INTRODUCTION

INTRODUCTION
This project is about the operational efficiency and profitability
analysis of the TCC Ltd .profitability analysis is a tool for analyzing or
measuring profitability of a firm for which is analyzed financial statement
analysis is a process of evaluating the relationship between component part
of financial statement to obtain a better understanding of a firm and its
position and performance. The management will be interested in knowing
financial strength of a firm to make their best use and to be able to spot out
financial weakness of the firm to take suitable corrective actions.
Profitability analysis is one of the starting points for making
plans before using any sophisticated forecasting and planning procedures.
Understanding the past is a prere!uisite for anticipating the future. "or
obtaining the material and relevant information necessary for ascertaining
the financial strength and weakness of an enterprise# it is necessary to
analyze data depilated in the financial statement.
$perational efficiency will reflect the systematic record of
e%penses and analysis the company to ascertain the cost of each product
manufactured or service rendered by the organization. Understanding the
operational efficiency will enable the management to know where to
economic cost# how to fi% prices# how to ma%imize profit and so on. &t also
provide information to enable management to make shortterm decisions of
various types# such as !uotation of price to special customers during a slump
make or buy decision# assigning priorities to various products.
'orking capital may be regarded as the life blood of the
business. 'orking capital refers to that part of the firm(s capital# which is
re!uired for financing short term or current assets such as cash# marketable
securities# debtors and inventories. The amount invested in current asset is
known as working capital funds invested in current assets keep revolving
fast and are being constantly converted into cash and this cash flow out gain
in e%change for other current assets. )ence# it is also known as revolving or
circulating capital or short term capital. 'orking management is concerned
with the problems that arise in attempting to manage the current assets. The
current liabilities and inter relationship that e%ist between them. The aim of
working capital management and policy is to maintain a proper balance
between the magnitude of working capital and the general scale of operation
of the company.
OBJECTIVES
Primary Objective:
*To analyze and evaluate the operational efficiency and profitability of The
Travancore Cochin Chemicals Limited +erala,
Secondary Objective:
C -%amine the profitability of the company during the period under
study.
C .easure the operational efficiency of the company
C -%amine the e%tent of relationship between li!uidity and profitability.
C /raw conclusion and offer suggestion.
C +now about the growth prospective of the company.
C &ntegrate the revenue profit and costing profit of the concern.
C .ake an analysis of the overall financial performance of the company.
C 0nalysis and evaluate li!uidity position of the company.
C To ascertain different sources of working capital
C To put forward constructive suggestions for the improvement of the
e%isting system of operational efficiency.


Limitation
1. The financial statements contain any historical data and would
necessarily reflect the future.
2. The reliability and accuracy of calculations and interpretations
depends very much on the information supplied in the form of
annual and other records.
3. The study involves the use of ratio analysis# which itself having its
own limitations.
4 &n this short period of time# the research could not go through all
the aspects of working capital management
SCOPE O! T"E STUD#
o $perational efficiency deals with minimization of waste and
ma%imization of resource capabilities# in order to deliver !uality products
and services to customers.
o $perational efficiency is concerned with identifying wasteful processes
and resources that drain the organization5s profits. $perational efficiency
is also concerned with designing new work processes that improve
!uality and productivity.
o Profit is made up of trading profit sales less the cost of production and
overheads all the things that are paid out to keep the business running.
To be profitable it helps to keep the cost of sales down 6raw materials#
labour costs7 and the value of sales up 6setting prices as high as the
market will stand. &n addition# costs such as premises# utilities and
salaries for nonproduction staff need to be kept as low as possible.
o "irm that can no longer pay its creditors8its bankers and suppliers8is
illi!uid and technically bankrupt# a situation that no manager wishes to
face. .anagers must make decisions that do not endanger their firm(s
li!uidity8a term that refers to the firm(s ability to meet its recurrent cash
obligations towards various creditors.
o 'orking capital management is an integral part of over all corporate
management. &t involves deciding upon the amount and composition of
current assets and how to finance these assets. To a finance manager
working capital sphere throws a welcoming challenge and opportunity.
REVIE$ O!
LITER%TURE
Revie& o' (iterat)re
Pro'it /efinition9
The positive gain from an investment or business operation
after subtracting for all e%penses. opposite of loss.
$*at Doe Pro'it +ean,
0 financial benefit that is realized when the amount of revenue gained from
a business activity e%ceeds the e%penses# costs and ta%es needed to sustain
the activity. 0ny profit that is gained goes to the business5s owners# who
may or may not decide to spend it on the business.
Calculated as9
Profit : Total revenue ; Total e%penses
Profit is the money a business makes after accounting for all the e%penses.
<egardless ofwhether the business is a couple of kids running a
lemonade stand or a publicly trademultinational company# consistently
earning profit is every company5s goal
TEN $%#S TO INCRE%SE !IR+ PRO!IT%BILIT#

'hen managing partners and members of law firm management
committees start talking about increasing firm income# one of the first things
they think of is reducing overhead. =ut some of the most profitable law
firms have found that cost cutting is not the only way to improve the firm5s
cash position. =y identifying the major factors that impact directly and
indirectly on the generation of gross receipts# a firm can change practices
that adversely affect firm revenue# and thereby increase income. $ne or
more of the following ten factors could be inhibiting profitability at your
firm.
-. Inade/)ate !irm +ana0ement
.any firms lack a management system that provides for longrange
planning# daytoday administration and appraisal of results. Typically# no
partner or group has authority for overseeing the successful operation of the
firm. Partners tend to direct their attention to specific problems only as
crises occur. =y the time partners identify and resolve these problems
months may have passed# and yearend dollar results may be less than
e%pected. 0 welladministered firm re!uires mechanisms for overseeing the
firm5s finances and operation and for ongoing communication among firm
members.
1. Inade/)ate +ana0ement2Coordination o' Practice %rea
Pressures on law firms to provide high !uality legal services in a timely
and profitable manner have encouraged partners to consider the systematic
application of basic management principles to substantive practice areas
when the management of the firm begins to ask# >&s this particular practice
area really profitable? @hould the firm redirect its efforts to other areas?
@hould certain partners be reassigned accountability for managing
particular practice areas? @hould we decrease the number of lawyers?>
3. %bence o' a +ar4etin0 P(an
0s a law firm grows# the ad hoc marketing strategies and efforts which
may work for a smaller firm become less effective. <esponsibility is
diffused. Lawyers can be working at cross purposes. .any lawyers dislike
the idea of marketing or are unwilling to put forth the necessary effort. 0s a
conse!uence# in a larger midsize firm there is the risk that lawyers will
assume the marketing task. &n this competitive environment# partners in law
firms of all sizes need periodically to remind themselves that every good
e%isting client they have is a potential new client for some other law firm.
5. %bence o' a !inancia( P(an
Unless a firm has a projected financial plan for income and e%penses
against which actual performance may be measured# the firm will have little
opportunity to identify and correct economic problems. 0 basic financial
plan that includes income and e%pense projections based on the firm5s past
e%perience will enable attorneys to prepare for unusual contingencies and
avoid financial surprises. &n addition# the plan will inform partners and
associates of their obligations concerning billable hours and collections.
<eview of monthly financial and management data by designated partner
or committee will identify potential problems and undesirable trends in time
for corrective action to be taken.
6. Inade/)ate E78ectation and t*e %bence o' a La&yer B)ine P(an
. -ach attorney reviews his or her business plan with a member of lawyer
management to reach a consensus about what each attorney intends to do to
progress the firm. Auarterly# each attorney is e%pected to report to lawyer
management about the status of implementing their plan. This allows
management to monitor the progress of each attorney in implementing their
plan and to offer suggestions for improvement# as re!uired.
9. % Com8enation P(an t*at Dico)ra0e Partner 'rom Per'ormin0
t*oe %ctivitie t*at %ddree t*e !irm: Need and Prioritie.
Partner compensation programs mold partners5 behavior patterns. Partners
will
do what they are paid to do. 0 compensation system that overemphasizes
partner billable hour production rather than providing incentives to
encourage partners to achieve the appropriate balance between their personal
billable hour production # marketing# associate training # delegation of work#
management of the firm and its practice areas# etc.# may increase revenue in
the shortrun# but will be detrimental to the longer term financial success of
the firm
;. Imba(ance in Ty8e o' Cae
0n imbalance in the number of contingency and noncontingency cases
can cause a cashflow crisis for an undercapitalized firm. @uch an imbalance
may not become apparent until the firm finds itself in a >cash crunch>
because too many attorneys are working on cases that promise a pot of gold
at the end of the rainbow rather than on matters that produce a systematic
cash flow.
"irms generally# and especially undercapitalized firms# should carefully
review their caseloads of contingency matters to determine whether too
much lawyer time is being devoted to cases that do not provide a steady
stream of income.
To ensure against cash flow problems# firms should obtain retainers or
deposits from clients and suggest that clients pay directly for major outof
pocket e%penses such as e%pert witnesses and depositions.
<. Unc(ear !ee %0reement
.ost fee disputes# writeoffs and discounted bills result from the
attorney5s failure to confirm in writing the nature of the representation and
the arrangements for fee payment. "irm policy should re!uire the attorney to
draft a confirmation letter as an integral part of the procedure for accepting a
new matter# especially from a new client.
=. Poor Bi((in0 and Co((ection Practice
Lawyers are notoriously slow to bill. They fre!uently defer billing for
completed work well beyond the time at which it could be reasonably billed.
Bet the decision about when to bill is an important one# since working
capitol is re!uired to cover unbilled time and disbursements. Conse!uently# a
firm must force its attorneys periodically to focus their attention on
billing.
.any of the more profitable firms centralize billings and collections
through a managing partner supported by an administrator# office manager or
bookkeeper.
->. Inade/)ate Bi((in0 Rate? t*e %bence o' Non@"o)r(y Bi((in0? Ri4 or
Bon) Bi((in0 %rran0ement &it* C(ient
The minimum hourly billing rates for partners and associates must be
sufficient to produce a reasonable income for the firm. 0mong the factors
that should be considered in determining fees are the hourly rates charged by
law firms in the same legal market. 0 number of local# regional and national
surveys provide such information.
Periodically# law firms of all sizes and types need to review their organization and
procedures to determine how they can increase their revenue and improve cash flow. The
result would be greater efficiency and profit.
!actor a''ectin0 a b)ine: 8ro'it
Profit is made up of trading profit sales less the cost of
production and overheads all the things that are paid out to keep the
business running.
To be profitable it helps to keep the cost of sales down 6raw materials# labour
costs7 and the value of sales up 6setting prices as high as the market will
stand. &n addition# costs such as premises# utilities and salaries for non
production staff need to be kept as low as possible.
O8erationa( e''iciency
Present competitive environment in business re!uires companies to
introduce !uality products at lower prices in order to capture market share.
Clobally# business has become more integrated with supply chains crossing
multiple nations. &nefficiency in this chain and internal drain of resources
due to outdated processes affect the ability of a company to be profitable.
$perational efficiency is therefore a critical systemwide initiative that can
translate to the company being in business or closing down.
De'inition
o $perational efficiency deals with minimization of waste and
ma%imization of resource capabilities# in order to deliver
!uality products and services to customers. $perational
efficiency is concerned with identifying wasteful processes and
resources that drain the organization5s profits. $perational
efficiency is also concerned with designing new work processes
that improve !uality and productivity. "or e%ample the >Dustin
time D&T> process emerged as a result of the focus on improving
operational efficiency by reducing inventory to the bare
minimum. The supply of inventory in D&T is delivered just when
it is needed for a process thus eliminating holding costs of
inventory.
Significance
o &mproving operational efficiency has a direct impact on the
company5s profit margins. 0ssuming the overall !uality is
standard# in order for businesses to profit# they have to either
raise the price of their product or service# sell more of their
products or lower the costs involved in making the product.
<aising the selling price and increasing the market share are
both inhibited by increased global competitive market.
)owever lowering costs is a viable option because internal
wastage contributes to increased cost.
Organizational Structure
o The organizational structure and the internal processes affect
operational efficiency. &t is also affected by the company culture
and employee morale. Companies that have very rigid
hierarchical structures have more inefficiency due to
duplication of efforts. @everal government structures suffer
from this kind of organizational structure. The communication
in such organizations tends to suffer# leading to disparate teams
or departments working for their personal objectives. Thus
there is a systematic buildup of wasted resources at every level.
Supply Chain
o The supply chain of an individual company also affects its
operational efficiency. The supply chain network involves
suppliers# distributors and consumers of the company5s products
and services. The overall operational efficiency can only be
improved when these links are efficient. "or e%ample if a
supplier is unreliable# then the company has to deal with the
cost of missed opportunities# lack of !uality and unsatisfied
customers. Therefore# improving operational efficiency should
also involve improving the >value chain>.
Metrics
Companies use several techni!ues to measure and gauge their
operational efficiency. =enchmarking or comparing and studying
their operations with the highest industry standard is one of the
!ualitative methods used. Auantitative analysis of the company5s
operations# analysis of financial statements# analysis of the cost of
goods# consumer surveys# are some of the methods used to get
statistical data on operational efficiency.
Conideration
&mproving efficiency is a systemwide effort. &mproving operational
efficiency involves adopting fle%ible organization structures that allow for a
network flow of information. The focus is on horizontal organizations and
network structures. &nvolving other stakeholders# such as the suppliers#
distributors and customers in improving the supply chain also translates to
greater operational efficiency. 0dopting established processes such as @i%
@igma and Total !uality .anagement 6TA.7 is another route to improving
operational efficiency. Companies that adopt these processes are able to
access prevalent benchmarks and also invest heavily in employee training.
Aualified employees and common standards all contribute to greater
operational efficiency.
+eanin0 o' &or4in0 ca8ita(
'orking capital is the capital invested in different item of
current assets needed for the business E&F# inventory# debtors# cash and
other current asset such as loans and advance to third parties. These current
assets are essential for smooth business operation and proper utilization of
fi%ed assets. The firm should maintain sufficient level of working capital to
produce up on a given capacity and ma%imize the return on investment in
fi%ed asset shortage working capital leads to lower capacity utilization#
lower turnover and hence lower profit. 'orking capital# in e%cess of the
amount re!uired to produce to full capacity# is idle and conse!uently leads to
decline.
Conce8t o' &or4in0 ca8ita(
T*ere are t&o conce8t o' &or4in0 ca8ita(:
617 Cross working capital.
627 Get working capital.
&n the broad sense# the term working capital refers to the gross working
capital and represents the amount of funds invested in current assets. This#
the gross working capital is the capital invested in total current assets of the
enterprise. Current assets are those assets which in the ordinary course of
business can be converted into cash within a short period of normally one
accounting year.
Com8onent o' &or4in0 ca8ita(:@
C)rrent aet
Inc()de 'o((o&in0:@
1. Cash
2. .arketable securities
3. @undry debtors
4. =ills receivable
H. @tock or inventory
I. 0ccrued incomes
J. @hort term loansK advances


C)rrent (iabi(itie

1. @undry creditors
2. =ills payable
3. @hort term borrowings
4. Provisions for ta%ation
H. $ut standing e%penses
I. &ncome receives in advance
J. &nstallments of long term loans
L. =ank over draft K dividend payable
!actor determinin0 t*e &or4in0 ca8ita(
# Gature or character of business
# Production cycle

E=usiness cycle
ECredit cycle
E<ate of growth of business
E-arning capacity and dividend policy9
!ore cat or etimate o' &or4in0 ca8ita( re/)irement
"actors have to taken into consideration while main and estimate
of working capital re!uirements9
So)rce o' &or4in0 ca8ita(

Lon0 term and 8ermanent o)rce
o &ssue of share
o /ebentures
o Loans from financial institution
o <etained earnings
Tem8orary or *ort term o)rce
E7terna( o)rce
Trade credit
Credit paper
=ank credit
CustomerMcredit
Covernment assistance
Loan from directors
Interna( o)rce
/epreciation
Provision for ta%ation
0ccrued e%penses
Need 'or &or4in0 ca8ita(
1. Conversion of cash into inventory
2. conversion of inventory into receivables
3. conversion of receivables into cash
$or4in0 ca8ita( ana(yi
<atio analysis
"und flow statement
Cash flow statement
Get working capital analysis
Ratio ana(yi
%A C)rrent ratio:@
Current ratio may be defined as the relationship between current
assets and current liabilities.
C)rrent aet
C)rrent ratio B
C)rrent (iabi(itie
BA C)ic4 ratio or acid tet ratio:@
Auick ratio also known as 0cid test ratio or Li!uid ratio# is a more
rigorous test of li!uidity than the current ratio.
C)ic4 or Li/)id ratio
C)ic42Li/)id or %cid tet ratio B
C)rrent (iabi(itie
cA Ca* 8oition ratio:@
This ratio analysis the position of cash in current assets. )ere
cash means bank plus cash in hand. &t is calculated by relating cash and
e!uivalents to current liabilities. The formula isN
Ca* and ban4 ba(ance
Ca* 8oition ratio B
C)rrent (iabi(itie
dA %vera0e co((ection 8eriod
0verage collection period is a measure of receivables turnover.
This ratio shows the credit and collection policies of the term and the
effectiveness of collection machinery. This ratio is in fact inter related with
and dependant upon the debtors ratio# it is calculated as follows

/ays in a year
0verage collection period :
/ebtors turn over ratio
The average collection period presents the average number of
days for which a firm has to wait before its receivables are converted into
cash. This measure the !uality of the debtors. The shorter the average
collection period# the better is the !uality of the debtors as short collection
period implies collection performance which in turn adversely affects the
li!uidity and increase the chance of bad debts.
eA %vera0e dib)rement 8eriod
The ratio represents the average number of days taken by the
firm to pay its creditors. "or calculating the average disbursement period# the
number of days in a year is divided by the creditor(s turnover ratio. &t can be
calculated as follows.
/ays in a year
0verage disbursement period :
Creditors turn over ratio
&n the study it is assumed that whole purchase is an credit basis. 0 higher
payment period implies greater credit period enjoyed by the firm and larger
benefit are reaped from credit supplier. This will lead to lesser discount
facilities or higher prices for credit purchases.
E''iciency o' &or4in0 ca8ita( mana0ement
The efficiency of working capital management can be evaluated
by using the following techni!ues of ratio analysis. These ratios used are9
1. 'orking capital turns over ratio
2. &nventory turn over ratio
3. /ebtors turn over ratio
4. Creditors turn over ratio
-. $or4in0 ca8ita( t)rn over ratio
The ratios test the efficiency with which working capital is used.
This ratio measures the working capital utilization with any increase in sales
volumeN there is a corresponding increase in the inventories and accounts
receivables. This ratio is computed to asses the degree of efficiency in the
use of short term funds for generating sales revenue. 0 very high ratio may
be the result of favorable turnover of inventories and accounts receivables. 0
low turnover of working capital may be result of an e%cess of working
capital. 0 slow turn over of inventories and receivables or a long cash
balance investment of working capital in short term securities.
0n increasing ratio indicates that working capital is more active than it
has been in the past while a decreasing ratio indicates that the company is
using working capital less economically. The working capital turnover ratio
also been calculated as follows.
Net a(e
$or4in0 ca8ita( t)rnover ratio B
Net &or4in0 ca8ita(
1. Inventory t)rnover ratio
3. Debtor t)rnover ratio
/ebtors turn over ratio is also called as debtor(s velocity or
receivables turnover. The li!uidity position of the firm depends on the
!uality of debtors to a great e%tend. Customers to whom goods are sold on
credit are called debtors. This ratio is used to analyze the operational
efficiency of the concern. Cenerally# higher the value of the debtor(s
turnover the move efficient is the management of credit
Sa(e
Debtor t)rnover ratio B
Tota( debtor
6. Creditor t)rn over ratio
Inventory to &or4in0 ca8ita(
&ncrease in volume of such ratios increase in the of inventory but
from a sound financial point of view# inventory should not e%ceed the
amount of working capital. The desirable ratio is 191. This ratio helps to
judge the !uantum of inventories in relation to size of the business. )eavy
inventories lead to failure of business in the event of prices of such
inventories crashing. &t can be avoided nay by purchasing proper !uantity
and under favorable market conditions that the business can succeed. @o
each business establishes a fi%ed relationship between inventory and net
working capital. &n order to ascertain that there is no over stocking the ratio
of inventory to working capital should be calculated as follows.
Inventory
Inventory to &or4in0 ca8ita( B
$or4in0 ca8ita(
I+PORT%NCE O! R%TIO %N%L#SIS
0uto analysis is one of the important tools for analyzing
the financial statements. &t helps understanding the financial health and trend
of a business.
-. UTILIT# TO +%N%DE+ENT
The ratio analysis helps the management in
6a7 "ormulating the policies
6b7 "orecasting and planning
6c7 /ecision making
6d7 +nowing the trend of business
6e7 .easuring efficiency
6f7 Communicating and controlling
2. Uti(ity to *are *o(der and invetor
0n investor would normally access the financial position of
business before invests his money in it. )e is interested in the safety#
security and profitability of his investments. 0ccenting ratios helps the
prospective investor in selecting best companies to invest their funds. <atios
enable the share holders to evaluate the performance and prospectus of the
company. $n the basis of some ratios# they are able to calculate the price of
their shares.
3. Uti(ity to creditor
The creditors or suppliers are those who supply goods to the firm on
credit basis. They are interested in the li!uidity position of the firm. To know
the li!uidity position or short term financial position# they use li!uidity
ratios.
5. Uti(itie to em8(oyee
The employees are interested in the profitability of the company.
Their wages# fringe benefit# working creditors etcOare related to the profit
earned by the company. They want to ascertain the profitability for
demanding wage increase and other benefits. "or understanding the
profitability of the company# profitability ratio comes to their help.
6. Uti(ity to 0overnment
The government uses ratio analysis for the studying the cost
structure of their industries on the basis of this study# the government can
formulate various policies. &t can implement the price control measures to
protect the interest of consumers.


INDUSTR# E ORD%NIF%TION
PRO!ILE
INDUSTR# PRO!ILE
Introd)ction

The &ndian Caustic @oda &ndustry is a mature industry with the first
plant placed by .ettur in 1P3I.@ince then industry grew steadily with the
production of tentacles soaps and detergent# alumina etc. the industry is
currently growing at the rate of IQ whereas internationally the growth is
around 2.2Q.
The tariff charged by the @tate -lectricity =oard 6@-=7. "or the
power supply of such industrial use is e%orbitantly high# especially when
compared to international levels. The industry is faced to shoulder the
burdens of subsidized power of certain sectors as well as inefficient
operation of the generating units.
$or(d Scenario
Gow the world is full of competition. The Chlor0lkali industries
are growing faster in the world. The chemical industries are also growing
fast in the world. The chemical industry plays a vital role in the production
of many manufactured goods. The industry provides a tremendous variety of
material to other manufactures. &t also produces chemical products that
benefits people directly. .ajor products of the industry include detergent#
drugs# fertilizers# food preservatives# flavoring and paper products etc.
.ost major chemicals are basis chemicals used in many
countries. &t is used to produce fertilizers and other chemicals. $ther basis
chemicals include chlorine# alkalis like lime and sodium )ydro%ide and
these chemicals are used in plastics.
Production of chemicals has become increasingly concentrated
in multinational corporations# which have plans and offices in a number of
countries. To reduce cost# most of the multinational companies locate their
factories in countries where raw material and cheap skilled labour are readily
available. @o many basis chemicals are produced in developing countries by
units of multinational firms. =ut chemicals re!uiring advanced production
methods are made in industrialized countries.
C*(or@%(4a(i Ind)try in t*e $or(d:

/uring the 1PJR(s Caustic @oda used to be manufactured by utilizing
the mercury cell technology. &t was produced by 0malgam process. =ut this
technology consumes a lot of energy and power. There was also the problem
of mercury pollution. &t was during the same period due to the .ina .ata
tragedy resulting from mercury pollution# forced the Dapanese Covernment
to issue a direction to all Caustic @oda plants to change over to other process
under a time bound programme. This process apart from totally avoiding
mercury# consumes 3RQ less power compared to the conventional process.
&n the international scene# the increased production of paper#
aluminium# soap and detergents naturally lead to increased re!uirement of
Chlor0lkali products in the world scenario. =ut the Creen peace movement
is seeking the phasing out of Chlor alkali industries in -urope and restricted
production in other -uropean and Gorth 0merican plants.
'ith the drop in international production# the international price
of the Caustic @oda rose steadily. The Caustic @oda which was selling for
SHRMtonne has grown up to S3RRMtonne now. The international markets
operates in the conte%t of demand and supply conditions prevailing from
time to time# so price of Caustic @oda became highly volatile. Predatory
pricing has become common and drop in import duty often led to steep drop
in price of chemical. Through demand for chlorine is growing faster demand
for Caustic @oda is not so promising. )ence the units in the Culf and
'estern countries are selling Caustic @oda at a cheaper price.
+ajor Co)ntrie Prod)cin0 Ca)tic Soda:
U.@.0
China
Dapan
Cermany
"rance
<ussia
Canada
&ndia
Indian cenario

&n &ndia# Caustic soda is produced by the electric process. The
manufacture of Caustic @oda started during 1P4R(s in the country. The
growth rate was slow up to 1PIR# and after that# the growth picked up
substantially. Today there are about J1 industrial units manufacturing
Caustic @oda of which 4R are in organized sector and the rest belong to
unorganized sector. The total installed capacity of all these units put
together# comes to about 1JHRRRR tonesTannum. There are si% other units
with the total annual installed capacity of J4#JHR tones# which is not in
operation for the past H years. 0t present# work for further capacity
e%pansion of about 12# HR#RRR tonesMannum is in process.
The &ndian chemical industry is an integral part of the &ndian
economy# contributing around I.JQ to the &ndian C/P. &t touches our lives
in many different ways. 'hether it is thermo plastic furniture we use# or a
synthetic garment we wear# or drug we consume. The is a vital part of the
agricultural and industrial development in &ndia has a key linkage with
several other downstream industries such as automotive# durables#
engineering# food processing etc.
The chemical industry in &ndia has the potential to grow around
U@/1RR billion by 2R1R. This world implies an annual growth rate of
1H.HQ. "or the industry to achieve this size# especially and knowledge
chemical
@egment would need to grow 1I.4 Q6 Current growth rate is 12.3Q7
respectively. The basic chemical segment would need to sustain its current
growth rate of J.JQ to match the profile of the chemical industry in global
market and the &ndian trade accounts for just 1.3Q of the world chemical
trade of U@/ H4H billion. 0lthough certain sector such as petro chemicals
and pharmaceuticals have trade surplus. The industry remains a net importer
with a trade deficit of around U@/ 1.31.L billion annually.
%t t*e Ind)try Leve(? t*e Indian C*emica( Ind)try i
c*aracteriGed by:
)igh domestic demand potential# as &ndian markets develop and
percapita consumption level increases.
)igh degree of fragmentation and small scale operations.
Limited emphasis on e%ports due to domestic market focus and
smallest scale of operation.
Low competitiveness as compared to other countries due to higher
cost of power# import duties# ta%es and cost of capital.
Low focus on <K/ despite initiative to innovative processes to
synthesis products cost effectively.

&n spite of the advantages# a few proactive &ndian companies
have created sizeable international operations to become significant
players in the global market place. The ability of chemical companies in
&ndia to perform better than global companies has already been reflected
by a comparatively performance of the &ndian operations of some global
companies. 0s operating profit margins of the &ndian subsidiaries range
LQ to 13Q as compared to the global operating margins range less 1Q to
IQ several chemical industries in medium and small scale sectors have
been forced to suspend operation due to their inability to adhere to the
environment standards in view of their technological and investment
constraints. 'hile the country has lost production capacity and economic
opportunity to some e%tent due to such closures9 it appears that the
country# by and large has not regretted about the closure of such units.
The chemical industries have now realized and have made3
environmental issues as an essential part of activity in project design and
they provide as much importance to environmental factors as they due to
marketing and financial aspects. &t is necessary that the social activities
should recognize this positive mindset amongst the management of
chemical industries and reframe from launching negative and hate
campaign.
&ndian chemical industries now have a great opportunity in the
field or research and development# in view of its large manpower of
reasonably good talent and <K/ facilities already created and operating.
'ith the 'T$ regime in force# &ndian industries should be able to protect
their newly developed technology and emerge competitive in the global
market.
+ajor So)t* Indian C*(or@%(4a(i Unit:
- Chemplast &ndustries Ltd# Tamilnadu.
- Chemfab 0lkali(s Ltd# Pondichery.
- +othari Petrochemicals Ltd# Chennai.
- @ree <ayalseema 0lkali(s and 0llied Chemicals Ltd#
0ndhra Pradesh.
- 0ndhra @ugars# 0ndhra Pradesh.
- @outhern Petrochemical industries corporation Ltd#
0ndhra Pradesh.
- 0ndhra @ugars# 0ndhra Pradesh.
- @outhern Petrochemical industries corporation Ltd#
Chennai.
- The Travancore Cochin Chemicals Ltd# -loor# +erala.
State Scenario
Caustic @oda is one of the basic inorganic chemicals
manufactured from common salt. There are four processes used in the
manufacturing of Caustic @oda# Chlorine and )ydrochloric acid which
are the byproducts obtained through this process.
&n the state# only Travancore Cochin Chemicals Ltd 6TCC Ltd7
is engaged in the production of Caustic @oda# Chlorine and )ydrochloric
acid.
TCC Ltd has an installed capacity to produce 1JH tones per day Caustic
@oda and it is used in the manufacturing of soap# te%tiles# plastics etc.
there are many small scale industries in the state which consumes Caustic
@oda for the production of soap# plastics# te%tiles etc.
Through the average demand# at an average rate of the capacity has
been increased by nearly JQ in view of the high transportation cost and
hazardous nature of chemicals transported. The Caustic @oda industry in
the state is more localized and the units have come nearer to the
consuming centers. 0lso because of the high transportation cost# it is not
possible to e%port Caustic @oda in large volume from the state.
Com8any 8ro'i(e
INTRODUCTION
The travancore Cochin Chemicals Ltd 6TCC Ltd7 is a public
sector undertaking owned by Covt. of +erala. @ituated at udyogamandal
in Cochin# The industrial belt in the state. The factory and the registered
office is located 2R km away from the Cochin international 0irport. TCC
Ltd is located on the banks of river periyar# one of the finest water ways
in +erala and is recognized as an artery of coastal trade and commerce.
The factory falls within -loor Panchayath and is adjacent to "0@T
udyogamandal division. TCC Ltd is accredited with &@$ PRR12RRR
certification reflecting the !uality policy of commitment and e%cellence.
TCC Ltd was established in 1PH1 and is engaged in the
manufacturing of basic chemicals re!uired by various industries. TCC
Ltd is a heavy chemical industry and allied chemicals. &t was -stablished
to .anufacture and marketing <ayon grade caustic soda# chlorine and
allied chemicals. &t was established to manufacture <ayon grade caustic
soda# e%panded its production capacities in stages to become a leading
Chlor0lkali unit in the country. 'hile keeping abreast of all technology
advancement. TCC Ltd entered into a contract in 1PPH with a world
renowned 0@0)& glass co. ltd Dapan for the production of 1RR trial runs
now. 'ith the implementation of these <s.P2 core project the production
capacity of TCC Ltd will increase from H2LRR.T per annum. 'ith
continues efforts of upgrading technology and professional management#
the company has a good track record of profitable and healthy industrial
relations.
+iion
TCC is committed to supply !uality chemicals at competitive
prices to customers. Customer satisfaction# Concern for
environment and @afety are our priorities.
+ Utmost level of conservation of all resource including
energy.
+ Cost effectiveness in all our operations.
+ <egular up gradation of technologies used in processing.
+ Compliance with laws and statutory regulations.
Time c*ed)(e o' t*e com8any
The TCC Ltd consists of there shifts for its production process.
The schedules of the organization are as follows9
L 0.. to 4 P..
4 P.. to 12 0..
12 0.. to L 0..
S*are ca8ita(
TCC Ltd is a Public limited company with four major shareholders.
The Covernment of +erala 6LRQ7# +@&/C 6with 1JQ7. "0CT 6with 2Q7.
0nd mettur Chemicals 6with 1Q7 shares.
.ajor shares of the Company9
Dovt. o' Hera(a <>I
HSIDC -;I
!%CT 1I
+ett)r C*emica( -I
ST%!! POSITION
The company has a highly skilled and dedicated work force. The
company employ(s JLI employees of whom. 31Q are white collared. There
are 1R3 managers 6including 23 e%clusive trainees7 and IL3 workers. 2HQ of
the total workforce is women. The work force consists of about 12H
postgraduates# 2IR graduates. .any of who ac!uired additional
Aualifications after joining the company. The company is providing
uniforms and identity card for the employees. The company introduced a
voluntary retirement scheme for its employees. This scheme was applicable
to all permanent employees who have completed 1R years of service as on
1M1M2RR3 or 4R years of age. -%cept those employees who are under
disciplinary proceedings. The company received 1P4 lakhs as compensation
being the employee cost.
+%N%DE+ENT O! T"E CO+P%N#
The are 12 directors for the company as a shareholderN Covt. of
+erala nominated the board of directorsN Professionals as well as bureaucrats
are being nominated to the world. The managing director and e%ecutive
director 6technical7 are full time directors in the board. The secretary of the
industrial development is the chairman. The board meeting of the company
is conducted once is every three moths and it is compulsory that each
department meeting will have to take place in every months as re!uired.
BO%RD O! DIRECTORS:
C*airman S*ri. H.S Sreeniva
+ana0in0 S*ri. V. +)ra(eed*aran Nair
Dovt. Nominee Director
Dovt. Nominee Director
Nominee Director. HSIDC

!)nctiona( de8artment
'e know that in every organization# there are different
departments. These departments perform various functions. They coordinate
men# material and labour for the attainment of organizational objectives. "or
doing each and every work of the company efficiently# the company
directors divide the works into different departments. This help to do each
works in correct way. The object of all departments in the company is to
minimize the coast and to provide good service. &n Travancore Cochin
Chemicals Ltd# there are seven departments. The brief e%planations of these
departments are as follows.
Peronne( de8artment
The Personnel .anager# head of the department directly
reports to the .anaging /irector. 'elfare $fficer and Personnel $fficer
reports directly to the Personnel .anager. The department has five
permanent administrative staff. The Personnel department manages all the
employee related activities in TCC Ltd# e%cept training.
!)nction o' Peronne( De8artment:
o <ecruitment
o .anpower Planning.
o 'elfare "unctions including @tatutory and Gon@tatutory 'elfare.
o Crievance handling as per the provision of &ndustrial /ispute 0ct
and as per the "actories 0ct.
o .aintain /iscipline.
o .aintain &ndustrial <elations and Public <elations.
o Dob specification.
o @taffing.
o Performance 0ppraisal.
o 'age and @alary 0dministration.
o Ceneral 0dministration.
")man Reo)rce De8artment
)uman resource is considered as most vital asset of an organization.
TCC Ltd provides a well defined employee power. &t helps the organization
to perform well in the market. )uman <esource /epartment is headed by the
)</ .anager# who organizes the training program for workers and
managerial staff.
T*e +ain ')nction o' t*e de8artment are9
&dentifying training needs.
&mportant the re!uired training.
.anaging the training records.
PRODUCTION DEP%RT+ENT
The production department is the most important departments of TCC
Ltd. This department carries out the manufacturing of all the products. The
company carries out continuous production and hence this department plays
a very crucial role in TCC Ltd. This department is headed by the production
manager is in charge of the production activities of the company. )e
overseas the production process and ensures the optimum utilization of raw
materials to produce the ma%imum output. The efficient functioning of this
department helps to minimize the cost and increase the profit of the
company.
!UNCTIONS O! PRODUCTION DEP%RT+ENT
.a%imize the production and confirming to product
specification.
<educe non confirming products.
.a%imize the availability of electrolyze operation.
$ptimizing the specific consumption of electricity# furnace
and purification chemicals.
.inimize the production overheads.
+ar4etin0 De8artment
TCC Ltd is only the Chlor0lkali unit in kerala and the only one in
the public sector has more or less a monopoly in kerala market. )owever# in
a nationwide# there are about 4R competitors. TCC Ltd regards customer
satisfaction as the main factor# which is given prime importance. They
maintain close contact with the customer and collect their views and
feedback about the products.
!inance De8artment
TCC Ltd has an efficient "inance department headed by the
"inancial .anager# who is assisted by an 0ssistant "inancial .anager.
"inance .anager is responsible for shaping the fortunes of the company#
preparing budgets# raising funds# keeping different accounts etc. there is a
.anagement &nformation @ystem 6.&@ @ystem7 to assist the "inance
department. -ach cash payments and receipt are stored in a computer. The
"inance department itself is divided into different sections like general
accounts# costing# bills# establishments and provident fund accounts section
etc. each section should be provided its own functions in a correct way.
!)nction o' !inance De8artment:
.aintain financial book keeping and "inalization of accounts.
.aintain Treasury operations.
.aintain Cost records.
.aintain .anagement &nformation @ystem and Corporate Planning.
+ateria( De8artment
.aterial is an important factor of production. .aterials
department of TCC Ltd plays an important role in reducing cost and
increasing the profit. Coing with the technical changes# it has a
computerized purchases inventory control system. The main materials used
in the industry are given a ten digit code to avoid comple%ities in handling.
The .aterials department is divided into two sections. They are the
following9
a7 Purchase /epartment
The department handles the Purchase activities of TCC Ltd.
The various raw materials needed for production are procured by this
department. The materials are purchased at the right time and in right
!uantity from the supplier. .aterials are procured as per the re!uest of
&nventory control section.
b7 @tore and &nventory Control /epartment
@tore /epartment stores the raw materials if about IRRR
items stored which include raw materials# chemicals# electronic goods#
e!uipments# spare parts# electrical items etc. the various items are given
ten digit codes for easy handling. There has a computerized system of
materials handling.
&nventory control is an essential function of @tore department. &t
helps to reduce cost and increase profit of an organization. &f material is
not coded# certification is done by /eputy .anager &nventory Control
6/.&C7. "or controlling the inventory# certain levels of inventory such
as ma%imum# minimum and reorder level is prepared. 'hen the stock
reaches the reorder level# purchase re!uest is made.
Tec*nica( De8artment
The department is headed by .anager Technical @ervices
6.T@7. Technical department provides four major sections. They are the
following9
Technical @ervice @ection.
Pollution Control @ection.
"ire and @afety @ection.
Auality Control @ection.

+ajor C)tomer o' TCC Ltd
)industan Lever LimitedCochin# +erala.
&ndian <are -arths LtdUdyogamandal# +erala.
Tamil Gadu Paper .ills Limited Pugalur# Tamilnadu.
Pigments &ndia Ltd.# Chalakudy# +erala.
&ndian $il Corporation# -rnakulam# +erala.
.ysore paper .ills Ltd.# =hadravathy# +arnataka.
"ertilizers K Chemicals Travancore Ltd.# -rnakulam# +erala.
Travancore Titanium Products Ltd.# Trivandrum# +erala.
+erala .inerals K .etals Ltd.# +ollam# +erala.
)industan Finc Ltd 60ll Units7.
)indalco. Ltd -rnakulam# +erala.
)industan Gewsprint Limited# +ottayam# +erala.
+erala Chemicals K Proteins Ltd.# Cochin# +erala.
)industan $rganic Chemicals Ltd.# 0mbalamugal# +erala.
+erala 'ater 0uthority Trivandrum# +erala.
)industan &nsecticides Ltd.# Udyogamandal# +erala.
Cochin .inerals K <utiles Ltd.# 0luva# +erala.
Gational Thermal Power Corporation 60ll Units7.
=inani Finc Limited# -dayar# +erala.
@teel 0uthority of &ndia Limited# 60ll Units7.
+arnataka @oaps K /etergents# .ysore# +arnataka.
Guclear "uel Coporation )yderabad# 0ndra Pradesh.
+udramukh &ron $re Ltd.# .angalore# +arnataka.
CTG Te%tiles )yderabad# 0ndra Pradesh.
+ochi <efineries Ltd.# -rnakulam# +erala.
+ajor Com8etitor o' TCC Ltd
0dul Ltd# 0hmadabad.
=ilt chemicals Ltd# Gew /elhi.
Century <ayon(s Ltd# Gew /elhi.
Chem "ab 0lkali(s Ltd# Pondichery.
Chemplast &ndustries Ltd# Chennai.
Chemplast @anmar Ltd# .umbai.
/C' Ltd# .umbai.
Crassim &ndustries Ltd# Gagda# .adhya Pradesh.
Cujarat 0lkalies Chemicals Ltd# Cujarat.
Cujarat )eavy Chemicals# 0hmadabad.
)ukumchand jute and &ndustries Ltd# $rissa
&ndian Petrochemicals Corporation# Cujarat.
&ndian <ayons and &ndustries Ltd# .umbai.
Dayashree Chemicals Ltd# $rissa.
+othari petrochemicals# Chennai.
@aurashtra Chemicals Ltd# Cujarat.
@outhern Petrochemical &ndustries Corporation# Chennai.
@ree <ayalaseema 0lkali(s and 0llied Chemicals# +urnool#
+arnataka.
Tata Chemicals Ltd# Cujarat.
The 0ndhra @ugars# 0ndhra Pradesh.
The Tuticorin 0lkali Chemicals and "ertilizers Ltd#
Tuticorin.
Dro&t* o' TCC Ltd
1PHI 0 continuous Caustic "usion Plant 2R tpd for producing
Caustic @oda flakes
1PHL0 Chlorine Li!uefied plant was added mainly to meet
demand from the new //T plant of )industan &nsecticides Ltd#
-rnakulam.
1PIRProduaction of caustic soda capacity was raised to 3R
tonesMday.
1PI3The Caustic @oda Capacity was raised to new level of 4R
TP/. The company established a new unit for the manufacture of
sodium )ydrosulphate with rated capacity of TP/.
1PIJThe capacity of caustic soda plant was raised to IR tones
per day.
1PJR0 IR TP/ Caustic @oda concentration plant was set up.
1PJH"orth stage e%pansion# a 1RR TP/ Caustic @oda plant was
set up.
1PJIThe company set its own water pumping and purification
station.
1PLR-%ported Commercial )ydrochloric 0cid to Culf countries.
1PL3&nstalled an indigenously developed plant to recover
mercury from effluents.
1PLJ&nstalled )ydrogen firing system in continues Caustic
fusion plant.
1PLL<eplaced Craphite anodes by Titanium anodes.
1PPR=rine /eChlorination unit commissioned.
1PP2<esearch and /evelopment section was set up.
1PP4The company in collaboration with <egional <esearch
Laboratory had set up a pilot synthetic rutile.
1PPIThe company plans to set up a technology for the
production of Caustic @oda collaboration with @0)& Class of
Dapan with a capacity of 1RR TP/.
1PPJThe company commissioned the new membrane
technology on mid Duly 1PPJ with mentioned capacity of 1RR
TP/.
2RRRThe company set up brine purification plant.
2RR12RR2 The Company has commissioned a new continues
Caustic fusion plant.
2RR22RR3 The company has increased its production capacity
of membrane cell plant to 12H TP/.
2RR42RRH 0dditional for either metric tones membrane cell
process 2H TP/.
2RRH2RRI 0n additional capacity of 2H TP/ added to the
membrane cell process.
%C"IEVE+ENTS O! TCC LTD
TCC Ltd is always at first to adopt and incorporate the latest
technology in its plants. @everal innovations and modernizations were
implemented to achieve high productivity# energy conservation#
environmental control etc. TCC Ltd was best owned with various awards for
an e%cellent performance with regard to production. Productivity# energy
conservation and environmental protection which is considered as an award
for commitment rather than for efficiency.
1PL1 =est Performance 0ward for @afety in the @tate from
/irectorate of "actories K =oilers# Covernment of +erala
1PLLLP =est Pollution Control 0ward under group
>)eavy &norganic &ndustries> in +erala# from +erala @tate
Pollution Control =oard
1PLP 0ward for =est Performance in @afety in &ndia under
>Chemical &ndustries> group from Gational @afety Council.
1PLPPR Prize for Productivity from +erala @tate
Productivity Council.
1PP3 =est Performance award for -nergy Conservation in
the @tate of +erala under group >Chemical K "ertilizers ;
above 3RRR +E0> from Covernment of +erala.
1PP4PH =est Performance award for the Productivity in
the @tate of +erala under group >Large &ndustries> from
+erala @tate Productivity Council.
1PPHPI =est Performance award for Productivity in the
@tate of kerala under group >Large &ndustries> from +erala
@tate Productivity Council.
1PPL =est performance award for -nergy Conservation in
the @tate of +erala under group >.ajor &ndustries> from
-nergy .anagement Centre# Covt.of +erala.
1PPL Performance award for -nergy Conservation under
group >Chloralkali @ector>. .inistry of Power#
Covernment of &ndia.
2RR3 +erala @tate -nergy Conservation 0ward 62RRR7 in
the category of Large @cale &ndustry.
2RRH Gational -nergy Conservation 0ward >Chloralkali
@ector>.
2RRL =est pollution control award from +erala Pollution
Control =oard.
!UTER PL%NS O! TCC LTD
TCC Ltd is in process of setting up a power project on its own
electricity# one of the raw materials needed for the company. &t contributes to
about IRQ of the production cost. The company would like to go for cheaper
sources of power and insulate itself from the future tariff hikes of the electric
supply utility. 0 hydel power project is under consideration at present.
/ue to the high demand of the products# the company is planning to
increase the production capacity HR tones per day. &n additional to the usual
products TCC Ltd is planning to produce @odium Chlorate and @ponge &ron.
These products have high demand in the market. The main byproduct of the
company is )ydrogen. TCC Ltd is planning supply this )ydrogen to "0CT.
The company is also planning to start a distilled water system within the
company.
The &T sector of the world is developing in a fast way. TCC Ltd is
going to become a part of it. The company is going to start an &T park and
community centers with the cooperation of the Panchayath 0uthority. The
construction works are in progress.
PRODUCT PRO!ILE
TCC Ltd(s main raw materials are common @alt 6@odium Chloride7#
-lectricity and water. The company re!uires about 3JRR units of electricity
and 1.J2 saltMtone of Caustic @oda produced. Common @alt is mainly
procured fro Cujarat and Tamilnadu.
Caustic @oda 1JH tonesMday
@odium )ypochlorite 4H tonesMday
Commercial )ydrochloric 0cid 3LJ tonesMday
Caustic soda "lakes 1RR tonesMday
Li!uid Chlorine J2 tonesMday
Prod)ct -
Ca)tic Soda Lye JN%O"K
Caustic soda is basic alkali. &t came into being in the later half of
1P
th
century with the development of -lectrolysis. Caustic @oda Lye
obtained .embrane Cells# 0 clear colorless# odorless and soapy li!uid. TCC
Ltd is producing two types of Caustic @oda lye of concentration 3R33Q and
4LQ.
Ue:
M &n bleaching# dyeing and mercerizing.
M "or processing of monazite and refining of =au%ite.
M 0 purification agent and absorbent of acidic gases.
M 0 cleaning agent.
M "or refining petroleum fractions.
M <eagent for production of various organic chemicals.
S8eci'ication La ->>I baiA
@odium carbonate as Ga2C$3 Q by mass.6.a%7 9 R.12
Chloride as GaCl Q by mass.6.a%7 9 R.R1
&ron as "e ppm by mass 9 R.IR
S8eci'ication La 6>I baiA
@odium hydro%ide as Ga$) Q by mass 9 4JHR
@odium Carbonate as Ga2C$3 Q by mass6.a%7 9 R.1L
Chloride as GaCl Q by mass 9 R.R1H
&ron as "e ppm by mass 9
1.RR
Prod)ct 1
Sodi)m "y8oc*(orite
@odium )ypochlorite is known as @oda =leach finds its
application in bleaching and disinfectant and also in the e%traction of race
chemicals. &t is a pale yellowish green co lour li!uid. @oda =leach is the only
branded product that is produced by the company# the brand name is
*-coclean,.
Ue:
"or sterilization.
0s a bleaching agent.
0s a germicide and cleaning agent.
Pale yellowish green clear li!uid
0vailable Chlorine gpl 6.in7
9 11R
-%cess 0lkalinity as Ga$) gpl 6.in7 9 1R ; 1H
Prod)ct 3
Li/)id C*(orine
Chlorine# a coproduct obtained in the process of
manufacture of Caustic @oda is a chemical used for the manufacture of
plastics# various organic and inorganic chemicals# petrochemicals# te%tiles#
paper# insecticides# and pharmaceuticals. &t is the traditional water
purification agent. Chlorine and chlorine compounds in pharmaceutical
industry has served billions of life since its discovery and use.
Ue:
1 =leaching agent.
1 "or the manufacturing of PEC and allied Copolymers.
1 Purifying drinking water and sterilizing sewage effluents.
1 "or upgrading Titanium content in illuminate.
1 Producing insecticides like //T# =)C etc and pesticides like 0ldrine.
Chlorine Q by vol 6.in7 9 PP.L
.oisture ppm by mass 6.a%7 9
1HR
Prod)ct 5
Commercia( "ydroc*(oric %cidJ"CLK
The company also produces high purity )ydrochloric 0cid# which is
used for $ssien# fertilizers etc. )ydrchloric 0cid U)C&V finds its application
in a number of chemical industries such as mineral processing# gelatin# food
industry# water treatment etc. it also serves the industries like engineering#
starch and plastics. &t is a yellowish green colour li!uid.
Ue:
O 0 cleaning in Calvanizing.
O "or the manufacture of PEC.
O "or hydrolyzing starch into sugar.
O "or the production of 0mmonium Chloride and in the manufacture
of Phosphoric 0cid.
Prod)ct 6
Ca)tic Soda !(a4e
Caustic @oda "lakes 6&@ 2H2M1PP17
'hite deli!uescent solid in flakes form



@odium hydro%ide as Ga$) Q by mass 6.in7 9 PP.HR
@odium Carbonate as Ga2C$3 Q by mass.6.a%7 9 R.4R
Chloride as GaCl Q by mass6.a%7 9 R.1R
&ron as "e ppm by mass6.a%7 9
2R


RESE%RC"
+ET"ODOLOD#
Reearc* met*odo(o0y
<esearch is a scientific and systematic search for pertinent information on a
particular topic. &t is careful investigation or in!uiry# especially through search for new
facts in any branch of knowledge. 0 well planned research methodology could be well
defined and the cause# if any could be known and solved.
The purpose of research is to discover answers to !uestions through the
application of scientific procedures. The main aim of research is to find out the truth
which is hidden and has not yet discovered. There are two types of methods of data
collection.
%RE% O! T"E STUD#
The area of study strictly limited to T<0E0GC$<- C$C)&G
C)-.&C0L@ situated in kerala
The financial data(s are obtained from the annual reports that are published
by the company.
The study has to be done for a period of five years analysis of financial
statements commencing from 2RRH2RRI to 2RRP2R1R
D%T% COLLECTION
/ata used under this study is @-C$G/0<B /0T0 .The secondary data are those
which have already been collected by some other agency and which have already been
processed. @econdary data are information which has previously been used by the
department under reference for an entirely different reason.
& have collected the secondary data from the company in the form of their annual
report for do the study.
Primary data: @
/ata is collected through personal interviews with company
officers.
Secondary data:@
@econdary data is collected through published records of the
company like balance sheet and annual reports and magazines and journals.
Period o' t*e t)dy:@
The topic *operational efficiency and profitability, with
reference to TCC Ltd is made on the basis of information abstracted from
the annual reports of the company for a period ofH years.
TOOLS USED !OR T"IS STUD#
The tools used under this study are
+ Comparison of "inancial statements
+ <atio analysis
+ Trend analysis

!IN%NCI%L ST%TE+ENTS
"inancial statements are records that provide an indication of an
individual(s# organizations# or business( financial status.
There are four basic types of financial statements9
=alance sheets.
PKL 0ccount.
Cashflow statements.
@tatements of retained earnings.
Typically# financial statements are used in relation to business endeavors
R%TIO %N%L#SIS
Cenerally an absolute figure conveys no meaning. 0 figure may become meaningful if it is
compared with some other information. @imilarly# the absolute figures appearing on the
financial statements. -ither the profitability statement or the balance sheet may not give the
!ualitative indication regarding the financial position or performance of an organization
which may be available if the accounting figures appearing in the financial statement can be
compared with each other.
-.g. &f the profitability statements disclose the amount of <s. 1 lakh as the net profit# it
appears to be a good performance but this information is supported by the fact that the sales
turnover during the corresponding period was <s. 1R crores. &t can be immediately concluded
that the performance of the organization is not all that fabulous# as the net profit as a
percentage of sales turnover is only R.R1Q the comparison on one hand and sales turnover on
the other hand gives a !ualitative indication about the performance of the organization. )ere
comes in to the picture the techni!ue of W<atio 0nalysis(.
The term ratio implies arithmetical relationship between two related figures. The
techni!ues of ratio analysis as a techni!ue for interpretation of financial statements deals
with computation of various ratios# by a grouping or regrouping various figures andMor
information appearing on the financial statements 6 either profitability statements or
balance sheet or both7 with the intention to draw the fruitful conclusions there from.
Inter8retation o' Ratio
The ratios calculated on the basis of grouping and regrouping of the figures
appearing on either profitability statement or balance sheet or both# may not all by
themselves mean anything. Unless they can be compared with some yardstick. The
yardstick with which the ratios can be compared may be in following three forms9
17 The ratios of one organization may be compared with the ratio of the same
organization for the various years# either the previous year or the future years.
This may be in the form of *&ntra firm comparison,.
27 The ratios of one organization may be compared with the ratios of the other
organization in the same industry and such comparison will be meaningful as the
various organizations in the same industry may be facing similar kinds of
financial problems. This may be in the form of *&nter firm comparison,.
37 The ratios of an organization may be compared with some standards which may
be supposed to be thumb rule for the evaluation of the performance. -.g. if the
comparison of current assents and current liabilities of an organization is to be
made# the result of 291 i.e. two rupees of current assets for one rupee of current
liabilities is supposed to be ideal. The position as reflected by the actual current
assets and current liabilities may be compared with this standard to evaluate the
performance of the organization.
C(ai'ication o' ratio:@
The ratio may be classified under various ways which may use various companies
to do the same. )owever# for convenience purposes# we will classify the ratios under the
following groups9
TREND %N%L#SIS
Trend analysis is a form of comparative analysis that is often
employed to identify current and future movements of an investment or
group of investments. The process may involve comparing past and current
financial ratios as they related to various institutions in order to project how
long the current trend will continue
0n aspect of technical analysis that tries to predict the future
movement of a stock based on past data. Trend analysis is based on the idea
that what has happened in the past gives traders an idea of what will happen
in the future
the e!uation of trend analysis is
B : a X bY
'here a : ZB N b : ZYB
n ZY
2
D%T% %N%L#SIS
%ND
INTERPRET%TION
Primary (eve( cotin0
Ra& materia(
Ca)tic oda (ye

The cost of raw material for producing one mt of caustic soda lye
is described below
Tab(e no: -
@tatement showing the raw material cost for
producing 1mt of caustic soda lye 2RRJ2RRL
Ra& materia( CotM)nitLRA Unit )ed
'or -mt
ca)tic
oda
(yeLH0A
Tota(
cotLRA
Common a(t -.5;9 -;1.> 163<.;1
Soda a* --.;<5 <.3- =;.=16
Bari)m
carbonateLH0A
-9.<3< -1.5; 1>=.=9=
Sodi)m
*ydro7ideLH0A
1.363 16 6<.<16
"ydroc*(oric
acidLH0A
-.5>> 3>.3< 51.631
Sodi)m
bi)(8*ate
1;.<>3 - 1;.<>3
Tota( 1=;6.;;5
Tab(e no: 1
@tatement showing the raw material cost for producing 1mt of caustic soda
lye 2RRL2RRP

<aw materials
CostTunit6<s7 Unit used for 1mt
caustic soda
lye6+g7
Total cost6<s7
Common salt 1.44H 1J2.R 24LH.4
@oda ash 1H.24L L.31 12I.J1
=arium
carbonate6+g7
1J.1PP 12.4J 214.4J1
@odium
hydro%ide6+g7
2.433 2H IR.L2H
)ydrochloric
acid6+g7
1.422 3R.3L 43.2RR
@odium
bisulphate
2P.L33 1 2P.L33
Total 2PIR.43P

Tab(e: 3
@tatement showing the raw material cost for producing 1mt of
caustic soda lye 2RRP2R1R
Ra&
materia(
CotM)nitLRA Unit )ed
'or -mt
ca)tic
oda
(yeLH0A
Tota(
cotLRA
Common a(t
-.5;9 -;1.> 163<.;1
Soda a*
--.;<5 <.3- =;.=16
Bari)m
carbonateLH0A
-9.<3< -1.5; 1>=.=9=
Sodi)m
*ydro7ideLH0A
1.363 16 6<.<16
"ydroc*(oric
acidLH0A
-.5>> 3>.3< 51.631
Sodi)m
bi)(8*ate
1;.<>3 - 1;.<>3
Tota(
1=;6.;;5
Inter8retation
.aterial cost is one of the major cost of production of a product.
)ere the material cost is increasing in the year 2RRP2R1R the material cost
has been increased more than proportionately from the previous year.
.aterial cost is increasing because of the cost of common salt is increasing.
&t is the major raw material and needed large !uantity.
Table no9 4
@tatement showing the cost of power for producing 1mt of
caustic soda lye 2RRJ2RRL
<aw material CostTunit Unit used for
1mt of
caustic soda
lye6+g7
Total cost
-lectric city 3.4H 2JRR P31H
"uel 1I.2R1 2L.4P 4I1.HII
Total PJJI.HII
Cot o' 8o&er
Tab(e: 6
@tatement showing the cost of power for producing 1mt of
caustic soda lye 2RRL2RRP
<aw material CostTunit Unit used for Total cost
1mt of
caustic soda
lye6+g7
-lectric city 3.69 1;>> =-1
"uel -=.3=1 1<.5= 661.5;
Total ->-95.5;
Tab(e no:9
@tatement showing the cost of power for producing 1mt of
caustic soda lye 2RRP2R1R
<aw material CostTunit Unit used for
1mt of
caustic soda
lye6+g7
Total cost
-lectricity 3.J4 2JRR 1RRPL
"uel 2H.3PL 2L.4P J2J.IH
@team R.PRH R.RLR R.RJ24
Total 1RL2H.J2
Inter8retation
The cost of power shows an increasing trend. &t is mainly because
of the increase in the unit cost of electricity and fuel charges have been
increasing from the previous years.
+an 8o&er
Labour cost refers to all labour e%plained in altering the
construction# composition# conformation or condition of the product. That
who is directly engaged on the production or in the carrying out of an
operation or process is called direct labour. The wages paid to the direct
labour is called direct wages.
Tab(e no: ;
@tatement showing the labour cost for producing 1mt
caustic soda lye.
year Direct &a0e2)nitLRA
1>>;@1>>< 3;9.=<
1>><@1>>= 1=5.35
1>>=@1>-> 555.61
Inter8retation
.an power cost in the latest years has been increased as compared
to the last year it is because of the man hours worked has been increased also
the production. =ut in the year 2RRL2RRP the labour cost is less compared to
the previous years. 0s the man power cost increase it will reflect in the
production cost.
+aintenance cot
.aintenance cost includes maintenance cost of building plant and
machinery# and other production facilities. The maintenance cost incurrent in
Producing one mt of caustic soda Lye is shown under.
Tab(e no: <
@tatement showing the .aintenance depreciation for
producing imt caustic soda lye.
Ra& materia( 1>>9@>;LRA 1>>;@><LRA 1>><@>=LRA
B)i(din0 116.-9 31<.9; 1<;.93
P(ant
mac*inery
939.3> 65;.16 63<.;<
Ot*er --;.5; 119-.96 15=.95
De8reciation -516.=5 -5>6.6= -<11.;;
TOT%L 15>5.<; 5653.-9 1<=<.<1
Inter8retation
.aintenance cost in the year 2RRJRL is very high as compared
to the previous yeares.=ot in the years 2RRLRP the maintenance cost has
been decreased. &n the case depreciation it has been increased.
Over*ead cot
$ver head cost includes the work over head and administrative
over head includes all indirect cast incurred for operation of manufacturing
or production division in a factory. 0dministration over head is the sum of
those costs of general management# secretaries# accounting# and
administrative services# which cannot be directly related to the production#
marketing research or development function of enterprise.
Tab(e no: =
@tatement showing the over head cost for producing 1mt of
caustic soda lye.
Partic)(ar 1>>;@1>>< 1>><@1>>= 1>>=@1>->
'ork over head 1936.2R 22P2.43 324P.34
0dministrative
over head
I41.LH HP2.2H P2I.R4
Tota( 32JJ.RH 2LL4.IL 41JH.3L
Inter8retation
$ver head cost in the year 2RRL2RRP# the over head cost very less
as compared to the other two years. &n the year2RRL2R1R# the over head cost
is high because both the work over head and administrative over head has
increased.

Cot o' 8rod)ction
Cost of production includes all the cost relating to production.
&t includes material cost# fuel cost# maintenance cost etc... The following
statement shows the cost of production for last three years.
Tab(e no: ->
@tatement showing the cost of production for producing
1mt of caustic soda lye.
Bear
Cost of production
2RRJ2RRL 1LL11.23
2RRL2RRP 2RLPJ.RL
2RRP2R1R 22IH4.JR
Inter8retation
Cost of production shows an increasing trend. &t is mainly
because of the material cost# power cost and employee cost are increasing
and it is reflected in the cost of production. The company has to decrease the
cost of production make a favorable return.
Cot o' a(e
Cost of sales includes the cost of purchasing raw materials and
manufacturing finished goods is e!ual to the beginning inventory plus the
cost of goods purchased during period minus the ending inventory. &t is also
called as cost of goods sold. The following statement shows sales for the last
three years.
Tab(e no: --
@tatement showing the cost of sales for producing 1mt of
caustic soda lye

Particulars 2RRJ2RRL 2RRL2RRP 2RRP2R1R
Cost of production
Less
Credits6from wastage K by producer7
0dd
@elling off
0dd
&nterest and financial charges
Cost of sales
1LL11.23
I324.PH
13I
14I4.R3
14RLI.31
2RLPJ.RL
J3JI.H2
1P2.RJ
H4I.34
142HL.PJ
22IH4.JR
4LP4.J4
2RR.R1
13R3.LR
1P2I3.JJ

Inter8retation
Cost of sales includes cost of production plus selling e%penses and
interest and financial charges. Cost of sales has been increased more than
proportionately in the year 2RRP2R1R. The company has to control the cost
of sales to increase the profit. The company has to make necessary steps to
control the cost of sales.

PRO!IT
Profit generally is the making of gain in the business activity for the
benefit of the owners of the business. The word comes from Latin meaning
*to make progress,. )ere profit is the difference between the cost of sales
per unit and selling price per unit.
Tab(e No: -1
Bear Cost of saver
unit6<s7
@ales
realization
unit6<s7
-%cise duty
and other
statutory
charges6<s7
Profit6<s7
2RRJ2RRL 14RLI.31 1PR4L.PL 2IPH.11 22IJ.H4
2RRL2RRP 142HL.PJ 1LJ1R.PJ 23HL.RJ 2RP3.L1
2RRP2R1R 1P2I3.JJ 22HR3.1P 31HJ.2I L2.1I

Inter8retation
Profit shows a decreasing trend in the year 2RRP2R1R it has
been decreased to L2.1I from 2RP3.L1 in the previous year. &t is because of
the cost of production and cost of sales has been increased. 0s it is the main
product of the company they have to make necessary steps to maintain
profit.
C%USTIC SOD% !L%HES
<aw material
The cost of raw materials for producing one .t of caustic soda
"lakes is described below9
Tab(e No: -3
Ra& materia( Cot 8er
)nitLRA
Unit )ed 'or
-mt o' ca)tic
oda '(a4eLH0A
Tota(
cotLRA
Caustic @oda lye6+g7 12.4J PLR 12221.23
Process Chemicals R.I14 1J.3H 1R.IJ
Total 12232.1R
Tab(e No: -5

@tatement showing the raw material cost for producing 1mt of
caustic @oda "lakes 2RRL2RRP.
<aw material CostTunit Unit used for 1mt Total Cost6<s7
Caustic @oda
"lakes
Caustic @oda Lye 6+g7 13.JP PLR 13H2R.HI
Process Chemicals R.2P 1J.3H H.2R
Total 13H2H.JI
Tab(e No: -6
@tatement showing the raw material cost for producing 1mt of
Caustic @oda "lakes 2RRP2R1R
<aw materials Cost per unit Unit used for 1mt
of Caustic @oda
"lakes 6<s7
Total cost
Caustic @oda lye 1J.JL PLR 1J432.JP
Process
chemicals
R.HI 1J.3H 3R.JR
Total 1J4I3.4P
Inter8retation

The material cost has been increased more than proportionately
in the year 2RRP2R1R. &t has been increased from 13H2H.JI to 1J4I3.4P. &t
has mainly due to the cost of Caustic @oda and Process Chemicals has been
increased.

Po&er
Tab(e no: -9
@tatement showing the cost of power for producing 1mt of
caustic soda flakes 2RRJ2RRL.
Particulars Cost per unit Unit used for 1mt of
caustic soda flakes 6+g7
Total cost6<s7
-lectricity 3.4H 1JL.RJ I14.34
"uel 1I.2R11 13H.H3 21PH.J2
Total 2L1R.RI
Tab(e no: -;
@tatement showing the cost of power for producing 1mt of
Caustic @oda "lakes 2RRL2RRP.
Particulars Cost per unit Unit used for 1mt
of caustic soda
flakes 6+g7
Total cost6<s7
-lectricity 3.HI 1JL.RJ I33.P2
"uel 1P.3P2 13H.H3 2I2L.1PJ
Total

Tab(e no: -<
@tatement showing the cost of power for producing 1mt of
Caustic @oda "lakes 2RRP2R1R.
Particulars Cost per unit Unit used for 1mt
of caustic soda
flakes 6+g7
Total cost6<s7
-lectricity 3.J4 1JL.RJ III.R1
"uel 2H.3PL 13H.H3 3442.2R
@team R.L4H P3.32 JL.LI
Total 41LJ.RJ
Inter8retation
Cost of power has also increased in the year 2RRP2R1R the cost
has been increased to 41LJ.RJ. &t is mainly because of the cost fuel has been
increased in the year 2R1RN the company has introduced steam as the one of
the power source.
+%N PO$ER

Labour cost refers to all labour e%pected in altering construction#
composition# conformation or condition of the product. These who are
directly engaged on the production or in the carrying out of an operation or
process are called direct labour. The wages paid to the direct labour is called
direct wages.
Tab(e no: -=

@tatement showing the labour cost for producing 1mt of caustic
soda flakes.
Bear /irect wages 6<s7
2RRJ2RRL JJ.H2
2RRL2RRP 2R4.JI
2RRP2R1R 1RR.LH
Inter8retation
&n the year 2RRL2RRP the employee cost has been increased
compared to the previous year. =ut in the year 2RRP2R1Rit has been reduced
to 1RR.LH. That has to continue action to reduce the employee cost.
+%INT%N%NCE COST
.aintenance cost includes maintenance cost of
building plant and machinery and other production facilities. The
maintenance cost incurred in producing 1mt of caustic soda lye is shown as
under.
Tab(e no: 1>
@tatement showing the maintenance cost Kdepreciation for
producing 1mt of caustic soda flakes.
Particulars 2RRJ2RRL 2RRL2RRP 2RR2R1R
=uilding L1.11 P2.P1 112.1H
PlantKmachinery 3JJ.LL 3HI.33 2JI.RL
$thers 42.31 I2.IH PJ.3I
/epreciation 1RLI.J4 1224.2P 1R31.RH
Total 1HLL.R4 1J3I.1L 1H1I.14
Inter8retation

.aintenance cost has increased in the year 2RRL2RRP. it is
increased to 1H1I.14# in the year 2RRP2R1R it shows that the company has
taking necessary steps to reduce the maintenance cost so that they can
reduce the cost of production. The depreciation has also reduced from the
last year.
OVER "E%D COST

$ver head cost includes the work overhead cost and
administrative over head cost. 'ork overhead includes all indirect cost
incurred for operation of manufacturing or production division in a factory.
0dministration over head is the sum of those costs of general management
secretarial# accounting and administrative services# which cannot be directly
relayed to the production# marketing# and research or development function
of the enterprise.
Tab(e: 1-
Particulars 2RRJ2RRL6<s7 2RRL2RRP6<s7 2RRP2R1R6<s7
'ork overhead H3P.LI ILL.3L J3I.IL
0dministrative
overhead
13J.RH 2RI.H3 21I.4R
Packing cost 3H2.HH 34I.1H 34I.HI
Total 1R2P.4I 1241.RI 12PP.I4
Inter8retation
The overhead cost includes the work over head cost and
administrative overhead. Packing post shows a decreasing trend. The
packing cost is decreased to 34I.HI. &t shows a good management of the cost
reduction.
Tab(e no: 11
@tatement showing the cost of production.
Bear Cost of production
2RRJ2RRL 1JJ2I.H1
2RRL2RRP 1PPIP.LJ
2RRP2R1R 24HIJ.IP
Inter8retation

Cost of production includes all the cost relating to production. &t
includes material cost# fuel cost# over head costN maintenance cost etc.The
cost of production has been increased from the previous years. The company
has to reduce the cost of production to increase the profit.
COST O! S%LES
Cost of sales includes the cost of purchasing raw material and
manufacturing finished goods e!ual to the beginning inventory plus the cost
of goods purchased during period minus the ending inventory. &t is also
called as cost of goods sold. The following statement show cost sales for the
last three years.
Tab(e no: 13
@tatement showing the cost of sales
Partic)(ar 1>>;@1>>< 1>><@1>>= 1>>=@1>->
Cot o' 8rod)ction
-;;19.6- -==9=.<; 1569;.95
Le: creditL'rom
&ata0e E by 8rod)ct
39.;> =-.-1 95.<6
%dd :e((in0 O" -3<.-1 1>=.-< 159.-;
%dd :interetE'inancia(
c*an0e
-=93.91 =56.9< 1-9=.9=
Cot o' a(e -=;=-.66 1->33.9- 19=-<.;>
Inter8retation

Cost of sales includes cost of production plus selling e%penses and
interest and financial charges. Cost of sales has been increased more than
proportionally in the year 2RRP2R1R. The company has to control the cost of
sales to increase the profit. The company has to make necessary steps to
control the cost of sales.
PRO!IT2LOSS
Profit generally is the making of gain in business activity for
the benefit of owners of business. The word comes from Latin meaning *to
make progress,# )ere profit is the difference between the cost of sales per
unit and the selling price per unit.
Table no9 24
@tatement showing the profitMloss
#ear Cot o' a(e
8er )nitLRA
Sa(e
rea(iGation2)nitLRA
Le:
E7cie
d)tieEo
t*er
c*ar0eL
RA
Pro'it2(o
1>>;@1>>< -=;=-.66 -=356.99 33=;.>3 L1=6-.-5A
1>><@1>>= 1->33.9- 1>3;<.>; 5995.;- L5>>=.-;A
1>>=@1>-> 19=-<.;> 1;9=<.;> 1-=5.=> L1=;5.66A
Inter8retation
The product gives a continues loss. The loss has been increased to
4RRP.1J. but in year 2RRP2R1R. it has been reduced to 2PJ4.HH. it shows
that the company is making arrangements to reduce the over all cost and to
reduce the loss.
%N%L#SIS O! $ORHIND C%PIT%L
1. C<$@@ '$<+&GC C0P&T0L

Cross working capital represents the amount of funds
invested in current assets. Thus# gross working capital is the capital is the
capital invested in total current asset of the enterprise.
Table no9 2H
@tatement showing the gross working capital <s in Lakh.
#E%R N N
1
Cross
working
capital LR A
#
N#
(RH ; WRI 2 4
2HLL.JH
H1JJ.H
(RI ; WRJ 1 1
3HJI.RI
3HJI.RI
(RJ ; WRL R R
3J1J.33
R
(RL; WRP 1 1
34HJ.23
34HJ.23
(RP ; W1R 2 4
3I3I.4H
J2J2.P
T$T0L 1R 1IPJH.L2 1PJI
a : 1IPJH.J2 : 33PH.144
H
b : 1PJI : 1PJ.I
1R
Inference:
The table shows that the company(s Cross working capital will be increased
from the beginning year.
Cross working capital value in 2011 will be about 3987.47
1. NET $ORHIND C%PIT%L
&n narrow sense# the term working capital refers to the net
working capital. Get working capital is the e%cess of current asset over
current liabilities.
Get working capital:Current asset ; current liabilities
Tab(e no: 19
@tatement showing Get working capital

Bear Current asset Current liabilities Get working
capital
2RRH2RRI 2HLL.JH HRI3.P3 24JH.1L
2RRI2RRJ 3HJI.RI HLHP.42 22L3.3I
2RRJ2RRL 3J1J.33 HHL3.33 1LII.RR
2RRL2RRP 34HJ.23 H4J3.L3 2R1I.IR
2RRP2R1R 3I3I.4H 4JR1.13 1RI4.IL
Total 1IPJH.L2 2IIL1.I4 PJRH.L2
Inter8retation

Get working capital over the five years shows a negative balance.
This indicates current assets are not sufficient to payoff claims against them
so we can interrupt that the company is suffering from inade!uate working
capital.
Tab(e no: 1;
@tatement showing share of inventory gross working capital
Bear &nventories Cross working
capital
&nventories to
gross working
capital ratio6Q7
2RRH2RRI I44.1P 2HLL.JH 24.LL
2RRI2RRJ PIJ.RR 3HJI.RI 2J.R4
2RRJ2RRL 1R44.P1 3J1J.33 2L.11
2RRL2RRP 1R1L.2J 34HJ.23 2P.4H
2RRP2R1R 1HR4.21 3I3I.4H 41.3I
Total H1JL.HL 1IPJH.L2 1HR.L4
0verage 1R3H.J1I 33PH.1I4 3R.1IL
Inter8retation
0verage share of the inventory in gross working capital is 3R.1IL
percent. The share of the inventory in working capital of each year of the
study shows as increasing trend. This nature of inventory has negative
impact of profitability and li!uidity of the studied company.

Tab(e no: 1<

@tatement showing share of debtors in gross working capital
Bear &nventories Cross working
capital
/ebtors to gross
working capital
ratio6Q7
2RRH2RRI PH4.IJ 2HLL.JH 3I.LL
2RRI2RRJ 1RPL.HI 3HJI.RI 3R.J2
2RRJ2RRL 1424.PH 3J1J.33 3L.33
2RRL2RRP 122P.14 34HJ.23 2P.4H
2RRP2R1R PJ4.11 3I3I.4H 2I.JP
Total HIL1.43 1IPJH.L2 1IL.2J
0verage 113I.2L 33PH.1I 33.IH4
Inter8retation
/ebtors share 6average7 in working capital is 33.IH4 Q# which is
the highest of the four component of gross working capital. /ebtors share in
gross working capital fluctuates in each year of study. /ebtors share to gross
working capital is highest in 2RRJ2RRL from that year it shows a decreasing
trend in 2RRP2R1R# it reaches 2I.JP Q. This decreasing trend is good for the
company. &t indicates management(s efficiency in collection of debts.

Tab(e no: 1=
@tatement showing cash and bank balance to gross working capital
ratio
#ear Ca* E ban4
ba(ance
Dro
&or4in0
ca8ita(
Ca* Eban4
ba(ance to
0ro &or4in0
ca8ita( ratio
LIA
1>>6@1>>9 -99.-; 16<<.;6 9.53
1>>9@1>>; -15.-1 36;9.>9 3.5;
1>>;@1>>< -3=.1< 3;-;.33 3.;6
1>><@1>>= --6.19 356;.13 3.33
1>>=@1>-> ->1.5= 3939.56 1.<1
Tota( 95;.31 -9=;6.<1 -=.<
%vera0e -1=.595 33=6.-9 3.=9
Inter8retation

The average share of cash and bank in gross working capital is
3.PI Q. &n the studied fiveyear(s period# share of cash and bank in current
assets fluctuates in each year.
Statement *o&in0 (oan and advance to 0ro &or4in0 ca8ita(
Table no9 3R
Bear Cash K bank
balance
Cross working
capital
Cash K bank
balance to
gross working
capital ratio
2RRH2RRI L23.J2 2HLL.JH 31.L2
2RRI2RRJ 13LI.J2 3HJI.RI 3L.JL
2RRJ2RRL 11RL.1P 3J1J.33 2P.L1
2RRL2RRP 1RP4.HI 34HJ.23 31.II
2RRP2R1R 1RHH.I4 3I3I.4H 2P.R3
0verage 1RP3.JII 33PH.1I 32.22
Inter8retation
The 32.22 Q of gross working capital is contributed by loans
and advances which is third highest components of gross working capital.
The share of loans and advances in gross working capital shows a
fluctuating trend. This trend shows management of loans and advances are
not good. .anagement should take necessary action regarding conversion of
loans advances into absolute li!uid asset.
%na(yi o' *ort term o(vency 8oition
The shortterm solvency position means the ability to
meet current or shortterm obligations as and when they become due.
"or analyzing shortterm solvency of TCC Ltd two types of ratios are
calculated they are
Li!uidity ratios
Current assets movement ratio
%A Li/)idity ratio

Li!uidity ratios are also termed as working capital ratios.
These ratios are used to judge a firm. 0bility to meet shortterm
obligations. The most significant li!uidity ratios are9
-. C)rrent ratio
&t is most widely used ratios for judging li!uidity of a business.
'hich establish the relation between current assets and current liability. &t
measures the shortterm debt. Paying ability of business. 0 good working
capital means a good umbrella for shortterm creditors against rainy day. The
standard norm of the ratio is 291
Current assets
Current ratio :
Current liabilities
Tab(e no: 3-

Statement *o&in0 c)rrent ratio
#ear C)rrent aet C)rrent
(iabi(itie
C)rrent ratio
1>>6@1>>9 16<<.;6 6>93.=3 .6-
1>>9@1>>; 36;9.>9 6<6=.51 .9-
1>>;@1>>< 3;-;.33 66<3.33 .9;
1>><@1>>= 356;.13 65;3.<3 .93
1>>=@1>-> 3939.56 5;>-.-3 .;;
Tota( -9=;6.<1 199<-.95 3.-=
%vera0e 33=6.-9= 6339.1 >.93<

Inter8retation
Table shows that current ratio ranged between .H1to.JJ and an
average of .I3L during the study period. 0pplying the conventional rules# the
position of current ratio during the last five years of the study period was not
good. This suggests that shortterm debt paying capacity was not
satisfactory. The main reason is that in all the five years current liabilities the
company is more than current assets. The company should try to increase
their current assets so that they can easily meet their shortterm obligation.

-. C)ic4 ratio
&t is the ratio of !uick current asset to current liabilities !uick ratio
is the same as the current ratio e%cept that it e%cludes inventorspresumably
the least li!uid portion current asset from the numerator. This is to access the
ability of the business to meet the current liabilities without having to wait
for the manufacturing cycle to be completed and scale to take place for
inflow of cash. 0 ratio of 191 considered to indicate a satisfactory position.
Li!uid assets
Auick ratio :
Current liabilities
Tab(e no: 31
Statement *o&in0 C)ic4 ratio
#ear Li/)id aet C)rrent
(iabi(itie
C)ic4 ratio
1>>6@1>>9 -=55.69 6>93.=3 >.3<
1>>9@1>>; 19>=.>9 6<6=.51 >.56
1>>;@1>>< 19;1.51 66<3.33 >.5<
1>><@1>>= 153<.=9 65;3.<3 >.56
1>>=@1>-> 1-31.56 5;>-.-3 >.56
Tota( --;=;.56 199<-.95 1.1-
%vera0e 136=.5= 6339.1 >.55
Inter8retation
&t is evident from the above tableN the picture from the view point of
conventional standard of !uick ratio was not easy judged by year wise
comparison with average# the li!uid assets were inade!uate to meet short
term debt. &t indicates that the firm did not hold enough funds to meet
current liabilities reflecting inefficiency in li!uidity management. The
greater amount of current liability is the main reason for the low !uick ratio
of the company.
1. %bo()te (i/)idity ratio
The absolute li!uid ratio indicates the immediate li!uidity of
the firm. This ratio is calculated by dividing the total amount of the current
liability. The acceptable norm for this ratio is R.H91
Ca* E mar4etab(e ec)ritie
%bo()te (i/)idity ratio B
C)rrent (iabi(itie
Tab(e no: 33
@tatement showing absolute li!uidity ratio
#ear %bo()te (i/)id
aet
C)rrent
(iabi(itie
%bo()te
(i/)idity ratio
2RRH2RRI 1II.1J HRI3.P3 R.R3
2RRI2RRJ 124.12 HLHP.42 R.R2
2RRJ2RRL 13P.2L HHL3.33 R.R2
2RRL2RRP 11H.2I H4J3.L3 R.R2
2RRP2R1R 1R2.4P 4JR1.13 R.R2
Total I4J.32 2IIL1.I4 R.11
0verage 12P.4I H33I.2 R.R22
Inter8retation
&n the case of TCC# the absolute li!uid ratio fails to reach to norms
192. The ratio is very below the norms. The reason for this is the high current
liabilities# which buts the company into tremendous trouble. The company is
advised to keep a through a check the current assets and liabilities and
maintain ade!uate cash in hand in hard firm.
BA C)rrent aet movement ratio
0ctivity ratios measures the efficiency or effectiveness with
which a manages it resources or assets. &t indicates the speed with which
assets are converted in to sales. &t is important to calculate these ratios to
comment upon the li!uidity position of the company.
-. Inventory t)rn over ratio
&nventory turnover ratio indicates the number of times the stock
has been turned over during the period and evaluates the efficiency with
which a firm is able to manage its inventory.
This ratio helps in determining the li!uidity of a business firm in
as much as it give the rates at which inventories are converted into sales and
there after into cash.
Net a(e
Inventory t)rnover ratio B
%vera0e inventory
Tab(e no: 35
Statement *o&in0 inventory t)rnover ratio
#ear Net a(e %vera0e
inventory
Inventory t)rn
over ratio
2RRH2RRI LLIL.HJ 13I.3P IH.R2
2RRI2RRJ 1RHJJ.3R 1R2.13 1RI.HR
2RRJ2RRL 1232R.IJ 2RL.2P HP.1H
2RRL2RRP P3PR.IR 3RP.LR 3R.31
2RRP2R1R 12RI2.IH 2P3.LR 41.RI
Total H3H1P.JP 1RHR.43 3R2.R4
0verage 1RJR3.PH 21R.RL IR.41

Inter8retation
0verage inventory turn over ratio is IR.4 times. The ratio shows a
fluctuating trend. &t goes on increasing and decreasing after year. "rom the
average ratio. &t is clear that the company(s utilization of inventories in
generating sales is a good. =ut the company(s efficiency in turning its
inventories to sales is fluctuating.
1. Inventory converion 8eriod
This ratio implies the inventoryholding period. 0 high inventory
holding ratio indicates blockup of funds in inventories and increase in
carrying cost resulting in adverse effect on profitability.
Day in a year
Inventory converion 8eriod B
Inventory t)rnover ratio
Tab(e no: 36

@tatement showing inventory conversion period
Bear /ay in a year &nventory
turnover ratio
&nventories
conversion
period
2RRH2RRI 3IH IH.R2 I
2RRI2RRJ 3IH 1RI.HR 3
2RRJ2RRL 3IH HP.1H I
2RRL2RRP 3IH 3R.31 12
2RRP2R1R 3IH 41.RI P
0verage 3IH IR.4R J
Inter8retation
0verage inventory conversion period is only Jdays. &t is
satisfaction one. &t indicates that proper inventory management.
3. Debtor t)rnover ratio
This ratio shows the speed with which debtors are converted
in to cash. &t shows the efficiency of the management in collecting
receivable and the credit policy of the business firm being maintained with
the customers.
Credit a(e
Debtor t)rnover ratio B
Debtor
5. %vera0e co((ection 8eriod ratio
The average collection period represents the average number
of days for which a firm has to wait before its receivable is converted into
cash.
Tab(e no: 39
@tatement showing debtors turnover ratio and average collection period ratio
#ear Net credit Debtor Debtor %vera0e
a(e t)rnover
ratio
co((ection
8eriod
2RRH2RRI LJ4R.R2 PH4.IJ P.1I 4R
2RRI2RRJ 1RJJP.JI 1RPL.HI P.L1 3J
2RRJ2RRL 1223I.H1 1424.PH L.HP 42
2RRL2RRP P2L1.1H 122P.14 J.HH 4L
2RRP2R1R 114RP.II PJ4.11 11.J1 31
Total H244J.1R HIL1.43 4I.L2 1PL
0verage 1R4LP.42 113I.2L P.3I4 3P.I
Inter8retation
/ebtor(s turnover ratio shows an increasing trend for the first two
years of study. 0fter 2RRI2RRJ the ratio fluctuates and in 2RRP2R1R# it
reaches 11.JH it is above the average. This shows that in that year the time
lag between credit sales and collection was short.
The collection period shows of fluctuating trend. The average
collection period is 3P days. -%cept for the 2RRL2RRP of the study.
Collection period is more than 3P days. @uggesting unfavorable situation
from the view point of li!uidity management.
6. $or4in0 ca8ita( t)rnover ratio
'orking capital turnover ratio indicates the velocity of
the utilization of net working capital. This ratio indicates the number of time
the working capital is turned over in the course of a year. The efficiency of
shortterm funds utilized. Can be tested with working capital turnover ratio.
Net a(e
$or4in0 ca8ita( t)rnover ratio B
Net &or4in0 ca8ita(
Tab(e no: 3;
Statement *o&in0 &or4in0 ca8ita( t)rnover ratio
#ear Net a(e Net &or4in0
ca8ita(
$or4in0 ca8ita(
t)rnover ratio
1>>6@1>>9 <<9<.6> L15;6.-<A L3.6<A
1>>9@1>>; -><;;.3> L11<3.39A L5.;>A
1>>;@1>>< -131>.9; L-<99.>>A L9.9>A
1>><@1>>= =3=>.9> L1>-9.9>A L5.99A
1>>=@1>-> -1>91.96 L->95.9<A L--.33A
Tota( 636-=.;= L=;>6.<1A L3>.=3A
%vera0e ->;>3.=6 L-=5-.69A L9.-<9A
Inter8retation
In t*e t)die 'ive year 8eriod &or4in0 ca8ita( t)rnover ratio
o' TCC i 'o)nd to be ne0ative? beca)e o' &or4in0 ca8ita(.
9. Ca* to c)rrent (iabi(itie ratio
Cash to current liabilities ratio measures firm is potential
in regard to meeting out the current obligation on the basis of net cash flows
originating from its own operation.
Tab(e no: 3<
@tatement showing cash to current liabilities ratio
#ear Ca* C)rrent
(iabi(itie
Ratio LIA
2RRH2RRI 1II.1J HRI3.P3 3.2L
2RRI2RRJ 124.12 HLHP.42 2.12
2RRJ2RRL 13P.2L HHL3.33 2.4P
2RRL2RRP 11H.2I H4J3.L3 2.11
2RRP2R1R 1R2.4P 4JR1.13 2.1L
Total I4J.32 2IIL1.I4 12.1L
0verage 12P.4I H33I.32 2.43

Inter8retation
The ratio shows fluctuating trend. The liabilities are increasing but the
cash level is diminishing. This is harmful for the organization as in the future
there may arise situation where the current liabilities are to be immediately
settled# and if the company does not save the money# if may fail to fulfill its
obligation and it will affect their reputation. This ratio indicates that the
e%tent of total funds invested as working capital.
Tab(e no: 3=

@tatement showing current asset to total asset ratio
#ear C)rrent aet Tota( aet Ratio LIA
2RRH2RRI 2HLH.JH 1RPR3.4R 23.J4
2RRI2RRJ 3HJI.RI 12H1I.HJ 2L.HJ
2RRJ2RRL 3J1J.33 312J.22 2L.32
2RRL2RRP 34HJ.23 12R2L.2R 2L.J4
2RRP2R1R 3I3I.4H 114I3.11 31.J2
Total 1IPJH.L2 IRR3L.HR 141.RP
0verage 33PH.1I 12RRJ.JR 2L.21
Inter8retation
0
20
40
60
80
100
120
140
160
2005-
2006
2006-
2007
2007-
2008
2008-
2009
2009-
2010
Total Average
Chart showing Current asset to total asset Ratio (%)
Ratio (%)
The ratio shows an increasing trend. The average ratio is 2L.21.0s
the current asset to total asset shows an increasing trend. &t shows the
effectiveness of company managing the current asset.
TR%V%NCORE COC"IN C"E+IC%LS
=0L0GC- @)--T 0@ $G 31 .0<C)2R1R
Particulars
Sc*ed)(e
No:@
0s at 31 march 2R1R 0s at 31
march 2RRP
<s.in lakh <s.in lakh
So)rce o' ')nd
S*are *o(der ')nd
S*are ca8ita(
Reerve and )r8()
Loan ')nd
Sec)red (oan
Unec)red (oan
TOT%L
%88(ication o' ')nd
!i7ed aet
Dro b(oc4
Le
-
1
3
5
6
1-3--=>>>.>>
>.>>
615<=-5=3.=9
5=;55;;-.>>
-95<6;69;6.3>
=195-1;>>.;=
1-3--=>>>.>>
6;5939195.=9
;<;;66195.=9
1-3--=>>>.>>
>.>>
619;11<;3.56
51=53;<;.>>
;<1;<699>.56
-9-=>31>96.=6
<5>;1<315.;=
De8reciation
NET BLOCH
Ca8ita( &or4@in 8ro0re
Invetment
C)rrent aet?(oanEadvance
Le
C)rrent (iabi(itie E 8roviion
Pro'it E Lo acco)nt
TOT%L
9
;
<
=
->
5>>99;>;6.;=
5<=<>3>>9.-5
;11-91=;5.6-
11==1;<;.-=
13>>>>.>>
@<=-36=3>.36
-3-6>6533.9-
;<;;66195.=9
;;<=>3;5-.-9
5-3-=9-.>>
13>>>>.>>
393956-5<.56
5;>--35-1.93
@->959<195.-<
->96<<111.5;
;<1;<699>.56
!INDINDS
!INDINDS
The cost of producing caustic soda lye and
flakes is increasing more than proportionately.
The cost of sales for caustic soda lye and
flakes is also increasing more than proportionately.
The raw material cost and cost of power
shows an increasing trend.
Profit per unit of caustic soda lye is
decreasing.
Caustic soda flakes gives loss for lost three
years.
The company shows a negative working
capital for the lost five years of the study. This indicates current assets are
not sufficient to pay off claims against them.
The components of gross working capital are
inventories# sundry debtors# cash and bank balances and loans and
advances.
0n ideal current ratio is 291.but the average
current ratio is R.I3L this shows that the firm has less current asset than
claims against them.
Company(s !uick ratio for the last five years is
44 and ideal ratio as 191. This again shows that the company is not
maintaining a satisfactory li!uidity position.
&n the case of TCC the absolute li!uid ratio
fails to reach the norms 192.the ratio is very below than the norms. The
reason for this is high current liabilities which put the company into
tremendous trouble.
0verage inventory turn over ratio of the
company is R.41Q this shows that the company(s utilization of
inventories in generating sales is good.
The average debtor(s turnover ratio is P93I
times. This is satisfactory.
The average debt collection period is 3P days
suggesting unfavorable situation from the view point of li!uidity
management.
'orking capital turn over ratio of TCC is
found to be negative# because of negative working capital.
Cash to current liability ratio shows a
fluctuating trend. The liability is increasing but the cash level is
diminishing. This is harmful for the organization there is no significant
relation between profitability and li!uidity of TCC Ltd. &t suggests that
the profitability of the unit under study was not affected in any way by
their li!uidity.
SUDDESTIONS
SUDDESTIONS
+ &ntroduce cost reduction policy in order to increase net profits.
+ Cost reduction will have to include material
cost reduction# power# maintenance cost and employee cost.
+ Cost of production of caustic soda flakes
should be reduced to increase profit.
+ &n order to manage debtors more efficiently.
-stablish clear credit practices as a matter of company policy and make
sure that these practices are clearly understood by staff supplies and
customers.
+ /evelop appropriate procedures for handling
late payments in order to collect money from debtors.
+ "or better stock control# review the
effectiveness of e%isting purchasing and inventory system.
CONCLUSIONS

CONCLUSION

'hile analyzing the operational efficiency and profitability
of TCC Ltd. The operational efficiency and profitability is not such
important according to the TCC Ltd like government owned companies.
@uch companies are mainly focused on the service# better care to the
employees and employee(s welfare. @o the operational efficiency and
profitability have no such important.
The study was conduct at the Travancore Cochin Chemicals
Ltd 6TCC Ltd7. The balance sheet and profit and loss account of the
company were analyzed. The analysis and interpretation of the data helps to
understand about financial and profit figures of last five years and can also
under stand the financial position of the company by the detailed study of
the balance sheet