coal to power plants of Rajasthan State Electricity Board and Delhi Vidyut Board(DVB) and to other industries like Aluminium (Hindalco), Chemicals etc.
  • 20. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED20 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com3.2 Vision and Mission of the organizationVISION“Be the leading energy supplier in the country, through bestpractices from mine to market.”MISSION“The mission of Coal India Limited is to produce and marketthe planned quantity of coal and coal products efficiently andeconomically with due regard to safety, conservation, qualityand environment.”
  • 21. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED21 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com3.3 Historical background of Singrauli Coalfields – A RetrospectSingrauli Coalfields is located in the northern most part of sone-Mahanadi master basinand covers an area of 2202 Sq. Km. in M.P. and U.P. States. Discovery of coal inSingrauli coalfields dates back to 1840 when Capt. Wroughton located the occurrence ofcoal near surface in the vicinity of Kota Dist. Mirzapur (presently known as Shaktinagar,Dist. Sonebhadra, UP). Primitive mining was reported even before 1857. In those dayscoal was transported by bullock carts and camel to Mirzapur for use in steamers on theGanges. In the outcrop region of Kota seam near Kota Basti – Shaktinagar, where miningwas being done through inclines and subsequently there was fire in the incline. A templehas been built near that site with the name of ‘Jwalamukhi’ (the name probably derivedfrom the fire emanating from the incline mouth). Due to poor quality of coal as well aspoor communication the coal from this coalfield could not compete in the market withgood quality coalavailable fromBihar and Bengalcoalfields withbettercommunication andtransport facilitiesand hence miningactivities ceasedvery quickly.Subsequently thiscoalfield wassurveyed andexplored by variousGeologists namelySmith (1857), Mellet (1872), Roberts (1885), Oldham (1894), Sinor (1923), and Fax(1934) etc. GeologistsF. Ahmed mapped the area in details in (1948-1953) andrecommended detailed drilling and investigations. In pursuance of this, GSI took upregional drilling in northern part of the coalfields in 1958. As a sequel to theseinvestigations by GSI thick coal seams containing inferior grade coal were discovered.Erstwhile NCDC (in association with GSI and IBM carried out detailed drilling after1958.The first major industrial activity was started in this area with the construction of RihandDam in 1954 for tapping hydel power. It was beyond the imagination of anybody toforesee at that point of time that this hydel project, which resulted in converting an area ofabout 487 sq. Km. into Govind Ballabh Pant Sagar (with a water capacity of about 10.44
  • 22. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED22 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comcu. Km) will come handy in developing a network of Thermal and Super Thermal PowerPlants, thus bestowing upon this most neglected area, the honour of becoming country’spower capital.With the increase indemand of coal andalso with anobjective to conservethe better qualitycoal in terms ofCoalmMines(Conservation &Safety) Act, 1952and rules 1954, thedevelopment &exploitation ofoutlying coalfieldsgained importancesince 2ndplan period(1956-61). NDNC was formed in 1956 with one of the objectives to develop outlyingcoalfields. Systematic coal mining was first started in 1964 by erstwhile NCDC. Thecoalfield was under command area of NCDC from 1962-73, under CMAL upto 1975 andthen under CCL from 1975-85. In November 1985 the area became Northern CoalfieldsLimited with Headquarters at Singrauli. Since then this coalfield has witnessedtremendous growth and has now developed in as one of the largest coal power complexesof the world.3.4 Different Departments of the organizationMaterials ManagementSales and Quality ControlIndustrial Engeneering DepartmentPersonnel DepartmentFinance DepartmentProject & planning
  • 23. 23 | P a g eUPRVUNL21.90%RRUVNL2.83%IPGCL2.98% HPGCL1.75%RPD4.26%Hindalco(Co. Gen.)0.37%Kanoria0.41%Consumer Profile (2009NTPC : National Thermal Power Corporation Ltd.UPRVUNL : Uttar Pradesh Rajya Vidyut Utpadan Nigam LimitedRRUVNL : Rajasthan Rajya Vidyut Utpadan Nigam LimitedIPGCL : Indraprasth Power Generation Company Ltd.HPGCL : Haryana Power Generation Corporation Ltd.RPD : Reliance PowerHindalco: Hindustan Aluminium Company Ltd.Kanoria Industries Ltd.RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITEDS h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comNTPC61.58%Hindalco(Co. Gen.)Aluminum0.40% Others3.52%Consumer Profile (2009-10)Sector Coal Supplied (MT)Power 61.714Aluminium 0.256Other 2.260Figure 3.1NTPC : National Thermal Power Corporation Ltd.UPRVUNL : Uttar Pradesh Rajya Vidyut Utpadan Nigam LimitedRRUVNL : Rajasthan Rajya Vidyut Utpadan Nigam LimitedGeneration Company Ltd.HPGCL : Haryana Power Generation Corporation Ltd.Hindalco: Hindustan Aluminium Company Ltd.Kanoria Industries Ltd.ANALYSIS OF NORTHERN COALFIELDS LIMITEDS h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comNTPCUPRVUNLRRUVNLIPGCLHPGCLRPDHindalco(Co. Gen.)KanoriaAluminumOthersCoal Supplied (MT) % Share96.08%0.40%3.52%Kanoria Industries Ltd.
  • 24. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED24 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com3.5 Organizational StructureManagement ProfileBoard of DirectorsMr. Vinay Kumar SinghChairman Cum Managing DirectorFUNCTIONAL DIRECTORSMs. Shantilata SahooDirector ( Personnel)Shri Niranjan DasDirector (Technical)Project & PlanningShri O. P. MishraDirector (Technical)OperationsShri S. K. RawatDirector (Finance)PART TIME OFFICIAL DIRECTORShri Kailash PatiEconomic Advisor, Ministry of CoalDr. A. K. SarkarDirector (Marketing), CIL
  • 25. 25 | P a g ePART TIME NONMr.J.N.L. Shrivastava Mr.V.K. BhallaMr. P. ParvathisemShri Chandan RoyCompany Secretary : Mr. D.H. LalwaniRATIO ANALYSIS OF NORTHERN COALFIELDS LIMITEDS h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comPART TIME NON-OFFICIAL DIRECTORSMr.V.K. Bhalla Mr. B.N. PanDr. B. B. GoelPERMANENT INVITEESShri R. S. Pandey Shri M. K. Roy: Mr. D.H. LalwaniANALYSIS OF NORTHERN COALFIELDS LIMITEDS h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comShri M. K. Roy
  • 26. 26 | P a g eSubsidiary Companies of Coal India LimitedProjects Under Northern Coalfields Ltd.Jhingurda KakriAmlori BinaRATIO ANALYSIS OF NORTHERN COALFIELDS LIMITEDS h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comSubsidiary Companies of Coal India LimitedProjects Under Northern Coalfields Ltd.NorthernCoalfieldsLimited,SingrauliBlock B Dudhichua JayantKhadia KrishnashilaANALYSIS OF NORTHERN COALFIELDS LIMITEDS h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comSubsidiary Companies of Coal India LimitedNigahi
  • 27. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED27 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com3.6 Current status of the organizationNCL – At a GlanceExplored area of the Moher Basin of Singrauli Coalfields is about 210 Sq. Km.Presently the coal mining activities are done over an area of about 100 Sq. Km.At present NCL produces only power grade coal through 10 nos. mechanised opencast mineslocated in M.P. (about 81% of Prod.) and U.P. State (about 19% of Prod.)Since incption, NCL has shown overall growth in all spheres.Coal production increased from 13.4 MT (1986-87) to 63.65 MT (2008-09).Overburden removal increased from 42.4 M. CuM. (1986-87) to 202.75 M.CuM. (2008-09).The profit (Before tax) of NCL grown from Rs. 74.70 Crores (1986-87) to Rs. 3131.01 crores(2008-09).NCL is presently the highest profit earning company of CIL.In NCL there is:• A Central Fire Station• A Central workshop besides workshops in each project• A Central Hospital (150 beds) besides 10 dispensaries and 2 other hospitals• Total Employees as on 30thNov.’09 are 16261 (1305 officers and 14956 staff/workman)Cordial relations between trade unions and managementCoal Resources in Northern Coalfields LimitedCategory wise, Depth wise and state wise Geological Reserves of Non Coking Coal in SingrauliCoalfieldsDepth Proved Indicated Inferred Total*** *** MP *** ***0-300 4251 2660 1040 7951300-600 115 3313 993 4421600-1200 0 40 4 44Sub Total MP 5366 6013 2037 12417*** *** UP *** ***0-300 866 196 0 1062Total 6232 6209 2037 13478Table No. 3.2Special Features of NCLMining OperationsFully mechanised Opencast mines.Largest Electric Rope Shovel 20 CuM.Largest Dragline 24/96 (24 Cum. Bucket)Largest Rear Dumper 170T
  • 28. 28 | P a g eConsumers’ SatisfactionSupply of sized coal through CHPElectronically Weighed Coal SuppliesDespatch through Merry-GoOther SpecialtiesAll employee’s salaries and wages are paid through Bank.Payment to all vendors through cheque with Bank name & Account NumberLiteracy of workforce, Free LPG to Employees, School Bus for Children,Supply of Drinking waterHousing Satisfaction – 100%Land oustees Employed in NCl 25.92% of total workman (Land ousout of total workman 14956)Spares andother stores12.18%P.O.L.10.57%Power5.14%Repairs6.76%Explosives4.43%Others5.17%Admin. Exp.4.16%Cost of production (NCL)RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITEDS h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comFigure 3.2Supply of sized coal through CHP – 97%Electronically Weighed Coal Supplies – 100%Go-Round Rail and Ropeway – 98%All employee’s salaries and wages are paid through Bank.to all vendors through cheque with Bank name & Account NumberLiteracy of workforce, Free LPG to Employees, School Bus for Children,Supply of Drinking water – 100 %100%Land oustees Employed in NCl 25.92% of total workman (Land ousout of total workman 14956)Wages23.73%OB outsourcing15.92%OBR Adj0.72%Int. & Dep.11.22%Spares andother storesAdmin. Exp.4.16%Cost of production (NCL) - Segment wiseShare (2009-10WagesOB outsourcingOBR AdjInt. & Dep.Spares and other storesP.O.L.PowerRepairsExplosivesOthersAdmin. Exp.ANALYSIS OF NORTHERN COALFIELDS LIMITEDS h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comto all vendors through cheque with Bank name & Account NumberLiteracy of workforce, Free LPG to Employees, School Bus for Children,Land oustees Employed in NCl 25.92% of total workman (Land oustees 3878 Nos.Segment wiseOB outsourcingInt. & Dep.Spares and other storesAdmin. Exp.
  • 29. 29 | P a g eComparison of the Production between NCL and Jayant Project (In Million Tonnes)Year-wise Status ofOutstanding Dues5060708090100110120130140CroreRs.Year-wise Status of Outstanding Dues0102030405060702004-052005-06109.949.95RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITEDS h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comFigure 3.3Comparison of the Production between NCL and Jayant Project (In Million Tonnes)Figure 3.42004-05 2005-06 2006-07 2007-08117.57 127.29 63.32 70.36wise Status of Outstanding DuesJayant ProjectNCL062006-072007-082008-0910.57 12.7913.0251.52 52.1659.62 63.65ANALYSIS OF NORTHERN COALFIELDS LIMITEDS h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comComparison of the Production between NCL and Jayant Project (In Million Tonnes)2008-0989.6wise Status of Outstanding DuesJayant ProjectJayant ProjectNCL
  • 30. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED30 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comInternational StandardsISO 14000 Certification for Environmental Management System since 2001 and renewedup to 2010.ISO 9001:2000 Certification for Quality Management System since 11 May 2009 andvalid until 14 November 2010.Efforts for certification of Integrated Management System complying ISO 14001:2004,ISO 9001:2008, OHSAS 18001:2007 and SA 8000:2008 are being made and stage- 1audit for the same is scheduled from 04.01.2010 by the Certification Body.3.7 Future plans of the organizationAfter achieving profits and coal production more than the targeted value, NCL in collaborationwith UPRUVNL is planning to set up a 1000 megawatt coal-based power plant in Uttar Pradesh.NCL is also planning to set up a power plant of 1000 megawatts in Madhya Pradesh withNeyewali Lignite Corporation. NCL has already got the permission with the Directors of CIL.Coal India Plans to raise Rs 4,500 cr by issue of fresh capital thru book-building route. CoalIndia has equity base of Rs 6,316 crore is holding company of seven coal producers Aggregateprofit to top Rs 7,043 cr this year. Performance of the company is continuously improvingquantitatively and qualitatively. As a part of liberalization Process, the CIL is going for proposeddisinvestments through Initial Public Offer (IPO). In deregulated environment, market is the bestjudge for performance and market discounts all past and future events, CIL is confident to gethigh value quote in the secondary market.
  • 31. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED31 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com3.8 Awards and achievementsPrestigious “ INDIRA GANDHI NATIONAL AWARD FOR EXCELLENCE” Given tothe BEST ENTERPRISES Amongst the Public SectorNATIONAL SAFETY AWARDS ( By the Hon’ble President of India)Four Awards of Excellence ( By the Hon’ble Prime Minister for Bina, Nigahi, AmlohriAnd Jhingurda Projects.National Award for promotion of Family PlanningCoal India Award of ExcellenceFor excellence in pollution Control – Indira Gandhi National Gold AwardJawaharlal Nehru Memorial National AwardDadabhai Naoroji International Millennium AwardTeri National Award for EnvironmentRajbhasha Shri AwardBest Chief Executive Gold Award by WHAT HAILS PUBLIC SECTOR TODAYBharat Gaurav Award by India International Friendship Society9th Gold Award in Metal & Mining Sector for outstanding achievement in EnvironmentManagement by GREENTECHSCOPE Meritorious award for environmental excellence & sustainable development –Gold Plaque Certificate of Excellence in Corporate Performance awarded by CIL.
  • 32. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED32 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comCHAPTER IVDATA ANALYSIS
  • 33. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED33 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comNorthern Coalfields Limited, Jayant ProjectBalance Sheet AS on 31stMarch 2010-2009PARTICULARS DETAILS AS AT 31STMARCH2010(RS INLAKH)DETAILS AS AT 31STMARCH2009(RS INLAKH)SOURCES OF FUND:SHAREHOLDERS FUNDS:Share capitalShare money pending allotmentReserves & surplusLOAN FUND:SecuredUnsecuredCurrent Account with HQAPPLICATION OF FUND:A. Fixed AssetsGross BlockLess: DepreciationNet BlockB. Capital work-in-Progress0.000.0082105.4892891.7458620.3734271.374170.9782105.480.000.00(27184.43)54921.050.000.0067025.4782890.7457996.9924893.75677.5167025.470.000.00(24918.57)42106.90
  • 34. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED34 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comC. Surveyed off Fixed AssetsAwaiting disposalInvestmentCurrent Assets , Loans &Advances:DebtorsInventoriesCash & Bank BalancesLoans& AdvancesOther current AssetsCost of Removal of OverBurdenTotal Current Assets, Loans &AdvancesLess: Current Liabilities &Provisions:Net Current AssetsMisc. Expenditure240.11(594.18)7594.3336.32600.583363.7628934.7639935.5723696.9738682.450.0016238.600.0054921.05195.71219.194994.180.14607.01632.6031572.8838026.0021686.0725766.970.0016339.930.0042106.90
  • 35. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED35 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comNORTHERN COALFIELDS LIMITED: JAYANT PROJECTPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED31STMARCH 2010-2009PARTICULARS 31STMARCH 2010(RS IN LAKHS)31STMARCH2009(RS IN LAKHS)INCOME:SalesCoal issued for other purposesAccretion/ Decretion in StockWorkshop jobs for own purposesOther incomeEXPENDITURE:Consumption of Stores & SparesEmployees Remuneration & BenefitsSocial OverheadPower & FuelRepairsContractual ExpensesMiscellaneous ExpensesOverburden Removal Adjustment –Existing MinesTotal ExpenditureGROSS OPERATING PROFIT/ LOSSInterestFinancial/Commitment Charges135235.590.002292.770.007511.49145039.8519900.2713336.933459.463814.224090.727037.105471.052638.1259747.8785291.88192.86175.76123719.150.00854.390.004735.80129309.3420644.3516093.003392.103903.615392.115819.956196.995709.5755732.5473576.80324.94312.29
  • 36. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED36 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comDepreciationProvisionsWrite OffPROFIT / LOSS FOR THE YEAROverburden Removal Adjust. For Closed MinesProvision written BackPrior Period AdjustmentExtra Ordinary ItemsPROFIT / LOSS BEFORE TAXATIONProvision for income tax for earlier yearsPROFIT AFTER TAXProvision for Dividend on Preference SharesProvision for proposed Dividend of Equity sharesProvision for income tax on proposed DividendNet profit After Tax & Proposed DividendRetained Profit After Trans. To ReserveBALANCE CARRIED TO BALANCE SHEET2856.35111.870.0081955.140.00131.6518.690.0082105.480.0082105.480.000.000.0082105.4882105.4882105.485853.00268.480.0066818.090.0029.04163.590.0067010.720.0067010.720.000.000.0067010.7267010.7267010.72
  • 37. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED37 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comCALCULATION & INTERPRETATION OF RATIOS1) CURRENT RATIO:Meaning:Current ratio may be defined as the relationship between current assets andcurrent liabilities. This ratio is also known as working capital ratio, is measure ofgeneral liquidity and mostly used to make the analysis of a short-term financialposition or liquidity of a firm. The rule of thumb for current Ratio is 2:1 which isconsidered as strong financial position of the company.Current ratio = Current AssetsCurrent LiabilitiesCalculation :Year 2010 2009Currentassets39935.57 38026.00Currentliabilities23696.97 21686.07Ratio 1.69:1 1.75:1Interpretation:In 2009 current ratio was 1.75 which is decreased to 1.69 in the year 2010. Ascompared to last year Current Assets has increased because of increase inInventories, Cash and Bank balance and other Current Assets but Current Ratiohas decreased because of excess advance received from debtor , decrease in Costof Removal of over burden, and increase in current liability .2) QUICK / ACID TEST/ LIQUID RATIO :Meaning:Quick ratio is more rigorous test of liquidity than the current ratio. Theterm liquidity refers to the ability to pay its short term obligations as and whenthey become due. As a rule of thumb quick ratio of 1:1 is consideredsatisfactory.Quick Ratio = Quick/ liquid AssetsCurrent liabilities
  • 38. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED38 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comCalculation :Year 2010 2009Quickassets3406.48 1458.94Currentliabilities23696.97 21686.07Quick ratio 0.14:1 0.07:1Interpretation:In 2009 quick ratio was 0.07 which has increased to 0.14 in 2010. Quick assetshas increased by 133% and Current liabilities has increased only by 9% Due towhich quick ratio has increased by 100%. The management has taken a greateffort in maintaining high quick assets as compared to last year.3) STOCK TURN OVER OR INVENTORY TURN OVER RATIO :Meaning :Every firm has to maintain a certain amount of inventory of finished goods so asto meet the requirement of business. But the level of inventory should neither betoo high nor too low. Because it is harmful to hold more inventory as amount ofcapital is blocked in it and some cost is involved in it.Inventory turn over ratio measure the speed with which stock is converted intosales. Usually high inventory ratio indicates an efficient management ofinventory because more frequently stocks are sold ; the lesser amount of moneyis required to finance the inventory. Where as low inventory turn over ratioindicates the inefficient management of inventory. A low inventory turn overimplies over investment in inventories.Inventory turn over ratio = Cost of good soldAverage inventoryCost of goods sold = Opening Stock+ Purchase + DirectExpenses - Closing StockAverage inventory = Opening stock + Closing stock2
  • 39. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED39 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comCalculation :Year 2010 2009COGS 57147.72 50738.36Avg.inventory6294.255 4994.18Ratio 9.08 Times 10.16 TimesInterpretation: In 2009 inventory turn over ratio was 10.16 times which isreduced to 9.08 times. Reduction of Inventory turn over ratio in 2010 may be dueto increase in cost of goods sold with increase in sales as compared to last year ordue to non availability of opening balance of inventory in the year 2009.4) DEBTOR TURN OVER RATIO:Meaning :A concern may sell goods on cash as well as on credit. The volume of sales canbe increased by adopting liberal credit policy. But liberal credit policy may resultin tying up substantial funds of a firm in form of trade debtors. Trade debtors areexpected to be converted into cash within short period and are included in currentassets.Debtors velocity indicates the number of times the debtors are turned over duringa year. Higher the value of debtor turnover the more efficient is the managementof debtors/sales and vice versa.Debtor turnover ratio = Net credit salesAverage debtorsAverage debtors = Opening Debtor + closing Debtor2
  • 40. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED40 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comCalculation :NOTES: Debtor in the year 2010 is -594.18 because of excess advancereceived from customer therefore debtor is considered nil.Interpretation:Debtor turn over ratio in the year 2009 is extremely high i.e 564 times . The ratiois too high because the entire sale done by the project is according to theagreement with customer. The debtor shown on the closing day of financial yearis not received by the customer because customer has time to pay his liability innear future. So the project is not worried about the Bad debts.5) GROSS PROFIT RATIO:Meaning :The gross profit ratio indicates the extent to which selling prices of goods per unitmay decline without resulting in losses on operations of a firm. It reflects theefficiency with which a firm produces its products. Gross profit should beadequate to cover the operating expenses and to provide for fixed charges,dividends and accumulation of reserves.Gross profit ratio = Gross profit * 100Net SalesGross Profit = Sales- Cost of goods soldCalculation :Year 2010 2009Sales 135235.59 123719.15Debtor Nil 219.19Ratio Nil 564 Times
  • 41. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED41 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comYear 2010 2009Gross profit 78087.87 72980.79Net sales 135235.59 123719.15Ratio 58 % 59 %Interpretation:In the year 2009 gross profit ratio was 59 % which is decreased to 58% in theyear 2010. The project gross profit has increased with increase in sales ascompared to last year. The project gross profit ratio has decreased by 1% due toincrease in direct expenses. The company has sound position to meet its non-operating expenses and also enough capable to pay taxes and royalty to thegovernment.6) OPERATING RATIO:Meaning :Operating ratio establishes the relationship between cost of goods sold and otheroperating expenses on the one hand and sales on the other hand. Operating ratioindicates the percentage of net sales that is consumed by operating cost. Higherthe operating ratio is less favourable for the company because it would havesmall margin to cover interest, income tax , dividend and reserve.Operating ratio = Operating Cost*100Net SalesCalculation :YEAR 2010 2009Operating Cost 59747.87 55732.54Net Sales 135235.59 123719.15Ratio 44.18% 45.05%Interpretation:
  • 42. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED42 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comIn the year 2009 operating ratio was 45.05% which is reduced to 44.18% in theyear 2010. Reduction in operating ratio will contribute more to net profit .Reduction in operating ratio may be possible due to reduction in cost per tones.7) NET PROFIT RATIO:Meaning:Net profit ratio establishes a relationship between net profit after tax and salesand indicate the efficiency of the management in controlling the expenses of thecompany.Net profit ratio = Net profit after tax *100Net salesCalculation :Year 2010 2009Net profit 82105.48 67010.72Net sales 135235.59 123719.15Ratio 60.71% 54.16%Interpretation:The net profit of the company has been increased by 6.55% as compared to lastyear. In 2009 project net profit was 54.16% which increased to 60.71% in 2010.Net profit of the project has been increased due to increase in sales/ production,reduction in cost per tonnes, and better control on operating expenses. The netprofit of the project reveals sound business of the project and strong financialposition.
  • 43. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED43 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com8) WORKING CAPITAL TURNOVER RATIO:Meaning:Working capital turnover ratio indicates the velocity of the utilization of networking capital. This ratio indicates the number of times the working capital isturned over in the course of a year. This ratio measures the efficiency withwhich the working capital is being used by a firm. A higher ratio indicatesefficient utilization of working and low ratio indicates otherwise. But a veryhigh working capital turnover ratio is not a good situation for any firm and mustbe taken while interpreting the ratio.Working Capital Turnover Ratio = Cost of SalesNet working capitalCalculation :YEAR 2010 2009COGS* 57147.72 50738.36WORKING CAP. 16238.6 16339.93RATIO 3.52 times 3.11imes*COGS :- Cost of Goods SoldInterpretation: In the year 2009 ratio was 3.11 times which is increased to3.52 times in the year 2010. As compared to last year working capital has beenutilized very efficitently. In 2010, the reciprocal of this ratio( 1/3.52=0.284)shows that for sales of RS 1 company requires 28 paisa as working capital.This ratio is very helpful to forecast the working capital requirement on thebasis of sales.
  • 44. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED44 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com9) CREDITOR TURNOVER RATIO:Meaning: In the course of business operations, a firm has to makecredit purchases and incur short-term liabilities. A supplier of goods i.e,creditors is always interested to know how much time the firm is likelyto take in repaying its trade creditors. It shows the speed at whichpayments are made to the supplier for purchase made from them. It is arelation between net credit purchase and average creditors. Highercreditor turnover ratio or lower credit period enjoyed signifies that thecreditors are being paid promptly.Creditors turnover ratio = Net Credit PurchasesAverage creditorsAverage creditors = opening creditors + closing creditors2Calculation :YEAR 2010 2009CREDITPURCHASE38301.77 39152.12AVG.CREDITORS22691.52 21686.07RATIO 1.69 times 1.81timesCredit purchase include consumption of stores and spares, social overhead,power & fuel, repairs& contractual expenses.Interpretation :A high creditors turnover ratio indicates that creditors not paid in time while alow ratio gives an idea that the business is not taking full advantages of creditperiod allowed by the creditors. Since creditors turnover ratio has decreasedfrom 1.81 times to 1.69 times which represents that creditors are paid in time.It’s a good sign for the company.
  • 45. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED45 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comPayment to Central/ State Exchequer(Rs. In Crores)Particulars 2006 – 07 2007-08 2008-09MP UP Total MP UP Total MP UP TotalRoyalty 385.94 110.90 496.84 504.40 115.17 619.57 645.17 93.40 738.57Central &State SalesTax 113.23 84.32 197.55 86.51 92.02 178.53 103.69 97.72 201.41Sales Taxon worksand scraps 2.94 1.44 4.38 2.56 1.27 3.83 2.03 1.81 3.84Entry Tax 5.60 1.50 7.10 6.86 - 6.86 5.19 0.08 5.27StowingExcise Duty 41.86 10.86 52.72 47.70 10.90 58.60 48.76 12.11 60.87SSDA Cess - 5.84 5.84 - 6.61 6.61 - 9.29 9.29PropertyTax - - - 3.77 - 3.77 0.07 - 0.07Forest Cess 16.09 - 16.09 2.63 - 2.63 36.80 - 36.80ProfessionalTax 2.16 - 2.16 2.29 - 2.29 2.21 - 2.21TOTAL 490.11 265.99 756.10 656.72 225.97 882.69 843.93 214.41 1058.33Table No. 3.3The above chart shows the detailed Statement of the payment of the taxes to the Madhya PradeshGovernment and Uttar Pradesh Government. The Coal belt of the NCL is situated in two states M.P. andU.P. so the NCL pay taxes to both government acoordingly.
  • 46. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED46 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comCHAPTER VSUMMARY ANDCONCLUSION
  • 47. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED47 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com5.1 Major Findings & SuggestionsI came across following suggestions and findings during undergoing the project work on topic“FINANCIAL ANALYSIS OF NORTHERN COALFIELDS LIMITED”.1. In NCL the coordination among the various sections of the Finance & Accountsdepartment is very nice, as the Finance & Accounts department is a big departmentconsisting of near about 32 sections. It is the work force of the Finance & Accountsdepartment, which makes it possible.2. In the NCL there not to create debtors they generally deal with first to receive the cashor cheque, and then they supply the finished material.3. In the NCL there working capital management is very good, they use the IBS (ERPsystem) to manage the over all activity.4. During the study I find that their is no huge variation in budget decided and the actualone.5. The taxation policy is to be made flexible because of which bulkiness of the work is tobe removed.6. The tendering process time is to be minimized so that the current market price benefitsif any can be availed.7. Monthly return filling is not on line process, hence sales and excise department faceproblem.8. Online inventory valuation can be implemented.9. The departmental policies is to made flexible which leads to decrease in the work flowprocess as well as it leads in better profits.10. Some The staff members of the NCL are lack of the Computer knowledge. During myinternship I observed that the employees don’t have the necessary training to do thejob efficiently and properly. So I think the management should arrange specialtraining for educating them. Proper distribution of work leads to success in everyorganization. Proper distribution of work prevents the employee from over and underwork situation. So for a smooth running of an organization proper distribution of workis the hint to be followed. During my internship I observed that there was no properdistribution of work in the organization. So ln this case the organization would not beable to utilize their energy. So their should be proper distribution of work
  • 48. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED48 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.com5.2 ConclusionAfter analyzing the different Ratios of the Northern Coalfields Limited I found that the Company isreally in Good financial condition because the management has taken a great effort in managing the fundslike acquiring and allocation of the funds, optimum utilization of the available resources.The analysisshows that the profitability of the company is increases as compared to the last years due to highproduction and sells with lesser expenses. The organization is in sound position which is good for thecompany, stakeholders as well as the Country also.Good financial position not just beneficial for thecompany stake holders but it helps to improves the GDP as well as the per capita income of the entirecountry.As compared to the last year Current ratio is decreased due to increase in Inventories, Cash and Bankbalance and other Current Assets. If we talk about the Quick Ratio then In 2009 it was 0.07 which hasincreased to 0.14 in 2010. The management has taken a great effort in maintaining high quick assets ascompared to last year. The company has sound position to meet its non-operating expenses and alsoenough capable to pay taxes and royalty to the government. The net profit of the company has beenincreased by 6.55% as compared to last year. Net profit of the project has been increased due to increasein sales/ production, reduction in cost per tonnes, and better control on operating expenses. The net profitof the project reveals sound business of the project and strong financial position.It is currently in good financial condition and it is continuously trying to implement new tools andtechniques to improve its productivity as well as profitability.
  • 49. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED49 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comREFERENCESECTION
  • 50. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED50 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comBIBLIOGRAPHY:1. Published books:Ajoy K Ghose, Mining, Challenges of the 21stcentury, 2000International Energy Agency Coal in the energy supply of India,2002C.R. Kothari, Research methodology-methods and techniques, New AgeInternational Publishers, New Delhi 1985, second edition.Text book of coal (indian context) first edition (2000) by D. Chandra, R.M.Singh & M.P. SinghAnubhuti Ranjan Prasad, Coal nIndustry of India, 1986Ashish Publishing House2. Journals/Periodical::KHANIJ URJA, Volume No. 48, September 2009KHANIJ URJA, Volume No. 52, January 2010NCL DIARY, Published by the organization every yearOnline Published material on the world wide web:URL : http://www.coalindia.nic.inJune 05, 2010URL : http://www.ncl.nic.inJune 05, 2010URL : http://www.wikipedia.nic.inJune 07, 2010URL : http://www.geologydata.infoJuly 15, 2010URL : http://books.google.co.inJuly 15, 2010
  • 51. RATIO ANALYSIS OF NORTHERN COALFIELDS LIMITED51 | P a g e S h r a w a n K u m a r D w i v e d i+91 8179130135 shrawan.sibar@gmail.comshrawan.dwivedi@bevconzentry.comThanks a lot for going through my project.Feel free to Contact me anytime for further queries and any help regarding this projector any other topic related to the Finance.All the best for your bright future. And one thing always keep in mind that smart workalways pays, so work smartly.Thanks & Regards,Shrawan Kumar Dwivedi+91 81791 30135+91 88855 11105shrawan.sibar@gmail.comshrawan.dwivedi@live.comFacebook:http://www.facebook.com/#!/shrawan.dwivedi