Summer Training Project Report

On

“WORKING CAPITAL ANALYSIS”

At

NICCO CORPORATION LIMITED

KOLKATA

Prepared by :
Suman Sarkar & Utsav Roy.
B.P.PODDAR INSTITUTE OF MANAGEMENT & TECHNOLOGY
EN-31, Salt Lake City, Sec.-V , Kolkata - 700091
[ Approved by AICTE, Affiliated to WBUT ]
Batch : 2006 - 09
Under guidance of :
Mr. Prasanta Pandit ( Dy.G.M.Finance, NCL,Kolkata )
Prof. S.K.Sarangi ( Vice – Principal, BPPIMT )

CONTENTS

1
Particulars Page no.

Declaration 4
Acknowledgement 5
Project Summary 6
Introduction & History of the company 7
Manufacturing facilities 8
Group Associate companies & Company Management 9
Board of Directors of the company 10
Bankers 11
Profile on Working Capital 12
Definition 13
Gross working capital 13-14
Need for working capital & Working capital positive or negative 15
Assessment of working capital 16
Operating cycle concept 17
Concept of margin 17-18
Liquid surplus 18
Recommendations by the Tandon Committee 19
Approach to Lending 20
Withdrawal of instructions relating to MPBF & New structure of
cash credit facility 21
Recommendations by the Chore Committee 22
Working capital term loan 23

Profile on Bank Facilities 24

Facilities available from bank 25

2
 Chart on bank facilities 26
Fund based facilities 27-29
Non-Fund based facilities 30-31
Profile on Financial Results of the company 32
Financial results 33-34
Column graph of financial results 35-36
References 37

3
 DECLARATION

We do hereby declare that this project report submitted by us in fulfillment of

Bachelor in Business Administration [ B.B.A. (H) ] in B.P.Poddar Institute of
Management & Technology (B.P.P.I.M.T), Kolkata .It is exclusively prepared
and conceptualized by us and is not submitted to any other institution or
published anywhere before.

Suman Sarkar

&

Utsav Roy

4
 ACKNOWLEDGEMENT

We express our deep gratitude to NICCO CORPORATION

LIMITED, Kolkata. We would like to thank Mr. Gangopadhyay, MS.
Annie Moothedam ( Dy. Manager-HRM ) for organizing and giving us an
opportunity to go through our summer training in the field of Finance and also
gave us a scope to gain practical knowledge and experience about an
organization. We are thankful to Mr. Prasanta Pandit (Dy. G. M, Finance)
NICCO Corporation Limited, Kolkata, whose guidance,support,inspiration
and motivation is the main key for making this project report successful. We
would also like to thank Mr. Ranjan Sen and Mr. Debabrata Biswas for
their encouraging support in the way of completion of the project.

We also express our gratitude towards Prof. S.K.Sarangi ( Vice

Principal,B.P.P.I.M.T ) for his valuable guidance.

5
 PROJECT SUMMARY

As a partial fulfillment of the B.B.A.(H) course in which a training

programme of two months has been incorporated in the curriculum, during
which a study is to be done in an organization to extract the knowledge &
skill from actual work environment and a scope to observe the actual work
place of an industry to gain practical experience. During our training we have
done project at NICCO Corporation Limited on Working Capital Analysis.

6
 INTRODUCTION & HISTORY OF THE COMPANY

The Nicco Group was established in 1942 and is a widely respected Indian
industrial powerhouse. The Nicco Corporation Limited is belongs to the
Nicco Group. Headquartered in Kolkata, the group is involved in a wide
spectrum of activities including production of power cables, executing
turnkey projects, providing engineering services, operating and setting up
amusement parks and delivering HR and IT solutions. The diverse and
dynamic Group comprises the following companies and employs over 2000
people. For nearly over six decades, Nicco Corporation Limited (NCL) has
been one of the pioneers in the Indian cable manufacturing industry. NCL's
Capital Division produces a wide range of power cables. Nicco Corporations
Limited has also opened a biotechnology (Msc.) institute at kalyani.

Nicco Corporation Ltd., the flagship Company of the Nicco Group is engaged
in:
Cable Manufacturing and Conductors (constituting 83% of FY 06
Net Sales)

NCL manufactures a wide range of cables from 1.1 KV to 66 KV capacities

(very few units can produce up to 66KV ). Its strength has been the capability
to manufacture highly specialized cables including the new generation
Electron Beam Irradiated Cross Linked Cables. Besides having a strong
domestic market, the company has also exported its products to Australia,
Asia Pacific, South East Asia, Algeria & the Middle East.

NCL is also involves in Turnkey Projects Services.

7
Manufacturing facilities

NCL commenced manufacturing cables, conductors & wires in 1942 at

Shyamnagar (N-24 Parganas, West Bengal) and subsequently extended the
manufacturing facilities by setting up a new unit at Baripada
(Mayurbhanj,Orissa). Both the units are ISO 9001 and 14001 accredited
and the products conform to BS. IEC, VDE and other customized
specifications and have been approved by a large number of vendors.

Shyamnagar Plant spread over 15 acres, mainly manufactures special

Elastomeric Cables including Electron Beam Irradiated Cables, XLPE
Cables, PVC Power / Control Cables & Flame Retardant Low Smoke
(FRLS) Cables. The Electron Beam Irradiated Cross Linked Cables are
produced through a 3 MeV Accelerator imported from Radiation
Dynamics Inc., USA. The Unit also has a state of the art Polymer
Compounding Plant for manufacturing captive requirements of highly
specialized compounds.

Baripada Plant sprawls over a total area of 22 acres and manufactures

XLPE cables up to 66 KV. The unit uses the latest triple extrusion using
single (Common) cross - head extrusion techniques and Dry Cure (inert
gas cured) cross-linking process. The Plant has been awarded the
prestigious Environmental Management Systems (EMS) certification ISO
14001, which made it the first cable manufacturer in the world to be
environmentally certified.

8
GROUP ASSOCIATE COMPANIES

Nicco Park & Resorts Ltd. The First Theme & Amusement park
in Kolkata.
Nicco Engineering & Services Ltd Pioneer in Under Pressure Leak
sealing. Enjoys monopoly in
Helifusion-automatic spiral welding
business.
Nicco Internet Ventures Ltd. Provides Technology Based
recruitment solutions.

COMPANY MANAGEMENT

The Group was founded by the late Mr. J.N. Bhan and the late Mr. G.K.
Khemka. The present chairman Mr. Rajeev Kaul has been the principal
architect in planning and executing the growth and development of the Nicco
Group. In addition to being a Mechanical Engineer from Imperial College,
London, Mr. Kaul is a Chartered Engineer from London, a fellow of the
Institute of Metals, London and also a member of the Harvard Alumni, USA.
Mr. Kaul has the distinction of being a past President of the Confederation of
Indian Industry (CII), The Indian Chamber of Commerce and Indian
Electrical and Electronics Manufacturers Association. He is on the Board of
Directors of several companies. The Companies in the Nicco Group are run
by experienced professionals.

9
BOARD OF DIRECTORS OF THE COMPANY

Mr. Rajeev Kaul

Mr. Pillapakkam Bahukutumbi Ramanujam

Dr. Tamal Datta Chaudhuri

Mr. Narottam Das

Mr. Prabir Chakravarti

Dr. Lakshminarayanapuram Ramier Vaidyanath

Mr. Dhirendra Nath Bhattacharjee

Mr. Hanumanthu Purushottam

Mr. Sujit Poddar

Mr. Sanjoy Bhattacharya

Mr. Udayan Roy

10
BANKERS

Allahabad Bank

Canara Bank

Central Bank of India

State Bank of India

State Bank of Bikaner & Jaipur

State Bank of Travancore

Uco Bank

11
PROFILE
ON
WORKING
CAPITAL

12
Working Capital:

Definition

In order to maintain flows of revenue from operations, every firm

needs certain amount of current assets. For example, cash is required either to
pay for expenses or to meet obligations for service received or goods
purchased etc., by a firm. On the identical plane, inventories are required to
provide the link between production and sale. Similarly, accounts receivables
generate when goods are sold on credit. Needless to mention, Cash, Bank,
Debtors, Bills Receivables, Closing stock(including Raw Materials, Work-in-
Progress and Finished goods), Prepayments and certain other Deposits and
Investments which are temporary in nature, represent Current Assets of a
firm. Economists like Mead, Mallot, Backer and Field are of the opinion that
the whole of these current assets form the Working Capital of a firm. And this
concept of Working Capital of a firm is frequently termed as Gross Working
Capital in the arena of Financial Management.

Gross Working Capital:

This amount is the total investment of the unit in the current assets and
current liabilities are not deducted. There are arguments in favor of
considering the gross working capital concept on the premise that whether it
is fixed capital or circulating capital, the firm has a cost either as interest or as
opportunity cost by way of earning foregone when invested as equity and the
firm has to earn appositive income after payment of interest on the total
investment.
Gross Working Capital = Total Current assets.
Or, Gross Working Capital = Long-term internal liabilities plus Long-term
debts plus the Current liabilities minus the amount blocked in the Fixed
Assets.

13
There is also another opinion regarding the concept of working capital. Prof.
H.G. Guthmann and H.E. Dougall, define working capital as the excess of
current assets over current liabilities. That is, the amount of current assets that
remain in a firm if all its current liabilities are paid. This concept of working
capital is known as Net Working Capital. This aspect of working capital is a
more realistic approach than the Gross Working Capital concept.

Net Working Capital = Current Assets minus Current Liabilities.

Or, Net Working Capital = Equity plus long-term debts minus as much as
blocked in Fixed Assets.

14
Need for Working Capital

In order to earn sufficient profits, a firm has to depend on its sales

activities apart from others. We know that sales are not always converted into
cash immediately, i.e., there is a time-lag between the sale of a product and
the realization of cash. So, an adequate amount of working capital is required
by a firm in the form of different current assets, for its activities to continue
uninterrupted and to tackle the problems that may arise because of the time-
lag. Practically, this happens simply owing to the ‘Operating cycle’ or “Cash
cycle’. ‘Cash cycle’ or ‘Operating cycle’ involves the following steps :

a) Conversion of Cash into Inventory ;

b) Conversion of Inventories into Receivables;
c) Conversion of Receivables into Cash;

Working Capital: Positive or Negative

If current assets exceed current liabilities, it is called positive

working capital and if current liabilities exceed current assets, it is called
negative working capital. Needless to mention, if gross concept of working
capital is used, there will always be positive working capital. On the other
hand, if net concept of working capital is used, there may be positive,
negative or nil working capital. It can also be explained from another
standpoint. If current assets are financed from long-term sources, working
capital will always be positive one. On the contrary, if fixed assets are
financed from short-term sources, working capital will always be negative
one.

15
 Assessment of Working Capital

Any enterprise whether industrial,trading or others requires two types of

assets to run its business. It requires ‘fixed assets’ such as land and buildings, plant
and machinery, furniture and fixtures etc. and the other types of assets required for
day to day working of a unit are known as ‘current assets’ which are generally
referred to as ‘working capital’. Large industrial projects may require large
investment of working capital and the service units may hardly require any working
capital. Current assets are partly financed by the long-term liabilities and partly by
current liabilities and other short-term loans arranged by the unit from the bank.

The total current assets with the firm may be taken as gross working capital.
The net working capital is sometimes referred to as ‘liquid surplus’. The
concept of liquid surplus represents excess of current assets over current
liabilities.

Net working capital = Current Assets – Current liabilities.

Current Assets = Current Liabilities + Working capital limits from banks + Margin
from long-term liabilities.

The assessment of working capital may involve the two aspects as under :

* The level of current assets required to be held by any unit which is adequate
for its day to day functioning, and

*The mode of financing of these current assets.

16
 OPERATING CYCLE CONCEPT

The day to day business operations of a concern of any nature and size
involves many successive steps and final working result would depend on the
effective combination of all these steps. The steps are as follows:

Realisation    > Cash   > Raw Material Stores, Spares

 
Bills Receivables/Sundry Semi-Finished Goods

 

Debtors 

 

SALES <       FINISHED GOODS

We start from cash to buy raw materials, then acquisition and storage of raw
materials, then actual production process bring the raw materials into finished
product, then storage of finished goods awaiting sales and realisation of sale
proceeds. After completing all the steps end up with the cash. The intervening
period required for completion of this entire process is the ‘Operating Cycle’.

Total working capital requirement is the ratio of ‘total operating expenses

expected during the year’ & ‘no. of operating cycles in a year’.

CONCEPT OF MARGIN

Margin in relation to working capital has two concepts which need to

be clearly understood. The concept of providing margin by way of liquid
surplus i.e. from long term liabilities has already been explained. It must be
now that current assets shall partly be financed by capital and long term
liabilities for any going concern.

17
 The other concept of margin is applicable to working capital limits is
related to the value of security charged to the banks as cover for these limits.
Financial accommodation up to 100% of the value of goods would not be
granted by the banks and they would fix a certain margin on the value of
security which must be provided by the borrower and the balance amount will
be financed by the bank.

Liquid Surplus

The concept of liquid surplus has been already explained & it represents
excess of current assets over current liabilities thereby meaning that some
long- term liabilities have already been utilized by the unit for creation of
current assets . This is also one concept of margin being provided by the unit
for working capital as already explained.

Adjustments made in the gross working capital as already calculated for

the above three items will give an idea of net working capital requirements.

The bank may not be willing to finance all the components of working
capital. The manufacturing and administrative expenses may not be financed
by the bank. Banks may be willing to finance sales operation by purchasing/
discounting bill receivable and may not be very stipulated for such advances.

The following methods is generally adopted by the banks:

I. Raw Materials
II. Stores and Spares
III. Semi-Finished Good
IV. Finished Goods
V. Bills Receivables / Book Debts

18
Recommendations by the Tandon Committee

Reserve Bank of India constituted a ‘Study Group’ with Shri Prakash Tandon
as chairman in July, 1974 to frame necessary guidelines on bank credit with
the following terms of reference :

 To suggest guidelines for commercial banks to follow up and supervise

credit from the point of view of ensuring proper end-use of funds and
keeping a watch on the safety of the advances and to suggest the type of
operational data and other information that may be obtained by banks
periodically from such borrowers and by the Reserve Bank of India from
the lending banks,
 To make recommendations for obtaining periodical forecasts from
borrowers of (a) business/production plans, and (b) credit needs,
 To make suggestions for prescribing inventory norms for different
industries both in the private and public sector and indicate the broad
criteria for deviating from these norms,
 To suggest criteria regarding satisfactory capital structure and sound
financial basis in relation to borrowings,
 To make recommendations regarding the sources for financing the
minimum working capital requirements,
 To make recommendations as to whether the existing pattern of financing
working capital requirements of cash/overdraft system etc., requires to be
modified, if so, to suggest suitable modifications, and
 To make recommendations on any other related matter as the Group may
consider relevant to the subject of enquiry or any other allied matter which
may be specifically referred to it by the Reserve Bank of India.

19
Approach to lending

The second aspect of recommendations of the group related to approach

to lending. It was stipulated that the unit should finance a part of its current
assets from owned funds and term liabilities. It prescribed a minimum margin
of 25% to be brought in by the unit from its owned funds and long-term
liabilities and suggested three different methods of lending.

These three methods are as under:

Method I. The borrower should bring in 25% of the net working capital
(current assets – current liabilities excluding bank borrowing) from its owned
and long-term liabilities.

Method II. The borrower should finance 25% of all current assets from
owned funds and long-term liabilities and the balance be financed by the
bank.

Method III. The hardcore current assets i.e., the current assets which are
permanently required by the unit for its functioning must be exclusively
financed by the borrower. The borrower should also provide 25% of the
remaining current assets and only the balance will be financed by the bank.

20
Withdrawal of instructions relating to MPBF

While announcing ‘Monetary and Credit Policy’ for the half of

1997-98, on 15th April, 1997. Reserve Bank of India has withdrawn
prescription in regard to assessment of working capital needs based on the
concept of maximum permissible bank finance (MPBF) enunciated by
‘Tandon Working Group’. Banks have been given freedom to evolve their
own system for assessing working capital needs of borrowers.

New Structure of Cash Credit facility

Cash credit limit is considered a short-term facility payable a

demand. Being the minimum requirement at all times, is used almost
permanently. It was, suggested that this part representing permanent
requirement of the unit may be sanctioned as a loan and the balance amount
of limit may be permitted as cash credit facility.

21
Recommendations by the Chore Committee

The quality of lending improved considerably but cash credit system

continued to pose few difficulties. Bifurcation of working capital limit in two
parts as demand loan and a fluctuating cash credit component, as suggested
by the Tandon Group, was not done by many banks. It was therefore,
considered necessary by Reserve Bank to review the system of cash credit in
all its aspects and for this purpose a ‘Working Group’ headed by Sh. K. B.
Chore was appointed in 1979. The terms of reference of the ‘Group’ were
follows:

 To review the operation of cash credit system in recent years, particularly

with reference to the gap between sanctioned credit limits and the extent of
their utilization;
 In the light of the review, to suggest:

(a) modifications in the system with view to making system more

amenable to rational management of funds by commercial banks and/or
(b) alternative types of credit facilities, which would ensure greater
credit discipline and also enable banks to relate credit limits to
increases output or other productive activities, and

 To make recommendations on any other related matter as the ‘Group’

may considered germane to the subject.

The ‘Group’ gave its recommendations in 1979.

22
Working capital term loan

A few borrowers on being placed on 2nd method of lending may not be

able to bring in the additional contributions immediately. The bank may
sanction ‘Working Capital Term Loan’ (WCTL) which may be placed on
liquidation basis within a maximum time of 5 years. The method to be
adopted for segregating excess borrowings on this account would be the same
as under ‘Tandon Group’. Higher interest at rate 1% more than the normal
rate charged on cash credit account may be charged on WCTL to induce all
borrowers for its early adjustments.

23
 PROFILE
ON BANK
FACILITIES

24
Facilities available from banks:

Banks provide a large variety of credit facilities to meet all types of needs of
their customers. Development banks help to construct a project but it is the
commercial banks run the project. A firm can draw funs from its bank within
the maximum credit limit sanctioned. Various types of facilities that are
generally available from the banks are given as follows:

1. Fund Based facilities

2. Non-Fund Based facilities

25
 Fund
Based

Term Wo
Loans

Cash credit Overdraft

Secured
Pledge Hypothecation Clean

26
1. Fund Based Facilities:

1.1 Term loan: Term loan is an installment credit repayable over a period of
time in monthly/quarterly/half yearly or yearly installments. Term loan is
generally granted for creation of fixed assets required for long-term use by the
unit. Commercial banks grant term loans for small projects falling under
priority sector ,small-scale sector and big units. Banks have now been
permitted to sanction term loan for big projects as well without the
association of financial institutions. The procedural aspects including
appraisal techniques of term loan proposals by banks are almost the same as
of other term lending institutions. Term loans are further classified in three
categories depending upon the period of repayment as under:

 Short-term loan repayable in less than 3 years.

 Medium term loans repayable in a period ranging from 3 years to 7 years.
 Long term loans repayable in a period over 7 years.

1.2 Working capital finance:

a) Cash Credit Facility: A major part of working capital requirement of any

industrial project would consist of maintenance of inventory of raw material.,
semi-finished and finished goods, stores and spares etc. Even in trading
concerns, the requirement of funds will be to maintain adequate stocks in
trade. Finance against such inventories by banks is generally in the shape of
cash credit facility where drawings will be permitted against stock of goods. It
is a running account facility where deposits and withdrawal are permitted as
frequently as required. Over drawls are, however, restricted to an agreed limit
and are further subject to availability of drawing power in the account. This
facility is very convenient in as much as the drawings in the account by the

27
borrower may relate to his actual requirement at any particular point of time.
This helps to reduce outlay on interest as no idle funds may be kept by the
borrower at any time. The drawings are secured against the stocks of goods
and periodical statement (generally every month) of stocks is required to be
submitted. The bank will determine the drawing power in the account after
deducting the agreed margin from the value of goods as per stock statement.
The customer would then be allowed to draw in his cash credit account up to
the drawing power. A part of this facility is now required to be availed as
working capital demand loan. The cash credit facility is of two types as
under:

i) Cash Credit(Pledge) : When the possession of the goods is with the bank
and drawings in the account are linked with actual movement of goods
from/to the possession of the bank. The physical control of the goods in such
facilities is exercised by the bank and the borrower may face some operational
difficulties in such accounts. The charge of the bank i9n such cases is on
specific goods pledged to the bank.

ii) Cash Credit (Hypothecation) : When the possession of the goods

remains with the borrower and a floating charge over the stocks is created in
favour of the bank. The borrower has complete control over the goods and the
drawings in the account are permitted on the basis of stock statement
submitted by the borrower. The charge of bank in such cases is not on any
specific goods but extends to all the stocks available at a particular point of
time. The operations in such accounts are very convenient and offer a good
deal of freedom to the borrower to manage his inventory.

b) Overdraft facility: Under the overdraft facility, the borrower is allowed to

withdraw funds in excess of the balance in his current account up to a certain
specified limit during a stipulated period. Though overdrawn amount is

28
repayable on demand, they generally continue for a long period by annual
renewals of the limits. It is a very flexible arrangement from the borrowers’
point of view since he can withdraw and repay funds swherever he desires
within the overall stipulations. Interest is charged on daily balances on the
amount actually withdrawn- subject to some minimum charges. The borrower
operates the account through cheques.

i) Cleaned: Overdraft may be permitted without any security as ‘clean

overdrafts’ for temporary periods to enable the borrower to tide over some
emergent financial difficulty.
ii) Secured: Overdrafts are also required to be secured by some tangible
securities such as fixed deposit receipt of banks, National Saving certificates
and such other securities etc. Over drafts may sometimes be permitted against
book debts as well.

29
2.Non Fund Based Facilities:

Credit facilities which do not involve actual deployment of funds banks but
help the obligations to obtain certain facilities from third parties are termed as
non-fund based facilities.

The different types of non-fund based Facilities are:

2.1 Letter of credit
3.1 Bank Guarantees
4.1 Co-acceptances of bills
These activities are called non-fund based because at the first instance banks
extend these facilities it does not entail actual lay out of funds by the bank.
The actual layout of funds could be contingent upon the happening and non-
happening of certain events. The non-fund based limits offers a source of
revenue without actual deployment of credit. Banks do not grant non-fund
based limit without an assessment as otherwise these non-fund based limit
will turn fund-based limits if the borrower to whom the non-fund base
facilities are granted fails to honor his commitments.

2.1 LETTER OF CREDIT:

Letter of credit is an assurance to the supplier from the buyer’s bank that after
the shipment is affected and the documents are presented. In accordance with
the conditions of the letter of credit, the buyer bank will make the payment
thereof. The commitment of the bank is on the faith that buyer borrower
should have sufficient funds with the bank or place funds with it when called
upon to do so to reimburse itself for the payment made to the seller. If the
borrower fails to make the payment, the bank would be burdened with an
advance which is unsecured as well as overdue. It can be established for all
types of commercial transactions where the seller wants an assurance on

30
behalf of the buyer from a credit institution like a bank. It is an excellent
medium of enforcing payment without risk as it is issued by a bank which has
links across the country as well as the world.

3.1 BANK GUARANTEES:

The bank stands as a surety on behalf of their customers for the performance
under a contract for effecting payment and in case the customer has failed to
make the payment, the bank will have to make the payment. There are various
types of business transaction in which the beneficiary parts wants assurance
on behalf of the other performing party either in respect of the advance
amount paid against the contracts or for due performance of the equipment
supplied against the contract. Bank guarantee available to regular customers
of the banks against a lesser margin, say, 50% which is retained by bank in
the form of fixed deposits on which the interest accrues. Bank guarantees
valid up to certain period and if no claims are preferred on the bank then they
cease to be effective. Banks have an interest in issuing guarantees as they earn
commission guarantees as well get cash margin which can be effectively used
in their business.

4.1 Co-Acceptances of Bills:

In case of IDBI it is used to operate a bills discounting facility for the sellers
of the equipment and insist that banks of the buyers of the equipment should
accept the bills drawn on the buyers by the sellers to enable the sellers bank to
get the bills rediscounted with IDBI The acceptance by the banker is in affect
a surety or a guarantee upon the bill. A banker’s acceptance is a short-term
time draft drawn by an individual or business concern upon a bank
undermining it to pay a stipulated sum of money at a specified date in the
future. When bank accepts the draft, it guarantees redemption at maturity.

31
PROFILE ON
FINANCIAL
RESULTS OF
THE
COMPANY

32
CONSOLIDATED AUDITED FINANCIAL RESULTS FOR THE
YEAR ENDED 31ST MARCH' 2008

  (Rs.in Lacs)

  YEAR ENDED

Sl.No. PARTICULARS 31.03.2008 31.03.2007

Audited Audited

Net Sales / Income from

1 45,343 39,748
Operations

2 Other Income 326 272

3 Total Income (1+2) 45,669 40,020

4 Expenditure

(Increase) /Decrease in
a) (790) 757
stock in Trade

Consumption of Raw
b) 32,403 26,077
Materials

c) Purchase of traded goods - -

d) Employee Cost 3,066 2,321

e) Depreciation 873 842

f) Other Expenditure 6,759 6,872

g) Total 42,311 36,869

5 Interest 1,819 1,587

Miscellaneous
6 53 88
Expenditure Written Off

Profit(+) / Loss(-) from

7 ordinary activities before 1,486 1,476
Tax (3) - (4+5+6)

8 Tax Expenses :

33
 Provision for Taxation 100 71

Add: Deferred Tax, Fringe Benefit

606 690
Tax & MAT

Profit(+) / Loss(-) from ordinary

9 779 716
activities after tax (7-8)

10 Extra ordinary items:

Share of Post acquisition Profit of

126 64
Associates for the year

Net Profit(+) / Loss(-) for the period

11 906 780
( 9 - 10)

12 Paid up Equity Share Capital 1,814 1,814

Reserves excluding Revaluation

13 2,722 2,722
Reserve

14 Earning per Share (in Rs.)

a) Basic 0.83 0.74

b) Diluted 0.83 0.74

15 Non Promoters Shareholding

No of Shares 90,698,847 90,698,847

Percentage of Shareholding 78.48% 82.66%

Year 2007 2008

Net Sales (Rs.in lacs) 39748 45343

34
 Consumption of Raw 26077 32403
Materials (Rs.in lacs)

Net Sales vs Consumption of Raw Materials

Net Sales
0 Column1
20 20
07 08

Year 2007 2008

Net Sales (Rs.in lacs) 39748 45343

Profit Before Tax 1476 1486

(Rs.in lacs)

Net Sales vs P.B.T.

5

Year 2007 2008

Net Sales (Rs.in lacs) 39748 45343

35
 Profit After Tax 716 779
(Rs.in lacs)

Net Sales vs P.A.T.

5

Year 2007 2008

Equity Share Capital 1874 1874

(Rs.in lacs)

Earnings per share 0.74 0.83

Equity Share Capital vs E.P.S.

800

400

REFERENCES

36
1. Annual Reports of the company 2006-2007
2. Books consults:
a) Borrowing from Banking and Financial Institutions
b) Financial Management – I.M.Pandey.
3. Data available on the website (www.niccogroup.com) of the company.

37
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