project report on working capital management in hcl

8/20/2019 Project Report on Working Capital Management in HCL

1/95

A REPORT

ON

““WORKING CAPITAL MANAGEMENT INWORKING CAPITAL MANAGEMENT IN

HCL INFOSYSTEMS LIMITED”HCL INFOSYSTEMS LIMITED”

BY

(Submitted in partial fulfillment of the requirements of MBA program at

!"A Business S#hool$ !handigarh%

1


2/95

ACKOWLEDGEMENT

A#hie&ement is finding out 'hat ou 'ould be then doing$ 'hat ou ha&e to do)

The higher the summit$ the harder is the #limb) The goal 'as fi*ed and 'e

began 'ith a determined resol&ed and put in #easeless sustained hard 'or+)

,reater #hallenge$ greater 'as our effort to o&er#ome it)

This pro-e#t 'or+$ 'hi#h is m first step in the field of professionali.ation$ has been su##essfull a##omplished onl be#ause of m timel support of 'ell/

'ishers) 'ould li+e to pa m sin#ere regards and than+s to those$ 'ho

dire#ted me at e&er step in m pro-e#t 'or+)

'ould also li+e to than+ the fa#ult members and the staff members of HCL

Infosystems Ltd for their +ind support and help during the pro-e#t)

2


3/95

TABLE OF CONTENTS

A#+no'ledgement

Abstra#t

0) ntrodu#tion

• The problems

• Purpose of stud

• Resear#h methodolog

• S#ope of the stud

• 1ata sour#es

• 2imitations

3) 4industan !omputers 2imited3. 4!2 nfosstems 5 An O&er&ie'

• !ompan6s histor

• 4!2 at a glan#e• Allian#es and partnerships

• Management team

• !orporate information

7) !on#eptual "rame'or+

• ntrodu#tion to 8or+ing !apital Management

• Signifi#an#e of 'or+ing #apital management

• 2iquidit &s Profitabilit9 Ris+ 5 Return trade off • !lassifi#ation of 'or+ing #apital

• Tpes of 'or+ing #apital needs

• "inan#ing of 'or+ing #apital

• "a#tors determining 'or+ing #apital requirements

• 8or+ing #apital ##le

• Sour#es of 'or+ing #apital

•4!2 finan#ials

3


4/95

• 8or+ing #apital position

• n&entor management

•!ash management

• Re#ei&ables management

• Managing paables (!reditors%

• "inan#ing #urrent assets

• 8or+ing #apital : short/term finan#ing

;) Analsis

• ndustr analsis

• "inan#ial graphs

• !on#luding analsis

• Suggestions and re#ommendations

• Bibliograph


5/95

ABSTRACT

This pro-e#t is based on the stud of 'or+ing #apital management in 4!2

nfostems) An insight &ie' of the pro-e#t 'ill en#ompass 5 'hat it is all about$

'hat it aims to a#hie&e$ 'hat is its purpose and s#ope$ the &arious methods used

for #olle#ting data and their sour#es$ in#luding literature sur&e done$ further

spe#ifing the limitations of our stud and in the last$ dra'ing inferen#es from

the learning so far)

4!2 nfosstems 2imited (4!2%$ is a leading domesti# #omputer hard'are

and hard'are ser&i#es #ompan) 4!2 is engaged in selling manufa#tured ( li+e

P!s$ ser&ers$ monitors and peripherals% and traded hard'are ( li+e noteboo+s$

peripherals% to institutional #lients as 'ell as in retail segment) t also offers

hard'are support ser&i#es to e*isting #lients through annual maintenan#e

#ontra#ts$ net'or+ #onsulting and fa#ilities management)

The 'or+ing #apital management refers to the management of 'or+ing #apital$

or pre#isel to the management of #urrent assets) A firm6s 'or+ing #apital

#onsists of its in&estments in #urrent assets$ 'hi#h in#ludes short/term assets=

#ash and ban+ balan#e$ in&entories$ re#ei&able and mar+etable se#urities)

This pro-e#t tries to e&aluate ho' the management of 'or+ing #apital is done in

4!2 nfosstems through in&entor ratios$ 'or+ing #apital ratios$ trends$

#omputation of #ash$ in&entor and 'or+ing #apital$ and short term finan#ing)

5


6/95

INTRODUCTION

6

The problems

Purpose of study

Research methodology

Scope of the study

Data sources

Limitations


7/95

INTRODUCTION:

The pro-e#t underta+en is on >8OR?N, !APTA2 MANA,EMENT N

4!2 N"OSYSTEMS 2MTE1@)

t des#ribes about ho' the #ompan manages its 'or+ing #apital and the &arious

steps that are required in the management of 'or+ing #apital)

!ash is the lifeline of a #ompan) f this lifeline deteriorates$ so does the

#ompans abilit to fund operations$ rein&est and meet #apital requirements and

paments) nderstanding a #ompans #ash flo' health is essential to ma+ing

in&estment de#isions) A good 'a to -udge a #ompans #ash flo' prospe#ts is

to loo+ at its 'or+ing #apital management (8!M%)

8or+ing #apital refers to the #ash a business requires for da/to/da operations

or$ more spe#ifi#all$ for finan#ing the #on&ersion of ra' materials into finished

goods$ 'hi#h the #ompan sells for pament) Among the most important items

of 'or+ing #apital are le&els of in&entor$ a##ounts re#ei&able$ and a##ounts

paable) Analsts loo+ at these items for signs of a #ompans effi#ien# and

finan#ial strength)

The 'or+ing #apital is an important ardsti#+ to measure the #ompan6s

operational and finan#ial effi#ien#) An #ompan should ha&e a right amount

of #ash and lines of #redit for its business needs at all times)

This pro-e#t des#ribes ho' the management of 'or+ing #apital ta+es pla#e at

7


8/95

4!2 nfosstems)

THE PROBLEMS

n the management of 'or+ing #apital$ the firm is fa#ed 'ith t'o +e problems9

0) "irst$ gi&en the le&el of sales and the rele&ant #ost #onsiderations$ 'hat are the

optimal amounts of #ash$ a##ounts re#ei&able and in&entories that a firm should

#hoose to maintainC

3) Se#ond$ gi&en these optimal amounts$ 'hat is the most e#onomi#al 'a to

finan#e these 'or+ing #apital in&estmentsC To produ#e the best possible

results$ firms should +eep no unprodu#ti&e assets and should finan#e 'ith the

#heapest a&ailable sour#es of funds) 8hC n general$ it is quite ad&antageous

for the firm to in&est in short term assets and to finan#e short/term liabilities)

8


9/95

PURPOSE OF STUDY

The ob-e#ti&es of this pro-e#t 'ere mainl to stud the in&entor$ #ash and

re#ei&able at 4!2 nfosstems 2td)$ but there are some more and the are /

The main purpose of our stud is to render a better understanding of

the #on#ept >8or+ing !apital Management@)

To understand the planning and management of 'or+ing #apital at HCL

Infosystems Ltd

To measure the finan#ial soundness of the #ompan b anal.ing &arious

ratios)To suggest 'as for better management and #ontrol of 'or+ing #apital at

the #on#ern)

9


10/95

RESEARCH METHODOLOGY

This project requires a detailed understanding of the

concept – !or"ing #apital $anage%ent&. Therefore'

(rstl) *e need to ha+e a clear idea of *hat is *or"ing

capital' ho* it is %anaged in ,#- nfos)ste%s' *hat are

the di/erent *a)s in *hich the (nancing of *or"ing capital

is done in the co%pan).

The management of 'or+ing #apital in&ol&es managing in&entories$

a##ounts re#ei&able and paable and #ash) Therefore one also needs to

ha&e a sound +no'ledge about #ash management$ in&entor management

and re#ei&ables management)

Then #omes the finan#ing of 'or+ing #apital requirement$ i)e) ho' the

'or+ing #apital is finan#ed$ 'hat are the &arious sour#es through 'hi#h itis done)And$ in the end$ suggestions and re#ommendations on 'as for better

management and #ontrol of 'or+ing #apital are pro&ided)

10


11/95

SCOPE OF THE STUDY

T!"s #$o%e&t "s '"t() to me "n ( s"*n"f"&(nt +(y It does !('e some

"m#o$t(n&e fo$ t!e &om#(ny too T!ese ($e (s fo))o+s ,

This pro-e#t 'ill be a learning de&i#e for the finan#e student)

Through this pro-e#t 'ould stud the &arious methods of the 'or+ing

#apital management)

The pro-e#t 'ill be a learning of planning and finan#ing 'or+ing #apital)

The pro-e#t 'ould also be an effe#ti&e tool for #redit poli#ies of the

#ompanies)

This 'ill sho' different methods of holding in&entor and dealing 'ith

#ash and re#ei&ables)

This 'ill sho' the liquidit position of the #ompan and also ho' do the

maintain a parti#ular liquidit position)

11


12/95

DATA SOURCES:

The follo'ing sour#es ha&e been sought for the prep of this report9

Primar sour#es su#h as business maga.ines$ #urrent annual reports$ boo+

on "inan#ial Management b &arious authors and internet 'ebsites the

imp amongst them being 9 ''')h#l)#om$ ''')indiainfoline)#om$

''')studfinan#e)#om )Se#ondar sour#es li+e pre&ious ears annual reports$ reports on 'or+ing

#apital for resear#h$ analsis and #omparison of the data gathered)8hile doing this pro-e#t$ the data relating to 'or+ing #apital$ #ash

management$ re#ei&ables management$ in&entor management and short

term finan#ing 'as required)This data 'as gathered through the #ompan6s 'ebsites$ its #orporate

intranet$ 4!26s annual reports of the last fi&e ears) A detailed stud on the a#tual 'or+ing pro#esses of the #ompan is also

done through dire#t intera#tion 'ith the emploees and b timel

studing the happenings at the #ompan)

Also$ &arious te*t boo+s on finan#ial management li+e ?han : Dain$

Prasanna !handra and )M)Pande 'ere #onsulted to equip oursel&es

'ith the topi#)

12

http://www.hcl.com/http://www.indiainfoline.com/http://www.studyfinance.com/http://www.hcl.com/http://www.indiainfoline.com/http://www.studyfinance.com/


13/95

LIMITATIONS OF THE STUDY:

8e #annot do #omparisons 'ith other #ompanies unless and until

'e ha&e the data of other #ompanies on the same sub-e#t)Onl the printed data about the #ompan 'ill be a&ailable and not

the ba#+5end details)"uture plans of the #ompan 'ill not be dis#losed to the trainees)2astl$ due to shortage of time it is not possible to #o&er all the

fa#tors and details regarding the sub-e#t of stud)The latest finan#ial data #ould not be reported as the #ompan6s

'ebsites ha&e not been updated)

13


14/95

HINDUSTAN COMPUTERS LIMITED:

Ty#e P-.)"&

/0SE1 23345670SE1 2899:4;

Fo-nded 00th August 0F<

He(d


15/95

mar+et) n 0L0$ 4!2 seeded a #ompan fo#used on addressing the #omputer

training industr$ NT$ though it has #urrentl di&ested its sta+e in the

#ompan) n 00$ 4P too+ minorit sta+e in the #ompan (3


16/95

HCL INFOSYSTEMS – AN OVERVIEW

16

Company’s history

HCL at a glance

Alliances and partnerships

Management team

Corporate information


17/95

HCL INFOSYSTEMS LIMITED

AN OVERVIEW ABOUT THE COMPANY

4!2 nfosstems is no flash in the nformation Te#hnolog pan) "ounded in

0F


18/95

HISTORY

4!2 nfosstems 2td is one of the pioneers in the ndian Tmar+et$ 'ith its origins in 0F


19/95

4664

/ 4!2 enters into a -oint &enture 'ith 4e'lett Pa#+ard/ 4P assists 4!2 to introdu#e ne' ser&i#es9 Sstems ntegration$ T #onsulting$

pa#+aged support ser&i#es ( basi# line$ team line %

466>/ 4!2 a#quires and e*e#utes the first offshore pro-e#t from BM Thailand/ 4!2 sets up #ore group to define soft'are de&elopment methodologies

4662

/ Starts e*e#ution of nformation Sstem Planning pro-e#ts/ E*e#ution pro-e#ts for ,erman and Australia/ Begins 4elp des+ ser&i#es

466=

/ Sets up the STP ( Soft'are Te#hnolog Par+ % at !hennai to e*e#ute soft'are pro-e#ts for international #ustomers/ Be#omes national integration partner for SAP

4665 / ?ol+ata and Noida STPs set up/ 4!2 bus ba#+ 4P sta+e in 4!2 4e'lett Pa#+ard

466: / !hennai and !oimbatore de&elopment fa#ilities get SO KK0 #ertifi#ation

4666

/ A#quires and sets up full o'ned subsidiaries in SA and ? / Sets up full o'ned subsidiar in Australia/ 4!2 ties up 'ith Broad&ision as an integration partner

9333

/ Sets up full o'ned subsidiar in Australia/ !hennai and !oimbatore de&elopment fa#ilities get SE 2e&el 7 #ertifi#ation

/ Bags A'ard for Top P! Gendor n ndia/ Be#omes the 0st T !ompan to be re#ommended for latest &ersion of SO KK09 3KKK/ Bags MATs A'ard for Business E*#ellen#e/ Rated as No) 0 T ,roup in ndia

9334/2aun#hed Pentium G P!s at belo' Rs 7K$KKK/1! rated 4!2 nfosstems as No) 0 1es+top P! !ompan of 3KK0

9339

/1e#lared as Top P! Gendor b 1ataquest/4!2 nfosstems : Sun Mi#rosstems enters into a Enterprise 1istributionAgreement/ Realigns businesses$ in#reasing fo#us on domesti# T$ !ommuni#ations :maging produ#ts$ solutions : related ser&i#es

9338

/ Be#ame the first &endor to register sales of ;K$KKK P!s in a quarter / "irst ndian #ompan to be numero uno in the #ommer#ial P! mar+et/ Enters into partnership 'ith AM1/ 2aun#hed 4ome P! for Rs 0$

933> / 0st to announ#e P! pri#e #ut in ndia$ post dut redu#tion$ offers E.eebee at Rs)0FK

19


20/95

/ Maintains No)0 position in the 1es+top P! segment for ear 3KKJ/ Be#omes the 0st #ompan to #ross 0 la# unit milestone in the ndian 1es+top P!mar+et

/ Partners 'ith nion Ban+ to ma+e P!s more affordable$ introdu#es lo'est e&erEM for P! in ndia/ Registers a mar+et share of 0J)F to be#ome No)0 1es+top P! #ompan forear 3KK7/ !rosses the landmar+ of 0 billion in re&enue in -ust nine months

9332

/ 2aun#h of 4!2 P! for ndia$ a full fun#tional P! pri#ed at Rs)$K/

/ Rated as the No)0 1es+top P! #ompan b 1! ndia /1ataquest

/ Best Emploer 3KK; 'ith fi&e star ratings b 1! ndia /1ataquest)

/ The Most !ustomer Responsi&e !ompan 3KK;

/T 4ard'are !ategor b The E#onomi# Times /A&aa ,lobal !onne#t)

/Top ;K fastest gro'ing Te#hnolog !ompanies in ndia : Top ;KK fastest

,ro'ing Te#hnolog !ompanies in Asia Pa#ifi# b 1eloitte : Tou#he) b

1eloitte : Tou#he

/Fth ETE /!orporate A'ard 3KK; for performan#e e*#ellen#e in the field of

!omputers : Tele#ommuni#ation Sstems b ETE)

/ndia s No)0 &endor for sales of AJ si.e Toshiba Multi "un#tional 1e&i#es for

the ear K7 /K; b 1!)

/Toshiba Super A'ard 3KK; to'ards business e*#ellen#e in distribution of

Toshiba Multifun#tional produ#ts$

/Strategi# Partners in E*#ellen#e A'ard b n fo#us !orporation for pro-e#tors)/Most &alued Business Partner A'ard for pro-e#tors b n fo#us !orporation in

3KK;

933=

/t"))

?-ne;

/ F;$ KKKQ ma#hines produ#ed in a single month/ 4!2 nfosstems in partnership 'ith Toshiba e*pands its retail presen#e inndia b un&eiling shop Toshiba/ 4!2 nfosstems : No+ia announ#e a long term distribution strateg/ 4!2 the leader in 1es+tops P!s un&eils ndias first segment spe#ifi# range ofnoteboo+s brand / 4!2 2aptops/ 1B sele#ts 4!2 as S partner for 0KK bran#hes !T infrastru#ture rollout/ 4!2 nfosstems sho'#ases !omputer Solutions for the Rural Mar+ets in ndia/ 4!2 Support 'ins the 1 !hannels/3KK< ,O21 A'ard for Best After SalesSer&i#e on a nation'ide #ustomer satisfa#tion sur&e #ondu#ted b 1!/ 4!2 nfosstems "irst in ndia to 2aun#h the Ne' ,eneration of 4ighPerforman#e Ser&er Platforms Po'ered b ntel 1ual / !ore eon ;KKKPro#essor / 4!2 "orms a Strategi# Partnership 'ith APP2E to pro&ide Sales : Ser&i#eSupport for iPods in ndia

20


21/95

VISION STATEMENT:

Together 'e #reate the Enterprises of Tomorro'

MISSION STATEMENT:

To pro&ide 'orld/#lass nformation Te#hnolog solutions and ser&i#es

in order to enable our #ustomers to ser&e their #ustomers better

CORE VALUES:

• Nothing transforms life li+e edu#ation)

• 8e shall honor all #ommitments

• 8e shall be #ommitted to ualit$ nno&ation and ,ro'th in e&er

endea&or

• 8e shall be responsible #orporate #iti.ens

QUALITY POLICY:

8e shall deli&er defe#t/free produ#ts$ ser&i#es and solutions to meet the

requirements of our e*ternal and internal #ustomers$ the first time$ e&er time)

21


22/95

OBJECTIVES:

• MANAGEMENT O0?ECTI@ES 5To fuel initiati&e and foster a#ti&it b allo'ing indi&iduals$ freedom

of a#tion and inno&ation in attaining defined ob-e#ti&es)

• PEOPLE O0?ECTI@ES 5 To help people in 4!2 nfosstems 2td)$ share #ompan6s su##ess$

'hi#h the ma+e possibleU to pro&ide -ob se#urit based on their

performan#eU tore#ogni.e their indi&idual a#hie&ementsU and help them gain a sense of

satisfa#tion and a##omplishment from their 'or+)

ALLIANCES and PARTNERSHIPS:

To pro&ide 'orld/#lass solutions and ser&i#es to all our #ustomers$ 4!2nfosstems ha&e formed Allian#es and Partnerships 'ith leading T #ompanies

'orld'ide)

4!2 nfosstems has allian#es 'ith global te#hnolog leaders li+e Inte)7 AMD7

M"&$osoft7 0-))7 Tos!".(7 No"(7 S-n M"&$osystems7 E$"&sson7 n@IDIA7

SAP7 S&(nsoft7 SCO7 EMC7 @e$"t(s7 C"t$"B7 CISCO7 O$(&)e7 Com#-te$

22


23/95

Asso&"(tes7 RedH(t7 Info&-s7 D-#)o7 S(ms-n* (nd No'e))

These allian#es on one hand gi&e us a##ess to best te#hnolog : produ#ts as

'ell as enhan#ing our understanding of the latest in te#hnolog) On the other

hand the enhan#e our produ#t portfolio$ and enable us to be one stop shop for

our #ustomers)

23


24/95

MANAGEMENT TEAM:

A%(" C!o+d!$y

!o/"ounder 4!2$ !hairman and !EO / 4!2 nfosstems)

An engineer b training$ A-ai !ho'dhr is one of the si* #o/founder members of 4!2$ ndia s premier T #onglomerate)

? @ R(m(m-$t!y

!hief Operating Offi#er 4!2 nfosstems 2td)D G Ramamurth has an engineering degree in Ele#troni#s :!ommuni#ations$ from ,uind Engineering !ollege$ and a Mastersdegree in Applied Ele#troni#s from the Madras nstitute ofTe#hnolog$ both in !hennai)

R(%end$( K-m($

E*e#uti&e Gi#e President / "rontline 1i&ision 4!2 nfosstems 2td)Mr) Ra-endra ?umar has been 'ith 4!2 for o&er JK ears and hasseen 4!2 gro' from a startup #ompan to a giganti# #onglomeratethat it is toda)

24


25/95

CORPORATE INFORMATION:

0OARD OF DIRECTORS C!("$m(n C!"ef EBe&-t"'e Off"&e$

A-ai !ho'dhr

W!o)et"me D"$e&to$

D)G) Ramamurth

D"$e&to$s

S) Bhatta#hara 1)S) Puri R)P) ?hosla E)A) ?shirsagar Anita Rama#handran T)S) Purushothaman

Narasimhan Degadeesh G)N) ?oura

COMPANY SECRETARY Sushil ?umar Dain

ADITORS Pri#e 8aterhouse$ Ne' 1elhi

0ANKERS State Ban+ of ndia !anara Ban+

41"! Ban+ 2td) !! Ban+ 2td) So#iete ,enerale Standard !hartered Ban+ State Ban+ of Patiala State Ban+ of Saurashtra

REGISTERED OFFICE LK


26/95

CORPORATE OFFICE E / 7$ ;$


27/95

WORKING CAPITAL MANAGEMENT

CONCEPTUAL FRAMEWORK

27

Introduction

Significance of working capital management

Liquidity Vs profitability: Risk – Return trade off

Classification of working capital

Types of working capital needs

Financing of working capital

Factors determining working capital requirements

Working capital cycle

Sources of working capital

HCL financials

Working capital position

Inventory management

Cash management

Receivables management

Managing payables (Creditors)

Financing current assets

Working capital & short-term financing

Financing Current Assets


28/95

INTRODUCTION TO WORKING CAPITAL

“Working Capital is the Life-Blood and Controlling Nerve Center of a

business”

T!e +o$"n* &(#"t() m(n(*ement #$e&"se)y $efe$s to m(n(*ement of

&-$$ent (ssets A f"$ms +o$"n* &(#"t() &ons"sts of "ts "n'estment "n &-$$ent

(ssets7 +!"&! "n&)-de s!o$tte$m (ssets s-&! (s1

!ash and ban+ balan#e$

n&entories$

Re#ei&ables (in#luding debtors and bills%$

Mar+etable se#urities)

8or+ing #apital is #ommonl defined as the differen#e bet'een #urrent assets

and #urrent liabilities)

8OR?N, !APTA2 W !RRENT ASSETS/!RRENT 2AB2TES

There are t'o ma-or #on#epts of 'or+ing #apital9

,ross 'or+ing #apital

Net 'or+ing #apital

28


29/95

Gross working capital:

t refers to firms in&estment in #urrent assets) !urrent assets are the assets$

'hi#h #an be #on&erted into #ash 'ith in a finan#ial ear) The gross 'or+ing

#apital points to the need of arranging funds to finan#e #urrent assets)

Net working capital:

t refers to the differen#e bet'een #urrent assets and #urrent liabilities) Net

'or+ing #apital #an be positi&e or negati&e) A positi&e net 'or+ing #apital

'ill arise 'hen #urrent assets e*#eed #urrent liabilities) And &i#e/&ersa for

negati&e net 'or+ing #apital) Net 'or+ing #apital is a qualitati&e #on#ept) t

indi#ates the liquidit position of the firm and suggests the e*tent to 'hi#h

'or+ing #apital needs ma be finan#ed b permanent sour#es of funds) Net

'or+ing #apital also #o&ers the question of -udi#ious mi* of long/term and

short/term funds for finan#ing #urrent assets)

29


30/95

Significance Of Working Capital Management

T!e m(n(*ement of +o$"n* &(#"t() "s "m#o$t(nt fo$ se'e$() $e(sons1

"or one thing$ the #urrent assets of a tpi#al manufa#turing firm a##ount for

half of its total assets) "or a distribution #ompan$ the a##ount for e&en

more)

8or+ing #apital requires #ontinuous da to da super&ision) 8or+ing

#apital has the effe#t on #ompans ris+$ return and share pri#es$

There is an ine&itable relationship bet'een sales gro'th and the le&el of

#urrent assets) The target sales le&el #an be a#hie&ed onl if supported b

adequate 'or+ing #apital neffi#ient 'or+ing #apital management ma lead

to insol&en# of the firm if it is not in a position to meet its liabilities and

#ommitments)

30


31/95

LIQUIDITY VS PROFITABILITY: RISK - RETURN

TRADE OFF

Another important aspe#t of a 'or+ing #apital poli# is to maintain and

pro&ide suffi#ient liquidit to the firm) 2i+e the most #orporate finan#ial

de#isions$ the de#ision on ho' mu#h 'or+ing #apital be maintained

in&ol&es a trade off/ ha&ing a large net 'or+ing #apital ma redu#e theliquidit ris+ fa#ed b a firm$ but it #an ha&e a negati&e effe#t on the

#ash flo's) Therefore$ the net effe#t on the &alue of the firm should be

used to determine the optimal amount of 'or+ing #apital)

Sound 'or+ing #apital in&ol&es t'o fundamental de#isions for the firm)

The are the determination of9

The optimal le&el of in&estments in #urrent assets)

The appropriate mi* of short/term and long/term finan#ing used to

support this in&estment in #urrent assets$ a firm should de#ide

'hether or not it should use short/term finan#ing) f short/term

finan#ing has to be used$ the firm must determine its portion in total

finan#ing) Short/term finan#ing ma be preferred o&er long/term

finan#ing for t'o reasons9

The #ost ad&antage

"le*ibilit

But short/term finan#ing is more ris+ than long/term finan#ing)

"ollo'ing table 'ill summari.e our dis#ussion of short/term &ersus

long/term finan#ing)

31


32/95

Maintaining a poli# of short term finan#ing for short term or temporar

assets needs (Bo* 0% and long/ term finan#ing for long term or

permanent assets needs (Bo* J% 'ould #omprise a set of moderate ris+ 5

profitabilit strategies) But 'hat one gains b follo'ing alternati&e

strategies (li+e b bo* 3 or bo* 7% needs to 'eighed against 'hat ou

gi&e up)

32


33/95

CLASSIFICATION OF WORKING CAPITAL

8or+ing #apital #an be #lassified as follo's9

On the basis of timeOn the basis of #on#ept

33


34/95

TYPES OF WORKING CAPITAL NEEDS

Another important aspe#t of 'or+ing #apital management is to anal.e

the total 'or+ing #apital needs of the firm in order to find out the

permanent and temporar 'or+ing #apital) 8or+ing #apital is required

be#ause of e*isten#e of operating ##le) The lengthier the operating

##le$ greater 'ould be the need for 'or+ing #apital) The operating

##le is a #ontinuous pro#ess and therefore$ the 'or+ing #apital is

needed #onstantl and regularl) 4o'e&er$ the magnitude and quantum

of 'or+ing #apital required 'ill not be same all the times$ rather it 'ill

flu#tuate)

The need for #urrent assets tends to shift o&er time) Some of these

#hanges refle#t permanent #hanges in the firm as is the #ase 'hen thein&entor and re#ei&ables in#reases as the firm gro's and the sales

be#ome higher and higher) Other #hanges are seasonal$ as is the #ase

'ith in#reased in&entor required for a parti#ular festi&al season) Still

others are random refle#ting the un#ertaint asso#iated 'ith gro'th in

sales due to firms spe#ifi# or general e#onomi# fa#tors)

T!e +o$"n* &(#"t() needs &(n .e ."f-$&(ted (s1

Permanent 'or+ing #apital

Temporar 'or+ing #apital

34


35/95

Permanent working capital:

There is al'as a minimum le&el of 'or+ing #apital$ 'hi#h is

#ontinuousl required b a firm in order to maintain its a#ti&ities) E&er

firm must ha&e a minimum of #ash$ sto#+ and other #urrent assets$ this

minimum le&el of #urrent assets$ 'hi#h must be maintained b an firm

all the times$ is +no'n as permanent 'or+ing #apital for that firm) This

amount of 'or+ing #apital is #onstantl and regularl required in the

same 'a as fi*ed assets are required) So$ it ma also be #alled fi*ed

'or+ing #apital)

Temporary working capital:

An amount o&er and abo&e the permanent le&el of 'or+ing #apital is

temporar$ flu#tuating or &ariable 'or+ing #apital) The position of the

required 'or+ing #apital is needed to meet flu#tuations in demand

#onsequent upon #hanges in produ#tion and sales as a result of seasonal

#hanges)

35


36/95

The permanent le&el is #onstant 'hile the temporar 'or+ing #apital is

flu#tuating in#reasing and de#reasing in a##ordan#e 'ith seasonal

demands as sho'n in the figure)

n the #ase of an e*panding firm$ the permanent 'or+ing #apital line

ma not be hori.ontal) This is be#ause the demand for permanent

#urrent assets might be in#reasing (or de#reasing% to support a rising

le&el of a#ti&it) n that #ase line 'ould be rising)

36


37/95

FINANCING OF WORKING CAPITAL

There are t'o tpes of 'or+ing #apital requirements as dis#ussed abo&e)

The are9

Permanent or "i*ed 8or+ing !apital requirementsTemporar or Gariable 8or+ing !apital requirements

Therefore$ to finan#e either of these t'o 'or+ing #apital requirements$

'e ha&e long/term as 'ell as short/term sour#es)

37


38/95

FACTORS DETERMINING WORKING CAPITAL

REQUIREMENTS

There are man fa#tors that determine 'or+ing #apital needs of an

enterprise) Some of these fa#tors are e*plained belo'9

• N(t-$e o$ C!($(&te$ of 0-s"ness

The 'or+ing #apital requirement of a firm is #losel related to the

nature of its business) A ser&i#e firm$ li+e an ele#tri#it

underta+ing or a transport #orporation$ 'hi#h has a short

operating ##le and 'hi#h sells predominantl on #ash basis$ has

a modest 'or+ing #apital requirement) Oh the other hand$ a

manufa#turing #on#ern li+e a ma#hine tools unit$ 'hi#h has a

long operating ##le and 'hi#h sells largel on #redit$ has a &er

substantial 'or+ing #apital requirement)Sinte#h is a manufa#turing #on#ern so this requires them to +eep a

&er si.eable amount in 'or+ing #apital)

• S"e of 0-s"nessS&()e of O#e$(t"onsintech has a good position in its seg%ent and the) are also spending

their operations in the do%estic %ar"et as *ell as in foreign %ar"et. The

scale of operations and the sie it holds in the %ar"et %a"es it a %ust

for the% to hold their in+entor) and current asset at a huge le+el.

38


39/95

• R(te of G$o+t! of 0-s"ness

The rate of gro'th of sales indi#ates a need for in#rease in the

'or+ing #apital requirements of the firm) As the firm is #$o%e&ted

to "n&$e(se their sales b


40/95

n due #ourse this sto#+ 'ill be used in produ#tion$ 'or+ 'ill be

#arried out on the sto#+$ and it 'ill be#ome part of the firm6s 'or+/

in/progress)

8or+ 'ill #ontinue on the 8P until it e&entuall emerges as the

finished produ#t)

As produ#tion progresses$ labor #osts and o&erheads need ha&e to

be met)

Of #ourse at some stage trade #reditors 'ill need to be paid)

8hen the finished goods are sold on #redit$ debtors are in#reased)

The 'ill e&entuall pa$ so that #ash 'ill be in-e#ted into the firm)

Ea#h of the areas/ Sto#+ (ra' materials$ 8P$ and finished goods%$ trade

debtors$ #ash (positi&e or negati&e% and trade #reditors 5 #an be &ie'ed as

tan+s into and from 'hi#h funds flo')

8or+ing #apital is #learl not the onl aspe#t of a business that affe#ts the

amount of #ash)

The business 'ill ha&e to ma+e paments to go&ernment for

ta*ation)"i*ed assets 'ill be pur#hased and sold2essors of fi*ed assets 'ill be paid their rent

Shareholders (e*isting or ne'% ma pro&ide ne' funds in the formof #ash

Some shares ma be redeemed for #ash

1i&idends ma be paid

2ong/term loan #reditors (e*isting or ne'% ma pro&ide loan

finan#e$ loans 'ill need to be repaid from time/to/time$ andnterest obligations 'ill ha&e to be met b the business

40


41/95

nli+e$ mo&ements in the 'or+ing #apital items$ most of these Xnon/

'or+ing #apital6 #ash transa#tions are not e&er da e&ents) Some of them

are annual e&ents (e)g) ta* paments$ lease paments$ di&idends$ interest

and$ possibl$ fi*ed asset pur#hases and sales%) Others (e)g) ne' equit

and loan finan#e and redemption of old equit and loan finan#e% 'ould

tpi#all be rarer e&ents)

SOURCES OF WORKING CAPITAL

4!2 nfosstems has the follo'ing sour#es a&ailable for the fulfillment

of its 'or+ing #apital requirements in order to #arr on its operations

smoothl9

0(ns9These in#lude the follo'ing ban+s 5

State Ban+ of ndia!anara Ban+

41


42/95

41"! Ban+ 2td)!! Ban+ 2td)So#iete ,eneraleStandard !hartered Ban+

State Ban+ of PatialaState Ban+ of Saurashtra

Comme$&"() P(#e$s1

!ommer#ial Papers ha&e be#ome an important tool forfinan#ing 'or+ing #apital requirements of a #ompan)!ommer#ial Paper is an unse#ured promissor note issued

b the #ompan to raise short/term funds) The buers of the#ommer#ial paper in#lude ban+s$ insuran#e #ompanies$ unit

trusts$ and #ompanies 'ith surplus funds to in&est for a short period 'ith minimum ris+)4!2 issues !ommer#ial Papers and had 7KKK #ommer#ial

papers in the ear 3KK


43/95

WORKING CAPITAL POSITION :

!RRENT ASSET 5 TOTA2 ASSET

43


44/95

PARTICLARS 933= 9332 933> 9338 9339

!RRENT

ASSETS

0KKFK L0;JJ ;7K0 7;K73 ;;L;

NET B2O!? FFK ;J3 73; 7;7 ;;;3TOTA2 ASSETS 0337F 0J LFKF< F03L; F;3K;

!ATA L3)77 L3)37


45/95

'ould automati#all suggest to'ards a &er effi#ient 'or+ing #apital

management 'here the assets of the firm 'hi#h are short/term in nature

ha&e been utili.ed optimall in #onne#tion to their fi*ed assets) The firm

has gone to'ards su#h a dramati# shift in their 'or+ing #apital position

might be be#ause of the tremendous gro'th 'itnessed in the domest"&

IT m($et

!RRENT ASSET 5 "E1 ASSET

PARTICLARS 933= 9332 933> 9338 9339

NET !ANET B2O!? ;)K


46/95

933> ;3;KKK 3;03 ;


47/95

!RRENT ASSETSN!REASE

3J)L7 ;K)F 3K)K /0);7 L)

!RRENT2AB2TES N!REASE

3);F 0F)< ;0)J; /)0 0)7;

The 0


48/95

n&entories #onstitute the most important part of the #urrent assets of

large ma-orit of #ompanies) On an a&erage the in&entories are

appro*imatel


49/95

Inventory Management Techniques

n managing in&entories$ the firm6s ob-e#ti&e should be to be in

#onsonan#e 'ith the shareholder 'ealth ma*imi.ation prin#iple) Toa#hie&e this$ the firm should determine the optimum le&el of in&entor)

Effi#ientl #ontrolled in&entories ma+e the firm fle*ible) neffi#ient

in&entor #ontrol results in unbalan#ed in&entor and infle*ibilit/the

firm ma sometimes run out of sto#+ and sometimes pile up unne#essar

sto#+s)

E&onom"& O$de$ -(nt"ty /EO;9 The ma-or problem to be

resol&ed is ho' mu#h the in&entor should be added 'hen

in&entor is replenished) f the firm is buing ra' materials$ it hasto de#ide lots in 'hi#h it has to pur#hase on replenishment) f the

firm is planning a produ#tion run$ the issue is ho' mu#h

produ#tion to s#hedule) These problems are #alled order quantit

problems$ and the tas+ of the firm is to determine the optimum or

e#onomi# lot si.e) 1etermine an optimum le&el in&ol&es t'o tpes

of #osts9/

• O$de$"n* Costs9 This term is used in #ase of ra' material

and in#ludes all the #ost of a#quiring ra' material) Thein#lude the #osts in#urred in the follo'ing a#ti&ities9

♠ Requisition

♠ Pur#hase Ordering

♠ Transporting

♠ Re#ei&ing

♠ nspe#ting

♠ Storing

Ordering #ost in#rease 'ith the number of orders pla#edU

thus the more frequentl in&entor is a#quired$ the higher the

firm6s ordering #osts) On the other hand$ if the firm

maintains large in&entor6s le&el$ there 'ill be fe' orders

pla#ed and ordering #osts 'ill be relati&el small) Thus$

ordering #osts de#rease 'ith the in#reasing si.e of in&entor)

49


50/95

• C($$y"n* Costs1 !osts are in#urred for maintaining a gi&en

le&el of in&entor are #alled #arring #osts) These in#lude

the follo'ing a#ti&ities9

♠ 8arehousing !ost

♠ 4andling

♠ Administrati&e #ost

♠ nsuran#e

♠ 1eterioration and obsoles#en#e

!arring #osts are &aring 'ith in&entor si.e) This

beha&ior is #ontrar to that of ordering #osts 'hi#h de#line

'ith in#rease in in&entor si.e) The e#onomi# si.e of

in&entor 'ould thus depend on trade/off bet'een #arring#osts and ordering #ost)

Com#os"t"on 933= 9332 933>

Ra' Material


51/95

a% nstitutions for 'hi#h the manufa#ture against orders and$ b% Retail segment of the mar+et)

The are more into retail than earlier and at present more than !

items@ represent relati&el least &alue and 'ould require simple

#ontrol) > B items@ fall in bet'een the t'o #ategories and require

reasonable attention of management)

51


52/95

?IT9 The rele&an#e of DT in 4!2 nfo sstem #an be questioned)

This is be#ause the pro#ure materials on the basis of pro-e#tions

made at least t'o or three months before) E&en at the time of

pro#urement the ensure that the pro#ure mu#h more than 'hat

a#tuall is required b the firm that is the hold signifi#ant amount

of in&entor as safet sto#+) This is done to #ounter the threat

in&ol&ed in default and a##idental brea+do'ns) The le&els of

safet sto#+ usuall &ar a##ording to the usage)

Conversion Periods Analysis

Raw Material

P($t"&-)($s 93356 933: 9336

Ra' Material !onsumption 00F

52


53/95

!ost of Produ#tion 0000 0;


54/95

P($t"&-)($s 933= 9332 933>

n&entor #on&ersion period JL 73 7;

A&erage #olle#tion period FK


55/95

its operation to ttaran#hal it in the present state is 'ould be affe#ted b

a #hange in the import dut stru#ture)

A ma-or #hun+ of their #urrent assets are in the form of in&entor and the

#hange in te#hnolog 'ill in&ariabl be a threat fa#ed b the firm) Thequestion of te#hnolog appling here li+e sas a #ertain de&i#e going sa

out of fashion or outdated) "or e)g) T"T monitors being in demand more

than !RT)

CASH MANAGEMENT

SOURCES OF CASH:

So-$&es of (dd"t"on() +o$"n* &(#"t() "n&)-de t!e fo))o+"n*1

E*isting #ash reser&esProfits ('hen ou se#ure it as #ash%

Paables (#redit from suppliers% Ne' equit or loans from shareholdersBan+ o&erdrafts or lines of #redit)2ong/term loans

f ou ha&e insuffi#ient 'or+ing #apital and tr to in#rease sales$ ou

#an easil o&er/stret#h the finan#ial resour#es of the business) This is

#alled o'e$t$(d"n*

E($)y +($n"n* s"*ns "n&)-de1

Pressure on e*isting #ash

E*#eptional #ash generating a#ti&ities e)g) offering high dis#ounts

for earl #ash pament

Ban+ o&erdraft e*#eeds authori.ed limit)

See+ing greater o&erdrafts or lines of #redit

Part/paing suppliers or other #reditors

55


56/95

Paing bills in #ash to se#ure additional supplies

Management pre/o##upation 'ith surviving rather than managing

"requent short/term emergen# requests to the ban+ (to help pa

'ages$ pending re#eipt of a #heque%)

CASH MANAGEMENT IN HCL INFOSYSTEMS:

T!e &(s! m(n(*ement system fo))o+ed .y t!e HCL Infosystems "s

m("n)y )o& .oB system

!ash Management Sstem in&ol&es the follo'ing steps9

0) The bran#h offi#es of the #ompan at &arious lo#ations hold the

#olle#tion of #heques of the #ustomers)3) Those #heques are either handed o&er to the !MS agen#ies or ban+

of the parti#ular lo#ation ta+e #harge of 'hole #olle#tion)J) These !MS agen#ies or ban+ send those #heques to the #learing

house to ma+e them reali.ed) These #heques #an be lo#al or

outstation)

7) The !MS agen#ies or ban+ send information to the #entral hub of

the #ompan regarding reali.ation#heque boun#ed);) The #entral hub passes on the reali.ed funds to the #ompan as per

the agreed agreements)


57/95

C(s!C-$$ent L"(.")"ty

P($t"&-)($s 3KK< 3KK; 3KK7

Absolute 2iquid Ratio K)3790 K)J090 K)0090

The absolute liquid ratio is the best for three ears and the #ash balan#es

as to the #urrent liabilit has impro&ed for the firm) "irm has large

resour#es in #ash and ban+ balan#es) 8hile large resour#es in #ash and

ban+ balan#es ma seem to affe#t the re&enue the firm #ould ha&e earned

b in&esting it else'here as maintenan#e of #urrent assets as #ash and in

near #ash assets and mar+etable se#urities ma in#rease the liquidit

position but not the re&enue or profit earning #apa#it of the firm)

D"'"dend Po)"&yC(s!

P($t"&-)($s 933> 9332 933=

1i&idend Poli# 30K J0K 7KK

Shift in Sales 0;73; 0LL< 3JL0J<

!ash Balan#e 77


58/95

58


59/95

The other notable feature in 4!2 statements has been the gro'ing

di&idend poli# of the firm) The pament of di&idend means a #ash

outflo') Thus #ash position is an important #riterion at the time of paing

di&idends) There is a theor that greater the #ash position and abilit to

pa di&idends) The firm has adopted a poli# of disbursing the re&enueearned as profits to the shareholders as di&idends as #ould be seen from

the in#reasing of di&idends de#lared)

P($t"&-)($s 933= 9332 933>

PB1T 073L7 0;


60/95

The firm feels that the should retain #ash and it 'ould be in the interest

of the firm as 'ell as the shareholders) This 'ould automati#all mean as

de#rease in Earningshare (EPS%(Basi# EPS de#lined from L in 3KK; to

Trade and other re#ei&ables /070


61/95

paables) The outflo's in in&entor ha&e be#ome as lo' as JF of 'hat

it 'as last ear despite an in#rease in the in&entor #onsumption b

0


62/95

The in&estment in mar+etable se#urities rather than ha&ing large #ash

balan#es in something that has been gi&en thought for b the firm) This is

be#ause 'hile a firm gets re&enue in the form of interests b in&estments$

it a#tuall has to pas #ertain amount mone to the ban+s for maintaining

#urrent a##ounts and fi*ed deposits usuall ha&e a longer maturit period)

That is$ the problem 'ith high in&estments is that the opportunit to earn

is lost$ thus a firm has to maintain an optimal #ash balan#e) But the

in&estment in mutual funds or other mar+etable se#urities might #reate a

problem of in&estment$ as the might not be readil reali.able as sa

liquid #ash or the amount deposited in the #urrent a##ount) The

in&estments in sa fi*ed assets sa ma earn a fi*ed rate of interest but

the ha&e a maturit period atta#hed to them)

n 4!2$ Standard !hartered is the #on#entration ban+ in 'hi#h all the

inflo's from the deposit ban+s are #on#entrated and passed on to the

disbursement ban+s for further disbursement)

L"


63/95

• Ensures regular pament of salaries and 'ages and da to

da #ommitments)

RECEIVABLES MANAGEMENT

!ash flo' #an be signifi#antl enhan#ed if the amounts o'ing to a

business are #olle#ted faster) E&er business needs to +no')))) 'ho o'es

them mone)))) ho' mu#h is o'ed)))) ho' long it is o'ing)))) for 'hat it

is o'ed)

L(te #(yments e$ode #$of"ts (nd &(n )e(d to .(d de.ts

Slo' pament has a #rippling effe#t on businessU in parti#ular on small

businesses 'hom #an least afford it) f ou dont manage debtors$ the

'ill begin to manage our business as ou 'ill graduall lose #ontrol

due to redu#ed #ash flo' and$ of #ourse$ ou #ould e*perien#e an

in#reased in#iden#e of bad debt)

T!e fo))o+"n* me(s-$es +")) !e)# m(n(*e yo-$ de.to$s1

0)4a&e the right mental attitude to the #ontrol of #redit and ma+e sure

that it gets the priorit it deser&es)

3)Establish #lear #redit pra#ti#es as a matter of #ompan poli#)

J)Ma+e sure that these pra#ti#es are #learl understood b staff$

suppliers and #ustomers)

7)Be professional 'hen a##epting ne' a##ounts$ and espe#iall

largerones)

63


64/95

;)!he#+ out ea#h #ustomer thoroughl before ou offer #redit) se

#redit agen#ies$ ban+ referen#es$ industr sour#es et#)


65/95

1ebtors due o&er K das (unless 'ithin agreed #redit terms% should generall

demand immediate attention) 2oo+ for the 'arning signs of a future bad debt)

"or e*ampleZ))

0) 2onger #redit terms ta+en 'ith appro&al$ parti#ularl for smaller orders)

3) se of post/dated #he#+s b debtors 'ho normall settle 'ithin agreed

terms)

J) E&iden#e of #ustomers s'it#hing to additional suppliers for the same

goods)

7) Ne' #ustomers 'ho are relu#tant to gi&e #redit referen#es)

;) Re#ei&ing part paments from debtors)

P$of"ts on)y &ome f$om #("d s()es

The a#t of #olle#ting mone is one$ 'hi#h most people disli+e for man

reasons and therefore put on the long finger be#ause the #on&in#e themsel&es

that there is something more urgent or important that demand their attention

no') There is nothing more important than getting paid for our produ#t or

ser&i#e) A #ustomer 'ho does not pa is not a #ustomer)

HERE ARE FEW WAYS IN COLLECTING MONEY FROM DEBTORS: -

• 1e&elop appropriate pro#edures for handling late paments)

• Tra#+ and pursue late paers

• ,et e*ternal help if ou o'n efforts fail)


66/95

• 1on6t feel guilt as+ing for mone )) its ours and ou are entitled to it)

• Ma+e that #all no') And +eep as+ing until ou get some satisfa#tion)

• n diffi#ult #ir#umstan#es$ ta+e 'hat ou #an no' and agree terms for the

remainder$ it lessens the problem)

• 8hen as+ing for our mone$ be hard on the issue 5 but soft on the person)

1on6t gi&e the debtor an e*#uses for not paing)

• Ma+e that our ob-e#ti&e is to get the mone$ not to s#ore points or get

e&en)

RECEIVABLES MANAGEMENT IN HCL INFOSYSTEMS:

PART!2ARS 3KK< 3KK; 3KK7 3KKJ

1EBTORS TRNOGER RATO ;)30 ;)LK ;);J


67/95

The debts doubtful ha&e doubled but their per#entage on the debts has almost

be#ome half) This implies a sales and #olle#tion poli# that get along 'ith the

re#ei&ables management of the firm)

COLLECTION POLICIES1

t refers to the #olle#tion pro#edures su#h as letters$ phone #alls and other follo'

up me#hanism to re#o&er the amount due from the #ustomers) t is ob&ious that

#osts are in#urred to'ards the #olle#tion efforts$ but bad debts as 'ell as

a&erage #olle#tion period 'ould de#rease) "urther$ a stri#t #olle#tion poli# of

the firm is e*pensi&e for the firm be#ause of the high #ost is required to be

in#urred b the firm and it ma also result in loss of good'ill) But at the same

time it minimi.es the loss on a##ount of bad debts) Therefore$ a firm has to

stri+e a balan#e bet'een the #ost and benefits asso#iated 'ith #olle#tion

poli#ies)

The steps usuall follo'ed in #olle#tion efforts are9

Sending repeated letters and reminders to the #ustomersPersonal &isits

sing agen#ies in&ol&ed in #olle#tion pro#essMa+ing telephoni# remindersnitiating legal a#tionsReal Time ,ross Settlement (RT,S%

Real Time ,ross Settlement as su#h is a #on#ept ne' in nature and though the

firm uses the sstem 'ith all the members of the #onsortium$ it is still in its

primal stage and 'ill ta+e time before all of the #lients of the firm are 'illing to

a##ept it) The firm has made a proposal to the #onsortium of the ban+s during

appraisal for faster implementation of internet based ban+ing fa#ilit b all the

ban+s and adoption of RT,S pament sstem through net)

The debtor6s turno&er ratio is #ompletel dependent upon the #redit poli#

follo'ed b the firm) The #redit poli# follo'ed b the firm should be su#h that

the threat of bad debts and the default rate in&ol&ed should be terminated)

PART!2ARS 3KK< 3KK; 3KK7 3KKJ


68/95

!RE1TORS TRNOGER RATO 4=>> 42=: 9496 944>

PAYMENT PERO1 99 98 45 4=

That the #reditors turno&er ratio has de#lined and pament period has in#reased

indi#ate that the #ompan has got a lee'a in ma+ing the pament to the

#reditors b 'a of in#reased time)

8ith #reditors the are ha&ing pre/agreements and ha&e underta+en

arrangements 'ith them$ 'hi#h the belie&e to be the best in the business and

these are fi*ed)

(NOTE9 A##eptan#es are not in#luded in the #omputation of #reditors turno&er%

MANAGING PAYABLES (Creditors)

Creditors are a vital part of effective cash management and should be

managed carefully to enhance the cash position.

Pur#hasing initiates #ash outflo's and an o&er/.ealous pur#hasing fun#tion

#an #reate liquidit problems)

Cons"de$ t!e fo))o+"n*1

• 8ho authori.es pur#hasing in our #ompan / is it tightl managed or

spread among a number of (-unior% peopleC

• Are pur#hase quantities geared to demand fore#astsC

• 1o ou use order quantities$ 'hi#h ta+e a##ount of sto#+ holding and

pur#hasing #ostsC

• 1o ou +no' the #ost to the #ompan of #arring sto#+C

• 1o ou ha&e alternati&e sour#es of supplC f not$ get quotes from ma-or


69/95

suppliers and shop around for the best dis#ounts$ #redit terms as it redu#es

dependen#e on a single supplier)

• 4o' man of our suppliers ha&e a return poli#C

• Are ou in a position to pass on #ost in#reases qui#+l through pri#e

in#reases to our #ustomersC

• f a supplier of goods or ser&i#es lets ou do'n #an ou #harge ba#+ the

#ost of the delaC

• !an ou arrange ('ith #onfiden#e% to ha&e deli&er of supplies staggered

or on a -ust/in/time basisC

There is an old adage in business that if you can buy !ell then you can sell

!ell. Management of our #reditors and suppliers is -ust as important as the

management of our debtors) t is important to loo+ after our #reditors/ slo'

pament b ou ma #reate ill feeling and #an signal that our #ompan is

ineffi#ient (or in trouble%)

e%e%er that a good supplier is so%eone *ho *ill *or" *ith )ou to enhance the future

+iailit) and pro(tailit) of )our co%pan).

Financing Current Assets

The firm has to de#ide about the sour#es of funds$ 'hi#h #an be a&ailed toma+e in&estment in #urrent assets)

Lon* te$m f"n(n&"n*1

t in#ludes ordinar share #apital$ preferen#e share #apital$ debentures$ long

term borro'ings from finan#ial institutions and reser&es and surplus)

S!o$t te$m f"n(n&"n*1


70/95

t is for a period less than one ear and in#ludes 'or+ing #apital funds from

ban+s$ publi# deposits$ #ommer#ial paper et#)

S#ont(neo-s f"n(n&"n*1

t refers to automati# sour#es of short/term funds arising in normal #ourse of

business) There is no e*pli#it #ost asso#iated 'ith it) "or e*ample$ Trade

!redit and Outstanding E*penses et#)

De#end"n* on t!e m"B of s!o$t (nd )on* te$m f"n(n&"n*7 t!e &om#(ny &(n

fo))o+ (ny of t!e fo))o+"n* (##$o(&!es

M(t&!"n* A##$o(&!

n this$ the firm follo's a finan#ial plan$ 'hi#h mat#hes the e*pe#ted life of

assets 'ith the e*pe#ted life of sour#e of funds raised to finan#e assets) 8hen

the firm

follo's this approa#h$ long term finan#ing 'ill be used to finan#e fi*ed assets

and permanent #urrent assets and short term finan#ing to finan#e temporar or

&ariable #urrent assets)

Conse$'(t"'e A##$o(&!

n this$ the firm finan#es its permanent assets and also a part of temporar

#urrent assets 'ith long term finan#ing) n the periods 'hen the firm has no

need for temporar #urrent assets$ the long/term funds #an be in&ested in

tradable se#urities to #onser&e liquidit) n this the firm has less ris+ of fa#ing

the problem of shortage of funds)


71/95

A**$ess"'e A##$o(&!

n this$ the firm uses more short term finan#ing than 'arranted b the

mat#hing plan) nder an aggressi&e plan$ the firm finan#es a part of its #urrent

assets 'ith short term finan#ing)

Relati&el more use of short term finan#ing ma+es the firm more ris+)

C-$$ent (sset to f"Bed (sset $(t"o1

The finan#ial manager should determine the optimum le&el of #urrent assets so

that the 'ealth of shareholders is ma*imi.ed) A firm needs fi*ed and #urrent

assets to support a parti#ular le&el of output

The le&el of #urrent assets #an be measured b relating #urrent assets) 1i&iding

#urrent assets b fi*ed assets gi&es !A"A ratio) ssu%ing a constant le+el of

(ed assets' a higher # ratio indicates a conser+ati+e current assets polic) and a

lo*er # ratio %eans an aggressi+e current assets polic) assu%ing other factors to

e constant. conser+ati+e polic) i.e. higher # ratio i%plies greater liquidit) and

lo*er ris" *hile an aggressi+e polic) i.e. lo*er # ratio indicates higher ris" and

poor liquidit). The #urrent assets poli# of the most firms ma fall bet'een these

t'o e*treme poli#ies) The alternati&e #urrent assets poli#ies ma be sho'n

'ith the help of the follo'ing figure)


72/95

n this figure the most #onser&ati&e poli# is indi#ated b alternati&e A$ 'here

as !A"A ratio is greatest at e&er le&el of output) Alternati&e ! is the most

aggressi&e poli#$ as !A"A ratio is lo'est at all le&els of output) Alternati&e B

lies bet'een the #onser&ati&e and aggressi&e poli#ies and is an a&erage poli#)

WORKING CAPITAL & SHORT-TERM FINANCING

CONSORTIM 0ASED FINANCING

C-$$ent Wo$"n* C(#"t() L"m"ts

NAME OF THE 0ANK FND 0ASED NONFND 0ASEDN1AN BAN? JKK 3;KSYN1!ATE BAN? 3KK 0KKTOTAL 233 823

n order to finan#e the 'or+ing #apital needs of the firm in the form of 8or+ing

!apital 1emand 2oan$ there is a #onsortium of nine ban+s) The #onsortium if

ban+s pro&ide a fund based limit of 03; !rores 'hi#h #omprises of #ash #redit

and 'or+ing #apital demand loans and non/fund based limits 'hi#h has ban+

gurantee and letter of #redit sub-e#t to a limit of 0JF; !rores) The Le(d 0(n

in this #onsortium of ban+s is St(te 0(n of Ind"( and the se&ond )e(d .(n "s

ICICI) t is SB$ 'hi#h fi*es the limit on the basis of #onsortium) The$ in

#onsultation of the #ompan de#ide the allo#ation of limit to &arious member

ban+s) The allo#ation #annot be higher than the limits fi*ed b it) S0I is the."**est &ont$".-to$ in the #onsortium for both fund and non/fund based limits

'ith about

8483 "n f-nds (nd 8>39 "n nonf-nd )"m"ts) The ratio of both limits for the

ear 933= is 3981355


73/95

t is on the basis of the a##ounts re#ei&able that the ban+s #ome to an agreement

'ith regards to the limits imposed) Though it is the fund based limits that

finan#e the 'or+ing #apital requirements$ the non/fund based limits are

important for the management of the 'or+ing #apital as there might be #lients

'ho are not 'illing to sell on open #redit and might be demanding letters of

#redit before an ad&an#es)

RENEWAL OF LIMITS

LIMITS 933= 9332 933>"N1 BASE1 00;KK 00;KK 00;KK

NON "N1 BASE1 7L;KK JL;KK 3L;KK

TOTAL =3333 23333 >3333

All ban+s san#tion the limits for a period of one ear) Thereafter it is to be

rene'ed e&er ear) SB appraises the limit on the basis of #onsortium) The

indi&idual ban+s appraise for their o'n indi&idual limit) The non fund based

limits of the firm in #onsortium finan#ing has been sub-e#ted to #hange for the past t'o ears as per the requirements of the firm and the #onsent of the lead

ban+ to its proposal) t 'as around JL; !rores in 3KK; and had been risen to

around 7L; !rores in 3KK


74/95

• Share holding pattern

• 2ist of the dire#tors

CONSORTIM MEETING 9

All the members of the #onsortium are required to meet to dis#uss &arious

issues relating to the 'or+ing fa#ilities) As per RB guidelines$ the lead ban+$

i)e)$ SB should ensure that one #onsortium meeting is held e&er quarter snd

this meeting has to be arranged b 4!2)

DOCMENTATION (nd ?OINT DOCMENTATION1

There are &arious do#uments that need to be signed at the time of rene'al or

indu#ting an ban+ to the #onsortium) The &arious do#uments are as follo's9

• 2oan agreement

• 4pothe#ation agreement for mo&able ma#hiner

• 4pothe#ation agreement for mo&ables and boo+ debts

• !ounter ndemnit

The abo&e are the standard agreements as+ed for b the ban+s) The #ommon

seal has to be 'itnessed b the #ompan se#retar and one of the dire#tors of

the #ompan)

As of 3KK;$ no additions or deletions 'ere made to the #onsortium of the ban+s)

But o&er the ears the number of ban+s in the #onsortium ha&e been redu#ed)

ndian Ban+s and State Ban+ of 4derabad are the t'o ban+s 'hi#h 'ere

earlier a part of the #onsortium)

Doint 1o#umentation is e*e#uted bet'een the #ompan and the #onsortium of

ban+s for the 'or+ing #apital fa#ilities e*tended b the #onsortium to the

#ompan) The -oint do#umentation is &alid for three ears) The do#uments

#omprising -oint do#umentation are9

• 8or+ing !apital #onsortium agreement


75/95

• Doint deed of do#umentation

• nter se agreement bet'een ban+ers

• 2etter of authorit to lead ban+ b other #onsortium ban+s

• 2etter of authorit to se#ond lead ban+ b other #onsortium ban+s• nderta+ing to #reate #harge on the assets of the #ompan)

ALLOCATION OF LIMIT 0Y LEAD 0ANK

SB appraises the limit on behalf of the #onsortium) t in #onsultation 'ith the

#ompan de#ided the allo#ation of the limit to &arious member ban+s) The

allo#ation of an member ban+ #annot be higher than the limit san#tioned b it)

The dra'ing po'er for it fund based limits out of the #onsortium are

determined on the basis of the sto#+ statement submitted b the #ompan) 4!2

is required to submit the sto#+ statement to all member ban+s in #onsortium for

e&er month)

FINANCIAL FOLLOW P REPORTS / FFRI FFRII;1

E&er quarterl and half quarterl inter&als$ the firm submits "inan#ial "ollo'p Reports and ) ""R is an e*tra#t of the balan#e sheet) n this report$ the

#ompan is required to submit the details of sales$ #urrent assets and #urrent

liabilities for the quarter and the estimates for the #urrent ear) ""R 5 the

#ompan is required to prepare P:2$ BS and !ash "lo' in a different format)

The information is to be pro&ided for the last ear (a#tual%$ #urrent ear half

earl results (a#tual% and the estimates for the ne*t ear)

SHORT TERM FINANCING

Other than the in&estment in #urrent assets$ the firm also has to be #on#erned

'ith short/term to long/term debt as this plas a &er important role in

determining the amount of ris+ underta+en b the firm) That is $ the firm not


76/95

onl has to be #on#erned about #urrent assets but also the sour#es through

'hi#h the are finan#ed) A firm before finan#ing in either of the t'o$ has to ta+e

into #onsideration &arious aspe#ts) 8hile short term might seem the ideal 'a

to finan#e our assets than the long term due to shorter maturit period and alsoless of #osts are in&ol&ed$ there is an inherent ris+ in short term finan#ing due to

flu#tuating interest rates and due to the reason that the firm might be unable to

rea the amount in a shorter span of time)

SECRED LOANS 933= 9332 933> 9338

SHORT TERM JL7 70)3L 9338

SHORT TERM 0;0K7 3;J)J


77/95

4ere 4!2 has a ma-or portion of their finan#ing done through short term

finan#ing than long term finan#ing) The preferen#e of short term finan#ing to

long term as su#h is not the part of an poli# emploed b the firm but it 'as

due to the reason that the interest rates in short term 'ere more in&estor friendland the #ost in&ol&ed in them 'ere also lo') At present$ 'e #an see that the firm

is mo&ing more to'ards long term finan#ing as the interest terms in the long

term has redu#ed #ompared to the short term)

YEAR END COMMERCIAL PAPERS

PARTICLARS 933= 9332 933> 9338

COMMERCIAL

PAPERS

7KKK 3;KK /// JKKK

The #redit rating b !RA #ontinued at XA46indi#ating highest safet to

#ompan6s #ommer#ial paper program of Rs) F; !rores) t a#ts as an effe#ti&e

tool in redu#ing the interst #ost and is used for finan#ing in&entories and other

re#ei&ables) As and 'hen the firm issues #ommer#ial papers$ it sends a letter to

the leader of the #onsortium$ i)e)$ SB to redu#e from the fund based limits theamount it has issued in the form of the #ommer#ial papers) Suppose the firm

issues JK !rores as #ommer#ial papers and the fund based limits are sa 00;

!rores) Then firm sends a letter to SB to redu#e the e*isting fund based limits

from 00; to L; !rores)

n terms of desirabilit$ the #ommer#ial papers are #heaper and ad&antageous to

the firm #ompared to the #onsortium finan#ing) The main ad&antage being theinterest rate 'hi#h is lo'er than the ban+ rates e*isting under #onsortium

finan#ing) But the firm depends on both and for 'or+ing #apital finan#ing$ it is

dependent on the ban+s for funds si#h as 'or+ing #apital demand loans and

#ash #redits) There is no point in the firm not ma+ing use of the fund based

limits in the #onsortium ban+ing as their &omme$&"() #(#e$s ($e $est$"&ted to

52 C$o$es)


78/95

MERITS OF COMMERCIAL PAPERS1

• t is an alternati&e sour#e of raising short/term finan#e$ and pro&es to be

hand during periods of tight ban+ #redit)

• t is a #heaper sour#e of finan#e in #omparison to the ban+ #redit)

DEMERITS OF COMMERCIAL PAPERS1

• t is an impersonal method of finan#ing)

• t is al'as a&ailable to the finan#iall sound and highest rated

#ompanies)

• The amount of lonable funds a&ailable in the #ommer#ial paper mar+et islimited to the amount of e*#ess liquidit of the &arious pur#hasers of

#ommer#ial paper)

ANALYSIS


79/95

INDUSTRY ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

Industry analysis

Financial graphs

Concluding analysis

Suggestions and recommendations

Bibliography


80/95

:+er the past decade' the nfor%ation Technolog) ;T< industr)

has eco%e one of the fastest gro*ing industries in ndia'

propelled ) eports ;the industr) accounted for %ore than a

quarter of ndia=s ser+ices eports in 2004>05


81/95

G$oss 0-s"ness In&ome1

!onsolidated Re&enue for the ear gre' to Rs) 00L;; #rores) Ser&i#esre&enue gre' b J0$ from Rs) 3F7 #rores to Rs) J


82/95

P$of"t (fte$ T(B1

Profit after ta* gre' b 0J$ from Rs) 3LK #rores in the pre&ious ear toRs) J0< #rores) The !ompounded Annual ,ro'th Rate (!A,R% for the

pre#eding fi&e ears is J


83/95

E($n"n*s Pe$ S!($e1

Basi# EPS gre' from Rs) 0


84/95

Net +o$t! S!($e!o)de$s F-nd1

Net 8orth gre' from Rs)


85/95

0o$$o+"n*s1 Year/end loan balan#es in#reased from Rs) L; #rores as onDune JK$ 3KK< to Rs) 3J< #rores as on Dune JK$ 3KKF) The in#rease in loan

balan#es 'as mainl to fund gro'th in !omputing Business in#luding

Sstem ntegration) 1ebt/Equit ratio \1ebt(1ebtQEquit%] is 33)

CRRENT ASSET RATIO1


86/95

CONCLUDING ANAYSIS

The 'or+ing #apital position of the #ompan is sound and the &arious

sour#es through 'hi#h it is funded are optimal)The #ompan has used its di&idend poli#$ pur#hasing$ finan#ing and

in&estment de#isions to good effe#t #an be seen from the inferen#es made

earlier in the pro-e#t)The debts doubtful ha&e been doubled o&er the ears but their per#entage

on the debts has almost be#ome half) This implies a sales and #olle#tion

poli# that get along 'ith the re#ei&ables management of the firm)The returns ha&e been affe#ted b a mar+ed gro'th in 'or+ing #apital

and though a 3)F; in 3KK< return on in&estment is good$ but it got

redu#ed as #ompared to J)K0 return in 3KK;)

The &arious ratios #al#ulated are an indi#ator as to the fa#t that the profitabilit of the firm and sales are on a rise and also the deletion of the

ineffi#ien#ies in the 'or+ing #apital management)The firm has not #ompromised on profitabilit despite the high liquidit

is #ommendable)4!2 nfosstems has rea#hed a position 'here the default #osts are as

lo' as negligible and 'here the #an readil fa#tor their a##ounts

re#ei&ables for a&ailing finan#e is note'orth)


87/95

SUGGESTIONS AND RECOMMENDATIONS

The management of 'or+ing #apital plas a &ital role in running of a

su##essful business) So$ things should go 'ith a proper understanding for

managing #ash$ re#ei&ables and in&entor)

4!2 nfosstems is managing its 'or+ing #apital in a good manner$ but still

there is some s#ope for impro&ement in its management) This #an help the

#ompan in raising its profit le&el b ma+ing less in&estment in a##ounts

re#ei&ables and sto#+s et#) This 'i ll ultimatel impro&e the effi#ien# of its

operations) "ollo'ing are fe' re#ommendations gi&en to the #ompan in

a#hie&ing its desired ob-e#ti&es9

The business runs su##essfull 'ith adequate amount of the 'or+ing

#apital but the #ompan should see to it that the #ash should not be tied

up in e*#essi&e amount of 'or+ing #apital)Though the present #olle#tion sstem is near perfe#t$ the #ompan as

due to the in#reasing sales should adopt more effe#ti&e measures so as

to #ounter the threat of bad debts)The o&er pur#hasing fun#tion should be a&oided as it #ould lead to

liquidit problems)The in&estment of #ash in mar+etable se#urities should be in#reased$ as

it is &er profitable for the #ompan)4olding of e*#essi&e and insuffi#ient sto#+ must be a&oided as it #reates

a burden on the #ash resour#es of a business and results in lost sales$

delas for #ustomers$ et# respe#ti&el)


88/95

BIBLIOGRAPHY

"ollo'ing sour#es ha&e been sought for the preparation of this report9

#orporate ntranet

inancial tate%ents ;nnual eports<

@irect interaction *ith the e%plo)ees of the co%pan)

nternet >>>>***.hclinfos)ste%s.in

Tetoo"s on (nancial %anage%ent > .$.Aande)

Bhan and Cain

Arasanna #handra

APPENDICES

FINANCIAL STATEMENTS FOR HCL INFOSYSTEMS LTD.

L ast 4 year Balance Sheet:

Although debt as a per#ent of total #apital in#reased at 4!2 nfosstems 2td)o&er the last fis#al ear to 30);J$ it is still in/line 'ith the T Ser&i#es


89/95

industrs norm) Additionall$ e&en though there are not enough liquid assets to

satisf #urrent obligations$ Operating Profits are more than adequate to ser&i#e

the debt) A##ounts Re#ei&able are among the industrs 'orst 'ith 3L)77 das

'orth of sales outstanding) This implies that re&enues are not being #olle#ted in

an effi#ient manner) 2ast$ in&entories seem to be 'ell managed as the n&entor

Pro#essing Period is tpi#al for the industr$ at 30)3 das)

Currency inMillions of Indian Rupees

As of: Jun 302004

Restated

Jun 30

2005Restated

Jun 30

2006Reclassified

Jun 30

2007

Assets

Cash and Equivalents 1,452! 2,512" 2,14#2 1,#"$5

%hort&'er( Invest(ents 114) 1,5"!$ !,1!"" 2,#!##

'*'A+ CA% A-. %*R' 'ERM I-/E%'ME-'% 1,5$"1 4,0)$! 5,2)$# 4,#1$4

Accounts Receivale 4,!#04 $,10!1 ",$#14 10,5200

*ther Receivales 22)2 4005 4$)1 5#!4

'*'A+ RECEI/A+E% 4,$1)" $,50!$ ),15#5 11,11!4

Inventory 2,)042 !,4#!# 4,$#$1 ",#1))

3repaid Epenses 10"0 1$!0 14$0 2)")

*ther Current Assets 2!) 5$4 )$) )4)

'*'A+ CRRE-' A%%E'% #,120) 14,!0!2 1),!"5! 24,!212

6ross 3roperty 3lant and Equip(ent 1,40$1 1,404" 1,"!1# 2,4!10


90/95

Accu(ulated .epreciation &"4#1 &"44# &)524 $$5

-E' 3R*3ER'7 3+A-' A-. E8I3ME-' $5"0 $5#) )"#5 1,4$45

6ood9ill && && 02 0)

+on&'er( Invest(ents 2,1#0# && && &&

.eferred 'a Assets, +on 'er( 5#1 && && &&

*ther Intaniles && #5! !24 !0#

*ther +on&'er( Assets && 51 "1) 1$0

TOTAL ASSETS 12,027.9 15,063.4 19,359.2 25,33.4

L!A"!L!T!ES # E$%!T&

Accounts 3ayale !,!#0$ 4,100# 5,#$4) ),2#)5

Accrued Epenses 1004 1010 1404 20#)

%hort&'er( orro9ins && !0"# ")4# 1,1)24

Current 3ortion of +on&'er( .et;Capital +ease $#04 4##$ 04 )#25

Current Inco(e 'aes 3ayale !01 )0# ""4 252)

*ther Current +iailities, 'otal 2,#14$ !,!""! 4,$)"# 5,21$$

nearned Revenue, Current 5!$4 #$5) 55"# ""52


91/95

TOTAL '%RRE(T L!A"!L!T!ES 7,662.6 9,433.4 12,213.7 16,27.

+on&'er( .et 15) "2 $01 2)40

.eferred 'a +iaility -on&Current 10#0 "!5 10"$ 124)

*ther -on&Current +iailities 1!# !) 10 &&

'*'A+ +IAI+I'IE% ",)01! #,51"# 12,!)24 1",2!$$

Co((on %toc< !2)# !!44 !!"5 !!)!

Additional 3aid in Capital $"!# ))!" 1,0445 1,0)"#

Retained Earnins !,1#!2 4,2#"! 5,5$52 ",1414

Co(prehensive Inco(e and *ther !0$ !01 2#$ 2#2

TOTAL 'O))O( E$%!T& 4,226.6 5,545.5 6,976. ,596.

TOTAL E$%!T& 4,226.6 5,545.5 6,976. ,596.

TOTAL L!A"!L!T!ES A(* E$%!T& 12,027.9 15,063.4 19,359.2 25,33.4

FINANCIAL STATEMENTS FOR HCL INFOSYSTEMS LTD.


92/95

L (st > ye($ C(s! F)o+ St(tement1

n 3KKF$ #ash reser&es at 4!2 nfosstems 2td) fell b 0F3)FM) 4o'e&er$ as a

per#ent of re&enues$ this #hange 'as similar to the T Ser&i#es industr median)

B loo+ing at the !ash "lo' Statement$ analsts #an easil see the sour#es and

use of #ash generated throughout the ear)

Currency in

Millions of Indian Rupees

As of: Jun 30

2004Restated

Jun 30

2005Restated

Jun 30

2006Reclassified

Jun 30

2007

-E' I-C*ME 1,"511 2,2""0 2,)0!$ !,15#5

.epreciation = A(orti>ation 1)01 1524 124! 1440

A(orti>ation of 6ood9ill and Intanile Assets && && && 41

.E3RECIA'I*- = AM*R'I?A'I*-, '*'A+ 1)01 1524 124! 14)1

@6ain +oss fro( %ale of Asset &04 &1$ 05 0$

@6ain +oss on %ale of Invest(ent &"#$ &)4# &$15 &552

Asset Britedo9n = Restructurin Costs 00 05 && &&

*ther *peratin Activities 2#2) !12 "#$ 2"1)

3rovision = Brite&off of ad .ets 14) 144 "2 #2

Chane in Accounts Receivale &1,5#!4 &1,##!4 &1,"24" &!,15))

Chane in Inventories &42!! &$)#" &1,2022 &!,222"

Chane in Accounts 3ayale 1,4"1) 1,5$1$ 2,"5#5 !,1122

CA% R*M *3ERA'I*-% 1,$140 1,2$"5 2,")$! 2$4"

Capital Ependiture &1)0" &2$") &424! &$"45


93/95

%ale of 3roperty, 3lant, and Equip(ent !5 10" )0! 1$

Invest(ents in Mar ye($ In&ome St(tement1


94/95

Year o&er ear$ 4!2 nfosstems 2td) has seen re&enues remain relati&el flat

(00J)FB to 00


95/95

*ther -on&*peratin Inco(e @Epenses !20 && && &&

E', EC+.I-6 -%A+ I'EM% 2,0!!0 2,")$! !,"!"# 4,22")

6ain @+oss on %ale of Invest(ents "#$ )50 $15 552

6ain @+oss on %ale of Assets 04 1$ &05 &0$

*ther nusual Ite(s, 'otal 2! )"2 40 4"

Insurance %ettle(ents 2! !" 40 4"

*ther nusual Ite(s && )40 && &&

E', I-C+.I-6 -%A+ I'EM% 2,1151 2,#$01 !,)02# 4,2)"1

Inco(e 'a Epense !$40 $)!1 ###! 1,12"$

Earnins fro( Continuin *perations 1,"511 2,2""0 2,)0!$ !,15#5

(ET !('O)E 1,751.1 2,277.0 2,03.6 3,159.5

(ET !('O)E TO 'O))O( !('L%*!( ETRA

!TE)S1,751.1 2,277.0 2,03.6 3,159.5

(ET !('O)E TO 'O))O( E'L%*!( ETRA

!TE)S1,751.1 2,277.0 2,03.6 3,159.5

project report on working capital management in hcl

Documents