MAHARASTRA ELEKTROSMELT LIMITED AN ISO 9001-2000 COMPANY INTRODUCTION:Maharashtra elektrosmelt limited is a public limited company date 27th February1974

under the companies Act 1956. M.E.L. was promoted by state industries and Investment Corporation (SICOM) and Development Corporation of vidarbha Govt. of Maharashtra undertaking. M.E.L is a subsidiary of Steel Authority of India ltd. (a Govt of India) enterprise and the largest manganese based Ferro and Silicon Alloy producer in the country. The finished products are provided as the raw material for Bokaro Steel plant (BSP), Bhilai steel plant (BSL), Rourkela steel Plant (RSP), Durgapur Steel Plant (D S P). M.E.L. is the largest Manganese based Ferro Producer in the country. The plant is situated 166 kms away from Nagpur; it is well connected by the railways and roads by the all major cities of the India. M.E.L. has created the direct employment for nearly 2000 people. It is supporting various industries M.E.L. is quickening the pace of industrialization of the region. Maharashtra Elektrosmelt Ltd is a Government Company U/s 617 of the Companies Act, 1956. Steel Authority of India Ltd (SAIL), a Government Company, is holding 99.12% in shares of MEL and that is why MEL falls under the category of Government Company. The Company is managed by the Board of Directors
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appointed by the Holding Company (SAIL). Being a Government Company, it is subjected to the control of Government of India through the respective Ministry viz Ministry of Steel. The Board of Directors consists of Chairman, three Directors from SAIL and one Independent Director appointed by the Holding Company and one Nominee Director appointed by the Govt of Maharashtra. The Company has its Registered Office at SAIL, International Building, 3rd Floor, Off: MK Road, Churchgate, Mumbai 400 020 and One Unit Office each at Nagpur and Bhilai. The Plant is located at Chandrapur in Maharashtra. Executive Director appointed by the Holding Company stationed at Chandrapur is the CEO of the organization. He is assisted by the Head of Departments of Works, Finance, Personnel & Administration, Commercial, Marketing, Vigilance, Board & Company Affairs, Law, Internal Audit and Public Relations. The Production facilities in the Plant consist of two Submerged Arc Furnaces (annual production capacity - 1,00,000 tonnes of equivalent Ferro Manganese) for production of Manganese based ferro alloys; one Electric Arc Furnace for production of medium carbon Ferro Manganese (annual production capacity - 2,500 tonnes); one Power Plant of 4.2 MW capacity producing electric power; two Sinter Plants (annual production capacity - 30,000 tonnes) for producing Manganese ore sinter from Manganese ore fines.

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Other Service Departments include Raw Material Yard, finished Product Handling Yard, Maintenance Departments, Environment Management Dept, Safety Engineering Dept, Commercial Dept, Personnel & Administration Dept, Finance & Accounts Dept etc. The main functions of MEL are:a) Production and selling of High Carbon Ferro Manganese, Medium / low Carbon Ferro Manganese and Silico Manganese to the integrated steel plants of SAIL and others in private sector. b) To help SAIL plants in formulating policies with respect to procurement of ferro alloys, a major raw material, for their steel plants. c) To help SAIL in conducting R&D activities with respect to ferro alloys and developing new grades of ferro alloys d) To ensure uninterrupted supply of ferro alloys to SAIL plants

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VISION

To be a respected world class corporation and the leader in Indian steel business in quality, productivity, profitability and customer satisfaction.
CREDO We build lasting relationships with customers based on trust and mutual benefit. We uphold highest ethical standards in conduct of our business. We create and nurture a culture that supports flexibility, learning and is proactive to change. We chart a challenging career for employees with opportunities for advancement and rewards. We value the opportunity and responsibility to make a meaningful difference in people's lives.

CORPORATE PLAN MISSION MEL has prepared an ambition corporate plan for its grout till 2005 AD. MEL has work based upon the corporate social responsibilities (CSR) in the village of Lohara. They provide book for student. MEL arranged an annual blind meeting other CSR activities of MEL is free treatment by American plastic surgeon in Chandrapur per year by Dr. Dikshit. Its mission is to develop and sustain as a leader in the field of Ferro alloys. Diversification in production of other value added special Ferro alloy instillation of Ferro alloy instillation of Ferro alloy casting machine is one of its corporate plans.

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PERFORMANCE
Phenomenal growth in Production Ferro Alloys since 19861987 achieving almost 110% of capacity utilization. Techno-Economical parameter comparable to International levels. A new record in turnover to the tune of around RS.200 crores.

TECHNOLOGICAL DEVELOPMENT

Development of new technology in the field of alloys and raw materials preparation has been made as fallows:

Production of low and medium carbon Ferro manganese through Sillico-thermic route. Preheating of raw materials in binds with the use of furnace gases. All the products and process of M E L are ISO standard because of ISO-9001 certification to whole company. As a part of diversification, lime is produced for use in paper industry.
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 A 100 TDP High pressure sinter plant was installed with the active association of R&D center for iron & steel, SAIL, Ranchi for gainful utilization of manganese ore fines and conservation of valuable lumpy ore. It is the first plant of its kinds of the world. MEL is think about new power plant in this premises.

RESEARCH AND DEVELOPMENT

SAIL has set its RESEARCH AND DEVELOPMENT centre at MEL which plays a significance role in technological up gradation. Many projects of waste management, environment control, energy conservation & beneficiation of ores have been undertaken through this centre. This centre also certifies the quality of finished goods prior to dispatch.

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UTILIZATION OF WASTE PRODUCT:Gainful utilization of waste product has been given prime important to conserve valuable resources some of that are

Bricks for construction are manufactured utilizing the granulated slag for the first time in the country.

Ferro manganese slag is utilized as manganese feed in production of sillico manganese.

Granulated slag as stowing material in mines.

Manganese ore fines are agglomerated to produce sinter and are used in SiMn production.

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 The gases emanating from furnace are utilized as a fuel for or manganese ore. Lime and in sintering plant. Thus replacing expensive furnace oil.

Furnace waste gas is utilized in Electric generation through 4.2 MW power plant.

PRODUCT OFFERED BY MEL MEL produced the following manganese based Ferro alloys with the size ranges and chemical specification as detailed as below:-

HIGH CARBON FERRO MANGANESE Size 10 15mm, 40 100mm, 12 15mm. CHEMICAL SPECIFICATION Manganese 70 74% & 74 78% Carbon 6 8% Silicon 1.5% max
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Phosphorus 0.43% max

SILICO MANGANESE Size 10 15mm, 40 100mm,12 25mm CHEMICAL SPECIFICATION Manganese 60 65% & 66 70% Carbon 200% max Silicon 15 - 20 % max Phosphorus 0.35% max

SERVICES OFFERED BY MEL

MEL having qualified and skilled technical man power also offers consultancy services in the following areas

INDUSTURIAL SAFETY / DISASTER MANAGEMENT MEL is trend setter in the field of industrial safety already being the safety plant it extent services to other industries for training the manpower in preparation of disaster management plan establishing safety system etc. MEL has already offered its services to a number of organizations in the MAHARASTRA and adjoining states.
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REFACTORING CONSULTING SERVICES:MEL also extends its consultancy services in the area of refactoring particularly for lining of steel ladies, LD and Arc furnace.

RAW MATERIAL YARD

Raw material is the unprocessed product. This is required for producing Ferro and Sillico Alloys in MEL. Raw material necessary for the production of HC Fe Mn, Si Mn, MC/Fe Mn which is handled by Raw material yard. It is I/P order material of the production process.

RAW MATERIAL:Mn ore Flux: Lime stone dolomite

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Quarts Sinter These raw materials are bought to raw material yard from different mines.

SUPPLIES OF Mn ORE OF MEL

MN ORE OF INDIA (MOIL) 89% Balance mine(mp) contain 50% Mn Balaghat Mn ore from Madhya Pradesh 48-50% Sandur Mn ore from Karnataka 40-45% Anant and Aishwarya Mn ore

SUPPLIER OF FLUX TO MEL

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Flux is used for making slag inside furnace. It is easily available because of all the mains of it are near by Chandrapur. Mn ore + flux HCFeMn

This chemical analysis of the Raw material is then carried out. After this Raw material is fed the ground hopper from where it is then linefeed to the from the bunker house.

PH YARD (PRODUCT HANDLING YARD)

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PRODUCT HANDLING YARD Handling product Storage product Packaging of product Dispatching of product

PROCEDURE OF HANDLING, STORAGE, PACKAGING, DISPATCHING OF PRODUCT

PURPOSE: This procedure is used for perform activities of receipt, Handling, Storage, Packaging, Dispatching of product. SCOPE: This procedure covers the following activities prefacing to HCFeMn and SiMn and MC/LC FeMn.

Handling storage identification protecting packaging dispatch. Recoveries from Slag, Slags-mix and Metal dust.

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SINTERING PLANT
There are two sinter plant in MEL and each plant has per day production 50 tones. Hence the per day total production of sinter plants is 100 tones. The sinter plant is work on the continuous process or system but the sinter plant 2 is work on the pot system. The sinter plant 1 was established in 1981 and sinter plant 2 was established in 1992. The 100 TPD high pressure sinter plant at MEL comprises of main unit as below: Raw material Crushing Screening & storing Raw material proportioning & mixing Sintering Sinter dispatching Cooling & dispatch system. PROCEDURE First of all Raw materials receiving and storing and crushing in the small particles. This small particle is sending in sintering part.
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The temp of the sintering part is 11000c to 12000c. The temp of the middle part is 4000c to 4500c. And the temp of the bottom part is 1100c. Where Mn is obtained as liquid state. The air pressure flow on the furnace. There are four section of pressure. The first pressure pump has 2000c, the second pressure pump has 1900c, the third pressure pump has 1700c and the last pressure pump has 1650c after this pressure the material is passed on cooler. The Mn is obtained at 650c to 750c.

FURNACE OPERATION
In MEL there are two type of furnace which is used for production. SAF: - Submerged Arc Furnace (two in number). EAF: - Electric Arc Furnace.

SAF:- it is used for production of HCFeMn and SiMn EAF:- it is used for the production of LCFeMn.

OPERATION
The raw material is transferred to the bunker house from the ground hopper after then screening, crossing operation in bunker house. It is transferred to the furnace bins. There are TWO types of SAP-1 & SAP-2. There are 8 bins & 3 Electrodes in SAP& supply is provided. The raw material from the bins injured in furnace, where the Electrodes are merged. Hence this is called furnace operation.
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The 22MW power is consumed by the electrodes in the Arc furnace and in near about 1700-20000c temp. The raw material is consumed in stolen state. Hence for one tapping process it takes minimum 2 hours. The coke is used in this process as a reducing agent. Here the reduction process is take place & in this reaction carbon monoxide (CO) is produced. This gas is well used in plant sintering and lime kiln less than the molted material so the slag float on the top can be recovered. After the cooling process material is transferred to the PH-Yard. The furnace generates very large heat. So it is cooled by flowing the cold water through the pump, which covers the furnace.

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LABORATORY
Laboratory department is that department where the Qualitavely & Quantatively analysis operation of raw material which is used in the production process & Finish material also analysis before sending procedure in MEL.

SCOPE
I. The raw materials are first analysis after then raw material send for production process. II. III. IV. V. Product meant for Dispatch Determination of moisture content of Mn ore and coke. Chemical analysis of Fe Si production process. Raw material, product, metallic by product at sample preparation room. VI. VII. Chemical analysis of CaO.MgO.SiO2 in limestone & dolomite. Analysis of loss of ignition content in lime.

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LIME KIL
For the production of medium carbon Ferrow manganese. The lime kill produces the lime from limestone. Which act as raw material. MEL has two limes kin one having the capacity of 7 tones per day and other having 4 tones per day. In kiln lime stone is heated at 10000c so the lime is produced.

PPC DEPARTMENT
(PRODUCTION PLANNING AND CONTROL DEPARTMENT)

PPC department operates around the clock in this shift with a line Manager in this shift to keep a track of all operational activities in production main tender raw material yard. Product handling dispatch and activities of other associated department are the function is this PPC department. It serves as an important communication link between the line Manager and working in different department and the section anchored. All the Information about product is gather in PPC department.

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HCFe Manganese Silico Manganese MC Ferro Manganese High & Low MnO slag Mn Ore Fines Mn Ore Microfine Khad Sludge

AUTO DEPARTMENT
Auto Department or transport department plays a very important role industry. The Transportation is done by various ways for various material products in furnace. (HCFeMn and SiMn and MC/LC FeMn). The various way of transportation are Dumper Loader Trucks Buses Tractors Trailer Bulldozer

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 Ambulance Car(Esteem,Indica&Ambastor)

The current year budget for transport department is Rs.90 lakhs. There are 85 workers work in the transportation department for all the kinds of vehicles maintenance. The role of transport department is very important because all the raw material and prepared goods are send by the transportation as a road and train.

WORK SHOP
Work shop is department where all the mechanical operation are performed and mainly it consists of mechanical accessories such as drilling machine lathe m/c etc. The main function of this department is production of electrode. The following machines are used in work shop:HMT lathe machine Kirloskar length machine Drilling machine Punching machine
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Grinder Bending machine Rolling machine Milling machine ELECTRODE CASING SPECIFICATION Height Diameter Angle between ribs Weight of ribs 1200mm 1.5mm 25.7mm 270kg

POWER PLANT
The power plant is established in 1998. The capacity of power plant is 4.2MW. The power plant is one of the steam based power plant which is self generated electricity suppliers by using carbon monoxide (CO) as main fuel sources. In any production process electricity as a main raw material parameter near about 65% to 70% of cost of production is required for the electricity supply.

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MEL take electricity from M.S.E.B. (Maharashtra state Electricity board) the per month electricity bill is paid by MEL is near about 10 crores. This is very high amount 70% of total production cost. So that MEL plan for establish the new POWER PLANT. The power plant having more capacity and they are earn the more profit.

PERSONNEL DEPARTMENT
Personnel management may be defined as planning, organized, directing and controlling of the resources and maintenance of employees for the purpose of contributing to the organizing grades. The main objectives of the personnel department is to achieve the objective of the organization, for this purpose they make proper planning, organized, directing and controlling of the resources and maintenance of employees for the purpose of controlling to the organizing grades.
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OBJECTIVES AND FUNCTIONS:-

Maintaining employees safety. Maintaining employees health. Maintaining employees services activities. Procurement and maintained of adequate work force. Maintains positive attitude of employee towards his work and work environment.

SAFETY AND HRD

The safety department works on this basis of HANRICH TRIANGLE, this theory is given in 1939.

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This theory is based upon the study of Fifteen thousand accidents HANRICH TRIANGLE is green triangle. In the area of industries safety MEL has carried a Niche for itself as one of the safes industrial establishment in the India and the World. The innumerable step undertaken have culminated in the winning many National and International Awards such as sword honor from British Safety council. UK certificate of mint from National safety council, USA, etc. In safety sector MEL got 20 awards on International level and 57 awards on National level. Here are 4 employees working in the safety department (2 Engineer and 2 Assistant).

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FINANCIAL STATEMENT OF MEL

The financial statement is prepared primarily for decision making the statement are not an ending themselves, but must be useful in decision making context In any kinds of organization there are various kinds of accounting works done simultaneously which is given below:i. ii. iii. iv. v. vi. vii. Sales and Excise Accounting Raw material Accounting Stores Accounting Salary and Wages Accounting Contractor Accounting Stock valuation & costing department Accounting All expenditure Accounting The controlling of these departments is called as Central Accounting. The central Account section prepares Trial balance, Profit& Loss Account and Balance Sheet of the company.

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i.

SALES ACCOUNTING

These contain inversing of each and every product including sale of scrap is raised in this Accounting, the party A/c debited and sales A/c credited along with respected with Excise duty and sales tax Accounting. Company sales material for provided party against advance payment the major product dispatch for SAIL (Steel Authority India limited) is under conversation basis where the major raw material is supplied by sail and the company by its only conversion charges to the SAIL plant. The amount due on SAIL plant for is being menatared by finance department for its realization in respect to Excise duty payment same is paid to Government on 5th of the following month for the presiding months at the end of the month of Central Accounting.

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ii.

RAW MATERIAL ACCOUNTING

In the raw material accounting, the purchase A/c debited and the party A/c credited. MIN (material inward notes) is prepared for the raw material accounting. It is such kinds of accounting where all the properties related to the raw material is prepared in this accounting and after this is controlled by the central accounting.

iii.

STORES ACCOUNTING

This is prepared on the basis of GRN (good receipt note). By stores A/c debited to the party A/c credited. The accounting of sales department is very simple, there are 200 party A/c in MEL CONDITION OF PURCHASE:a) Condition of contract and Delivery terms. b) Delivery c) Packing d) Inspection of good. e) Removal of rejected good f) Bills and Invoice g) Risk of loss
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h) Recovery of material cost i) Warranty j) Insurance k) LD for late delivery l) Right of Buyer to set of m) Jurisdiction

In the purchase order we see the Discount, Excise duty, Education cess and VAT/CST and then calculate the price of the good, and the price to be taken for the current value not the previous value. To read all the purchase order and done the calculation because these are some condition like Delivery date, Dispatch price, LD and etc. If there are found any mistake so we can return the Bill for correction. CALCULATION IS DONE LIKE THAT:Product Add Add Excise duty Education cess Qty *Price = Basic Price

(on the excise duty) Add Less VAT/CST (on the basic price) Discount (on the basic price)

FINAL PRICE OF THE PRODUCT

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iv.

CONTRACTOR ACCOUNTING

In MEL the contract based security is also allowed there are following kinds of contractor in MEL, Breaking contractor, Handling contractor, Stacking contractor, Loading contractor and Unloading contractor.

v.

SALARY- WAGES ACCOUNTING

In this part of accounting by Salary A/c debited to Bank A/c credited. In the salary accounting there are 25 heads found in MEL. In salary including Basic pay +DA+ HRA+ Car allowances/scooter allowances+ HRD allowances+ Canteen allowances +Incentives is also available in MEL

vi.

ALL EXPENDITURE ACCOUNTING

In this part of accounting, the calculation is taken place such as Regular Expenditure Telephone Expenditure Traveling Expenditure Seminar Expenditure Stationary Expenditure etc. Such kind of Expenditure is calculated in this part. There is no separate place for suspense account in MEL.

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What Does Working Capital Management Mean? A managerial accounting strategy focusing on maintaining efficient levels of both components of working capital, current assets and current liabilities, in respect to each other. Working capital management ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses. What Does Cash Flow Mean? A revenue or expense stream that changes a cash account over a given period. Cash inflows usually arise from one of three activities - financing, operations or investing - although this also occurs as a result of donations or gifts in the case of personal finance. Cash outflows result from expenses or investments. This holds true for both business and personal finance. What Does Current Assets Mean? A balance sheet account that represents the value of all assets that are reasonably expected to be converted into cash within one year in the normal course of business. Current assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be readily converted to cash. In personal finance, current assets are all assets that a person can readily convert to cash to pay outstanding debts and cover liabilities without having to sell fixed assets. What Does Current Liabilities Mean? A company's debts or obligations that is due within one year. Current liabilities appear on the company's balance sheet

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and include short term debt, accounts payable, accrued liabilities and other debts. What Does Days Working Capital Mean? An accounting and finance term used to describe how many days it will take for a company to convert its working capital into revenue. The faster a company does this, the better. To calculate days working capital, the following formula can be used:

Days working capital can be used in ratio and fundamental analysis. What Does Inventory Accounting Mean? The body of accounting that deals with valuing and accounting for changes in inventoried assets. Changes in value can occur for a number of reasons including depreciation, deterioration, obsolescence, change in customer taste, increased demand, and decreased market supply and so on.

What Does Working Capital Mean? A measure of both a company's efficiency and its short-term financial health. The working capital ratio is calculated as:

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Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory). Also known as "net working capital", or the "working capital ratio". If a company's current assets do not exceed its current liabilities, then it may run into trouble paying back creditors in the short term. The worst-case scenario is bankruptcy. A declining working capital ratio over a longer time period could also be a red flag that warrants further analysis. For example, it could be that the company's sales volumes are decreasing and, as a result, its accounts receivables number continues to get smaller and smaller. Working capital also gives investors an idea of the company's underlying operational efficiency. Money that is tied up in inventory or money that customers still owe to the company cannot be used to pay off any of the company's obligations. So, if a company is not operating in the most efficient manner (slow collection), it will show up as an increase in the working capital. This can be seen by comparing the working capital from one

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period to another; slow collection may signal an underlying problem in the company's operations. Principles of Working Capital Management Concept of working capital Operating and cash conversion cycle Permanent and variable working capital Balanced working capital Determinants of working capital Issues I working capital management Estimating working capital Policies of working capital finance Concepts of Working Capital Gross working capital (GWC) GWC refers to the firms total investment in current assets. Current assets are the assets which can be converted into cash within an accounting year (or operating cycle) and include cash, short-term securities, debtors, (accounts receivable or book debts) bills receivable and stock (inventory). Net working capital (NWC).
NWC refers to the difference between current assets and

current liabilities.
Current liabilities (CL) are those claims of outsiders which

are expected to mature for payment within an accounting

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year and include creditors (accounts payable), bills payable, and outstanding expenses.
NWC can be positive or negative. Positive NWC = CA > CL

Negative NWC = CA < CL GWC focuses on

Optimisation of investment in current Financing of current assets

NWC focuses on
Liquidity position of the firm

Judicious mix of short-term and long-tern financing Operating Cycle

CASH

DEBTORS / BILL MATERIAL FINISHED GOOD

RAW RECEIVABLES

OPERATING CYCLE

Operating cycle is the time duration required to convert sales, after the conversion of resources into inventories, into
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cash. The operating cycle of a manufacturing company involves three phases:

Acquisition of resources such as raw material,

labour, power and fuel etc.

Manufacture of the product which includes

conversion of raw material into work-in-progress into finished goods.

Sale of the product either for cash or on credit. Credit

sales create account receivable for collection.

The length of the operating cycle of a manufacturing firm is the sum of:
inventory conversion period (ICP). Debtors (receivable) conversion period (DCP). Inventory conversion period is the total time needed for

producing and selling the product. Typically, it includes:

raw material conversion period (RMCP) work-in-process conversion period (WIPCP) finished goods conversion period (FGCP) Creditors or payables deferral period (CDP) is the length

of time the firm is able to defer payments on various resource purchases.

Gross operating cycle (GOC)

The total of inventory conversion period and debtors conversion period is referred to as gross operating cycle (GOC).
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 Net operating cycle (NOC)

NOC is the difference between GOC and CDP. Cash conversion cycle (CCC) CCC is the difference between NOP and non-cash items like depreciation.
Permanent or fixed working capital

A minimum level of current assets, which is continuously required by a firm to carry on its business operations, is referred to as permanent or fixed working capital.
Fluctuating or variable working capital

The extra working capital needed to support the changing production and sales activities of the firm is referred to as fluctuating or variable working capital. Determinants of Working Capital Nature of business Market and demand Technology and manufacturing policy Credit policy Supplies credit Operating efficiency Inflation Issues in Working Capital Management

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 Levels of current assets Current assets to fixed assets Liquidity Vs. profitability Cost trade-off
Estimating Working capitalCurrent

assets holding

period
To estimate working capital requirements on the basis of average holding period of current assets and relating them to costs based on the companys experience in the previous years. This method is essentially based on the operating cycle concept. Ratio of sales To estimate working capital requirements as a ratio of sales on the assumption that current as
Sets change with sales.

Ratio of fixed investment To estimate working capital requirements as a percentage of fixed investment. Working Capital Finance Policies Long-term Short-term Spontaneous

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 Short-term Vs. Long-term financing :Cost Flexibility Risk

Working Capital Finance Policies Matching Conservative Aggressive

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Factoring is a purchase of assets. The business remains active with the flow of the finance. The flow of the finance is clear from the factoring accounts receivable, invoices and other related services. Factoring actually is a financial operation where a businessman sells its invoices. Here the more emphasis is given to the values of receivables than the credit. It is not a loan. It involves three parties instead of two.

Factoring plays a vital role in the progress of the business. They provide the information regarding the financial services and funding policies. They also assist the clients to choose the right factor for the growth of their business. To manage cash flow the concept of factoring has been used since long by businesses.

Factoring Accounts Receivable Factoring account receivable is the flexible and simple service through which businesses can avail finance. The process is carried over by invoices. Instant or immediate working of the cash is protected through the selling of invoices or accounts receivable. It is very helpful to get a good deal. A factor company will buy the receivable in advance payment up to 90%. The left over balance is released on the receipt of invoices. But you should weight before you get payment. Factoring assists the business owner to select the best factor according to your requirement. This facility makes you able and confident to extend your sales and grow your business.

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Factoring accounts receivable is the fastest mean through which you can get finance easily. To get finance from other sources is very long and wastage of time for a small business owner.

Why we prefer factoring? Factoring helps to obtain a source funds in shortest and easiest way. It gives relief to the business owner from slow-pay clients. Business owner have option to increase orders. The funding program is very flexible. Your funds increase as you increase your sales. Will be able to take benefits of seller discounts... Can get funds to pay taxes. Customer can get large benefits on large orders. Can purchase any equipment or supply according to its demand.

Reverse Funding

Sometimes the buyers do not pay the invoices. In such situation the sellers fully take the responsibility of funding. In reverse funding the factors can buy the account receivable with their choice. There is a risk in selling the accounts to the factors and the whole of the risk is on the shoulders of sellers itself.

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WORKING CAPITAL MANAGEMENT OF MAHARASTRA ELEKTROSMELT LIMITED

FOR THE YEAR 2006 CURRENT ASSEST, LOAN & ADAVANCES:Particular Inventories Sundry Debtors Cash and Bank Balance Interest Receivable/ Accrued Loan and Advances TOTAL Rs.(In lakhs) 6502.74 1720.74 719.43 88.48 2072.98 11104.37

CURRENT LIABILITIES & PROVISION:Particular Current liabilities Provision TOTAL Rs.(In lakhs) 4722.80 2936.10 7658.90

WORKING CAPITAL = CURRENT ASSEST CURRENT LIABITILIES WORKING CAPITAL = 11104.37 7658.90 WORKING CAPITAL = 3445.47 WORKING CAPITAL RATIO = 1.5:1

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FOR THE YEAR 2007 CURRENT ASSEST, LOAN & ADAVANCES:Particular Inventories Sundry Debtors Cash and Bank Balance Interest Receivable/ Accrued Loan and Advances TOTAL Rs.(In lakhs) 6828.75 130.94 2179.24 97.31 1488.55 10724.79

CURRENT LIABILITIES & PROVISION:Particular Current liabilities Provision TOTAL Rs.(In lakhs) 5396.93 2879.61 8276.54

WORKING CAPITAL = CURRENT ASSEST CURRENT LIABITILIES WORKING CAPITAL = 10724.79 8276.54 WORKING CAPITAL = 2448.25 WORKING CAPITAL RATIO = 1.25:1

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FOR THE YEAR 2008 CURRENT ASSEST, LOAN & ADAVANCES:Particular Inventories Sundry Debtors Cash and Bank Balance Interest Receivable/ Accrued Loan and Advances TOTAL Rs.(In lakhs) 4219.39 3389.08 8610.23 194.47 1303.30 17716.47

CURRENT LIABILITIES & PROVISION:Particular Current liabilities Provision TOTAL Rs.(In lakhs) 6792.42 5600.37 12392.79

WORKING CAPITAL = CURRENT ASSEST CURRENT LIABITILIES WORKING CAPITAL = 17716.47 12392.79 WORKING CAPITAL = 5323.68 WORKING CAPITAL RATIO = 1.40:1

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CONCLUSION
MEL is maintaining their WORKING CAPITAL very nicely As well as carefully. If we see the last 3 years past record for that we know that the NET WORKING CAPITAL =CURRENT ASSETS > CURRENT LIABILITIES. Its means the company is going in the positive way and maintain the positive cash flow. Current assets are exceeding its current liabilities, and then it may pay back creditors in the short term, and taking advantage of short term profit. It shows identities of good company, because every Blue chief are maintain their working capital very carefully.

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BIBLIOGRAPHY

Financial Management
(NINTH EDITION)

I.M.Pandey

Management Accounting

A.P.Rao

Referred Web- site:www.investopedia.com www.google.com

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