1

INTRODUCTION:
The aim of working capital management is to manage the firms current assets and current
liability in such a way that maintained a satisfactory level of working capital. This is so because
if the firm cannot maintain a satisfactory level of working capital, it is likely to become insolvent
and may even be forced into bankruptcy. The current assets should be large enough to cover its
current liabilities in order to ensure a reasonable level of safety. The interaction between
currentAssets, current liabilities, and its use in best and possible way is the main theme of the
theory of working capital management.
I did my project training in Working Capital Management at National Thermal Power
Corporation (NTPC) under the title of Study the working capital and its different
components. I was asked to collect the information related to finance and accounting system of
the organization, for that purpose, I meet the managers of NTPC who are doing job at executive
level in the organization. I collected data from the financial statements of NTPC .

The secondary objective was to gather information about the different components of working
capital. I started my survey from bills and stores section of NTPC in financial department itself. I
went through all the eight sections of accounts department in NTPC.
What is Working Capital and why working capital is required in the organization?
Answer of the above question are as follow:-
Working capital management is concerned with the problems that arise in attempting to manage
the current assets, the current liabilities, and the interrelationship that exist between them.
Because they are highly liquid and need to manage it in a better way for its best utilization and

2

meet all short-term finance and repayment of short-term debt. It manages the required funds to
carry the required levels of current assets to enable the company to carry on its operations at the
expected level without any disruption.
There are two concepts of working capital: Gross and Net.
Gross working capital: - The term Gross working capital is refers to the total current
assets of the company. In addition, the capital that includes all the detectable items likes
expenses and others.
Net Working Capital:- The term Net working capital can be defined in two ways:-
(i) The most common definition of net working capital (NWC) is the difference between
current assets and current liabilities.
(ii) Alternative definition of net working capital is that portion of current assets which is
financed with long-term funds. Since current liabilities represent sources of short-term funds, as
longs as current assets exceed the current liabilities, the excess must be finance with long-term
funds. This is more useful for the analysis of the trade-off between profitability and risk.









3

COMPANY PROFILE:

About National Thermal Power Corporation:

NATIONAL THERMAL POWER PLANT









4

CORE VALUES:

(BCOMIT)
Business Ethics
Customer Focus
Organizational Pride
Mutual Respect and trust
Initiative and speed
Total Quality

NTPC VISION:

TO BE ONE OF THE WORLDS LARGEST AND BEST POWER UTILITIES, POWERING
INDIAS GROWTH










5

CORPORATE MISSION:

Make available reliable and quality power in increasingly large quantities at competitive
prices and ensure timely realization of revenues.
Adopt a broad based capacity portfolio including hydropower, LNG, nuclear power, and
non-conventional and eco-friendly fuels.
Plan and speedily implement power project using state-of the art technologies.
Be an integrated utility by implementing strategic diversifications in areas such as power
trading, distribution, transmission, coal mining, coal beneficiation etc.
Develop a strong portfolio of profitable businesses in overseas markets including
technical services, generation assets etc.
Continuously attract and develop competent and committed human resources to match
world standards.
Lead fundamental and applied research for adoption of state of the art technologies,
breakthrough efficiency improvements, and new fuels.
Lead developmental efforts in the Indian power sector including assisting stat utility
reform, policy advocacy etc.
Be a socially responsible corporate entity with thrust on environment protection, ash
utilization, community development, and energy conservation.
Speedily plan and implement power projects, with contemporize technologies.




6


DADRI POWER PROJECT IN NATIONAL THERMAL POWER CORPORATION


NTPC DADRI POWER STATION:

4 X 210MW + 2 X 490MW COAL BASED POWER PLANTS and
817 MW Combined Cycle Gas Turbine Plant
World / India / Uttar Pradesh / Dadri







7

NATIONAL THERMAL POWER CORPORAION LTD:
The year 1975 witnessed the birth of an organization that went on to achieve great feats in
performance in a sector that was, until then, characterized largely by lack of investment, severe
supply shortage and operational practices that made the commercial viability of the sector
unsustainable. On November 7 1975, NTPC came into being and with it came a bold way of
looking at the power infrastructure that could support the economy, then reeling under the oil
crisis. Since then, NTPC has led the power sector with the creation of an immensely efficient and
reliable power generation infrastructure, which was until then largely in the hands of state
electricity boards. NTPC was set up in the central sector to build, own, and operate large thermal
power stations which unit size of 200 MW and 500 MW.

Capacity addition by NTPC was meant to supplement the efforts of state electricity boards
(SEBs). The first four projects namely, Singrauli, Korba, Ramagundam, Farakka, in four
different regions of the country, were already on the drawing board and were to be set up as pit-
head stations. There were challenges aplenty. The expectations were high and so were the risks.
NTPC symbolized hope
of the country suffering from crippling power black-outs, the government of India, which was
trying to put an ailing, economy back on track and the World Bank, which was supporting the
country in many development initiatives. Thus, NTPC was created not only to redraw the power
map of India but also to excel in its performance and set benchmarks for others to follow. It
succeeded on both counts.

8

In 1978, it was a clean state. Until the first sketches of an idea were scribbled on it. In
addition, them, in no time, it seems, what was a dream became a reality power. Today,
Singrauli stands tall among Indias foremost power plants.
Cleared by the Government of India on eighth Dec.76, the project began to take shape in
early78. An intrepid group of site engineers, supervisors, and workers braved the elements to
lay the foundations of what at the time was thought to be a dream.
By mid 1978, the first T.G raft connecting, a very precise and massive task was
completed. By Nov. 78, the erection of the first steam generator had commissioned. In Nov.79,
the first major milestone in the erection of the main plant was reached with the boiler drum of
unit I being lifted successfully, signaling the commencement of pressure parts erections. By
June80 the turbine installation work had already begun, and in Sept.81, the boiler was lit up
and the cleaning process completed by Oct.81.
Finally, on 13 Feb.1982, the turbine was steam rolled and the first unit of NTPC was
successfully synchronized with the Northern Grid at Dadri. The peak load of 200MW was
touched in April82. The fifth and the last one on 20 Feb.84, bringing the curtain down on stage-
I of the project.
National Thermal Power Corporation is the largest power generation company in India. The
Forbes Global 2000 ranking for 2005 ranks it as the 5
th
leading company in India and the 486
th

leading company in the world. It is a public listed (Bombay Stock Exchange) Indian public
sector company, with majority shares owned by the Government of India. India. At present,
Government of India holds 89.5% of the total equity shares of the company and the balance
10.5% is held by FIIs, Domestic Banks, Public and others. NTPC ranks amongst the top five
companies, in terms of market capitalizations.

9

NTPCs core business is engineering, construction, and operation of power generating plants and
providing consultancy to power utilities in India and abroad. As on date the installed capacity of
NTPC is 26, 404 MW through its 14 coal based (21,395 MW), seven gas based (3,955 MW) and
4 Joint Venture Projects (1,054 MW).
NTPCs share on 31 Mar 2006 in the total installed capacity of the country was 19.51% and it
contributed 27.68% of the total power generation of the country during 2005-06. Thus, every
fourth home in India is enlightened by NTPC. A total of 170.88 Bus of electricity was produced
across all the stations of the company in the financial year 2005-2006. The Net Profit after Tax
on March 31, 2006 was INR 58, 202 million. Net Profit after Tax for the quarter ended June 30,
2006 was INR 15528 million, which is 18.65% more than the same quarter in the previous
financial year (2004-2005) where the profit was INR 13087 million.
Pursuant to special resolution passed by the Shareholders at the Companys Annual General
Meeting held on September 23, 2005 and the approval of the Central Government under section
21 of the Companies Act, 1956, the name of the Company National Thermal Power Corporation
Limited has been changed to NTPC Limited with effect from October 28, 2005.
The company, which has completed its thirty years of existence on November 7, 2005, has made
its foray into hydropower and is planning to go into nuclear too). Within a span of 31 years,
NTPC has emerged as a truly national power company, with power generating facilities in all the
major regions of the country. Based on 1998 data, carried out by Data monitor UK, NTPC is the
6
th
largest in terms of thermal power generation and the second most efficient in terms of
capacity utilization amongst the thermal utilities in the world

10


NTPCs core business is engineering, construction, and operation of power generating plants and
providing consultancy to power utilities in India and abroad. As on date the installed capacity Of
NTPC is 24,954 MW through its 14 coal based (20,685MW), seven gas based (3,955 MW) and 3
Joint Venture Projects (314 MW). NTPC acquired 50% equity of the SAIL Power Supply
Corporation Ltd. (SPSCL). This JV company operates the captive power plants of Durgapur (120
MW), Rourkela (120 MW) and Bhilai (74 MW).
NTPCs share on 31 Mar 2006 in the total installed capacity of the country was 19.51% and it
contributed 27.68% of the total power generation of the country during 2005-06.NTPC has set
new benchmarks for the power industry both in the area of power plant construction and
operations. It is providing power at the cheapest average tariff in the country. With its experience
and expertise in the power sector, NTPC is extending consultancy services to various
organizations in the power business.TPC is committed to the environment, generating power at
minimal environmental cost and preserving the ecology approximately the plants. NTPC has
undertaken massive a forestation near its plants. Plantations have increased forest area and

11

reduced barren land. The massive forestation by NTPC in and around its Ramagundam Power
station (2100 MW) has contributed reducing the temperature in the areas by about 3c. NTPC
has also taken proactive steps for ash utilization. In 1991, it set up Ash Utilization Division to
manage efficient use of the ash produced at its coal stations. This quality of ash produced is ideal
for use in cement, concrete, cellular concrete, building material.

A Centre for Power Efficiency and Environment Protection (CENPEEP) has been established
in NTPC with the assistance of United States Agency for International Development.
(USAID).Cenpeep is efficiency oriented, eco-friendly and eco-nurturing initiative a symbol of
NTPCs concern towards environmental protection and continued commitment to sustainable
power development in India.
As a responsible corporate citizen, NTPC is making constant efforts to improve the socio-
economic status of the people affected by the projects. NTPC was among the first Public Sector
Enterprises to enter into a Memorandum of Understanding (MOU) with the Government in
1987-88. NTPC has been Placed under the Excellent category (the best category) every year
since the MOU system became operative. Recognizing its excellent performance and vast
potential, Government of the India has identified NTPC as one of the jewels of Public Sector
Navratnas- a potential global giant.




12

INSTALLED CAPICITY:
Projects No. of Projects
Commissioned
Capacity
(MW)
NTPC OWNED
COAL 14 22,395
GAS/LIQ. FUEL 07 3,955
TOTAL 21 26,350
OWNED BY JVCs
Coal 3 314*
Gas/LIQ. FUEL 1 740**
GRAND TOTAL 25 27,404
* Captive Power Plant under JVs with SAIL
** Power Plant under JV with GAIL, & MSEB
Table: 1.1




13

Coal based State
Commissioned
Capacity
(MW)
1. Singrauli Uttar Pradesh 2,000
2. Korba Chhattisgarh 2,100
3. Ramagundam Andhra Pradesh 2,600
4. Farakka West Bengal 1,600
5. Vindhyachal Madhya Pradesh 3,260
6. Rihand Uttar Pradesh 2,000
7. Kahalgaon Bihar 1,340
8. NTCPP Uttar Pradesh 840
9. TalcherKaniha Orissa 3,000
10. Unchahar Uttar Pradesh 1,050
11. Talcher Thermal Orissa 460
12. Simhadri Andhra Pradesh 1,000
13. Tanda Uttar Pradesh 440
14. Badarpur Delhi 705
Total (Coal) 22,395
Coal Based Power Stations table 1.2

14

Gas/Liq. Fuel Based Power Stations:
Gas based State
Commissioned
Capacity
(MW)
1 Anta Rajasthan 413
2 Auraiya Uttar Pradesh 652
3 Kawas Gujarat 645
4 Dadri Uttar Pradesh 817
5 Jhanor-Gandhar Gujarat 648
6
Rajiv Gandhi CCPP
Kayamkulam
Kerala 350
7 Faridabad Haryana 430
Total (Gas) 3,955

Table 1.3




15

Projects under Implementation:
Coal / Hydro State Fuel
Additional
Capacity Under
Implementation
(MW)
1.
Kahalgaon Stage II
(Phase I) (Phase II)
Bihar Coal
500
500
2. Sipat (Stage I) (Stage II) Chhattisgarh Coal
1980
1000
3. Barh Bihar Coal 1980
4.
Bhilai (Exp. Power
Project-JV with SAIL)
Chhattisgarh Coal 500
5. Korba (Stage III) Chhattisgarh Coal 500
6. Farakka (Stage III) West Bengal Coal 500
7. NCTPP (Stage II)
Uttar
Pradesh
Coal 980
8. Simhadri (Stage II)
Andhra
Pradesh
Coal 1000
9. Koldam (HEPP)
Himachal
Pradesh
Hydro 800

16

10. Loharinag Pala (HEPP) Uttarakhand Hydro 600
11.
TapovanVishnugad
(HEPP)
Uttarakhand Hydro 520
Total (Coal + Hydro) 11,360
Table 1.4


Power Plants with Joint Ventures:

Coal
Based
State Fuel
Commissioned
Capacity
(MW)
22. Durgapur West Bengal Coal 120
23. Rourkela Orissa Coal 120
24. Bhilai Chhattisgarh Coal 74
25. RGPPL Maharastra Naptha/LNG 740
Total(JV) 1054
Grand Total (Coal + Gas + JV) 27,404
Table -1.5




17

ACHIEVEMENTS:

Recognizing its excellent performance and vast potential, Government of the India has identified
NTPC as one of the jewels of Public Sector 'Navratnas'- a potential global giant.
NTPC ranked 317th in the 2009, Forbes Global 2000 ranking of the Worlds biggest
companies.
NTPC has been rated as one of the top most Best Employer of the country for the year
2003, 2004 & 2005 in a row.
It has also been rated as one of the Best Companies to Work for in India by Mercer
HR Consulting- Business Today Survey 2004, it has developed into a multi-location and
multi-fuel company over the past three decades.
NTPC has been awarded No.1, Best Workplace in India among large organizations for
the year 2008, by the Great Places to Work Institute, India Chapter in collaboration with
The Economic Times.
Leadership Award for CMD, NTPC in the fourth Global Leadership Summit by Amity
University for Sect oral Excellence in Power industry for his outstanding contribution to
the growth of Indian business & bringing glory to the country through his pioneering
leadership.
Ranked #1 independent power producer in Asia in the THIRD ANNUAL PLANTS TOP
250 GLOBAL ENERGY COMPANY AWARDS 2008 for outstanding Global financial
& Industrial performance at the award ceremony in Singapore. The corporation has been
simultaneously ranked #15, overall in Asia amongst the energy companies.

18

NTPCs excellence in executing power projects & its initiative in Decentralized
Distributed Power Generation has been recognized and awarded at IEEMA Power
Awards 2008. NTPC Vindhyachal Stage-III (2x 500MW) has been conferred the IPMA
SILVER MEDAL for Project Excellence by International Project Management
Association, at the IPMA Congress, held in Rome, Italy, for implementation of project
in record time & achieving excellent environmental, economic performance and giving
outstanding support to the local community.

















19

ORGANIZATION STRUCTURE OF NTPC :



20

LOCATION OF NTPC PLANTS:









21

FINANCIAL DEPARTMENTS IN DADRI:

Dadri is also having their own separate financial department and FAS (Online Integrated
Material and Financial Accounting System). This department does all the function, which is
related to the finance or fund of the company. It use a specific language in the computer for
manage zing all the work or communicating with other department and this language is ingress.

DADRI SECTIONS:-
There are various section are working in the NTPC Dadri for managing all the work in better
way this section are divided according to the nature of work . It is organized into following
ways:-
I. Establishments
II. Works and Bills section
III. Store, Bills and PSL (Price Store Ledger) Section
IV. Commercial Section
V. Weighting and Concurrences
VI. Cash and Bank
VII. Books and Budget section
VIII. Miscellaneous





22

ESTABLISHMENT SECTION:















The establishment Section of F&A is mainly involved into two activities viz. Salary Preparation
or processing & payment of Establishment or Employee Bills like Medical, LTC, TA etc. The
section is processing the salary for the employees of Dadri Thermal, Dadri Gas and
Muradnagar.The monthly Salary is processed based on inputs provided by Site HR, C&M
Department. (Stores) etc. The data can be either master data or temporary data. The latter is
temporary while the former is permanent in nature. The statutory deductions like PF, Pension are
made as per the prevailing law while the income tax at source is deducted based on estimated
Establishment Section
Salary Processing
Input Data from
HR Department
Processing of the Salary
Input Data from
C&M Department
Other Input like
Medical, Bill,
Deduction etc.
Monthly Salary Slip

23

Gross Income/Savings of the employee and as per the prevailing Income tax rules/act. The TDS
certificate in the Form 16 is issued, at the end of each Financial Year, to the concerned
employee. Similarly, employees are issued pension & PF Slips/ statements, at the year end, based
on the deductions made from their salary as per procedure.

Besides, above, the sections also pay/reimburse TA, LTC and medical bill payments as per the
prevailing rules, policies & procedure of the NTPC.

ACCOUNTING BOOKS:

The Books Section of Finance Department is mainly involved in the following activities:-
Preparation of Balance Sheet and P&L A/C, based on available/prevailing accounting
guidelines/policies.
Coordination with other sections of finance for review of Sectional Accounts.
Preparation & review of General Ledger.
Preparation & review of Trial Balance.
Coordination with corporate accounts for preparation of final accounts viz. B/Sheet and
P&L A/c.
Coordination with various Auditors viz. Internal, Statutory and Government Auditors.
Reconciliation of Inter Unit Accounts with Corporate Centre/Other Units of NTPC.
Tax Audit


24

The Books Section at NCPS, Dadri is engaged in preparation of Three Balance Sheets, namely
Dadri Thermal, Dadri Gas &Muradnagar that is a unique accomplishment by any station of
NTPC. Besides, above, it is also maintaining various documents what are required as per the
various prevailing laws & procedures. For instance, it is maintaining fixed assets register, which
contains all the relevant details of various fixed assets in the station/projects. The books section
also prepares/controls DCO (Capital) budget and MBOA budget in consultation with site P&S.


CASH & BANK (TREASURY):

Fund management
Payment of cash transactions
Preparation of cash book
Payment of Cheque/DD transactions
Receipt of cash
Receipt of outstation cheque/DD etc.
Preparation of Bank Book
Preparation of Bank Reconciliation Statements with various banks viz. SBI, PNB, OBC,
ICICI.





25

WORKS & MISC SECTION:

Payment to various work contractors for capital works, as per LOA/WO issued by
site/corporate contracts deptartment. & measurements recorded in the Measurement Book
by the executing deptartment.
Payment to various O&M contractors for various operation & maintenance jobs carried
out in plant & township. The payment is released based on LOA/WO issued by contracts
Department. & measurements recorded by the executing Department in the
Measurement Book.
Accounting for the payments made to various works & O&M contractors.
Preparation of material reconciliation statement.
Deduction of Income Tax from the payments made to various contractors and issues of
TDS certificate(s) thereon.
Payment of Final Bill and contract closing.



26

STORES BILL SECTION:

Payment to various suppliers for procurements made, based on SRV/Purchase
order/invoices issued /authenticated by the materials department.
Accounting for the payments made to various suppliers.
Reconciliation & Audit of accounts with various suppliers.
Preparation and filing of sales tax return.

FINANCIAL CONCURRENCE:

Vetting of cost estimates for civil, procurements and O&M works as per laid down
guidelines regarding availability of Budget(s), canons of financial proprietary, delegation
of powers etc.
Vetting of deviation statements viz.
o Extra item statement
o Substituted item statement
o Interim deviation statement
o Final deviation statement
o Modification of any terms & conditions in the LOA/P.O/W.O. with financial
implication
Vetting of time extension proposals as per laid down guidelines.
Interpretation of delegations of powers.

27

PRICED STORES LEDGER (PSL):

Accounting for material issued by the central stores.
Accounting for material received by the central stores from the suppliers.
Accounting for the material returned to the stores deptartment by the executing
department.
Accounting for material transferred from the station/project to other projects/stations of
NTPC.
Accounting for scrap material
Physical verification of central stores items as per the available/existing guidelines lay
down by the corporation.



28

COMMERCIAL SECTION:

At the operating stage of a power plant, Commercial, which mainly involves selling of electricity
to various SEBs, is the main activity of the station. The NCPS occupies a unique position among
all the power stations of NTPC. For, it has twin projects of Gas & Coal based units. The Gas
Project has dual fuel capability of using HSD as well as gas for power generation. The total
installed capacity of the twin project is 1669 MW. The sheer size and complexity of operations
make it imperative that an effective system of internal controls is in place to ensure accuracy of
record and reduce the scope for the interests of the corporation being compromised in any
manner. To achieve this end, a comprehensive internal control system has been devised for all
aspects of the corporation working in the Commercial Section. The system for fuel accounting is
summarized below-
1. Coal:-
The supply of coal is linked up with the Piparwar mine at Jharkhand. The coal is
mainly washed coal in nature. Total quantity of coal supplies in a year/ quarter/month
are done based on linkage committee of the ministry of coal. The price of washed
coal and terms & conditions are determined by the various MOMs between NTPC &
CCL, while that of raw coal is based on various price notifications. The various steps
in coal accounting are enumerated below-
a) Quantity:-
Coal is dispatched from the mines by railway wagons after weighment at the
loading point with the help of weight meters. The latter are kept under joint seal
and have to be recalibrated in the presence of representatives of both the parties as

29

and when desired by either party. For accounting purposes, a Store Receipt
Voucher (SRV) is made out for entry into the Priced Stores Ledger (PSL) for
quantity determined as above. There is adjustment on A/c of moisture content.
b) Grade variances:-
Both supplier & third party conduct chemical analysis of their respective samples
in order to ascertain the actual grade of the coal received. Credit/Debit
adjustments are passed on by the supplier based on the grade determined.
c) Billing and payment:-
Bills are initially raised by the coal company based on declared grade. Payment to
the coal company is released after making adjustments for grade difference,
moisture content etc.
d) Consumption :-
Coal from the track hopper or the stockyard is passed thru crushers before being
sent to the pulverized mills, which convert it to a fine powder. The pulverized
coal is then loaded into the coalbunkers from where it is fed into the boilers thru
the Gravimetric feeders. It is at this point that the weight of coal actually being
fed into the Gravimetric/Merrick feeders is recorded. A Stores Issue Voucher
(SIV) is then prepared and entry made in the Priced Stores Ledger (PSL) as the
quantity consumed.
e) Periodic Stock verification
Stock verification of coal is done on six monthly/ annually basis as per the
guidelines issued by the corporate centre. Actual quantity in stock is compared

30

with book stocks and adjustments are made in the books of account after the
approval of the Competent Authority.
f) Recovery of Coal Cost Through Tariff:-
Coal cost is recovered through tariff under two heads: Basic Cost Recovery and
Fuel Price Adjustment. Basic coal recovery is built into notified tariff based on
coal price and Gross Calorific Value (GCV) on fired basis at the time of
calculation of basic tariff. Fuel Price Adjustments are billed on a monthly basis
by taking into account the weighted average cost of coal and actual GCV in that
particular month. In the computation of weighted average cost of coal for a
particular month, all costs that are attributable to the purchase of coal are taken
into account in the priced stores ledger (PSL). Such costs include basic price,
royalty, excise duty, surface transportation charges, Sales Tax, railway freight,
debit, credit, note etc.
Gas:-
Similar to the case of coal, gas linkage are also linked up with the source at the time of project
identification itself. Daily availability of gas is intimated in advance. Gas Price is fixed by the
Govt. of India whereas the Commercial terms and conditions of supplies are laid down in the
Gas supply agreement entered into with GAIL. However, if the actual calorific value of the Gas
supplied is less than the specified GCV in the agreement, a rebate proportionate to the difference
between the actual and standard calorific value is given to NTPC. In the same fashion, a
premium proportionate to the difference between the actual & standard calorific value is payable
by NTPC.


31

Billing and payment:-
In accordance with the terms of the Gas supply agreement, billing for gas is fortnightly and
payments are to be made within three working days of presentation of invoice. In case of
discrepancy/dispute, a claim is to the lodged with the seller within fourteen days of receipt of the
invoice under question.
Recovery of Gas Cost Through Tariff:-
Gas cost is recovered thru tariff under two heads:
Basic Gas Recovery and Fuel Price Adjustment. Basic Gas Recovery is built into notified tariff
based on Gas Price and Gross calorific value (GCV) at the time of computation of basic tariff.
Fuel Price Adjustments are billed on a monthly basis by taking into account the weighted
average cost of gas and actual GCV in that particular month. In the computation of weighted
average cost of gas for a particular month all costs that can be attributed to the purchase of gas
are taken into account.
Liquid Fuels:-
In case of gas station while gas is the primary fuel, HSD is the alternate fuel under the dual fuel
provisions. Since liquid firing is a very costly option, it is done only at the specific instruction of
the Regional Board/Ministry. Handling and accounting for all liquid fuels being procured is done
based on purchase order placed on the various oil companies.
The other activities are being carried out in the commercial section are summarized below:
Payment and accounting of various kinds of fuel viz. solid; liquid; and gas.
Preparation & control of O&M budget in consultation with respective deportments, site
P&S/MTP; Regional HQ & Corporate Office.
Computation of Fuel Price Adjustment.

32

Preparation of monthly cost sheet and cost sheet as per cost accounting record rules.
Interface with suppliers of various fuels viz.
o IOCL
o BPCL
o HPCL
o GAIL
o CCL
o Eastern
o Railways: Eastern Central,
o Northern Railway

Interface with other departments at NCPS, Dadri
o C&M
o O&M: Thermal & Gas
o P&S
o HR
o TS
o EDP & Communication
o TA
Preparation of various MIS Reports as per the requirement of Site/Regional
HQ/Corporate Office.
Reconciliation of Accounts with Coal Companies/Oil Companies/Railways

33

Sales Reconciliation with Regional Office/Corporate Office for Sale of Electricity to
different SEBs.
Interaction with various auditors viz. Internal/Statutory/Government.


JOINT VENTURES:

NTPC has identified Joint Ventures, strategic alliances as well as acquisitions & diversifications
as viable and desired options for its business development.

NTPC looks for opportunity to create such joint ventures & strategic alliances, in the entire value
chain of the power business. NTPC as a partner endows the Joint Venture Alliances with a
winning edge. Acquisitions & Diversifications in the areas related to the core business not only
ensure growth but also add to the robustness of the company. Diversification is carried out either
directly or through subsidiaries/JV.
SUBSIDIARIES OF NTPC:




34

COMPETITORS:











35

NEED OF THE STUDY:
The financial parameters are the ultimate performance indicator of any company. This is because
variability inall costs and efficiency activities and solvency position of the company will reflect
the financial status of the company.
The following are stated to be in the need for the study:-
To enhance the financial performance of the NTPC Company.
To know the proper utilization of working capital.
In order to know the working capital management.
To know the operating efficiency of company.
To identify liquidity position of the company.
In order to understand the movement of profit over a period of time
To know the reason for the variation of profit.
In short, this study is conducted so that the financial performance evaluation serves as an eye
opener to the company.
The need for working capital (Gross) or current assets cannot be overemphasized. The objective
of financial decision making to maximize the shareholders wealth, it is necessary to generate
sufficient profits.
The amount of such profits largely depends upon the magnitude of sales. However, sales do not
convert into cash instantaneously. There is always a time gap between of goods and receipt of
cash. Working capital is required for this period in order to sustain the sales activity. In case
adequate working capacity is not available for this period, the company will not be in a position

36

of sustaining the sales, since it may not be in an opposition to purchase raw materials, pay wages
and other expenses required for manufacturing the good to be sold.
Working capital is required because of the time gap between the sales and their actual realization
in cash. This time gap is technically termed as operating cycle of the business. In other words,
the term cash cycle of operating cycle refers to the length of time necessary to complete the
following cycle of events.














37

SCOPE OF THE STUDY:
This project is vital to me in a significant way. It does have some importance for the company
too. These are as follows
This project will be a learning device for the finance student.
Through this project I would study the various methods of the working capital
management.
The project will be a learning of planning and financing working capital.
The project would also be an effective tool for credit policies of the companies.
This will show different methods of holding inventory and dealing with cash and
receivables.
This will show the liquidity position of the company and also how do they maintain a
particular liquidity position.









38

OBJECTIVE OF THE STUDY:
The objective of this project is to study and analyze the inventory, cash, receivables at NTPC
Ltd, But they are some more and they are - The main purpose of my project training is to render
a better understanding of the concept Working Capital Management theoretically and
practically.

To know about the working capital management in NTPC
To study working capital and its different components.
To study the working capital requirement at NTPC.
To focus on problem areas of working capital management at NTPC.












39

RESEARCH METHODOLOGY:

Research can also define as a systematic & scientific search for pertinent information on a
specific topic. In fact, it is art of scientific investigation.
Systematic effort to gain new knowledge Redman &Mory
The manipulation of things, concepts or symbols for the purpose of generally to extend, correct
or verify knowledge whether that knowledge aids in constructing of theory or in the practice of
an art Clifford woody
Types of research: - The basic types are-
Descriptive & Analytical
Applied & Fundamental
Qualitative & Quantitative
Conceptual & empirical
As such, the term Research refers to the systematic method consisting often uncrating of the
problem, formulating a hypothesis, collecting the facts or data, analyzing the fact for finding the
solution.
Sampling:
There are following steps in my sampling design:-

1. Type of universe: The first step in developing any sample design is to clearly define the
set of objects, technically called the universe, to be studied. It is the finite universe
because the numbers of items is certain.

40

2. Sampling unit: Decision has to be taken concerning a sampling unit before selecting
sample. Sampling unit is following;-
Financial Department, Township Administration, Finance & Account, Civil/ Electrical
Maintenance Department, Control & Instrumentation, Fuel Management, Human
Resources and Electrical Office.
Above all the sampling units that are used by me for study. I do the study through Questionnaire
Method & Interview method.

RESEARCH INSTRUMENTS:

When I do the research on working capital management, then I use some tools that are
given below -
ANNOVA
Correlation
Accounting research tools like ratio analysis etc.
Regression

DATA COLLECTION:
SECONDARY DATA:
While doing the research on working capital, i collected the following things:
1. I got the knowledge of working capital management, NTPC through reading the
Financial Policy file.
2. Reading of annual reports of NTPC:-

41

i. 29
th
Edition
ii. 30
th
Edition
3- Reading of NTPC Financial Reports.
4- Reading of Journals of NTPC.
5- Reading of NTPC Magazine like
DakshinDhwani
AlokBharti
Uttar Jyoti
Roshni
Damini

6- Reading of Reports of NTPC.












42

LIMITIONS:

The research study focuses on working capital management only and does not include
other areas of financial management.
Data used at various places for this research studyare basically from published sources
and thus, any error in data may have significant effects on the results arrived in this study.
Working capital management is also effected by several environmental variables in
managing working capital due to lack of time and resources.
















43

DISCRIPTIVE WORK ON SUB TOPIC OF STUDY:
WORKING CAPITAL MANAGEMENT IN NTPC:

National Thermal Power Corporation is the largest power generation company in India. The
Forbes Global 2000 ranking for 2005 ranks it as the 5th leading company in India and the 486th
leading company in the world. It is a public listed (Bombay Stock Exchange) Indian public
sector company, with majority shares owned by the Government of India.
Its main business of this company is to generate electricity. Therefore, according to its nature it is
clear that this company required hues Working capital for the fulfillments of basic need of the
company.

The company engage to producing electricity which not having physical existence, so there are
not any types of raw material in term of finished goods for the company are present, which are
use by other company as a raw material. In addition, the company does not having any types of
semi-finished goods in their production cycle.

44

CASH MANAGEMENT:
Cash management has existed in business since the initial use of money as medium of exchange.
Cash to an organization is what food to human bodies. It is both the means and ends of an
organization. For cash management purposes cash is used broadly to cash and generally accepted
equivalents of cash such as demand and time deposit in banks, claques, drafts, etc. and also
marketable security i.e. short-term investment of cash.
Cash management is simple terminology means forecasting cash requirement and marketing
arrangements thereof. In other words, it refers to his manageability to forecast cash problems and
to solve them when they arise with help of an expert in this field. The system of cash
management, thus, aims at making the optimum use of the cash resources. Though, the specific
nature of cash management of an organization depends upon the nature of the business
enterprise, the internal organization structure and the nature of the concerned finance executive,
yet he is expected to carry out certain specific generalized functions in the fields of cash
management which are as enumerated below:-
Collection and Custody of cash and securities.
Control of disbursements e.g. providing sufficient cash at the time Place required
meeting obligations.
Maintenance of adequate supply of cash to meet projected cash requirement, cash-
budgets, and day-to-day demands.
Investment of surplus cash in marketable security to keep it fully employed and
working towards greater profits.

45

Maintenance of sound relations and adequate deposits to meet operating needs
and to compensate the banks for their services.
Cash management is equally important of both small concerns and big concerns. Even a fast
growing concern yielding handsome profit may face shortage of cash posing threat to the
interrupter flow of production.
So deducing adequate fund requirement for the operating needs of the organization happens to be
the perennial objective of finance executive.

MOTIVES OF HOLDING CASH:
A distinguishing futures of cash as an assets irrespective of the firm in which it is held, is that it
does not earn any substantial return for the business. In spite of this fact cash in held by the firm
and with the following motives.
(1) Transaction Motives
The transaction motives for holding cash arise to enable the concern to conduct its business
in the normal course. A firm needs cash to make payment for purchases, wages, operating
expense, taxes, dividend etc.
(2) Precautionary Motive
A firm keeps cash balance to meet unexpected cash needs arising out of unexpected
contingencies such as floods, presentment of bills of payment earlier than the expected data,
unexpected slowing down of collection of account receivable, sharp increase in price of raw
materials etc.

46

(3) Speculative Motive
The speculative motive for holding cash is deriving benefits out of changes in security price,
material prices etc.
The concern may postpone the purchase of material when its prices are high or it may go to
more than the required material when its prices fall down.
(4) Compensation Motive
Banks provide certain services to their clients free of charge. They, there for, usually require
clients to keep minimum cash balances with them, which help them to earn interest, and thus
compensate them free services so provided.

OBJECTIVE OF CASH MANAGEMENT:
Cash is the vital component of the working capital of a firm, as every transaction results in either
an inflow or an outflow of cash. The main objectives behind effective management of cash are:
(a) The precision of cash needed to meet operational requirement.
(b) The provision of reserves liquidity against the forecast outflows and expected payments
of cash and.
(c) Minimum balance of cash to be held to channelizing otherwise used cash into earning
assets. A part of cash required as compensating balance with the banks.

47

MANAGEMENT OF CASH AT NTPC:
Cash section is an important section of finance and accounts department. It deals with the
employees, contractors and suppliers for their payments.
Corporate office plays a dominant role in cash management. The corporate office allocates
different amount of each to different coalmines as per its requirements. Corporate office acts as a
linkage between the NTPC and main book. The state bank of India, Corporate office has
determined the credit facility for every units of NTPC. No one unit of NTPC can get the credit
facility more than ones limit. The credit facility is known as rolling cash limit. This keeps on
changing from year to year depending upon companys position transactions, profitability and
inventory position.
Although corporate office provides credit limit facilities, yet NTPC is fully dependent on the
corporate office. The sale of scrap materials of defective at plant level generates the cash. Thus,
at a time, plant can also pay liabilities and then the balance amount is only intimated to the
corporate office. NTPC gives priority in cash payment, which is urgent, and sends the report to
corporate office.

FUND ALLOCATION:
Here the initial allocation for funds at NTPC is done by corporate office and all supplementary
requirements are to look by NTPC itself. The corporate office allocates the funds for all
coalmines and particularly about NTPC.

48

FUND UTILISATION:
NTPC operates an annual cash budget and a rolling cash plan drawn up every month. Although
specific forecasting technique is used, funds are deployed to different departments as per their
requirements. A daily report on cash transaction is prepared by cash section to keep a track of all
payment in the days work. Every month, cash transaction report is sent to corporate office
showing the all transaction of cash, actual utilization of cash and allocation of fund is compared.
If the utilization of cash is more then, the allocation of funds, then the plant has to justify its
more utilization and if the justifications are not found satisfactory then the corporate office gives
the letter of improvement.
CASH PLANNING AND MANAGEMENT:
Cash planning is an important technique of operation. It becomes the prime responsibility of the
financial controller to make adequate arrangements of the payment of operating expenses,
inventories, fixed assets, creditors etc. Even a profit-earning concern may face shortage of cash
with its growing needs. The basic objective of cash planning is to enable the concern to meet
cash disbars committed for this purpose because holding of cash involves cost in the form of
opportunity cost.
Cash planning may be done on daily, weekly or monthly basis depending upon the size concern
and managements Normally, large concern prepare daily or weekly plan, medium size concern
go for weekly or monthly plan and small firms go for monthly plan. The periodicity of cash
planning (i.e. Daily, Weekly, monthly) depends upon the position of funds i.e. whether funds
position is tight, normal, or liberal.

49

CASH FORECASTING AND BUDGETING:
Cash budget is the more significant device to plan for and control the cash receipts. Cash budget
is a summary of NTPC expected cash inflows and outflows. Again, this cash budget is broken
into month wise budget where allocation of cash done on month basis with the help of projection
of cash on month wise it becomes easier to allocate the amount. The information of expected
cash flows and cash balance helps to financial managers of NTPC to determine the future cash
need of the firm, plan for the financing of these needs and exercise control over the cash and
liquidity of NTPC.
NTPC needs cash to carry out the day-to-day functions of business just as the level of operations
affects working capital requirements; it affects the need for cash. These days the direct sale of
billets and merchant products are increasing cash. Cash has been receiving from customers and
has been providing for adequate cash for their liabilities.








50




Fig: 9 Parties involved in working capital managements


51

EVALUATION OF CASH MANAGEMENT:
Composition and growth of cash:
Cash balance represents the aggregate of cash in hand, cheques in hand, remittances in transit,
and balances with banks in current accounts and in fixed deposits with others. To bring
uniformity on the components of cash, cash balances of the selected undertakings have been
divided into two segments. Cash in hand and cheques on hand.
Cash management at NTPC includes the discussion on size of each, cash flow statement, and
liquidity position of the firm.

On the bases of above points it is clear that cash is to important term for the organization, and I
clear the importance of cash management with the help of following graph representation which
are based on the formula of ration analysis
I. current ratio:- Current Assets
Current Liabilities


II. Acid Test ratio:- Liquid Current Assets
Current liabilities






52

3- Cash Turnover Ratio:-
Cash Turnover Ratio are the two known about the relationship between how much company hold
the ideal balance of the cash in the organization.

Cash Turnover Ratios:-Interest & Finance Charges
Average Cash Balance

4-Cash Holding Period:-
This ratio show the actually, no. of days on which company holds the cash in the organization:


Cash Holding Period:-Average Balance of Cash
Interest & Finance Charges

5- Cash to Current Assets:-
This cash to current assets ration show the relationship between cash and current assets in the
organization and show that how much cash affect to the current assets:

Cash to Current Assets:-Cash
Current Assets


6- Cash to Receivables Ratio:-Cash
Receivables






53

INVENTORY MANAGEMENT:
Inventory is an integral part of every business origination. The role of inventory has grown with
advances in production technology.
Inventory management is the vital area of management covering the sum total of activities need
for the acquisition, storage, and raw materials. It is a technique of controlling the purchase, use,
and transformation of materials in an optimal manner. In sample words inventory refers to the
stock of products that a concern is offering for sale and the components that make up the
product. The various forms in which inventory are exists in the company.
MEANING OF INVENTORY MANAGEMENT:
Inventory management can be defined that co-coordinated function responsible to plan for,
acquire, store, move and control materials and final products to optimize usage of facilities,
personnel, capital goods and to provide customer service in line with corporate goal.
The following arc the important factors affecting inventory management.
Availability of credit in the economy.
Government policy in procurement and distribution of materials.
Complexities of business.



54

MOTIVES FOR HOLDING INVENTORIES:
The transaction motives emphasize the need to maintain inventories to facilitate smooth
production and sales operation.
Precautionary motive which necessities holding of inventories to guard against the risk of
unpredictable changes in demand and supply forces and other factors.
Speculative motives influence the decision to increase or reduce inventory level to take
advantage of price fluctuations.
OBJECTIVES OF INVENTORY MANAGEMENT:
The objective of the inventory management is therefore, to determine and maintain the optimum
level of investment in inventories, which help in achieving the following objectives.
Ensuring a continuous supply of materials of production department facilitating
uninterrupted production.
Maintaining sufficient stock of raw material in periods of short supply.
Maintaining sufficient stock of finished goods for smooth sales operations.
Minimizing the carrying costs.
Investment in Inventories at the optimum level.



55

INVENTORY MANAGEMENT AT NTPC:
Inventory is stock of a company, which is manufacturing for sale and component that make up
the product. Inventory means, A schedule of items held at a particular point of time.
In managing inventories, the objective of NATIONAL THERMAL POWER CORPORATION LTD. is
to determine and maintain optimum level of inventory investment.
The optimum level of inventory lies between two-danger point of excess and inadequate
inventories.

INVENTORY:
The inventory of NTPC is unique for not having semi-finished goods, finished goods or raw
materials. Fuel is some way could be considering raw material but by most definitions it would
not qualify to be raw material because the product is intangible. The inventory of NTPC consist
of fuel, spare parts, loose tools and components, chemicals consumables and some other
material. The inventory of NTPC is very large comprising 73000 material codes. The inventory
at Singrauli alone consist of 53000 material codes. Being a large inventory some of which is to
be maintained permanently for to continuity and security of generation, the inventory is valued
by the monthly weighted moving average method.

The inventory of NTPC is subject to several analysis including ABC, XYZ, VED, FSN, ICU.
The consumption is valued at PSL rate. Whereas at the point of induction at the store it is valued
at the invoice price. The inventory is regularly verified for a match between the Bin Card

56

balances and the physical stock as with the PSL run. This inventory in NTPC is also subject to
regular checks and control exercises.
RAW MATERIAL:
Raw materials are the inputs used by the concern for products of finished goods through
manufacturing process. Raw material inventory are those, which have been purchased and are
stored for future production.
In NATIONAL THERMAL POWER CORPORATION LTD. raw material is purchased by central
procurement and regional procurement unit of central marketing organization as per the
requirement of the individual coal plant.
The bulk purchase are procured and sent to the place of the need.
Basic objectives in holding raw materials inventory is turn separate purchase and production
activities. If raw material inventories were not held, purchase would have to be made
continuously at the usage rate in production.







57

Inventory Turnover Ratio:

1. Average Holding Period

Average Holding Period:-Average Inventory
Cost of Goods Sold

2. Cash to Inventory Ratio

Cash to Inventory:-Cash
Inventory


RECEIVABLES MANAGEMENT:
The term receivable is defined as "Debt own to the firm by customer arising from sale of goods
or services in ordinary course of business.
Account receivable management is also an important aspect of working capital management.
When a firm sells its products and services and does not receive cash for it is immediately, the
firm is said to have granted trade credit to the customer and the customer from whom receivables
or took debt have to be collected in future are called trade debtor. Account receivable represents
the extension of credit on an open account by the firm to its customers. In order to keep current
customer and attract new ones, most manufacturing firms find it necessary to offer credit. The
practices give birth to accounts receivables. Receivable constitute a substantial portion of current
assets of several firms.


58

MANAGEMENT OF RECEIVABLES IN NTPC:
Receivables of NTPC are very important because of the nature of a product and the credit
policy followed by NTPC. NTPC produce electricity which have no any physical existence like
other finished goods and it sale their goods to the customers on the only credit bases. NTPC
gives 60 days (two months) time to their customer for making payment, its means all the sales of
the NTPC are on the credit bases.

MANAGEMENT OF PAYBLE:
Management of account payable is as much important as management of account receivables.
Whereas the underlying objectives in cash accounts receivable is to maximize the acceleration of
the collection process, the objectives in cash of account payables is to slow down the payment
process much as possible. However, it should be noted the delay in payment of account payable
may result in saving of some interest cost but it can prove costly to the firm in the form of loss of
credit in market. The finance manager has therefore, to insure that the payment to the creditors is
made at the stipulated times after obtaining the best credit terms possible.
MANAGEMENT OF ACCOUNT PAYABLES AT NTPC:
The creditors are managed at plant level only. Mostly the creditor comprises of contractors to
whom payment are to be given and the capital works. This is done as per terms and condition
with respective parties. In case of small-scale industries, it is done within 30 days.

59

There is also a scheme of earnests money deposits for the registered small-scale industries. The
schemes allow having a security deposits which is refundable at the end of contract. In case of
statutory payment that is the income tax, excise tax one month due is there.
When the final payment is to be made to ex-employee, it is only done after the file reaches the
department as per the individual case. Major chunk is from statutory liabilities, which are rapid
as per act that is one month due is given.

1.Cash to Inventory Ratio
Cash to Inventory Ratio:-Cash
Inventory

2.Average Collection Period
Average Collection Period:-Average Receivables
Sales

3.Receivables to Current Assets Ratio
Receivables to Current Assets Ratio:-Receivables
Current Assets

4.Receivables to Current Liability Ratio
Receivables to Current Liability Ratio:-Receivables
Current Liabilities










60

Loan and Advances Management:
Although current assets traditionally comprise inventory, receivables and Cash, in an
organization like NTPC which provides loans to its employees and also advances both to the
employees and supplier as well as contractors, the loan and advances are also an important part
of the company. The advances given to contractor are mainly the nature of mobilization
advances and to the employees with the purpose of providing assistant to them by way facilities
to help in the discharge of their duties. Their loans are included in the category of current assets
for their regular recovery from the employees adjust and recovery from supplier within a very
short period.
The loan and advances given by the company to its suppliers, contractor, and its
employees are the major part of its current assets. These other mainly on interest or free of
charge advances given to suppliers and contactor are mostly free two of the advances given to
employees are interest free, multipurpose advances and furniture advance recoverable in 12 and
60 installment respectively. Beside these all other loan and advances are on interest. The
recovery of these interests bearing loan done as such a way that the principal is recovered first
and the interest there after. The interest is levied on the diminishing balance of principal and
there is no interest on interest.
These loan and advances are categorized as current assets because their recovery is
continuous immediately from the after the drawn month and the principal is first recovered.
Loan and Advances to Current Assets Ratio

Loan and Advances to Current Assets Ratios:-Loan & Advances
Current Assets



61

CURRENT LIABILITIES MANAGEMENT:

Current Liability shows the different combination of liabilities, which includes various liabilities.
It generally shows on the liability side in the balance sheet under the head of liabilities. Others
liabilities represent amount of income tax deducted at source, redemption amount payable on
maturity of bonds, sales tax payable, development surcharge amount to be transferred to
customers etc.
Besides current assets, current liabilities also count in framing the structure of working capital.
Bank over-draft, creditors for goods supplied, unpaid dividend, and taxes are the main
constituents of current liabilities. The share of each constituent to total current liabilities
determines to some extent the availability of current liabilities, the management remains more
concerned with the administration of current assets.
Other liabilities have increased due to transfer of as amount of Rs. 2,426 million from
Development Surcharge Fund. In the previous years as per the regulations of central electricity
regulatory commission (CERC) development surcharge was being charged from customer and
kept invested in instruments as required by the regulations. CERC vide its order dated
09//11/2008 discontinued the billing and realization of development surcharge. It further directed
that the amount collected earlier from the state utilities and invested in instruments
corresponding to the amount contributed by each of the state utilities shall be transferred in the
name of the concerned utility.
Current Liabilities to Inventory:-
This is a way to show the relationship between Inventory and total Current Liabilities.
Current Liabilities to current Inventory:-Current Liability
Inventory

62

EVALUATION OF CASH MANAGEMENT:
Composition and growth of cash
Cash balance represents the aggregate of cash in hand, cheques on hand, remittances in transit,
and balances with banks in current accounts and in fixed deposits with others. To bring
uniformity on the components of cash, cash balances of the selected undertakings have been
divided into two segments. Cash in hand and cherubs on hand.
Cash management at NTPC includes the discussion on size of each, cash flow statement and
liquidity position of the firm.

On the bases of above points it is clear that cash is to important term for the organization, and I
clear the importance of cash management with the help of following graph representation which
are based on the formula of ration analysis
1. Current ratio:-Current Assets
Current liabilities


(Current assets includes Inventory, Bills Receivables, Debtors, Cash in hand, Cash at bank etc.)
(A current asset includes Bills payable, Bank Overdraft, Creditors etc.)





63

2. Acid Test ratio:- Liquid Current Assets
Current liabilities


3. Cash Turnover Ratio:-
Cash Turnover Ratio is known about the relationship between how much company hold the ideal
balance of the cash in the organization.

Cash Turnover Ratio:-Interest & Finance Charges
Average Cash Balance

4. Cash Holding Period:-
This ratio show the actually, no. of days on which company holds the cash in the organization:
Cash Holding Period:-Average Balance of Cash
Interest & Finance Charges


5.Cash to Current Assets:-
This cash to current assets ration show the relationship between cash and current assets in the
organization and show that how much cash affect to the current assets:

Cash to Current Assets:-Cash
Current Assets



6.Cash to Receivables Ratio:-Cash
Receivables



64

MOTIVES FOR HOLDING INVENTORIES:
The transaction motive emphasizes the need to maintain inventories to facilitate smooth
production and sales operation.
Precautionary motive which necessities holding of inventories to guard against the risk of
unpredictable changes in demand and supply forces and other factors.
Speculative motives influence the decision to increase or reduce inventory level to take
advantage of price fluctuations.

OBJECTIVES OF INVENTORY MANAGEMENT:
The objective of the inventory management is therefore, to determine and maintain the optimum
level of investment in inventories, which help in achieving the following objectives.
Ensuring a continuous supply of materials of production department facilitating
uninterrupted production.
Maintaining sufficient stock of raw material in periods of short supply.
Maintaining sufficient stock of finished goods for smooth sales operations.
Minimizing the carrying costs.
Investment in Inventories at the optimum level.


65

INVENTORY MANAGEMENT AT NTPC:
Inventory is stock of a company, which is manufacturing for sale and component that make up
the product. Inventory means, A schedule of items held at a particular point of time.
In managing inventories, the objective of NATIONAL THERMAL POWER CORPORATION
LTD. is to determine and maintain optimum level of inventory investment.
The optimum level of inventory lies between two-danger point of excess and inadequate
inventories.

INVENTORY:
The inventory of NTPC is unique for not having semi finishedShed goods, finished goods, or
raw materials. Fuel is some way could be considering raw material but by most definitions it
would not qualify to be raw material because the product is intangible. The inventory of NTPC
consist of fuel, spare parts, loose tools and components, chemicals consumables and some other
material. The inventory of NTPC is very large comprising 73000 material codes. The inventory
at Singrauli alone, consist of 53000 material codes. Being a large inventory some of those, are to
be maintained permanently for continuity and security of generation, the inventory is valued by
the monthly weighted moving average method. The valued inventory are called priced stores
ledger (PSL). PSL is run on monthly basis. This is regulated by the four instruments.
(1) MRN
(2) MTN
(3) SRV
(4) SIV.

66

The inventory of NTPC is subject to several analysis including ABC, XYZ, VED, FSN, ICU.
The consumption is valued at PSL rate. At the point of induction at the store, it is valued at the
invoice price. The inventory is regularly verified for a match between the Bin Card balances and
the physical stock is with the PSL run. This inventory in NTPC is also subject to regular checks
and control exercises.
RAW MATERIAL:
Raw materials are the inputs used by the concern for products of finished goods through
manufacturing process. Raw material inventory are those, which have been purchased and are
stored for future production.
In NATIONAL THERMAL POWER CORPORATION LTD. raw material is purchased by
central procurement and regional procurement unit of central marketing organization as per the
requirement of the individual coal plant.
The bulk purchase are procured and sent to the place of the need.
Basic objectives in holding raw materials inventory is turn separate purchase and production
activities. If raw material inventories were not held, purchase would have to be made
continuously at the usage rate in production.
Inventory Turnover Ratio
Average Holding Period:- Average Inventory
Cost of Goods Sold

Cash to Inventory :- Cash
Inventory


67

RECEIVABLES MANAGEMENT:
The term receivable is defined as "Debt own to the firm by customer arising from sale of goods
or services in ordinary course of business.
Account receivable management is also an important aspect of working capital management.
When a firm sells its products and services and does not receive cash for it is immediately, the
firm is said to have granted trade credit to the customer and the customer from whom receivables
or took debt have to be collected in future are called trade debtor. Account receivable represents
the extension of credit on an open account by the firm to its customers. In order to keep current
customer and attract new ones, most manufacturing firms find it necessary to offer credit. The
practices give birth to accounts receivables. Receivable constitute a substantial portion of current
assets of several firms.
MANAGEMENT OF RECEIVABLES IN NTPC:
Receivables of NTPC are very important because of the nature of a product and the credit
policy followed by NTPC. NTPC produce electricity which have no any physical existence like
other finished goods and it sale their goods to the customers on the only credit bases. NTPC
gives 60 days (two months) time to their customer for making payment, its means all the sales of
the NTPC are on the credit bases.
There is a rebate on early or prompt payment. The present system of Tariff is
Availability Based Tariff (ABC) where as the previous tariff system called the KP Rae Tariff
was a two part Tariff essentially rewarding efficiency or PLF, the present system is a three part
Tariff.


68

(1) Fixed charge
(2) Variable charge (now called energy charge)
(3) Unscheduled interchange charge rewarding availability between the power producers
i.e. NTPC and the customer.
SEBE there is a monitor in the institution of the regional electricity board which coordinates the
Availability schedule awarded to each of power producer in the region as well as the joint meter
reading and both the ends. In addition, implement the new resume. The billing is completed
during the first five days of the month following and therefore the billing cycle of NTPC comes
to be 35 days.
MANAGEMENT OF PAYBLE:
Management of account payable is as much important as management of account receivables.
Whereas the underlying objectives in cash accounts receivable is to maximize the acceleration of
the collection process, the objectives in cash of account payables is to slow down the payment
process much as possible. However, it should be noted the delay in payment of account payable
may result in saving of some interest cost but it can prove costly to the firm in the form of loss of
credit in market. The finance manager has therefore, to insure that the payment to the creditors is
made at the stipulated time periods after obtaining the best credit terms possible.




69

MANAGEMENT OF ACCOUNT PAYABLES AT NTPC:
The creditors are managed at plant level only. Mostly the creditor comprises of contractors to
whom payment are to be given and the capital works. This is done as per terms and condition
with respective parties. In case of small-scale industries, it is done within 30 days.
There is also a scheme of earnests money deposits for the registered small-scale industries. The
schemes allow having a security deposits which is refundable at the end of contract. In case of
statutory payment that is the income tax, excise tax one month due is there.
When the final payment is to be made to ex-employee, it is only done after the file reaches the
department as per the individual case. Major chunk is from statutory liabilities, which are rapid
as per act that is one month due is given.

Cash to Inventory Ratio
Cash to Inventory Ratios:-Cash
Inventory

Average Collection Period
Average Collection Period:-Average Receivables
Sales

Receivables to Current Assets Ratio
Receivables to Current Assets Ratio:-Receivable
Current Assets

Receivables to Current Liability Ratio
Receivables to Current Liability Ratio:-Receivable
Current Liability

70


Investment to Receivable Ratio
Investment to Receivable Ratio:-Investment
Receivables



Loan and Advances Management :
Although current assets traditionally comprise inventory, receivables and Cash, in an
organization like NTPC which provides loans to its employees and also advances both to the
employees and supplier as well as contractors, the loan and advances are also an important part
of the company. The advances given to contractor are mainly the nature of mobilization
advances and to the employees with the purpose of providing assistant to them by way facilities
to help in the discharge of their duties. Their loans are included in the category of current assets
for their regular recovery from the employees adjust and recovery from supplier within a very
short period.
The loan and advances given by the company to its suppliers, contractor, and its
employees are the major part of its current assets. These other mainly on interest or free of
charge advances given to suppliers and contactor are mostly free two of the advances given to
employees are interest free, multipurpose advances and furniture advance recoverable in 12 and
60 installment respectively. Beside these all other loan and advances are on interest. The
recovery of these interests bearing loan done as such a way that the principal is recovered first
and the interest there after. The interest is levied on the diminishing balance of principal and
there is no interest on interest.

71

These loan and advances are categorized as current assets because their recovery is
continuous immediately from the after the drawn month and the principal is first recovered.
Loan and Advances To Current Assets Ratio
Loan and Advances to Current Assets Ratios: Loan & Advances
Current Assets


CURRENT LIABILITIES MANAGEMENT:

Current Liability shows the different combination of liabilities, which includes various liabilities.
It generally shows on the liability side in the balance sheet under the head of liabilities. Others
liabilities represent amount of income tax deducted at source, redemption amount payable on
maturity of bonds, sales tax payable, development surcharge amount to be transferred to
customers etc.
Besides current assets, current liabilities also count in framing the structure of working capital.
Bank over-draft, creditors for goods supplied, unpaid dividend, and taxes are the main
constituents of current liabilities. The share of each constituent to total current liabilities
determines to some extent the availability of current liabilities, the management remains more
concerned with the administration of current assets.

Other liabilities have increased due to transfer of as amount of Rs. 2,426 million from
Development Surcharge Fund. In the previous years as per the regulations of central electricity
regulatory commission (CERC) development surcharge was being charged from customer and

72

kept invested in instruments as required by the regulations. CERC vide its order dated
09//11/2008 discontinued the billing and realization of development surcharge.

Current Liabilities to Inventory:-
This is a way to show the relationship between Inventory and total Current Liabilities.
Current Liabilities to currentInventory:-Current Liability
Inventory
















73

Balance Sheet of NTPC
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Sources Of Funds
Total Share Capital 8,245.46 8,245.46 8,245.50 8,245.50 8,245.50
Equity Share
Capital
8,245.46 8,245.46 8,245.50 8,245.50 8,245.50
Share Application
Money
0.00 0.00 0.00 0.00 0.00
Preference Share
Capital
0.00 0.00 0.00 0.00 0.00
Reserves 65,045.71 60,138.66 55,478.60 50,749.40 46,021.90
Revaluation
Reserves
0.00 0.00 0.00 0.00 0.00
Net worth 73,291.17 68,384.12 63,724.10 58,994.90 54,267.40
Secured Loans 9,156.30 9,910.68 9,079.90 8,969.60 7,314.70
Unsecured Loans 38,182.03 33,277.56 28,717.10 25,598.20 19,875.90
Total Debt 47,338.33 43,188.24 37,797.00 34,567.80 27,190.60
Total Liabilities 120,629.50 111,572.36 101,521.10 93,562.70 81,458.00



Financial Statements of NTPC
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

74

Application Of Funds (Rs. In Crores)
Gross Block 81,723.52 72,583.94 66,663.80 62,353.00 53,368.00
Less:
Accumulated
Depreciation
36,465.12 33,519.19 32,088.80 29,415.30 27,274.30
Net Block 45,258.40 39,064.75 34,575.00 32,937.70 26,093.70
Capital Work in
Progress
41,827.82 38,441.84 32,290.60 26,404.90 22,478.30
Investments 11,206.38 12,344.84 14,807.10 13,983.50 15,267.20
Inventories 3,702.85 3,639.12 3,347.70 3,243.40 2,675.70
Sundry Debtors 5,832.51 7,924.31 6,651.40 3,584.20 2,982.70
Cash and Bank
Balance
16,146.11 326.34 634.00 271.80 473.00
Total Current
Assets
25,681.47 11,889.77 10,633.10 7,099.40 6,131.40
Loans and
Advances
16,863.73 7,648.10 6,357.10 7,826.10 9,936.20
Fixed Deposits 0.00 15,858.92 13,825.50 15,999.80 14,460.20
Total CA, Loans
& Advances
42,545.20 35,396.79 30,815.70 30,925.30 30,527.80
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current
Liabilities
16,388.98 10,945.55 7,896.80 7,439.20 5,548.40
Provisions 3,819.32 2,730.31 3,070.50 3,249.50 7,360.60

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Total CL &
Provisions
20,208.30 13,675.86 10,967.30 10,688.70 12,909.00
Net Current
Assets
22,336.90 21,720.93 19,848.40 20,236.60 17,618.80
Miscellaneous
Expenses
0.00 0.00 0.00 0.00 0.00
Total Assets 120,629.50 111,572.36 101,521.10 93,562.70 81,458.00

Contingent
Liabilities
42,308.16 33,227.29 40,044.00 66,083.20 29,361.80
Book Value
(Rs)
88.89 82.94 77.28 71.55 65.81





Competitors of NTPC
Name List price Market Cap.
(Rs. cr.)
Sales
Turnover
Net Profit Total Assets
NTPC 171.20 141,162.35 62,053.58 9,223.73 120,629.50
Power Grid Corp 117.35 54,329.83 10,035.33 3,254.95 62,092.11
Reliance Power 84.55 23,717.34 66.12 310.86 16,101.33
Tata Power 99.90 23,706.99 8,495.84 1,169.73 20,954.12

76

NHPC 18.25 22,448.86 5,654.69 2,771.77 39,153.15
Neyveli Lignite 81.50 13,673.33 4,866.85 1,411.33 15,178.57
Reliance Infra 505.90 13,304.66 17,906.67 2,000.26 27,688.61
Adani Power 41.60 9,068.95 3,948.90 -293.92 30,832.27
SJVN 20.70 8,562.82 1,927.50 1,068.68 9,326.68
JaiprakashPow 31.75 8,333.60 1,615.56 402.95 17,551.83
JSW Energy 48.85 8,011.67 5,016.42 234.64 11,119.71
Torrent Power 153.00 7,228.46 7,917.82 1,237.46 8,931.15
CESC 320.00 4,032.00 4,669.00 565.00 8,611.66
IndiaBPower 11.70 3,091.99 1.15 52.42 4,829.01





The operating cycle consists five phases:-
I phase - Cash are converted into raw material.
II phase: - Raw material is converted into work-in-progress.
III phase: - Work-in-Progress is converted into finished goods.
IV phase: - Finished goods are converted into sales.

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V phase: - Sales are converted into debtors.


OPERATING CYCLE:-
If it were possible to complete the sequences instantaneously, there would be n-o need for
current assets (working capital). However, since it is not possible, the firm is forced to have
current assets. If cash inflows and outflows do not match, firm have to necessarily keep cash or
invest in short term liquid securities so that they will be in a position to meet obligations when
they become due.
Therefore, due to above statement it is clear that why the companies are needed working capital.
There are mainly three part of Working Capital in the company, which is as follow:-
A) Cash
B) Inventory
C) Bills Receivable

CASH:

78

Cash is the most important component of current assets. All other components such as debtors and
inventories ultimately are converted into cash and this fact further emphasizes the importance of
management of cash.
The goal of cash management is to maintain the minimum cash balance that provides the firm
with sufficient liquidity needed to meet its financial objectives.
The term cash includes not only currency but also near cash assets such as marketable securities
and demand deposits in bank.
Cash section is an important section of finance and accounts department. It deals with the
employees, contractors and suppliers for their payments.
Corporate office plays a dominant role in cash management. The corporate office allocates
different amount of each to different coalmines as per its requirements. Corporate office acts as a
linkage between the NTPC and main book. The state bank of India, Corporate office has
determined the credit facility for every units of NTPC. No one unit of NTPC can get the credit
facility more than ones limit. The credit facility is known as rolling cash limit. This keeps on
changing from year to year depending upon companys position transactions, profitability, and
inventory position.
Although corporate office provides credit limit facilities, yet NTPC is not fully dependent on the
corporate office. The sale of scrap materials of defective at plant level generates the cash. Thus,
at a time, plant can also pay liabilities and then the balance amount is only intimated to the
corporate office. NTPC gives priority in cash payment, which is urgent, and sends the report to
corporate office.

79

In brief, the main uses of the cash in organization are as follow:-
It required paying for the fuel and coal charges to the supplier.
It also use to making payment for other construction in organization like building, road,
etc. on every day or week or monthly bases.
It use to buying loose tools, spare parts, etc.
In addition, making payment to the employees in the organization.




STRUCTURE OF WORKING CAPITAL:

80


CIRCULATION SYSTEM OF WORKING CAPITAL
The structural study of working capital involves the analysis of composition of current
assets and current liabilities. The current assets consist of inventory, cash, receivables,
and marketable securities. Current liabilities usually comprise the borrowings, trade
credits, assessed tax and unpaid dividend or any other things.



TYPES OF WORKING CAPITAL:

81

Working capital can be divided into two categories of the basis of time.
I. Permanent or long-termworking capital
This refers to that minimum amount of investment in all current assets, which is required at all
times to carry out minimum level of business activities. In other words, it represents the current
assets required on a continuing basis over the entire year. Tondon committee has referred to
this type of working capital as CORE CURRENT ASSETS. The following are the
characteristics of this type of working capital.
Amount of payment working capital remains in the business in one from another. This is
particularly from the point of view of financing. The suppliers of such working capitals should
not accept its return during the lifetime of the firm.
It also grows with the size of the business. In other words greater the size of the business
greater is the amount of such working capital and vice versa. Permanent working capital is
permanently needed for the business and therefore it should be financed out of long-term
funds.
II. Temporary or short-term working capital
The amount of such working capital keeps on fluctuating from time to time because of
business activities. In other words, it represents additional current assets required at different
times during the operating years. For example, extra inventory has to be maintained to support
cells during peak sales period. Similarly receivable also increase and must be financed during

82

period of high sales. On the other hand, investments in inventories, receivable etc will decrease
in period of depreciation.














83

ADVANTAGES OF WORKING CAPITAL:
I Cash Discount- If proper cash balance is maintained the business can avail the
advantages of cash discount by paying cash for the purchase of raw materials and
the merchandise. It will result in reducing the cost of production
II. It creates a feeling of security and confidence Adequate working capital
creates a sense of security, confidence, and loyalty not only throughout the
business itself but also among its customers creditors and business associates.
III. Sound goodwill and debt capacity - The promptness of payment in business
creates goodwill and increases the debt capacity of business.
IV. Easy loans for the banks An adequate working capital helps the company to
borrow insecure loans from the banks because the access provides a good security
to the insecure loans. Banks favor in generating seasonal loans, if business has a
good credit standing and reputation.
V. Distribution of dividend If company is sort of working capital it cannot
distribute the good dividend to its shareholders in spite of sufficient profits. On
the contrary, if the working capital is sufficient, ample dividend can be declared.
VI. Exploitation of good opportunities- In case of adequacy of capital in a concern,
good opportunities can be exploited. Company may make off-season purchase
resulting in substantial savings or it can fetch big supply orders resulting in good
profits.

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VII. Meeting unseen contingencies Financial crisis due to heavy losses, business
oscillations etc can easily be overcome if company maintains adequate working
capital.
VIII. It increases fixed assets efficiency Adequate working capital increases the
efficiency of fixed assets of the business because of its proper maintenance.
IX. High moral- The provision of adequate working capital improves the moral of
the executive because they have an environment of certainty, security, and
confidence, which is a great psychological, factor in improving the overall
efficiency of the business and of the person who is at helm of affairs in the
company.
X. Increased Production efficiency A continuous supply of raw materials
research programme innovations and technical developments and expansion
programmes can successfully carried out if adequate working capital is
maintained in the business.
XI. Maintaining Solvency and containing production In order to maintain the
solvency of the business, it is necessary that sufficient amount of funds be
available to make all the payments in time and when they are due. Without ample
working capital, productions will suffer particularly in the era of cutthroat
competition and business can never flourish in the absence of adequate working
capital.


85

FINANCING OF WORKING CAPITAL:
Sources of financing of working capital differ as per the classification of working capital into
permanent working capital and variable working capital.
Sources of permanent working capital:
(a) Owners funds- are the main source sale of equity or preference stock could
provide a permanent working capital to the business with no burden of repayment
particularly during short period. These funds can be retained in the business
permanently. Permanent working capital provides more strength to the business.
(b) Bond financing-Another source of permanent working capital is bond financing
but it has a fixed maturity period and ultimately repayment has to be made. For
repayment of his source, company provides sinking funds for retirement of bonds
issued for permanent working capital.
(c) Term loan- from banks of financial institutions has the same characteristics as the
bond financing or permanent working capital.
(d) Short term- Borrowing is also a source of working capital finance on permanent
basis.




86

Sources of temporary working capital:
(a) Trade creditors- Trade creditors provide a quite effective source of financing variable
working capital for the period falling between the point when goods are purchased and
the point when payment is made.
(b) Bank loan- bank loan is used for variable or temporary working capital such loans run
for 30 days to several months with renewals being very common.
(c) Commercial paper- It can be defined as a short-term money market instrument issued in
the form of promissory notes for a fixed maturity. It will be much unsecured and will
have a maturity period running from 90 days to 180 days. It will meet the short-term
finance requirements of the companies and will be good short-term investment for
parking temporary surpluses by corporate bodies.
(d) Depreciation as a source of working capital- The entire amount deducted towards
depreciation to fixed assets is not invested in the acquisition of fixed assets and is saved
and utilized in business as working capitals.
(e) Tax liabilities- Differed payment of taxes is also a source of working capital. Taxes are
not paid from day to day but estimated liability for taxes is indicated in balance sheets.
Besides it, business organizations collect taxes by way of income tax payable on salaries,
providend fund, staff deducted at source, old age retirement benefits excise taxes, sales
taxes, etc. and retain them for some period in business to be used as working capital.
(f) Other miscellaneous sources are Dealers Deposits, Customers Advances, etc.


87

DATA ANALYSIS AND INTERPRETATION:
Working Capital = Current Assets - Current Liabilities

Rs. In cores













year Mar '12 Mar11 Mar10 mar'09 Mar'08
Total Current Assets 42,545.20 35,396.79 30,815.70 30,925.30 30,527.80
Total Current Liabilities 20,208.30 13,675.86 13,675.86 10,688.70 12,909.00
Working capital 22,336.90 21,720.93 17,139.84 20,236.60 17,618.80

88

Working capital management:

year Mar '12 Mar11 Mar10 mar'09 Mar'08
current ratio 2.105333 2.5882679 2.2532916 2.8932705 2.364846231

Working Capital is comparatively good in the year 2012. Therefore, we can conclude that
the organization is growing faster than previous years.
Current ratio of the organization match to the standard ratio i.e. 2:1













89

SWOT ANALYSIS OF NTPC:

STRENGHTS

Good corporate image.
Established brand name.
Strong and wide networks of manpower across India.
The company has kept with itself sufficient liquid funds to meet any kind of cash
requirement.
Company with an excellent record and high profits.
An early starter more than 32 years of experience in power sector.
Highly motivated and dedicated workers and officers and no industrial problems.
Efficient and timely completion of projects.
Excellent growth prospects with significant additions, modifications and replacements.

WEAKNESS

Depleting raw materials.
Some of the plants have become old and need investment in renovation and
modernization.




90

OPPORTUNITY

Huge investment leading to greater demand of goods and services.
Upcoming hydro and nuclear sector.
Huge opportunity in consultancy services.

THREATS

Rising prices of raw materials.
Increase in number of small contractors leading to price war.
Emergence of competitors in the market like Reliance energy, Tata power and other
private development.
Huge capital requirement for expansion and diversification.
Change in government policies for open trade or stock trading or energy trading.










91

CONCLUSION & SUGGESTIONS:

CONCLUSION:
The tools applied in the study to analyze the efficiency and effectiveness in financial
management is most appropriate ones.
The firms Liquidity position in terms of short term and long term are good.
The above analysis enables the company to understand the financial position and
financial soundness of NTPC, Dadri.
The main thing, I got that most of the employees are having some satisfaction and few
are not satisfied in NTPC as some employees are getting more salary than they deserve,
based on their educational qualification.

FINDINGS AND INFERENCES:

Blockage of high cash and bank balances in government securities.
Consistently maintaining higher inventories.
High credit payable period.
Excessive working capital during rising cost of materials.





92

SUGGESTIONS TO THE COMPANY:

Effective computerization:
All the departments should be computerized and SAP should be properly implemented..
Improved coordination:
A proper co-ordination between all the departments should be improved
Training:
All the employee should properly trained about the technologies which are being implemented













93

RECOMMENDATIONS:
The Company should pump more money into business through debt or equity and should
reduce reliance on short term creditors.
The Company should try to focus on avoiding wastage of raw materials i.e. coal during
inbound transportation.
The Company should try to control its cost to enhance its profit margins.
High cost cutting measures should be adopted.












94

BIBLIOGRAPHY:

Books:
Mukherjee. Financial accounting for management (1
st
edition): Sultan Chand & Sons
New Delhi(2009)
Maheshwari S.N &Maheshwari S.K. An introduction to accountancy (9
th
edition: Vikas)
Publishing House New Delhi (2008)
Panday /I.M. Financial management (9
th
edition). New Delhi: Vikash Publishing House
Khan and Jain. Financial management (5
th
edition Ed). : Tata McGraw-Hill Publishing
Company Limited New Delhi (2009)
R.P. Rostagi. Financial management (5
th
edition Ed): GalGotia Publishing Company
New Delhi(2008)
KrishRangarajan& Anil Mishra. Working Capital Management(Ist edition). New Delhi:
Excel Publication (2005)
Websites:
www.ntpc.co.in
www.moneycontrol.com
www.indiabudget.nic.in
www.indianfoline.com.
www.rbi.org.in



95

Financial Information from the Company:
Financial policy report of different years issued by NTPC.
Performance highlights book.
NTPC news Magazine of different years.
Employees hand book.
Annual reports of NTPC:
o 28
th
Edition- 2007-08
o 29
th
Edition- 2008-09
o 30
th
Edition -2009-10
o 31th Edition -2010-11
o 32th Edition -2011-12
News flash NTPC journal.
Horizon journal.

References:
Woolf, Tanna and Karam Singh, Financial Management, MacDonald and Evans,
Plymouth, First Edition, p.245.
C.J.SlayBaugh, Inventory Management Program Management Accounting, Vol.53
(July 1971), p.13
Richard I. Levin&Charles A Kirkpatrick, Quantitative Approaches to Management,
3
rd
Edition (New York: McGraw-Hill 1975) Chapter 7 & 8
Happy Pierce, Learning& the Lessee,: Management, Vol.57(December 1975) p.33

96

Dr.S.N. Maheswari, Financial management: Principles & Practice, Sultan chand&
sons (9
th
edition), New Delhi, 2004, ch.9.
Solomon,E.andPringle,J.J.,an introduction to financial management,Prentic-Hall of
India,1977 p.182
K.B.Smith and S.B.Sell,Working capital management in practice, in readings on
the management of working capital, 2
nd
edition. K.B.Smith (St. Paul, Minn.: West
publishing 1980, pp.
R.J.Tersiree, Material management & inventory control (New York : Elsevier North
Holland 1976)
RajmaniRajan& Ajay Shah, New directions in Indian financial sector policy,
October 2003